Court Refused to Exclude Insurance Expert Witness’ Opinions on Insurance Availability
Posted on November 18, 2024 by Expert Witness Profiler
This case stems from a dispute over a provision of a ground lease between Stewart Development, LLC and 111 Veterans Boulevard, LLC. Stewart owned Heritage Plaza, a Class A office building in Metairie, Louisiana but leases the land on which it sits pursuant to a ground lease. 111 Veterans took over this ground lease in 2017. A few years later, in 2022, Stewart listed Heritage Plaza for sale, and 111 Veterans expressed interest in purchasing the building. However, purchase negotiations ultimately fell through. The next year, on March 16, 2023, 111 Veterans defaulted Stewart for allegedly violating the ground lease. In the default letter sent to Stewart, 111 Veterans explained Stewart breached the ground lease for failing to maintain $110,700,000 of casualty insurance, the amount equal to the replacement cost of the building (less depreciation of 10%) with a $10,000 or less deductible.
About three months after this letter was sent, Stewart filed this lawsuit seeking a declaratory judgment and alleging claims for breach of contract and Louisiana Unfair Trade Practice and Consumer Protection Act (“LUTPA”) violations. Stewart argues inter alia that 111 Veterans’ mandated amount of insurance coverage is not reasonably obtainable, that Stewart’s failure to obtain such coverage was not a violation of the ground lease, and that 111 Veterans breached the lease by placing Stewart in default. 111 Veterans argues inter alia that its required coverage is reasonably obtainable, and that Stewart did in fact breach the ground lease for failing to maintain such coverage.
Stewart filed a motion to exclude the testimony of 111 Veterans’ insurance expert Timothy Gold under Federal Rules of Evidence 702 and 703 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1998).
Insurance Expert Witness
Timothy Gold began his insurance career in 2005 and joined Hartwig Moss Insurance Agency in 2013. Gold holds both property and casualty as well as life, health and accident licenses.
Discussion by the Court
In his report, Gold provided the following opinions:
- There were no indicators from the commercial insurance market of pending issues acquiring property or flood coverage in southeast Louisiana prior to landfall of Hurricane Katrina on August 29, 2005;
- For the coverage periods of 2021- 2024, it has been possible to obtain replacement cost, special form property insurance coverage excluding coverage for the peril of windstorm, for a significant property risk with an insured value in excess of $100,000,000 at a reasonable market cost;
- For the coverage periods of 2021-2024 it has been possible to obtain property insurance coverage for the peril of windstorm for a building with insured values in excess of $100,000,000 with coverage limits in excess of $10,000,000 at a market cost;
- And the cell captive program and parametric insurance policy Stewart Development, LLC utilized do not comply with paragraph 3(g) of the Fourth Amendment of the Ground Lease agreement.
Analysis
Stewart advanced numerous arguments in support of excluding Gold’s testimony. Specifically, Stewart argued that Gold’s testimony on Stewart’s parametric wind policy should be excluded because Gold did not read Stewart’s policy. Stewart claimed that Gold’s testimony on Stewart’s captive cell policy should be excluded because it is a legal conclusion. Plaintiff alleged that Gold’s opinions on the local insurance market before and after Hurricane Katrina in 2005 are speculative and warrant exclusion because Gold did not work in the insurance industry until 2006.
Moreover, Stewart claimed that Gold’s reliance on conversations with other industry brokers constitutes unreliable methodology for his opinions on insurance availability from 2021-2024. And Stewart asserted that Gold’s testimony is undermined by his failure to read the testimony of Eric Lowenstein, 111 Veterans’ corporate representative, and his misreading of key facts from the testimony of Jason Provenzano, 111 Veterans’ insurance broker, and Andrew Schutzman, president and owner of AMS Risk Management and Consulting, Inc.
111 Veterans opposed Stewart’s motion. Basically, 111 Veterans argued that Gold’s opinions meet the requirements of Rule 702, Rule 703, and Daubert, and that Stewart’s concerns constitute fodder for cross examination, not reasons for exclusion under Rule 702. Defendants further argued that, because this is a bench trial, Stewart’s concerns can be explored during trial with the judge as the gatekeeper and trier of fact.
The Court agreed with 111 Veterans. The purpose of a Daubert motion is “to ensure that only reliable and relevant expert testimony is presented to the jury.”
Held
The Court denied Stewart’s motion to exclude Timothy Gold’s opinions and testimony.
Key Takeaway:
The Court is “capable of assessing the probative value of the evidence and the weight [the expert’s] testimony should be given.” Moreover, as 111 Veterans points out, cross examination is the proper vehicle for Stewart’s concerns. In conclusion, 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.
Case Details:
| Case Caption: | Stewart Development, LLC V. 111 Veterans Boulevard, LLC |
| Docket Number: | 2:23cv2085 |
| Court: | United States District Court, Louisiana Eastern |
| Order Date: | November 15, 2024 |
