KBS Preowned Vehicles, LLC v. Reviva, Inc. et al

Filing 115

MEMORANDUM OPINION AND ORDER DENYING DEFENDANT'S DAUBERT MOTION (DKT. NO. 108 ) Signed by District Judge Irene M. Keeley on 9/5/14. (mh)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA

KBS PREOWNED VEHICLES, LLC, a West
Virginia limited liability company,
Plaintiff,
v.

//

CIVIL ACTION NO. 1:13CV138
(Judge Keeley)

UNITED FINANCIAL CASUALTY CO.,
a foreign corporation also known as
Progressive,
Defendant.
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANT’S DAUBERT MOTION [DKT. NO. 108]
Pending

before

the

Court

is

the

motion

to

exclude

the

testimony of John G. Barnes (dkt. no. 108) filed by the defendant,
United Financial Casualty Company (“United”). For the reasons that
follow, the Court DENIES the motion.
I.
This case arises from an insurance coverage dispute between
the insured plaintiff, KBS Preowned Vehicles, LLC (“KBS”), and the
insurer, United.

Although KBS has asserted claims for breach of

contract and bad faith, the Court bifurcated the bad faith claims,
and, at this juncture, only the breach of contract claim is
relevant.
KBS is a motor vehicle hauling company based in Monongalia
County, West Virginia.

Its haulers are covered under a Commercial

KBS PREOWNED VEHICLES, LLC v. UNITED FINANCIAL CASUALTY CO.
1:13CV138
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S DAUBERT MOTION
Auto Insurance Policy (the “Policy”) provided by United, which
includes coverage for loss to an insured automobile caused by fire.
Important to this issue, however, excluded from that fire coverage
are losses
4.

Resulting from manufacturer defects, wear and tear,
freezing, or mechanical or electrical breakdown or
failure. But, coverage does apply if the damage is
the result of other loss covered by the policy.

(Dkt. No. 109-2 at 3) (emphasis in original). Finally, if the fire
loss is covered, United is obligated to pay “the amount necessary
to repair the damaged property to its pre-loss physical condition.”
Id. at 4.
On May 9, 2011, one of KBS’s drivers, James Allen Sims
(“Sims”), was hauling vehicles from an auto auction in Buckhannon,
West

Virginia

while

driving

KBS’s

recently

purchased

2003

International 4400 Durastar Truck (the “Truck”) along Route 33.
Suddenly, the gauges began “acting crazy” and the Truck lost power.
Sims was able to pull over onto the shoulder, at which point he
noticed smoke rising from underneath the hood.

When he opened the

hood, Sims saw a fire in the rear of the engine compartment.

He

quickly grabbed the Truck’s fire extinguisher and put out the
flames.

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KBS PREOWNED VEHICLES, LLC v. UNITED FINANCIAL CASUALTY CO.
1:13CV138
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S DAUBERT MOTION
Sims immediately contacted United, which had the Truck towed
to Elkins Truck Service.

The repair shop determined that “the

cause of fire was the main hot wire from battery to starter touch
the frame & shorted out started fire & oil on eng help fire along.”
(Dkt. No. 109-3 at 4).

On May 16, 2011, a claims adjuster from

United contacted KBS to inform it that “the cause is not cov[ered]
& in this case the cause was the main starter wire shorted out &
started fire & the wire & labor to install will not be cov[ered] as
it was the cause.”

Id.

Although United did not cover the repairs to the wiring, it
did replace the engine.

However, in its amended complaint, KBS

alleges that the engine United selected for replacement was of
inferior quality and not identical to the previous engine.
About one year later, the engine had to be replaced again
after the first replacement engine had broken down on several
occasions.

KBS contacted United to apprise the insurer of the

issues with the replacement engine and to advise it that the Truck
was experiencing problems KBS believed were related to the May 2011
fire and the burnt electrical system.

For example, there were

issues with the Truck’s tachometer, dash lights, and headlamps.
Eventually,

in

September

2012,

inoperable.
3

the

Truck

became

completely

KBS PREOWNED VEHICLES, LLC v. UNITED FINANCIAL CASUALTY CO.
1:13CV138
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S DAUBERT MOTION
KBS took the Truck to Hunter Truck Sales and Repair (“Hunter”)
in Smithfield, Pennsylvania for a diagnostic review.

The repair

shop determined that the Truck’s wiring harness had sustained
damage either from the May 2011 fire or from oil being thrown about
the engine compartment due to defects in the initial replacement
engine.

Hunter also repaired the wiring harness at a cost of

$5216.68, but refused to release the Truck to KBS until the bill
was paid in full.

When KBS submitted the bill to United for

payment, United declined to pay because it concluded that the
damage to the wiring harness was unrelated to the May 2011 fire.
KBS was unable to pay the bill due to lost income because one of
its haulers was inoperable and the other was repossessed.
After about four months, KBS was able to secure funds to pay
the repair bill and regain the use of the Truck.

However, the

electrical problems persisted, and in July 2013, the Truck broke
down due to engine malfunction.

The Truck has been inoperable

since that time.
KBS filed its initial complaint in the Circuit Court of
Monongalia County, West Virginia in April 2013, several months
before

the

Truck

completely

broke

down.

The

complaint

was

subsequently removed to this Court, and was amended in January
2014. In its breach of contract claim, KBS alleges that, under the
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KBS PREOWNED VEHICLES, LLC v. UNITED FINANCIAL CASUALTY CO.
1:13CV138
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S DAUBERT MOTION
Policy, United “had the duty to restore the Plaintiff’s 2003
International Truck to its pre-fire condition.”
6).

(Dkt. No. 52 at

And according to KBS, United did not discharge its duty in

this regard merely by replacing the engine.
After a discovery dispute related to KBS’s expert witness
disclosure, KBS filed an amended expert disclosure and report in
May 2014.

On August 1, 2014, United filed the pending motion to

exclude the testimony of KBS’s purported expert, John G. Barnes
(“Barnes”), arguing that, under Fed. R. Evid. 702 and Kumho Tire
Co. v. Carmichael, 526 U.S. 137 (1999), Barnes is unqualified to
offer his expert opinions and that his opinions are unreliable.
On August 26, 2014, the Court heard oral argument on the
pending motion, during which the parties agreed that the only
opinion of Barnes relevant to KBS’s breach of contract claim is
that

“[t]he

‘symptoms’1

the

truck

was

displaying

after

the

[replacement] engines were installed, appear to be the result of
the original fire and damage to the wiring.”

(Dkt. No. 93-1 at 7).

The Court permitted the parties to submit supplemental briefs on
the

admissibility

of

Barnes’s

opinion

1

under

the

Kumho

Tire

Barnes later clarified during his deposition that, by “symptoms,”
he meant electrical problems. (Dkt. No. 113-2 at 14).

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KBS PREOWNED VEHICLES, LLC v. UNITED FINANCIAL CASUALTY CO.
1:13CV138
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S DAUBERT MOTION
standard.

Both parties filed supplemental briefs on September 2,

2014.
II.
Under Fed. R. Evid. 702, an expert witness must be qualified
by “knowledge, skill, experience, training, or education.” If that
threshold is satisfied, the expert may offer testimony in the form
of an opinion, but only if all of the following are true:
(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.
The current version of Rule 702, as amended in 2000 and 2011,
reflects the Supreme Court’s decision in Daubert v. Merrell Dow
Pharm., Inc., 509 U.S. 579 (1993), and its subsequent decision in
Kumho Tire.

See Fed. R. Evid. 702 advisory committee’s note.

Under the Daubert standard, “the trial judge must determine at the
outset, pursuant to Rule 104(a), whether the expert is proposing to
testify to (1) scientific knowledge that (2) will assist the trier
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KBS PREOWNED VEHICLES, LLC v. UNITED FINANCIAL CASUALTY CO.
1:13CV138
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S DAUBERT MOTION
of fact to understand or determine a fact in issue.”
592.

509 U.S. at

In Kumho Tire, the Supreme Court held that all “specialized

testimony” must be “reliable and relevant,” regardless of “whether
the testimony reflects scientific, technical, or other specialized
knowledge.”
The

526 U.S. at 149.

mechanism

by

which

courts

perform

this

gatekeeping

function is found in Fed. R. Evid. 104(a), which requires courts to
decide

“any

preliminary

question

about

whether

a

witness

qualified, a privilege exists, or evidence is admissible.”

is
The

proponent of the testimony bears the burden of proving the expert’s
qualifications

and

the

reliability

preponderance of the evidence.

of

the

opinions

by

a

See Daubert, 509 U.S. at 592 n.10

(citing Bourjaily v. United States, 483 U.S. 171, 175-76 (1987));
Cooper v. Smith & Nephew, Inc., 259 F.3d 194, 199 (4th Cir. 2001).
III.
A.

Qualifications
United seeks to exclude Barnes’s opinion, in part, based on

his qualifications.

From 1983 to 1994, Barnes drove trucks for a

living. During the four-year period between 1989 and 1993, he also
managed a fleet of trucks for Capital City Distribution, Inc.
Beginning

in 1997,

he

worked

as

a

commercial

auto

insurance

underwriter before opening his own consulting firm in 2007. United
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KBS PREOWNED VEHICLES, LLC v. UNITED FINANCIAL CASUALTY CO.
1:13CV138
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S DAUBERT MOTION
questions whether this experience qualifies Barnes to opine on the
causative link between the May 2011 fire in the Truck’s engine
compartment and the subsequent problems.

According to Barnes, he

is qualified to opine on the causation issue based on “30 years of
experience in the trucking industry.”

(Dkt. No. 93-1 at 7).

Moreover, Barnes asserts that “I have operated numerous trucks with
Engine Control Modules, . . . [and] I have seen every kind of
failure of these components.”

Id.

During oral argument, the Court indicated to counsel for
United that, in the Court’s view, Barnes’s qualifications are
sufficient.

United’s supplemental brief does not persuade the

Court otherwise.

During his deposition, Barnes testified that he

has “experience with vehicles that have had fires in the fleets
that I’ve managed in the past.”

(Dkt. No. 109-5 at 5).

His

experience also includes “years of operating a number of commercial
vehicles

and

electrical

having

direct

problems,

fires

experience

with

and

issues.”

other

trucks

that

Id.

at

have
20.

Moreover, Barnes has “decades” of experience “running lots of
commercial vehicles that have experienced fires and electrical
problems.”

Id. at 21-22.

Finally, as a fleet manager, Barnes

oversaw repairs to the trucks:

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KBS PREOWNED VEHICLES, LLC v. UNITED FINANCIAL CASUALTY CO.
1:13CV138
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S DAUBERT MOTION
[L]et me clarify that as part of fleet management is that
over the years of being in the truck industry, in the
trucking industry, is that I was responsible for the
vendors that repaired the vehicles.
I made repair
decisions. I would be involved in direct review of any
kind of repairs to trucks. So on a daily basis it would
be –- come across my desk would be phone calls or e-mails
from suppliers or vendors on repairs. . . . So over the
years I’ve become very familiar with all –- you know, the
function of trucks, how to maintain them.
Id. at 27-28.
United urges that, despite Barnes’s extensive background with
truck repairs and his particularized experience with fire-related
damages to electrical components in trucks, he is not a mechanic
and has never dealt specifically with diesel trucks like the one at
issue. The level of specialization demanded by United, however, is
far greater than that demanded by law.

“An expert need not

necessarily have specific experience with a particular facet of his
or her expertise in order to be competent to testify as to that
facet,” and “[a] lack of specialization generally does not affect
the admissibility of the opinion, only its weight.”

Loeffel Steel

Prods., Inc. v. Delta Brands, Inc., 372 F. Supp. 2d 1104, 1113
(N.D. Ill. 2005) (internal quotation marks and citations omitted);
see also Dreyer v. Ryder Auto. Carrier Grp., Inc., 367 F. Supp. 2d
413, 417 (W.D.N.Y. 2005) (finding an expert qualified to opine on
a design defect of autohaulers based on his general experience

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KBS PREOWNED VEHICLES, LLC v. UNITED FINANCIAL CASUALTY CO.
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MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S DAUBERT MOTION
loading, unloading, and operating autohaulers); Smith v. Ford Motor
Co., 882 F. Supp. 770, 772-73 (N.D. Ind. 1995) (permitting an
expert to testify as to the cause of a truck fire based on his
experience in the auto collision repair industry); Mason v. E.L.
Murphy Trucking Co., 769 F. Supp. 341, 344 (D. Kan. 1991) (finding
an expert qualified to opine on unique markings of a transportation
trailer based on nineteen years of “practical experience” operating
and maintaining transportation trailers).
B.

Reliability
In addition to being qualified, an experiential witness must

demonstrate how his experience leads to his conclusion, and how his
experience is reliably applied to the facts.

See United States v.

Wilson, 484 F.3d 267, 274 (4th Cir. 2007).

That said, “[a]

district court’s reliability determination does not exist in a
vacuum, as there exist meaningful differences in how reliability
must be examined with respect to expert testimony that is primarily
experiential in nature as opposed to scientific.”

Id.

During his deposition, Barnes explained precisely how his
experience led him to his conclusion that the Truck’s subsequent
problems were caused by the burnt electrical wiring:
This would be strictly from my expert experience and over
the years of operating a number of commercial vehicles
and having direct experience with trucks that have
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KBS PREOWNED VEHICLES, LLC v. UNITED FINANCIAL CASUALTY CO.
1:13CV138
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S DAUBERT MOTION
electrical problems, fires and other issues.
These
problems, if they are not corrected at the beginning or
there’s fire damage that isn’t repaired due to the
complexity of all the electronics and the wire harnesses,
they become a continuous maintenance problem.
That’s
what I see is happening here in this –- at this point.
(Dkt. No. 109-5 at 20-21).
As to Barnes’s methodology, United argues that the basis of
his opinion is the claim file, which concludes that the subsequent
problems with the Truck “are not in any way related” to the May
2011

fire

or

the

covered

repairs.

(Dkt.

No.

113-1

at

4).

Additionally, United points out that Barnes conceded the claims
adjuster who inspected the Truck was in a better position than
Barnes to determine whether the electrical problems were related to
the original fire.
United’s

(Dkt. No. 113-2 at 11).

points

are

well-taken.

Nevertheless,

Barnes’s

opinion is not unreliable simply because he disagrees with the
opinion of the claims adjuster or the notes in the claim file.
forming

his

opinion,

Barnes

studied

the

claim

file,

In

viewed

photographs of burnt wiring and fire damage to the Truck’s engine
compartment,

and

read

Sims’s

deposition

testimony

transcript

discussing the lack of problems with the Truck prior to the fire.
After reviewing all these materials, and based on his experience,
Barnes concluded that the Truck’s electrical problems were caused

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KBS PREOWNED VEHICLES, LLC v. UNITED FINANCIAL CASUALTY CO.
1:13CV138
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S DAUBERT MOTION
by damage to the wiring from the May 2011 fire.
unreliable about this methodology.

There is nothing

Although United points out

purported weaknesses in the basis of Barnes’s opinion, “‘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.’”
United States v. Crisp, 324 F.3d 261, 269-70 (quoting Daubert, 509
U.S. at 596).
IV.
Therefore,

for

the

reasons

discussed,

the

Court

DENIES

United’s motion.
It is so ORDERED.
The Court directs the Clerk to transmit copies of this Order
to counsel of record.
DATED: September 5, 2014.
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE

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