Expert Witnesses in Insurance Claim Cases
More About Experts in Insurance Cases
Dennis Wall
September 9, 2012
Experts in Insurance Coverage and Insurance Bad Faith Cases are providing many opportunities for Judicial Decisions. See 1 Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" § 8:17 (West Third Edition 2011, 2012 Supplement) (addressing reported cases involving issues of Expert Testimony in Third-Party Bad Faith Cases); 2 id. § 12:18 (discussing case law developing around issues concerning reception of Expert Testimony in First-Party Insurance Bad Faith Cases).
In TRAX, LLC v. Continental Cas. Co., 2012 WL 377042 *7 (N.D. Ill. August 29, 2012), Download TRAX, LLC v. Continental Cas. Co. (N.D. Ill. Amended Memorandum Opinion and Order Filed August 29, 2012) PUBLIC ACCESS, the issue was allocation. The Policyholder, TRAX, settled an underlying lawsuit against it. Continental refused to pay for it, contending that at least part of the settlement is attributable to a claim not covered by its Global Technology Errors & Omissions Policy. (PACER, the online docket of the Federal Courts, reflects that Continental filed a Notice of Appeal on September 5, 2012).
To say again, the issue was allocation: How much of the underlying settlement, if any, was allocable to covered claims? Continental relied on the Testimony of an Expert whose Opinion was that the underlying settlement should be apportioned 50-50 between covered and noncovered claims. The District Court granted TRAX's Motion to Exclude the Continental Expert's Testimony, however. TRAX's Motion was granted in part on the ground that the Expert in question never spoke to anyone who was at the Settlement Conference in the underlying case and the Expert did not "read the participants' depositions prior to preparing his written opinion." Trax, LLC v. Continental Cas. Co., 2012 WL 377042 *7 (N.D. Ill. August 29, 2012). [Emphasis added.] The Court granted the Plaintiff's-Policyholder's Motion to Exclude the Testimony of Continental's Expert in this case on the ground that the Testimony was "irrelevant and appeared to not be based on sufficient information". The Testimony therefore "failed to meet the requirements of Fed.R.Evid. 702." Trax, LLC v. Continental Cas. Co., 2012 WL 377042 *7 (N.D. Ill. August 29, 2012).
After making that ruling, the District Court held that TRAX met its burden of demonstrating that the "entire" underlying settlement "was covered by the Policy," whereas Continental had failed to show in this case "how," in the words of the District Court, "any of the policy exclusions it presents would be applicable and exclude coverage of the settlement." Trax, LLC v. Continental Cas. Co., 2012 WL 377042 *7 (N.D. Ill. August 29, 2012). [Emphasis added.]