Insurance Expert Allowed to Opine on the Preparation of Statements of Value

Plaintiff Great American Insurance Company of New York ("Great American") brought this action against policyholder Koch Foods, Inc. ("Koch") following a 2016 explosion at a Koch feed mill (the "Feed Mill") located in Rockmart, Georgia, for which Great American provided a first-party property insurance policy (the "Excess Policy"). Great American sought rescission of that policy or, in the alternative, a declaration that the Excess Policy does not cover the explosion loss because Koch's underlying primary insurance was not exhausted.

Koch disclosed David L. Stegall as its insurance expert. Great American asked the Court to exclude Stegall's testimony.

Insurance Expert Witness

David Lynn Stegall has been the Principal Consultant and Founder of Risk Consulting & Expert Services (RCES) since January 1, 2007, with over 44 years of insurance, reinsurance, bond and risk management industry experience. He is a Chartered Property & Casualty Underwriter, an Associate in Risk Management, an Associate in Reinsurance, and a Registered Professional Adjuster and has experience as an underwriter, an agent, a broker, a surety bond producer, a reinsurer, a managing general agent, a third-party administrator, a captive manager, a self-insured fund executive, a risk management consultant, an expert witness, and has been retained as an arbitrator in two Arbitrations.

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Discussion by the Court

Great American asserted that Stegall's opinions are inadmissible because they are purely "speculative" and factually unsupported. In support of this argument, Great American highlighted testimony from Stegall's deposition, arguing that Stegall (1) "had no idea" how Koch's statement of values was calculated; (2) "agreed that it 'may very well be true' that Koch was careless or negligent in preparing its statement of values"; and (3) put forth speculative reasons, which conflicted with other evidence in the record, about how Koch prepared its statement of values and why.

Great American's arguments are unavailing for two reasons. First, other than the assertion that Stegall "had no idea" how Koch calculated its statement of values, Great American's arguments go to the credibility and accuracy of Stegall's testimony, not the reliability of his methodology. To the extent that Great American seeks to call into question Stegall's credibility, that is "a question for the jury, not the Court."

Second, each fact that Great American highlighted to attack the admissibility of Stegall's testimony is properly disputed. For example, Great American cherry-picks soundbites from Stegall's deposition to suggest that Stegall "just looked at the statement of values" without further analysis, but Koch points out that Stegall "had multiple conversations with Koch's CFO," Lance Buckert, "who prepared the statement of values." Koch also cites the numerous materials that Stegall reviewed when preparing his expert report, which included Buckert's deposition transcript and Koch's discovery responses—two documents that "described in detail how Koch prepared the statement of values." And similarly, Koch identified specific deposition testimony from Stegall to dispute Great American's other assertions about Stegall's testimony concerning what factors underwriters consider when preparing a statement of values.

Held

Accordingly, the Court in its discretion finds that Stegall's opinions are admissible, and that Great American has thus admitted the facts that it disputed based only on the inadmissibility of Stegall's testimony.

Key Takeaway

"The Daubert framework when assessing the reliability of an expert's testimony is a flexible one," and Defendants failed to show that Stegall's methodologies fall short of this standard.

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