America Can! v. Arch Insurance Company
| Decision Date | 09 April 2022 |
| Docket Number | Civil Action No. 3:20-CV-0850-X-BH |
| Citation | 597 F.Supp.3d 1038 |
| Parties | AMERICA CAN! and America Can! Cars for Kids, Plaintiffs, v. ARCH INSURANCE COMPANY and Care Providers Insurance Services LLC, Defendants. |
| Court | U.S. District Court — Northern District of Texas |
Aubrey Nick Pittman, The Pittman Law Firm PC, James Gregory Marks, Slack Davis Sanger LLP, Valerie A. Yanaros, Yanaros Law, P.C., Dallas, TX, for Plaintiffs.
Brian S. Martin, Christina Anne Culver, Cyrus Wayne Haralson, Kevin F. Risley, Neal D. Kieval, Rodrigo Garcia, Jr., Benjamin Louis Schlitt Ritz, Thompson Coe Cousins & Irons LLP, Houston, TX, Rhonda J. Thompson, Thompson Coe Cousins & Irons LLP, Dallas, TX, for Defendants.
Referred to U.S. Magistrate Judge1
Before the Court is Plaintiffs’ Motion to Exclude Testimony of Christopher Martin , filed October 28, 2021 (doc. 104). Based upon the relevant filings, evidence, and applicable law, the motion to exclude is DENIED .
This is an insurance coverage dispute between American Can! (Insured) and America Can! Cars for Kids (ACCK) (collectively Plaintiffs), and Arch Insurance Company (Insurer) and Care Providers Insurance Services LLC (Broker) (collectively Defendants), involving attorneys’ fees and expenses incurred by Insured while defending a trademark infringement case. (See doc. 52.) Broker sold Plaintiffs commercial general liability policies issued by Insurer which provided, in relevant part, that Insurer has "a duty to defend the insured against any ‘suit’ seeking those damages [described herein]." (Id. at 2-4.)2 In December 2014, Insured was sued by Kars 4 Kids in New Jersey federal court for trademark infringement, where it asserted various defenses as well as a counterclaim seeking to establish prior use of its trademark. (Id. ) In April 2015, Insurer agreed to "defend" Insured in the lawsuit. (Id. ) The lawsuit went to trial in May 2019, and the jury found in favor of Insured on its defense and counterclaim. (Id. ) Several months later, the New Jersey court entered a judgment awarding Insured monetary damages and injunctive relief, but denied its requests for attorneys’ fees and enhanced damages. (Id. at 4-5.)
Plaintiffs allege that the fees and expenses incurred and paid by them in connection with the lawsuit exceeded $4 million, but Defendants "only reimbursed [them] a fraction of this amount." (Id. at 5.) They allege that they promptly communicated with Defendants and their claims processing agents and provided supporting documentation for the fees and expenses, but Defendants refused to fully reimburse them even though the fees and expenses are covered by the insurance policies. (Id. at 6-7.)
On March 12, 2020, Plaintiffs filed this action against Defendants in state court. (doc. 1-4.) After the state case was removed to this court, Plaintiffs filed an amended complaint on December 18, 2020. (docs. 51, 52.) It asserts claims against Defendants for negligence, gross negligence, negligent misrepresentation, breach of contract, breach of duty of the good faith and fair dealing, and violations of the Texas Insurance Code and the Deceptive Trade Practices Act, and it seeks actual, exemplary, and punitive damages, declaratory relief, attorneys’ fees and expenses, and prejudgment and post judgment interest. (doc. 52 at 7-17.)
Defendants designated Christopher Martin, an attorney with experience in insurance, as one of their experts, and provided his expert report. (See doc. 104 at 16-33.) According to his report, he was retained "as a rebuttal expert to comment and opine on the expert opinions of ." (Id. at 17.) He is expected to testify on "issues pertaining to Plaintiffs’ claims for improper claims handling, agency issues and reimbursement of attorney's fees and expenses arising out of the underlying civil action in New Jersey." (Id. at 16.)
On October 28, 2021, Plaintiffs moved to exclude Mr. Martin's expert testimony under Rules 403 and 702 of the Federal Rules of Evidence. (doc. 104.) Defendants responded on November 18, 2021, and Plaintiffs replied on November 23, 2021.
Plaintiffs seek to exclude Mr. Martin's expert testimony under Rule 702 on grounds that he is not qualified and his opinions are not reliable. (See doc. 104 at 3-12.)
Rule 702 governs the admissibility of expert testimony and provides that:
Fed. R. Evid. 702. Under this rule, the main issue is whether a particular expert has "sufficient specialized knowledge to assist the jurors in deciding the particular issues in this case." Kumho Tire Co. v. Carmichael , 526 U.S. 137, 156, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999) (citations omitted). A court has discretion to keep an expert witness from testifying if it finds that the witness is not qualified to testify in a particular field or on a given subject. Wilson v. Woods , 163 F.3d 935, 937 (5th Cir. 1999). The key factors in evaluating expert testimony are relevance and reliability. Daubert v. Merrell Dow Pharms., Inc. , 509 U.S. 579, 589, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993).
The burden is on the proponent of the expert testimony to establish its admissibility by a preponderance of the evidence. See Id. at 592 n.10, 113 S.Ct. 2786. The proponent does not have to demonstrate that the testimony is correct, only that the expert is qualified and the testimony is relevant and reliable. Moore v. Ashland Chem., Inc. , 151 F.3d 269, 276 (5th Cir. 1998). The court's inquiry is flexible in that "[t]he relevance and reliability of expert testimony turns upon its nature and the purpose for which its proponent offers it." United States v. Valencia , 600 F.3d 389, 424 (5th Cir. 2010) (citation omitted). "As a general rule, questions relating to the bases and sources of an expert's opinion affect the weight to be assigned that opinion rather than its admissibility and should be left for the [trier of fact's] consideration." Viterbo v. Dow Chem. Co. , 826 F.2d 420, 422 (5th Cir. 1987). "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." Daubert , 509 U.S. at 596, 113 S.Ct. 2786 ; see also Guy v. Crown Equip. Corp. , 394 F.3d 320, 325 (5th Cir. 2004) ().
Plaintiffs argue that Mr. Martin lacks the qualifications to provide opinions on the reasonableness and necessity of attorneys’ fees and expenses in the trademark lawsuit because he has no experience "trying intellectual property cases" and no experience "trying cases in New Jersey." (doc. 104 at 3-4.) They also argue that he should be excluded from providing "insurance industry testimony regarding the actual practices of insurers and insureds" because he does not have "industry experience actually handling or processing claims." (Id. at 4.)
Before allowing expert testimony to be heard, a district court "must be assured that the proffered witness is qualified to testify by virtue of his ‘knowledge, skill, experience, training, or education.’ " United States v. Cooks , 589 F.3d 173, 179 (5th Cir. 2009) (quoting Fed. R. Evid. 702 ). "A district court should refuse to allow an expert witness to testify if it finds that the witness is not qualified to testify in a particular field or on a given subject." Wilson v. Woods , 163 F.3d 935, 937 (5th Cir. 1999). "The standard for qualifying expert witnesses is fairly liberal; the witness need not have specialized expertise in the area directly pertinent to the issue in question if the witness has qualifications in the general field related to the subject matter in question." Guzman v. Mem'l Hermann Hosp. Sys. , No. CIV.A. H-07-3973, 2008 WL 5273713, at *15 (S.D. Tex. Dec. 17, 2008). "Differences in expertise bear chiefly on the weight to be assigned to the testimony by the trier of fact, not its admissibility." Huss v. Gayden , 571 F.3d 442, 455 (5th Cir. 2009). The inquiry is whether a particular expert has "sufficient specialized knowledge to assist the jurors in deciding the particular issues." Tanner v. Westbrook , 174 F.3d 542, 548 (5th Cir. 1999) (quoting Kumho , 526 U.S. at 156, 119 S.Ct. 1167 ). The court has wide discretion in determining whether an expert is qualified. See Watkins v. Telsmith, Inc. , 121 F.3d 984, 988 (5th Cir. 1997).
Mr. Martin is an attorney who has represented parties in civil suits involving insurance claims and coverage disputes in state and federal courts across Texas and other jurisdictions for over 30 years. (doc. 110-1 at 73-74.) He is board certified in Consumer Law, the specialization covering Insurance Law, by the Texas Board of Legal Specialization. (Id. at 74.) He has experience in insurance disputes involving coverage issues and operational claim decisions arising out of a wide variety of intellectual property (IP) cases, and has provided guidance to liability carriers "on a wide range of issues including determining whether a duty to defend was owed, the selection of defense counsel, the monitoring of defense counsel, the review of defense counsel's fee bills and expenses submitted for reimbursement, policy...
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