Housing Enterprise Insurance Company, Inc. v. One South Place, LP et al (JRG2)

Filing 139

MEMORANDUM AND ORDER: Housing Enterprise Insurance Companys Motion to Exclude Robert Underdown 75 , Wells Fargos Motion to Exclude Robert Underdown 78 , and Emerald Housing Management, LLC, and One South Place, LPs Motion in Limine to Exclude Billy Akin 80 are GRANTED. Signed by Magistrate Judge H Bruce Guyton on 12/4/18. (ABF)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
HOUSING ENTERPRISE INSURANCE
COMPANY INC.,
Plaintiff,
v.
ONE SOUTH PLACE, LP; SOUTH RIDGE
HOUSING, LLC; EMERALD HOUSING
MANAGEMENT, LLC; BERKADIA
COMMERCIAL MORTGAGE, LLC,
Defendants.
ONE SOUTH PLACE, LP and EMERALD
HOUSING MANAGEMENT, LLC,
Counter-Plaintiffs,
v.
HOUSING ENTERPRISE INSURANCE
COMPANY, INC.,
Counter-Defendant.
ONE SOUTH PLACE, LP and EMERALD
HOUSING MANAGEMENT, LLC,
Third-Party Plaintiffs,
v.
WELLS FARGO INSURANCE SERVICES
USA, INC.,
Third-Party Defendant.

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No. 3:17-CV-241-JRG-HBG

MEMORANDUM AND ORDER

This case is before the undersigned pursuant to 28 U.S.C. § 636, the Rules of this Court,
and Standing Order 13-02.
Now before the Court are the following Motions: Housing Enterprise Insurance Company’s
Motion to Exclude Robert Underdown [Doc. 75], Wells Fargo’s Motion to Exclude Robert
Underdown [Doc. 78], and Emerald Housing Management, LLC, and One South Place, LP’s
Motion in Limine to Exclude Billy Akin [Doc. 80].
The Court addressed the Motions at a hearing on October 23, 2018. Attorney Alan Lyons
appeared on behalf of Housing Enterprise Insurance Company. Attorney Robert Vance appeared
on behalf of One South Place, LP, and Emerald Housing Management, LLC. Attorneys Bradford
Payton and Thomas Potter, III, appeared on behalf of Wells Fargo Insurance Services USA, Inc.
Accordingly, for the reasons further explained below, the Court GRANTS the Motions [Docs. 75,
78, 80].
I.

BACKGROUND
The Court will first discuss the allegations in the Amended Complaint and other pleadings

and then turn to the expert witnesses’ opinions in this case.
A.

Factual History

The lawsuit arises from an insurance coverage dispute filed by Housing Enterprise
Insurance Company (“HEIC”).

In the Amended Complaint, HEIC alleges that it issued a

commercial property insurance policy (“Property Policy”) to One South Place, LP (“One South
Place”) as the sole named insured effective September 20, 2016, to September 20, 2017. [Doc. 49
at ¶ 11]. In addition, HEIC also issued a commercial general liability insurance policy (“CGL

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Policy”) to One South Place as the sole named insured effective September 20, 2016, to September
20, 2017. [Id. at ¶ 12].
On April 12, 2017, an ACORD form Property Loss Notice was submitted to HEIC on
behalf of One South Place, which provided notice of a claim under the Property Policy for damage
caused by a fire that occurred on April 10, 2017. [Id. at ¶ 16]. In addition, HEIC received an
ACORD form General Liability Notice of Occurrence/Claim on behalf of One South Place, which
provided notice of a claim under the CGL Policy arising from the fire at the property. [Id. at ¶ 18].
Following receipt of the notices, HEIC commenced a coverage investigation under the Property
Policy and the CGL Policy. [Id. at ¶ 19].
The Amended Complaint alleges that during HEIC’s investigation, it received
documentation showing that on September 29, 2016, One South Place sold of all its interest in the
property to South Ridge Housing, LLC (“South Ridge”). [Id. at ¶ 20]. Prior to receiving such
documentation as part of its coverage investigation, HEIC had not been informed and did not have
any knowledge of the sale of the property. [Id. at ¶ 21]. The Amended Complaint states that upon
information and belief, after September 29, 2016, One South Place no longer maintained any
interest, whether legal, financial, equitable, or otherwise, in the Property. [Id. at ¶ 22]. HEIC
states that after the sale of the property, One South Place no longer had an insurable interest in the
property, and as a result, the Property Policy and the CGL Policy were void as of September 30,
2016. [Id. at ¶¶ 25, 30]. HEIC informed One South Place by letter dated May 24, 2017, that the
Property Policy and the CGL Policy were void for lack of insurable interest as of September 30,
2016. [Id. at ¶¶ 32-33]. HEIC also enclosed with the letter a check payable to One South Place in

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the amount of $18,663.45, representing a pro rata return of the premium for the Property Policy
and CGL Policy, calculated from September 30, 2016. [Id. at ¶ 34].
HEIC requests a declaratory judgment that it has no obligation to make any payments under
the Property Policy or the CGL Policy. HEIC alleges that South Ridge is the current owner of the
property but that it is not an insured or loss payee under the Property Policy or the CGL Policy.
[Id. at ¶ 41]. HEIC states that Emerald Housing Management, LLC, (“Emerald”) acted as the
property manager, but it is also not an insured or loss payee under the Property Policy or the CGL
Policy. [Id. at ¶¶ 42-43, 56]. Further, HEIC avers that Berkadia Commercial Mortgage, LLC
(“Berkadia”) made a loan to One South Place, which was secured by the property, but Berkadia is
not an insured or loss payee under the Property Policy. [Id. at ¶¶ 44, 46].
South Ridge, the owner of the property, claims that HEIC breached the Property Policy by
denying insurance coverage for the fire and loss damages that were incurred. [Doc. 50]. Further,
Emerald and One South Place filed a Third-Party Complaint against Wells Fargo Insurance
Services USA, Inc., (“Wells Fargo”), alleging as follows: Emerald purchased the Property Policy
and CGL Policy through Wells Fargo, Wells Fargo is HEIC’s agent, and Wells Fargo breached
the duty of care to Emerald. [Doc. 20].
Relevant to the instant Motions, Emerald and One South Place retained Robert Underdown
as an expert in this case, which Wells Fargo and HEIC have both challenged. In addition, Wells
Fargo retained Billy Akin as an expert in this case, which Emerald and One South Place have
challenged. The Court will now turn to the testimony of each challenged expert witness.

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B.

Opinion of Robert Underdown

According to his Preliminary Expert Report, Robert Underdown (“Underdown”) has been
in the insurance industry for over thirty years. [Doc. 79-1 at 2]. He states that for twenty years,
he was a corporate risk manager responsible for purchasing insurance for a number of public and
private corporations. [Id.]. He is currently licensed in Arizona as an insurance producer. [Id.].
Underdown opines that Wells Fargo had a special relationship with Emerald, and therefore,
owed a higher duty to Emerald than the average insurance agent. [Id. at 11]. Underdown states
that it is apparent that Wells Fargo, in its day-to-day communications with Emerald, was aware
that there was a transfer of physical assets of the subject property and that part of the payment of
the insurance premiums was from the new owner’s escrow. [Id.]. Underdown submits that Wells
Fargo and HEIC both had notice of the sale because an email referencing “Assumption Insurance
requirements” was sent from a Berkadia employee to an Emerald employee, which was then
forwarded to Wells Fargo. [Id.]. Further, Underdown opines that in Tennessee, under certain
circumstances, an insurance carrier can be found vicariously liable for an agent’s breach of duty
to its client. [Id.]. Underdown continues that there was no change in exposure to the insurance
carrier because the same property manager, Emerald, continued in its position after the sale. [Id.].
He explains that there was simply a change in ownership and that the policy should have been
amended by Wells Fargo and HEIC as an industry custom. [Id. at 8].
Further, Underdown opines that despite HEIC’s claim that it was required to underwrite a
new owner of the HUD-managed property, HEIC was not required to perform additional
underwriting because the purchaser was already well known by HUD. [Id. at 12]. Underdown
states that under ordinary circumstances, without the fire claim, HEIC would not have raised any
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issue with respect to amending the existing policy to reflect the change in the ownership of the
property. [Id. at 12]. Underdown opines that HEIC was having financial problems and used the
loss as an opportunity to improve its financial position to the detriment of the parties involved.
[Id.]. He concludes as follows:
It is my opinion that the sale and transfer of ownership of the
property from One South Place LP to South Ridge Housing, LLC
did not materially increase the hazard of risk on the property. The
sole member of South Ridge Housing, LLC is Hoosier Housing
Group, LLC. South Ridge Housing, LLC owner, via the Hoosier
Housing Group, is a larger entity than One South Place and
therefore South Ridge Housing, LLC and the Hoosier Housing
Group would be a better ownership group for that property from
a risk standpoint and was already accepted as a participant in the
HUD system. In addition, in this case, the property manager
Emerald Housing Management and the mortgage company
Berkadia Commercial Mortgage both remained in place after the
transfer of ownership.
In my opinion, it is clear that it was the intent of Wells Fargo and
Emerald to transfer the insurance policy ownership to South
Ridge Housing, LLC and that the property be covered against the
loss that is at issue here based upon the fact that the property was
included in the policy, the premiums were paid, and the overall
facts related to this case.
As a result, based on the above, it is my opinion that Wells Fargo
fell below the standard of care for insurance agents, in many
ways. One indicator being the failure of Wells Fargo to comply
with the enhanced standard of care based on the factors as
outlined above. In this case, Wells Fargo rushed Emerald into the
renewal with a very short time window. Another was that Wells
Fargo failed to provide guidance to Emerald in the processing of
the paperwork for the sale and third, the fact that Wells Fargo
failed to take action on the documentation about the sale that was
received by Wells Fargo.
It is further my opinion that Wells Fargo failed to comply with
even a basic standard of care as evidenced by some of the
mistakes it made. For example, Wells Fargo included the wrong
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mortgage company when it issued the 2016 policies and, next,
the certificates Wells Fargo issued were inconsistent with the
policy.
Therefore, it is my opinion that Wells Fargo failed to adhere to
the applicable basic standard of care and also for the enhanced
standard of care based on "special circumstances ''. As a result,
both Wells Fargo and HEIC fell below the standard of care
expected of insurance agents and insurance companies.
[Id. at 12-13].
C.

Opinion of Billy Akin

As mentioned above, Billy Akin (“Akin”) was retained as an expert by Wells Fargo. In his
expert report, Akin explains that he was requested to examine certain documents in regard to this
case and express his professional opinion as to whether personnel of Wells Fargo met an acceptable
standard of care and followed acceptable custom and practice of the insurance industry while
dealing with all the parties involved in this litigation. [Doc. 80-1 at 3]. Akin opines that Wells
Fargo met the acceptable standard of care and followed acceptable custom and practice of the
insurance industry while dealing with all of the parties involved. [Id. at 6].
In support of his opinion, Akin states that Wells Fargo was not notified of the needed name
changes in the policies within a reasonable time before or during the policies’ renewal period
and/or near the time of the sale of the property. [Id.]. Further, he states that there is no record of
Wells Fargo receiving any information requesting a named insured change under the policies at or
near the 2016 renewal effective date. [Id.]. He submits that the correspondence produced in this
case is irrelevant to the situation and that much of the correspondence regarding the renewal of the
polices in September 20, 2016, were exchanged between Wells Fargo and other entities. [Id.].
Akin emphasizes in his report that there was correspondence between Wells Fargo and various
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parties after the renewal of the policies and after the property sale, but no one mentioned to Wells
Fargo that the named insured needed to be changed.

[Id.].

Finally, Akin disagrees with

Underdown’s opinion expressed in the Preliminary Expert Report as it relates to Wells Fargo. [Id.
at 9].
II.

POSITIONS OF THE PARTIES
The Court will address the Motions in the order in which they were filed.
A.

HEIC’s Motion to Exclude Robert Underdown

HEIC has challenged [Doc. 75] the following six opinions by Underdown: (1) In
Tennessee, under certain circumstances, an insurance carrier can be found vicariously liable for an
agent’s breach of duty to a client, (2) none of the conditions set forth in Tennessee Code Annotated
§ 56-7-1803 were present or applicable, (3) the risk or exposure did not change because Emerald
remained the property manager, and it is industry custom to amend the policy when there is a
change of ownership, (4) HEIC was not required to underwrite a new owner because the purchaser
was already vetted and approved by HUD, (5) HEIC and Wells Fargo were on notice that the
property had been transferred to a new owner, and (6) under ordinary circumstances, without the
fire claim, HEIC would have amended the existing policy, and HEIC was having financial
problems, so it used this loss as an opportunity to improve its financial position to the detriment
of the new property owner.
HEIC asserts that such opinions are inadmissible under Federal Rule of Evidence 702 for
three main reasons. First, HEIC argues that Underdown is not qualified to opine on issues of
Tennessee law. HEIC explains that Underdown’s opinions are legal issues and that he is not an
attorney. Further, HEIC contends that opinions on Tennessee law should be precluded as improper
8

expert evidence and that Underdown also ignored the Subproducer Agreement between Wells
Fargo and HEIC’s insurance agent that directly contradicts his opinion that Wells Fargo is HEIC’s
agent.
Second, HEIC asserts that Underdown is not qualified to opine on insurance industry
customs and/or underwriting issues. HEIC states that Underdown is not an expert on insurance
underwriting, he has never provided an expert opinion on insurance underwriting, and he has no
experience in this field. Finally, HEIC argues that Underdown’s opinions do not involve scientific,
technical, or other specialized knowledge.
In Response [Doc. 86], Emerald and One South Place submit that Underdown has offered
three opinions: (1) Wells Fargo was the producer of the insurance policies, (2) HEIC was not
entitled to cancel the policy unless one of the conditions set forth in the polices’ Tennessee
Amendatory Endorsement were met, and (3) that none of the conditions were met. Emerald and
One South Place argue that Underdown is qualified to offer his opinions because he has worked
in the insurance industry for thirty years and is licensed as a casualty, property, accident/health,
and life insurance producer. They assert that Underdown has extensive knowledge and experience
with respect to the provisions of commercial property insurance policies.
Further, Emerald and One South Place claim that Underdown’s opinions are reliable and
will assist the trier of fact. With respect to Underdown’s opinion that Wells Fargo was the producer
of the insurance policies, Emerald and One South Place assert that this opinion is based on
Underdown’s knowledge of insurance industry standards, and while consistent with Tennessee
law, it is not based on his interpretation of the law. They submit that his opinion is supported by
the facts of this case and that it will assist the jury because the subject matter is not within the
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common knowledge of the average juror. Finally, they argue that Underdown has extensive
experience with respect to commercial property policies, which renders his opinions regarding the
policies’ cancellation provisions reliable. They maintain that Underdown’s opinions are based on
his specialized knowledge as applied to the facts of this case.
HEIC filed a Reply [Doc. 88], asserting that it challenged six opinions in its Motion and
that the Response failed to address several of HEIC’s challenges. HEIC states that any opinion
that Wells Fargo is the producer is inadmissible because such opinion was not offered in the expert
report and that this matter is an issue under Tennessee law. Further, HEIC contends such an
opinion is unreliable because Underdown did not provide any evidence that his interpretations are
in accord with industry standards, he failed to consider documents, and he did not consider the
relevant Tennessee statute. HEIC maintains that Underdown is not qualified to render such an
opinion because he has never been a licensed producer in Tennessee.

HEIC states that

Underdown’s experience as an insurance producer was limited to life insurance policies, and he
only worked that job for about a year.
Finally, HEIC states that Underdown’s opinion that HEIC was not permitted to void the
policies under the Tennessee cancellation statute is inadmissible because it is a legal opinion, he
is not qualified to render such an opinion, and it is not based on any specialized or technical
knowledge.
B. Wells Fargo’s Motion to Exclude Robert Underdown
Wells Fargo also moves [Doc. 78] to exclude Underdown. First, Wells Fargo asserts that
his experience and background do not qualify him to testify about an insurance agent’s standard
of care in issuing a property policy. Second, Wells Fargo argues that Underdown’s testimony rests
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upon an unreliable basis and that his conclusory labels about facts are not admissible as expert
opinions, and therefore, his opinions cannot substantially assist the trier of fact. Wells Fargo
contends that Underdown did not identify any methodology, technique, or explanation and only
reviewed the pleadings.
Emerald and One South Place respond [Doc. 85] that Underdown is qualified to render his
opinions in this case because he has worked in the insurance industry for over thirty years and is
licensed as a casualty, property, accident/health, and life insurance producer. They assert that he
is familiar with the insurance industry and the standard of care with respect to insurance producers.
Further, Emerald and One South Place argue that Underdown’s testimony is both reliable and will
assist the trier of fact. They submit that his testimony is consistent with the facts in this case and
Tennessee law. Further, they argue that Underdown’s testimony is based on his specialized
knowledge of industry standards as applied to the facts of this case. Finally, Emerald and One
South Place argue that his opinion will assist the trier of fact because the average juror is not
familiar with the roles of various parties working within the insurance industry or the standard of
care with respect to insurance producers.
C.

Motion to Exclude Billy Akin

Emerald and One South Place move [Doc. 80] to exclude Akin, who was retained by Wells
Fargo as an expert witness. Emerald and One South assert that Akin’s opinion—that is, Wells
Fargo met the acceptable standard of care and followed acceptable custom and practice of the
insurance industry—directly contradicts his deposition testimony.

They further argue that

Underdown is not qualified to testify regarding the standard of care of an insurance producer in

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the affordable housing market because his experience is with underwriting and he has no
experience with the affordable housing market.
Wells Fargo asserts [Doc. 84] that Emerald and One South Place mischaracterize Akin’s
opinion. Wells Fargo submits that Emerald and One South Place’s arguments go to the weight of
Akin’s testimony, and not to the admissibility of the testimony. In addition, Wells Fargo states
that Akin is qualified and experienced to render his opinions because he has been an insurance
consultant for many years and he has worked as an insurance producer. Wells Fargo states that
Akin has previously written business for a housing authority.
Emerald and One South Place filed a Reply [Doc. 87], asserting that Akin’s opinion is
unreliable because he did not take into account the multiple admitted failures of Wells Fargo.
They maintain that this demonstrates that the methodology upon which Akin relies on is unreliable.
III.

STANDARD OF REVIEW
“Federal Rule of Evidence 702 obligates judges to ensure that any scientific testimony or

evidence admitted is relevant and reliable.” Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137,
147 (1999) (quoting Daubert v. Merrell Dow Pharma., Inc., 509 U.S. 579, 589 (1993)).
Specifically, Rule 702 provides as follows:
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;

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(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.
In Daubert, the Supreme Court of the United States stated that a district court, when
evaluating evidence proffered under Rule 702, must act as a gatekeeper, ensuring “that any and all
scientific testimony or evidence admitted is not only relevant, but reliable.” 509 U.S. at 589. The
Daubert standard “attempts to strike a balance between a liberal admissibility standard for relevant
evidence on the one hand and the need to exclude misleading ‘junk science’ on the other.” Best v.
Lowe’s Home Ctrs., Inc., 563 F.3d 171, 176–77 (6th Cir. 2009).
The factors relevant in evaluating the reliability of the testimony, include: “whether a
method is testable, whether it has been subjected to peer review, the rate of error associated with
the methodology, and whether the method is generally accepted within the scientific community.”
Coffey v. Dowley Mfg., Inc., 187 F. Supp. 2d 958, 970-71 (M.D. Tenn. 2002) (citing Daubert, 509
U.S. at 593–94). Rule 702 inquiry as “a flexible one,” and the Daubert factors do not constitute a
definitive checklist or test. Kumho Tire Co., 526 U.S. at 138-39 (citing Daubert, 509 U.S. at 593);
see also Heller v. Shaw Indus., Inc., 167 F.3d 146, 152 (3d Cir. 1999) (explaining that these factors
“are simply useful signposts, not dispositive hurdles that a party must overcome in order to have
expert testimony admitted”).
“Although Daubert centered around the admissibility of scientific expert opinions, the trial
court’s gatekeeping function applies to all expert testimony, including that based upon specialized
or technical, as opposed to scientific, knowledge.” Rose v. Sevier Cty., Tenn., No. 3:08-CV-25,
13

2012 WL 6140991, at *4 (E.D. Tenn. Dec. 11, 2012) (citing Kumho Tire Co., 526 U.S. at 138-39).
“[A] party must show, by a ‘preponderance of proof,’ that the witness will testify in a manner that
will ultimately assist the trier of fact in understanding and resolving the factual issues involved in
the case.” Coffey, 187 F. Supp. 2d at 70-71 (quoting Daubert, 509 U.S. at 593-94). The party
offering the expert has the burden of proving admissibility. Daubert, 509 U.S. at 592 n. 10.
“Furthermore, the court must examine the expert's conclusions in order to determine
whether they can reliably follow from the facts known to the expert and the methodology used.”
In re Diet Drugs, No. MDL 1203, 2001 WL 454586, at *7 (E.D. Pa. Feb. 1, 2001) (citing Heller,
167 F.3d at 153). A court should “exclude proffered expert testimony if the subject of the
testimony lies outside the witness's area of expertise.” In re Diet Drugs, 2001 WL 454586, at *7
(quoting 4 Weinstein's Fed. Evid. § 702.06[1], at 702–52 (2000)). This simply means that “a party
cannot qualify as an expert generally by showing that the expert has specialized knowledge or
training which would qualify him or her to opine on some other issue.” Id. (other citations
omitted).
IV.

ANALYSIS
Guided by the foregoing, the Court will now turn to the parties’ Motions. The Court will

first address the challenges to Underdown’s opinion and then turn to the objections with respect
to Akin’s opinion.
A.

Robert Underdown

HEIC and Wells Fargo have both challenged Underdown’s qualifications to render his

14

opinions in this case. Several of their challenges are addressed further below.1 HEIC also argues
that Underdown cannot opine that as a matter of industry custom, HEIC should have amended the
policy and that the change in ownership did not increase the risk so that no additional underwriting
was necessary. HEIC emphasizes that Underdown has no experience in underwriting and that he
acknowledged during his deposition that he does not consider himself to be an expert in
underwriting. Emerald and One South emphasize that Underdown has thirty years of experience
in the insurance industry and that he has been employed in ten different positions within the
industry, such as working as an insurance producer and risk manager.
The Court finds that Emerald and One South have not established Underdown’s
qualifications to render him an expert as to underwriting. Specifically, they point to his experience
in the insurance industry as an insurance producer and risk manager, but they do not explain how
such experience qualifies Underdown to opine on matters relating to underwriting. See Berry v.
Crown Equip. Corp., 108 F. Supp. 2d 743, 749 (E.D. Mich. 2000) (explaining that the “trial court
must determine whether the expert's training and qualifications relate to the subject matter of his
proposed testimony”) (citing Smelser v. Norfolk Southern Ry. Co., 105 F.3d 299, 303 (6th Cir.
1997)). Further, in his deposition, Underdown acknowledged that he did not have any insurance
underwriting experience from the insurer side, the only underwriting training he had was in the
various courses he took in general insurance, and that he has never provided an expert opinion on
insurance underwriting. [Doc. 79-1 at 147-48]. He testified that he does not consider himself an

1

For instance, HEIC and Wells Fargo assert that Underdown cannot render legal opinions
because he is not an attorney and such opinions are not helpful to the jury. The Court will address
these arguments below.
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expert on insurance underwriting. [Id. at 148]. Later in his deposition, he testified that he did not
have any direct experience in underwriting. [Id. at 228]. Accordingly, the Court finds HEIC’s
argument well taken.
HEIC and Wells Fargo also argue that Underdown’s opinions constitute improper legal
conclusions and do not substantially assist the jury. The Court agrees. Specifically, Rule 704(a)
provides, “An opinion is not objectionable just because it embraces and ultimate issue.” Fed. R.
Evid. 704(a); see also Hyland v. HomeServices of Am., Inc., 771 F.3d 310, 322 (6th Cir. 2014). It
is well established, however, that the Rules do not allow experts to make legal conclusions. United
States v. Melcher, 672 F. App’x 547, 552 (6th Cir. 2016). An expert makes a legal conclusion
when he/she “defines the governing legal standard or applies the standard to the facts of the case.”
Id. Courts have reasoned that expert testimony that “attempts to tell the jury what result to reach
and which runs the risk of interfering with a district court’s jury instructions, hardly can be viewed
as being helpful to the jury.” Woods v. Lecureux, 110 F.3d 1215, 1220 (6th Cir. 1997) (citing Fed.
R. Evid. 702).
The Court has reviewed Underdown’s report and agrees with HEIC and Wells Fargo that
the report contains a number of improper legal conclusions. For instance, Underdown opines that
Wells Fargo had a special relationship with Emerald and that it owed Emerald a higher duty than
the average insurance agent. Other courts have found similar opinions inadmissible. See Paul
Revere Life Ins. Co. v. Wilner, 230 F.3d 1359, 2000 WL 1290365, at *4 (6th Cir. 2000) (precluding
expert from testifying that a “special relationship” existed between an agent and the insured
because this opinion was a legal conclusion); Superior Aluminum Alloys, LLC v. U.S. Fire Ins.
Co., No. 1:05-CV-207, 2007 WL 4618463, at *9 (N.D. Ind. June 25, 2007) (“Accordingly, whether
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Sky and OmniSource enjoyed a ‘special relationship’ that imposed upon Sky an enhanced duty to
advise is a matter for the Court, and not [an expert], to decide; therefore, [the expert’s] opinion on
the matter is inadmissible.”).
Further, in his Preliminary Expert Report, Underdown discusses Tennessee law, citing
Cleveland Custom v. Acuity Mut. Ins. Co., No. E2013–02132–COA–R3–CV, 2014 WL 2586374
(Tenn. Ct. App. 2014) and Tennessee Code Annotated § 56-6-115, to conclude that none of the
proscribed conditions set forth in the statute, under which an insurer may cancel a policy, were
present or applicable. He further discusses that in Tennessee under certain circumstances, an
insurance carrier can be found vicariously liable for an agent’s breach of duty. He opines on Wells
Fargo’s and HEIC’s intent with respect to transferring the property and concludes that both their
conduct fell below the standard of care. The Court finds that such opinions simply instruct the
jury on what verdict to reach, rendering his opinions inadmissible. See Louisville Marketing, Inc.
v. Jewelry Candles, LLC, No. 3:15-cv-84, 2016 WL 6595094, *5 (W.D. Ky. Nov. 4, 2016)
(excluding an opinion when the expert witness’s determination “supplies the jury with no
information other than the witness’s view of how the verdict should read”); see also In re
Commercial Money Ctr., Inc., 737 F. Supp. 2d 815, 829–30 (N.D. Ohio 2010) (explaining that
testimony as to the breach of duty encompasses legal conclusions and finding expert opinions
regarding a breach of the applicable standards impermissible).
Further, the Court finds Underdown’s remaining opinions are not helpful to the jury
because they do not involve any specialized knowledge. Specifically, Underdown reviews Wells
Fargo’s advertisements to conclude that it held itself out as having greater than average expertise
in the insurance of rental properties. In addition, he opines that in a magazine, Wells Fargo
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announced its plan to sell its commercial insurance business and that the transition of ownership
and possible personnel changes may have contributed to Wells Fargo’s oversight with respect to
the change of ownership of the subject property. He also reviews certain communications to opine
that HEIC and Wells Fargo had notice of the sale. Underdown further opines that there was no
increased risk because the purchaser had already been approved by HUD and Emerald remained
the property manager. The Court finds that the jury is capable of reviewing such evidence and
forming their own opinions. United States v. Freeman, 730 F.3d 590, 597 (6th Cir. 2013) (“A
witness, lay or expert, may not form conclusions for a jury that they are competent to reach on
their own.”); McGowan v. Cooper Indus., Inc., 863 F.2d 1266, 1272 (6th Cir. 1988) (“[The
witness’s] proffered testimony . . . consisted of opinions which were not helpful to the jury because
they addressed matters that were equally within the competence of the jurors to understand and
decide, and thus were inadmissible under [Rules 701 and 702].”).
Finally, the Court finds Underdown’s opinion that HEIC was having financial problems
and used this loss as an opportunity to improve its financial position to the detriment of the property
owner mere speculation. He bases his opinion on an email and two other documents that discussed
not writing additional business. [Doc. 79-2 at 243-45]. The jury, however, is capable of reviewing
such evidence and determining whether HEIC denied coverage based on a financial motive.
Accordingly, for the above reasons, the Court finds Underdown’s opinions not admissible in this
case.

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B.

Billy Akin

As noted above, Wells Fargo retained Akin as an expert in this case. At the hearing in this
matter, Wells Fargo acknowledged that this case is not appropriate for expert testimony and that it
retained Akin simply because Emerald and One South retained Underdown.
In the present matter, Akin opines that Wells Fargo met an acceptable standard of care and
followed acceptable custom and practice of the insurance industry while dealing with the other
parties involved. In addition, he states that he disagrees with Underdown’s opinion. Similar to
Underdown’s opinion, Akin does not provide a description of the acceptable customs and practices
but simply concludes that Wells Fargo met them, along with the acceptable standard of care. The
Court finds Akin’s opinion is also an impermissible legal conclusion, and the Court hereby
excludes his opinion for the same reasons explained above.
V.

CONCLUSION
Accordingly, for the reasons stated above, the Court finds Housing Enterprise Insurance

Company’s Motion to Exclude Robert Underdown [Doc. 75], Wells Fargo’s Motion to Exclude
Robert Underdown [Doc. 78], and Emerald Housing Management, LLC, and One South Place,
LP’s Motion in Limine to Exclude Billy Akin [Doc. 80] are GRANTED.
IT IS SO ORDERED.
ENTER:

United States Magistrate Judge

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