October 20, 2008
IVELISSE HERNANDEZ, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT, AND KAREN STEFANELLI AND JENNIFER KIELTY, PLAINTIFFS-RESPONDENTS,
ORANGE MOUNTAIN MEDICAL PRIMARY CARE, WILLIAM BURKE, M.D., AND LAUREEN BURKE, INDIVIDUALLY, DEFENDANTS-APPELLANTS, AND DENIS SCHISANO, M.D., INDIVIDUALLY, DEFENDANT, AND ORANGE MOUNTAIN MEDICAL PRIMARY CARE AND WILLIAM BURKE, M.D., INDIVIDUALLY, DEFENDANTS/THIRD-PARTY PLAINTIFFS-APPELLANTS/ CROSS-RESPONDENTS,
MCDONOUGH & STELLATO, INC., AND MONDI & STELLATO, INC., THIRD-PARTY DEFENDANTS-RESPONDENTS.
On appeal from Superior Court of New Jersey, Law Division, Essex County, No. L-9234-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 9, 2008
Before Judges Wefing, Yannotti and LeWinn.
Plaintiffs Ivelisse Hernandez, Karen Stefanelli and Jennifer Kielty sued their employer, William Burke, M.D., and his professional corporation, Orange Mountain Medical Primary Care ("Orange Mountain"), for violating New Jersey's Conscientious Employee Protection Act ("CEPA"), N.J.S.A. 34:19-1 to -8.*fn1 Plaintiff Hernandez was the office manager for Orange Mountain, Stefanelli a billing medical coder and Kielty a billing clerk. Defendant asserted that plaintiffs were fired for their poor performance on the job and claimed that their negligence in billing led to a loss in revenue of more than one million dollars. Defendant also filed a third-party complaint against his insurance brokers, McDonough & Stellato, Inc. and Mondi & Stellato, Inc., for not recommending and securing employment practices liability insurance. That third-party complaint was ultimately dismissed for discovery violations.
The matter was tried to a jury. During the course of the trial, the court ruled that the testimony of defendant's expert on billing practices was inadmissible as a net opinion. The only questions submitted to the jury dealt with plaintiffs' CEPA claim. The jury found in favor of plaintiff Hernandez and awarded her back pay of $60,000 but did not award any damages for pain, suffering or emotional distress. The jury also returned a verdict of no cause with respect to plaintiffs Stefanelli and Kielty.
Defendant appealed from the judgment entered in favor of Hernandez and also argued that the trial court erred in precluding the testimony of his expert witness, in not restoring his third-party complaint and in the award of counsel fees. Hernandez cross-appealed, contending that the trial court erred when it ruled that her award for back pay had to be reduced by the amount of unemployment compensation benefits she had received following her termination. During the pendency of this appeal, the parties settled most of the issues they had presented, leaving only for our consideration the viability of defendant's claim for damages for improper billing practices. As to this question, we have carefully reviewed the record in this matter. We are satisfied that the trial court's rulings were correct, and we thus affirm.
Defendant presented April Leaver as an expert witness. Ms. Leaver was a certified professional coder and had seventeen years of experience in medical billing. At the time of trial, she was the billing manager for another medical practice. Following a Rule 104 hearing, the trial court ruled that she could testify about problems she observed in the billing procedures employed by plaintiffs, which would go to the propriety of their termination, but could not express an opinion on damages.
In the course of that Rule 104 hearing, Ms. Leaver explained to the court how she had calculated defendant's damages. She calculated "collection ratios" for the practice for the years 1999 through 2002 by dividing the payments received by the charges billed and showed a steadily declining collection ratio, from 58% to 45%. She also attempted to calculate the loss of revenue from 2000 to 2002; she admitted that her calculations contained several significant mathematical errors. Finally, she estimated that there had been more than $1,200,000 in unbilled charges. She was unable to explain how she arrived at this determination. She said she went "back through logs and rebill[ed] everything that we could find to rebill for that time period." She admitted the figure was her "best estimation" because "there was no system in place to retrieve everything that was not billed." She said there was "no way to quantify what was missing," because the data was never entered into the computer in the first place. In the course of her calculations, she made various unexplained assumptions, such as a ten percent allowance for assumed error.
Further, Ms. Leaver made no attempt in her testimony to correlate her damage calculations with plaintiffs' employment. Plaintiff Hernandez had no direct responsibility for billing, plaintiff Stefanelli was not hired until March 2002, and plaintiff Kielty worked from May 2000 until she resigned in December 2001, only to return in April 2002.
The trial court then made the following ruling:
I'm--I'm not satisfied, based on what I've heard, that there's a reasonable basis for the opinions regarding the amount of damages here. I mean we have-- there's so much speculation involved here that to allow the jury to be given a 1.6 or even adjusted to whatever it should be, 1.4 or whatever million dollars-- I mean we're talking about accounts receivable that goes back to '98, four years old. Whose responsibility it was back in '98. We've got periods of time when none of these parties were ever even in the office. We have-- I mean it appears to be, you know, just rough estimates, 10 percent collected, 10 percent errors, you know, what-- what was the amount.
[T]here's no basis the jury can look at these numbers and come up with a damage issue as to these plaintiffs. We're using these unbilled loss charges, they're just pulled out of a hat using numbers from the last couple of years. I-- I-- I think that's just not a sufficient basis to come up with a damage issue on a counterclaim. I think there's too much speculation, allows too much speculation for the jury. There's just not a sufficient basis to come up with a counterclaim.
The decision whether to admit or exclude expert testimony is left to the sound discretion of the trial court. State v. Berry, 140 N.J. 280, 293 (1995); State v. Moore, 122 N.J. 420, 459 (1991). A qualified expert should be allowed to give opinion testimony if the expert's "scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue . . . ." N.J.R.E. 702.
Expert testimony should be excluded where it consists of "bare conclusions, unsupported by factual evidence." Buckelew v. Grossbard, 87 N.J. 512, 524 (1981). "[A]n opinion is no stronger than the facts which support it . . . ." Parker v. Goldstein, 78 N.J. Super. 472, 484 (App. Div. 1963). Thus,
[i]n addition to determining whether a witness is qualified to testify as an expert, the trial court must also decide the closely related issue as to whether the expert's opinion is based on facts and data. Biunno, Current N.J. Rules of Evidence, comment 2 on N.J.R.E. 702 (2002). As construed by applicable case law, N.J.R.E. 703 requires that an expert's opinion be based on facts, data, or another expert's opinion, either perceived by or made known to the expert, at or before trial. Buckelew v. Grossbard, 87 N.J. 512, 524 (1981); Nguyen v. Tama, 298 N.J. Super. 41, 48-49 (App. Div. 1997). Under the "net opinion" rule, an opinion lacking in such foundation and consisting of bare conclusions unsupported by factual evidence is inadmissible. Johnson v. Salem Corp., 97 N.J. 78, 91 (1984); Buckelew, supra, 87 N.J. at 524. The rule requires an expert "to give the why and wherefore" of his or her opinion, rather than a mere conclusion. Jiminez v. GNOC, Corp., 286 N.J. Super. 533, 540 (App. Div.), certif. denied, 145 N.J. 374 (1996).
[Rosenberg v. Tavorath, 352 N.J. Super. 385, 401 (App. Div. 2002).] Here, the facts underlying Leaver's determination of damages are missing from the record. Most obviously, there is no documentation in the record supporting the numbers Leaver used in the spreadsheet, and there is simply no way to gauge the accuracy of her reports. Leaver testified that the reported $1.2 million in unbilled charges "is [her] best estimation based on the historical data." She did not explain what data she looked to, or how the data informed her estimate.
We are satisfied the trial court was entirely correct in precluding Ms. Lever from expressing any opinion to the jury on the question of damages.
The judgment under review is affirmed.