McGee v. Zurich American Insurance Company ( 2021 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 James McGee, No. CV-17-04024-PHX-DGC 10 Plaintiff, ORDER 11 v. 12 Zurich American Insurance Company, 13 Defendant. 14 15 16 Plaintiff James McGee sued Defendant Zurich American Insurance Company for 17 breach of contract and bad faith, alleging that Defendant improperly refused to defend 18 Elizabeth Foutz in an underlying tort action brought against her by Plaintiff. Plaintiff was 19 injured when his vehicle collided with Foutz, who was driving a car provided by her 20 employer, AAA Landscaping. Defendant provided auto insurance to AAA, and the key 21 questions for trial are whether the policy covered Foutz’s use of AAA’s vehicle at the time 22 of the accident and whether Defendant acted in bad faith when it denied coverage. Foutz 23 assigned her coverage and bad faith claims to Plaintiff in settlement of the underlying tort 24 case, and Plaintiff now asserts those claims against Defendant. A five-day jury trial will 25 begin on January 6, 2022. See Doc. 80. 26 The parties have filed Daubert motions. Docs. 87, 91. Responses have been filed 27 (Docs. 107, 112), and the Court heard oral argument at the Final Pretrial Conference on 28 December 17, 2021. See Doc. 129. This order addresses each Daubert motion. 1 I. Rule 702 and Daubert Standards. 2 Under Federal Rule of Civil Procedure 702, an expert may offer “scientific, 3 technical, or other specialized knowledge” if it “will assist the trier of fact to understand 4 the evidence or to determine a fact in issue,” provided the testimony rests on “sufficient 5 facts or data” and “reliable principles and methods,” and “the witness has reliably applied 6 the principles and methods to the facts of the case.” Fed. R. Evid. 702(a)-(d). The 7 proponent of expert testimony has the burden of showing, by a preponderance of the 8 evidence, that the proposed testimony is admissible under Rule 702. See Fed. R. Evid. 9 104(a); Cooper v. Brown, 510 F.3d 870, 942 (9th Cir. 2007). The trial court acts as a 10 gatekeeper for expert testimony to assure that it “both rests on a reliable foundation and is 11 relevant to the task at hand.” Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 597 12 (1993); see Davis v. McKesson Corp., No. CV-18-1157-PHX-DGC, 2019 WL 3532179, 13 at *3-4 (D. Ariz. Aug. 2, 2019). 14 II. Plaintiff’s Motion to Exclude Testimony of Charles Hewitt (Doc. 87). 15 Defendant disclosed Charles Hewitt as an expert to testify about Defendant’s 16 coverage decision and claims handling practices in this matter. Hewitt is a claims 17 consultant and member of the Insurance Expert Network. Doc. 87-1 at 3.1 Hewitt has 18 nearly 50 years of experience in insurance claims handling and management practices, and 19 has been involved in hundreds of commercial automobile coverage decisions. Id. 20 Hewitt has issued a report in which he opines generally that Defendant’s decision 21 to deny coverage “met the standard of care in the industry, followed judicial law, and was 22 only reached after a thorough investigation by claims management and coverage counsel.” 23 Id. at 3. He offers these specific opinions at the end of his report (id. at 8): 24 1. In my experience, Zurich has in place an excellent safeguard 25 process for investigating potential coverage declinations that is at or above the standard of care in the industry. Neither their branch offices nor their 26 [third-party administrator (“TPA”)] can decline coverage without Zurich 27 Corporate approval. Coverage issues are investigated and reviewed at 28 1 Citations are to page numbers attached to the top of pages by the Court’s electronic filing system. 1 Corporate both by experienced claims personnel and experienced coverage counsel. Recommendations are discussed in roundtables with senior claims 2 management before approved. It is this significant review process that 3 protects insureds, or potential insureds, from wrongful denials of coverage, and meets the standard of care in the industry. 4 5 2. Notwithstanding Foutz’s apparent attempt to hide from Zurich her arrest for Extreme DUI, in my experience Zurich’s TPA met the standard 6 of care in the industry by conducting the additional investigation necessary 7 when the arrest was made known. This included obtaining the police report, arrest record, court notes, photographs, and other documents. My opinion is 8 this was adequate to confirm the DUI issue. 9 3. As required, the TPA elevated potential coverage issues in a 10 timely basis to Zurich Corporate. In my experience this requirement meets the standard of care in the industry. Follow-up additional investigation was 11 requested and conducted through the email exchange with George McNeely 12 and obtaining the relevant documents signed by Foutz. My opinion is this was appropriate direction of the TPA by the Corporate Office on the issue of 13 permissive use and further complies with the standard of care in the industry. 14 4. Also, in my experience, the standard of care related to coverage 15 declinations requires researching and reporting on relevant case law. Zurich met this standard related to permissive use (see cites to the James and 16 Universal Underwriters cases above) and then followed protocol before 17 approving the declination based on violation of permissive use. I concur in the conclusion to decline coverage to Foutz based on her Extreme DUI in 18 violation of her driver agreement and Arizona case law.2 19 Under Rule 702, an expert witness may be qualified based on his “knowledge, skill, 20 experience, training, or education[.]” Fed. R. Civ. P. 702; see Thomas v. Newton Int’l 21 Enters., 42 F.3d 1266, 1269 (9th Cir. 1994) (Rule 702 “contemplates a broad conception 22 of expert qualifications”). Plaintiff does not dispute that Hewitt is qualified to offer expert 23 opinions in this case. See Doc. 87 at 2 (noting Hewitt’s “considerable experience” in the 24 insurance field). Plaintiff instead contends that Hewitt’s testimony “amounts to nothing 25 more than ipse dixit guesswork.” Id. Specifically, Plaintiff argues that (1) Hewitt’s 26 testimony will not assist the trier of fact, and (2) his opinions are not based on sufficient 27 28 2 Hewitt also observed that Defendant met the standard of care by not claiming that it had been prejudiced by Foutz’s late notice of the claim. See id. 1 facts or data or reliable principles and methods, and he therefore has not reliably applied 2 any principles and methods to the facts of the case. Id. at 2-5. Defendant counters that 3 Hewitt’s testimony will be relevant to coverage and bad faith issues and his opinions meet 4 the requirements of Rule 702. Doc. 107. 5 A. Hewitt’s Testimony Will Assist the Trier of Fact. 6 Whether an insurer has complied with industry standards for handling claims is 7 relevant to the issue of bad faith. See Rawlings v. Apodaca, 151 Ariz. 149, 158, 726 P.2d 8 565, 574 (1986) (“Although compliance with industry custom is not an absolute defense, 9 failure to comply may be relevant to the question of an insurer’s alleged bad faith.”); 10 Hangarter v. Provident Life & Accident Ins., 373 F.3d 998, 1016 (9th Cir. 2004) (relying 11 on a claims handling expert and holding that the defendants’ “deviat[ion] from industry 12 standards supported a finding that they acted in bad faith”). Plaintiff acknowledges that 13 claims handling experts are permitted to testify about relevant industry standards. See Doc. 14 112 at 10 (citing King v. GEICO Indem. Co., 712 Fed. App’x. 649, 651 (9th Cir. 2017) 15 (“Although it is well established that experts may not give opinions as to legal conclusions, 16 experts may testify about industry standards[.]”)); see also Hangarter, 373 F.3d at 1017 17 (the district court did not err by allowing an expert to testify that the defendants “departed 18 from insurance industry norms”); Roberts v. Garrison Prop. Cas. & Ins., No. CV-19- 19 01232-PHX-SPL, 2021 WL 3909918, at *6 (D. Ariz. Sept. 1, 2021) (“It is well established 20 in the Ninth Circuit that a claims handling expert may testify to applicable industry 21 standards.”) (citing King and Hangarter); Temple v. Hartford Ins. Co. of Midwest, 40 F. 22 Supp. 3d 1156, 1161 (D. Ariz. 2014) (“Both Arizona law and Ninth Circuit law recognize 23 that experts in the area of insurance claim handling are proper [and] that they may testify 24 regarding the application of industry standards to claim handling[.]”) (citing Rawlings and 25 Hangarter). 26 According to Plaintiff, Hewitt identifies no industry standard and instead offers his 27 personal opinion that “Defendant met whatever the standard of care requires.” Doc. 87 28 at 2. The Court does not agree. 1 Hewitt states that, based on his substantial experience as a claims adjuster and 2 manager, the applicable standard of care requires that coverage declinations by branch 3 offices undergo “complete review by coverage counsel and senior claims management.” 4 Doc. 87-1 at 3; see id. at 4 (providing examples from his own experience in which the 5 purported standard of care was met through this review process). Hewitt further states that 6 “[i]t is this significant review process that protects insureds . . . from wrongful denials of 7 coverage, and meets the standard of care in the industry.” Id. at 8. Contrary to Plaintiff’s 8 assertion, Hewitt has identified a specific standard of care, drawn from his years of 9 experience in claims handling. The Court finds that Hewitt’s testimony will assist the jury 10 on the bad faith claim. 11 B. Hewitt’s Opinions Meet the Rule 702 Requirements. 12 As noted, Rule 702 permits testimony from a qualified expert where (1) the 13 testimony is based on sufficient facts or data, (2) the testimony is the product of reliable 14 principles and methods, and (3) the witness has reliably applied the principles and methods 15 to the facts of the case. Fed. R. Evid. 702(b)-(d). Plaintiff contends that none of these 16 requirements has been met. Doc. 87 at 4-6. The Court does not agree. 17 1. Sufficient Facts or Data. 18 Plaintiff asserts that Hewitt is without facts or data “as to the industry standard” 19 because he does not reference “an article, a claims manual, a publication, or a law 20 establishing the industry standard[.]” Doc. 87 at 4. Hewitt states that his opinions are 21 “based on [his] experience and knowledge of the standards of care in the industry[,]” noting 22 that in his “49 years of insurance claims handling and management, [he] was involved in 23 literally hundreds of Commercial Automobile coverage decisions.” Doc. 87-1 at 3. Hewitt 24 further explains that during his 19 years with Liberty Mutual Insurance Company, he 25 “handled multiple commercial automobile claims as an adjuster and senior adjuster, 26 managed them in [his] roles as supervisor and manager, taught the coverage to new 27 adjusters and later to experienced adjusters, and . . . was responsible for getting coverage 28 1 counsel opinions for branch offices and reviewing those opinions with senior claims 2 management.” Id.; see also id. at 4 (discussing similar experience at other companies). 3 As Plaintiff acknowledges, expert opinions may be based on “personal knowledge 4 or experience.” Doc. 112 at 6 (quoting Kumho Tire Co. v. Carmichael, 526 U.S. 137, 150 5 (1999), and citing Hankey, 203 F.3d at 1169 (opinions offered under Rule 702 may 6 “depend[] heavily on the knowledge and experience of the expert”)); see also id. at 8 7 (quoting Fed. R. Evid. 702, advisory committee’s note to 2000 amendment (“Nothing in 8 this amendment is intended to suggest that experience alone . . . may not provide a 9 sufficient foundation for expert testimony.”)). Plaintiff also acknowledges that Hewitt has 10 reviewed numerous documents in this case. Doc. 87 at 4. Those documents, which are 11 listed in Hewitt’s report, consist of more than 3,800 pages. See Doc. 87-1 at 4-5. Hewitt 12 also sets forth in his report the facts, as he understands them, regarding the underlying 13 accident and Defendant’s investigation of Foutz’s claim and its coverage decision. Id. at 3, 14 6-7; see also Doc. 87 at 4 (noting that Hewitt “summarizes what he believes to be the 15 facts”). The Court finds that Hewitt’s opinions are based on sufficient facts for purposes 16 of Rule 702(b). 17 2. Reliable Principles and Methods. 18 Because Hewitt identifies no industry standard, Plaintiff argues, there are no 19 principles or methods for him to apply. Doc. 87 at 4. This argument is without merit 20 because Hewitt has identified industry standards as discussed above. See Doc. 87-1 at 3. 21 The Court finds that Hewitt’s opinions satisfy the “reliable principles and methods” 22 requirement of Rule 702(c). 23 3. Reliable Application of the Principles to the Facts of the Case. 24 Plaintiff contends that Hewitt’s opinions “appear[] to be ipse dixit guesswork since 25 there is no application of the facts to any standards.” Doc. 87 at 5. The Court does not 26 agree. Hewitt opines that Defendant “has in place an excellent safeguard process for 27 investigating potential coverage declinations that is at or above the standard of care in the 28 industry.” Doc. 87-1 at 8. He explains that neither the branch office nor the TPA can 1 decline coverage without Defendant’s corporate approval, that coverage issues are 2 investigated and reviewed at the corporate level by experienced claims personnel and 3 experienced coverage counsel, and that recommendations are discussed in roundtables with 4 senior claims management before approval. Id. It is this “significant review process,” 5 according to Hewitt, that protects insureds “from wrongful denials of coverage[] and meets 6 the standard of care in the industry.” Id. Hewitt opines that, in this case, “the TPA elevated 7 potential coverage issues in a timely basis to Zurich Corporate” and “additional 8 investigation was requested and conducted[.]” Id. He further opines that Defendant met 9 the standard of care by conducting additional investigation when Foutz’s DUI arrest was 10 made known and by researching relevant case law on permissive use. Id. 11 The Court finds that Hewitt has reliably applied his proposed standard of care to the 12 facts of this case. See Fed. R. Civ. P. 702(d). 13 C. Conclusion. 14 Hewitt’s opinions satisfy the requirements of Rule 702, and his testimony will assist 15 the jury in deciding the bad faith claim. Plaintiff’s motion to exclude Hewitt’s testimony 16 (Doc. 87) will be denied. 17 III. Defendant’s Motion to Exclude Testimony of Frederick Berry, Jr. (Doc. 91). 18 Plaintiff disclosed Fredrick Berry as an expert to testify about relevant industry 19 standards and Defendant’s claims handling practices in this matter. Berry has prepared a 20 57-page report (Doc. 112-4) that sets forth his education and experience in the insurance 21 industry (id. at 1-2); the materials and legal authority he reviewed (id. at 2-9); relevant facts 22 (at 10-40); the business of insurance and a history of insurance regulation (at 40-43); the 23 common law duty of good faith and fair dealing (at 43-46); his opinions regarding industry 24 standards for adjusting first-party insurance claims (at 46-53); his opinions on Defendant’s 25 handling of Foutz’s claim (at 53-55); and additional material he requested (at 55-57). 26 Defendant contends that Berry is not qualified to offer his opinions, that he is an 27 advocate and not an expert, and that the probative value of his testimony is outweighed by 28 the risk of confusion and prejudice. Doc. 91 at 1-11. Defendant further contends that, to 1 the extent Berry is qualified to testify, he should be precluded from expressing legal 2 opinions or testifying about Defendant’s intent, motive, and state of mind. Id. at 11-15. 3 A. Berry Is Qualified to Testify as an Expert Under Rule 702. 4 An expert is qualified to testify under Rule 702 where the expert has “sufficient 5 specialized knowledge to assist the jurors in deciding the particular issues in the case.” 6 Kumho Tire, 526 U.S. at 156. “Because Rule 702 ‘contemplates a broad conception of 7 expert qualifications,’ only a ‘minimal foundation of knowledge, skill, and experience’ is 8 required.” Nay v. BNSF Ry. Co., No. C19-5425-BHS-MLP, 2021 WL 5321979, at *5 9 (W.D. Wash. Nov. 16, 2021) (quoting Hangarter, 373 F.3d at 1015-16). 10 Berry attended Arizona State University between 1965 and 1973, earning a 11 Bachelor of Science degree in insurance and a Juris Doctor degree. Doc. 112-1 at 1. He 12 served as the Arizona Deputy Director of Insurance and Hearing Officer from July 1976 13 until September 1978. Id. He has been a licensed insurance producer in Arizona since 14 2010, has served as Chairman of the Arizona State Bar’s Insurance Committee (1996- 15 2002), and is a member of various insurance-related societies. Id. at 1-2. 16 Defendant asserts that Berry “has never worked in the insurance industry” and “has 17 absolutely no training or experience in handling insurance claims.” Doc. 91 at 3, 5 18 (emphasis in original). But as Plaintiff notes, Berry has served as a claims adjuster for two 19 insurance companies. Doc. 112 at 3. Berry states that he served in these positions as “the 20 Arizona resident claim manager for mostly automobile claims.” Doc. 112-3 at 2. He both 21 engaged in and supervised the investigation and evaluation of claims, primarily automobile 22 liability claims. Id. at 2-3. He supervised the claims adjusters in his office and had 23 authority to approve certain settlement offers. Id. at 3. While those positions were fill-in 24 roles in the 1980s or 1990s (see id. at 3-4), Berry does in fact have experience handling 25 insurance claims.3 26 3 The cases Defendant cites are inapposite because the expert in each case had no experience in claims handling. See Cal. Shoppers, Inc. v. Royal Globe Ins. Co., 175 Cal. 27 App. 3d 1, 66 (Ct. App. 1985) (“[A]s Aitkin candidly admitted, he had never been employed nor even retained as counsel by an insurance company.”); Trident Web Offset, 28 Inc. v. Emps. Mut. Cas. Co., No. D040133, 2003 WL 21291039, at *15 (Cal. Ct. App. June 5, 2003) (“Greenfield is an attorney whose practice consists of first party and third 1 Defendant further asserts that Berry has no “specialized knowledge” of third-party 2 liability claims, noting that his report focuses on first-party claims. Doc. 91 at 2, 8-9 As 3 noted, Berry does have some experience handling third-party liability claims. See Doc. 4 112-3 at 2-3. And while he clearly focuses on first-party claims in his report, he also 5 discusses relevant Arizona law for third-party claims. See Doc. 112-4 at 6 (discussing 6 Revised Arizona Jury Instruction (Civil) 6th, Bad Faith 8 (Third Party) (“The duty of good 7 faith and fair dealing requires an insurance company to give the same consideration to its 8 insured’s interests as it gives to its own when it considers a settlement offer.”); id. at 46 9 (opining that “[t]he insurance company must treat its policyholder’s interests with equal 10 regard as it does its own interests”); id. at 55 (“Disregarding the fair interests of the insured 11 in the investigation and evaluation process is . . . probative evidence of bad faith claim 12 handling[.]”). 13 Defendant contends that there are “important distinctions” between first-party and 14 third-party claims (Doc. 91 at 2), but never describes those distinctions or explains how 15 they render Berry’s opinions inadmissible. Cf. Clearwater v. State Farm Mut. Auto. Ins. 16 Co., 792 P.2d 719, 723 (Ariz. 1990) (explaining that while the applicable standard of 17 conduct is different, “[t]he duty to accept reasonable settlements in third-party situations 18 and the duty not to withhold payment of first-party claims ‘are merely two different aspects 19 of the same duty’”) (citation omitted). Defendant’s reliance on City of Hobbs v. Hartford 20 Fire Ins. Co., 162 F.3d 576 (10th Cir. 1998), is misplaced because the expert in that case 21 “lacked specialized knowledge on New Mexico bad faith cases” (the applicable law) and 22 party insurance defense and insurance coverage[.]”); Lopez v. Allstate Fire & Cas. Ins. Co., No. 14-20654-Civ-COOKE/TORRES, 2015 WL 5584898, at *5 (S.D. Fla. Sept. 23, 2015) 23 (“[Kaydek] has no experience adjusting claims for insurance companies, and has never been employed by an insurance company.”); Novak v. Progressive Halcyon Ins. Co., No. 24 CIV.A. 04-0632, 2005 WL 5989782, at *3 (M.D. Pa. Sept. 13, 2005) (“While qualified as an attorney with knowledge of insurance statutes and regulations, [Foster] offers nothing 25 in the way of experience . . . in the internal handling of claims.”); Butler v. First Acceptance Ins. Co., 652 F. Supp. 2d 1264, 1272 (N.D. Ga. 2009) (“Jenkins has never 26 worked in the insurance industry . . . [and his] experience relates to personal injury and insurance claims in general.”); Tactical Stop-Loss LLC v. Travelers Cas. & Sur. Co. of 27 Am., No. 08-0962-CV-W-FJG, 2010 WL 427779, at *4 (W.D. Mo. Feb. 2, 2010) (“[N]either Mr. Lakin’s Expert Report nor his curriculum vitae reveal any experience in 28 handling insurance claims[.]”). 1 the district court had determined that “the jury was capable of determining the bad faith 2 issue on its own[.]” 162 F.3d at 586-87. 3 The Court finds that Berry is sufficiently qualified to testify on coverage and bad 4 faith issues based on his education, knowledge, and experience in the insurance industry. 5 Defendant’s motion will be denied in this regard. 6 B. Berry Will Be Precluded from Testifying as an Advocate. 7 “[W]here an expert becomes an advocate for a cause, he . . . departs from the ranks 8 of an objective expert witness, and any resulting testimony would be unfairly prejudicial 9 and misleading.” Elliott v. Versa CIC, L.P., 349 F. Supp. 3d 1004, 1006-07 (S.D. Cal. 10 2018); see also Hayward Prop., LLC v. Commonwealth Land Title Ins. Co., No. 17-CV- 11 06177 SBA, 2021 WL 4923379, at *2 (N.D. Cal. Aug. 31, 2021) (“Experts are not 12 advocates in the litigation but sources of information and opinions.”) (citation omitted). 13 Defendant argues that Berry’s report largely consists of “argument riddled with 14 inflammatory statements and one-sided propaganda directed at the insurance industry as a 15 whole.” Doc. 91 at 10. The Court agrees that much of Berry’s report “reads like that of 16 an advocate rather than an expert[.]” Burrows v. BMW of N. Am., LLC, No. CV 17-6960- 17 R, 2018 WL 6314187, at *2 (C.D. Cal. Sept. 24, 2018). For example, Berry states: 18 • The collision was shocking. . . . . [N]o car, no matter how sturdy, could have 19 prevented major injury in a collision of this magnitude (Doc. 112-4 at 11). 20 • In March 2016, after Zurich unilaterally and wrongfully declined coverage 21 and representation and to protect herself from financial ruin Foutz entered into an “Agreement and Covenant Not to Execute” assigning her rights 22 against Zurich to McGee (id. at 39). 23 • Litigation is very expensive, time-consuming, and emotional. An insurer’s 24 great power of litigation tolerance was explained above. Insurance 25 companies know that they possess this litigation power and some unethical insurance companies abuse this power as they utilize the Law of Large 26 Numbers (id. at 53). 27 • Insurance companies know that most claims can be compromised for far less 28 money than the insurance company is obligated to pay and they are fully 1 aware of the fact that many claimants will simply give up a claim either out of disgust, fear or the inability to locate competent counsel to represent their 2 interests (id.). 3 • The net effect of the unethical misuse of the litigation power is that insurance 4 companies know with certainty that few of the claimants that are denied 5 benefits will actually withstand the gauntlet of litigation. Few claimants actually obtain a day in court where their case can be presented to a fair 6 minded jury and judge (id.). 7 • In my judgment, Zurich has violated the standard of care and misused its 8 power of money, time, superior knowledge, and litigation tolerance as it 9 provided substandard investigative, coverage, and claim-processing services to and for Foutz (id.). 10 11 • Zurich was so blinded by protecting its own interests that it failed to look out for Foutz’s interests in the slightest (id. at 54). 12 13 Berry also provides commentary on what the facts purportedly show, and he repeatedly 14 asserts that Defendant’s claims adjusters and managers have “admitted” and “conceded” 15 certain facts. Id. at 18-32, 38-39. 16 Plaintiff asserts in his response that Berry understands his role as an expert and will 17 not testify as an advocate, and gave the same assurance at oral argument. Doc. 112 at 8-9. 18 The Court will make sure of it. Defendant’s motion will be granted on this point. 19 C. Berry Will Be Precluded from Expressing Legal Opinions. 20 The Ninth Circuit “has repeatedly affirmed that ‘an expert witness cannot give an 21 opinion as to her legal conclusion, i.e., an opinion on an ultimate issue of law.’” United 22 States v. Diaz, 876 F.3d 1194, 1197 (9th Cir. 2017) (citations omitted; emphasis in 23 original). “This prohibition of opinion testimony on an ultimate issue of law recognizes 24 that, ‘when an expert undertakes to tell the jury what result to reach, this does not aid the 25 jury in making a decision, but rather attempts to substitute the expert’s judgment for the 26 jury’s.’” Id. 27 Defendant argues that Berry should be precluded from expressing legal opinions. 28 Doc. 91 at 11-12. The Court agrees. 1 Berry acknowledges that “it is not [his] role as an insurance expert witness to 2 provide an opinion concerning the legal duty of an insurer” (Doc. 112-4 at 43), but he 3 proceeds to offer his opinion on the common law duty of good faith and dealing (id. at 4 43-46). Much of Berry’s report contains his opinion of various legal authorities and 5 principles, including the permissive use doctrine, an insurer’s duty to conduct an adequate 6 investigation and reasonably evaluate a claim, and Arizona’s regulation of claims handling. 7 Id. at 3-9, 42-43. His report includes lengthy quotations from case law, statutes, and jury 8 instructions on bad faith issues. See id. Any such testimony at trial would impermissibly 9 “invade[] the role of the Court to instruct the jury on the applicable law.” Bahra v. Cty. of 10 San Bernardino, No. EDCV-161756 JGB (SPx), 2021 WL 3914042, at *3 (C.D. Cal. 11 June 24, 2021) (citation omitted). “Indeed, courts consistently hold that ‘an expert may 12 not state his or her opinion as to legal standards, nor may he or she state legal conclusions 13 drawn by applying the law to the facts.’” Id. (citation omitted); see also Pinal Creek Group 14 v. Newmont Mining Corp., 352 F. Supp. 2d 1037, 1042 (D. Ariz. 2005) (“The principle that 15 legal opinion evidence concerning the law is inadmissible is so well-established that it is 16 often deemed a basic premise or assumption of evidence law – a kind of axiomatic 17 principle.”). 18 Berry may testify about relevant industry standards contained in his report and offer 19 his opinions on the reasonableness of Defendant’s claims handling in this case, but he may 20 not opine on legal standards and ultimate issues of law. See King, 712 F. App’x at 651.4 21 Defendant’s motion will be granted in this respect. 22 D. Testimony About Intent, Motives, and State of Mind. 23 Berry opines on the intent, motivations, and state of mind of insurers in general and 24 Defendant in particular. See, e.g., Doc. 112-4 at 53-54. Defendant argues that all such 25 opinions should be excluded, noting that the general rule precluding an expert from 26 4 The Court recognizes that this can be a difficult distinction to discern. An expert’s opinion on whether an insurer complied with the standard of care necessarily involves 27 identification of the standard and evaluation of the insurer’s conduct in light of it. But what an expert clearly cannot do is purport to tell the jury what the law requires – that is the 28 province of the Court – or how it should decide the case under the law – that is the province of the jury. The Court will do its best to address these issues as they arise at trial. 1 testifying about intent, motive, and state of mind applies specifically to testimony by a 2 “bad faith expert.” Doc. 91 at 12-14 9 (citations omitted). 3 “Courts routinely exclude as impermissible expert testimony as to intent, motive, or 4 state of mind.” Siring v. Oregon State Bd. of Higher Educ., 927 F. Supp. 2d 1069, 1077 5 (D. Or. 2013). “This is so because: 6 Expert testimony as to intent, motive, or state of mind offers no more than the drawing of an inference from the facts of the case. The jury is sufficiently 7 capable of drawing its own inferences regarding intent, motive, or state of 8 mind from the evidence, and permitting expert testimony on this subject would be merely substituting the expert’s judgment for the jury’s and would 9 not be helpful to the jury.” 10 Hunton v. Am. Zurich Ins. Co., No. CV-16-00539-PHX-DLR, 2018 WL 1182550, at *2 11 (D. Ariz. Mar. 7, 2018) (quoting Siring, 927 F. Supp. at 1077). 12 Because Berry’s testimony on intent, motive, and state of mind is “outside the 13 bounds of appropriate expert testimony[,]” it will be precluded. In re Bard IVC Filters 14 Prod. Liab. Litig., No. MDL 15-02641-PHX DGC, 2018 WL 495187, at *3 (D. Ariz. 15 Jan. 22, 2018). Defendant’s motion will be granted in this regard. 16 E. Defendant’s Rule 403 Argument. 17 According to Defendant, some jurors may erroneously assume that, as a lawyer, 18 Berry has some unique insight into claims handling which a career claims person, such as 19 Hewitt, would not possess. Doc. 91 at 11. Defendant contends that the probative value of 20 Berry’s testimony is outweighed by the risk of confusion and prejudice to Defendant. Id. 21 (citing Fed. R. Evid. 403). But when an expert meets the threshold established by Rule 702, 22 “the expert may testify and the jury decides how much weight to give that testimony.” 23 Sampedro v. ODR Mgmt. Grp. LLC, No. CV-18-04811-PHX-SPL, 2021 WL 2012697, 24 at *2 (D. Ariz. May 20, 2021) (citation omitted). 25 The Court cannot conclude that Berry should be precluded from testifying under 26 Rule 403. Defendant’s motion will be denied in this respect. 27 / / / 28 / / / 1 F. Berry’s Testimony About the Business and History of Insurance. 2 Berry’s report includes a discussion of the business of insurance and the history of 3 || insurance regulation that dates back to the 17th Century. Doc. 112-4 at 40-42. The Court 4|| finds that the marginal probative value of this proposed extended testimony is substantially 5 || outweighed by the danger of wasting time. Fed. R. Evid. 403. Plaintiff may have Berry 6 || touch on this issue to the extent truly relevant, but he may not give the kind of long narrative □□ contained in his report. 8 IT IS ORDERED: 9 1. Plaintiff's Daubert Motion Regarding Charles Hewitt (Doc. 87) is denied. 10 2. Defendant’s Daubert Motion Regarding Frederick Berry, Jr. (Doc. 91) is 11 || granted in part and denied in part as set forth in this order. 12 Dated this 22nd day of December, 2021. 13 4 aur 6 Cour 15 David G. Campbell 16 Senior United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28 -14-