American Zurich Insurance Company v. Gilbeaux

Filing 141

ORDER granting in part and denying in part 81 Motion to Exclude Signed by District Judge Louis Guirola, Jr on 04/13/2018 (Guirola, Louis)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
AMERICAN ZURICH INSURANCE COMPANY
v.

PLAINTIFF

CAUSE NO. 1:16CV354-LG-RHW

CURTIS GUILBEAUX

DEFENDANT/
COUNTER-CLAIMANT

v.
SOUTHWEST BUSINESS CORPORATION, d/b/a/
INSURANCE PARTNERS, USAA INSURANCE
AGENCY, INC., and AMERICAN ZURICH
INSURANCE COMPANY
COUNTER-DEFENDANTS

ORDER GRANTING IN PART AND DENYING IN PART
MOTION TO EXCLUDE EXPERT TESTIMONY OF WILLIAM D. HAGER
BEFORE THE COURT is the [81] Motion to Exclude William D. Hager as an
Expert Witness, filed by Southwest Business Corporation, d/b/a Insurance Partners
and USAA Insurance Agency, Inc. The Motion has been joined by American Zurich
Insurance Company [89] and the issues have been fully briefed.1 After due
consideration, the Court finds that the Motion should be granted in part and denied
in part.
DISCUSSION
The plaintiff American Zurich Insurance Company filed this Complaint for
Declaratory Judgment claiming that its insured, Guilbeaux, made material
misrepresentations that justify rescission of the policy, and requests that the Court

1

The Court refers to all three movants together as “the insurance
companies.”

declare the policy void under Mississippi law. Guilbeaux designated William D.
Hager as his expert concerning the industry standards and duties owed by the three
insurance companies involved in this case. Hager is an attorney who has extensive
experience working in and for the insurance industry and in regulating the
insurance industry. The insurance companies have moved to strike Hagar’s expert
opinions, claiming that they constitute nothing more than legal opinions, and that
they are based on insufficient evidence.
Rule 702 of the Federal Rules of Evidence establishes the following standards
for determining whether expert testimony is admissible:
(a) the expert’s scientific, technical, or other specialized knowledge
[must] help the trier of fact to understand the evidence or to determine
a fact in issue;
(b) the testimony [must be] based on sufficient facts or data;
(c) the testimony [must be] the product of reliable principles and
methods; and
(d) the expert [must have] reliably applied the principles and methods
to the facts of the case.
Fed. R. Evid. 702. Rule 704(a) states that opinion testimony “otherwise admissible
is not objectionable because it includes an ultimate issue to be decided by the trier
of fact.” “Neither rule, however, permits expert witnesses to offer conclusions of
law.” C.P. Interests, Inc. v. Ca. Pools, Inc., 238 F.3d 690, 697 (5th Cir.2001) (citing
Owen v. Kerr McGee Corp., 698 F.2d 236, 240 (5th Cir.1983)). Proposed expert
testimony which offers a legal opinion is inadmissible, Estate of Sowell v. United
States, 198 F.3d 169, 171 (5th Cir. 1999), because it does not “help the trier of fact to
understand the evidence or determine a fact in issue . . . .” Fed. R. Evid. 702(a).

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The Court has carefully reviewed the opinion portion of Hager’s report.
There are a few sentences describing the relationship of an insurer and its agents,
(See Mot. to Exclude Ex. 1, at 11, ECF No. 81-1), and a few sentences describing an
agent’s obligation to advise a potential insured when there will be no coverage. (See
id. at 12). These statements are admissible because they might assist the jury in
understanding relevant industry standards, but Hager may not “draw conclusions
from those standards.” Jones v. Reynolds, 2:06-CV-57-SA, 2008 WL 2095679, *12
(N.D. Miss. May 16, 2008).
The majority of Hager’s opinions draw legal conclusions. He opines that
Zurich breached its duty of good faith and fair dealing; the insurer (presumably,
Zurich) failed to adequately supervise the action of the agents; the agents breached
their duties to the insured; the agent’s breach is imputed to the insurance company;
and Zurich breached its duty to carefully and thoroughly investigate the claim. (See
Mot. to Exclude Ex. 1 10-12, ECF No. 81-1). These opinions are conclusions
regarding the legal implications of the insurance companies’ conduct. Accordingly,
the opinions are inadmissible. See Found. Health Servs., Inc. v. Zurich Am. Ins. Co.,
No. CV 15-59-JJB-EWD, 2016 WL 1449678, at *2 (M.D. La. Apr. 13, 2016) (citation
omitted) (compliance with the obligations of good faith are inadmissible legal
conclusions); Willis v. Allstate Ins. Co., No. 2:13-CV-60-KS-MTP, 2014 WL 4804396,
at *2 (S.D. Miss. Sept. 26, 2014) (opinions regarding reasonableness of insurer’s
claim investigation and legitimacy of reason to deny claim are inadmissible legal

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conclusions). For this reason, the insurance companies’ Motion is denied to the
extent of Hager’s opinions as to the customs, practices, or standards of the
insurance industry noted above, and granted in all other respects.
IT IS THEREFORE ORDERED AND ADJUDGED that the [81] Motion to
Exclude William D. Hager as an Expert Witness, filed by Southwest Business
Corporation, d/b/a Insurance Partners and USAA Insurance Agency, Inc., and joined
by American Zurich Insurance Company [89] is GRANTED IN PART AND
DENIED IN PART as set out above.
SO ORDERED AND ADJUDGED this the 13th day of April, 2018.

s/

Louis Guirola, Jr.

LOUIS GUIROLA, JR.
UNITED STATES DISTRICT JUDGE

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