The US District Court jury is weighing Mueller's false-accusation claim against Swift's cross complaint alleging assault and battery.
Mueller was sacked by his employer, country music station KYGO, and he's seeking up to $3 million in damages.
Mueller said, "I thought he was just telling me one of his stories".
"This was an assault and Ms Swift reported that it happened".
Radio host David Mueller sued the singer-songwriter, saying he was falsely accused and that she should have called police instead of his bosses, who fired him soon after the June 2013 encounter.
The trial is expected to last for 10 days.
A photo published by the TMZ celebrity news website showing Swift posing between Mueller and his girlfriend is expected to be among the key pieces of evidence.
Mueller's lawyer showed the eight jurors the photograph which was taken at the time of the alleged assault.
Swift retaliated with a suit of her own, insisting that Mueller grabbed her derrière during the pre-concert photo opp.
Arthur Lewis, also 32 and a real estate agent, said he's "a big supporter of Taylor Swift and just wanted to check it out". He was sacked the next day on the basis he had violated a "morals clause", according to Mr McFarland.
Swift, who is countersuing Mueller, wants damages in an amount to be proven at trial, but also a verdict that holds Mueller responsible for the alleged assault.
Baldridge repeatedly interrupted Mueller during an aggressive cross-examination and noted that Mueller has said he lost an audio recording of a meeting he had with his bosses before they fired him.
On Tuesday, the former KYGO DJ, David Mueller, took the stand after a jury panel of six women and two men was seated. Swift is due to give evidence later this week.
Swift's attorney Doug Baldridge asked Mueller why he didn't bring this up as he was being escorted out of the venue by security and during the ensuing conversations leading up to his firing from KYGO.
Mueller stated that he didn't want to go to the Sunday night concert, because he had to work the morning show shift early the next day. Both teams also used additional photos from other meet-and-greets that night they claim prove their point about the nature of Mueller's conduct. After watching testimony all day in the courtroom, Chris Cain, a 31-year-old software developer, described the he-said-she-said allegations as "really off".
After losing his position, Mueller sued swift, saying it was a "humiliating thing to be accused of something that despicable", and that if anything, he had accidentally touched her "ribcage or ribs".
Mr McFarland showed the jury a picture from the photoshoot and said Mueller's hand was not under her dress. He frequently challenged Mueller's statements by referring him back to his deposition testimony, rereading sections verbatim and then asking, "Did I read that correctly?"