Bankr. M.D.N.C.: In re Randolph Hospital I & II- Motion for Summary Judgment and Expert Witnesses in a Bench Trial

Summary (MSJ):

The Liquidating Trustee   sought judgment on his claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and unfair or deceptive acts  or practices against   Moses H. Cone Memorial Hospital Operating Corporation ("Cone Health),  with both parties seeking summary judgment.  

Ranging over 76 pages,  the bankruptcy court opinion regarding the numerous causes of action variously granted or denied the parties' Motions for Summary Judgment,  with specific order also attached.

Summary  (Expert Witness):

The bankruptcy court excluded portions of an expert witness's testimony  to the extent that it involved conclusions as  to a parties' legal responsibilities  or its alleged breaches of the agreement,  but otherwise overruled in all other respects.  Fed. R. Evid. 702 (2023),  specifically 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 or otherwise if the proponent demonstrates to the court that it is more likely than not that: 

(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and 

(d) the expert’s opinion reflects a reliable application of the principles and methods to the facts of the case. .   

The application of Rule 702 here was "relaxed"  as  this case was to be decided by the bankruptcy judge,  rather than by a jury,  so "there is less need for the gatekeeper to keep the gate when the gatekeeper is keeping the gate only for himself."  . See, e.g., United States v. Wood, 741 F.3d 417, 425 (4th Cir. 2013) (quoting United States v. Brown, 415 F.3d 1257, 1269 (11th Cir. 2005)).

Commentary:

While reading 94 pages about the contractual fights in a hospital bankruptcy is not immediately pertinent for most consumers attorneys,  the second of these opinions does  examine in detail  the allowance of expert witnesses in bankruptcy cases,  with it appearing that broad discretion, almost up to the point an expert providing legal opinions, should be given in bench trials, whether  medical systems experts or, as an example more likely in a consumer context,  for forensic mortgage accountants.

Additionally useful is the discussion of the waivers of breaches of contract,  which the bankruptcy court held requires:

1. The waiving party is the innocent, or nonbreaching party; 
2. The breach does not involve total repudiation of the contract so that the nonbreaching party continues to receive some of the bargained-for consideration;  
3. The innocent party is aware of the breach;
4. The innocent party intentionally waives his right to excuse or repudiate his own performance by continuing to perform or accept the partial performance of the breaching party. See Wheeler v. Wheeler, 263 S.E.2d 763, 766-767 (N.C. 1980). 

In consumer cases,  the question of waiver  touches on,  for example,  whether a reaffirmation is required. A waiver  of a breach of contract,  including perhaps the acceptance of payments after receiving notice of a breach of contract due to the filing of bankruptcy,  could remove any event of default and make any reaffirmation an impermissible and unnecessary "undue hardship".