Fabrics Expert Allowed to Testify About the Value of Clothing Fabric
Posted on September 12, 2025 by Expert Witness Profiler
This action arises from Michael’s Fabric’s LLC’s claim for loss of its inventory of high-end fabrics caused by water damage that was submitted under its insurance policy with Defendant Donegal Mutual Insurance Company. Ultimately, Plaintiff contended “Defendant has intentionally, maliciously and wrongfully denied the claim by Michael’s for replacement value of the inventory.”
Defendant filed two motions to exclude Plaintiff’s expert witnesses: David Chadick and William W. Funderburke.
Fabrics Expert Witness
David Chadick has been in the fabric business for almost his entire life, working for Rosen & Chadick, his father’s company, from 1983 through 2019, and his own company, David Chadick Fabrics and the Chadick Collection, from 2020 through the present. For nearly 30 years, he was the primary purchaser of all fabrics for Rosen & Chadick.
He has also provided fabric for myriad purchasers, including Broadway productions, Ralph Lauren stores and fashion shows, as well as a number of stores and hotels throughout New York City. Chadick also earned his degree in fashion merchandising in 1983 and is a member of a number of professional organizations concerning fabrics.
Accounting Expert Witness
William W. Funderburke, CPA, CFE measures business interruption losses, inventory losses, manufacturing/ production losses, gross margin erosion, increased operational expenses, inefficiencies and theft losses for Rollins Accounting and Inventory Services, Inc., a forensic accounting firm that is well-known and highly regarded throughout the loss consulting community.
Discussion by the Court
David Chadick
Defendant’s argument focuses primarily on the following facts: “Chadick never looked at the damaged fabrics to determine the age, condition, thread counts, labels, roll marks, or manufacturer marks. Chadick stated that he never reviewed [Plaintiff’s owner’s] retail prices listed by Michael’s Fabrics for its inventory of fabrics at the time of the water loss. He never reviewed any data from any of the fabric manufacturers to see what they charged for the fabrics. According to Chadick, he didn’t need to do any of the research normally done to determine the value or replacement costs of clothing fabrics, because he just knew the value of each.”
Defendant challenged the reliability of Chadick’s methodology and resulting opinion. However, Chadick valued the damaged fabrics after reviewing the list of fabrics provided by Plaintiff, which “contained a detailed description of the fabric, including the type of fabric, the country of origin, the designer of the fabric, and the yardage of the fabric.” Upon consideration of those factors, he priced the wholesale cost of the fabric based on his education and professional experience in valuing and purchasing fabrics.
Analysis
Plaintiff’s retail prices for the fabric inventory are not data that bear heavily on Chadick’s determination of value; indeed, retail pricing does not appear incredibly relevant, in the common meaning of the word, to the determination of the wholesale or replacement cost of the damaged inventory. And while the Court can imagine some potential benefit of physically examining the damaged fabrics, the Court is not persuaded that failure to look at or examine the damaged fabric undermines Chadick’s opinion, including his methodology and other foundational tenets.
There would, after all, appear to be scant value in reviewing thousands of
yards of damaged fabric to opine on the value of that fabric in an undamaged state. As Chadick testified, “there was no need for me to see the rolls of fabrics because I know what every fabric is on the description with my knowledge of doing this for 41 years.”
William Funderburke
Unlike Defendant’s Chadick Motion, the Funderburke Motion did not seek exclusion under Federal Rule of Evidence 702, but instead for non-compliance with Local Rule 103.3 due to Funderburke and his employer’s purported financial interest in the outcome of the claim.
The nature of the relationship is as follows: On January 23, 2023, shortly after the loss at issue in this action, Plaintiff entered into a Public Adjuster Contract with Goodman-Gable-Gould (“GGG”), in which it agreed to pay GGG 10% “of the gross amounts adjusted or otherwise recovered as a result of the losses and/or damages sustained.”
GGG is owned by Molecular Holdings. Funderburke is employed by Rollins
Accounting and Inventory Services. Rollins is also owned by Molecular Holdings.
Basically, Defendant contended that common ownership of GGG and Rollins meant that “Funderburke and his employer have a financial interest in the outcome of the claim” that ought to have been disclosed in Plaintiff’s Local Rule 103.3 disclosure statement.
Local Rule 103.3 requirement serves administrative purposes, including aiding the Court in consideration of its jurisdiction. Defendant offered no legal support for the draconian result it seeks; and the Court found no legal support for Defendant’s contention that purported non-compliance with Local Rule 103.3 serves as a basis for disqualifying an expert witness. Moreover, assuming without finding that Plaintiff has not complied with the rule by its non-disclosure of Funderburke, the error and impact is de minimis in nature, and the Court disagreed that such non-compliance calls for exclusion of Funderburke’s testimony.
Held
The Court denied the Defendant’s motions to exclude the opinions of expert witnesses David Chadick and William W. Funderburke.
Key Takeaway:
To sum up, Chadick reached his opinion on value after considering detailed descriptions of the fabrics at issue against the backdrop of his deep knowledge acquired over four decades in the relevant industry.
The Court is satisfied that Chadick’s proffered opinion, grounded in his education and professional experience, is based on and subject to the “the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.”
Case Details:
| Case Caption: | Michael’s Fabrics, LLC V. Donegal Mutual Insurance Company |
| Docket Number: | 1:24cv1585 |
| Court Name: | United States District Court, Maryland |
| Order Date: | September 11, 2025 |
