Estate of Jorge Luis Arroyo, Jr. v. Infinity Indemnity Insurance Company

Filing 132

ORDER ON DEFENDANT'S DAUBERT MOTIONS granting 80 Motion to Exclude or Limit Testimony; granting in part and denying in part 81 Motion to Exclude or Limit Testimony. Signed by Judge Marcia G. Cooke on 8/29/2016. (tm)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 15-20548-Civ-COOKE/TORRES
ESTATE OF JORGE LUIS ARROYO, JR.,
by and through JORGE ARROYO, SR.,
and NOEMI IZQUEIRDO, Co-Personal
Representatives and surviving parents,
Plaintiff,
vs.
INFINITY INDEMNITY INSURANCE
COMPANY,
Defendant.
___________________________________________/
ORDER ON DEFENDANT’S DAUBERT MOTIONS
Infinity Indemnity Insurance Company (“Defendant” or “Infinity”) challenges the
testimony of the Estate of Jorge Luis Arroyo, Jr.’s (“Plaintiff” or “Estate”) two expert
witnesses in this case. For the reasons below, Defendant’s Daubert Motion to Exclude or
Limit Testimony of Plaintiff’s Expert Witness, Lewis N. Jack, Jr. (ECF No. 80), is granted,
while its Daubert Motion to Exclude or Limit Testimony of Plaintiff’s Expert Witness,
James P. Schratz (ECF No. 81), is granted in part and denied in part.
I.

BACKGROUND

The background facts of this case are detailed in my Order Denying Motions for
Partial Summary Judgment. See ECF No. 115. Defendant seeks to limit or exclude the
expert testimony of Lewis N. Jack, Jr. (“Jack”) and James P. Schratz (“Schratz”). Plaintiff
submits the experts to opine on Infinity’s handling of the Estate’s insurance claims and the
extent of damages warranted in this case.
Infinity questions Jack’s credentials as an attorney who has never adjusted casualty
claims or been licensed to do so in Florida. On Schratz, Infinity doubts the relevance of his
prior insurance claims handling experiences, including Schratz never personally handling
claims in Florida. Infinity further contends that much of both experts’ opinions are based on
proscribed determinations of credibility and factual disputes reserved for the jury.
1

II.

LEGAL STANDARDS

Rule 702 of the Federal Rules of Evidence governs the admissibility of expert
testimony. It states the following:
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.
A district court has the responsibility of acting as a gatekeeper to exclude unreliable
expert testimony. Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). This
gatekeeping function applies to “all expert testimony,” whether based on “scientific
knowledge” or “based on technical and other specialized knowledge.” Kumho Tire Co., Ltd.
v. Carmichael, 526 U.S. 137, 141 (1999). In performing this function, the district court’s role
is not “to make ultimate conclusions as to the persuasiveness of the proffered evidence.”
Quiet Tech., 326 F.3d at 1341. “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. (quoting Daubert, 509 U.S. at 596).
In order to determine the admissibility of expert testimony, a district court must
consider three factors: (1) whether the expert is qualified to testify competently about the
subject matter he intends to address, (2) whether the expert’s methodology is sufficiently
reliable, and (3) whether the testimony assists the trier of fact to understand the evidence
through the application of the witness’s expertise. Quiet Tech. DC-8, Inc. v. Hurel-Dubois U.K.
Ltd., 326 F.3d 1333, 1340 – 41 (11th Cir. 2003). The party seeking to introduce expert
testimony bears the burden of satisfying these criteria by a preponderance of the evidence.
Allison v. McGhan Med. Corp., 184 F.3d 1300, 1306 (11th Cir. 1999).
“A witness may be qualified as an expert by scientific training, education, or
experience in a pertinent field or occupation.” United States v. Frazier, 387 F.3d 1244, 1261
(11th Cir. 2004). “A lawyer with extensive experience in a particular area of law is not
necessarily qualified to provide expert testimony on proper internal processes of the
2

particular industry the lawyer represents.” Lopez v. Allstate Fire & Cas. Ins. Co., No. 14-20654Civ-COOKE/TORRES, 2015 WL 5584898, at *5 (S.D. Fla. Sept. 23, 2015) (citing
additional district court cases that support the point).
When analyzing whether an expert’s testimony is reliable, “Rule 702 identifies three
components of the reliability element: “(1) the testimony is based upon sufficient facts or
data, (2) the testimony is the product of reliable principles and methods, and (3) the witness
has applied the principles and methods reliably to the facts of the case.” Cincinnati Ins. Co. v.
Cochran, No. CIV.A. 99-0552-WS-C, 2005 WL 2179799, at *2 (S.D. Ala. Sept. 2, 2005).
“For nonscientific expert testimony, the trial judge must have considerable leeway in
deciding in a particular case how to go about determining whether particular expert
testimony is reliable. . . . A district court may decide that nonscientific expert testimony is
reliable based upon personal knowledge or experience.” Am. Gen. Life Ins. Co. v. Schoenthal
Family, LLC, 555 F.3d 1331, 1338 (11th Cir. 2009) (internal quotation marks omitted). “In
the context of an expert witness testifying on the basis of specialized experience, a reliable
methodology means that the witness must explain how [his] experience leads to the
conclusion reached, why that experience is a sufficient basis for the opinion, and how that
experience is reliably applied to the facts [of the case].” Lopez, No. 14-20654-CivCOOKE/TORRES, 2015 WL 5584898, at *6 (internal quotation marks omitted) (alterations
in original).
Under the relevance factor, “expert testimony is admissible if it concerns matters that
are beyond the understanding of the average lay person. . . . Proffered expert testimony
generally will not help the trier of fact when it offers nothing more than what lawyers for
the parties can argue in closing arguments.” Frazier, 387 F.3d at 1262 – 63.

3

III.

DISCUSSION

In briefing for these motions, the Estate outlines the opinions Jack and Schratz will
proffer.1 See ECF Nos. 94 at 5 – 6, 95 at 5 – 6. Jack’s opinions touch upon Infinity’s duties
to the insured, its investigation of this case, its reliance on Infinity’s agents, and his belief
that Infinity could and should have settled this case. Schratz’s opinions mostly concern
Infinity’s handling of its investigation. Analyzing the admissibility of these experts’ opinions
with the the three factors outlined above, I find that Jack’s testimony must be excluded
because he is not qualified to render an opinion on insurance handling, and his remaining
opinions are inadmissible. I also find that Schratz is qualified to render an opinion on the
standards of insurance handling and the reasonableness of Infinity and its agents’ conduct in
the present case, though his other opinions are inadmissible.
A. Admissibility of Lewis N. Jack’s Opinions
Jack has practiced law for over forty years. He has advised insurance companies
about claims handling and complying with Florida’s particular insurance provisions. But he
has no experience in personally handling claims, has not published any materials on the
subject, and appears unfamiliar with guidelines from the Florida Department of Insurance.
Like a seasoned attorney that I rejected in a similar instance, see Lopez, No. 14-20654-CivCOOKE/TORRES, 2015 WL 5584898, at *5, Jack’s insurance law specialty does not
qualify him to opine as an expert on Infinity’s handling of the Estate’s insurance claim or
the duties therein.2
Jack’s remaining opinions on the credibility of witnesses and damages are also
inadmissible since they are either forbidden or unreliable. An expert is not permitted to
remark on the truthfulness of another witness’s statements, such as Jack’s assertion that one
of Infinity’s agents was untrustworthy. See United States v. Henderson, 409 F.3d 1293, 1299
(11th Cir. 2005); State v. Townsend, 635 So. 2d 949, 958 (Fla. 1994). Jack’s opinion about the
1

Plaintiff failed to meet the expert witness report disclosure requirements under Federal
Rule of Civil Procedure 26(a)(2)(B). Though I have relieved Plaintiff from this expert report
requirement (ECF No. 118), I must rely on the Estate’s representations and the witnesses’
depositions alone to understand what opinions Jack and Schratz intend to propound.
2
This does not mean a lawyer with an insurance law specialty could never have the
expertise to opine on insurance claims handling. But without additional experiences, I am
hesitant to permit such opinions from Jack here. My conclusion does not impinge on a
lawyer’s ability to opine about other areas of a bad faith insurance case.
4

reasonableness of the damages total in this case is unreliable since his conclusions relate to
damages in a separate state court action involving the passenger in the decedent’s
automobile. Put simply, Jack’s assessment does not apply to the facts of this case. Without
an expert witness report that attaches Jack’s opinion on damages to the present action, it is
unreasonable for Jack to remark on the issue now.
In lieu of the proper qualifications to speak on claims handling, and with his other
opinions being either inadmissible or unreliable, there is little doubt that Jack’s opinions are
irrelevant to the jury. Stripped of their admissible expert testimony label, Jack’s remaining
thoughts amount to issues of fact the jury can assess on its own, or are ones the lawyers can
include in their closing arguments. In sum, all of Jack’s expert testimony must be excluded.
B. Admissibility of James P. Schratz’s Opinions
Schratz is a licensed attorney who currently consults clients on claims handling
techniques and procedures. He spent thirteen years working in various capacities, including
claims handling, with the Fireman’s Fund Insurance Company (“Fireman’s Fund”). Schratz
has also published several articles on claims handling during his thirty years of relevant
experience. Though Schratz has not had extensive insurance claim experience in Florida, he
supervised several hundred automobile liability claims in the state during his time at the
Fireman’s Fund and also served as an expert witness in at least one case in this district.
Other Florida federal cases have not barred the expert testimony of someone with limited
Florida-specific experiences, since defendants could cross-examine an expert’s experiences
or offer contrary evidence. See, e.g., Lopez v. Allstate Fire & Cas. Ins. Co., No. 14-20654-CivCOOKE/TORRES, 2015 WL 6447497, at *2 – 3 (S.D. Fla. Oct. 26, 2015); Bottini v. Geico
Gen. Ins. Co., No. 8:13-CV-365-T-17AEP, 2014 WL 7273934, at *2 – 3 (M.D. Fla. Dec. 19,
2014). What is more, Schratz is not contending Infinity’s compliance with Florida law. I
find Schratz is qualified to opine on national industry standards of insurance company
claims handling and investigation processes, and how Infinity applied them in this case.
Many of Schratz’s opinions are sufficiently reliable. Schratz formed his views on
Infinity’s claims handling based on his over thirty years of experience in insurance claims
handling and a review of substantial portions of the record in this case, including much of
the relevant claims files, Infinity’s best practices manual, and several depositions. Infinity
can, of course, challenge Schratz’s review of the full record during its cross-examination.

5

But Schratz’s comments on the reasonableness of Infinity’s claims handling and the duties
therein are permissible. See Camacho v. Nationwide Mut. Ins. Co., 13 F. Supp. 3d 1343, 1366
(N.D. Ga. 2014) (“An insurance expert may testify regarding what duties are owed by an
insurance company during the claims handling process and whether the actions of the
insurance company complied with those duties without offering improper legal
conclusions.”). Contrary to Infinity’s assertions, experts are permitted to base their opinions
on a certain version of disputed facts, which the jury may then assess. See Fed. R. Evid. 702
(advisory comm. notes) (“When facts are in dispute, experts sometimes reach different
conclusions based on competing versions of the facts. The [rule] is not intended to authorize
a trial court to exclude an expert's testimony on the ground that the court believes one
version of the facts and not the other.”).
Still, there are other opinions from Schratz that I do find inadmissible. For one,
Schratz cannot mention the equal consideration doctrine, or describe the doctrine as the
“industry standard” as he discusses in his deposition. See ECF No. 95 at 6, ¶11(a). While the
doctrine exists in other Eleventh Circuit-area states, see, e.g., Delancy v. St. Paul Fire & Marine
Ins. Co., 947 F.2d 1536, 1549 (11th Cir. 1991) (discussing Georgia’s equal consideration
doctrine “requires the insurer . . . give the interests of its insured the same faithful
consideration it gives its own interests”), there is no evidence from the Estate, Schratz, or
case law that the doctrine formally applies in Florida. Schratz can still discuss his opinions
on Infinity’s claims handling and investigation, and how it compares to what other
insurance companies should do in similar situations, but he must not refer to or describe the
doctrine itself. Any of Schratz’s comments that touch upon legal conclusions are also
excluded. In particular, Schratz cannot mention the standards of bad faith when it comes to
insurance investigations. See id. at 6, ¶11(e). I do believe Schratz’s thoughts on Infinity’s
omission of a reservation of rights are proper, however, so long as he does not proffer what
the law states on issuing these documents. Separately, Schratz may not opine on the states
of mind of other parties in this litigation. See In re Trasylol Prod. Liab. Litig., No. 08-MD01928, 2010 WL 4259332, at *8 (S.D. Fla. Oct. 21, 2010) (“The question of intent or motive
is a classic jury question and not one for experts.”). While Schratz can cite to the problems
with Infinity’s claims handling and any of their agents’ alleged missteps, he cannot intimate
a motive or intent to any of these actions. Therefore, any mentions of Infinity “totally

6

ignor[ing] and disregard[ing] the interest of its insured,” and that its agent “made material
misrepresentations” are barred. See id. at 5, ¶10.
All of Schratz’s permissible opinions will assist the jury. Schratz’s insights into
insurance claims handling exceeds what an average jury member may know. See, e.g.,
Camacho, 13 F. Supp. 3d at 1366. In sum, Schratz’s opinions on the reasonableness of
Infinity’s investigation compared to national standards of what insurance companies are
expected to do are permissible. He cannot present the equal consideration doctrine,
expound upon the legal standards in a bad faith case, or speculate about the motives of
various actors.
IV.

CONCLUSION

As outlined above, Defendant’s Daubert Motion to Exclude or Limit Testimony of
Plaintiff’s Expert Witness, Lewis N. Jack, Jr. (ECF No. 80) is GRANTED, and its Daubert
Motion to Exclude or Limit Testimony of Plaintiff’s Expert Witness, James P. Schratz
(ECF No. 81), is GRANTED in part and DENIED in part.
DONE and ORDERED in chambers at Miami, Florida, this 29th day of August
2016.

Copies furnished to:
Edwin G. Torres, U.S. Magistrate Judge
Counsel of record

7