O'Sullivan v. Geico Casualty Company
Filing
99
ORDER granting in part and denying in part 73 Motion to Strike Report and Exclude Testimony of Plaintiffs Expert David Torres and granting in part and denying in part 71 Motion to Strike Plaintiffs Expert Witness Robert Baldwin. ORDERED by Judge William J. Martinez on 02/07/2017. (cthom, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 15-cv-1838-WJM-MJW
DONALD O’SULLIVAN,
Plaintiff,
v.
GEICO CASUALTY COMPANY,
Defendant.
ORDER REGARDING PLAINTIFF’S EXPERTS TORRES AND BALDWIN
In this insurance dispute pending under the Court’s diversity jurisdiction, 28
U.S.C. § 1332, Plaintiff Donald O’Sullivan (Plaintiff, or “O’Sullivan”) brings claims for
breach of contract, for breach of the duty of good faith and fair dealing, for
unreasonable delay or denial of insurance benefits in violation of Colorado Revised
Statutes §§ 10-3-1115 & -1116 (i.e., “statutory bad faith”), and for exemplary damages
against Defendant Geico Casualty Company (Defendant, or “Geico”).
Now before the Court are Defendant’s Motion to Strike Plaintiff’s Expert Witness
Robert Baldwin (ECF No. 71) and Defendant’s Motion to Strike Report and Exclude
Testimony of Plaintiff’s Expert David Torres (ECF No. 73). For the reasons set forth
below, both motions are granted in part.
I. BACKGROUND
This case was filed in August 2015. The central claim is that at the time Plaintiff
purchased his auto insurance contract, Geico did not prov ide adequate notification and
opportunity for Plaintiff to purchase uninsured/underinsured (“UM/UIM”) motorist
coverage at limits equal to the limits of his bodily injury liability coverage. See
generally Colo. Rev. Stat. § 10-4-609(2); Allstate Insurance Co. v. Parfrey, 830 P.2d
905, 912–13 (Colo. 1992). Plaintiff alleges that Geico is obligated to reform its existing
insurance coverage to provide him with a higher level of UM/UIM coverage and has
acted unreasonably in denying his claim and/or delaying payment of his insurance
benefits, contrary to §§ 10-3-1115 & -1116.
As relevant here, the initial scheduling order set the deadline for affirmative
expert disclosures at February 1, 2016, the date for rebuttal expert disclosures at March
1, 2016, the discovery cut-off date at April 22, 2016, and the dispositive motion deadline
at May 24, 2016. (ECF No. 21 at 9.) Through several unopposed motions, which the
Court granted, the parties mutually sought to extend the deadlines for affirmative expert
disclosure and for discovery cutoff. (See ECF Nos. 25, 38, 40, 48, 51.) 1
The parties then timely exchanged affirmative expert disclosures on their new
deadline to do so, April 18, 2016. (See ECF Nos. 51, 71-1, 71-3.) As relevant here,
Plaintiff’s affirmative disclosure included Mr. David M. Torres, an insurance claims
consultant, and Geico’s included attorney Jon F. Sands.
However, presumably through oversight, the parties had never requested any
extension of the deadline to disclose rebuttal experts before Geico filed an unopposed
motion on April 22, 2016, requesting such an extension. (See ECF No. 55.) This
motion came several weeks after the existing rebuttal disclosure deadline (March 1,
1
The parties did not, however, request an extension of the deadline to file dispositive
motions. (See ECF Nos. 48, 51.)
2
2016) had already passed, and after the parties had already exchanged their affirmative
expert disclosures. (See id.)
The Court granted Geico’s request to reset the rebuttal disclosure deadline to
May 18, 2016. (ECF No. 55.) The parties did not, however, seek any extension of the
existing May 23, 2016 cutoff date for discovery, which was also the deadline to
complete any experts’ depositions. (See ECF Nos. 51 & 55.) Thus, by their own
requests, as filed by Geico and granted by the Court, the parties set a case schedule
which allowed only five days between the deadline for rebuttal expert disclosures (May
18, 2016) and the existing deadline to complete all discovery, including expert
depositions (May 23, 2016).
On the re-set deadline for rebuttal expert disclosures, May 18, 2016, Plaintiff
disclosed Robert M. Baldwin as a rebuttal expert (see ECF Nos. 71-4 & 71-8), and
Geico disclosed Mr. Sands as its rebuttal witness (see ECF Nos. 58 & 71-5).
Neither party moved for any further extensions of deadlines, or for leave to
complete additional discovery or supplementation of disclosures after the close of
discovery. Therefore—at least so far as far as the record before the Court reveals—
discovery was completed by the existing deadline of May 23, 2016. (See ECF No. 51;
ECF No. 71 at 3.) Geico filed a motion for summary judgment the same day (see ECF
Nos. 60 & 61), and the motions now before the Court (ECF Nos. 71 & 73) followed on
June 27–28, 2016.
II. GEICO’S MOTION TO STRIKE TORRES
The Court first addresses Geico’s motion to strike Mr. Torres’s report and to
3
exclude his testimony pursuant to Federal Rule of Evidence 702. (ECF No. 73.)
A.
Legal Standard: Rule 702
A district court must act as a “gatekeeper” in admitting or excluding expert
testimony. Bitler v. A.O. Smith Corp., 400 F.3d 1227, 1232 (10th Cir. 2004). Adm ission
of expert testimony is governed by Rule 702, which provides:
A witness who is qualified as an expert by knowledge, skill,
experience, training, or education may testify in the form of
an opinion or otherwise if: (a) the expert’s scientific,
technical, or other specialized knowledge will help the trier of
fact to understand the evidence or to determine a fact in
issue; (b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and
methods; and (d) the expert has reliably applied the
principles and methods to the facts of the case.
Fed. R. Evid. 702. The proponent of the expert testimony bears the burden of proving
the foundational requirements of Rule 702 by a preponderance of the evidence. United
States v. Nacchio, 555 F.3d 1234, 1241 (10th Cir. 2009).
While an expert witness’s testimony must assist the jury to be deemed
admissible, Fed. R. Evid. 702(a), it may not usurp the jury’s fact-finding function. See
Specht v. Jensen, 853 F.2d 805, 808 (10th Cir. 1988). The line between what is helpful
to the jury and what intrudes on the jury’s role as the finder of fact is not always clear,
but it is well-settled that “[a]n opinion is not objectionable just because it em braces an
ultimate issue.” Fed. R. Evid. 704(a).
Ultimately, “the rejection of expert testimony is the exception rather than the
rule.” Fed. R. Evid. 702 advisory committee’s note. “[T]he trial court’s role as
gatekeeper is not intended to serve as a replacement for the adversary system. . . .
4
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.” Id. (citations and internal quotation marks omitted).
B.
Mr. Torres’s Report & Opinions
Plaintiff disclosed Mr. Torres to offer opinions regarding Geico’s handling of
Plaintiff’s underinsured motorist claim. (See ECF No. 73-1 at 1.) His written report2
indicates that he has “more than 25 years working in the insurance industry,” evidently
for State Farm. (Id.) He worked in various claims-handling roles, including “16 years
overseeing the adjusting of claims,” and managing claims handling, including litigation
in Colorado, New Mexico, and Nevada. (Id. at 2.) He left State Farm in 2014 and has
worked as a “claims practices consultant” since then. (Id. at 3.)
Mr. Torres’s report recites that his above “background and experience” have
made him “highly familiar with insurance industry customs and practices and industry
standards.” (Id.) Mr. Torres makes clear that he is not a lawyer, although his report
states that he is “familiar with the Model Unfair Claims Practices Act, which has been
largely adopted in Colorado at [Colorado Revised Statutes §] 10-3-1104.” (Id.) He
explains that “[i]f I state an opinion that an insurer failed to follow industry standard[s]
and practices, I am opining that the insurer’s conduct deviated from the norms of what
insurers typically do in the handling of claims.” (Id. at 3.)
Mr. Torres indicates that he reviewed various documents, correspondence,
2
Neither party mentions, cites, or attaches excerpts from, any deposition testimony by
Mr. Torres. (See generally ECF Nos. 73, 83, 90.) The Court is therefore left to presume that
Geico has not taken his deposition.
5
deposition transcripts and other factual and discovery materials from this litigation,
including Geico’s claim notes. (Id. at 3–5.) He also reviewed certain court opinions
from other insurance litigation. (Id. at 4.)
Mr. Torres’s report then includes a narrative discussion of his views of the
operation of the insurance industry, including sections on “General Principles of
Insurance,” “Role of Insurance Companies,” the “Nature of Uninsured Motorist
Coverage,” and “Claims Handling Standards.” (Id. at 5–10.) In this background
discussion he includes several generic statements, such as noting that “[c]laims should
be separated from profit consideration and should be handled appropriately and
thoroughly” (id. at 6), and that “[i]t is well recognized in the insurance industry that often,
an insured is in an especially vulnerable economic and personal position” when filing
claims, and that “[c]laims personnel are trained to understand this important principle
and . . . the importance of fulfilling the claims process” (id.). He notes that “[i]nsurance
companies should treat its [sic] policyholder’s interests with equal regard as . . . its
own,” and notes that “[i]n Colorado, the General Assem bly has recognized the need to
ensure reasonable and prompt handling of first party claims by enacting [§§] 10-3-1115
and 1116, which provides [sic] that an insurer will not unreasonably deny payment of a
claim for first party benefits.” (Id. at 7.)
As to uninsured motorist coverage, Mr. Torres explains that this is “first party
coverage,” and that handling such claims should be distinguished from handling thirdparty claims, specifically, that insurance companies should not “approach an UM claim
with an adversarial eye,” and should “promptly pay amounts due on first [party] claims.”
6
(Id.) As to claims handling standards, he outlines certain practices prohibited under
relevant model guidelines and the Colorado Unfair Claim Settlement Practices Act
(Colo. Rev. Stat. § 10-3-1104(1)(h)), stating these provisions and standards “should be
familiar to all claim handlers in the insurance industry. (Id. at 8–10.)
After setting out this background, Mr. Torres’s report includes a factual narrative
of the accident and claims-handling at issue in this case (id. at 10–13), followed by his
analysis applying the outlined standards to Geico’s conduct in this case ( id. at 13–17).
The analysis section of Mr. Torres’s report repeats generic statements of certain
supposed insurance industry standards (e.g., “[t]reating their insureds with equal regard
as to its own interest without turning the claims process into an adversarial process,”
and “[p]romptly and adequately communicating the basis for claims decisions”). (Id. at
14.) Mr. Torres then sets out provisions of the Colorado Unfair Claims Settlement Act
which he believes Geico violated in this case. (Id.) He concludes that based on his
review he believes Geico has improperly taken an adversarial approach to handling
Plaintiff’s claim and has “refused to issue Underinsured Motorists Benefits without clear
explanation.” (Id. at 15.)
Relevant to Plaintiff’s claim that he is entitled to uninsured/underinsured
coverage at a $100,000 policy limit, Mr. Torres opines that Geico’s claims
representative “was unaware if the limits . . . [were] explained to [Plaintiff],” and that she
had a duty “to investigate whether [Plaintiff] was offered such higher limits.” (Id.) Given
his understanding of industry standards calling for coverage in cases of ambiguity or
confusion, Mr. Torres further opines that Geico’s claims representative should “err on
7
the side of her insured,” and contrasts Geico’s handling here with what he himself had
done in similar cases and what the “leader in the insurance industry” (presumably he
means his former employer, State Farm) does in a similar situations. (Id. at 15–16.)
Mr. Torres also includes several concluding opinions. (Id. at 16–17.) Here, he
opines that “[i]t appears GEICO may be basing . . . denial . . . on their own
interpretation of the current claims environment in Colorado and this is egregious”; that
insurance companies “do not get the choice of spinning current laws in Colorado to their
own advantage”; and when faced with “different interpretations of the current claims
environment, GEICO should err on the side of their insured, which is common practice
in the insurance industry.” (Id. at 16.) Noting Plaintiff’s injuries and medical bills, Mr.
Torres objects to Geico’s requests for “prior records/bills” as “possibly” an effort to
“devalue [Plaintiff’s] claim.” (Id. at 17.)
Finally, noting that Plaintiff “was forced into litigation” in this case, Mr. Torres
opines that Geico’s conduct “constitutes an unreasonable delay and/or denial of
[Plaintiff’s] policy benefits,” that Geico was aware of Colorado case law and “knew or
should have known that it was disregarding [Plaintiff’s] rights under his policy,” and that
“this claim was not adjusted consistent with GEICO’s duty of Good Faith and Fair
Dealing.” (Id. at 17.)
C.
Analysis
Geico argues that Mr. Torres’s anticipated expert testimony and opinions should
be excluded under Rule 702 and Daubert v. Merrell Dow Pharmaceutical, 509 U.S. 579
(1993), for three reasons: (1) because he is insufficiently qualified (ECF No. 73 at 5–7);
8
(2) because his opinions are not based on a reliable application of sound principles to
the facts of this case (id. at 7–11); and (3) because certain of his opinions amount to
impermissible legal conclusions (id. at 11–13). The Court addresses each argument in
turn.
1.
Qualifications
The Court finds Mr. Torres is adequately qualified to testify as an expert under
the standards of Rule 702. Both the language of Rule 702 and Tenth Circuit precedent
make clear that the “specialized knowledge” required for expert testimony “can be
acquired through ‘experience’ and ‘training.’” United States v. Garza, 566 F.3d 1194,
1199 (10th Cir. 2009) (quoting Fed. R. Evid. 702). Mr. Torres worked for decades in the
insurance industry, in a variety of capacities relevant to matters on which he offers
opinions here.3 His report reflects familiarity with the standards and practices used by
his former employer, with standards published by industry bodies, and with statutory law
that insurers in Colorado must follow. His statement of relevant industry standards and
his opinions on how they apply in this case plainly arise from that experience. The
Court finds his experience more than adequate to support his claim that his
“background and experience” have made him “highly familiar” with industry customs
and practices (see ECF No. 73-1 at 3), and also finds that this specialized knowledge
3
Although Geico’s motion references attachments to Mr. Torres’s report and/or Rule 26
disclosure which evidently included his curriculum vitae, list of prior litigation testimony, and
similar supporting materials (ECF No. 73 at 6), those pages are not among those docketed by
either party (see ECF Nos. 73-1, 83-2). Crediting the description of his professional
background found in his written report (ECF No. 73-1 at 2–3), the Court concludes that he is
adequately qualified under Rule 702(a), presuming the omitted documents provide further detail
consistent with what is summarized in his written report.
9
based upon his employment training and experience will be helpful to the jury in this
case. Fed. R. Evid. 702(a).
Geico’s arguments to the contrary are readily dismissed. Geico argues that
Mr. Torres “does not possess a higher level of knowledge skill, experience, training, or
education than an ordinary person employed in the insurance industry.” (ECF No. 73 at
5.) But the relevant standard is not whether he is more qualified than others in the
insurance industry, but whether his “technical, or other specialized knowledge will help
the trier of fact to understand the evidence or determine a fact in issue.” Fed. R. Evid.
702(a). The Court has little doubt that Mr. Torres has far more specialized knowledge
of insurance industry practices and standards than does a typical juror, and finds this
specialized knowledge will be helpful to the trier of fact.
To the extent Geico criticizes Mr. Torres’s experience for having been gained
primarily or exclusively at a single insurance company, that is a fact which opposing
counsel can no doubt highlight on cross-examination, and which bears on the weight or
credibility of Mr. Torres’s opinions, but not on their admissibility. See Lovato v.
Burlington N. & Santa Fe Ry. Co., 2002 WL 1424599, at *4 (D. Colo. June 24, 2002)
(“Whatever shortcomings [the defendant] may perceive in [plaintiff's expert's] academic
or professional background are more properly addressed in cross-examination. [The
defendant's] challenge to [his] qualifications go to the weight of the witness's testimony,
and not to its admissibility.”).
Finally, the Court flatly rejects Geico’s suggestion that Mr. Torres is unqualified
because he “only recently shifted his professional emphasis to providing expert witness
testimony.” (ECF No. 73 at 6.) The relevant expertise under Rule 702 is the subject
10
matter in which the witness holds specialized knowledge, not the skill or experience a
witness has in testifying or working with lawyers. In the undersigned’s experience, both
lawyers and juries are often better served by experts who have spent more of their time
continuing to actively work in their relevant field, rather becoming full-time retained
experts, whom juries may readily discount as “hired guns.”
2.
Reliability
Geico next argues that Mr. Torres’s opinions do not rest on the “reliable
application of reliable principles to the facts of this case,” and/or “are not based on
sufficient facts or data, as required by Fed. R. Evid. 702[(b)–(d)].” (See ECF No. 73 at
8–10.) The Court again disagrees.
Geico first contests that although Mr. Torres listed documents, deposition
transcripts, correspondence, and other documents and evidence among materials that
he reviewed to reach his opinions, “he did not consider enoug h facts to support his
opinions,” and does not “identify any specific documents upon which his conclusions
are based” or “link any identified evidence to his conclusions.” (ECF No. 73 at 9–10.)
As the Court reads this argument, it is really an attack that Mr. Torres’s written
report did not disclose the “basis and reasons for” his opinions with sufficient detail or
specificity. See Fed. R. Civ. P. 26(a)(2)(B)(i). The Court finds it sufficiently clear from
the overall content and organization of Mr. Torres’s written report that his methodology
amounts to explaining what he knows of insurance industry standards and practices
based on his experience, explaining the facts and evidence he reviewed in this case,
then opining on the ways he believes Geico’s handling of Plaintiff’s claim fell short the
relevant industry standards (as he understands them) and/or differed from handling of
11
similar claims in his experience. The Court also finds that this method is, as a general
matter, sufficiently reliable for Mr. Torres to offer admissible testimony under Rule 702.
Geico’s principal complaint seems to be that Mr. Torres’s written report does not
provide factually-specific examples and explanations of his generically-stated criticisms
of Geico’s handing of Plaintiff’s claim. If Geico wanted a more detailed disclosure of
how Mr. Torres reached his opinions, or more specific examples of the “specific
documents upon which his conclusions are based” (ECF No. 73 at 10), its recourse in
the first instance would have been to press for a more detailed report and/or to take Mr.
Torres’s deposition in the usual course of discovery. Geico evidently did not pursue
those options, instead choosing to proceed by means of a Daubert motion. This tactical
choice by Geico’s counsel does not call for wholesale exclusion of Mr. Torres’s
testimony based merely on lack of specificity regarding some of his written opinions.
See Fed. R. Evid. 705 (expert may state an opinion and give the reasons for it without
first testifying to the underlying facts or data, but may be required to disclose such facts
or data on cross-examination).
Moreover, the pending issue raised by Geico’s Daubert motion is not the
admissibility of Mr. Torres’s written report (which the Court would not ordinarily admit
into evidence), but whether Mr. Torres’s testimony should be excluded as a whole as
based on insufficiently reliable methods, pursuant to Rule 702. Geico does not hav e
any motion pending pursuant to Federal Rules of Civil Procedure 26 and/or 37
opposing the sufficiency of Mr. Torres's disclosure or arguing for appropriate relief on
that basis. Accordingly, having reviewed Mr. Torres’s credentials and written report,
and the parties’ moving papers, the Court concludes that his method is sufficiently
12
reliable in general terms, and is sufficiently based on facts and data and a reliable
application of the same, so that he may testify under Rule 702.
In addition, the Court concludes that Mr. Torres’s testimony (to the extent
consistent with his written report) would be relevant and helpful to the jury in this case.
It is true that trial courts may exclude expert testimony expounding insurance industry
standards on matters the jury can understand themselves, when relevance is in doubt,
when the proponent has not shown the testimony would assist the jury, or when the
testimony does not pass the Rule 403 balancing text. Thompson v. State Farm Fire &
Cas. Co., 34 F.3d 932, 941 (10th Cir. 1994). 4
However, the Colorado Supreme Court
has recognized that in insurance bad faith cases, although expert witness testimony is
not required, it “can provide additional relevant evidence of the standard of care if the
standard is not within the common knowledge of the ordinary juror.” Am. Family Mut.
Ins. Co. v. Allen, 102 P.3d 333, 343 (Colo. 2004). Indeed, use of expert opinions to
establish industry standards in such cases is fairly common. See, e.g., Peden v. State
Farm Mut. Auto. Ins. Co., 841 F.3d 887, 890 (10th Cir. 2016); Goodson v. Am.
Standard Ins. Co. of Wisconsin, 89 P.3d 409, 415 (Colo. 2004) (“The aid of expert
witnesses is often required in order to establish objective evidence of industry
standards.”).
4
Thompson is distinguishable from this case. There, the Tenth Circuit found no abuse
of discretion where the trial court excluded expert testimony in an instance where the relevant
Oklahoma insurance statute did not create a private right of action. Id. Here, Plaintiff proceeds
on a right of action explicitly granted by Colorado Revised Statutes §§ 10-3-1115 & -1116, and
expert testimony regarding insurance industry standards is routinely admitted in Colorado
insurance bad faith cases. See Goodson, 89 P.3d at 415.
13
Here, the Court concludes that Mr. Torres’s specialized experience and
knowledge go well beyond the common knowledge of ordinary jurors and will assist the
jury by providing evidence of relevant insurance industry standards. Since Geico’s own
expert likewise offers his opinions regarding “applicable insurance industry standards”
(see ECF No. 81-3 at 6–9, 12), Geico can hardly complain that all such testimony is
irrelevant. Moreover, the competing experts’ opinions will guard against the possibility
that the jury might be misled by hearing one-sided expert testimony on a non-scientific
subject.
To be sure, the Court agrees with Geico that Mr. Torres’s report might have been
better written, could have disclosed more detail, given more specific explanations and
examples, or provided clearer citations to industry publications and the factual record.
His written summary of claims-handling events is in places somewhat cryptic, and does
not explain exactly what conclusions he drew from the record reviewed. (See, e.g.,
ECF No. 73-1 at 11 (summary of claims log includes entries such as “May 27, 2014,
Atty LOR” and “May 29, 2014 doc faxed to atty”).) Some of those criticisms relate to the
Court’s exclusions detailed below. But, to varying degrees, similar criticisms of how a
written report could be improved are present in every case. Again, such shortcomings
bear principally on the weight or credibility of Mr. Torres’s opinions but do not prevent
him from testifying. See Fed. R. Evid. 705. The Court presumes that Geico’s counsel
will capably criticize the shortcomings of his opinions and will put on opposing evidence.
The Court therefore applies the usual rule that “the rejection of expert testimony
is the exception rather than the rule,” and that “[v]igorous cross-examination,
presentation of contrary evidence, and careful instruction on the burden of proof are the
14
traditional and appropriate means of attacking shaky but admissible evidence.” Fed. R.
Evid. 702 advisory committee’s note.
3.
Speculative Opinions
However, the Court does agree with Geico’s contention that certain of Mr.
Torres’s opinions—at least as phrased in his written report—are improperly speculative
or conclusory. (See ECF No. 73 at 10.) For instance, he opines that “[i]t appears
GEICO may be basing a portion of their denial on their own interpretation of the current
claims environment” (ECF No. 73-1 at 16 (emphasis added)), and “may also be basing
their denial of [Plaintiff’s] claim based on the fact that they have a signed selection form
by one of the insured” (id. (emphasis added)). Elsewhere, Mr. Torres states that he
“find[s] it interesting,” that GEICO has requested certain medical records “to possibly
devalue” Plaintiff’s claim. (Id. at 17 (emphasis added).) And in several places he offers
variations on the conclusory statement that Geico has “failed to produce information
[that] Uninsured/Underinsured coverage was explained and offered to [Plaintiff],” and
“has refused to issue Underinsured Motorists Benefits without clear
explanation/evidence,” and “it appears their refusal/denial to do so is based on their
own interpretation of the current environment.” (Id. at 15.)
The Court will, by necessity, defer until trial ruling on whether Mr. Torres has
articulated a sufficient foundation for the testimony and opinions that will actually be
offered in his trial testimony (and likewise cannot address before hearing the actual
testimony offered whether it was fairly within the contents of Plaintiff’s disclosure, see
Fed. R. Civ. P. 26(a)(2) & Fed. R. Civ. P. 37(c)). However, to the extent Mr. Torres’s
testimony follows from his written report, speculative opinions surmising what “may”
15
have motivated Geico’s decisions, or what facts “possibly” led to Geico’s actions will be
excluded. Nothing in the record reflects that Mr. Torres has knowledge of the
motivations or basis of Geico’s actions other than as revealed in the claims file,
deposition testimony, and other factual materials he reviewed. The Court will exclude
speculative or subjective opinions or commentary, including statements lacking
foundation as to what Geico was “possibly” attempting to do (see ECF No. 73-1 at 17),
or other testimony not grounded in a specific factual observation. See Fed. R. Evid.
602 (witness must have personal knowledge of the matter); Fed. R. Evid. 703 (testifying
expert must have “been made aware of or personally observed” facts or data on which
she or he relies).
The Court will also exclude conclusory and prejudicial commentary such as Mr.
Torres’s statements that it would be “egregious” to deny benefits based on an
insurance company’s “own interpretation of the current claims environment” or “spinning
current laws . . . to their own advantage,” or that Plaintiff “should be paid” benefits to
cover his “serious objective injury.” (Id. at 16, 17.) See generally Fed. R. Evid. 403.
Nothing in Mr. Torres’s written report actually explains how he believes Geico has
“spun” the relevant law or legal standards. And, as further explained below, Mr. Torres
will not be permitted to offer opinions stating ultimate legal conclusions. Mr. Torres can
testify as to how Geico’s conduct differed, in factual terms, from the practices of other
insurers, from how he would have handled the claim in his experience, or from relevant
industry practices and standards (as he understands them ). He may not, however,
offer conclusory opinions as to whether Geico’s UM/UIM offer was ultimately sufficient,
whether Plaintiff “should be paid,” or whether Geico’s conduct was unlawful or
16
“egregious,” nor generalizations hinting at “different interpretations of the current claims
environment” without ever explaining what “different interpretations” he has in mind.
(See id. at 16.)
4.
Ultimate Issue and Legal Opinions
Lastly, Geico objects that certain of Mr. Torres’s opinions contain impermissible
legal conclusions that will not assist the jury. (See ECF No. 73 at 11–13.) Mr. Torres
correctly acknowledges that he is not a lawyer. (See ECF No. 73-1 at 3.) But, he
nevertheless goes on to offer several legal conclusions among his opinions. For
example, he opines that Geico’s conduct violated various provisions of the Colorado
Unfair Claims Settlement Act (ECF No. 73-1 at 14), and that Geico’s conduct
“constitutes an unreasonable delay and/or denial of [Plaintiff’s] policy benefits,” contrary
to § 10-3-1115, and was “not . . . consistent with GEICO’s duty of Good Faith and Fair
Dealing.” The Court will exclude such legal conclusions.
An expert’s opinion is not inadmissible simply because it embraces an ultimate
issue to be determined by the trier of fact. Fed. R. Evid. 704(a). Here, the central issue
in dispute is the reasonableness of Geico’s conduct. The reasonableness of an
insurer’s conduct is “determined objectively, based on proof of industry standards,”
Goodson, 89 P.3d at 415, and the jury will be tasked with deciding whether Geico’s
actions were reasonable based, in large part, on the parties’ competing expert
testimony regarding insurance industry standards. Thus Mr. Torres may offer testimony
articulating what he believes to be the relevant industry standards, and
explaining—factually—how Geico’s conduct did or did not comport with those
standards.
17
However, an expert witness’s testimony may not usurp the jury’s fact-finding
function. See Specht v. Jensen, 853 F.2d 805, 808 (10th Cir. 1988); see also Phillips v.
Calhoun, 956 F.2d 949, 952 (10th Cir. 1992) (“W hile an expert may not state legal
conclusions, Fed. R. Evid. 704(a) allows an expert witness to testify in the form of an
opinion or inference even if that opinion or inference embraces an ultimate issue to be
determined by the trier of fact.”). The line between what is helpful to the jury and what
intrudes on the jury’s role as the finder of fact is not always clear, but in adopting Rule
704, the drafters of the Federal Rules of Evidence provided some guidance as to what
is permissible expert testimony:
The abolition of the ultimate issue rule does not lower the
bars so as to admit all opinions. Under Rules 701 and 702,
opinions must be helpful to the trier of fact, and Rule 403
provides for exclusion of evidence which wastes time.
These provisions afford ample assurances against the
admission of opinions which would merely tell the jury what
result to reach, somewhat in the manner of the oath-helpers
of an earlier day. They also stand ready to exclude opinions
phrased in terms of inadequately explored legal criteria.
Thus the question, “Did T have capacity to make a will?”
would be excluded, while the question, “Did T have sufficient
mental capacity to know the nature and extent of his
property and the natural object of his bounty to formulate a
rational scheme of distribution?” would be allowed.
Fed. R. Evid. 704 Advisory Committee’s Note.
Applying this guidance here, Mr. Torres may testify as to insurance industry
standards, which may include his testimony and opinions explaining how he believes
Geico’s conduct differed from the conduct of other insurers or fell short of industry
standards. Mr. Torres may not, however, offer ultimate legal opinions, and he “may not
simply tell the jury what result it should reach without providing any explanation of the
18
criteria on which that opinion is based or any means by which the jury can exercise
independent judgment. United States v. Richter, 796 F.3d 1173, 1195–96 (10th Cir. 2015).
The Court will therefore exclude opinions of Mr. Torres that Geico’s conduct was
unreasonable or insufficient as a matter of law, or was in violation of any statute. He is
unqualified to offer such opinions as a matter of legal expertise, Fed. R. Evid. 702(a), and
such ultimate conclusions would not be helpful to the jury and would improperly intrude on
its fact-finding function. See Specht, 853 F.2d at 808; Richter, 796 F.3d at 1195–96; see
generally 1 Kenneth S. Broun, et al., McCormick on Evidence § 12 (7th ed., June 2016
update) (“Even a court which does not automatically ban opinion on the ultimate issue
may condemn a question phrased in terms of a legal criterion that is not adequately
defined”).
To illustrate, Mr. Torres may offer an explanation, consistent with his written
report, of how Geico’s communications with Plaintiff offering him UM/UIM benefits
differed from the practices of other insurers or from industry standards. (See ECF No.
73-1 at 15 (explaining that “the leader in the industry obtains signed waivers if the
liability and uninsured/underinsured limits are different”).) He may also offer testimony
explaining how industry standards (as he understands them) suggest that Geico’s
claims-handler should have acted to investigate what information regarding UM/UIM
coverage was provided to Plaintiff, and thereafter how to proceed on his claim, based
on the factual information shown in the record. (Id.) However, he may not offer an
opinion that Geico’s information or explanation regarding UM/UIM benefits was
ultimately insufficient, since that is a legal conclusion which the jury will be charged to
resolve. (See id.)
19
Likewise, regarding Geico’s handling of Plaintiff’s claim, Mr. Torres may
articulate what he believes were the relevant industry standards applicable to handling
such a claim. He may opine whether and how, based on the facts reviewed, he
believes Geico departed from those industry standards (see, e.g., ECF No. 73-1 at 16
(explaining that in cases where UM/UIM coverage varied from liability coverage, it would
have been his former employer’s practice to provide equal levels of UM/UIM coverage if
they could not determine the insured was provided an adequate explanation of UM/UIM
limits).) But he may not offer an ultimate opinion that Geico’s handling was, overall,
unreasonable or constituted an unreasonable delay or denial of benefits. (See id. at
17.) Likewise, he may not offer an ultimate opinion that Geico’s conduct was contrary
to its duty of good faith and fair dealing or was in violation of Colorado statutes. In
short, he may testify as to insurance industry standards, but not as to his opinion of
what Colorado law requires.
5.
Summary of Rulings
Given the above analysis, Geico’s motion to exclude Mr. Torres’s testimony is
granted in part and denied in part. To help guide counsel in preparing for trial, the
Court specifically re-articulates the effect of the rulings set out above as follows:
Subject to ordinary objections and evidentiary rulings at trial, Mr. Torres may
testify:
!
Explaining his experience and credentials, and the materials he has
reviewed in this case, consistent with pages 1–4 of his written report (ECF
No. 73-1 at 2–5);
!
Explaining his knowledge of “General Principles of Insurance,” the “Role
of Insurance Companies,” and the “Nature of Uninsured Motorist
Coverage,” consistent with pages 4–7 of his written report (id. at 5–8);
20
!
Explaining his understanding of the sources of insurance claims handling
standards, and his articulation of such standards, consistent with pages
7–9, 13 & 14 of his written report (id. at 8–10, 14, 15);
!
Explaining the background of the accident and Plaintiff’s insurance claim
in this case, as he understands it based upon his review, consistent with
pages 9–12 of his written report (id. at 10–13);
!
Offering his “Analysis” and opinions to the extent he explains how, based
upon his review of the record, Geico’s conduct differed from his
understanding of insurance industry standards, including:
!
His opinion that Geico “has taken an adversarial approach” to
handling Plaintiff’s claim (id. at 15);
!
His understanding of the conduct of Geico’s claims investigation
based on his review of the testimony of Geico’s claims handler, Ms.
Nop (id.);
!
His opinion that Ms. Nop, consistent with insurance industry
standards, should have investigated whether and how Plaintiff was
offered UM/UIM benefits (id.);
!
His opinion that “[i]f her investigation determined the information
was not explained . . . she should err on the side of her insured”
(id.);
!
His testimony regarding how “the leader in the insurance industry”
offers its customers UM/UIM benefits and policy limits and handles
UM/UIM claims arising in situations similar to the claim at issue
here (i.e., where liability and UM/UIM limits differ), and whether
Geico’s investigation of its UM/UIM offer and resulting claims
handling were consistent with industry standards (id. at 15–16).
Other than as stated above, Mr. Torres’s testimony and opinions will be excluded
as unduly speculative, prejudicial, lacking foundation, and/or offering impermissible legal
conclusions, as analyzed above. In other words, all portions of his “analysis” not fairly
described within the above list of areas of admissible testimony will be excluded. This
specifically includes exclusion of any legal conclusions, including opinions that Geico
acted “unreasonably” in its claims handling or that Geico violated and statute, violated
21
the duty of good faith and fair dealing, or violated any other articulated legal duty.
III. GEICO’S MOTION TO STRIKE BALDWIN
As summarized above, Plaintiff disclosed Mr. Baldwin as a rebuttal expert
following Geico’s disclosure of Mr. Sands. Both Mr. Baldwin and Mr. Sands are
attorneys. Geico argues that Plaintiff’s disclosure of Mr. Baldwin was an improper
rebuttal expert disclosure and went beyond the limits of rebutting the opinions of Mr.
Sands. Therefore, Geico argues, Mr. Baldwin should have been disclosed as an
affirmative expert and so his disclosure was untimely. Geico seeks to exclude Mr.
Baldwin’s testimony in its entirety pursuant to Rule 37(c). (See ECF Nos. 71, 89.)
A.
Legal Standard: Rules 26(a)(2) & 37(c)
Rule 26(a)(2) governs pretrial disclosure of anticipated expert testimony,
including the timing of disclosure for both affirmative and rebuttal expert testimony.
Here, the relevant disclosure provision is Rule 26(a)(2)(D)(ii), which provides rebuttal
may follow affirmative disclosures, “if the evidence is intended solely to contradict or
rebut evidence on the same subject matter identified by another party.”
Federal Rule of Civil Procedure 37(c) provides, in relevant part: “If a party fails to
provide information or identify a witness as required by Rule 26(a) or (e), the party is
not allowed to use that information or witness to supply evidence on a motion, at a
hearing, or at a trial, unless the failure was substantially justified or is harmless.” The
sanctions available under Rule 37(c) are often described as “self executing” and
“automatic.” Fed. R. Civ. P. 37 advisory committee’s notes to 1993 Amendment.
However, in addressing Rule 37 generally, the Tenth Circuit has made clear that
“[t]he protections and sanctions found in the discovery rules are not absolute and
22
contemplate the use of judicial discretion.” Marshall v. Ford Motor Co., 446 F.2d 712,
713 (10th Cir. 1971); see also Woodworker’s Supply, Inc. v. Principal Mut. Life Ins. Co.,
170 F.3d 985, 993 (10th Cir. 1999) (recognizing that Rule 37(c) vests broad discretion
with the trial court). In particular, “[t]he determination of whether a Rule 26(a) violation
is justified or harmless is entrusted to the broad discretion of the district court.” Id.
B.
Analysis
As detailed above, Plaintiff affirmatively disclosed Mr. Torres, a long-time
insurance claims handler, to offer opinions as to whether Geico’s offer of UM/UIM
insurance and its handling of Plaintiff’s claim were consistent with industry standards
and practices.
Geico affirmatively disclosed Mr. Sands, an attorney. (See ECF No. 81-3.) His
affirmative report includes a substantive recitation of what he states are “Applicable
Insurance Industry Standards.” (Id. at 6–9.) He states that “[t]his matter involves two
primary issues,” which he then analyzes. (See id. at 6.) First, he opines that Geico
complied with its obligation to offer Plaintiff UM/UIM limits equal to his bodily injury
liability limits, in particular applying the test and factors set out in Parfrey, 830 P.2d at
912–13, and subsequent cases. (Id. at 10–11). Because of his view that Geico met the
standard required by Parfrey, he also opines that Geico acted reasonably when it
reached the same conclusion and therefore declined to provide Plaintiff with higher
UM/UIM coverage than was written in his insurance contract. (Id.). Second, he opines
that Geico conducted a reasonable investigation of Plaintiff’s claim, including a
reasonable investigation of its own UM/UIM offer. (Id. at 12.)
Plaintiff’s disputed disclosure of Mr. Baldwin counters Mr. Sands’s opinion,
23
arguing that Geico’s offer of UM/UIM coverage was insufficient under Parfrey. (See
ECF No. 81-2 at 2–6.) He then opines that Geico’s claim handling was unreasonable,
including an analysis of case law similar to that cited by Mr. Sands. (Id. at 6–8.) This is
followed by an argument that Geico should have further evaluated Plaintiff’s injuries,
because “a reasonable insurer would have evaluated [Plaintiff’s] claim at substantially
more than the $100,000 in coverage that he was requesting” and would therefore have
analyzed its “chance of a successful defense,” including its exposure to potential
statutory damages and award of attorneys’ fees pursuant to §§ 10-3-115 & -1116.
(Id. at 8–10.) Mr. Baldwin opines this is analysis that “any reasonable insurer should
do” and is “standard in the industry.” (Id. at 10).
Geico argues that Mr. Baldwin’s opinions are affirmative in nature and were
therefore untimely and should be excluded. (See generally ECF No. 71 at 7–10.) Rule
26(a)(2)(D)(ii) provides that rebuttal expert testimony is testimony which is “intended
solely to contradict or rebut evidence on the same subject matter identified by another
party.” Here, the question therefore becomes what was the “same subject matter”
identified by Geico’s expert, Mr. Sands, which was properly open to rebuttal testimony.
The opinions of Mr. Torres, Mr. Sands, and Mr. Baldwin all bear on the same central
issue in dispute, that is, the reasonableness of Geico’s conduct, but they do not all
address the same aspects of that issue. The Court concludes that Mr. Baldwin’s
opinions fall within the “same subject matter” as Mr. Sands’s opinions, but not
necessarily those of Mr. Torres.
As noted earlier, Mr. Torres is not a lawyer. He did not (and could not) offer legal
analysis of the case law, including the law following the Parfrey decision that sets the
24
standard for an insurance company’s notification and offer of UM/UIM limits equal to
bodily injury liability limits. Although he evidently reviewed certain court decisions in
preparing his report, he did not discuss them or offer any opinions regarding them.
(See generally ECF No. 73-1.) Rather, as detailed above, Mr. Torres’s opinions arise
not from legal analysis but from his experience working in insurance claims, including
his views of how Geico’s competitor(s) might have handled Plaintiff’s claim differently.
Mr. Sands, however, is a lawyer. He both cited and discussed applicable court
decisions in reaching his opinions as to the reasonableness of Geico’s conduct. (See
generally ECF No. 81-3.) As to the adequacy of Geico’s offer of UM/UIM benefits
under Parfrey, this appears to be an issue on which Geico bears the burden of proof.
See Morris v. Travelers Indemn. Co. of Am., 518 F.3d 755, 761 (10th Cir. 2008) (noting
evidence relied upon in Johnson v. State Farm Mut. Auto. Ins. Co., 158 Fed. App’x 119
(10th Cir. 2005) that “was sufficient to meet the insurance company’s burden to
establish it had made a compliant offer”). It therefore seems unremarkable that Geico
affirmatively disclosed an expert on this issue, who was in turn subject to Plaintiff’s
rebuttal disclosure, from an attorney, offering legal analysis directly responsive to the
subject area first raised by Mr. Sands.
As to the reasonableness of Geico’s investigation, Mr. Torres addressed this
question in large part by analyzing whether Geico’s claims representative appropriately
conferred with attorneys, considered “arguments advanced by counsel,” and responded
appropriately to “legal arguments and case law” and to “aggressive legal argument”
from Plaintiff’s counsel. (ECF No. 81-3 at 12.) Mr. Sands again ties this issue to
whether Geico reasonably reached the conclusion “that it had made a commercially
25
reasonable offer of [UM/UIM] coverage” to Plaintiff, compliant with Parfrey, and his view
that Geico appropriately responded to Plaintiff’s legal arguments. (Id.) This is not
ground that was covered by Mr. Torres, nor could it have been. Geico fairly opened the
door to rebuttal testimony from a lawyer or legal expert when it disclosed an expert
opinion defending the reasonableness of its conduct based somewhat on “industry
standards” but mostly based on the expert’s review and response to legal arguments.
As to Mr. Baldwin’s final point, he opines that Geico’s investigation was
unreasonable because it did not evaluate the scope of Plaintiff’s injuries and medical
bills, and that Geico therefore unreasonably failed to analyze its exposure in litigation.
The Court concludes that this is a reasonable form of rebuttal to Mr. Sands’s
conclusions. Mr. Sands opines, essentially, that Geico did everything it should have
done in handling Plaintiff’s claim, i.e., everything the law requires. Mr. Baldwin rebuts
this by identifying a specific legal analysis which he believes Geico did not undertake,
but should have. (See ECF No. 81-2 at 8 (describing the analysis as “[w]hat is missing
. . . [and] should have been done”).) In the circumstances of this case, the Court finds
this was a fair and reasonable form of rebuttal testimony.
Finally, the Court concludes that to any extent Mr. Baldwin’s report crept beyond
the bounds of narrowly rebutting Mr. Sands’s opinions, the additional disclosure was
harmless within the application of Rule 37(c). The Court has considerable discretion in
this determination but is guided by the factors articulated in Woodworker’s Supply: (1)
the prejudice or surprise to the impacted party; (2) the ability to cure the prejudice; (3)
the potential for trial disruption; and (4) the erring party’s bad faith or willfulness. 170
F.3d at 993. These factors weigh rather heavily against excluding Mr. Baldwin’s trial
26
testimony, as “[t]he decision to exclude evidence is a drastic sanction.” Summers v.
Missouri Pac. R.R. Sys., 132 F.3d 599, 604 (10th Cir. 1997).
First, the Court sees no surprise. The parties’ scheduling order, as extended,
contemplated disclosure of rebuttal witnesses. Geico surely anticipated that Plaintiff
might disclose someone to rebut Mr. Sands, and presumably an attorney. They cite no
authority which restricted Plaintiff to using only its original expert, Mr. Torres, in rebuttal
once Geico had disclosed an expert with a different type of expertise.
Second, Geico has had ample opportunity to cure any prejudice. Geico
complains that it was unable to notice and complete a deposition of Mr. Baldwin within
the discovery schedule, particularly given the requirement to provide 14 days advance
notice of a deposition. (See ECF No. 71 at 12–13 (citing D.C.COLO.LCivR. 30.1).) But
the scheduling problem was of Geico’s making, since it requested a rebuttal deadline
only five days before the close of discovery. Under that schedule, any depositions of
newly-disclosed rebuttal experts would most likely have needed to be completed past
the existing discovery cutoff date. How did Geico expect to conduct discovery of any
rebuttal experts? Moreover, it appears Geico simply never tried to take Mr. Baldwin’s
deposition, nor took any other particular steps to cure its alleged prejudice. Since
Plaintiff does not object now to an additional deposition of Mr. Baldwin (see ECF No. 81
at 14), the Court presumes Plaintiff also would have co-operated with a deposition
following the rebuttal disclosure some months ago, if Geico had requested it. It
appears that Geico’s counsel made a decision to seek a tactical advantage by filing a
motion to exclude rather than attempting to actually cure Geico’s supposed prejudice,
when there was ample opportunity to do so.
27
To the extent there has been any prejudice, the Court will allow Mr. Sands to
offer sur-rebuttal testimony in response to Mr. Baldwin’s opinions at trial, as set out
below. In the Court’s view, having the two similarly-qualified experts directly address
one another’s previously-disclosed opinions in front of the jury will best serve the
interests of justice rather than rewarding either side for litigation gamesmanship.
Third, there is no potential for trial disruption as both parties have had, and still
have, ample time to prepare their trial examinations of both Messrs. Baldwin and
Sands, with trial still more than seven weeks away.
Fourth, the Court sees no bad faith here on the part of Plaintiff. Plaintiff served
his rebuttal disclosure on the deadline to do so, as did Geico. Giv en the differing
expertise of Messrs. Torres and Sands, the Court sees no impropriety in Plaintiff not
choosing to affirmatively disclose an attorney in the first instance. This is particularly
true since the most significant portion of Mr. Sands’s opinions goes to analyzing Parfrey
standard, an issue on which Geico bears the burden. Geico complains that Plaintiff
could have disclosed Mr. Baldwin ahead of the deadline but did not do so. This
complaint rings hollow, given that Geico also served its own affirmative and rebuttal
disclosures on the existing deadlines, but not a day before. (See ECF Nos. 53, 58.)
In sum, the Court is unpersuaded that any aspect of Mr. Baldwin’s proposed
opinions were improperly disclosed, and it is also convinced that, to the extent any such
non-disclosure did occur, it was harmless. Therefore exclusion of Mr. Baldwin’s
testimony is not warranted but the Court grants very limited alternative relief in the
interests of justice, as set forth below.
28
IV. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.
Defendant’s Motion to Strike Report and Exclude Testimony of Plaintiff’s Expert
David Torres (ECF No. 73) is GRANTED IN PART and DENIED IN PART, as set
out above;
2.
Defendant’s Motion to Strike Plaintiff’s Expert Witness Robert Baldwin (ECF No.
71) is GRANTED IN PART to allow “such other and further relief” as the Court
deems appropriate, per Defendant’s request (id. at 15–16). Specifically, the
Court WILL ALLOW Defendant’s Expert, Mr. Sands, to offer limited and
narrowly-targeted sur-rebuttal testimony at trial, in direct response to the opinions
and testimony offered by Mr. Baldwin. The Court will not require additional pretrial disclosure but emphasizes that the intent of this limited relief is ordered
solely in the interests of justice, to allow Messrs. Sands and Baldwin to each
directly address the previously-disclosed opinions of the other. Any attempt to
unduly expand the scope of Mr. Sands’s rebuttal of Mr. Baldwin will result the
exclusion of such testimony as a whole. Defendant’s Motion is in all other
respects DENIED.
Dated this 7th day of February, 2017
BY THE COURT:
William J. Martínez
United States District Judge
29
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