Allstate Indemnity Company v. Dixon et al

Filing 134

ORDER denying 105 motion to strike ; granting 126 motion for leave to file sur-reply. Signed on 2/29/2016 by District Judge M. Douglas Harpool. (Hance, Breanna)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
SOUTHERN DIVISION
ALLSTATE INDEMNITY COMPANY,
Plaintiff / Counter Defendant,
v.
JOSEPH DIXON and CASEY DIXON,
Defendants / Counter Plaintiff,
v.
LORETTA BAILEY AGENCY, INC. and
BETHANY FLENNIKEN,
Counter Defendants.

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Case No. 6:14-cv-03489-MDH

ORDER
Before the Court is Defendants’ Motion to Strike Plaintiff’s Non-Retained Expert
Disclosures (Doc. 105) and Plaintiff’s Motion for Leave to File a Sur-reply (Doc. 126). The
Court hereby GRANTS Plaintiff’s motion for leave to file a sur-reply and Plaintiff’s sur-reply
(Doc. 126-1) is deemed filed.1 After carefully reviewing the issues and arguments presented by
the parties, the Court hereby DENIES Defendants’ motion to strike.
This matter involves a dispute over insurance coverage arising from a total loss fire that
occurred at the Dixons’ property on or about April 12, 2014. The Dixons filed a claim for
coverage and Allstate denied coverage on grounds that the Dixons concealed and/or
misrepresented material facts with regard to the claimed loss and are otherwise barred from
recovery because an investigation revealed that the Dixons, or someone at their direction, started

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Plaintiff should be permitted to respond to Defendants’ argument that the expert testimony would be prejudicial.
To the extent Plaintiff’s sur-reply reiterates or attempts to bolster the arguments made in Plaintiff’s original
suggestions in opposition, the Court ignores such briefing.

the fire. The Dixons now move to strike Allstate’s disclosure of two non-retained experts
designated to testify concerning the value of the property.
The Dixons first argue the expert disclosures should be stricken because the value of the
Dixons’ property is a non-issue in this case because, pursuant to Missouri’s valued policy statute,
see Mo. Rev. Stat. § 379.140, Allstate is bound by the actual cash value of the property as stated
in the policy. The Dixons argue that expert testimony concerning the value of the Dixons’
property is irrelevant, cumulative, prejudicial, amounts to a waste of time, and will confuse the
jury. Allstate responds that the anticipated expert testimony concerning the value of the Dixons’
property is directly relevant to the Dixon’s motive to commit arson fraud. Allstate argues “[i]n
this case, evidence of Defendants’ grossly overvalued/over-insured property is relevant to show
their motive to commit arson fraud for insurance proceeds.” Allstate asserts that the Dixons will
not be prejudiced by such testimony because “in the event of a verdict for Defendants, Allstate
will stipulate that the building is total loss and RSMo. § 379.140 applies.”
The Court finds the evidence concerning the value of the Dixon’s property is relevant in
this case because it goes to the Dixons’ motive to commit arson fraud. In a similar case, the
Eighth Circuit held that such evidence was “obviously relevant and wholly admissible.” Gen.
Cas. Ins. Companies v. Holst Radiator Co., 88 F.3d 670, 672 (8th Cir. 1996). In that case, the
Eighth Circuit explained:
The [valued policy statutes] are directed toward insurance companies who accept
large premiums on overvalued property and then, when a claim is made, either
pay only the actual value or deny the claim in its entirety because of the
overvaluation. General Casualty did not introduce the evidence at issue to prove
that it claimed that it only had to pay the actual value of the property or to prove
that it had denied Holst’s claim because he had overvalued the property. The
evidence was introduced as circumstantial proof that Holst had a motive to
commit arson. In these circumstances, the evidence was obviously relevant and
wholly admissible.

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Id. (internal citations omitted). In light the binding and analogous Eighth Circuit precedent cited
above, the Dixons’ argument that evidence of overvaluation is “not at issue in this case” is
rejected. Moreover, the Court finds the Dixons will not be prejudiced by the admission of such
evidence at trial because the Dixons will have the opportunity to rebut such evidence and
because Allstate has agreed to stipulate that the Dixons are entitled to recover the full amount
stated in the policy if the jury finds in the Dixons’ favor.
The Dixons further argue the expert disclosures should be stricken because Allstate’s
designated experts are not qualified to provide expert opinion on the valuation of the Dixons’
property. Allstate designated two experts to opine on value – the Howell County Assessor and
Robert Eckhart. The Dixons admit in their reply suggestions that, due to the absence of certain
information, “the Dixons cannot determine whether or not Allstate has laid even the minimum
foundation for designation of the Assessor and/or the Assessor’s records as valid expert
testimony/evidence.” In light of this statement, the Court finds any objection to the foundation
or qualifications of the County Assessor are better reserved for a later time. As to designated
expert Robert Eckhart, who is the former owner of the property, the Dixons argue that, while a
current owner can testify as an expert concerning the value of his/her property,2 there is no
authority that allows a previous owner to testify concerning the value of the property that he/she
used to own. Given the two month span between the time the Dixons purchased the property
from Mr. Eckhart and the time of the fire, the Court finds Mr. Eckhart’s opinion as to the value
of the property during the time that he owned it may be relevant and he is qualified to opine on

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An Advisory Committee Note to Federal Rule of Evidence 702 states that “within the scope of the rule are not only
experts in the strictest sense of the word, e.g., physicians, physicists, and architects, but also the large group
sometimes called ‘skilled’ witnesses, such as bankers or landowners testifying to land values.”

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that subject. The Court may reconsider such ruling in response to a more specific objection at or
before trial and upon the opportunity to review the specific testimony at issue.3
In sum, the Court finds evidence concerning the value of the property is admissible to
show the Dixons’ motive to commit arson fraud and Allstate is permitted to designate experts to
opine on that subject. At this time, the two non-retained experts disclosed by Allstate appear to
have adequate foundation and qualification to testify as experts. Based on the foregoing, the
Court cannot say at this time that Allstate’s experts should necessarily be stricken or that their
testimonies are inadmissible.

The Dixons may further submit objections to the specific

testimony of the designated experts through motions in limine or at trial.

IT IS SO ORDERED.
Dated: February 29, 2015

/s/ Douglas Harpool
DOUGLAS HARPOOL
UNITED STATES DISTRICT JUDGE

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For example, the Court is not inclined to permit Mr. Eckhart to opine as an expert on the value and condition of the
property for the entire time period designated by Allstate, i.e. back to 2008. Moreover, the Court is not likely to find
the entire sales history of the property dating back to 2008 relevant, even assuming such sales history is relevant at
all. Such information appears to go well beyond the Dixon’s profit motive to commit arson fraud. Moreover, as
argued by Plaintiff, Allstate will need to provide good reason why Mr. Eckhart’s opinion differs from the sales price,
which is presumed to represent the fair market value at the time the property was sold to the Dixons.

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