The Travelers Indem. Co. v. Johnson
| Decision Date | 05 May 2022 |
| Docket Number | 4:17-CV-86-TLS |
| Parties | THE TRAVELERS INDEMNITY COMPANY, Plaintiff, v. BRITTANY M. JOHNSON, Defendant. BRITTANY M. JOHNSON, Counter-Claimant, v. THE TRAVELERS INDEMNITY COMPANY, Counter-Defendant. |
| Court | U.S. District Court — Northern District of Indiana |
THERESA L. SPRINGMANN JUDGE.
On April 27, 2008, Brittany M. Johnson suffered serious and permanent injuries in a vehicular collision involving a semi-truck driven by Kimiel Horn, an employee of Sandberg Trucking, Inc. Johnson sued Horn and Sandberg Trucking in state court. The jury returned a verdict of $7, 100, 000 and assessed Horn's fault at 30%, resulting in a verdict against Horn and Sandberg Trucking of $2, 130, 000. Both were insured by The Travelers Indemnity Company (Travelers) with a $1, 000, 000 policy limit. Sandberg Trucking's liability was capped at the $1, 000, 000 policy limit pursuant to an agreement in its bankruptcy proceedings. Horn assigned to Johnson his right to sue Travelers in relation to the excess verdict of $1, 130, 000 against him.
This matter is now before the Court on the parties' cross motions for summary judgment, ECF Nos. 89, 90, on whether Travelers breached its duty to deal in good faith with Horn its insured, by not settling for the $1, 000, 000 policy limit prior to the jury verdict in light of the risk to Horn of an excess verdict. For the reasons stated below, the Court denies both motions.
On November 2, 2017, Travelers filed a one-count Complaint [ECF No. 1] against Johnson, seeking a declaratory judgment that Travelers owes no more than the $1, 000, 000 policy limits to Johnson for her claim in the underlying lawsuit. Compl. 5-6 ECF No. 1. On December 21, 2017, Johnson filed an Answer and Counterclaim [ECF No. 19]. The Counterclaim seeks a declaration that Travelers owes Johnson the entirety of the judgment entered against Horn (Count I) and brings claims of negligent failure to settle (Count II), bad faith failure to settle (Count III), and breach of contract (Count IV). Answer & Countercl. 16-21, ECF No. 19. On Travelers' motion the Court dismissed the negligent failure to settle claim. See Feb. 18, 2020 Op. & Order, ECF No. 63.
Summary judgment is warranted when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The movant may discharge this burden by “either: (1) showing that there is an absence of evidence supporting an essential element of the non-moving party's claim; or (2) presenting affirmative evidence that negates an essential element of the non-moving party's claim.” Hummel v. St. Joseph Cnty. Bd. of Comm'rs, 817 F.3d 1010, 1016 (7th Cir. 2016) (citation omitted). In response, the non-movant “must make a sufficient showing on every element of [the non-movant's] case on which [the non-movant] bears the burden of proof; if [the non-movant] fails to do so, there is no issue for trial.” Yeatts v. Zimmer Biomet Holdings, Inc., 940 F.3d 354, 358 (7th Cir. 2019) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). With cross-motions for summary judgment, the Court must construe all facts in a light most favorable to the party against whom the motion under consideration is made. Blow v. Bijora, Inc., 855 F.3d 793, 797 (7th Cir. 2017). A court's role Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994) (citations omitted).
Travelers challenges the admissibility of the case valuation opinion given by Susan Kaufman, Johnson's claims handling expert. Kaufman opined that “an honest and fair evaluation of [Johnson's] damages should have resulted in a range of [$5, 000, 000 to $10, 000, 000] or more.” Def. Ex. O, 13, ECF No. 88-16. The admissibility of expert testimony is governed by Federal Rule of Evidence 702 and the Supreme Court's opinion in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). See Lees v. Carthage Coll., 714 F.3d 516, 521 (7th Cir. 2013). Under that standard, courts apply a three-step analysis, asking whether: (1) “the witness is qualified”; (2) “the expert's methodology is scientifically reliable”; and (3) “the testimony will assist the trier of fact to understand the evidence or to determine a fact in issue.” Myers v. Ill. Cent. R.R. Co., 629 F.3d 639, 644 (7th Cir. 2010) (internal quotation marks omitted). Travelers contends that Kaufman is not qualified and that she failed to use an objective methodology. The Court overrules Travelers' objection.
First, an expert may be qualified by “knowledge, skill, experience, training, or education.” Fed.R.Evid. 702. Travelers argues that Kaufman is not qualified because she is not an attorney and has never handled an insurance claim in Indiana. Travelers ignores that Kaufman has worked in the insurance industry for 32 years, including 20 years for Travelers in claims handling. Def. Ex. O, 1; Def. Ex. Q, 121:21-23, ECF No. 88-18. As director of legal claims, Kaufman evaluated Travelers' conduct for consistency with good faith standards, reviewing files for which policy limits were offered and rejected. Def. Ex. Q, 122:1-19. If Travelers acted inconsistently with industry standards, she evaluated the full damages and entered into negotiations to resolve the claim to include extra-contractual monies. Id. at 122:20-123:3. The Court finds that Kaufman is qualified to render her case valuation opinion.
Second, a court need not admit a qualified expert's opinion if it is “connected to existing data only by the ipse dixit of the expert.” Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997). In arguing that Kaufman used no objective methodology, Travelers cites Kaufman's testimony that case valuation is not an “exact science.” Pl. Ex. N, 28:22-29:14, ECF No. 91-14. Yet, Kaufman explained that valuing potential damages is based on information that is or should be available and that evaluating comparative fault is based on years of training and experience. Id. at 29:3-14. Travelers also criticizes that Kaufman reviewed no jury verdicts to value the case. Id. at 102:1520. Kaufman explained that jury verdicts are “not reflective of a fair and reasonable evaluation of a claim” and that relying on jury verdicts is not how claims should be evaluated. Id. at 102:22103:5. For most of her career, Kaufman handled moderate to very large cases, evaluated thousands of cases herself as well as thousands initially evaluated by others, and reviewed claim files all over the country for ten years as an expert. Id. at 34:14-19; 99:23-100:3. In this case, she reviewed Travelers' file and worksheets, defense counsel's pretrial report, medical reports, depositions, and court documents. Id. at 121:2-11. The Court finds that Kaufman's damages valuation is based on sufficient and reliable methodology as well as known facts. See Kumho Tire Co. v. Carmichael, 526 U.S. 137, 156 (1999) ().
On April 27, 2008, Johnson was involved in a vehicular collision with a truck operated by Horn and owned by Sandberg Trucking, Inc. Compl. ¶ 8. Johnson was the passenger in the vehicle, and the driver was pronounced dead at the scene. Answer to Countercl. ¶¶ 18, 19, ECF No. 23. In the underlying state action, Johnson alleged that Horn, having pulled onto the shoulder of Interstate 65 after hitting a deer, failed to use his emergency flashers, warning triangles, and road flares to warn of his stopped semi-truck and the deer carcass in the roadway. Compl. Ex. B, ¶ 5, ECF No. 1-2. This allegedly caused Johnson's vehicle to swerve to avoid hitting the deer and then collide with the rear of the semi-tractor/trailer. Id. Johnson was 22 years old at the time of the crash with a life expectancy to the age of 82 years old. Answer to Countercl. ¶ 17. As a result of the crash, Johnson suffered a severe traumatic brain injury that affected her memory, balance, and behavior; multiple skull fractures; removal of her spleen; multiple fractured ribs; permanent facial palsy and scarring across her forehead; deafness in her left ear; and seizures. Id. at ¶ 16.
Sandberg Trucking had a $1, 000, 000 policy of insurance with Travelers, and both Sandberg Trucking and Horn, its employee, were insured under the policy. Compl. Ex. A, ECF No. 1-1; Def. Ex. D, 42:16-21, ECF No. 88-5.
On September 26, 2008, Sandberg Trucking filed for bankruptcy. Compl. Ex. C, 5, ECF No. 1-3. On July 23, 2009, Johnson filed a lawsuit in state court against Sandberg Trucking and Horn, seeking damages for the injuries she suffered in the collision. Id. Travelers provided a defense to Sandberg Trucking and Horn. Pl. Resp. 2, ECF No. 95. Travelers assigned Mark Miner as claims adjustor and initially assigned staff attorney Paul Belch as defense counsel. Pl. Ex. B, 4:11-23, 67:9-13, ECF No. 91-2. The litigation was stayed as a result of Sandberg Trucking's bankruptcy.
On August 21, 2009, Attorney Belch assessed comparative fault of Sandberg Trucking and Horn at 10%; he did not assess likely damages. Pl. Ex. C, 4, ECF No. 91-3.
On October 23, 2009, Travelers sent a letter to Horn, confirming that Attorney Belch was...
To continue reading
Request your trial