Plaintiffs Gregory Hebbler and Marion Hebbler contracted with Defendant State Farm Fire and Casualty Company to insure their home located at 6009 Angler Drive, Picayune, Mississippi.
On August 29, 2021, Hurricane Ida made landfall, purportedly damaging the residence. When Defendant conducted an on-site inspection and estimated the monetary damage caused by Hurricane Ida, it issued no payment because this figure fell below Plaintiffs’ deductible.
Plaintiffs ultimately designated Rich Lyon as their sole expert witness, referencing a June 7, 2023, Estimate as his report, but they did not attach this Estimate to their designation. On July 1, 2024, almost three months after their expert designation deadline had passed, Plaintiffs submitted a supplemental designation, disclosing Lyon’s Supplemental Report.
On August 19, 2024, Defendant filed the instant motion to strike Plaintiffs’ expert witness Rich Lyon.
Insurance Expert Witness
Rich Lyon is a licensed State of Louisiana Public Insurance Adjuster and Registered Insurance Appraiser. He is the owner and operator of Gulf Coast Adjusting, LLC. Gulf Coast Adjusting, LLC is a Louisiana-licensed and bonded company offering Public Adjusting, Insurance Claims Appraising, Insurance Claims Umpiring and Construction Estimating services throughout the states of Louisiana and Mississippi.
Discussion by the Court
A. Lyon’s reports
1. The June 7, 2023, Estimate
The June 7, 2023, estimate offered by Plaintiffs as Lyon’s initial expert report contains only damage estimates and includes no narrative language, explanations, or opinions as to causation. The Estimate valued the damage to Plaintiffs’ property at $144,661.05, with no amount specified for depreciation. The Estimate is based on a June 5, 2023, inspection that was conducted by an independent contractor hired by Lyon.
2. The Supplemental Report
In his supplemental report, Lyon for the first time offered an opinion as to causation, stating that Hurricane Ida caused the damage to Plaintiffs’ residence. This opinion is based upon “on-site inspections of the subject property, interviews with the property owner, . . . documentation provided to [him], [his] extensive work related to hurricanes [and] windstorms, and [his] accumulative experience in the construction and insurance industries gained over the past 25 years.”
Lyon conducted an inspection of Plaintiffs’ property on June 24, 2024, which resulted in him revising the June 7, 2023, damage estimate downward to $75,707.42, again with no deduction specified for depreciation.
B. Defendant’s Motions
Defendant asked the Court to exclude the June 7, 2023, estimate because it was made by unknown independent contractors, such that the Court cannot test the reliability of its factual underpinnings or methodologies. Next, the Court should strike the supplemental report because it is not supplemental, but is in fact a new report, and was produced by Plaintiffs over two and half months after the expert designation deadline.
1. Defendant’s challenge to the June 7, 2023, Estimate offered as Lyon’s expert report
Defendant argued that Plaintiffs’ timely June 7, 2023, estimate is unreliable because it offered no causation opinions and because unknown independent contractors collected the data underlying the estimate and did the majority of the work creating it.
Lyon affirmed under oath that both the inspector and estimators’ identities are protected by nondisclosure agreements, and he would not reveal them. Since Plaintiffs have not identified who conducted the inspection or created the Estimate, neither Defendant nor the Court can test the reliability of the data and methods employed in repairing it. On this record, Plaintiffs cannot meet their burden of showing that the bases and methodologies underlying the estimate are reliable, and the Court therefore rejected the June 7, 2023, estimate.
2. Lyon’s Supplemental Report offering causation opinions
Defendant next challenged Lyon’s supplemental report, disclosed after Plaintiffs’ expert designation deadline but prior to the close of discovery.
It should be noted that Lyon’s supplemental report relies upon information gathered by an unknown independent contractor during the June 7, 2023, inspection, Lyon’s own inspection conducted on June 24, 2024, documentation provided to him, and interviews with Plaintiffs. With the exception of Lyon’s inspection, this information was available to Plaintiffs well before the expert designation deadline of April 9, 2024, and Plaintiffs have not offered any explanation why Lyon could not have conducted his inspection before the deadline. For these reasons, the Court concluded that the supplemental report is not supplemental but is in fact a new expert report, such that it could and should have been disclosed by April 09, 2024.
Four factor analysis under Rule 37 to determine the proper sanction
Starting with the fourth factor, the explanation for the failure to comply with the Court’s deadlines, Plaintiffs justify the late disclosure by stating that they paid out-of-pocket to repair their roof in July 2023.
But Plaintiffs do not explain how the completion of these repairs prevented them from timely disclosing the supplemental report or why, if there was an issue, it could not be resolved in the nine months between the completion of repairs and the designation deadline of April 9, 2024.
The third factor is the possibility of a continuance. This, according to the Court, weighs in favor of Defendant because the case is scheduled for Pretrial Conference next month and a continuance would only further delay this case, in essence rewarding Plaintiffs for failing to timely disclose the supplemental report without any justifiable explanation.
The first factor is the importance of the witness’ testimony. Without Lyon, Plaintiffs cannot meet their burden of showing causation and Defendant will be entitled to summary judgment. But even where the expert testimony is significant, “the importance of such proposed testimony cannot singularly override the enforcement of local rules and scheduling orders.”
Turning to prejudice, Lyon had the benefit of possessing Defendant’s expert report when he prepared the supplemental report, and Defendant’s expert’s ability to prepare his own report was impeded by not having access to Lyon’s supplemental report. Defendant would also be required to expend time and financial resources to prepare a response to Lyon’s new causation opinion, causing further prejudice. On balance, the Court held that this factors weigh in favor of excluding the supplemental report.
The circumstances of this case warrant striking the Supplemental Report
Plaintiffs argued that Defendant waived the right to challenge Lyon’s expert designation by failing to file its motion thirty days before the discovery deadline.
The Court found that Plaintiffs attempted to frame Defendant’s argument as a challenge to the initial expert designation, when in fact Defendant is contending that the supplemental report itself introduces new expert testimony and is therefore not supplemental. This would mean that Defendant would have had to file its challenge to Plaintiffs’ disclosure no later than five days later. It would be unfair to permit Plaintiffs to violate their deadline for disclosing expert reports by almost three months, and then penalize Defendant for failing to file its motion to strike by the deadline because Plaintiffs served the supplemental report mere days before it passed.
Held
The Court found that Defendant’s motion to strike should be granted as to Plaintiffs’ expert Rich Lyon, and he will be excluded from testifying at trial. The
Court also granted Defendant’s motion for summary judgment because Plaintiffs cannot make the requisite showing as to causation. Plaintiffs Gregory Hebbler and Marion Hebbler’s claims were dismissed with prejudice.
Key Takeaways:
- The Court excluded June 07, 2023, estimate offered as Lyon’s expert report because unknown independent contractors did the majority of the work creating it as a result of which the Court cannot test the reliability of its factual underpinnings or methodologies.
- The supplemental report offered by Lyon is not supplemental but is in fact a new expert report, such that it could and should have been disclosed by April 09, 2024. It should be noted that Lyon’s supplemental report relies upon information gathered by an unknown independent contractor during the June 7, 2023, inspection, Lyon’s own inspection conducted on June 24, 2024, documentation provided to him, and interviews with Plaintiffs. With the exception of Lyon’s inspection, this information was available to Plaintiffs well before the expert designation deadline of April 9, 2024, and Plaintiffs have not offered any explanation why Lyon could not have conducted his inspection before the deadline.
Case Details:
Case Caption: | Hebbler Et Al V. State Farm Fire And Casualty Company |
Docket Number: | 1:23cv247 |
Court: | United States District Court, Mississippi Southern |
Order Date: | December 18, 2024 |
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