Expert Witness Profiler

Category: Insurance Expert Witness

  • Court Refused to Exclude Insurance Expert Witness’ Opinions on Insurance Availability

    Court Refused to Exclude Insurance Expert Witness’ Opinions on Insurance Availability

    This case stems from a dispute over a provision of a ground lease between Stewart Development, LLC and 111 Veterans Boulevard, LLC. Stewart owned Heritage Plaza, a Class A office building in Metairie, Louisiana but leases the land on which it sits pursuant to a ground lease. 111 Veterans took over this ground lease in 2017. A few years later, in 2022, Stewart listed Heritage Plaza for sale, and 111 Veterans expressed interest in purchasing the building. However, purchase negotiations ultimately fell through. The next year, on March 16, 2023, 111 Veterans defaulted Stewart for allegedly violating the ground lease. In the default letter sent to Stewart, 111 Veterans explained Stewart breached the ground lease for failing to maintain $110,700,000 of casualty insurance, the amount equal to the replacement cost of the building (less depreciation of 10%) with a $10,000 or less deductible.

    About three months after this letter was sent, Stewart filed this lawsuit seeking a declaratory judgment and alleging claims for breach of contract and Louisiana Unfair Trade Practice and Consumer Protection Act (“LUTPA”) violations. Stewart argues inter alia that 111 Veterans’ mandated amount of insurance coverage is not reasonably obtainable, that Stewart’s failure to obtain such coverage was not a violation of the ground lease, and that 111 Veterans breached the lease by placing Stewart in default. 111 Veterans argues inter alia that its required coverage is reasonably obtainable, and that Stewart did in fact breach the ground lease for failing to maintain such coverage.

    Stewart filed a motion to exclude the testimony of 111 Veterans’ insurance expert Timothy Gold under Federal Rules of Evidence 702 and 703 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1998).

    Insurance Expert Witness

    Timothy Gold began his insurance career in 2005 and joined Hartwig Moss Insurance Agency in 2013. Gold holds both property and casualty as well as life, health and accident licenses.

    Get the full story on challenges to Timothy J. Gold’s expert opinions and testimony with an in-depth Challenge Study. 

    Discussion by the Court

    In his report, Gold provided the following opinions:

    • There were no indicators from the commercial insurance market of pending issues acquiring property or flood coverage in southeast Louisiana prior to landfall of Hurricane Katrina on August 29, 2005;
    • For the coverage periods of 2021- 2024, it has been possible to obtain replacement cost, special form property insurance coverage excluding coverage for the peril of windstorm, for a significant property risk with an insured value in excess of $100,000,000 at a reasonable market cost;
    • For the coverage periods of 2021-2024 it has been possible to obtain property insurance coverage for the peril of windstorm for a building with insured values in excess of $100,000,000 with coverage limits in excess of $10,000,000 at a market cost;
    • And the cell captive program and parametric insurance policy Stewart Development, LLC utilized do not comply with paragraph 3(g) of the Fourth Amendment of the Ground Lease agreement.

    Analysis

    Stewart advanced numerous arguments in support of excluding Gold’s testimony. Specifically, Stewart argued that Gold’s testimony on Stewart’s parametric wind policy should be excluded because Gold did not read Stewart’s policy. Stewart claimed that Gold’s testimony on Stewart’s captive cell policy should be excluded because it is a legal conclusion. Plaintiff alleged that Gold’s opinions on the local insurance market before and after Hurricane Katrina in 2005 are speculative and warrant exclusion because Gold did not work in the insurance industry until 2006.

    Moreover, Stewart claimed that Gold’s reliance on conversations with other industry brokers constitutes unreliable methodology for his opinions on insurance availability from 2021-2024. And Stewart asserted that Gold’s testimony is undermined by his failure to read the testimony of Eric Lowenstein, 111 Veterans’ corporate representative, and his misreading of key facts from the testimony of Jason Provenzano, 111 Veterans’ insurance broker, and Andrew Schutzman, president and owner of AMS Risk Management and Consulting, Inc.

    111 Veterans opposed Stewart’s motion. Basically, 111 Veterans argued that Gold’s opinions meet the requirements of Rule 702, Rule 703, and Daubert, and that Stewart’s concerns constitute fodder for cross examination, not reasons for exclusion under Rule 702. Defendants further argued that, because this is a bench trial, Stewart’s concerns can be explored during trial with the judge as the gatekeeper and trier of fact.

    The Court agreed with 111 Veterans. The purpose of a Daubert motion is “to ensure that only reliable and relevant expert testimony is presented to the jury.” 

    Held

    The Court denied Stewart’s motion to exclude Timothy Gold’s opinions and testimony.

    Key Takeaway:

    The Court is “capable of assessing the probative value of the evidence and the weight [the expert’s] testimony should be given.” Moreover, as 111 Veterans points out, cross examination is the proper vehicle for Stewart’s concerns. In conclusion, vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence.

    Case Details:

    Case Caption: Stewart Development, LLC V. 111 Veterans Boulevard, LLC
    Docket Number: 2:23cv2085
    Court: United States District Court, Louisiana Eastern
    Order Date: November 15, 2024
  • Insurance Expert Witness’ Testimony Limited Because it is Needlessly Cumulative

    Insurance Expert Witness’ Testimony Limited Because it is Needlessly Cumulative

    This lawsuit stems from claims of breach of contract and statutory and common-law bad faith.

    It all started when Plaintiff, Paul Schulz, was injured when his motorcycle struck an oil spill in the roadway, causing the front tire to slide out and the motorcycle to overturn. Shortly thereafter, Schulz filed a claim with his insurer, Shelter Mutual Insurance Company (“Shelter”), for uninsured/underinsured motorist (“UIM”) coverage. After speaking with Schulz about the accident and the injuries he sustained, the claims adjuster determined Schulz was 100% at fault for the accident and denied coverage. When Schulz hired an attorney, Shelter agreed to consider any other information that might bear on the claim and ordered the police report. Nine days later, Shelter again denied the claim on the basis that Schulz was more than 50% at fault.

    Defendant filed a motion to strike certain opinions of Plaintiff’s industry standard expert Brian Seigal.

    Insurance Expert Witness

    Brian Seigal has been involved in the insurance industry throughout his career since 1995, working in and being responsible for claims departments. He has a multi-line background in P & C and Health Insurance. He has managed claims departments for carriers and TPAs, with experience spanning primary, excess, and reinsurance levels. Over the years, he has managed and trained hundreds of adjusters and has been involved with thousands of claims. He has also held department reserve and settlement authority.

    Get the full story on challenges to Brian Seigal’s expert opinions and testimony with an in-depth Challenge Study. 

    Discussion by the Court

    Seigal should be precluded from relying on averments in Shelter’s amended answer to the complaint

    Shelter first argued Seigal should be precluded from relying on averments in Shelter’s amended answer to the complaint to draw conclusions about the adequacy vel non of Shelter’s investigation. Essentially, in response to a series of allegations regarding the cause of the crash, the nature of Schulz’s injuries, and Shelter’s initial investigation, Shelter responded that it was without sufficient information to admit or deny those allegations. Seigal opined these answers demonstrate Shelter’s investigation was inadequate because they suggest Shelter was unclear as to the basic facts of the accident, the nature and extent of Schulz’s damages, and the results of its own investigation.

    The Court held that the relevant facts regarding Shelter’s initial investigation are recited in Shelter’s claim file notes and were the subject of inquiry at the 30(b)(6) depositions of the corporate representatives. Expert testimony regarding Shelter’s pleadings about these same matters therefore also would be needlessly cumulative and wasteful of limited trial time.

    Seigal’s opinion suggests Shelter’s investigation was unreasonable for failing to engage experts to vet Schulz’s claim prior to the initiation of litigation

    Seigal stated there exist a variety of tools of which a carrier may take advantage to fulfill its duty of reasonable investigation, and while there is no formulaic approach, not pursuing a particular investigative avenue may indicate a lack of good faith in particular circumstances. Seigal suggests this case presented a circumstance in which the adjuster should have engaged one or more experts as part of the investigation of the claim.

    Shelter points out that the insured bears the initial burden of producing sufficient evidence to suggest his damages were caused by an event that comes within the coverage of the policy.

    The Court held that it is not objectionable for Seigal to opine that Schulz’s case was one which warranted the retention of one or more experts as part of Shelter’s investigation.

    Seigal testified that Shelter’s attempt to condition payment of Schulz’s policy limits on his execution of a release was impermissible and unreasonable

    Shelter sought to preclude Seigal from testifying that Shelter’s attempt to condition payment of Schulz’s policy limits on his execution of a release was impermissible and unreasonable.

    Shelter attached a Release and Trust Agreement to his settlement letter which, inter alia, would have required Schulz to release Shelter from “all liability under any Uninsured Motorist/Underinsured Motorist/Uninsured Motorist Property Damage policy provisions for bodily injury, sickness, disease, or property damage (collectively “damages”) arising from the accident.”

    The Court denied the motion to exclude this portion of Seigal’s testimony because the insurer breaches its duty not to unreasonably delay or deny payment of undisputed benefits, even if additional benefits remain in dispute. Shelter’s recommendations with regard to the payment of benefits suggested that Shelter acknowledged Schulz was entitled to a payment of more than $138,000, but suggested withholding the remainder of the policy limits until he signed a release.

    Seigal opined, in regard to the withholding of the Fisher payment, that “other courts in Colorado have dealt with similar issues and provided orders against carriers who utilized these practices”

    Lastly, and relatedly, Shelter objected to Seigal testifying, in regard to the withholding of the Fisher payment, that “other courts in Colorado have dealt with similar issues and provided orders against carriers who utilized these practices.” Seigal’s supplemental report suggested that he will provide these cases in a further supplemental appendix, and Schulz claims by his response that they have been provided to Shelter in discovery (although Shelter disputes that suggestion).

    Critically, however, these cases are nowhere to be found in the record before the court. It therefore is impossible for the court to determine whether these cases are indeed analogous, as Seigal suggests. Even if they were, the Court held that allowing Seigal to discuss these other cases at trial runs too great a risk of confusing and misleading the jury, as well as wasting time on matters that can be, at best, merely tangential to the issues this jury will be asked to decide.

    Held

    The Court granted in part and denied in part Defendant’s motion to strike certain opinions of Plaintiff’s industry standard expert Brian Seigal.

    Key Takeaway:

    • The insured bears the initial burden of producing sufficient evidence to suggest his damages were caused by an event that comes within the coverage of the policy. As a result, Shelter’s investigation was unreasonable for failing to engage experts to vet Schulz’s claim prior to the initiation of litigation.
    • According to Shelter’s recommendations with regard to the payment of benefits, Shelter was aware that Schulz was entitled to a payment of more than $138,000, but suggested withholding the remainder of the policy limits until he signed a release. However, the insurer breaches its duty not to unreasonably delay or deny payment of undisputed benefits, even if additional benefits remain in dispute.

    Case Details:

    Case Caption: Schulz V. Shelter General Insurance Company
    Docket Number: 1:23cv1657
    Court: United States District Court, Colorado
    Order Date: September 12, 2024
  • Insurance Expert Witness’ Testimony Excluded Despite Being Crucial to Plaintiff’s Claims

    Insurance Expert Witness’ Testimony Excluded Despite Being Crucial to Plaintiff’s Claims

    The CLM Trust is the owner of real property including a home and multiple barns located at 25 Cattle Farm Road in Picayune, Mississippi. At all times relevant, these structures were insured under a homeowner’s policy issued by State Farm Fire and Casualty Company. CLM’s lawsuit arises from alleged damages caused by Tropical Storm Claudette on or about June 19, 2021, and additional damage caused by Hurricane Ida on or about August 29, 2021. State Farm’s estimate of damages to the home totalled $5,505.17, the actual cash value of which falls below the Policy deductible. On March 11, 2024, CLM designated its expert Public Adjuster/Appraiser, Richard Lyon to contest State Farm’s estimate of damages incurred. State Farm filed its motion to strike expert Lyon and supporting memorandum pursuant to Federal Rules of Civil Procedure 26 and 37 and Federal Rules of Evidence 702 and 403.

    CLM was required to designate its expert witnesses no later than March 12, 2024. CLM timely filed its expert designation identifying Lyon and incorporating his June 8, 2023, estimate of repair for the home and additional Property structures. In its purported designation, CLM stated “Lyon’s report will be supplemented upon completion.” On June 6, 2024, more than two months after expiration of CLM’s expert designation deadline, CLM filed its motion to supplement expert eeport and amend case management order incorporating Lyon’s written May 30, 2024, expert report. State Farm argued that, not only is Lyon’s original report inadequate, but the supplemental report is an untimely “initial report” and sought to strike Lyon’s opinions for non-compliance with Rule 26.

    Insurance Expert Witness

    Richard Lyon is a licensed and bonded public insurance adjuster. He the founding member of Gulf Coast Adjusting, and enjoys over 15 years of working in the construction and insurance industries.

    Lyon has been continually licensed by the State of Louisiana # 508253 and State of Mississippi # 10180259 and the State of New Jersey #1513282 as a Public Adjuster. He is proficient with insurance industry leading estimating software Xactimate and Xactcontents. Lyon is an admitted expert in the field of Claims Damage Estimating in Federal Court in the Eastern District of Louisiana.

    Get the full story on challenges to Richard Lyon’s expert opinions and testimony with an in-depth Challenge Study. 

    Discussion by the Court

    Adequacy of Plaintiff’s Expert Disclosure

    CLM’s initial expert designation included Lyon’s curriculum vitae, compensation rate, previous testimony, photographs, roof reports, and estimates. CLM’s initial designation did not include the basis and reasons for Lyon’s estimates; the facts or data relied upon by Lyon in forming his opinions; or a written, signed report as to Lyon’s expected testimony. The Court held that these documents clearly do not meet requirements of a written report and are deficient pursuant to Rule 26. According to Rule 26, the initial report must be complete and not vague. Moreover, the Court held that Lyon’s estimates, without explanation or opinions, constitute “conclusory unsupported allegations.”

    CLM argued that Lyon’s estimates constituted a report because it was to be supplemented at a later date. The Court held that CLM failed to properly designate Lyon as an expert on March 11, 2024. It was not until June 6, 2024, almost three months after CLM’s expert designation deadline, that it provided Lyon’s written May 30, 2024, report.

    Substantially Justified or Harmless Factors

    CLM argued that even if Lyon’s report was initially inadequate, the inadequacy should be excused as his report would still have to be substantially changed after State Farm provided its Supplemental Disclosures. CLM further argued that because a supplemental report would have been necessary regardless of Lyon’s initial report, any potential error is substantially harmless.

    The Court looks to the following factors to determine whether a party’s failure to timely disclose an expert is harmless or substantially justified: “(1) the explanation for the failure to identify the witness; (2) the importance of the testimony; (3) potential prejudice in allowing the testimony; and (4) the availability of a continuance to cure such prejudice.”

    The explanation for the failure to identify the witness

    The first factor weighed in favor of State Farm. State Farm’s production of critical documents on March 25, 2024, after CLM’s expert designation deadline necessitated the subsequent report. As addressed earlier, Lyon’s “subsequent report” is instead his initial report. CLM failed to state why the initial report was not produced until more than two and a half months after the designation deadline or why Lyon needed this time to review the “critical documents” necessary to author his report. Instead, it appeared to the Court that CLM failed to explain to Lyon his true assignment—to create a report—until well after the designation deadline, uprooting CLM’s argument that Lyon intended to make a report on March 12, 2024.

    The Court granted CLM an extension to March 12, 2024, in which to file its expert designation. CLM had ample time to submit Lyon’s initial report in a timely manner. Simply put, CLM was aware that the Rule 26 disclosures were due. It has failed to state why an initial report was not filed prior to the deadline.

    Plaintiff asserted that Lyon is absolutely essential to CLM’s claims. While this factor leans in favor of CLM, the Court held that the importance of proposed testimony cannot ‘singularly override the enforcement of local rules and scheduling orders.’ Additionally, the importance of the testimony underscores how critical it is for a Plaintiff to timely designate the expert.

    Potential prejudice in allowing the testimony

    CLM did not timely designate Lyon. So, Lyon’s untimely report left State Farm without the chance to retain a counter-expert. CLM’s motion for leave to file supplemental expert report on June 6, 2024, was the first time it provided Lyon’s May 30, 2024, supplemental report, more than two months after State Farm’s expert designation deadline had expired. Additionally, this failure left State Farm’s deposition of Lyon at a disadvantage to prepare for trial or anticipate his future testimony. During his May 30, 2024, deposition, Lyon repeatedly could not, or refused to, answer questions regarding his investigation and inspection of the CLM property. Additionally, Lyon testified in his deposition that the June 8, 2023, estimate produced in CLM’s initial expert designation is “no longer relevant.”

    The availability of a continuance to cure such prejudice

    The ability and opportunity for State Farm to depose Lyon as to his May 30, 2024, report with a continuance still does not solve the prejudice, as “this would obviously result in additional delay and increase the expense of defending this lawsuit.” While CLM offered State Farm “the option to re-depose Lyon at Plaintiff’s expense after submission of the supplemental reports” this offer does not address the likely delay in the case and prejudice to State Farm. Additionally, a continuance would not alleviate the prejudice to State Farm as the discovery and expert deadlines have expired. Absent a rescheduling of deadlines State Farm is unable to retain counter-experts. Granting an extension of those deadlines would require a continuance of the trial, which weighs in favor of the Court striking Lyon’s opinions.

    Held

    The Court granted State Farm’s motion to strike Plaintiff’s expert Richard Lyon.

    Key Takeaways:

    • Importance of proposed testimony cannot singularly override the enforcement of local rules and scheduling orders.
    • The ability and opportunity for State Farm to depose Lyon as to his May 30, 2024, report with a continuance still does not solve the prejudice, as “this would obviously result in additional delay and increase the expense of defending this lawsuit.” 
    • The delay of even a few weeks in disclosing expert testimony disrupts the Court’s schedule and the opponent’s preparation and is thus prejudicial.

    Case Details:

    Case Caption: Bigelow V. State Farm Fire And Casualty Company
    Docket Number: 1:23cv285
    Court: United States District Court for the Southern District of Mississippi, Southern Division
    Order Date: October 27, 2024
  • Insurance Expert Witness’ Testimony Limited Because it Consists of the Interpretation of Policy Language

    Insurance Expert Witness’ Testimony Limited Because it Consists of the Interpretation of Policy Language

    Plaintiff American Empire Surplus Lines Insurance Company (“AESLIC” or “Plaintiff”) issued to J.R. a commercial excess liability insurance policy, which included a premium charge to be computed as a percentage of J.R.’s gross receipts during the policy period. Plaintiff assigned an advanced premium to the Policy based on J.R.’s estimate of its gross receipts during the policy period, which was subject to adjustment if a post-policy audit reflected that J.R.’s actual gross receipts exceeded its initial estimate.

    The post-policy audit concluded that J.R.’s actual gross receipts exceeded its initial estimate, and thus J.R. owed an additional premium in the amount of $487,386.00. Following non-payment of this additional premium, AESLIC brought this action on June 13, 2023, seeking to recover payment of said additional premium.

    After Arthur R. Nelson issued his expert report in support of J.R., Thomas M. Trezise issued his rebuttal report in support of AESLIC.

    Based on his review of the audit and the Nelson Report, Trezise offered the following four opinions:

    1. The Policy was a surplus lines policy and, as such, not regulated by the State of New Jersey. [AESLIC] had full discretion to establish the forms and terms of the Policy as well as the rules and rates by which the premium was determined.

    2. The terms of the Policy solely define the relationship between [AESLIC] and J.R…. Standards and practices, whether of admitted or surplus lines insurers, have no application.

    3. The Policy provided coverage for significant risks. The coverage was not illusory.

    4.  J.R. and Nelson cannot challenge the underwriting process of [AESLIC].

    Motion to Exclude

    While addressing a number of Nelson’s premises and assumptions, Trezise maintained that “rate [at issue] was unmistakably and clearly stated and anyone familiar with basic arithmetic can understand how it determined the premium. The Policy has no flaw as to the definition of the [r]ates and is, therefore, enforceable.”

    On August 16, 2024, J.R. filed its Daubert motion to exclude Trezise’s expert opinion.

    Insurance Expert Witness

    Thomas M. Trezise graduated cum laude from Western Maryland College in 1975 with a Bachelor of Arts in American Studies and Political Science. He then obtained his Juris Doctor degree from Washington & Lee University in 1978. In 2009, Trezise was licensed as an adjuster in the State of Florida.

    From 1978 to 1992, Trezise practiced as a trial attorney, where his experience included commercial, and property & casualty and life insurance coverage and bad faith litigation and his expertise included commercial litigation, premises and premises security liability, and insurance coverage. Trezise held various positions in the insurance industry for over 30 years and, during that time, he supervised individuals who conducted premium audits. He also was involved in litigation where there was a dispute “over the premium owed or whether additional amounts were owed under the policies.” The policies in that litigation were “structured similar to the policies in this case,” because there was “an [upfront] premium involved and then a premium due at the end.”

    Additionally, Trezise’s self-identified expertise includes “the management of primary and excess property and casualty liability, property, auto physical damage, and worker’s compensation business operations, claims, coverage, and litigation, as well as reinsurance and surplus lines issues in those lines.” He also has assisted underwriting departments in the development, drafting and approval of policy forms, underwriting classifications, rate filings and risk management services.

    Get the full story on challenges to Thomas M. Trezise’s expert opinions and testimony with an in-depth Challenge Study. 

    Discussion by the Court

    Qualifications

    Defendant argued that Trezise is not qualified as an expert because he lacks relevant experience in conducting post policy premium audits, especially in connection with surplus lines policies. 

    The Court found that Trezise is qualified as an expert. The Court added that Trezise possesses “specialized knowledge” in insurance that will more likely than not “help the trier of fact to understand the evidence or to determine a fact.”

    In addition to his experience of over 30 years in the insurance industry and related experience involving insurance coverage as a trial attorney, the Court added that he has “experiential qualifications in a general field closely related to the subject matter in question.” Considering the “liberal thrust” of the Federal Rules and their “general approach of relaxing the traditional barriers to ‘opinion’ testimony,” Trezise is qualified as an expert to provide an opinion (but not as to legal conclusions). 

    Existence Of Sufficient Facts Or Data And Reliable Principles And Methods

    Defendant argued that Trezise’s opinions are not well-grounded, are not reliable, are purely speculative, and lack analysis, because Trezise has no experience with post-policy premium audits. 

    The Court found that Trezise’s opinions, as permitted herein, are based upon sufficient facts and reliable principles and methods drawn from his background, including relevant experience. Trezise has decades of experience in the insurance industry, during which he was exposed to the surplus lines market. Trezise’s opinions regarding industry practice, including his opinions about the purpose of surplus lines policies and the general existence of standards and practices in the surplus lines market, is based upon that experience. After all, Trezise explicitly tied his conclusion regarding industry practice to his specialized experience.

    Defendant argued that Trezise’s experience, which does not include participation in post-policy premium audits, does not align with the issues here. The Court held that such a “quibble” goes to the “weight and credibility,” and not the admissibility of Trezise’s opinion.

    Helpful To The Trier Of Fact

    The Court found that portions of the Trezise Report and related deposition testimony improperly reach legal conclusions. For example, the Trezise Report includes interpretation of policy language, such as the discussion of whether a professional liability exclusion clause in the Policy limits its coverage for New York Labor Law claims.

    The Court held that such legal conclusions are not helpful to the trier of fact, because an expert’s opinion on questions of law is inadmissible even when an expert—like Trezise, who is a former practicing attorney—has legal qualifications. 

    Held

    The Court granted in part and denied in part the Defendant’s Daubert motion to exclude Trezise’s expert opinion.

    Key Takeaways:

    • Trezise explicitly tied his conclusion regarding industry practice to his specialized experience. Trezise’s opinions regarding industry practice, including his opinions about the purpose of surplus lines policies and the general existence of standards and practices in the surplus lines market, is based upon his years of experience in the insurance industry and his exposure to the surplus lines market.
    • Trezise may provide testimony about the insurance industry and audits, and he may provide his opinion regarding premiums due under the Policy based upon a hypothetical set of facts. However, Trezise may not testify or provide his opinion about his interpretation of the Policy, and may not testify about any other legal conclusions. 

    Case Details:

    Case Caption: American Empire Surplus Lines Insurance Company V. J.R. Contracting & Environmental Consulting, Inc.
    Docket Number: 1:23cv4942
    Court: United States District Court, New York Southern
    Order Date: October 21, 2024
  • Insurance Expert Witness Barred From Opining On Electrical Equipment’s Sensitivity to Water Damage

    Insurance Expert Witness Barred From Opining On Electrical Equipment’s Sensitivity to Water Damage

    On March 10, 2023, Subrigo International Corporation (“Subrigo”) initiated a lawsuit against Sentinel Insurance Company (“Sentinel”) in the Los Angeles Superior Court. Shortly thereafter, Sentinel transferred the case to the Federal Court. Subrigo’s claims arose from Sentinel’s refusal to cover property damage caused by flooding at its business location. Subrigo operated a data center in Los Angeles, which needed extensive infrastructure for its network, servers, electrical systems, and cooling. The insurance policy issued by Sentinel specifically covered loss or damage to the electrical equipment used in the data center.

    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.  

    Get the full story on challenges to Gary Richman’s expert opinions and testimony with an in-depth Challenge Study.  

    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

  • Legal Conclusions Do Not Necessitate the Wholesale Exclusion of Insurance Expert Witness’ Testimony

    Legal Conclusions Do Not Necessitate the Wholesale Exclusion of Insurance Expert Witness’ Testimony

    Plaintiff Ashley Fawcett was in a car accident in 2017, while she was covered by an insurance policy issued by Defendant Standard Fire Insurance Company (doing business as Travelers Insurance Company (“Travelers”)). Fawcett opened claims with Travelers, and alleged in this lawsuit that Travelers unreasonably investigated and evaluated her claim for underinsured motorist (“UIM”) benefits.

    Travelers filed a motion to exclude the testimony of Fawcett’s expert Mary Owen because her opinions consisted of legal conclusions on the ultimate issue, namely whether Travelers’ conduct was unreasonable or violates insurance regulations. Travelers also contended that Owen lacked the experience or qualifications necessary to allow her to testify as an expert as to proper claim-handling procedures.

    Insurance Expert Witness

    Mary E. Owen is widely regarded as an authoritative expert in the field of insurance defense litigation. She is experienced in all aspects of civil litigation, from commencement to resolution, by way of dismissal, negotiated settlement, alternative dispute resolution, and jury trials.

    Get the full story on challenges to Mary E. Owen’s expert opinions and testimony with an in-depth Challenge Study.  

    Discussion by the Court

    Fawcett emphasized the portions of Owen’s testimony that pertained to issues of fact and accused Travelers’ expert of including legal conclusions in his testimony. Fawcett also contended that to the extent that any legal conclusions need to be excluded from Owen’s testimony, this issue is the proper subject of a motion in limine, rather than a broad motion to exclude.

    The Court agreed with this approach, finding that wholesale exclusion of Owen’s testimony and report would be inappropriate. Owen’s declaration submitted in support of Fawcett’s opposition to Travelers’ summary judgment motion does contain opinions regarding Travelers’ compliance (or non-compliance) with industry standards, but some portions could also be characterized as legal conclusions outside her purview as an expert.

    The report attached to Owen’s declaration references legal conclusions to a lesser degree: she opined that Travelers’ conduct violated certain standards and was unreasonable, but does not, for example, conclude that this conduct constitutes bad faith. The Court did not rely on Owen’s legal conclusions in resolving Travelers’ summary judgment motion, and it can excise the legal conclusions from Owen’s trial testimony via a motion in limine.

    Travelers’ second argument, as to Owen’s expertise, also failed to persuade the Court that Owen’s testimony should be excluded entirely. Travelers has not shown that Owen is categorically unqualified to serve as an expert in this case, given Owen’s years of experience in the relevant field.  To the extent that Travelers disputed whether Owen’s experience was sufficiently particularized as to be useful in this case, this argument goes to the weight that should be given to Owen’s testimony, rather than its admissibility.

    Held

    The Court denied Travelers’ motion to exclude Mary E. Owen’s testimony.

    Key Takeaway:

    While the Court acknowledged that expert witnesses cannot offer legal conclusions, it determined that fully excluding Owen’s testimony was unnecessary. The Court found that a motion in limine could resolve any concerns regarding legal conclusions in her testimony, allowing her opinions on industry standards to remain. Additionally, the Court ruled that any questions about Owen’s experience concerned the weight accorded to her testimony, not its admissibility.

    Case Details:

    Case Caption: Fawcett V. The Standard Fire Insurance Company
    Docket Number: 2:23cv248
    Court: United States District Court for the Western District of Washington
    Order Date: October 4, 2024
  • Insurance Expert Witness’ Testimony Regarding the Storm Damage and Cost of Necessary Repairs Admitted

    Insurance Expert Witness’ Testimony Regarding the Storm Damage and Cost of Necessary Repairs Admitted

    This case arises from a claim for wind/hail damage that allegedly occurred on or around December 5, 2021. The damage occurred to Plaintiffs’ property located at 16207 E. 47th Place, Tulsa, Oklahoma. State Farm inspected the home twice and found minor hail damage. State Farm did not observe any hail damage to the roof itself. According to State Farm, the minor hail damage observed did not exceed the deductible; therefore, no payment was issued.

    Plaintiff designated R. Sean Wiley as a construction and insurance industry expert to testify regarding his assessment of hail and wind damage to Plaintiffs’ roof and the estimated replacement cost. 

    Defendant sought an order barring Plaintiff from calling Wiley as an expert witness on the grounds that his opinions were unreliable and inadmissible under Rule 702.

    Insurance Expert Witness

    Randy (Sean) Wiley is the President of JW Construction Management Inc. and works as insurance appraisal and umpire in insurance claims. He also works as a construction consultant for insurance carriers.

    Want to know more about the challenges Randy (Sean) Wiley has faced? Get the full details with our Challenge Study report. 

    Discussion by the Court

    The Court held that Wiley is qualified to provide expert opinions in the areas of his proposed testimony.

    Reliability and Relevance

    Defendant challenged Wiley’s expert opinions as speculative solely because Defendant believed Wiley was first retained after an “historic Father’s Day storm struck Plaintiffs’ neighborhood” in June 2023. Based on this belief, Defendant assumed “Wiley’s ‘multiple inspections’ likely occurred after the Father’s Day storm,” and Defendant faulted Wiley for failing to address that storm “or provide an explanation of how he links all of the alleged damage he reports to the 2021/2022 storms” underlying Plaintiffs’ insurance claim.

    Plaintiff stated that “Wiley first inspected the Bales’ home on June 3, 2022, more than a year before the Father’s Day storm” and provided a one-page affidavit from Wiley so stating. Wiley also stated that his report “discusses damage that was present during my June 3, 2022 inspection.”

    The Court found that Defendant’s criticism of Wiley’s opinions was unfounded.

    Defendant attempted to avoid this conclusion by attacking Wiley’s affidavit as an untimely supplemental report. Defendant argued at length that Rule 26(a) required Wiley to provide a complete statement of his opinions and their basis in his original report and that his affidavit is a supplemental disclosure that should be disregarded. 

    Rule 26

    The Court held that Wiley’s affidavit served only to correct Defendant’s factual error. Apparently, Defendant elected not to depose Wiley but assumed facts regarding his work based on certain deposition testimony of Bales. But for Defendant’s error, Wiley’s affidavit would have been unnecessary. The affidavit consisted of four simple sentences identifying the dates of Wiley’s inspections and stating that he personally observed the damage discussed in his report. Except the first date, which became material solely because of Defendant’s motion, Wiley’s original report contained the same information. Plaintiffs’ new “disclosure” was not made because they “learn[ed] that in some material respect [Wiley’s report] is incomplete or incorrect.”

    Held

    The Court denied  Defendant’s Daubert motion to exclude the testimony of Plaintiffs’ expert R. Sean Wiley.

    Key Takeaway:

    Defendant made an incorrect factual assumption concerning the timing of Wiley’s first inspection. With that mistake corrected, Defendant had no substantial basis to challenge the reliability of Wiley’s opinions regarding the storm damage and the cost of necessary repairs.

    Case Details:

    Case Caption: Bales Et Al V. State Farm Fire And Casualty Company
    Docket Number: 5:22cv851
    Court: United States District Court, Oklahoma Western
    Order Date: August 16, 2024

  • Insurance Expert Witness’ Testimony About the Industry Norms and Customs of the Insurance Adjustment Process Admitted

    Insurance Expert Witness’ Testimony About the Industry Norms and Customs of the Insurance Adjustment Process Admitted

    This claim arises from 2B’s negligent handing of an auto insurance claim brought by Harold and Milagros Lacey against GoAuto insureds, Alisha and Kayranasia Hill resulting from a motor vehicle accident in Panama City Beach, FL on July 31, 2020 (the “Lacey Claim”). GoAuto is a Louisiana-based insurance company that writes policies in Louisiana, Texas, Ohio, and Nevada and whose senior claim adjusters are not licensed in the state of Florida. GoAuto therefore engaged 2B to handle the adjustment of this Florida-based claim.

    The parties, Plaintiff GoAuto and Defendant 2B Claims, each moved to exclude opposing expert witnesses. GoAuto filed a motion to exclude the expert testimony of Kelly Gray while 2B Claims filed a motion to strike expert witness Susan Kaufman based on GoAuto’s untimely disclosure.

    Insurance Expert Witnesses

    Kelly Kathleen Gray is an attorney licensed to practice law in the State of Florida since 1993. During the past thirty years, she has focused her practice on insurance coverage and extra-contractual matters, both as a litigation attorney and as a corporate claims attorney. This includes first-party property litigation. In addition, she has several years of experience litigating various types of personal injury matters, including catastrophic automobile accidents, construction defect litigation, and professional liability.

    Get the full story on challenges to Kelly Gray’s expert opinions and testimony with an in-depth Challenge Study. 

    Susan Kaufman has been retained as a claim handling expert or consultant in jurisdictions across the United States, including cases in Colorado, Florida, Kentucky, South Carolina, Utah, South Dakota, Indiana, Wyoming, Illinois, Nevada, Washington, and Arizona. She has given testimony as an expert in insurance claim practices on 80 or more occasions in state or federal court. She is presently a Florida Licensed All Lines Adjuster (620), and she has held such license since 1986.

    Want to know more about the challenges Susan Kaufman has faced? Get the full details with our Challenge Study report. 

    Discussion by the Court

    Kelly Gray

    GoAuto did not challenge Gray’s qualifications. Instead, it argued her testimony would not assist the jury for three reasons: it focused on irrelevant facts, did not articulate an objective industry standard, and constituted legal argument rather than expert opinion.

    As to relevance, GoAuto argued Gray’s differentiating between a third-party administrator (TPA) and independent adjuster (IA) is a “red herring” since “the crux of this case is not whether 2B’s relationship with GoAuto was that of an IA or that of a TPA, but whether 2B made negligent misrepresentations to GoAuto on proper Florida claims handling.” But regardless of “the crux” of the case, the Court held that the nature of the parties’ relationship (which is disputed) is relevant in determining what duties were owed. And to the extent GoAuto argued Gray was wrong about the relationship, that is a question for the jury.

    Next, GoAuto argued Gray did not articulate an objective, industry standard—that she provided only general statements of a professional standard without clearly defining it. But, the Court found that Gray described industry norms and customs of the insurance adjustment process that are “beyond the understanding of the average layperson.”

    GoAuto claimed Gray did little more than summarize the record and make legal conclusions that usurped the jury’s role.  Gray opines about the different relationships within the insurance industry, what the standards are for those relationships, and whether 2B Claims’ conduct was consistent with those standards, which, according to the Court, are admissible opinions.

    Susan Kaufman 

    2B Claims moved to strike expert witness Susan Kaufman based on GoAuto’s untimely disclosure. The expert disclosure deadline had been April 30, 2024. 2B Claims had served its expert disclosure by that deadline, but GoAuto had not. GoAuto disclosed Kaufman as a rebuttal expert witness on May 30. The parties disputed whether Kaufman was a true rebuttal witness and whether the disclosure had been timely.

    The Court held that the rule-breaking party has the burden to show its failure to disclose was harmless. Here, GoAuto has shown that the delay is harmless. As GoAuto argues, the disclosure came a month before the close of discovery and several months before trial, leaving ample time for discovery and trial preparation with the new information. Indeed, 2B Claims does not appear to contend that the disclosure’s timing prejudices it, but rather that the testimony itself is harmful. 

    Held

    The Court denied both motions to exclude the testimony of Kelly Gray and Susan Kaufman.

    Key Takeaways:

    • According to Rule 704, the fact that expert testimony may “embrace[] an ultimate issue” does not, in itself, make the testimony inadmissible. Gray opines about the different relationships within the insurance industry, what the standards are for those relationships, and whether 2B Claims’ conduct was consistent with those standards. 
    • Gray described industry norms and customs of the insurance adjustment process that are “beyond the understanding of the average layperson.”
    • The expert disclosure deadline had been April 30, 2024. 2B Claims had served its expert disclosure by that deadline, but GoAuto had not. GoAuto disclosed Kaufman as a rebuttal expert witness on May 30. As GoAuto argues, the disclosure came a month before the close of discovery and several months before trial, leaving ample time for discovery and trial preparation with the new information.

    Case Details:

    Case Caption: Goauto Insurance Company V. 2b Claims Services, Inc.
    Docket Number: 5:23cv188
    Court: United States District Court, Florida Northern
    Order Date: July 18, 2024
  • Scope of Damages Identified by Insurance Expert Witness Admitted

    Scope of Damages Identified by Insurance Expert Witness Admitted

    This suit arises from alleged damage to Plaintiff, Curt Marcantel’s primary residence in Lake Charles, Louisiana, and his ranch in Singer, Louisiana, during Hurricane Laura. At all relevant times the properties were insured under policies issued by State Farm. Plaintiff filed suit in this court on June 6, 2022, alleging that State Farm had not timely or adequately compensated him for his covered losses. Accordingly, he raised claims for breach of insurance contract and bad faith under Louisiana law.

    State Farm filed a motion to exclude or limit the testimony of Plaintiff’s expert Stevephen Lott. In particular, State Farm argued that Lott’s opinions based on moisture meter readings conducted by Plaintiff’s expert Charles Norman do not meet the standards laid out in Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1995).

    Insurance Expert Witness

    Stevephen Lott has been providing professional public adjuster & consulting services to Insureds and Clients across the country. Prior to this, he spent 10 years working claims for several large Insurance Carriers on the other side of the aisle. He started Integrity Claims Consultants out of a strong belief that the Insured’s interests were not being represented fairly, by both the Carrier’s he was representing and the Public Adjusting firms they were being represented by. 

    Get the full story on challenges to Stevephen Lott’s expert opinions and testimony with an in-depth Challenge Study. 

    Discussion by the Court

    Notably, Lott testified that he did not use any moisture meters to determine readings on which he based his opinion that certain repairs needed to be made to the interior of the home. Rather, Lott relied on Norman’s moisture meter readings.

    State Farm challenged the scope of damages identified by Lott because he had relied on moisture meter readings conducted by Charles Norman. In two separate Daubert motions, State Farm had challenged Norman’s technique in using the moisture meter as well as his failure to account for the fact that both properties had sat in Louisiana’s humid weather without air conditioning for nearly a year before his inspection. The Court had denied those challenges as impacting the weight rather than the admissibility of Norman’s testimony. Accordingly, there was no basis for excluding or limiting Lott’s testimony.

    Held

    The Court denied State Farm’s motion to exclude or limit the testimony of Plaintiff’s expert Stevephen Lott.

    Key Takeaway:

    The Court refrained from excluding Lott’s opinions based on moisture meter readings conducted by Plaintiff’s expert Charles Norman because State Farm had previously challenged Norman’s technique in using the moisture meter as well as his failure to account for the fact that both properties had sat in Louisiana’s humid weather without air conditioning for nearly a year before his inspection. The Court had denied those challenges as impacting the weight rather than the admissibility of Norman’s testimony.

    Case Details:

    Case Caption: Marcantel V. State Farm Fire & Casualty Co
    Docket Number: 2:22cv1511
    Court: United States District Court, Louisiana Western
    Order Date: July 9, 2024
  • Insurance Expert Witness’ Testimony Admitted Despite Not Being Tied to Covered Loss

    Insurance Expert Witness’ Testimony Admitted Despite Not Being Tied to Covered Loss

    A district judge in Texas admitted the insurance expert’s testimony about the cost to repair or replace the damaged areas.

    This is a commercial property insurance coverage dispute arising from hail and wind damage to Plaintiff’s property located at Midland, Texas. Landmark insured the Property under a commercial policy. Landmark received notice that the Property had sustained storm damage with the date of loss claimed as June 19, 2020.

    On March 28, 2022, Landmark sent Plaintiff a letter explaining that investigation revealed that the roof was exposed to multiple hail events on April 16, 2017; on May 16, 2017; and/or on April 23, 2019, but did not support that a hail event occurred at the Property on or about June 19, 2020. Plaintiff subsequently filed suit against Landmark for alleged property damages with a date of loss of June 19, 2020.

    Plaintiff designated Kevin Funsch, “a licensed public adjuster and owner of US Insurance Adjusters, LLC.” On March 22, 2024, Landmark filed a motion requesting that the Court exclude Plaintiff’s expert witness, Funsch’s testimony and strike his expert report.

    Insurance Expert Witness

    Kevin Funsch is a public adjuster and the owner of an insurance adjusting firm with a solid background in claims handling and estimating. He is experienced in adjusting property losses and performing appraisals.

    Get the full story on challenges to Kevin Funsch’s expert opinions and testimony with an in-depth Challenge Study. 

    Discussion by the Court

    Landmark sought for Funsch’s report to be struck and his testimony excluded because: (1) Plaintiff’s expert designation and Funsch’s report did not comport with Federal Rule of Civil Procedure 26(a)(2); (2) Funsch’s report and opinions were unreliable; and (3) Funsch’s report and opinions were irrelevant.

    Funch’s Compliance with Rule 26 and Rule 702

    Defendant asserted that Funsch’s expert report is deficient for multiple reasons: (1) it “did not contain a complete statement of the basis and reasons for Funsch’s opinions as to the damages sustained to the property and the cost of repairs”; (2) Funsch did not “explain in his report how his experience as an insurance adjuster led him to reach his conclusions”; (3) the report “did not include any explanation as to the basis or reliability of the estimate”; (4) it “failed to demonstrate that Funsch’s opinions on the damages and necessary repairs are based on sufficient facts or data”; and (5) “that Funsch reliably applied those principles and methods in forming his estimate as required by Rule 702”.

    After thoroughly scrutinizing Funsch’s report, the Court found it satisfied both Rule 26 and Rule 702. It added that Landmark’s reliance on its cited Rule 702’s advisory committee note was inapplicable to Funsch’s expert report in this case, as he stated that he relied on multiple other documents and conversations with Neil Hall in forming his opinions, rather than relying solely on experience as the advisory committee note contemplated.

    The Court addressed Landmark’s arguments that Funsch failed to demonstrate his opinions on the damages and necessary repairs are based on sufficient facts or data, the product of reliable principles and methods; and that he reliably applied those principles and methods in forming his estimate as required. The Court noted that Plaintiff designated Funsch as his damages expert. Funsch is offered as an expert to provide opinion testimony only on the cost to repair or replace the damaged areas identified in the Hall Report.

    Reliability of Kevin Funsch’s Opinions

    Next, Landmark asserted Funsch’s “opinions regarding the costs of repairs are unreliable because he relied on unexplained assumptions about the Property that have no factual basis.” Landmark’s argument is premised on Funsch’s deposition testimony. In his deposition, Funsch stated most of the quantities and measurements in his estimate were copied over from the Berkley estimate. Then, because Hall’s report “only called for replacing some sections of the roof and the Berkeley estimate called for replacing all of them, Hall told Funsch to just use ‘about half’ of some of the Berkeley quantities.” Funsch admitted he “wasn’t able to verify every single one of the quantities.” Funsch concluded ‘these quantities, the number of items seems reasonable’ which Landmark asserted were “assumptions” by Funsch instead of “actual quantities” actually rendered the entirety of Funsch’s opinions unreliable.

    The Court, citing Rule 703, found Funsch’s testimony and report reliable.

    Relevancy of Kevin Funsch’s Opinions

    Landmark argued Funsch’s opinions were irrelevant because: (1) his repair estimate was based on prices as of April 2023, when the Policy required valuation based on the date of loss; (2) his repair estimate was a replacement cost estimate, not an actual cash value estimate; and (3) his opinions were not tied to “covered causes of loss.”

    His repair estimate was based on prices as of April 2023, when the Policy required valuation based on the date of loss

    Defendant first asserted Funsch’s opinions were irrelevant and/or not helpful to the jury because his report contained prices from April 2023 instead of 2019, and the Policy’s valuation provision mandated the cost of repairs be in 2019 (the alleged date of loss).

    The Court found that the date of Funsch’s damage estimate did not render it
    completely irrelevant and unhelpful; rather the exact weight to be given to Funsch’s testimony and expert report was for the fact finder to determine.

    His repair estimate was a replacement cost estimate, not an actual cash value estimate

    Landmark argued Funsch’s opinions were irrelevant and/or not helpful to the jury because his report contained only a replacement cost estimate, and “[i]n order to receive Replacement Cost coverage, the Policy stated that Plaintiff must first ‘actually’ repair or replace the property.” However, “it was undisputed that Plaintiff did not make the necessary repairs and the very minor repairs Plaintiff did make were not made until over two and a half years later.”

    The Court noted that whether Plaintiff could recover replacement cost value or actual cash value damages was a point of contention currently being litigated. Thus, without an order barring Plaintiff from recovering replacement cost damages, the Court found Funsch’s opinion as to replacement cost damages was relevant.

    Funsch’s opinions are irrelevant and/or not helpful because his opinions are not tied to a covered loss

    Landmark argued Funsch’s opinions are irrelevant and/or not helpful because his opinions are not tied to a covered loss. The Court emphasized that Plaintiff designated Funsch as his damages expert. Funsch is offered as an expert to provide opinion testimony only on the cost to repair or replace the damaged areas identified in the Hall Report.

    Held

    The Court denied Landmark’s motion to strike and exclude the testimony of Kevin Funsch.

    Key Takeaways:

    • It is not unusual in insurance coverage cases to have separate causation and damages experts, and to have the damages expert rely on causation opinions from the separate expert.
    • Simply because Funsch relied on Hall’s opinion and his own analysis of photographs, does not render Funsch’s reliability below Rule 702’s threshold, as this is exactly the kind of facts and data experts in Funsch’s field reasonably rely on in forming their opinions.

    Case Details:

    Case Caption: William Douglas C/O The Havens Group, Inc. V. Landmark American Insurance Company
    Docket Number: 7:22cv167
    Court: United States District Court, Texas Western
    Order Date: May 28, 2024