Bamford, Inc. v. Regent Insurance Company et al

Filing 134

MEMORANDUM AND ORDER that defendant's motion 94 is granted in part and denied in part. That portion of Dietz's report which interprets what Regent meant when it referred to Nebraska juries as conservative is excluded. Dietz's opinion that Regent's Short-Term Incentive ("STI") program could cause a pernicious or perverse effect and evidence of bonuses is excluded. The remainder of defendant's motion 94 is denied. The plaintiff's motion to compel 116 is denied. Ordered by Senior Judge Lyle E. Strom. (JSF)

IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEBRASKA
BAMFORD, INC., a Nebraska
business corporation,

)
)
)
Plaintiff,
)
)
v.
)
)
REGENT INSURANCE COMPANY,
)
a Wisconsin business
)
corporation,
)
)
Defendant.
)
______________________________)

8:13CV200

MEMORANDUM AND ORDER

This matter is before the Court on two related motions.
The first motion (Filing No. 94) filed by the defendant is to
exclude the expert testimony of Rob Dietz (“Dietz”) pursuant to
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 589
(1993).

The second motion (Filing No. 116) filed by the

plaintiff is to compel discovery from the defendant.
have been fully briefed.

The motions

After review of the motions, briefs,

indices of evidence, and relevant case law, the Court finds as
follows.
I.

BACKGROUND
Bamford, Incorporated (“Bamford”) is a commercial

contractor of plumbing, heating, and fire sprinkler systems in
Kearney, Nebraska (Filing No. 1, ¶ 1).

Bamford purchased

automobile liability insurance policies from Regent Insurance Co.
(Id. at ¶¶ 6, 7).

On May 11, 2009, one of Bamford’s employees

was involved in a serious automobile collision in Dawson County,
Nebraska (Id. at ¶¶ 8, 9).

The accident caused serious injury to

the Davises (hereinafter “third persons”) who brought claims

against Bamford (Id. at ¶ 10).

Regent maintained responsibility

over the investigation and settlement of the claims at their sole
discretion (Id. at ¶¶ 6, 7).
Prior to trial, Regent denied numerous early offers
from the third persons to settle the case below the $6,000,000
policy limit (Id. at ¶¶ 11, 13).

The plaintiffs received a

$10,621,757.18 verdict against Bamford; however, the parties
elected to settle the case for less (Id. at ¶ 14).

In the end,

Regent paid its policy limit and Bamford paid $1,999,999.49 outof-pocket pursuant to the settlement (Id. at ¶ 16).

Bamford

alleges a breach of a fiduciary duty to handle third party
automobile personal injury claims with good faith and fair
dealing (Id. at ¶¶ 18-27).
II.

LEGAL STANDARD
“The admissibility of expert testimony in diversity

cases is governed by federal law.”
394 F.3d 1008, 1011 (8th Cir. 2005).

Unrein v. Timesavers, Inc.,
Federal Rule of Evidence

702 provides the following:
[i]f scientific, technical or other
specialized knowledge will assist
the trier of fact to understand the
evidence or to determine a fact in
issue, a witness qualified as an
expert by knowledge, skill,
experience, training or education
may testify thereto in the form of
an opinion or otherwise, if (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.
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Fed. R. Evid. 702.

Under Rule 702, the court acts as a

gatekeeper to determine “whether the witness is qualified to
offer expert testimony.”

Schmidt v. City of Bella Villa, 557

F.3d 564, 570 (8th Cir. 2009) (citing Daubert v. Merrell Dow
Pharm., Inc., 509 U.S. 579, 589 (1993)).

The Eighth Circuit has

determined that a district court should apply a three-part test
when screening testimony under Rule 702:
First, evidence based on
scientific, technical, or other
specialized knowledge must be
useful to the finder of fact in
deciding the ultimate issue of
fact. This is the basic rule of
relevancy. Second, the proposed
witness must be qualified to assist
the finder of fact. Third, the
proposed evidence must be reliable
or trustworthy in an evidentiary
sense, so that, if the finder of
fact accepts it as true, it
provides the assistance the finder
of fact requires.
Lauzon v. Senco Prods., Inc., 270 F.3d 681, 686 (8th Cir. 2001)
(internal citations and quotations omitted).

The proponent of

the expert testimony bears the burden of proving its
admissibility by a preponderance of the evidence.

Id.

The first inquiry is whether the proposed testimony is
relevant.

Daubert, 509 U.S. at 591.

Relevant testimony is

testimony which “logically advances a material aspect” of a
party's case.

Allison v. McGhan Medical Corp., 184 F.3d 1300,

1312 (11th Cir. 1999).
Next, the witness’ qualifications are considered.

An

expert must possess the “knowledge, skill, experience, training
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or education sufficient to assist the trier of fact.”

Robinson

v. GEICO Gen. Ins. Co., 447 F.3d 1096, 1100 (8th Cir. 2006)
(citation and internal quotation marks omitted).

This standard

is satisfied when the expert's testimony “advances the trier of
fact's understanding to any degree.”

Id.

Federal Rule of

Evidence 702 “requires that the area of the witness's competence
matches the subject matter of the witness's testimony.”

Id. at

1101 (citation and internal quotation marks omitted).
Neither Daubert nor its progeny preclude experiencebased testimony and trained experts may form conclusions by
extrapolating from existing data.

See General Electric Co. v.

Joiner, 522 U.S. 136, 146 (1997).

An expert's opinion testimony

is inadmissible, however, where it is connected to existing data
only by the ipse dixit, or word alone, of the expert.

Joiner,

522 U.S. at 146.
Last, the reliability of the testimony must be measured
to determine whether it will be helpful to the jury.

An expert's

qualification and experience alone are not sufficient to render
his testimony relevant.

Id.

It must assist the trier of fact,

and “[p]roffered 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.”

Id. at 1262–63.

III. DISCUSSION
Dietz possesses fourteen years of experience with one
insurance company.

Regent argues Dietz’s experience makes him

unable to competently testify regarding Regent’s actions in this
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case.

Filing No. 100, at 10.

Bamford offers a number of

examples of Dietz’s qualifications.

Filing No. 104, at 2-7.

After review of the briefs, indices of evidence, and relevant
case law, the Court finds Dietz’s experience at least meets the
basic qualifications to form an expert opinion in this case.
Next, Regent argues that Dietz ought to possess some
experience in the Nebraska insurance industry before offering
opinions regarding Nebraska insurance practices.

Bamford

explains that Dietz’s opinions are based upon industry standards.
The Court finds Regent’s arguments are insufficient to bar
Dietz’s testimony and are best heard by the jury in the context
of cross examination.
Finally, Regent moves to exclude several specific items
from Dietz’s testimony.
“legal conclusions.”

First, Regent moves to exclude Dietz’s

After review of the arguments and specific

statements, the Court will deny Regent’s motion.
Second, Regent moves to exclude Dietz’s testimony that
he relied upon Nebraska state law in part to form his opinions.
Regent claims the statutes of Nebraska are irrelevant to this
case because Nebraska bad-faith claims are based on case law.
However, Bamford responds that Dietz has only limited testimony
regarding how Nebraska statutes affect insurers within the state.
After review of the arguments and law, the Court will deny
Regent’s motion.
Third, Regent moves to exclude an opinion that racial
tension was an element of its actions during the previous trial.
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Regent prepared a document outlining the claim and trial.

In

that document, Regent posited how the jury was favorable to its
defenses and, two sentences later, mentions that the jury was all
white and that the plaintiffs were black.

The juxtaposition of

Regent’s belief that the jury was favorable with the racial
identities of the jury provides sufficient basis for Dietz’s
opinion.

Therefore, Regent’s motion will be denied.
Fourth, Regent’s employees made a statement regarding

the relative fiscal nature to Nebraska jury awards.
described Nebraska juries as conservative.

Regent

Regent wishes to

exclude Dietz’s interpretation of conservative.

Though

ostensibly relevant, Bamford makes clear that it will introduce
what it perceives to be an insult against all Nebraskan juries to
the jury in this case; and by delivering this perceived slight to
the jurors, Bamford hopes to rally the jurors to its case through
passion and prejudice.

Dietz’s interpretation of Regent’s

statement is as follows:
Regent “suggests that [Nebraska
juries] are not capable of
understanding or appreciating the
effect of and consequences of
serious injuries to another human
being, and therefore are either
less sensitive or somewhat
incapable of awarding appropriate
and fair sums of money in
compensation to seriously injured
people.
Filing No. 120, at 10-11 (citing the Dietz Report, at p. 18).
This is wild speculation.

For the foregoing reason, the Court

will grant Regent’s motion and will exclude the above quoted
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opinion from the trial.

The Court does not exclude all evidence

of the relative conservative nature of Nebraska juries.
Fifth, Regent seeks to exclude Dietz’s opinion that
Regent’s Short-Term Incentive (“STI”) program could cause a
pernicious or perverse effect:

to encourage claims handlers to

low-ball in their evaluation of claims.

Filing No. 104, at 29.

Regent employees who handled the Bamford claim had no financial
incentive to low-ball the Bamford claim because one case does not
affect whether Regent employees receive a bonus.

Nonetheless,

Bamford insists that “bonus systems do not have to tie directly
into a specific outcome in the claims handling of a specific
case” in order for Dietz’s opinion to be relevant to this case.
Id. at 30.

That is difficult to believe.

“[T]he proposed

evidence must be reliable or trustworthy in an evidentiary sense,
so that, if the finder of fact accepts it as true, it provides
the assistance the finder of fact requires.”
686.

Lauzon, 270 F.3d at

The proposed evidence is unhelpful, irrelevant, and

confuses the facts of the case.

Therefore, the Court will grant

Regent’s motion and evidence of bonuses will be excluded.
Consequently, the Court will deny the plaintiff’s motion to
compel, which relates to STI bonus documents (Filing No. 116).
Sixth, the parties have reached an agreement as to the
issue of misrepresentation.

Filing No. 120, at 12.

Seventh, Regent objects to four instances in Dietz’s
report in which he purportedly offers evidence of Regent’s state

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of mind.

After reviewing the statements, briefs, and case law,

the Court will deny Regent’s motion to exclude this testimony.
Eighth and last, Regent objects to an excerpt from
Dietz’s report which details the purposes behind insurance.
After reviewing the statements, briefs, and case law, the Court
will deny Regent’s motion to exclude this testimony.
IT IS ORDERED:
1) The defendant’s motion (Filing No. 94) is granted in
part and denied in part.
2) That portion of Dietz’s report which interprets what
Regent meant when it referred to Nebraska juries as conservative
is excluded.
3) Dietz’s opinion that Regent’s Short-Term Incentive
(“STI”) program could cause a pernicious or perverse effect and
evidence of bonuses is excluded.
4) The remainder of defendant’s motion (Filing No. 94)
is denied.
5) The plaintiff’s motion to compel (Filing No. 116) is
denied.
DATED this 3rd day of December, 2014.
BY THE COURT:
/s/ Lyle E. Strom
____________________________
LYLE E. STROM, Senior Judge
United States District Court

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