Opinion
26869-21 26872-21 26874-21 26877-21
08-11-2023
ESTATE OF ROMAN J. FINNEGAN, DECEASED, v. COMMISSIONER OF INTERNAL REVENUE, Respondent KEVIN C. TANKERSLEY, PERSONAL REPRESENTATIVE & LYNETTE FINNEGAN, ET AL., Petitioners
ORDER
Joseph W. Nega Judge
These consolidated cases are presently calendared for an in-person trial at the session of the Court scheduled to commence on Monday, August 14, 2023, in Indianapolis, Indiana. On August 3, 2023, respondent filed (1) a Motion in Limine to Exclude From Evidence the Report and Affidavit of James Douglas Bremner, M.D. (Bremner motion) and (2) a Motion in Limine to Exclude from Evidence Testimony from Petitioners about Facts and Circumstances After April 4, 2017 (post-settlement facts motion). By Order issued August 3, 2023, the Court directed petitioners to file responses to the Bremner motion and post-settlement facts motion by August 9, 2023. On August 9, 2023, petitioners filed (1) a Response to Motion in Limine to Exclude From Evidence the Report and Affidavit of James Douglas Bremner, M.D. and (2) a Response to Motion in Limine to Exclude from Evidence Testimony from Petitioners About Facts and Circumstances After April 4, 2017.
I. Discussion
Proceedings in this Court are conducted in accordance with the Federal Rules of Evidence (FRE). See § 7453; Rule 143. Relevant evidence is generally admissible under FRE 402. FRE 401 provides that evidence is relevant if "it has any tendency to make a fact more or less probable than it would be without the evidence" and "the fact is of consequence in determining the action."
Unless otherwise indicated, statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, and Rule references are to the Tax Court Rules of Practice and Procedure.
A. Bremner Motion
Testimony by expert witnesses is governed by FRE 702 and 703. FRE 702 provides that a witness who is "qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion" if his testimony will help the trier of fact and the following conditions are met: (1) the testimony is based on sufficient facts or data; (2) the testimony is the product of reliable principles and methods; and (3) the expert has reliably applied the principles and methods to the facts of the case. Testimony based on scientific, technical, or other specialized knowledge is subject to the Court's gatekeeping function, which forecloses expert testimony that does not "rest[ ] on a reliable foundation" or is not "relevant to the task at hand." Daubert v. Merrill Dow Pharm., Inc., 509 U.S. 579, 597 (1993); see Kumho Tire Co. v. Carmichael, 526 U.S. 137, 149 (1999) (extending the principles of Daubert to all expert testimony). The Court has broad discretion in the exercise of this gatekeeping function. See Trimmer v. Commissioner, 148 T.C. 334, 351 (2017); Neonatology Assocs., P.A. v. Commissioner, 115 T.C. 43, 85 (2000), aff'd, 299 F.3d 221 (3d Cir. 2002).
In this Court, an expert report is "received in evidence as the direct testimony of the expert witness." Rule 143(g)(2). Generally, an expert report is not admissible if it is does not assist the Court in understanding the facts and contains improper conclusions as to issues of law. See Hospital Corp. of Am. v. Commissioner, 109 T.C. 21, 59 (1997); Laureys v. Commissioner, 92 T.C. 101, 129 (1989). To the extent that an otherwise-helpful and admissible expert report expresses an improper legal conclusion, we will disregard it. See Hospital Corp. of Am., 109 T.C. at 59; see also Kreit Mech. Assocs., Inc. v. Commissioner, 137 T.C. 123, 131-32 (2011) (allowing expert report with improper legal conclusion into evidence due to report's value in facilitating Court's understanding of factual issues).
In the Bremner motion, respondent seeks to exclude from evidence the report and testimony of petitioners' expert witness, James Douglas Bremner, M.D., on three separate grounds. First, respondent contends that, because Dr. Bremner's report was authored in March 2020 (almost three years after the settlement of petitioners' claims), it could not have served as a basis of settlement and thus lacks relevancy as to whether the settlement was paid in lieu of damages for physical injury or physical sickness within the meaning of section 104(a)(2). Second, respondent characterizes Dr. Bremner's report as improper advocacy, pointing in part to his conclusion that post-traumatic stress disorder is a physical sickness and the fact that he issued his preliminary report prior to interviewing petitioners. Third and finally, respondent argues that Dr. Bremner's report should be excluded under Daubert, because his conclusions are speculative, unreliable, and not based upon use of the scientific method. Petitioners oppose the Bremner motion on all three grounds.
We will take the Bremner motion under advisement and reserve our decision on the admissibility of Dr. Bremner's report and testimony until after trial, when we will have the benefit of a fuller record that may bear out or contradict respondent's objections. See, e.g., Snap-Drape, Inc. v. Commissioner, 105 T.C. 16, 19-20 (1995), aff'd, 98 F.3d 194 (5th Cir. 1996). Dr. Bremner's report and trial testimony may proceed as an offer of proof. Cf. Laureys, 92 T.C. at 125. After trial is completed, the parties will have the opportunity to address the admissibility of Dr. Bremner's report and testimony.
B. Post-Settlement Facts Motion
Respondent contends that any testimony offered by petitioners about facts and circumstances after April 4, 2017-the date the settlement agreement was executed-should be excluded because such testimony would lack relevancy as to whether the settlement was paid in lieu of damages for physical injury or physical sickness within the meaning of section 104(a)(2).
At this stage, we are not inclined to preclude petitioners from offering testimony at trial. Respondent is of course entitled to offer any objections to that testimony as it arises at trial, including for relevancy, and the Court will consider and rule upon them in due course.
Accordingly, it is
ORDERED that respondent's Motion in Limine to Exclude From Evidence the Report and Affidavit of James Douglas Bremner, M.D., filed August 3, 2023, is taken under advisement. Petitioners shall present the report and testimony of Dr. James Douglas Bremner, M.D. as an offer of proof. It is further
ORDERED that respondent's Motion in Limine to Exclude from Evidence Testimony from Petitioners About Facts and Circumstances After April 4, 2017, filed August 3, 2023, is denied without prejudice.