MEMORANDUM

JOHN R. PADOVA, District Judge.

Presently before the Court is a Motion by Plaintiffs to exclude the Report of Defendant Saxon Mortgage Services, Inc.'s expert witness Marsha J. Courchane, Ph.D. (the "Courchane Report"1). Plaintiffs argue that certain of Dr. Courchane's opinions, offered in rebuttal to the Report provided by Plaintiffs' expert Dr. Ian Ayers in support of Plaintiffs' Motion for Class Certification ("the Ayers Report"2), must be excluded because she has improperly offered a legal opinion on the interpretation of the Temporary Payment Plan ("TPP") contracts under the federal Home Affordable Mortgage Program ("HAMP") that form the basis of Plaintiffs' claims, the parties obligations under those contracts, and whether the parties have breached their contracts while opining on class certification issues.3 For the reasons that follow, we grant the Motion in part.4

I. STANDARD OF REVIEW

The United States Court of Appeals for the Third Circuit has recently joined "certain of our sister courts to hold that a plaintiff cannot rely on challenged expert testimony, when critical to class certification, to demonstrate conformity with [Federal Rule of Civil Procedure] 23 unless the plaintiff also demonstrates, and the trial court finds, that the expert testimony satisfies the standard set out in Daubert [v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993)]." In re Blood Reagents Antitrust Litig., 783 F.3d 183, 187 (3d Cir. 2015). The Court held that expert testimony "that is insufficiently reliable to satisfy the Daubert standard cannot `prove' that the Rule 23(a) prerequisites have been met `in fact,' nor can it establish `through evidentiary proof' that Rule 23(b) is satisfied." Id.

The Daubert analysis governing the admissibility of expert testimony has been codified in Federal Rule of Evidence 702, which provides as follows:

Fed. R. Evid. 702. The proponent of the expert testimony has the burden of establishing its admissibility by a preponderance of the evidence. Padillas v. Stork-Gamco, Inc., 186 F.3d 412, 418 (3d Cir. 1999) (citing Daubert, 509 U.S. at 592 n.10 (1993)); see also Mahmood v. Narciso, 549 F. App'x 99, 102 (3d Cir. 2013) (citing In re TMI Litig., 193 F.3d 613, 663 (3d Cir. 1999)).

There are three requirements for the admissibility of expert testimony pursuant to Rule 702, "`qualification, reliability and fit.'"5 Calhoun v. Yamaha Motor Corp., U.S.A., 350 F.3d 316, 321 (3d Cir. 2003) (quoting Schneider v. Fried, 320 F.3d 396, 405 (3d Cir. 2003)). "Fit" means that "`the expert's testimony must be relevant for the purposes of the case and must assist the trier of fact.'" Id. (quoting Schneider, 320 F.3d at 405). It pertains "`primarily to relevance.'" Meadows v. Anchor Longwall & Rebuild, Inc., 306 F. App'x 781, 790 (3d Cir. 2009) (quoting Lauria v. Nat'l R.R. Passenger Corp., 145 F.3d 593, 599 (3d Cir. 1998)). "The expert's testimony must `fit' under the facts of the case so that `it will aid the jury in resolving a factual dispute.'" Id. (quoting Lauria, 145 F.3d at 599). This element "`requires a valid scientific connection to the pertinent inquiry as a precondition to admissibility.'" Id. (quoting Lauria, 145 F.3d at 600). "In other words, expert testimony based on assumptions lacking factual foundation in the record is properly excluded." Id. (citing Stecyk v. Bell Helicopter Textron, Inc., 295 F.3d 408, 414 (3d Cir. 2002)).

II. DISCUSSION

a. Background: the Court's prior legal rulings and Dr. Courchane's opinions.

In deciding Saxon's earlier motions to dismiss the Cave I and Cave II complaints, we determined that the Plaintiffs had plausibly alleged breach of contract claims based upon the allegation that Saxon's countersigning a borrowers' TPP (1) constituted a determination that the borrower qualified for a HAMP modification, and (2) created a binding obligation to make the modification subject to two conditions precedent. Construing the agreements, we held, inter alia:

We find that Dr. Courchane's opinions, offered to rebut the Ayers Report, fail to meet the Daubert standard in key regards because she incorporates a misinterpretation of the duties and obligations we have determined are contained in certain class members' TPPs. Unfortunately, because the definitions of the various classes proposed by Plaintiffs are not identical, any decision we make concerning whether Dr. Courchane's opinions "fit" with the proposed class definitions is complicated by the fact that neither Dr. Ayers nor Dr. Courchane differentiate between the various class definitions when offering their opinions. Our negative determination on the fit of Dr. Courchane's opinions regarding her discussion of actual eligibility for a permanent modification is limited to the Cave I classes and their corresponding identically defined Cave II classes. The Cave II Multistate Class, whose definition requires that its members were actually entitled to a permanent modification, must be differentiated.

In her response to the Ayers Report, Dr. Courchane endeavors to determine "whether a common data analysis method can be applied to the available electronic data to reliably identify members of the classes proposed by Plaintiffs." (Courchane Report ¶ 7.) She also provides a response to Dr. Ayers' proposed approach to ascertaining the class and calculating class-wide damages.11 (Id. ¶ 8.) In so doing, we find that Dr. Courchane contradicts our legal rulings in two interrelated respects. First, while we held that Saxon's countersigning the named Plaintiffs' TPP created a binding obligation (subject to two conditions precedent) to provide the permanent modification or issue a timely denial notice, Dr. Courchane disregards this ruling. Second, while the TPP itself provides for a "Modification Effective Date," by which Saxon was required to issue a denial or provide the permanent modification, Dr. Courchane relies upon parol evidence in concluding that the Modification Effective Date means something other than what it unambiguously states.

b. Dr. Courchane's treatment of the TPP's binding obligations.

In her rebuttal to Dr. Ayers' opinion that Class membership may be ascertained using the common evidence of Saxon's internal data and governmental submissions, Dr. Courchane opines that the Class is not ascertainable from this data because:

(Courchane Report ¶ 13.) She continues that the:

First, membership in all of the proposed classes is not based upon "a putative class member's submission of a signed TPP," but rather upon Saxon's countersigning the TPP, indicating that the borrower qualified for the program and would receive a modification so long as he or she satisfied the conditions precedent. We determined for the named Plaintiffs that a binding agreement was created when Saxon countersigned the TPP, subject only to those conditions precedent to Saxon's duty to perform. Cave II, 2013 WL 1915660, at *6 (stating that "a mortgage servicer is required to make a determination regarding a borrower's qualifications for a modification under HAMP regulations upon receipt of the signed TPP, and that the servicer's return of an executed TPP to the borrower is a communication that the borrower is, in fact, qualified"). With the exception of the Multistate Class, Dr. Courchane's focus on the borrower's subsequent duty to provide accurate information and prove their actual eligibility for a permanent modification ignores the class definitions proposed by Plaintiffs. The Cave I Denied Class and the Cave II Pennsylvania Class are not comprised of persons who were actually eligible for a HAMP modification; they are composed of persons who were put into a TPP but never received a permanent HAMP modification or a timely written notification of denial. Membership in the Credit Reporting Class and the Foreclosure Class also does not depend upon actual eligibility for a permanent modification. If a class member failed to provide accurate information, was ineligible for a permanent modification, or the information submitted was delayed, deficient or ambiguous, it was incumbent upon Saxon under the terms of the signed TPP to issue a notice of denial within the time period specified. Dr. Courchane's opinion treats the condition precedent that the borrower supply accurate information as a reason to find that they are not members of the class, when satisfying those conditions precedent are not part of the class definition. Furthermore, this interpretation of the TPP contradicts the exchange of enforceable promises that the contracts contain because it improperly shifts the responsibility from Saxon to the borrower for the consequences of Saxon's failure to communicate a timely decision on a permanent modification. This interpretation is clearly found in Dr. Courchane's opinion that "[e]valuations of putative class members by Saxon for permanent HAMP loan modifications were dependent upon actions by the borrowers subsequent to the initiation of their TPPs" (Courchane Report ¶ 46), and when she further opines that "[w]hen a borrower fails to supply to their loan servicer all of the required documentation, and to do so on a timely basis, delays are introduced into the evaluation process, and can result in a Modification Effective Date beyond the anticipated MED contemplated in a borrower's TPP." (Id. ¶ 47.)

Because Dr. Courchane's opinions in Paragraphs 13, 15, 17, 46 and 47 of the Report misconstrue the condition precedent that the borrower supply accurate information into a method by which Saxon could exercise unfettered discretion on its obligations under the TPP, we find that these Paragraphs fail the Daubert fit test as all proposed classes save the Cave II Multistate Class.

Likewise, Paragraph 16 of the Report fails the fit test for these same classes. Dr. Courchane opines that Dr. Ayers has failed to provide a method for systematically identifying whether any of the putative class members actually qualified for a permanent HAMP modification based on verifiable information. Dr. Courchane's insistence that the requirement of actual eligibility for the modification renders the class unascertainable is mostly irrelevant, since membership in the proposed classes, other than the Cave II Multistate Class, does not depend upon actual eligibility. It relies upon whether Saxon provided a timely eligibility decision. Even borrowers that were ultimately deemed ineligible for a permanent modification can be members of the Denied Class and the Pennsylvania Class if Saxon failed to inform them of that fact on a timely basis; if they were eligible, by definition they did not receive the modification to which they were entitled.

c. Dr. Courchane's treatment of the Modified Effective Date provision.

Dr. Courchane's opinions regarding the MED term applicable to the Cave I Denied Class, the Cave II Pennsylvania Class and Multistate Class are also improper.13 Dr. Courchane opines that Dr. Ayers erroneously assumed "that the Modification Effective Date for each TPP was three or four months after the trial period began (`Trial MED'), which may well not have been the case." (Report ¶ 16.) She also opines that Dr. Ayers "did not offer a reliable method for determining the Modification Effective Date applicable to each putative class member. (Id. ¶ 21; see also ¶ 47 ("When a borrower fails to supply to their loan servicer all of the required documentation, and to do so on a timely basis, delays are introduced into the evaluation process, and can result in a Modification Effective Date beyond the anticipated MED contemplated in a borrower's TPP."); ¶¶ 48-50 (further discussing the effect of delays in a borrower providing information); ¶ 53 (criticizing Dr. Ayers for assuming that the "operative MED for all potential class members is necessarily established and fixed by the anticipated MED"); ¶ 55 (asserting the "MED is legitimately subject to change"; thus Dr. Ayers' "approach would tend to incorrectly inflate the number of class members"); ¶ 58 (criticizing Dr. Ayers' failure to address extensions to anticipated MEDs).) In so doing, she relied upon concepts — namely, the "anticipated" MED and the "official" MED — that are not contained in the TPP. She improperly opines that the MED actually contained in the TPP is only the anticipated Modification Effective Date of the official loan modification, subject to Treasury guidelines and requirements, while the "Official MED is the actual Modification Effective Date of an official loan modification, if one is issued." (Id. ¶ 16.14)

(Ex. D, § 2.) In his Report, Dr. Ayers asserts that class members can be identified through common evidence and methods because borrowers who did not receive (1) a timely permanent modification or (2) notice that they were ineligible for a permanent modification could be determined using data Saxon reported to Treasury. (See Ayers Report ¶¶ 70-74.) He relies in part upon the fact that, under the terms of the TPP:

(Ayers Report ¶ 40.15)

We find the criticisms leveled in Paragraphs 16, 21, 53, 55, and 58 of the Courchane Report based on Dr. Ayers' use of the MED actually contained in the TPPs also fail the fit test. Dr. Courchane's attempt to distinguish between an anticipated MED and an official MED based upon parol evidence contained in Treasury's HAMP Data Dictionary is improper. The TPP itself unambiguously sets the date upon which Saxon was required to issue a permanent modification or terminate the Plan.16 Time of performance is an essential term to a contract to which there must be agreement for the contract to be binding. See Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 585 (3d Cir. 2009). Notably, the TPP itself declares in the same portion that contains the MED clause that "TIME IS OF THE ESSENCE under this Plan." (Ex. D, § 2.) Dr. Courchane's reference to parol evidence material outside the contract — Treasury's HAMP Data Dictionary — in an attempt to explain or vary the unambiguous terms contained therein is inappropriate. Mellon Bank, N.A. v. Aetna Bus. Credit, Inc., 619 F.2d 1001, 1010 n.9 (3d Cir. 1980) ("If the written contract is unambiguous, the Parol Evidence Rule and the doctrines cited above bar the use of extrinsic evidence for interpretation."). Accordingly, these portions of her Report fail to comport with Daubert.

d. Dr. Courchane's criticism of Dr. Ayers' failure to consider other factors.

In Paragraph 19 of the Report, Dr. Courchane lists eight factors Dr. Ayers failed to consider in reaching his ascertainability opinion:

We find Dr. Courchane's reliance on these eight factors fails the Daubert test.

The first factor fails the fit test for all classes since a borrower who never received a TPP, or was denied a modification prior to receiving a TPP, cannot be a class member. The second, third, fourth and eighth factors fail the fit test for all classes other than the Multistate Class since a borrower who received a countersigned TPP but failed to submit all required documentation, whose stated income was not verified, whose financial condition changed, or who did not otherwise qualify for a permanent modification, was still entitled to receive a timely denial notice based on that criterion. The fifth, sixth and seventh factors, which relate to "extensions" of the trial period beyond the MED stated in the TPP are rejected for all classes whose definition incorporates a timeliness requirement for the reasons detailed above concerning Dr. Courchane's treatment of the MED term.

e. Dr. Courchane's criticism of Dr. Ayers' assumption that a borrower would have received the modification stated in the TPP.

In Paragraphs 97-98 of the Courchane Report, Dr. Courchane faults Dr. Ayers for assuming in his damages methodology that "each class member would have been entitled to receive a permanent modification with the same terms as their individual TPP, if a permanent modification had been issued. This assumption may turn out to be true for some putative class members, but it cannot be assumed as a general rule." (Courchane Report ¶ 97.) She explains that, if the documentation submitted by a borrower after the TPP was countersigned indicated a change in financial circumstances, "HAMP guidelines would have required that the terms of any permanent modification be adjusted to reflect that verified information," and "it would have been appropriate for Saxon to revise the planned modification terms or eligibility determination accordingly." (Id. ¶ 98.) These opinions also fail the fit test. We have determined that a class member was entitled to a permanent modification if they satisfied the two conditions precedent. If a borrower's finances were not as represented, i.e., if he or she did not satisfy a condition precedent, Saxon's obligation was to deny the permanent modification by the MED. Other than the Multistate Class, by definition the classes contain no person for whom Saxon exercised that remedy. Accordingly, criticizing Dr. Ayers for making that assumption fails the fit test.

III. CONCLUSION

We conclude that the Courchane Report paragraphs we have identified contain opinions that are contrary to our prior rulings. They are per se unreliable and inadmissible under Daubert. See United States v. Cunningham, 679 F.3d 355, 380 (6th Cir. 2012) (approving district court's exclusion of expert analysis that conflicted with the court's rulings and applicable law); Herbert v. Lisle Corp., 99 F.3d 1109, 1117 (Fed. Cir. 1996) (the "exercise of the trial court's gatekeeper authority [is encouraged] when parties proffer, through purported experts, not only unproven science . . . but markedly incorrect law. Incorrect statements of law are no more admissible through `experts' than are falsifiable scientific theories."); Southard v. United Reg'l Health Care Sys., Inc., Civ. A. No. 7-06-11, 2008 WL 4489692, at *2 (N.D. Tex. Aug. 5, 2008) ("[W]here as here, the expert's opinion is based on an erroneous legal premise, it is appropriate to exclude such testimony"); Malletier v. Dooney & Burke, Inc., 525 F.Supp.2d 558, 573 (S.D.N.Y. 2007) (excluding expert testimony where it did not fit within applicable substantive law); Loeffel Steel Prods. v. Delta Brands, Inc., 387 F.Supp.2d 794, 806 (N.D. Ill. 2005) ("Expert opinions that are contrary to law are inadmissible. . . . They cannot be said to be scientific, to be reliable, or to be helpful to the trier of fact."). See also Gulfstream III Assocs., Inc. v. Gulfstream Aerospace Corp., 995 F.2d 425, 432 (3d Cir. 1993) (holding that defendants' evidence was properly excluded where it was contrary to the court's ruling on the type of damages available to plaintiffs). In making this finding, we have been careful to limit our purview to the face of the expert reports and only analyze how our prior legal holdings have been applied. The Court reserves to the full hearing of all class certification issues the final determination on admissibility and weight to be accorded to all expert and other testimony presented. An appropriate Order will be entered.17