This action arises from a dispute about the payment of service fees by Bulldog National Risk Retention Group (“Bulldog”) to Plaintiff GB Group. Specifically, the dispute centers on a Service Agreement between GB Group and Bulldog, as well as an Addendum thereto entered into in July 2018 and August 2020.
To begin with, GB Group is a claims and risk management company that specializes in providing third-party administration services in property and casualty insurance. By contrast, Bulldog is a North Carolina risk retention group that was established in 2018 and provides insurance to small, independent, and intermediate and long-haul trucker clients.
In addition, Defendant Michael Hunter is the current president of Bulldog, and Defendant Matthew Holycross is Bulldog’s treasurer. Importantly, all of Bulldog’s services are provided by third-party vendors. Defendant Holycross owns Defendant Palmetto Consulting of Columbia (“Palmetto”), and notably, Palmetto is Bulldog’s current captive manager.
On July 2, 2018, GB Group entered into a Service Agreement with Bulldog to provide policy service, risk, and claims management for Bulldog. GB Group would be paid as a percentage of the gross written premium (GWP) of policies written by Bulldog in accordance with an attached fee schedule. Subsequently, on April 14, 2020, Bulldog and GB Group entered into an Addendum to the Service Agreement. However, neither Hunter, Holycross, nor Palmetto are signatories to the Addendum.
At the time the Service Agreement was executed, Bulldog was under the control of MVT Insurance Services, Inc., the then Managing General Agent (“MGA”).
Ultimately, as a result of ongoing regulatory issues with the North Carolina Department of Insurance (“NCDOI”), Bulldog terminated MVT for cause.
Defendants filed a motion to exclude the testimony of GB Group, LLC’s expert Mr. Konstantin Sakherzon pursuant to Rule 702 and the Daubert standard.
Actuarial Science Expert Witness
Konstantin Sakherzon, ACAS, MAAA is a Member of the American Academy of Actuaries, Associate of the Casualty Actuarial Society and is a Managing Member of Ark-tuary, LLC. Sakherzon has expertise in loss and premium valuations for various purposes including insurance unpaid liability calculations and economic damages calculations.
He has had an extensive career in the insurance industry, including working for Managing General Agents (MGAs) and carriers where he was responsible for developing pricing valuations and guidelines for clients and submitting and defending rate filings to state insurance departments.
Discussion by the Court
To begin with, the Defendants argued that Sakherzon’s opinion as to the liability of Hunter, Holycross, and Palmetto has no basis in law or fact. Moreover, the Defendants argued that Sakherzon’s opinion as to damages is speculative, untrustworthy, and failed to rest on sufficient data or facts. Finally, the Defendants argued that Sakherzon’s opinions as to the calculations related to the frequency and minimum premium conditions should be excluded as these opinions are based on Sakherzon’s own interpretation of the Service Agreement and Addendum.
However, the Court rejected Defendants’ argument that Sakherzon has attempted to offer an expert opinion as to the liability of Hunter, Holycross, or Palmetto.
Also, the Court rejected Defendants’ arguments as to the reliability of Sakherzon’s opinions, both as to damages calculations and opinions as to calculations related to the frequency and minimum premium conditions.
Analysis
GB Group’s fees were determined by calculating a percentage of all GWP written by Bulldog in accordance with the fee schedule attached to the Service Agreement. Later, the Addendum changed how GB Group’s fees were calculated. This should be a simple issue, but the premium data generated while MVT was managing Bulldog was unreliable. Specifically, prior to its termination, MVT oversaw Bulldog’s policy database, Quickbase, which was used to identify and calculate GB Group’s fees. However, later audits determined that the premium records in Quickbase were inadequate and inaccurate.
Accordingly, Sakherzon performed three damages calculations for his report. The first is based on the “raw” data which Sakherzon assumes for the purposes of that calculation is accurate. The second and third calculations attempted to remedy and account for the inaccuracies in Defendants’ raw data. The Court determined that such an approach did not render Sakherzon’s calculations as unreliable so as to render them inadmissible under Rule 702. In circumstances where actual data is missing or unreliable, courts permit parties to “rely on reliable estimates.”
Here, Sakherzon does not attempt to opine as to the proper interpretation of the Service Agreement or the Addendum. Moreover, the Court agreed with GB Group that where Sakherzon’s report presumes that the Service Agreement and Addendum are interpreted in a certain way, his opinion as to the resulting damage is limited to that interpretation of the agreements. In other words, GB Group’s expert report did not attempt to “draw a legal conclusion by applying law to the facts which would render his opinion inadmissible.
Held
The Court denied Defendants’ motion to exclude the expert opinion of Konstantin Sakherzon.
Key Takeaway
Exclusion of Sakherzon’s opinion is further not warranted based on the inclusion of any legal opinions. Damages experts are entitled to assume liability when rendering their opinions.
Case Details:
| Case Caption: | GB Group, LLC V. Bulldog National Risk Retention Group, Inc. |
| Docket Number: | 5:23cv29 |
| Court Name: | United States District Court, North Carolina Eastern |
| Order Date: | January 08, 2026 |
Leave a Reply