Expert Allowed To Testify Regarding Bad Faith, But With Limitations

In the case of Three Rivers Hydroponics, LLC v. Florists’ Mut. Ins. Co., No. 2:15-CV-809 (W.D. Pa. Jan. 27, 2020 Hornak, J.), the court allowed a Plaintiff’s bad faith expert to testify with certain limitations.

The case arose out of a first party property loss from fire damage to a commercial greenhouse sterilization system.

The Plaintiff alleged that the carrier had wrongly denied coverage and that, as a result, the Plaintiff was forced out of business due to the carrier’s conduct. The Plaintiff sued for breach of contract and bad faith.

One of the experts the Plaintiff sought to use at trial was a bad faith expert. That bad faith expert was an attorney who also had over twenty (20) years of experience as a claims adjuster. That expert was offered by the Plaintiff to present opinions regarding insurance industry standards and practices, regarding the carrier’s handling of the claim at issue, regarding the carrier’s compliance with insurance statutes and regulations, and with respect to an interpretation of the carrier’s policy that was issued to the Plaintiff.

The carrier brought a Daubert Motion to Preclude the Plaintiff’s bad faith expert’s testimony. The defense asserted that the expert attorney’s legal conclusions would not help a jury. The carrier more specifically sought to preclude the expert from testifying on whether or not the carrier violated statutes or regulations and with respect to the expert’s interpretation of the Plaintiff’s insurance policy.

The federal district court ruled that “the admissibility of expert testimony hinges on a ‘trilogy of restrictions’: qualification, reliability and fit.”

In this matter the admissibility of the testimony rested on the restrictions pertaining to 'fit.'   In that regard, the court noted that, under Federal Rule of Evidence 702, the expert testimony must help the jury to understand the evidence or to determine a fact in issue.

The court noted that the “standard for fit is ‘not that high,’ although the standard was noted to be is higher than mere relevance.

In the end, the court ruled that, with certain limitations, the bad faith expert’s testimony would assist the jury in determining what constituted reasonable conduct when handling an insurance claim. The court noted that the expert’s twenty-six (26) years of experience as a claims adjuster would also be helpful in providing the jury with guideposts as to what constitutes reasonable adjusting and claims handling conduct.

As such, the expert was permitted to testify as to best practices in handling insurance claims of the type at issue in this case.

The expert was prohibited from testifying on whether or not the carrier violated any statutes or regulations.

Anyone wishing to review a copy of this decision may click this LINK


I send thanks to Attorney Lee Applebaum, the writer of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog and of the Philadelphia law firm of Fineman, Krekstein & Harris for bringing this case to my attention.

Third Circuit Court of Appeals Rejects Plaintiff's Request for a New Trial Because Trial Judge Used Hand Gestures When Providing Jury With Instructions in Bad Faith Case

Just when you think you've heard all, along comes an argument that a new trial should be granted because a trial court judge improperly used hand gestures during jury instructions to explain a point.

In the case of Antonio v. Progressive Insurance Co., No. 19-1074 (3d Cir. Jan. 8, 2020 Fuentes, J., Scirica, J., Shwartz, J.), the Third Circuit Court of Appeals reviewed various evidentiary rulings by a lower court judge in a post-verdict appeal after a jury entered a verdict in favor of the carrier in a UIM bad faith case.

Of note, the Third Circuit Court of Appeals agreed that there was no abuse of discretion by the trial court judge in barring the Plaintiff’s expert testimony. The Plaintiff wanted her expert to testify for the very limited purpose of establishing a range of value for her underlying UIM claim.

The court noted that this analysis involved the expert looking at other cases not before the court in this trial. The trial court had ruled that “what other cases have paid is not relevant to this case [and] what the value of this case is [and] the jury will be instructed to use their common sense in compensating [the insured] should be prevail.”

The court of appeals found no abuse in the trial court’s discretion in finding that the proposed expert testimony would not aid the jury in the case at hand.

The Third Circuit Court of Appeals also upheld the trial court’s ruling that precluded the Plaintiff from introducing into evidence in the bad faith claim a medical report that addressed the extent of the Plaintiff's alleged injuries and damages, where that report was never provided to the carrier during the underlying claims process.

The court found that such evidence had no relevance to the issue of whether the carrier acted in bad faith as they had not been provided with any opportunity to include that information in their underlying investigation and evaluation.

The appellate court also rejected the Plaintiff’s challenge to the jury instructions. The Plaintiff was complaining that she was entitled to a new trial because the judge had used “hand gestures demonstrating [the Plaintiff’s] burden in the ‘clear and convincing’ standard as a point mid-way between proof by preponderance of the evidence and proof beyond a reasonable doubt.” The court found no error here that would merit the relief requested by the Plaintiff in this regard.

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein & Harris for bringing this decision to my attention. Please be sure to check out Attorney Applebaum’s excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog.

Judgment in Favor of Carrier on Bad Faith Claim Affirmed

In the non-precedential decision of the Pennsylvania Superior Court in the case of Lewis v. Erie Insurance Exchange, 2115 EDA 2018 (Pa. Super. Aug. 21, 2019), the Court affirmed a trial court's dismissal of a bad faith claim relative to the purchase of automobile insurance coverage.

In one issue of note, the Superior Court affirmed the trial court's ruling that precluded the Plaintiff from utilizing an insurance agent as an expert at trial.

The Opinion is also notable for the Court's handling of the word limit Rule for appellate Briefs and confirms that the Court apparently does keep an eye out for violations of the same.

In this case where the Appellant raised 11 issues, the Pennsylvania Superior Court also turned to its oft-repeated advice for appellate litigants to only raise their strongest issues as "[a] brief that raises every colorable issue runs the risk of burying good arguments[.]  Lewis citing Com. v. Showers, 782 A.2d 1010, 1015-1016 (Pa. Super. 2001)[other citations omitted].

Anyone wishing to review this non-precedential decision may click this LINK.

I send thanks to Attorney Robert J. Cahall of the Wilmington, DE office of McCormick & Priore for bringing this case to my attention.

A Split of Authority Continues With Respect to Allowing Expert Testimony in Insurance Bad Faith Cases

In the case of Debellis v. Mid-Century Ins. Co., No. 18-CV-214 (W.D. Pa. Nov. 25, 2018 Schwab, J.), the court addressed a Plaintiff’s Motion In Limine to preclude the carrier’s bad faith expert in this UIM bad faith litigation.  

The court observed that there continues to be a split of authority on whether expert testimony concerning a carrier’s bad faith is permissible and noted that this was a controversial issue.  

Nevertheless, this particular court allowed the carrier to put on its bad faith expert with certain limitations.

The court in Debellis found that expert testimony may be appropriate with respect to issues such as insurance claims adjusting procedures, a carrier’s compliance with industry customs and standards, and whether the carrier lacked a reasonable basis for denying a Plaintiff’s claim.  

In this federal court case, after noting that this matter involved a non-jury trial and that the court was familiar with bad faith law, the Debellis court concluded that the expert testimony offered by the carrier might assist the judge as the trier of fact “assuming [the carrier’s] claims handling procedures are complex.”   

However, the court otherwise held that the expert could not testify or give opinions that the court ultimately construed as legal conclusions.  

Judge Schwab additionally noted that he would give the expert testimony appropriate weight and caution that the testimony could be disregarded if it appeared to be nothing more than speculation unsupported by any specialized knowledge. 

Anyone wishing to review this decision may click this LINK.

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein, & Harris, and the writer of the excellent Pennsylvania New Jersey Insurance Bad Faith Case Law blog, for bringing this case to my attention.