This case involves a Hurricane Laura claim by Plaintiff Rapides Station Land Company, LLC (“Plaintiff”), the owner of the property known as “Cowboy Town” located in Boyce, Louisiana, near Interstate 49, for alleged property damage attributable to the Hurricane. Markel American Insurance Company (“MAIC”) issued a builders risk policy of insurance to Plaintiff which provided coverage for an alleged “rehabilitation or renovation project” for the policy period of October 17, 2019, to September 1, 2020.
According to the scheduling order, the final date for exchanging expert reports was April 24, 2023, the deadline for completion of discovery was May 31, 2023, and the deadline for taking the depositions of experts was June 2, 2023.
RSLC designated Jeffery S. Major as an expert on public adjusting and estimating.
Major’s expert report was produced to Markel on April 24, 2023. The report and supporting documentation were presented across two emails.
The first email contained a folder labelled “Skyline Estimate” with three documents attached: a document showing the calculation of depreciation for the main building and the annex building, a second containing over 1,000 photos of the property purporting to show damage, and a third containing a 56-page estimate prepared using the industry standard Xactimate program. The second email contained an .esx file, which contained the underlying data used to prepare the Xactimate estimate. Markel was also provided with a 23-page written report, although it is unclear when this report was furnished, it too is dated April 24, 2023.
Motion to Exclude Major
Markel asserted multiple issues with RSLC’s expert production and qualifications:
(1) The production of Major’s report and the underlying .esx file in multiple files caused confusion;
(2) Major is unqualified to offer his opinion regarding the causation of damages because he is not licensed as an engineer, architect, or contractor;
(3) Major’s opinions regarding causation of damages are unreliable and untested;
(4) Major is unqualified to offer his opinion concerning best practices in the insurance industry because he has never worked on behalf of insurance companies;
(5) Major offers opinions regarding Markel’s intent or motives without a proper foundation; and
(6) Major offers legal opinions.
Adjuster Expert Witness
Jeffery S. Major is an expert on public adjusting and estimating. Major has been engaged in the practice of public adjusting in various capacities since at least 1990. Prior to that, Major was a builder and general contractor from 1983-1990.
Major has purportedly estimated, consulted, or adjusted over 600 commercial and 1,000 residential claims, many of which were hurricane related. He is apparently licensed as a public adjuster in 44 states and territories. Also, he lists twenty engagements as an insurance industry continuing education presenter or instructor. Major has recently been allowed to testify as an expert in the Western District of Louisiana regarding similar matters.
Discussion by the Court
Major is qualified to testify on issues of damage causation, repair costs, insurance industry customs, standards, and practices, and Markel’s conduct
To begin with, Markel complained that Major is not licensed as an engineer, architect, or general contractor, that he is not a college graduate, and he has not worked for insurance companies. Markel contended that without these specific qualifications, Major is unqualified to offer his expert opinion on damage causation, repair costs, insurance industry customs, standards, and practices, or Markel’s conduct in adjusting the claim.
However, Major has been engaged in the practice of public adjusting for over thirty years and worked in construction for nearly a decade. He is licensed as a public adjuster in 44 states and territories, has taught numerous continuing education courses in various aspects of public adjusting and insurance claim handling, and adjusted over 1,600 claims. The Court held that Major’s experience qualifies him to testify as to these issues commonly within a public adjuster’s purview, including damage causation, repair costs, industry customs, standards, and practices, and insurer conduct.
Moreover, Markel’s contention that a person must hold a license as an architect, engineer, or contractor to testify regarding these issues have recently been rejected by this district. Major was recently qualified in this district to testify regarding “industry standards, customs, and practices applicable to handling insurance claims.” To the extent that Markel believes Major’s experience and licensure are inadequate to support his conclusions, it is entitled to subject his testimony to vigorous cross-examination and present contrary evidence in their defense.
Major is not qualified to testify regarding Markel’s intent or motives or to offer legal opinions
Markel complained that Major’s expert report impermissibly offers legal opinions and testimony on Markel’s intent or motives. Although Federal Rule of Evidence 704 permits an expert witness to give testimony that embraces an ultimate issue to be decided by the trier of fact, experts remain prohibited from rendering a legal opinion because there can only be a single arbiter of the law, the Court, and allowing parties to offer competing legal opinions would only serve to confuse juries. Further, Louisiana public adjusters are expressly prohibited from providing legal advice to an insured or otherwise engaging in the unauthorized practice of law.
The Court held that Major will not be allowed to offer testimony on Markel’s intentions or motivations. Further, Major will not be permitted to offer his legal opinions, this includes assertions regarding Markel’s conduct specifically satisfying the elements of the Louisiana bad faith claim handling statutes. Such statements include assertions that Markel’s conduct was “arbitrary, capricious, and without probable cause”, “vexatious”, or performed in “bad faith.”
RSLC satisfactorily complied with Rule 26
RSLC provided Major’s expert report and underlying data to Markel within the deadlines set for expert disclosures. Markel apparently takes issue with the production being contained in multiple e-mails without clarification from RSLC’s counsel regarding the contents of each e-mail. Markel was afforded the opportunity to depose Major regarding the expert production and, as best as this Court can tell, RSLC does not intend to offer any expert materials that were not timely disclosed to Markel prior to Major’s deposition.
The Fifth Circuit has established four factors to consider when deciding whether to exclude expert testimony, (1) the explanation for the failure to [submit a complete report on time]; (2) the importance of the testimony; (3) potential prejudice in allowing the testimony; and (4) the availability of a continuance to cure such prejudice. These factors do not inure to the benefit of Markel. The full report was timely submitted, albeit in separate communications. Markel recognized that it had the full report in a timely fashion. Markel has suffered no genuine surprise. Though the testimony is likely important, Markel will not be prejudiced by allowing it. In other words, there is no cause to exclude the report pursuant to Rule 26(a)(2).
Held
The Court granted in part and denied in part Markel’s motion in limine to exclude the testimony of Jeffrey Major.
Key Takeaway:
While the Court admitted Major’s testimony regarding damage causation, cost of repairs, the facts of Markel’s adjustment of the claim, and industry standards, customs, and practices applicable to handling insurance claims, Major was not allowed to offer testimony on Markel’s intentions or motivations. Further, Major was not permitted to offer his legal opinions, which includes assertions regarding Markel’s conduct specifically satisfying the elements of the Louisiana bad faith claim handling statutes.
In conclusion, there can only be a single arbiter of the law, the Court, and allowing parties to offer competing legal opinions would only serve to confuse juries.
Case Details:
| Case Caption: | Rapides Station Land Co L L C V. Markel American Insurance Co |
| Docket Number: | 1:21cv3716 |
| Court: | United States District Court, Louisiana Western |
| Order Date: | December 2, 2024 |
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