Insurance Expert May Not Testify About Law or Causation

Posted on November 11, 2021 by Barry Zalma

An Expert Witness May Not Testify Outside his Field of Expertise

For more than a decade I have testified as an insurance claims expert. I have never, however, even considered testifying about the cause of a loss or engineering about which I know nothing. Erie Insurance Property and Casualty Company, d/b/a Erie Insurance Group’s (“Erie”), faced with an insurance expert who proposed to testify about the law of the case and the cause of a loss, moved in limine to exclude Plaintiff’s expert Vince King from offering testimony regarding the cause of Plaintiff’s alleged damages and from offering opinion testimony as to the law of the case. In Richard Ferguson v. Erie Insurance Property And Casualty Company, d/b/a Erie Insurance Group, Civil Action No. 3:19-0810, United States District Court, S.D. West Virginia, Huntington Division (November 8, 2021) the USDC found it necessary to limit the proffered testimony of an insurance expert.

BACKGROUND

This case involves an insurance coverage dispute for property damage at Plaintiff Richard Ferguson’s home in Putnam County, West Virginia. Plaintiff alleged that his home sustained damages to the foundation walls through the blasting operations of Bizzack Construction, LLC during its road construction activities in 2017-2018. Plaintiff alleged that the foundation walls to his home sustained fifteen vertical cracks during those blasting operations.

At the time of the damage, Plaintiff’s home was covered by an insurance police issued by Erie. Plaintiff submitted a claim to Erie. Erie retained a structural engineer, Tammy St. Clair, P.E., to investigate Plaintiff’s damages and opine as to the cause of loss. Ms. St. Clair issued a report to Erie, finding that the cause of the damage to Plaintiff’s home resulted from the shrinkage of the grout-filled CMU cells. Because of this report, Erie advised Plaintiff that there was no coverage. Plaintiff sued Erie, alleging that Erie wrongfully denied coverage for his property insurance claim, which was the result of blasting.

Throughout the course of the litigation, Plaintiff identified Vince King as an insurance expert. Plaintiff stated that “Mr. King is expected to testify regarding the standard practices and protocols in the insurance industry.” In anticipation of the litigation, Mr. King produced a report in which he offered three categories of opinions: (1) that Erie engaged in post-claim underwriting; (2) that Erie breached the insurance contract by violating the implied covenant of good faith and fair dealing; and (3) that Erie could be subject to extracontractual claims.

The insurer moved in limine to preclude Mr. King from offering opinions regarding the cause of any of the alleged damages or challenging the methods and basis by which Defendant’s expert reached her conclusions. Defendant also seeks to preclude Mr. King from offering opinions regarding the law or to instruct the trial court as to applicable law of the case.

LEGAL STANDARD AND DISCUSSION

The admissibility of expert testimony in court proceedings is governed by Rule 702 of the Federal Rules of Evidence and is relevant if: “(a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.”

Expert Testimony on Causation

Mr. King’s only opinion as to Ms. St. Clair’s findings was to criticize her conduct during her investigation, specifically for not having reviewed pre-blast and post-blasting reports in ruling out blasting as a cause of loss. Defendant argued that Mr. King is not qualified, by his own admission, to volunteer opinions about grout shrinkage.

It is undisputed that Vince King is not a qualified engineer and cannot, as he did in his depositions, volunteer opinions regarding grout shrinkage or causation. He is similarly not qualified to offer opinions as to what investigation was necessary for a structural engineer to determine whether grout shrinkage had occurred, because he has no expertise in this area. Accordingly, the court concluded that Mr. King cannot testify as to causation or critique the scientific foundation underlying Ms. St. Clair’s reports, and so the Motion was granted in part.

Expert Testimony on Insurance Claims

Erie claims that Mr. King’s testimony as to insurance coverage issues or the way Erie determined coverage is irrelevant. Given that the scope of the question before the jury involves questions of insurance coverage that go beyond causation, Mr. King might be able to assist a jury in the typical protocols and analysis an insurer uses when deciding to cover a claim. This may assist a jury in determining whether the cause of damage that Defendant asserts constitutes “post-claim underwriting.” Accordingly, Mr. King may testify as an insurance expert on matters of insurance procedures and practice as they relate to coverage.

Whether or not the jury finds this evidence persuasive is a matter for them. For these reasons, Mr. King should be permitted to testify as to the analysis an insurance company should follow in determining coverage. This may implicate Ms. St. Clair’s conclusions, but if Mr. King attempts to testify as to causation or her scientific findings, this Court can rule on objections during trial as to particular questions that may be improper.

Expert Testimony on the Applicable Law

Defendant asks the Court to preclude Mr. King from testifying as to his opinions regarding the applicable law. Generally it is not permissible for an expert to opine as to the law of the case, or to instruct the trial court as to the applicable law of the case. An expert “may not testify as to such questions of law as the interpretation of a statute. or case law… or the meaning of terms in a statute… or the legality of conduct. [Jackson v. State Farm Mut. Auto. Ins. Co., 600 S.E.2d 346, 255 (W.Va. 2004).]

In his deposition, Mr. King testified at length as to the applicable law. Similarly, in his report, he explains the applicable law to support some of his contentions. These statements are inadmissible.

CONCLUSION

Mr. King may testify as to applicable insurance practice and standards. However, he may not testify as to the causation of the damage, or the scientific underpinnings of Ms. St. Clair’s report. Similarly, he must not opine on the law underlying the case. Within the scope of these limitations however, Mr. King may testify.

ZALMA OPINION

The orders rendered by the USDC appears to be correct in limiting the expert’s testimony to insurance issues. However, he claims to be able to testify about “post loss underwriting” which scheme was created to deal with a supposed overuse of the equitable remedy of rescission by insurers. Since Erie just denied the claim, did not cause the policy to be void, and only denied the claim because the cause of loss was not due to an enumerated peril that was not excluded. Underwriting – whether original or after a loss – is irrelevant to the issues and he should be precluded from testifying about a concept that is not at issue.

© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.

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