Rejection of Computer Software Expert Witness’ Interpretation Attempt on Contract

This is a breach of contract dispute between Paired Pay and ClearObject. Paired Pay alleged that ClearObject breached the parties’ contract because ClearObject purportedly did not provide a “dedicated” team during a particular phase of the project.

Defendant filed a motion to exclude the report and testimony of Larry E. Daniel, one of Plaintiff’s testifying expert witnesses under Federal Rule of Evidence 702.

Daniel’s expert report stated that Plaintiff’s counsel asked him to “review documents to determine the meaning of ‘dedicated’ as it applies to the software development process in general and the Paired Pay and ClearObject agreements and to explain the significance of a dedicated team as applied to the contract that is the subject of this litigation.”

Computer Software Expert Witness

Lawrence E. “Larry” Daniel has over 40 years of experience in software development, data recovery, computer and server diagnosis and repair, and network administration and cybersecurity. Larry has over 20 years of experience in digital forensics and has amassed thousands of hours of experience in these areas.

Discussion by the Court

Computer Software Expert Witness Daniel appeared to have consulted four software companies’ websites and performed research on the definition of a ‘dedicated’ development team based on companies offering such. 

As a matter of fact, ClearObject provided a clear definition of the word dedicated:

“Dedicated—Full time, only working on Black Inc. workload. This improves efficiency (eliminated downtime due to context shifting), and also allows for development of a deeper domain knowledge.”

When Daniel concluded that Defendant did not provide Plaintiff a “dedicated” software development team, it was based solely on an email between the parties.

Under federal law, experts cannot testify as to conclusions of law, and, as stated by the Court, an interpretation of a contract is a conclusion of law. In Marx & Co. v. Diners’ Club Inc., 550 F.2d 505, 508-09 (2d Cir. 1977), the Court held that expert witnesses cannot provide opinions as to the legal obligations of the parties under a contract.

Moreover, the Court found that Daniel blatantly attempted to interpret the contract at issue instead of attempting to testify regarding the “custom and usage of an industry.” As a result, Daniel’s conclusion was based entirely on his interpretation of evidence from this very case.

Held

The Court granted Defendant’s motion to exclude the report and testimony of Computer Software Expert Witness Larry E. Daniel.

In conclusion, the Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.

Key Takeaways:

1. Legal Limitations: Under federal law, expert witnesses cannot testify to conclusions of law. For instance, the Court cited Marx & Co. v. Diners’ Club Inc., emphasizing that expert opinions on contractual obligations are not permissible.
2. Interpretation vs. Industry Custom: Daniel’s attempt to interpret the contract directly conflicted with the permissible scope of expert testimony, which should focus on the custom and usage of an industry rather than legal interpretations.
3. Conclusion Basis: Daniel’s conclusion was solely based on his interpretation of evidence from the specific case, instead of broader industry practices or standards.

Case Details:

Case Caption:	Paired Pay Inc V. Clearobject Inc
Docket Number:	2:22cv1013
Court:	United States District Court, South Carolina
Citation:	2024 U.S. Dist. LEXIS 46361
Order Date:	February 1, 2024