Rulings on Daubert motions should not be underestimated: a favorable ruling can provide confidence and credibility while an unfavorable ruling can undermine any possibility of success at trial. By taking note of recent rulings on motions to exclude, first-party property insurers can prepare more effective motions to exclude and coach their own experts on issues that may arise.
Federal Rule of Evidence 702 governs the admissibility of expert testimony, which provides that “a witness qualified as an expert by knowledge, skill, experience, training, or education” may testify in the form of an opinion “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.” Fed. R. Evid. 702. In applying this rule, trial judges have the “special obligation” to act as “gatekeepers” to ensure only expert testimony that is both relevant and reliable is admitted. Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993). “District courts are charged with this gatekeeping function to ensure that speculative, unreliable expert testimony does not reach the jury under the mantle of reliability that accompanies the appellation ‘expert testimony.’” Rink v. Cheminova, Inc., 400 F.3d 1286, 1291 (11th Cir. 2005) (citations omitted). Under this unique obligation, the Court must make an independent inquiry into the reliability and relevance of all proffered expert testimony. U.S. v. Frazier, 387 F.3d 1244 (11th Cir. 2004).
Unless a district court’s decision to admit or exclude an expert is “manifestly erroneous,” the ruling will be upheld on appeal. Greater Hall Temple Church of God v. Southern Mut. Church Ins. Co., 820 Fed.Appx. 915 (11th Cir. July 15,2020) (applying an abuse of discretion standard of review). This wide breadth of discretion yields results that vary from case to case and judge to judge. The following will discuss recent rulings on motions to exclude in Georgia federal courts and the 11th Circuit and will specifically focus on experts tendered and challenged in first-party property or subrogation cases involving fire losses, wind damage and mold damage.
Origin and cause experts who opine that a fire was caused by an intentional act should not take it personally when their opinions become the subject of a Daubert challenge. Indeed, in Dobbs, the policyholder alleged the insurer wrongfully denied the underlying fire claim in relying in part upon material misrepresentation and concealment made by the policyholder. Dobbs v. Allstate Indemnity Co., 2020 WL 930491 (M.D. Ga. Feb. 26, 2020). Allstate sought to exclude the policyholder’s origin and cause expert Ricky Turner, who opined that there was not conclusive evidence that the fire was intentionally set; and therefore, the fire was accidental. Id. at *4. This “accidental” loss classification was based upon the theory that a cat knocked over a lamp, which sparked and resulted in the ensuing fire. Id. at *5. Judge Tilman E. Self, III denied the defendant insurer’s motion to exclude Mr. Turner’s testimony, finding that he applied reliable methodology in reaching his opinion “including review of documentary and photographic evidence; independent testing of samples collected from the scene; and visit to the scene (albeit years later . . .” Id. at *6. Notably, in his opinion regarding the admissibility of Mr. Turner’s origin and cause opinion, Judge Self did not discuss NFPA 921 or whether Mr. Turner should be permitted to opine that the fire was “accidental” or merely “undetermined” based upon the evidence gathered.
Judge Story recently used a finer comb when analyzing origin and cause testimony in a subrogation dispute. National Surety Corp. v. Georgia Power Co., 2019 WL 4394403 (N.D. Ga. Sept. 12, 2019). In that case, National Surety Corporation issued payments to its insured for fire damage to a horse arena and then sought to recoup those payments from Georgia Power, alleging negligent work on the barn’s electrical system caused the fire. Id. at *1. While various motions to exclude were argued, the most notable discussion related to the origin and cause opinion of National Surety’s expert Edward Brill. Brill opined that “the probable cause of the fire is due to an electrical malfunction at the Georgia Power electric meter that was damaged when the meter was removed and reinstalled multiple times by Georgia Power prior to the fire. Id. at *5. Brill’s “electrical malfunction” theory as to causation rested on his finding of arcing near the electrical meter. Id. at *5. Georgia Power challenged the reliability of Brill’s opinion on the grounds that “(1) Brill did not rely on sufficient facts and data; (2) Brill could not rule out alternative causes; and (3) Brill’s theory of causation rests on critical assumptions he did not support with data.” Id. at *6. Judge Story agreed, finding that Brill’s opinion was speculative and unreliable and excluding Brill’s opinion on the grounds that it took too large a leap between the physical evidence and the conclusion reached. Id. at *5. Specifically, the Court pointed out (and Brill conceded) that “arcing in the meter does not rule out the possibility that the arcing was the result of the meter being attacked by the fire.” Id. at *6. Also, because certain electrical components were not recovered in the fire debris, the Court noted that Brill could not opine with certainty as to whether the arcing resulted from fire attack (as opposed to a fault or malfunction from the arc site).
Judge Michael Brown took a similarly discerning look at the opinion proffered by origin and cause expert Jeff Morrill in the Trias decision. Trias v. State Farm Fire & Cas. Co., 2020 WL 3399915 (N.D. Ga. March 16, 2020). In that case, State Farm denied the plaintiff/insured’s homeowner’s insurance claim arising from a fire on the grounds that the insured concealed or misrepresented material facts and violated the “intentional acts” policy provision, prohibiting recovery. Id. at *6-7. State Farm based this denial, in part, on their expert Jeff Morrill’s opinion that the fire was intentionally set. During litigation, the plaintiff/insured sought to exclude Jeff Morrill’s opinion on the grounds that it was based upon a “negative corpus” methodology condemned by NFPA 921. Id. at *13. “Negative corpus” methodology implies that a conclusion has been reached by eliminating other alternatives but without affirmative proof supporting the conclusion. Id. Morrill attempted to defend his opinion by pointing out the lack of fuel load and irregular fire patterns observed, which were consistent with an ignitable liquid being poured in the area of origin. Id. Also, Morrill eliminated certain accidental causes of fire, as the electricity was disconnected from the property at the time of the loss, the home was unoccupied and secured, and no evidence of smoking activities at the property existed. Id. Judge Brown found that while Morrill did not enter the speculative realm of negative corpus, “Morrill merely opined that the lack of accidental causes suggests that the fire was incendiary.” Id. at *14. Judge Brown allowed Morrill to testify about his investigation and observations and permitted Morrill to testify as to how accidental causes were eliminated; however, Morrill could not testify that the fire was “incendiary.” Id. at *14. In the Court’s opinion, this information would arm the jury with sufficient information to determine if the plaintiff was entitled to recover. Id. at 14. In reaching this opinion, Judge Brown downplays Morrill’s testimony regarding irregular burn patterns, fuel loads and fire dynamics as building blocks of his conclusion that the fire was “incendiary.”
Judge Eleanor Ross in the Northern District of Georgia took a more permissive approach when evaluating motion to exclude an origin and cause expert in the Ali matter. Ali v. Travelers Home and Marine Ins. Co., 2019 WL 5106278 (N.D. Ga. Sept. 4, 2019). In that case, the defendant insurer denied coverage for a house fire loss on the basis of “intentional loss” and material misrepresentations and concealment made by the insured. The plaintiff/insureds filed suit. In a Motion to Exclude that this firm’s Karen Karabinos and the author argued late last year, the defendant insurer sought to exclude the plaintiffs’ origin and cause expert Gary Farge on three (3) methodology challenges: (1) that Mr. Farge failed to identify a competent ignition source; (2) that his conclusions concerning the first fuel ignited are not supported by scientific testing or facts in the record; and (3) that Mr. Farge fails to identify what evidence or technical note supports his opinions regarding cross contamination. Id. at *3. Specifically, the defendant insurer argued that Mr. Farge classified the fire as an “accidental” electrical cause without identifying the specific arc site that led to the fire’s ignition. Id. Because numerous arc sites existed in the area of origin, the specific arc site that allegedly resulted in the fire was a threshold determination in identifying the first fuel ignited and eliminating fire attack as a cause (as opposed to fault or malfunction from the circuit itself). Id. The Court rejected this challenge, finding it sufficient that Mr. Farge narrow the cause to one of six arc sites (without identifying which of the six was the ultimate cause). Id. at *3-4. The defendant insurer also took issue with Mr. Farge’s dismissal of debris samples that tested positive for ignitable liquid on the grounds that the “false positive” samples were derived from firefighters tracking debris around the property after the fire. Id. Even though Farge did not interview these firefighters or identify the arc site that allegedly caused the fire, the Court found that Mr. Farge’s utilization of “cognitive testing” or using his own experience as a sounding board for his opinions, sufficient to support his opinions and denied the defendant/insurer’s motion to exclude. Id. at *4. Thus, Judge Ross gave greater deference to the role of an expert’s experience in reaching a fire classification conclusion than either Judge Story or Judge Brown in the opinions discussed above.
Opening our eyes to the world beyond fire damage claims, the 11th Circuit recently upheld Judge Lisa Godbey Wood’s order excluding causation opinions proffered by wind damage experts. Greater Hall Temple Church of God v. Southern Mut. Church Ins. Co., 820 Fed.Appx. 915 (11th Cir. July 15, 2020). The coverage dispute at issue centered on whether certain roof damage was caused by winds from Hurricane Matthew. Greater Hall offered John Kern, Shawn Brown and Alfred Teston as experts and Southern Mutual moved to exclude all three in the district court action. Kern inspected the property six months after the loss and opined that the “majority” of the damage was due to winds causing uplift pressure on the roof. However, he had no idea how to test his theory, did not have any scientific or objective basis for his opinion and did not know what the rate of error that should be applied. Judge Wood excluded this opinion as unreliable and the 11th Circuit upheld this exclusion. Shawn Brown opined that the roof damage “was caused by high winds and rain which occurred in October, 2016.” However, Brown admitted he was “not an expert in wind or wind velocity,” that he did not base his opinion on science, but merely used “common sense.” The 11th Circuit similarly upheld the district court’s exclusion of Brown’s opinion under the “manifestly erroneous” standard of review. Lastly, expert Alfred Teston was not timely disclosed by counsel for Greater Hall. Because Teston sought to offer an opinion as to a central issue of causation without having personally observed the wind event, coupled with counsel’s failure to disclose his identity or provide a copy of Teston’s report within the district court’s deadlines, the 11th Circuit upheld the lower court’s exclusion of Teston. Thus, even when experts are identified based upon experience as opposed to training, requirements that opinions be rooted in scientific principles remains vital.
In the final opinion up for discussion, Judge Eleanor Ross found the methodology lacking in a mold growth expert’s opinion in the Scheinfeld decision. Scheinfeld v. LM General Ins. Co., 2020 WL 4724295 (N.D. Ga. July 9, 2020). There, the plaintiff insured sought to exclude Jared Powell, P.E.’s opinion regarding the cause and duration of mold growth in a coverage dispute regarding coverage under a homeowners’ policy. Id. at *2. Specifically, Mr. Powell found that “(1) water overflowing one or more master bathroom fixtures caused water damage; (2) the lack of climate control caused conditions favorable for fungal growth; and (3) the fungal growth had been ongoing for at least six months.” Id. Although Mr. Powell’s qualifications were challenged, the Court found the Mr. Powell’s industry experience, including 200 claim investigations involving water intrusion issues and 30 investigations focused on mold analysis sufficient to pass muster. Id. at *6. However, in discussing the reliability of Mr. Powell’s testimony and the methodology utilized, the Court found Powell’s report lacking in “analysis and application” and noted that Mr. Powell did not present how or why his experience and relied-upon articles led him to his proffered conclusions. Id. at *8. Therefore, the Court excluded Mr. Powell’s “conclusory” opinion on the grounds that it lacked analytical support. Id. It is unclear if the concept of “cognitive testing” was argued or considered as component of Mr. Powell’s methodology.
In summary, experts can only draw opinions based upon the evidence available and their own experience and training. As advocates, we can assist our clients and experts to gather as much evidence as possible and draw conclusions that leave no analytical holes.