This matter arises out of a motor vehicle accident (“MVA”) on May 15, 2017, in Denver, Colorado. Plaintiff, Richard Marion Jr was driving a vehicle registered in the State of Nebraska and insured by American Family under a Nebraska family car policy and Umbrella policy (“Policy”) issued to Plaintiff’s parents, Richard and Angela Marion. Marion filed a claim against the tortfeasor and received American Family’s consent to settle with the tortfeasor’s insurance carrier for policy limits of $100,000.00. Plaintiff also sought underinsured motorist benefits (“UIM”) under his Policy.
American Family evaluated the information received from Plaintiff and initially offered Plaintiff $60,000.00, followed by two additional offers of $70,000.00 and $80,000.00. Plaintiff did not respond to American Family’s offer of $80,000.00 and instead filed this action. He sought UIM benefits under two policies, a Nebraska family car policy with UIM coverage limits of $250,000.00, and an umbrella policy with UIM coverage limits of $1,000,000.00. Plaintiff asserted claims for: (1) breach of contract and/or determination of benefits owed; (2) common law bad faith under Colorado law; and (3) statutory bad faith.
In support of his claims against American Family, Plaintiff disclosed Lorraine Berns as his retained liability expert, along with her affirmative expert report. Defendant American Family Mutual Insurance Company filed a motion to limit the testimony Plaintiff’s expert, Lorraine Berns, pursuant to Rule 702 and Rule 403.
Insurance Expert Witness
Lorraine Berns provides insurance consulting and expert witness testimony in the area of insurance bad faith/good faith claims-handling practices based upon insurance claims industry standards. She has worked in the insurance industry since 1991 and has been a consultant and expert witness in this field since 2006. She also provides consulting services to attorneys in the areas of settlement strategies, pre-litigation strategies, investigations, negotiations, and claims handling industry standards.
Discussion by the Court
Opinions that Defendant Unreasonably Delayed Benefits
Defendant argued that Berns’ opinions that it unreasonably delayed benefits to Plaintiff are legal conclusions and therefore improper expert opinion that should be excluded from trial. Plaintiff responded that he had no intention of asking Berns to usurp the role of the jurors. Instead, Plaintiff explained that he intended to question Berns about her background in automobile insurance claim handling; the facts and data she reviewed; her knowledge of insurance industry standards applicable to the handling of UIM claims; her observations / conclusions as to whether the insurer’s claim handling evidenced compliance with industry standards.
Under Federal Rule of Evidence 704(a), an expert’s opinion is not inadmissible simply because it embraces an ultimate issue to be determined by the trier of fact. The Court concluded that Berns may offer testimony articulating what she believes to be the relevant industry standards, and explaining—factually—how Defendant’s conduct did or did not comport with those standards. However, the Court excluded Berns’ opinions that Defendant’s conduct was unreasonable or insufficient as a matter of law, or was in violation of any statute.
Opinions Concerning Defendant’s Motives or State of Mind
Defendant argued that Berns’ “speculative opinions regarding American Family’s motives or state of mind during the handling of Plaintiff’s claim are impermissible and should be precluded from trial.” Defendant added that such opinions concerning Defendant’s motivation or state of mind regarding policy limits are not based on any personal knowledge or personally observed facts or data.
The Court granted in part and denied in part this portion of the motion. The Court granted the Motion to the extent that Plaintiff may not elicit testimony regarding Defendant’s motives or state of mind because such testimony would constitute speculation. However, the Court denied the Motion to the extent Berns is permitted to testify about facts from which the jury could infer intent, as such testimony is proper expert testimony.
Opinions Regarding Nebraska Law
Defendant argued that Berns is not qualified to render opinions regarding Nebraska’s Unfair Claims Settlement Practices Act. Defendant emphasized that Berns has not worked in the insurance industry in Nebraska, has not evaluated a Nebraska claim, and is not familiar with Nebraska law. Additionally, Defendant argued that opinions regarding American Family improperly or incorrectly applying Nebraska law (in other words, saying that Defendant should have applied Colorado law) to Plaintiff’s claims are also impermissible expert opinion that usurp the function of this Court.
The Court granted the motion to the extent that Berns was precluded from offering opinions on Nebraska’s Unfair Claims Settlement Practices Act. However, the motion was denied to the extent that Berns may offer opinions concerning whether Defendant’s offers of compromise complied with the applicable insurance industry standards.
Held
The Court granted in part and denied in part the Defendant American Family Mutual Insurance Company’s motion to limit the testimony Plaintiff’s Expert, Lorraine Berns.
Key Takeaways:
- The Court excluded Berns’ opinions that Defendant’s conduct was unreasonable or insufficient as a matter of law, or was in violation of any statute. She was unqualified to offer such opinions as a matter of legal expertise and such ultimate conclusions would not be helpful to the jury and would improperly intrude on its fact-finding function.
- Only the Court will determine what law applies to the remaining claims in this case, and Berns may not offer opinions concerning which state’s law Defendant should have applied.
Case Details:
| Case Caption: | Marion V. American Family Mutual Insurance Company, S.I. |
| Docket Number: | 1:22cv1330 |
| Court: | United States District Court, Colorado |
| Order Date: | July 12, 2024 |
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