Arch & Eng, LLC v. Gator Flower Mound, LLC, et al

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
ARCH & ENG, LLC d/b/a Z GRILL
AND TAP,
Plaintiff,
v.
GATOR FLOWER MOUND, LLC
a/k/a FLORIDA GATOR FLOWER
MOUND, LLC,
Defendant.
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Civil Action No. 4:24-cv-1068
Judge Mazzant
MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendant Gator Flower Mound, LLC’s Motion to Exclude
the Testimony of Alan Someck (the “Motion”) (Dkt. #38). Having considered the Motion and the
relevant pleadings, the Court finds that the Motion should be GRANTED in part and
DENIED in part.
BACKGROUND
The factual background of this case has been thoroughly examined in this Court’s prior
ruling and needs no repeating here (Dkt. #74 at pp. 1–3). Pertinent to the pending Motion is
Plaintiff’s retention of one Alan Someck (“Someck”), an individual with significant managerial
experience in the restaurant industry, to opine on the amount and type of damages that Plaintiff
incurred due to Defendant’s failure to maintain the property it leased to Plaintiff (See Dkt. #38-5 at
p. 6). In his expert report, Someck posits that the presence of bad odors in and around Defendant’s
leased property contributed significantly to Plaintiff’s purported loss of profits and investment
capital (Dkt. #38-5 at p. 6).
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Defendant contends that Someck should not be permitted to offer testimony on either type
of damage, as both are inadmissible under the facts of this case and have also been calculated
incorrectly (Dkt. #38). Plaintiff responds that Someck is a qualified expert offering his opinion on
two permissible types of damages and that he has not erred in his most recent damage calculations
(Dkt. #43).
On May 28, 2025, Defendant moved to strike and exclude Someck’s opinions as to
Plaintiff’s damages under Federal Rule of Evidence 702 (Dkt. #38 at p. 4). On June 11, 2025,
Defendant filed its Response (Dkt. #43). On June 17, 2025, Defendant filed its Reply (Dkt. #44).
LEGAL STANDARD
Federal Rule of Evidence 702 provides for the admission of expert testimony that assists
the trier of fact to understand the evidence or to determine a fact in issue. FED. R. EVID. 702. In
Daubert v. Merrell Dow Pharms., Inc., the Supreme Court instructed courts to function as
gatekeepers, and determine whether expert testimony should be presented to the jury. 509 U.S.
579, 590–93 (1993). Courts act as gatekeepers of expert testimony “to make certain that an expert,
whether basing testimony upon professional studies or personal experience, employs in the
courtroom the same level of intellectual rigor that characterizes the practice of an expert in the
relevant field.” Kuhmo Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999).
The party offering the expert’s testimony has the burden to prove that: (1) the expert is
qualified; (2) the testimony is relevant to an issue in the case; and (3) the testimony is reliable.
Daubert, 509 U.S. at 590–91. A proffered expert witness is qualified to testify by virtue of his or her
“knowledge, skill, experience, training, or education.” FED. R. EVID. 702. Moreover, to be
admissible, expert testimony must be “not only relevant but reliable.” Daubert, 509 U.S. at 589.
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“This gate-keeping obligation applies to all types of expert testimony, not just scientific testimony.”
Pipitone v. Biomatrix, Inc., 288 F.3d 239, 244 (5th Cir. 2002) (citing Kuhmo, 526 U.S. at 147).
In deciding whether to admit or exclude expert testimony, the Court should consider
numerous factors. Daubert, 509 U.S. at 594. In Daubert, the Supreme Court offered the following
non-exhaustive list of factors that courts may use when evaluating the reliability of expert
testimony: (1) whether the expert’s theory or technique can be or has been tested; (2) whether the
theory or technique has been subjected to peer review and publication; (3) the known or potential
rate of error of the challenged method; and (4) whether the theory or technique is generally
accepted in the relevant scientific community. Id. at 593–94; Pipitone, 288 F.3d at 244. When
evaluating Daubert challenges, courts focus “on [the experts’] principles and methodology, not on
the conclusions that [the experts] generate.” 509 U.S. at 595.
The Daubert factors are not “a definitive checklist or test.” Id. at 593. As the Supreme
Court has emphasized, the Daubert framework is “a flexible one.” Id. at 594. The test for
determining reliability can adapt to the particular circumstances underlying the testimony at issue.
Kuhmo, 526 U.S. at 152. Accordingly, the decision to allow or exclude experts from testifying under
Daubert is committed to the sound discretion of the district court. St. Martin v. Mobil Expl. &
Producing U.S., Inc., 224 F.3d 402, 405 (5th Cir. 2000) (citations omitted).
ANALYSIS
A traditional analysis regarding the admissibility of expert testimony involves a district
court’s consideration of the multiple nonexhaustive Daubert factors, which naturally precedes its
ultimate declaration on the matter. See Watkins v. Telsmith, Inc., 121 F.3d 984, 988–89 (5th Cir.
1997). But, as noted above, this is far from the exclusive means of addressing an expert witness
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challenge. “[W]hether Daubert’s suggested indicia of reliability apply to any given testimony
depends on the nature of the issue at hand, the witness’s particular expertise, and the subject of
the testimony.” Seatrax, Inc. v. Sonbeck Int’l, Inc., 200 F.3d 358, 372 (5th Cir. 2000) (citing Kuhmo,
526 U.S. at 147–53). In this case, Defendant makes specific challenges to limited portions of
Someck’s opinion, rendering a full Daubert analysis unnecessary. See, e.g., Nunn v. State Farm Mut.
Auto. Ins. Co., No. 3:08-CV-1486-D, 2010 WL 2540754, at *4 (N.D. Tex. June 22, 2010) (“Because
neither party has briefed the Daubert factors individually with respect to Callicoatt’s opinions, the
court evaluates Callicoatt’s methodology based on Nunn’s responses to State Farm’s specific
arguments and on his proof that the testimony complies with the general Daubert standards.”).
Thus, the Court will determine if Plaintiff’s expert witness testimony is admissible in light of
Daubert by addressing each argument sequentially. See Perez Librado v. M.S. Carriers, Inc., No.
CIV.A.3:02-CV-2095-D, 2004 WL 1490304, at *8 (N.D. Tex. June 30, 2004).
I. Lost Profits
Defendant raises two arguments against Someck’s interpretation of Plaintiff’s proposed
lost profits damages. First, Defendant avers that the leasing agreement between the parties (the
“Contract”) prohibits recovery of consequential lost profits, rendering Someck’s opinion on the
subject irrelevant (Dkt. #38 at p. 6). Second, Defendant claims that Someck fails to deduct actual
profits from claimed lost profits, rendering his opinion unreliable (Dkt. #38 at p. 9).
Defendant’s first argument is unpersuasive here for the same reason it was unpersuasive at
the summary judgment stage. The Court previously held that Plaintiff may potentially recover its
lost profits under the Contract if it proves those profits are a “direct,” as opposed to a
“consequential,” result of Defendant’s wrongful acts (Dkt. #74 at pp. 19–20). The Court also held
that Plaintiff may potentially recover its lost profits under certain tort causes of action (Dkt. #74 at
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p. 20). Thus, Someck’s opinion is not irrelevant on these grounds. On the contrary, Someck’s
opinion will likely be crucial in helping Plaintiff carry its burden at trial. See Harper v. Wellbeing
Genomics Pty Ltd., No. 03-17-00035-CV, 2018 WL 6318876, at *10 (Tex. App.—Austin Dec. 4,
2018, pet. denied) (noting that whether lost profits are direct or consequential relates “to the nature
of the breaches that were alleged and proved at trial—i.e., did the damages flow ‘necessarily’ from
the breach, or only ‘naturally’”).
Defendant’s second argument is unpersuasive, as its claim that “Someck fails to deduct
actual profits from claimed lost profits” (Dkt. #38 at p. 9) is directly countered by the fact that
Someck has since revised and reduced the applicable projected profits by $150,730.00 “based on
the correct assumption . . . that actual profits needed to be subtracted from projected profits to get
the corrected lost profits” (Dkt. #43-1 at p. 5). Because Someck has fixed the alleged “foundational
flaw” in his methodology, the Court finds that Someck’s testimony on Plaintiff’s recovery for lost
profits is not unreliable under FED. R. CIV. P. 702 (Dkt. #38 at p. 9).
II. Lost Investments
The matter of Plaintiff’s “lost investments” has also been addressed by the Court’s prior.
There, the Court held that Plaintiff’s pleadings allow it to seek recovery for tort damages under its
“lost investments” theory (Dkt. #74 at p. 22). This decision was based in part upon the Texas
Supreme Court’s repeated recognition that obligations and duties separately imposed by contract
and by tort may co-exist. See Formosa Plastics Corp. USA v. Presidio Eng’rs. & Contractors, Inc., 960
S.W.2d 41, 44 (Tex. 1998); Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex. 1986); see, e.g.,
MCN Energy Enters., Inc. v. Omagro de Colombia, L.D.C., 98 S.W.3d 766, 772 (Tex. App.—Fort
Worth 2003, pet. denied) (holding that a plaintiff could recover under a negligent
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misrepresentation theory separate and apart from a contract because a defendant “had a duty not
to negligently misrepresent that it was committed to a business deal when it was not”).
Defendant argues that Someck’s proposed testimony on Plaintiff’s “lost investments”
should be excluded because of its irrelevance and unreliability (Dkt. #38 at p. 9). The Court agrees,
and finds that the insufficiency of the proposed opinion warrants its exclusion from trial.
First, Someck’s opinion is irrelevant. “Relevance depends upon ‘whether [the expert’s]
reasoning or methodology properly can be applied to the facts in issue.’” Knight v. Kirby Inland
Marine Inc., 482 F.3d 347, 352 (5th Cir. 2007) (quoting Daubert, 509 U.S. at 593). Defendant argues
that Someck has failed to connect any damage amount to any act or omission taken by Defendant
and has instead merely combined all of Plaintiff’s business expenses over the years and offered it
as proof of “lost investments.” Defendant posits that “the Court does not need help to add up
numbers on a page,” and that the testimony is therefore irrelevant and cannot assist the trier of fact
(Dkt. #24 at p. 10). The Court agrees, and finds that Someck’s opinion on “lost investments” is
impermissibly general under the facts of this case. In his expert report, Someck assumes “[t]hat it
is reasonably probable that there would not have been a significant lost [sic] of investment capital if
not for the conditions of the bad odor impacting sales and profit” (Dkt. #38-5). Even under this
assumption, however, Someck does not offer any reasoning or methodology to explain how his
definition of lost investments constitutes a compensable injury as opposed to an unrelated expense.
Nor does Someck offer insight as to the source of these expenses. For instance, he does not
identify which portions of the “lost investments” arose as a pecuniary loss from Defendant’s
alleged negligent misrepresentation as opposed to Defendant’s alleged fraudulent inducement.
Someck does not identify which portions of “lost investments,” if any, would have been spent
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separate and apart from Defendant’s actions or omissions. Someck’s bare assumption, combined
with a receipt of gross expenses, is not sufficiently relevant to render his opinion admissible at trial.
Second, Someck’s opinion is unreliable. Defendant has argued and provided sufficient
evidence that Plaintiff’s “lost investment” damages constitute an impermissible attempt to recover
for expenses borne by third parties. Plaintiff’s expert report makes intentional and repeated
reference to the “lost investment” damages borne by multiple illusory “plaintiffs” (Dkt. #38-5 at
pp. 6, 18–19). In reality, only one Plaintiff—a business entity—is currently before the Court. These
additional unnamed “plaintiffs” likely represent Plaintiff’s owners, whose “lost investments”
were marked in the report under a section entitled “Payments from Esmat Motlagh/Parviz &
Paiam Mashayekhi” (Dkt. #38-6). Plaintiff’s expert report ties “investment money lost over the
period of operations” to the contributions made by illusory third-party “plaintiffs” near its
conclusion, which describes its investment damages as “an influx of money from owners to manage
financial challenges . . . . [t]hese payments are loans to the business that get paid back from a
successful operation over time” (Dkt. #38-5 at p. 18). The expert report further references “Mr.
Marsh and his wife” investing a total of “$983,224 back into the restaurant to keep it afloat”
(Dkt. #38-5 at p. 9).
Someck’s testimony begs the question: who has suffered under his interpretation of “lost
investment” damages? Was it Plaintiff, or Plaintiff’s owners and operators? The answer to this
question is paramount, and controls whether Plaintiff has standing to seek what Someck defines as
“loss of investment” at all. This is because Plaintiff, as a corporate entity separate and apart from
its owners and operators, lacks standing to recover their damages for them. See Drury Sw., Inc. v.
Louie Ledeaux #1, Inc., 350 S.W.3d 287, 292 (Tex. App.—San Antonio 2011, pet. denied) (“Even
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assuming that sweat equity is a compensable damage, it would not be a damage that Ledeaux could
be compensated for because it was Ledeaux’s owners that made the time investment, not
Ledeaux.”). However, Plaintiff may recover for the lost investment of its own property, even when
it is sourced from third parties. See Wingate v. Hajdik, 795 S.W.2d 717, 719 (Tex. 1990) (“Ordinarily,
the cause of action for injury to the property of a corporation, or the impairment or destruction of
its business, is vested in the corporation, as distinguished from its stockholders, even though it may
result indirectly in loss of earnings to the stockholders.” (quoting Massachusetts v. Davis, 168 S.W.2d
216, 221 (1942), cert. denied, 320 U.S. 210 (1943))); see also Sun Towers, Inc. v. Heckler, 725 F.2d 315,
331 (5th Cir. 1984) (“It is an elementary principle of corporate law that a corporation and its
stockholders are separate entities and that the title to corporate property is vested in the
corporation and not in the owners of the corporate stock.”). This legal reality is reinforced by the
principle that “an individual shareholder, even a sole shareholder . . . has no standing to recover
personally for damages incurred by the corporation.” Singh v. Duane Morris, L.L.P., 338 S.W.3d
176, 181 (Tex. App.—Houston 2011, pet. filed).
Someck’s testimony simply does not permit the Court to accurately distinguish between
injuries incurred by Plaintiff and the injuries incurred by illusory “plaintiffs.” Neither Someck nor
Plaintiff have clarified their interpretation of “lost investment” damages on this issue. As a result,
the Court finds that Someck’s opinion is unreliable under FED. R. EVID. 702.
Under the evidence presented, Someck cannot offer a relevant or reliable opinion on “lost
investment” damages. As a result, Someck’s expert opinion testimony as to Plaintiff’s lost
investments is rightfully excluded.
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CONCLUSION
It is therefore ORDERED that Defendant Gator Flower Mound, LLC’s Motion to
Exclude the Testimony of Alan Someck (Dkt. #38) is hereby GRANTED in part and DENIED
in part.
Accordingly, Alan Someck will be permitted to provide an expert opinion on the matter of
lost profits at trial, but will be prohibited from providing an expert opinion on the matter of lost
investments at the same.
IT IS SO ORDERED.
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