After Subrigo reported its claim, Sentinel contended that it was not liable for coverage. Sentinel argued that Subrigo had not provided adequate documentation to support the claim. As a result, Subrigo pursued legal action, claiming breach of the insurance contract and breach of the implied covenant of good faith and fair dealing.
Subrigo retained insurance expert witness Gary Richman. He was tasked with assessing whether Subrigo had met its obligations in presenting its claim. Additionally, he needed to determine if Sentinel had properly investigated and evaluated Subrigo’s claim based on the relevant standards of care and the insurance policy’s terms.
In response, Sentinel moved to exclude certain parts of Richman’s opinions, arguing they exceeded his insurance expertise. Sentinel claimed that Richman lacked the necessary scientific, technical, or specialized knowledge to testify on the contested areas which relate to “whether the conditions at Subrigo’s facility caused damage to the electronic and computer networking equipment in question” and “whether any damage could be repaired.”
Insurance Expert Witness
Gary Richman offers consulting, expert witness, and litigation support services to attorneys and consumers involved in disputed insurance claims.
Since 1996, Gary has been the Principal at Richman Consulting LLC, where he offers expert analysis and insights in insurance claims and litigation. Before this, he worked at State Farm Fire & Casualty Company as both a Litigation Specialist and a Claim Specialist.
He earned a Master of Education and a Bachelor of Arts from UCLA. Richman also holds several professional licenses, including a Public Insurance Adjuster license and a California Clear Teaching Credential in Social Studies.
He was recognized as the first claims consultant to provide both a qualitative and quantitative analysis of an insurer’s wrongdoing as trial testimony. He has also helped to secure recoveries in excess of $200 million.
Discussion by the Court
A. Sentinel’s Argument
Sentinel aimed to exclude certain parts of Richman’s expert opinion. The company argued that Richman, retained to evaluate the “reasonableness and adequacy of [Sentinel’s] claim handling,” also provided testimony on electronic equipment that exceeded his expertise.
Sentinel pointed out certain highlighted sections of Richman’s testimony where Richman discussed the impact of water damage on Subrigo’s specialized electronic equipment. For instance, he stated that the water damage made the equipment “inoperable and completely unsalvageable” and that Subrigo could not have continued operations on the equipment as it would have been hazardous to employees and customers.
Furthermore, Richman asserted that “water-damaged equipment will never again provide that level of dependability and reliability.” He explained that the electronics used by Subrigo were highly sensitive and likely to fail if their optimal working conditions were not maintained. Richman also described what those ideal conditions were and repeatedly claimed that testing the damaged equipment was pointless. He believed the extent of water exposure had rendered the equipment unserviceable.
Sentinel emphasized that Richman’s technical knowledge about electrical equipment and its vulnerability to water damage exceeded his expertise as an insurance claims handler. During his deposition, Richman acknowledged that he had never handled insurance claims related to water damage to electrical equipment. He stated he would “defer to another expert regarding whether the computer items needed complete replacement” and “whether any functionality remained in these items.”
Given Richman’s own admissions and the fact that his expertise primarily involved insurance claims handling, Sentinel sought to prevent him from providing testimony about the impact of water damage on specialized electronic equipment.
B. Subrigo’s Counter-Argument
Subrigo contended that Sentinel exaggerated the expertise requirements of Rule 702. They argued that Richman did not need the “very specific experience that Sentinel was demanding.” Subrigo also stated that Richman possessed “immense qualifications to serve as an expert in this case regarding insurance industry claim handling.”
However, Subrigo did not directly address Sentinel’s specific arguments. Sentinel’s challenges focused solely on Richman’s capability to provide opinions about the complexities of Subrigo’s electrical equipment and how that equipment responded to water exposure.
C. Analysis
The Court agreed with Sentinel that Richman lacked the “minimal foundation of knowledge, skill, and experience” needed to provide expert testimony on the impact of water damage on specialized electrical equipment. While Richman could discuss how to handle insurance claims for advanced electrical equipment, he could not comment on the operability or functionality of that equipment after water exposure.
Consequently, the Court determined that certain parts of Richman’s proposed expert testimony must be excluded as beyond his expertise. Furthermore, since Subrigo did not present focused arguments regarding the specific sections of Richman’s expert report highlighted by Sentinel, it waived its chance to demonstrate how those sections were supported by Richman’s qualifications.
Held
The Court granted Sentinel’s motion to exclude Plaintiff’s insurance expert witness, Gary Richman, from offering opinions that he is not qualified to express.
Key Takeaway:
Richman lacked even the minimal foundation of knowledge, skill, and experience required in order to give ‘expert’ testimony” on the effect of water damage on specialized electrical equipment. Though he can opine as to how insurance claims for advanced electrical equipment should be handled, he cannot opine as to the operability or functionality of that equipment following water exposure.
Case Details:
| Case caption: | Subrigo International Corporation V. Sentinel Insurance Company, Ltd. Et Al |
| Docket Number: | 2:23cv3354 |
| Court: | United States District Court for the Central District of California |
| Order Date: | August 28, 2024 |
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