Insurance Claims And Issues

Expert Witnesses, Reasonableness of Conduct and Other Business/Law/Financial Issues.

     Do you pay your Expert Witnesses $1,000 an hour?  Summaries in the newspapers of recent studies reflect that Expert Witnesses often charge that much.  Here is a handy link here.  This report uses many of the studies as resources.

    It is interesting that in 1 out of 3 lawsuits, Expert Witnesses testify at Trial in Federal Court about the "reasonableness of a party's actions" and other "business/law/financial" issues, as reported by studies of Federal Civil Trials and surveys of Federal Trial Judges across the nation.  More such issues are likely to be presented as the financial crisis deepens.

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Vioxx Decision Shows Limits of Expert Witness Testimony.

     "An expert's bare opinion will not suffice to support a jury's verdict."  Download Merck_Co. v. Ernst (Tex. 14th Ct. App. Case No. 14-06-00835-CV, Opinion Filed May 29, 2008)..txt at page 15 of 20.

     In this recent Texas appellate decision, the Texas appellate court reversed a judgment entered on a jury verdict against Merck & Company in a wrongful death case.  Mrs. Carol Ernst contended that Vioxx, a drug manufactured by Merck, killed her husband.  Three Expert Witness physicians testified in the Plaintiff's behalf.  Their testimony was unsupported by sufficient facts in the record, the Texas appellate court ruled.  "The substance of the [experts'] testimony must be considered."  Id.

    The legal standards governing the weight to be given to Expert Witness testimony, including on appeal, mark the same weight that Expert Witness testimony will have to carry in Insurance Cases, or similarly be deemed legally insufficient to support a jury's verdict against the defendant it appears.

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Disclaimer Letters and Catch-Alls: No Waiver? Prejudice?

     Disclaimer Letters usually end with a 'catch-all' sentence.  It follows a list of specific reasons why the Insurance Company has concluded there is no Coverage for a claim.  The catch-all sentence usually goes something like this:  'Nothing in this letter nor any investigation undertaken by or for the Insurance Company waives or is intended to waive any rights of any of the parties to the Insurance Policy.'  Ever wonder why Disclaimer Letters have that language, or if this language is any good to actually stand up against a claim of waiver because a provision in the Policy was not specifically mentioned in the Disclaimer Letter?

     In a recent decision, a Federal Court in New York has held that similar language in a Disclaimer Letter allowed a Business Owners Property Insurance Company to deny Coverage for a reason that the Insurance Company did not mention in its Disclaimer Letter.  Not only did the Insurance Company not mention the particular Policy provision in its Disclaimer Letter, but the applicability of the provision apparently came to light for the first time in the lawsuit that was filed by the Policyholders against the Insurance Company after it disclaimed all coverage.  Here is a link to the Official Report:  Dalton_v. Harleysville Worcester Insurance Co. (E.D.N.Y. Case No. 05.CV.2020, Opinion Filed July 23, 2007).pdf.  This decision is also accessible by subscription at 2007 WL 2120403.   A Notice of Appeal was filed on August 16, 2007 and an appeal is apparently still pending in this case.  Here is what happened in the Trial Court.

 

Expert on Cause of Damages Disqualified in Texas.

     "An expert who is trying to find a cause of something should carefully consider alternative causes."  Wyndham_International_Inc. v. Ace American Insurance Co. (Tex. Ct. App., Dallas, Case No. 05.04.01443.CV, Opinion Filed March 10, 2006).htm.  The Plaintiff in this case proffered a single Expert on the issue of its Damages.  The Plaintiff, Wyndham, claimed business income loss exceeding $66,000,000.00 in this case, which Wyndham attributed to the events of 911.

     As a result of the four hijacked commercial airliners that flew into various buildings and a field on that date, Wyndham claims that it lost many hotel bookings.  Its one Expert on its Damages Claim did not take into account evidence of rebookings, or "any other causes which could have affected Wyndham's profitability," according to the Texas Appellate Court.  The Court affirmed the Trial Court's Orders Excluding this Expert Witness and as a consequence Dismissing the Claim, since there was no other Witness nor Evidence of Damages.

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Insurance Expert Not Reimbursable in Sixth Circuit, Court Holds.

     In a post today on Insurance Claims Bad Faith, www.insuranceclaimsbadfaith.typepad.com, a recent Sixth Circuit decision is examined in which the Federal Court unambiguously held that a party to that Insurance Case could not be be reimbursed for the fees of its Expert Witness, i.e.,  "the hourly rate charged for the expert's time and services" under various Federal Rules and Statutes.  Careful attention should be paid by parties and practitioners to those Federal Rules and Statutes, and others.

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Expert "Guesswork And Speculation" Disallowed, "Physically Impossible Assumptions" Not Excludable, ...

                               ...  and Case Dismissed.   

     "Generally, Fed. R. Evid. 702 provides the standard for admission of expert testimony [in Federal Courts].  The Rule states that an expert's opinion must be based on facts established by independent evidence properly introduced, and that expert witness testimony must be both reliable and helpful to the jury as a predicate for admissibility."  Mayton_v. Auto-Owners Insurance Co. (E.D. Va. Case No. Civ.A.3.05CV667, Opinion Filed May 2, 2006).pdf. A subscription-required report of this interesting decision is at 2006 WL 1214831.

     The Defendant Insurance Company filed a motion to exclude two Insurance Experts in that case.  One was "an independent insurance adjuster who was initially hired by Defendant Auto-Owners to conduct an investigation after the Hurricane."  Official slipsheet Opinion, linked above, at page 3.  This Expert offered opinions about "the cause of damage to a structure".  Id. at 3-4.  The Federal Judge granted the Defendant's Motion to Exclude the Expert Testimony as to the proposed opinions of this Expert.  The Federal Court held that his "proposed opinions are not the product of reliable principles and methods are are in violation of Fed. R. Evid. 702....  [Further, his] opinions regarding wind and the storm surge are unsupported by his training and education.  They only amount to guesswork and speculation."  Id. at 4.

     The other Expert at issue fared better in the Federal Court's eyes.  The other Expert is "a professional engineer," who offered opinions about wind causing damage, when in what sequence, and at what angle.  The Defendant contended that this Expert's conclusions were incorrect, that he misunderstood facts, and that his observations were based on what the Defendant argued "are physically impossible assumptions."  Id.  Without mentioning Rule 702 in regard to the proposed testimony of this Expert, the Federal  Court denied  the Defendant's Motion to Exclude his Expert Testimony.  Id.

     It is of further interest that in the same Order, the Federal Judge addressed and GRANTED the Defendant's Motion for Summary Judgment on both claims, for alleged Breach of the Insurance Contract and for alleged Bad Faith.  Id. at 7-13.  That meant that the entire case would be closed (which it was), that there would be no Trial absent a reversal on appeal (an appeal apparently was not taken), and that the Expert who was not Excluded from Testifying, will never testify at a Trial in this case because on the same day, in this same Order, the Federal Judge ruled in essence that there was no genuine issue of material fact for a Trial.

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Expert Properly Relies on Statutes and Regulations ...

                            ... Even If No Lawsuit Exists For Their Breach.

     Testimony of an Expert Witness was held in a recent case to be proper when based in part on statutes and regulations that did not provide a claim or cause of action for Bad Faith.  The Policyholder's claim in that case was not based on any statutes or regulations.  Her Bad Faith Claim in that case was instead based on alleged common law Bad Faith arising out of her Homeowner's Insurance Company's alleged "breach of the implied covenant of good faith and fair dealing".  She relied on the Expert's Testimony as evidence in support of her common law claim.  Jordan_v_Allstate_(Cal. 2d DCA March 22, 2007).pdf.

 Note that the statute and the regulations relied on by the Expert Witness in this Bad Faith Case involved Insurance Claim Handling Practices.  See id. at pages 19-20 and footnotes 8 and 9.

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Don't Let Your Babies Grow Up To Be Experts.

     Retention of an Expert before Insurance Bad Faith was claimed is the subject of a new case and a new post at Insurance Claims and Bad Faith Law Web Log.  Here is the new case discussed there:   Ullman_v. Auto-Owners Mutual Insurance Co. (S.D. Ohio Case No. 2.05.CV.1000, Opinion Filed June 11, 2007).pdf.  Sometimes an Expert can become part of the Bad Faith Case, even if she or he does not want to be.  See the analysis at Insurance Claims and Bad Faith Law Web Log.

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Expert Witnesses: Guidance, Documents, and Court Orders.

    Experts in Insurance Cases can find guidance in cases involving Experts in other kinds of cases, of course.  For example, there is currently a flap involving use by a Plaintiff's Expert Witness physician, of documents protected by Court Order.  The Defendant in that case disputed the Expert's use of the protected documents.  Regardless of the other ramifications of the flap, including whether the Expert admitted to "illegal" acts or not, all involved agree that the Expert in question will pay $100,000.00 to the Defendant.  The Defendant announced that it will give the money to charity.

    The convoluted and complicated story, such as it has become known at this time, including  an explanation of many lengthy Orders entered in the case by Federal Judge Jack B. Weinstein of the United States District Court for the Southern District of New York, is being widely reported thanks to the results of a lot of hard work posted in several informative places, including Torts Prof Blog and Health Blog of the Wall Street Journal Online.

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Update--Expert: Things We Remember

    In the recent criminal trial in Washington, D.C. concerning perjury, obstruction of justice, and lying charges, evidence was proffered last year of a "memory expert".  Newspaper reports and the Hearing conducted to examine this proffered testimony in Federal Court were posted here on October 28, 2006.  Here is how it begins: 

    Expert Proffered for Memory Forgets Previous Crossexam!

                When Does an Expert Hearing Make National News?

         When the Expert is being examined in Federal Court for reliability in a high-profile case.  And, it seems, when the Expert is proffered on what the media calls "a memory defense," and testifies that she forgets that the interrogating attorney, in this case Patrick Fitzgerald, also previously cross-examined her in a different case.

The Federal Judge ruled to exclude this proferred testimony, a ruling which was posted here on November 3, 2006.  Now, the excluded expert is given a forum by a newspaper to opine that if she had only been allowed to testify there may not have been a conviction in that Federal criminal case.

     Unfortunately, the newspaper in question requires a paid subscription in order to link to it:   here .  I forget the price of the newspaper online or in print on the newstands, but let's say it costs a dollar.  I do remember an old saying that in this case would go something like, with the opinion piece and a dollar for the newspaper, you can buy a copy of the newspaper.

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