If you are in business long enough, you will get subpoenaed by someone involved in a dispute that may not even involve you. A subpoena is technically a court order compelling you to appear and testify or to produce records or both. If you are actually involved in the dispute as the plaintiff or defendant, your duty to comply with the subpoena is generally very clear and mandatory.
However, when you are not the plaintiff or defendant, complying blindly with a subpoena without asking any questions may not be in your best interest. As a non-party, a subpoena may be issued to you for two basic (*), but very different, purposes. In the first instance, you may be called as a fact witness and asked to testify to what you saw or did not see. In the second instance, you may be called and asked to render an opinion, also based on what you saw or didn’t see. The main difference is that giving an opinion based on your professional experience is the same as being called to testify as an expert witness and offering an expert opinion may open the door to a future claim against or, in some rare cases, result in you being added to the lawsuit as a new party.
The best way to understand the difference between being a fact witness and being an expert witness is to think about the situation like this. Assume you are an accident reconstruction expert and while you are out walking your dog you see a blue car run a stop sign and hit a red car in the middle of the intersection. Being a good citizen, you call 9-1-1, wait until the police arrive, and then give a statement to the police about what you saw. About a year later you receive a subpoena to testify in a lawsuit filed by the driver of the red car against the driver of the blue car. If you are testifying as a fact witness, you will be asked questions like “did the blue car stop at the stop sign?” or “did you hear the sound of brakes squealing before the crash?” In other words, you will be giving fact testimony. On the other hand, if you are asked to estimate the speed of the blue car at the time of impact based on the amount of damage to the red car, you are being asked to give your professional opinion and that means you are testifying as an expert witness.
If you are testifying as a fact witness, the risk of being added to the lawsuit as a party or being sued separately later is pretty low. However, if you offer any opinions based on your professional experience, the risk of getting embroiled in a dispute is much higher. For this reason, if you have done any work for either party in the underlying dispute you need to get advice before testifying. If you are not sure whether you are a fact witness, you should also seek advice. Very few experts are paid to testify about a real estate transaction they were involved in previously as a primary service provider (appraiser, home inspector, etc.).
For example, if you inspected a home for the buyer a year ago and now the buyer is suing the seller as well as the real estate agents/brokers involved in the sale for not disclosing certain defects in the home, you could be subpoenaed. Then, during questioning about what you saw on the day of the inspection you could get asked a question about your opinion on the condition of the foundation and in your answer you could potentially offer an opinion or make a statement which opens the door for a potential claim against you.
The bottom line is that any professional who is subpoenaed to testify about a real estate transaction where they performed a service for a fee should contact their E&O carrier as soon as they have been served a subpoena so the carrier can offer advice about how to handle the matter. Many carriers also offer free access to outside legal counsel as part of your policy benefits. Finally, in some cases, your E&O carrier might even appoint counsel to seek to quash the subpoena entirely or to limit the scope of questioning to protect you. Just remember it is far better to be safe than sorry.
(*) You could also be served with what is called a subpoena duces tecum. This is a subpoena for records and may not involve testifying at all, especially if you are willing to authenticate the records for the party requesting them.
*The author, Brian L. Trotier, is a former practicing attorney who represented builders, banks, and trade associations. Mr. Trotier is now living in the San Diego area and serves as the EVP/COO of ALIA, FREA, and NDC Data.