Plaintiff Paramount Contractors & Developers, Inc. ("Paramount") respectfully moves this Court for an order excluding the expert testimony and report of Dr. Mehmet Sanli, Defendants' designated economic expert, on the grounds that his opinions are unreliable, speculative, and based on flawed methodology that does not satisfy the requirements of Sargon Enterprises, Inc. v. University of Southern California (2012) 55 Cal.4th 747.
On January 15, 2026, Defendants designated Dr. Sanli as their expert on economic damages. Dr. Sanli's report, dated February 28, 2026, opines that Paramount's claimed damages are "speculative and overstated" and offers an alternative damages calculation reducing Paramount's claim from $4.2 million to approximately $380,000.
Dr. Sanli's methodology suffers from three fundamental defects: (1) he improperly applies a "willing buyer-willing seller" valuation framework to signage rights that are not freely transferable on the open market; (2) he fails to account for the City's own valuation of the permits at issue, as established in the Henderson v. Pacific line of cases; and (3) his discount rate of 18% is unsupported by any comparable transaction data and appears to have been selected solely to minimize Paramount's recovery.
Under Sargon, the trial court acts as a "gatekeeper" to exclude expert opinion that is based on "assumptions of fact without evidentiary support, or on speculative or conjectural factors." 55 Cal.4th at 770. The court must determine whether the expert's opinion is "based on matter... of a type that reasonably may be relied upon by an expert in forming an opinion." Evidence Code § 801(b).
Expert testimony must be based on "reasons and a reasoned explanation connecting the factual predicates to the ultimate conclusion." Jennings v. Palomar Pomerado Health Systems, Inc. (2003) 114 Cal.App.4th 1108, 1117. An expert opinion that is "purely conclusory" or based on "unreasonable assumptions" is properly excluded. Bushling v. Fremont Medical Center (2004) 117 Cal.App.4th 493, 510.
Dr. Sanli's entire analysis rests on the premise that Paramount's signage permits should be valued using a "willing buyer-willing seller" approach — the standard method for valuing freely traded assets. But signage permits in the City of Los Angeles are not freely traded assets. They are regulatory entitlements that attach to specific properties and cannot be separately conveyed. See L.A.M.C. § 14.4.4(B)(11); Paramount Contractors v. City of Los Angeles (2019) (unpub.) [permits are "property-specific regulatory approvals, not transferable market commodities"].
By applying a market-transaction valuation to a non-market asset, Dr. Sanli introduces a fundamental methodological error that infects his entire analysis. As the California Supreme Court observed in GHK Associates v. Mayer Group, Inc. (1990) 224 Cal.App.3d 856, 873, an expert's methodology must "fit" the factual circumstances; a methodology designed for one type of asset cannot simply be transplanted to a fundamentally different type.
| Category | Paramount Expert | Dr. Sanli | Difference |
|---|---|---|---|
| Lost signage revenue | $2,840,000 | $210,000 | -$2,630,000 |
| Permit value diminution | $980,000 | $120,000 | -$860,000 |
| Consequential damages | $380,000 | $50,000 | -$330,000 |
| Total | $4,200,000 | $380,000 | -$3,820,000 |
The disparity between the two experts' conclusions — a factor of more than 11:1 — is itself evidence that Dr. Sanli's methodology is fundamentally flawed. While reasonable experts may disagree on quantum, an 11-fold divergence suggests not a difference of opinion but a difference of analytical framework.