Insurance Expert Witness’ Testimony Excluded Despite Being Crucial to Plaintiff’s Claims
Posted on October 30, 2024 by Expert Witness Profiler
The CLM Trust is the owner of real property including a home and multiple barns located at 25 Cattle Farm Road in Picayune, Mississippi. At all times relevant, these structures were insured under a homeowner’s policy issued by State Farm Fire and Casualty Company. CLM’s lawsuit arises from alleged damages caused by Tropical Storm Claudette on or about June 19, 2021, and additional damage caused by Hurricane Ida on or about August 29, 2021. State Farm’s estimate of damages to the home totalled $5,505.17, the actual cash value of which falls below the Policy deductible. On March 11, 2024, CLM designated its expert Public Adjuster/Appraiser, Richard Lyon to contest State Farm’s estimate of damages incurred. State Farm filed its motion to strike expert Lyon and supporting memorandum pursuant to Federal Rules of Civil Procedure 26 and 37 and Federal Rules of Evidence 702 and 403.
CLM was required to designate its expert witnesses no later than March 12, 2024. CLM timely filed its expert designation identifying Lyon and incorporating his June 8, 2023, estimate of repair for the home and additional Property structures. In its purported designation, CLM stated “Lyon’s report will be supplemented upon completion.” On June 6, 2024, more than two months after expiration of CLM’s expert designation deadline, CLM filed its motion to supplement expert eeport and amend case management order incorporating Lyon’s written May 30, 2024, expert report. State Farm argued that, not only is Lyon’s original report inadequate, but the supplemental report is an untimely “initial report” and sought to strike Lyon’s opinions for non-compliance with Rule 26.
Insurance Expert Witness
Richard Lyon is a licensed and bonded public insurance adjuster. He the founding member of Gulf Coast Adjusting, and enjoys over 15 years of working in the construction and insurance industries.
Lyon has been continually licensed by the State of Louisiana # 508253 and State of Mississippi # 10180259 and the State of New Jersey #1513282 as a Public Adjuster. He is proficient with insurance industry leading estimating software Xactimate and Xactcontents. Lyon is an admitted expert in the field of Claims Damage Estimating in Federal Court in the Eastern District of Louisiana.
Discussion by the Court
Adequacy of Plaintiff’s Expert Disclosure
CLM’s initial expert designation included Lyon’s curriculum vitae, compensation rate, previous testimony, photographs, roof reports, and estimates. CLM’s initial designation did not include the basis and reasons for Lyon’s estimates; the facts or data relied upon by Lyon in forming his opinions; or a written, signed report as to Lyon’s expected testimony. The Court held that these documents clearly do not meet requirements of a written report and are deficient pursuant to Rule 26. According to Rule 26, the initial report must be complete and not vague. Moreover, the Court held that Lyon’s estimates, without explanation or opinions, constitute “conclusory unsupported allegations.”
CLM argued that Lyon’s estimates constituted a report because it was to be supplemented at a later date. The Court held that CLM failed to properly designate Lyon as an expert on March 11, 2024. It was not until June 6, 2024, almost three months after CLM’s expert designation deadline, that it provided Lyon’s written May 30, 2024, report.
Substantially Justified or Harmless Factors
CLM argued that even if Lyon’s report was initially inadequate, the inadequacy should be excused as his report would still have to be substantially changed after State Farm provided its Supplemental Disclosures. CLM further argued that because a supplemental report would have been necessary regardless of Lyon’s initial report, any potential error is substantially harmless.
The Court looks to the following factors to determine whether a party’s failure to timely disclose an expert is harmless or substantially justified: “(1) the explanation for the failure to identify the witness; (2) the importance of the testimony; (3) potential prejudice in allowing the testimony; and (4) the availability of a continuance to cure such prejudice.”
The explanation for the failure to identify the witness
The first factor weighed in favor of State Farm. State Farm’s production of critical documents on March 25, 2024, after CLM’s expert designation deadline necessitated the subsequent report. As addressed earlier, Lyon’s “subsequent report” is instead his initial report. CLM failed to state why the initial report was not produced until more than two and a half months after the designation deadline or why Lyon needed this time to review the “critical documents” necessary to author his report. Instead, it appeared to the Court that CLM failed to explain to Lyon his true assignment—to create a report—until well after the designation deadline, uprooting CLM’s argument that Lyon intended to make a report on March 12, 2024.
The Court granted CLM an extension to March 12, 2024, in which to file its expert designation. CLM had ample time to submit Lyon’s initial report in a timely manner. Simply put, CLM was aware that the Rule 26 disclosures were due. It has failed to state why an initial report was not filed prior to the deadline.
Plaintiff asserted that Lyon is absolutely essential to CLM’s claims. While this factor leans in favor of CLM, the Court held that the importance of proposed testimony cannot ‘singularly override the enforcement of local rules and scheduling orders.’ Additionally, the importance of the testimony underscores how critical it is for a Plaintiff to timely designate the expert.
Potential prejudice in allowing the testimony
CLM did not timely designate Lyon. So, Lyon’s untimely report left State Farm without the chance to retain a counter-expert. CLM’s motion for leave to file supplemental expert report on June 6, 2024, was the first time it provided Lyon’s May 30, 2024, supplemental report, more than two months after State Farm’s expert designation deadline had expired. Additionally, this failure left State Farm’s deposition of Lyon at a disadvantage to prepare for trial or anticipate his future testimony. During his May 30, 2024, deposition, Lyon repeatedly could not, or refused to, answer questions regarding his investigation and inspection of the CLM property. Additionally, Lyon testified in his deposition that the June 8, 2023, estimate produced in CLM’s initial expert designation is “no longer relevant.”
The availability of a continuance to cure such prejudice
The ability and opportunity for State Farm to depose Lyon as to his May 30, 2024, report with a continuance still does not solve the prejudice, as “this would obviously result in additional delay and increase the expense of defending this lawsuit.” While CLM offered State Farm “the option to re-depose Lyon at Plaintiff’s expense after submission of the supplemental reports” this offer does not address the likely delay in the case and prejudice to State Farm. Additionally, a continuance would not alleviate the prejudice to State Farm as the discovery and expert deadlines have expired. Absent a rescheduling of deadlines State Farm is unable to retain counter-experts. Granting an extension of those deadlines would require a continuance of the trial, which weighs in favor of the Court striking Lyon’s opinions.
Held
The Court granted State Farm’s motion to strike Plaintiff’s expert Richard Lyon.
Key Takeaways:
- Importance of proposed testimony cannot singularly override the enforcement of local rules and scheduling orders.
- The ability and opportunity for State Farm to depose Lyon as to his May 30, 2024, report with a continuance still does not solve the prejudice, as “this would obviously result in additional delay and increase the expense of defending this lawsuit.”
- The delay of even a few weeks in disclosing expert testimony disrupts the Court’s schedule and the opponent’s preparation and is thus prejudicial.
Case Details:
| Case Caption: | Bigelow V. State Farm Fire And Casualty Company |
| Docket Number: | 1:23cv285 |
| Court: | United States District Court for the Southern District of Mississippi, Southern Division |
| Order Date: | October 27, 2024 |
