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Watson v. Allstate Property and Casualty Insurance Co.

United States District Court, S.D. Mississippi, Northern Division

July 3, 2018




         The Court considers three items in the above-styled case. Plaintiff Kerrick Watson has filed a Motion to Exclude Certain Opinion Testimony of Joseph Hines. Defendant Allstate Property and Casualty Insurance Company has filed a Motion to Exclude the Opinions of Annette Herrin and a Motion for Summary Judgment, or in the alternative, a Motion for Partial Summary Judgment. The matters are fully briefed and ready for adjudication.

         I. Background

         On December 28, 2015, a fire destroyed Watson's house, where he lived with his fiancé Zanetta Bowman and her daughter G.B. At the time, Watson had a homeowners insurance policy with Allstate. Watson immediately filed an insurance claim for the contents of the house.

         The following day, Jennifer Morales, Allstate's contents adjuster, inspected Watson's home. Watson told her that everything in his house was new and purchased within the last two to three years. Watson requested the full policy limit of $107, 681 for his contents claim.

         On April 22, 2016, Watson and Bowman submitted to an examination under oath (EUO). Watson testified that in addition to working as a Mississippi State Trooper, he worked part-time as a commercial truck driver for Chambliss Automobile Agency, a truck driver for Falco Line Company, and a courtesy officer for Kings Apartment Complex. Watson also stated that he alone owned all of the items listed in his claim.

         Allstate hired Joseph Hines, a forensic accountant, to assess Watson's claim. Hines drafted an initial report on August 1, 2016. Hines found that based on Watson's bank records, child support payment history, and his employer's payroll records, Watson could not have incurred $107, 681 of household expenses because doing so would have left him with a cash-flow deficit (“CFD”) of $85, 243.

         In response, Watson hired Annette Herrin, also a forensic accountant. Herrin concluded that Allstate did not request the proper financial records to make an informed determination of the reasonableness of Watson's claim. Namely, Herrin stated that Allstate should have requested financial records from Bowman.

         At the close of its investigation on September 14, 2016, Allstate denied Watson's claim because Watson “intentionally overstated the value of the personal property damaged by the fire” and “made additional misrepresentations during the investigation of the claim.”

         Watson filed suit in Warren County Circuit Court in November 2016, alleging 10 state law claims against Allstate. Allstate properly removed the case to this Court on December 28, 2016, pursuant to diversity jurisdiction. On Allstate's Motion, the Court dismissed Watson's claims for breach of fiduciary duty, and estoppel and detrimental reliance. See Watson v. Allstate Prop. & Cas. Ins. Co., No. 3:16-CV-00987-CWR-FKB, 2017 WL 4158860, at *3 (S.D.Miss. Sept. 19, 2017). Watson's remaining claims include breach of contract; bad faith denial of insurance benefits; negligence; negligent, grossly negligent, and wanton failure to monitor and train agents and adjusters; intentional infliction of emotional distress; indemnity; as well as Watson's request for punitive damages.

         Allstate has designated Hines as an expert. Hines produced two additional reports based on new documents that Allstate received through discovery, including the depositions of Watson and Bowman who both testified that they shared household expenses equally. In his October 19, 2017 report, Hines found that Watson would have incurred a CFD of $29, 340. In his December 19, 2017 report, he recalculated a CFD of $68, 488.

         II. Legal Standards

         A. Daubert

         The standard set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) and the post-Daubert amendments to Federal Rule of Evidence 702 govern the admissibility of expert testimony.[1] The purpose of Rule 702 is to guide the district court's gatekeeping function, which ensures that the jury hears reliable and relevant expert testimony. Guy v. Crown Equip. Corp., 394 F.3d 320, 325 (5th Cir. 2004). “Reliability is determined by assessing whether the reasoning or methodology underlying the testimony is scientifically valid. Relevance depends upon whether that reasoning or methodology properly can be applied to the facts in issue.” Knight v. Kirby Inland Marine Inc., 482 F.3d 347, 352 (5th Cir. 2007).

         The Daubert Court outlined a non-exclusive list of factors that trial judges should consider when assessing the reliability of expert testimony. These factors include: (1) whether the theory has been tested; (2) whether the theory has been subjected to peer review and publication; (3) the known error rate of the theory; and; (4) whether the theory is generally accepted in the scientific community. The party offering the testimony bears the burden of establishing reliability by a preponderance of the evidence. Moore v. Ashland Chem. Inc., 151 F.3d 269, 276 (5th Cir. 1998).

         The Daubert analysis applies strictly to the expert's process of reaching his or her conclusions, not the merits of those conclusions. See Guy, 394 F.3d at 325. The merits of an expert's conclusions are subject to scrutiny at trial through the use of “[v]igorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof.” Daubert, 509 U.S. at 596. As a result, when district courts assess the admissibility of expert testimony, the “court should approach its task with proper deference to the jury's role as the arbiter of disputes between conflicting opinions.” United States v. 14.38 Acres of Land, 80 F.3d 1074, 1077 (5th Cir. 1996).

         B. Summary Judgment

         Summary judgment is appropriate 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 moving party bears the initial burden of identifying the basis for its motion and the portions of the record that support it. Nola Spice Designs, L.L.C. v. Haydel Enters., Inc., 783 F.3d 527, 536 (5th Cir. 2015). “Once a summary judgment motion is made and properly supported, the nonmovant must go beyond the pleadings and designate specific facts in the record showing that there is a genuine issue for trial.” Wallace v. Tex. Tech Univ., 80 F.3d 1042, 1047 (5th Cir. 1996).

         When considering a summary judgment motion, the court “must view all facts and evidence in the light most favorable to the non-moving party.” Juino v. Livingston Parish Fire Dist. No. 5, 717 F.3d 431, 433 (5th Cir. 2013) (citation omitted). But “[u]nsubstantiated assertions, improbable inferences, and unsupported speculation are not sufficient to defeat a motion for summary judgment.” Brown v. City of Hous., 337 F.3d 539, 541 (5th Cir. 2003) (citation omitted).

         III. Discussion

         A. Plaintiff's Motion to Exclude the ...

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