442 P.3d 1237
Utah Ct. App.2019Background
- Darnell and Greg Ghidotti bought a property believing it was not subject to an HOA and planned to operate a dog training/boarding business there. Sellers and listing omitted HOA/CC&R information.
- After closing, neighbors and the HOA objected to the Ghidottis’ conditional use permit; research showed the property was subject to CC&Rs that barred keeping dogs and operating the planned business.
- The Ghidottis sued the Sellers, Re/Max, and agents for nondisclosure; claims against Sellers and the agent/broker were resolved before appeal, leaving Re/Max.
- In initial disclosures the Ghidottis listed Darnell as a fact witness and stated they had not yet computed damages; later supplemental disclosures included a 20-year lost-profit figure (~$2.78 million) but no retained or designated expert.
- Re/Max moved for summary judgment arguing the Ghidottis could not prove lost profits with required certainty; district court granted summary judgment, finding (1) lost-profit proof for a new business required expert proof or other acceptable evidence, and (2) Darnell was not properly disclosed as a non-retained expert under Utah R. Civ. P. 26(a)(4)(E).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Darnell was properly disclosed as a non-retained expert under Utah R. Civ. P. 26(a)(4)(E) | Listing Darnell as a fact witness, her deposition on damages, and supplemental financial documents gave defendants ample notice she would give expert-type testimony | Ghidottis failed to provide the written summary required for non-retained experts; disclosure as a fact witness is insufficient | Court held she was not properly disclosed as a non-retained expert; implicit disclosure insufficient |
| Whether the Ghidottis proved lost profits with requisite certainty for a new business | The damages statement and exhibits provided a reasonable lost-profits estimate over 20 years | Without expert testimony or other acceptable proofs, lost-profit damages for a new business are speculative | Court held Ghidottis failed to prove lost profits with required certainty; summary judgment proper |
| Whether failure to disclose was harmless or excusable | Late identification could be addressed; deposition and documents supplied substance | Defense relied on plaintiffs’ representation of no experts and made discovery decisions accordingly; late disclosure would prejudice defendants | Court held failure was not harmless and plaintiffs did not show good cause; exclusion appropriate |
| Proper application of disclosure rules (liberal construction vs. strict enforcement) | Rules should be liberally construed to avoid harsh exclusion where opponent had notice | Disclosure rules require identification plus summary of opinions to avoid unfair surprise; strict enforcement furthers fair discovery | Court applied rule strictly: minimal compliance required and enforcement consistent with Rule 1 objectives |
Key Cases Cited
- Atkin, Wright & Miles v. Mountain States Tel. & Tel. Co., 709 P.2d 330 (Utah 1985) (plaintiff must prove fact and amount of damages; lost profits require reasonable certainty)
- Kilpatrick v. Wiley, Rein & Fielding, 37 P.3d 1130 (Utah 2001) (new businesses may recover lost profits but must prove with reasonable certainty; alternative proof methods available)
- Cook Assocs., Inc. v. Warnick, 664 P.2d 1161 (Utah 1983) (alternative means to prove lost profits: expert testimony, profits of similar businesses, subsequent earnings)
- Solis v. Burningham Enters. Inc., 342 P.3d 812 (Utah Ct. App. 2015) (designating a witness as a fact witness does not suffice to present expert opinion at trial)
- RJW Media Inc. v. Heath, 392 P.3d 956 (Utah Ct. App. 2017) (expert designation must accompany disclosure of expected opinion testimony to fairly inform opponent)
- Townhomes at Pointe Meadows Owners Ass’n v. Pointe Meadows Townhomes, LLC, 329 P.3d 815 (Utah Ct. App. 2014) (failure to disclose expert not harmless where substantial additional discovery would be required)