Plaintiffs are the estate and heirs of Timothy Hunt, who was killed in a grain engulfment accident. Defendant is the insurance company who insured the farm (Butts Farms) where the accident occurred. Defendant denied coverage for the accident under the policy. Butts Farms assigned its claims to Plaintiffs as part of an arbitration and non-execution agreement. Plaintiffs secured an arbitration award of approximately $12 million against Butts Farms and seeks to collect that from Defendant.
Plaintiffs designated Ronald Clifton as an expert on Defendant’s claims handling practices. Clifton’s report outlined the facts of the case, and in doing so concluded that the grain vacuum Hunt was using was attached to the trailer. He opined on the liability of Butts Farms, coverage of the loss under the policy, claims handling deficiencies by Defendant, Defendant’s conformance with its “Claims Best Practices” and the Kansas Unfair Claim Settlement Practices Act, and Defendant’s breach of fiduciary duty toward Butts Farms.
The Defendant filed a motion to exclude Plaintiffs’ expert Clifton.
Insurance Expert Witness
Ronald Clifton has over 37 years of claim handling experience. He has also served as an insurance claims litigation consultant for over 21 years.
Clifton’s opinion is “that a reasonable insurer would have settled this claim and paid the full available policy limits,” that Defendant acted negligently by failing to settle the claim for policy limits, and that Defendant failed to act in good faith in handling the claim.
The Court has reviewed Clifton’s report. It shared many of the concerns raised by Defendant. Clifton’s report includes an extensive discussion of policy provisions and a conclusion that the accident is covered under the policy.
Analysis
To begin with, Clifton concluded without elaboration that the grain vacuum was attached to the grain trailer. But that is a factual question the jury will be asked to decide—a fact question that does not require expert testimony. If a jury finds the grain vacuum was attached to the trailer (which can include being tied), coverage exists under the policy. It is not Clifton’s role to tell the jury how they should decide by simply declaring there is coverage based on the grain vacuum being attached.
To the Court’s knowledge, there are no disputes about any other provisions in the policy. Even to the extent there was an issue about the policy, it is not Clifton’s role to opine on what the policy says or does not say because that is a legal issue for the Court to decide.
Clifton’s report also repeated opinions of others, including a doctor’s opinion about Hunt’s cause of death. Clifton is not qualified to opine on that issue, nor is it proper for him to simply repeat what others have said. To the Court’s knowledge, Hunt’s cause of death is not an open issue in this case.
There are other opinions that do not seem to “fit” the case. For example, Clifton’s report included a series of opinions that Butts Farms had a duty to exercise reasonable care toward Hunt, and it breached that duty. To the Court’s knowledge, Butts Farms’ obligations toward Hunt are not an issue the jury will be asked to decide. Additionally, Clifton opined that Defendant breached its fiduciary duty to Butts Farms. This opinion is conclusory and veers into legal opinion.
Held
The Court granted in part and denied without prejudice in part the Defendant’s motion to exclude the testimony of Ronald Clifton.
Key Takeaway
The Court found that many of Clifton’s opinions are not relevant, would not aid the jury, or touch on legal matters or on matters beyond his expertise. However, Clifton did have some expertise that qualifies him to offer opinions about insurance industry standards and practices. What those opinions are and the basis for them are not clear from the report, however. Accordingly, the Court will voir dire Clifton before the trial.
Case Details:
Case Caption:
Hodges V. Farm Bureau Property & Casualty Insurance Company
Plaintiffs, Michael and Karen Green claimed that they had sustained loss as a result of hail and wind. Defendant Nationwide Mutual Insurance Company issued them a homeowner’s policy but when Plaintiffs filed a claim for loss under the policy, it gave rise to this dispute because Nationwide apparently failed to reimburse all covered losses under the Policy.
Nationwide sought to exclude the testimony of Plaintiffs’ retained expert witness, James Taylor, a licensed public adjuster.
Insurance Expert Witness
James Taylor has extensive knowledge about restoration and common practices in adjusting and handling claims in the insurance industry. He is licensed public adjuster, insurance appraiser, and IICRC-certified restorer with significant experience in insurance claims handling, loss assessment, and industry-standard compliance.
He has worked in field of remediation since 2000, and as an insurance adjustor and appraiser since 2019. Taylor’s professional background includes experience in water intrusion and hail damage assessments and structural loss analysis. He holds a public adjuster license with multi-state reciprocity, including Missouri, and maintains IICRC certification in restoration practices.
Nationwide argued that Taylor lacked the qualifications to opine on the Nederveld engineering report or offer credibility opinions regarding third parties. Plaintiffs countered that Taylor’s testimony concerned insurance industry standards and claims handling practices, not legal conclusions, and agreed he would not testify on the legal standard for vexatious refusal to pay under Missouri law.
The Court found Taylor qualified based on his extensive experience as a public adjuster, appraiser, and restorer. The Court ruled that Taylor will be permitted to testify regarding insurance industry practices and standards in general, proper claims handling, how certain information affects claims decisions, and whether Nationwide’s actions deviated from insurance industry customs and practices.
As for the Nederveld engineering report, the Court allowed Taylor to testify on how the industry uses such reports and why, as an adjuster, he finds it reliable or not, but ruled he could not offer opinions on structural engineering defects. Similarly, while he could not give unfounded credibility opinions about third parties like SeekNow or Sedgwick Claims, the Court permitted him to testify if their services or practices were consistent with insurance industry standards.
Held
The Court granted in part and denied in part the Defendant’s motion to exclude the testimony of expert James Taylor.
Key Takeaway
Taylor is not an attorney offering a legal opinion as to whether Nationwide complied with Missouri law. He is a licensed public adjuster and former restorer, and he is an expert in insurance industry practices and standards. He is offering opinions as to whether Nationwide’s handling of Plaintiffs’ claim was in line with practices in the insurance industry, which goes to the issue of reasonableness and is admissible.
Case Details
Case Caption:
Green v. Nationwide Mut. Ins. Co.
Docket Number:
4:23 cv 156
Court Name:
United States District Court for the Eastern District of Missouri, Eastern Division
This case is centered around a contractual dispute between Greenup Industries, LLC (“Greenup”), the general contractor, and Five S Group, LLC (“Five S”), the subcontractor, along with the involvement of Hartford Fire Insurance Company (“Hartford”), related to excavation work on a U.S. Army Corps of Engineers (“USACE”) project.
In 2020, Greenup was awarded a contract to execute a specific scope of work related to the United States Army Corps of Engineers’ Hurricane Storm Damage Risk Reduction Project at the Bonnet Carre Spillway, referred to as the Stockpile #1 work (the “Prime Contract”). The comprehensive work involved excavating a designated amount of fill from Bonnet Carre Spillway and transporting it to another specified location. Subsequently, Greenup initiated the process of soliciting bids from subcontractors to undertake particular aspects of the Stockpile #1 work, and Five S submitted a bid proposal to Greenup.
On October 26, 2020, Greenup, as the prime contractor, entered into a subcontract (“Subcontract”) with Five S, the subcontractor. The terms of the Subcontract outlined that Five S would be responsible for providing labor and equipment to prepare the excavation site and excavate 1,000,000 cubic yards (“CY”) of fill material (the “Work”). The Subcontract stipulated that the excavation of 1,000,000 CY of fill material should be completed within approximately 15 months. Notably, Five S was awarded only a portion of the total Work and did not receive any trucking or delivery responsibilities; the Subcontract exclusively focused on site preparation and excavation. The Subcontract also integrated the schedule of the Prime Contract.
Greenup retained the authority to schedule the work, and Five S had the obligation to complete the various components and the entirety of the Subcontract Work in accordance with the schedule outlined in the Prime Contract with the USACE or as directed by Greenup. Throughout the course of the litigation, Five S and Hartford consistently asserted that Five S was entitled to standby time for delays purportedly caused by Greenup. Additionally, they contended that Greenup was obligated to provide a specific number of trucks under the Subcontract.
Now, the current motion before the Court involved Greenup’s request to strike and/or limit the expert testimony and reports of David E. Lourie, retained by Five S. Greenup argued that Lourie’s proposed testimony contained impermissible legal conclusions and should be excluded from the trial. Specifically, they disputed two of Lourie’s opinions concerning contractual interpretation and another opinion which questioned the factual support on soil moisture at the project site. Five S, in opposition, defended Lourie’s qualifications and asserted that his testimony could help in resolving the terms of the subcontract which the Court found ambiguous. The Court was tasked with deciding whether Lourie’s expert opinions should be admitted into evidence.
Geotechnical Engineering Expert Witness
David E. Lourie P.E., D.GE, is CEO and founder of Lourie Consultants, a geoprofessional firm based in Louisiana near New Orleans. He has been practicing geotechnical engineering and geoenvironmental consulting for nearly 40 years. He is an adjunct professor at the University of New Orleans and has been an adjunct associate professor at Tulane University.
Discussions by the Court
The Court analyzed the motion to exclude expert testimony in accordance with Federal Rules of Evidence 702 and 704. Federal Rule of Evidence 702 served as the governing framework for the admissibility of expert witness testimony, emphasizing the need for the expert’s knowledge, skill, experience, training, or education to assist the trier of fact in understanding the evidence or determining a fact in issue. Trial Courts are entrusted with the responsibility of acting as gatekeepers to ensure the reliability and relevance of expert testimony before allowing it into evidence, following the principles set forth in Daubert v. Merrell Dow Pharmaceuticals (1993). Daubert established that expert testimony must not only be relevant, in the sense that it pertains to a fact in issue, but also reliable. An expert’s testimony had to meet the requirement of relevance, which extended beyond the general relevance criteria specified in Federal Rule of Evidence 402. Specifically, the expert’s proposed opinion needed to assist the trier of fact in understanding or determining a fact in issue.
In the case at hand, the primary issue raised by Greenup and was the admissibility of three specific opinions put forward by David Lourie, the proffered expert. The first legal conclusion was “Opinion One,” where Lourie made at least two ultimate legal conclusions: firstly, that the Five S bid proposal was incorporated into the Subcontract, and secondly, that it did not conflict with the other contract documents. Importantly, he stated, “[t]herefore and subject to legal interpretation, we believe FSG is entitled to compensation for its standby time in accordance with its bid proposal”. The second legal conclusion was “Opinion Two,” where Lourie contended that the primary reason for low productivity and schedule slippage was Greenup’s inability to provide the required number of trucks consistently. Lastly, in “Opinion Three,” Lourie attempted to discredit Greenup’s claims regarding the adverse impact of wet clay on Five S’s performance. He did so by presenting another legal and ultimate conclusion, stating, “Therefore, we conclude there is no basis for JW’s allegation that FSG’s ‘means and methods’ were responsible for the clays being too wet.” Importantly, this conclusion was not based on a scientific analysis but on his assertion that Greenup “should have anticipated that the excavated soils loaded into trucks could be ‘wet’ and require processing.” Notably, Greenup contended that Lourie failed to provide factual support for this assertion, and it contradicted the explicit terms of the Subcontract, which assigned all means and methods to Five S.
The Court emphasized the well-established principle that experts were not allowed to render conclusions of law, citing Goodman v. Harris County. The specific legal issue under consideration was whether the Subcontract incorporated the Bid Proposal, which constituted a question of contractual interpretation. The Court noted that while experts could assist in resolving contractual ambiguities by shedding light on industry customs and usage, Lourie’s background and experience as a civil and environmental engineer did not qualify him to provide opinions on contractual responsibilities.
The Court cited the case of Dickson v. Sklarco L.L.C., which addressed a similar situation where an expert outside the field of law was found to be improper in rendering legal conclusions. In this case, the Court concluded that Lourie’s testimony about the contractual obligations of the parties was outside the scope of his expertise and qualifications. The Court found that Lourie did not provide evidence or reasoning based on industry customs or practices that would support his opinions regarding the contractual obligations.
While the Court acknowledged that expert testimony should be admitted if it helped the jury understand complex technical matters, it was of the opinion that Lourie’s testimony went beyond this scope and encroached into the realm of legal conclusions. As such, the Court decided that Lourie’s legal opinions concerning the contractual aspects should not be admitted as expert testimony. It emphasized that Lourie was not licensed to practice law in the state of Louisiana and, therefore, was not qualified to offer legal conclusions on contractual responsibilities of the parties.
The Court, however, found Lourie’s testimony in “Opinion Three” regarding soil moisture to be based on sufficient facts and data. Lourie had relied on USACE test results, preconstruction soil boring data, and other project documents. This met the requirements of Federal Rule of Evidence 702, as it was firmly grounded in data and the expert’s experience in the field. The Court noted that the opposing party’s disagreement with Lourie’s interpretation of the facts did not render his opinion irrelevant or unreliable. The Court highlighted that challenges to the factual basis of expert opinions were more appropriately addressed through cross-examination during the trial. The Court stated that under the adversarial system, challenges to the factual basis of an expert opinion were best addressed through cross-examination rather than exclusion.
Held
Greenup’s request to strike and/or limit the expert testimony and reports of David E. Lourie was granted in part and denied in part by the Court. The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.
Key Takeaways
This case demonstrates the importance of ensuring expert witnesses stay within the bounds of their expertise when testifying. The Court excluded portions of the expert’s proposed testimony that strayed into providing legal conclusions, rather than keeping to his area of technical expertise. Specifically, the engineering expert was prohibited from opining on the meaning of contract terms, whether one document was incorporated into the contract, and the contractual responsibilities of the parties. Interpreting contracts requires specialized legal knowledge the expert did not possess. However, the expert was permitted to testify regarding technical engineering issues like soil moisture content that were within his qualifications.
This case underscores that Courts serve a gatekeeping role in screening expert testimony to ensure it is relevant and reliable under Daubert standards. Experts cannot draw legal conclusions better left to the jury. However, experts may offer opinions on technical questions within their field of expertise that will assist the trier of fact. Challenges to the factual bases for an expert’s opinion are better handled through cross-examination rather than exclusion. Overall, this case provides guidance on confining expert testimony to the proper scope so it constructively contributes to the resolution of disputed issues.
