Baumann v. Am. Family Mut. Ins. Co.

• Decision Date: 28 December 2011
• Docket Number: Civil Action No. 11–cv–00789–CMA–BNB.
• Citation: 836 F.Supp.2d 1196
• Parties: Nan J. BAUMANN, Plaintiff, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of Colorado

836 F.Supp.2d 1196

Nan J. BAUMANN, Plaintiff,

v.AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant.

Civil Action No. 11–cv–00789–CMA–BNB.

United States District Court,

D. Colorado.

Dec. 28, 2011.

Jeremy Andrew Sitcoff, Marixa A. Frias, Roberts Levin Rosenberg, PC, John Edmund Scipione, Taussig, Moyson & Scipione, P.C., Denver, CO, John G. Taussig, III, Taussig Law Firm, LLC, Boulder, CO, for Plaintiff.

Lelia Kathleen Chaney, Martha Chandler Ferris, Michael G. Paul, Lambdin & Chaney, LLP, Denver, CO, for Defendant.

ORDER

BOYD N. BOLAND, United States Magistrate Judge.

This matter arises on Defendant's Motion to Preclude Plaintiff's Expert Richard Hodges' Opinions [Doc. # 93, filed 12/6/2011] (the “Motion to Exclude”), which is GRANTED.

I.

The following facts are derived from the plaintiff's statement of claims contained in the Scheduling Order [Doc. # 14]:

The case arises on the plaintiff's claim for underinsured motorist (“UIM”) insurance benefits. The plaintiff, an 89 year-old woman at the time of the accident, was a pedestrian struck by an automobile driven by Elise Henderson. The plaintiff suffered a shattered left leg, lacerations to her head, and a closed head injury. Prior to the accident, the plaintiff lived independently. After the accident, she requires assistance with her daily activities and cannot live independently. The plaintiff's medical bills for treatment of the injuries suffered in the accident exceed $200,000. In addition, the plaintiff claims permanent physical impairment.

Ms. Henderson's auto insurance had liability limits of $50,000 per person, which have been paid to the plaintiff. At the time of the accident, the plaintiff was insured under a policy issued by Ohio Casualty Insurance Company (“Ohio Casualty”) with uninsured/underinsured motorist (“UM/UIM”) coverage of $50,000, which also have been paid to the plaintiff.

The plaintiff's claims against American Family Insurance, the defendant here, are based on the following:

In addition to her Ohio Casualty policy, Ms. Baumann [the plaintiff] was a resident-relative of an individual who was insured by Defendant American Family Mutual Insurance Company ... under three (3) separate automobile liability insurance policies issued by American Family, each of which provided UM/UIM benefits in the amount of $100,000.00. On or about October 13, 2010 and November 10, 2010, Ms. Baumann requested that Defendant timely evaluate her claim and pay the $300,000.00 UIM motorist benefits for the significant damages sustained when she was run over by Henderson on February 5, 2010. At the time that Ms. Baumann requested that American Family fairly and timely evaluate her request for UIM benefits, she provided Defendant with any and all medical bills and records available that supported her claim for benefits. Defendant unreasonably delayed in evaluating Ms. Baumann's claim by continually requesting additional information that would not substantially effect a fair evaluation of the claim. When American Family finally responded to Ms. Baumann's request that it pay the UIM benefits rightfully due and owing to her, Defendant offered a total of $22,000.00, even though Ms. Baumann's damages and injuries far exceeded the limits of her available UIM benefits.

Prior to Defendant's refusal to pay Ms. Baumann any UIM benefits under the policy of insurance that insured her, Ms. Baumann, through her attorneys, provided documentation to American Family that her economic and non-economic damages incurred as a result of the February 5, 2010 collision far exceeded the $100,000.00 received from State Farm and Ohio Casualty and the additional $300,000.00 UIM benefits available under Defendant's policies which insured Ms. Baumann. As provided to Defendant, Ms. Baumann's medical bills, alone, were in excess of $200,000.00. As such, her claim far exceeded the $22,000.00 offered by Defendant and represented a significant and unreasonable under-evaluation of her claim.

Plaintiff has brought claims against Defendant for breach of contract, bad faith breach of contract, and for violations of C.R.S. § 10–3–1115(1)(a) and C.R.S. § 10–3–1116(1), for unreasonably delaying and denying her request for payment of her UIM benefits.

Scheduling Order [Doc. # 14] at pp. 3–5.

II.

Richard Hodges is a lawyer who has been retained by the plaintiff to offer expert opinions concerning insurance industry standards and American Family's claims handling. He has substantial experience in the insurance industry. He worked for Allstate Insurance Company from 1968 through 1982 as an adjuster and manager. He earned his law degree in 1972. He has been engaged in the private practice of law since 1984; is a frequent lecturer on issues concerning insurance coverage, insurance bad faith, and related topics; and has testified as an expert witness in at least 58 cases. The defendant does not challenge Mr. Hodges' qualifications as an expert.

The defendant seeks to exclude Mr. Hodges from offering the following opinions at trial:

First, the defendant seeks to exclude Mr. Hodges' opinion concerning American Family's “duty” to pay uncontested amounts. The opinion includes the following:

Where there is no dispute concerning whether the insured has coverage, the insurance company should pay that portion of the claim over which there is no dispute. It cannot withhold what is undisputed based on a dispute as to the remainder. Insurance personnel “should promptly pay all amounts they know the insurer owes and should negotiate in a forthright, honest, and flexible manner over any amounts that are in dispute. The Claims Environment, 1st Ed., James Markham, Kevin M. Quinley, Layne S. Thompson, 1993, p. 19.

* * *

American Family had the duty to pay its insured what it undisputedly concluded Ms. Baumann was entitled. At a minimum, that amount was $32,000 established as American Family's evaluation of her claim on February 23, 2011. Alternatively, that amount will be what a fact finder might conclude was a reasonable amount that American Family should have determined Ms. Baumann was entitled to on a particular date after October 13, 2010. American Family satisfied itself concerning all of the elements necessary to arrive at the conclusion that Ms. Baumann was entitled to UIM benefits purchased for the protection of such insured under circumstances such as this.

Id. at p. 10. The opinion was supplemented to include Mr. Hodges' statement that “American Family was and is obligated to tender to its insured the undisputed amount that it has concluded represents the evaluation of its insured's UM/UIM claim.” Supplemental Statement of Opinions [Doc. # 93–4] at p. 3.

Second, the defendant seeks to exclude Mr. Hodges' testimony that “[o]ther than the initial investigation into the resident relative status of Ms. Baumann and some review of medical records, there was absolutely no investigation directed toward identifying, considering or evaluating the non-economic elements of Ms. Baumann's claim.” Hodges Statement of Opinions [Doc. # 93–2] at p. 9.

Finally, the defendant seeks to prevent Mr. Hodges' testimony that:

An additional systematic hurdle built into American Family's incredibly confused and convoluted approach to the evaluation of claims is the requirement to submit bills through American Family's computer program that is supposedly geared toward testing the reasonableness of the cost of medical services by geographic area (ebill). Ms. Pachl needed computer friendly information (i.e. UB's) so she could comply with this requirement, hoop or hurdle.

* * *

American Family's unreasonable handling of Ms. Baumann's claim for UIM benefits is further evidenced by the continual request for additional information including the late need to have the UB documentation, probably only for the purpose of feeding compatible informationthrough American Family's ebill program.

Id. at pp. 3, 10 (original emphasis).

III.

The proponent of expert testimony bears the burden of showing that the expert's testimony is admissible. United States v. Nacchio, 555 F.3d 1234, 1241 (10th Cir.2009). The Tenth Circuit Court of Appeals has described the burden as follows:

Under Rule 702, the district court must satisfy itself that the proposed expert testimony is both reliable and relevant, in that it will assist the trier of fact, before permitting a jury to assess such testimony. In determining whether expert testimony is admissible, the district court generally must first determine whether the expert is qualified by knowledge, skill, experience, training, or education to render an opinion. Second, if the expert is sufficiently qualified, the court must determine whether the expert's opinion is reliable by assessing the underlying reasoning and methodology, as set forth in Daubert [ v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) ].

Reliability questions may concern the expert's data, method, or his application of the method to the data. The party offering the expert must show that the method employed by the expert ... is scientifically sound and that the opinion is based on facts which satisfy Rule 702's reliability requirements.... In making a reliability determination, generally, the district court should focus on an expert's methodology rather than the conclusions it generates.

Id. (internal quotations and citations omitted except as shown).

Although Daubert concerned experts offering scientific testimony, the court's gatekeeping function to ensure that expert testimony is both relevant and reliable was extended to all expert testimony in Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 147, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999).

Although Daubert instructs that the court's focus should be on the expert's methodology rather than the conclusions it generates:

[C]onclusions and methodology are not entirely distinct from one another.... [N]othing in either Daubert or the Federal Rules of Evidence requir...