Court: District Court of Appeal of Florida; May 2, 1997; Florida; State Appellate Court
In this breach of contract case, the court addressed whether it abused its discretion by permitting opinion testimony on the value of an annuity. The trial court's decision to admit the testimony was affirmed. Wallace M. Cichon, after retiring from Sears Roebuck and Company, chose to invest a lump sum of $206,000 with Dean Witter, upon the recommendation of account executive Christopher Miller, who proposed a monthly payment of $2,029 for life. Dean Witter purchased two annuities: a five-year fixed annuity from Northbrook Insurance Company and a deferred variable annuity from Nationwide Insurance Company. Dean Witter earned $7,000 in commissions from this transaction. The Northbrook annuity paid as expected until November 1994, but Mr. Cichon later discovered that the Nationwide annuity would not provide the anticipated payment, prompting him to sue Dean Witter for breach of contract following non-compliance with his demand for resolution. He was awarded $115,000 plus prejudgment interest after a jury trial.
During the trial, Mr. Cichon introduced expert testimony from Rex Catón, vice president of Catón Insurance Agency and a chartered life underwriter, to establish the value of the annuity. While Catón lacked actuarial credentials and relied on insurance companies for market pricing, the trial court allowed his testimony despite objections from Dean Witter. The appellate court ruled that the trial court did not abuse its discretion, emphasizing that qualification for expert opinion is primarily determined by the trial court and should not be overturned absent clear error.
Florida's legal standard for expert testimony, outlined in section 90.702 of the Florida Statutes, allows a qualified witness to provide opinion testimony if their specialized knowledge aids the jury in understanding evidence or determining factual issues. In the case at hand, the trial court deemed Mr. Catón qualified to opine on annuity valuation due to his specialized knowledge, experience, and training, which would assist the jury in assessing damages. Dean Witter's objections to Mr. Catón's qualifications were more relevant to the weight of his testimony rather than its admissibility. Furthermore, Dean Witter argued that Mr. Catón's reliance on hearsay quotes from insurance companies rendered his testimony inadmissible. However, section 90.704 permits experts to base their opinions on facts that are inadmissible in evidence, provided these facts are reasonably relied upon by professionals in the field. Mr. Catón's methodology included gathering pertinent information from potential investors and consulting multiple insurance companies for quotes, while considering factors such as age, desired payout, tax implications, and interest rates over time. His analysis mirrored the standard practices of Dean Witter in pricing annuities. Consequently, the trial court affirmed that Mr. Catón's reliance on insurance company information did not invalidate his opinion. The decision was affirmed, with Judge Dauksh concurring and Judge Griffin dissenting without opinion.
