Adamscheck v. American Family Mutual Insurance

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS March 29, 2016
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
PATRICK ADAMSCHECK,
Plaintiff - Appellee,
v. No. 15-1125
AMERICAN FAMILY MUTUAL
INSURANCE COMPANY,
Defendant - Appellant.
_________________________________
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:13-CV-02074-RPM)
_________________________________
Debra K. Sutton (Ashley R. Larson with her on the briefs), Sutton Booker, P.C., Denver,
Colorado, for Defendant-Appellant.
Steven T. Nolan, Steven T. Nolan, P.C., Colorado Springs, Colorado (Joseph R. Winston,
The Winston Law Firm, P.C., Colorado Springs, Colorado, with him on the briefs), for
Plaintiff-Appellee.
_________________________________
Before GORSUCH, MURPHY, and McHUGH, Circuit Judges.
_________________________________
McHUGH, Circuit Judge.
_________________________________
At the close of a five-day trial, a jury found that Defendant-Appellant
American Family Mutual Insurance Company (American Family) breached its
insurance contract and unreasonably denied payment of underinsured motorist (UIM)
benefits to Plaintiff-Appellee Patrick Adamscheck. On appeal, American Family
challenges three district court rulings: the district court’s decision denying American
Family’s motion for partial summary judgment on the ground that workers’
compensation benefits could not be offset against any recovery at trial, the district
court’s pre-trial decision to exclude American Family’s biomechanical engineering
expert, and the district court’s post-verdict calculation of damages to include the
jury’s award of $395,561 in UIM benefits, plus twice that amount for statutory
damages on the unreasonable-denial-of-benefits claim.
Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm in part, but
vacate the verdict and remand for additional proceedings. We conclude the district
court correctly determined that workers’ compensation benefits may not be offset
against UIM coverage under Colorado law. But the district court failed to fulfill its
gatekeeping obligation under Rule 702 of the Federal Rules of Evidence, and
therefore erred in excluding American Family’s expert. Because the record is
inadequate to allow us to perform the district court’s gatekeeping function in the first
instance, and because we cannot conclude this error was harmless, we vacate the
verdict and remand for a new trial. Finally, we do not reach American Family’s
objection to the calculation of statutory damages, which was not first presented to the
district court.
2
I. BACKGROUND
On June 7, 2011, Patrick Adamscheck was driving in Colorado Springs, Colorado,
while working as an El Paso County Deputy Sheriff, when he was rear-ended by Ms.
Darian Agan. Because he was in the course and scope of his employment at the time of
the accident, Mr. Adamscheck received workers’ compensation benefits for his injuries.
With American Family’s permission, Mr. Adamscheck settled with Ms. Agan for
her liability policy limit of $25,000. But Mr. Adamscheck asserted he had severely
injured his lower back and, as a result, had incurred damages that exceeded $25,000. In
particular, Mr. Adamscheck claimed $185,000 in existing economic damages, which
included past medical expenses and lost wages, and also sought recovery of his future
medical care, future wage loss, and permanent disability, along with non-economic
damages. Thus, in addition to Ms. Agan’s policy limits, Mr. Adamscheck made demand
under a personal automobile insurance policy issued by American Family (the Policy) for
the full $500,000 of his underinsured motorist (UIM) coverage.
American Family offered to settle Mr. Adamscheck’s claim for $65,000, but
Mr. Adamscheck rejected the offer and filed suit in Colorado state court. He asserted
claims for unreasonable denial of benefits pursuant to Colorado state statute, breach of
contract, and bad faith. American Family removed the case to the United States District
Court for the District of Colorado.
A. Pretrial Rulings
Approximately three months before the final pretrial conference, American
Family filed a motion for partial summary judgment, arguing it could not be liable
3
for common law or statutory bad faith because it had properly reduced Mr.
Adamscheck’s claim by the amounts he had received in workers’ compensation
benefits. American Family claimed that Colorado law allows insurers to prohibit
double recovery for losses already covered by workers’ compensation, and that Mr.
Adamscheck’s policy included such limiting provisions. American Family also
asserted that under Colorado’s UIM statute, “a Plaintiff would not be legally entitled
to recover duplicate damages from a tortfeasor.” Finally, American Family relied on
public policy to assert a defendant should not be charged twice for the same elements
of loss.
American Family therefore argued its offer of $65,000 to Mr. Adamscheck in
satisfaction of his claim—which included $12,033 for lost wages and $52,967 for
general damages—was not unreasonable. Specifically, it claimed the lost wages
portion of the offer was properly limited to the one-third of Mr. Adamscheck’s lost
wages that had not been paid through workers’ compensation. American Family also
asserted it had reasonably excluded any amount for future losses from the offer based
on video surveillance that proved Mr. Adamscheck’s symptoms had resolved and he
did not need future care. According to American Family, because the offer was
consistent with Colorado law and the Policy, it could not constitute bad faith as a
matter of law.
On June 13, 2014, the district court summarily denied American Family’s motion.
The district court revisited the issue at the final pretrial conference on August 26, 2014,
and again at the trial preparation conference on January 5, 2015, but each time the court
4
confirmed its ruling that workers’ compensation was “not a defense in this case” and was
“not a setoff.”
Although American Family stipulated that Ms. Agan was at fault in causing the
accident, it disputed the cause and extent of Mr. Adamscheck’s injuries. American
Family asserted that Mr. Adamscheck had exaggerated his symptoms and that the low-
speed impact of the accident could not have caused the extensive injuries he claimed. To
the extent Mr. Adamscheck was injured at all, American Family attributed his symptoms
to a previous workplace injury. In support, American Family noted Mr. Adamscheck had
reported largely the same symptoms after his workplace injury that he now attributed—
albeit claiming greater severity—to the traffic accident with Ms. Agan. American Family
also relied on evidence that no injuries were reported at the scene of the accident, Mr.
Adamscheck’s vehicle sustained only $390.60 in damage to the rear bumper, and video
surveillance showed Mr. Adamscheck engaging in activities after the accident that, in
American Family’s view, showed he was misrepresenting the severity of his injuries.
To further support its theory, American Family planned to call a
biomechanical engineering expert, Dr. Jeffrey P. Broker. But at the final pretrial
conference, the district court excluded Dr. Broker’s expert testimony, based on the
following exchange:
THE COURT: . . . So what are the--I don’t do motions in limine. I don’t
know what you’re contemplating here.
MR. WINSTON: Your Honor, I think the motion in limine that we were
filing is--they have a biomechanical engineer who I think his opinion is
that, given the forces from the accident, he couldn’t have been hurt in
5
the type of accident that occurred. And that kind of testimony--there are
lots of District Court opinions, and I think there’s a Court of Appeals--
THE COURT: Well, I wouldn’t allow that.
MR. WINSTON: Okay, well, that’s what our motion in limine was, that
he couldn’t have been hurt in the accident because he--
THE COURT: Well, I wouldn’t allow that kind of testimony. So forget
that.
MS. SUTTON: I won’t ask that question.
THE COURT: Well, you won’t call that witness.
MS. SUTTON: Well, I might give it a shot if you’ll let me lay
foundation for, I think, some opinion testimony and an explanation for
the vehicle dynamics, what happens in a rear-end collision, the nature of
the injury he sustained.
THE COURT: You know, every rear-end collision, something happens
differently.
MS. SUTTON: It does. And I--
THE COURT: Yeah, it does. And you can make a proffer, but I won’t
allow that kind of testimony.
MS. SUTTON: Okay.
THE COURT: You can make a proffer during the trial.
During a subsequent trial preparation conference, the district court reiterated
that American Family could submit a written proffer of Dr. Broker’s testimony at
trial. The court stated it had “already excluded” Dr. Broker’s testimony, but would
“do it officially on the record in the course of the trial so that it’s an appropriate
proffer.” It then instructed American Family’s counsel to submit Dr. Broker’s expert
report as the proffer. American Family followed the district court’s instruction and
6
submitted a written proffer in the form of Dr. Broker’s expert report on the first day
of trial.
B. Post-Trial Damages Calculation
At the close of trial, the jury returned a verdict in favor of Mr. Adamscheck,
awarding $395,561 in UIM benefits and finding that American Family unreasonably
denied payment of Mr. Adamscheck’s claim.1 The district court dismissed the jury
and then in the presence of both parties, applied Colo. Rev. Stat. § 10-3-1116 to
calculate the total judgment amount. The district court stated its understanding that,
for statutory damages under section 10-3-1116, the amount of the jury verdict would
be doubled. Mr. Adamscheck’s counsel responded that the double statutory damages
were “in addition to the principal.” Rather than challenge this position, American
Family’s counsel stated, “That’s my understanding, Your Honor. However, this --.”
Although it appears the district court interrupted, counsel did not finish her statement
or otherwise make an objection to Mr. Adamscheck’s proposed calculation of
statutory damages.
The district court therefore entered a total judgment of $1,186,683, which
included the jury’s award of $395,561 on the breach of contract claim, plus twice that
amount for the statutory violation. After entering a Final Judgment consistent with its
oral ruling, the district court amended the judgment to include $104,439 in
1
Mr. Adamscheck withdrew his common law bad faith claim during trial.
Thus, the jury decided only the breach of contract claim and the statutory claim for
unreasonable delay or denial of benefits.
7
prejudgment interest, and awarded Mr. Adamscheck $122,936 in attorneys’ fees and
$32,970.48 in costs, for a total of $1,447,028.48.2
II. DISCUSSION
A. Workers’ Compensation
American Family challenges the district court’s denial of summary judgment,
claiming that because its pre-suit offer appropriately included an offset for workers’
compensation benefits, the bad faith claim should not have been presented to the
jury. We review the district court’s denial of summary judgment de novo, “apply[ing]
the same legal standard used by the district court . . . and examin[ing] the record to
determine if any genuine issue of material fact was in dispute; if not, we determine if
the substantive law was correctly applied.” Applied Genetics Int'l, Inc. v. First
Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990).
Here, the material facts are not disputed: the parties stipulated that Mr.
Adamscheck was in the course and scope of his employment at the time of his
accident with Ms. Agan and that he received workers’ compensation benefits as a
result. The only issue before the district court on summary judgment was a legal
question: whether Mr. Adamscheck’s UIM benefits should be offset by the amounts
he received in workers’ compensation benefits for the losses resulting from the same
accident.
2
American Family does not dispute the award of attorneys’ fees and costs
beyond its request to “reverse the final amended judgment entered against American
Family . . . , including the award of attorneys’ fees and costs awarded.”
8
American Family argues the answer to that question is apparent from the plain
language of the Policy. Specifically, American Family cites the “Limits of Liability”
provision in the UIM portion of the Policy:
3. No one will be entitled to receive duplicate payments for the
same elements of loss. Any amount we pay under this Part to or
for an insured person will be reduced by any payment made to
that person under any other Part of this policy. In no event shall a
coverage limit be reduced below any amount required by law.
...
5. We will not pay for any element of loss if a person is entitled to
receive payment for the same element of loss under any workers’
compensation law, disability benefits law or any similar law.
American Family is correct that these provisions plainly preclude duplicate
recovery for the same elements of loss covered by the Policy, expressly including
amounts received under the workers’ compensation laws. See Mountain States Mut.
Cas. Co. v. Roinestad, 296 P.3d 1020, 1024 (Colo. 2013) (“When interpreting an
insurance contract, we first give effect to the plain meaning of its terms, and we only
find ambiguity where a term is reasonably susceptible to more than one meaning.”
(citation omitted)). But we will not enforce the plain language of the Policy if it is
contrary to Colorado law or public policy. See Pacheco v. Shelter Mut. Ins. Co., 583
F.3d 735, 740 n.8 (10th Cir. 2009) (“Where there is a conflict between an insurance
policy and a statute, the statute controls.”); Aetna Cas. & Sur. Co. v. McMichael, 906
P.2d 92, 100 (Colo. 1995) (en banc) (“[E]ven if a policy provision is unambiguous,
the provision is void and unenforceable if it violates public policy by attempting to
dilute, condition, or limit statutorily mandated coverage.” (internal quotation marks
9
omitted)); id. (“Insurance policy clauses that are contrary to a provision of a statute
are void as against public policy. Consistently, this court has refused to enforce
provisions in automobile insurance policies that are against public policy.” (citation
omitted)). See also Brown v. Royal Maccabees Life Ins. Co., 137 F.3d 1236, 1242
(10th Cir. 1998) (stating that, under Wyoming law, insurance contracts must not
conflict with pertinent statutes or public policy); Mut. Reinsurance Bureau v. Great
Plains Mut. Ins. Co., 969 F.2d 931, 934–35 (10th Cir. 1992) (holding arbitration
clause in reinsurance agreement unenforceable under Kansas statute).
The provisions of the Policy quoted by American Family are contrary to
Colorado law. In Nationwide Mutual Insurance Co. v. Hillyer, the insured’s policy
required reduction of UIM benefits by “[t]he amount paid and the present value of all
amount payable on account of bodily injury under any workmen’s compensation
law.” 509 P.2d 810, 811 (Colo. App. 1973). Relying on this provision the insurer
argued it could offset the insured’s recovery by the amount received in workers’
compensation benefits. Id. The insured disagreed, claiming that such an offset would
be contrary to public policy. Id. The Colorado Court of Appeals acknowledged that
courts had reached diverging conclusions on this issue, but ultimately adopted the
position of those courts that “prohibit a casualty insurance carrier from reducing its
liability to a victim of an uninsured motorist by the amount of any workmen’s
compensation award.” Id. Because the Colorado Supreme Court has not had occasion
to reach this issue, we consider the pronouncement from the Colorado Court of
10
Appeals persuasive of how the Colorado Supreme Court might rule. See Perlmutter v.
U.S. Gypsum Co., 4 F.3d 864, 869 n.2 (10th Cir. 1993).
But American Family attempts to distinguish Hillyer, claiming its holding
should be limited to situations where the insurer attempts to reduce UIM benefits
below the statutory minimum. The court in Hillyer did not so limit its holding.
Rather, it stated broadly that recovery under a UM (or UIM) policy could not be
reduced by amounts paid by workers’ compensation.3 And since Hillyer, Colorado
courts, including the Colorado Supreme Court, have prohibited offsets “from
UM/UIM coverage amounts received by an insured from ‘separate and distinct’ types
of insurance coverages or agreements, such as Social Security disability insurance
[SSDI] benefits, release-trust agreements, or personal injury protection [PIP]
benefits.” Carlisle v. Farmers Ins. Exch., 946 P.2d 555, 558 (Colo. App. 1997); see
also Barnett v. Am. Family Mut. Ins. Co., 843 P.2d 1302, 1307–09 (Colo. 1993)
(prohibiting offset for SSDI payments); Kral v. Am. Hardware Mut. Ins. Co., 784
P.2d 759 (Colo. 1989) (same for release-trust agreements); Newton v. Nationwide
Mut. Fire Ins. Co., 594 P.2d 1042, 1045–46 (Colo. 1979) (same for PIP). We are
3
The parties have not cited and we have not located more recent Colorado
decisions addressing the enforceability of provisions allowing for the offset of
workers’ compensation benefits against UM/UIM benefits. In Colorado Insurance
Guaranty Ass’n v. Menor, the Colorado Court of Appeals remanded for a factual
determination of the overlap between UIM and workers’ compensation benefits
without reaching the question of whether the offset provision was contrary to public
policy. 166 P.3d 205, 212–13 (Colo. App. 2007). Thus, Hillyer remains instructive on
this issue.
11
persuaded that the Colorado Supreme Court would treat workers’ compensation
benefits the same as these other types of benefits for purposes of offset.
In support of a contrary conclusion, American Family cites Levy v. American
Family Mutual Insurance Co., 293 P.3d 40 (Colo. App. 2011). There, American
Family paid for the insured’s medical expenses and the insured also received a
settlement from the tortfeasor’s insurer. When the insured then approached American
Family a second time, seeking recovery of UIM benefits, id. at 42–43, American
Family successfully argued that the amount of UIM benefits should be reduced by the
amounts American Family had already paid for the insured’s medical expenses.
Importantly, the facts in Levy did not present “the traditional collateral source
scenario where the plaintiff is entitled to double recovery—once from the tortfeasor
and once from her insurer.”4 Id. at 45. Rather, the question in Levy was whether the
insurer itself should pay twice for the same loss. It therefore does not persuade us
that American Family should be entitled to offset Mr. Adamscheck’s workers’
compensation benefits here.
We also reject American Family’s argument that Colorado’s collateral source
rule, Colo. Rev. Stat. § 13-21-111.6, requires an offset for Mr. Adamscheck’s
workers’ compensation benefits. Section 13-21-111.6 provides:
4
Calderon v. American Family Mutual Insurance Co., also cited by American
Family, similarly involves a situation where the insured sought to recover twice from
American Family. Thus, as explained below, Calderon and Levy are inapplicable here
for similar reasons. No. 13CA1185, 2014 WL 2149652 (Colo. App. May 22, 2014),
cert. granted, No. 14SC494, 2015 WL 3956029 (June 29, 2015).
12
In any action by any person or his legal representative to recover damages
for a tort resulting in death or injury to person or property, the court, after
the finder of fact has returned its verdict stating the amount of damages to
be awarded, shall reduce the amount of the verdict by the amount by which
such person, his estate, or his personal representative has been or will be
wholly or partially indemnified or compensated for his loss by any other
person, corporation, insurance company, or fund in relation to the injury,
damage, or death sustained; except that the verdict shall not be reduced by
the amount by which such person, his estate, or his personal representative
has been or will be wholly or partially indemnified or compensated by a
benefit paid as a result of a contract entered into and paid for by or on
behalf of such person. The court shall enter judgment on such reduced
amount.
Although section 13-21-111.6 includes a directive that trial courts reduce a
verdict by the amount received from collateral sources, it also contains an exception
for benefits “paid as a result of a contract entered into and paid for by or on behalf of
such person.” Id. In turn, the Colorado Court of Appeals has held that workers’
compensation benefits are received as a result of an employee’s contract with its
employer and therefore fall within this express statutory exception. See Combined
Commc’ns Corp., Inc. v. Pub. Serv. Co., 865 P.2d 893, 902 (Colo. App. 1993).
Therefore, section 13-21-111.6 is not implicated here.
Finally, American Family cites Colo. Rev. Stat. § 10-4-609 to argue for an
offset. Section 10-4-609(1)(c) explains that UIM coverage “shall be in addition to
any legal liability coverage and shall cover the difference, if any, between the amount
of the limits of any legal liability coverage and the amount of damages sustained.”
According to American Family, workers’ compensation is “legal liability coverage”
that must be offset against the amount of the damages sustained to determine the
amount of UIM coverage due. Because neither the statute nor the Colorado courts
13
define “legal liability coverage,” American Family relies on dictionary definitions
equating “legal liability” with “legal obligation or accountability.” American Family
reasons that workers’ compensation carriers are legally obligated to pay benefits and
thus, such benefits must fall within the scope of “legal liability coverage.” We reject
this interpretation.
Colorado courts interpreting section 10-4-609 have consistently framed their
analysis and conclusions in terms of the tortfeasor’s or the liable party’s legal
liability coverage. See Tubbs v. Farmers Ins. Exch., 353 P.3d 924, 926 (Colo. App.
2015); Jordan v. Safeco Ins. Co. of Am., Inc., 348 P.3d 443, 448–49 (Colo. App.
2013). In Jordan, the Colorado Court of Appeals reviewed the legislative history of
section 10-4-609, noting that prior to 2008, that section provided:
The maximum liability of the insurer under the uninsured motorist coverage
provided shall be the lesser of:
(a) The difference between the limit of uninsured motorist coverage and the
amount paid to the insured by or for any person or organization who may be
held legally liable for the bodily injury; or
(b) The amount of damages sustained, but not recovered.
Jordan, 348 P.3d at 448 (quoting Ch. 92, sec. 1, § 10-4-609(5), 1983 Colo. Sess.
Laws 455). Colorado courts interpreted this prior provision to provide “that UIM
benefits must be provided for damages in excess of any amount paid by a tortfeasor
in settlement or of any judgment against the tortfeasor.” Id.5
5
The Colorado decisions identified in Jordan are Freeman v. State Farm
Mutual Automobile Insurance Co., 946 P.2d 584 (Colo. App. 1997); State Farm
14
In 2008, the Colorado General Assembly repealed section 10-4-609(5) and
replaced it. Of importance for our purposes, the revised version of the statute
includes section 10-4-609(1)(c), which American Family relies on for its argument
that workers’ compensation benefits are “legal liability coverage.” But the Colorado
Court of Appeals foreclosed that interpretation in Jordan. Relying on the proposition
that the General Assembly had knowledge of the prior statute and the judicial
decisions interpreting it, the court held: “The amended statutory language [of section
10-4-609(1)(c)] is plain and unambiguous. The insurer’s obligation to pay benefits is
now triggered by exhaustion of the tortfeasor’s ‘limits of . . . legal liability
coverage,’ not necessarily any payment from or judgment against the tortfeasor.” Id.
at 449 (emphasis added) (citation omitted). See also Baker v. Allied Prop. & Cas. Ins.
Co., 939 F. Supp. 2d 1091, 1109–10 (D. Colo. 2013) (applying Colorado law to
interpret Section 10-4-609(1)(c) and holding insurer is liable for damages that exceed
the tortfeasor’s liability policy limit, up to the UIM coverage limit of the policy).
Thus, the General Assembly changed Colorado’s UIM coverage scheme from “a
‘reduction’ approach—where UIM coverage was reduced by any payment received or
judgment against the tortfeasor—to an ‘excess’ approach—where UIM coverage is
payable for damages exceeding the tortfeasor’s liability policy limit, subject only to
the UIM coverage limit in the insured’s policy.” Jordan, 348 P.3d at 449 (emphasis
added).
Mutual Automobile Insurance Co. v. Tye, 931 P.2d 540 (Colo. App. 1996); and State
Farm Mutual Automobile Insurance Co. v. Bencomo, 873 P.2d 47 (Colo. App. 1994).
15
Subsequently, the Colorado Court of Appeals interpreted section
10-4-609(1)(c) somewhat more broadly, stating that its plain and ordinary meaning
“requires that UIM policies cover the difference between the damages the insured
party suffered and the limit of any liable party’s legal liability coverage, regardless
of whether the insured party’s recovery from the liable party exhausted that limit.”
Tubbs, 353 P.3d at 926 (emphasis added). Under this interpretation, if a party is
liable for the damages the insured party suffered, that liable party’s legal liability
coverage limit may be included in the calculation of the amount of UIM benefits due.
Here, there can be no argument that Mr. Adamscheck’s workers’ compensation
benefits are part of Ms. Agan’s “legal liability coverage.” And the parties do not
dispute that Ms. Agan is the party liable for the damages suffered by Mr.
Adamscheck as a result of the accident. We accordingly reject the argument that
Mr. Adamscheck’s workers’ compensation benefits can be offset against UIM
benefits under section 10-4-609(1)(c).
In summary, we hold that under Colorado law, American Family was not
entitled to an offset for the amount Mr. Adamscheck received from workers’
compensation. As a result, we affirm the district court’s decision denying summary
judgment on Mr. Adamscheck’s bad faith claim.
B. Exclusion of Expert Testimony
Next, American Family argues the district court erred when it excluded Dr.
Jeffrey Broker as an expert witness. Because the district court summarily excluded
Dr. Broker’s testimony without providing the basis for its decision, American Family
16
maintains the district court failed to perform its gatekeeping function under Rule 702
of the Federal Rules of Evidence and under Daubert v. Merrell Dow Pharm., Inc.,
509 U.S. 579 (1993). We agree.
“It is by now well established that [Fed. R. Evid.] 702 imposes on a district
court a gatekeeper obligation to ‘ensure that any and all scientific testimony or
evidence admitted is not only relevant, but reliable.’” Dodge v. Cotter Corp., 328
F.3d 1212, 1221 (10th Cir. 2003) (quoting Daubert, 509 U.S. at 589). Although the
district court has discretion in deciding how to conduct a Daubert analysis, “there is
no discretion regarding the actual performance of the gatekeeping function.” Goebel
v. Denver & Rio Grande W. R.R. Co., 215 F.3d 1083, 1087 (10th Cir. 2000).
Accordingly, we review de novo the issue of whether the district court “actually
performed its gatekeeper role in the first instance.” Dodge, 328 F.3d at 1223. If the
district court fulfilled its gatekeeping responsibility, “[w]e then review the trial
court’s actual application of the standard in deciding whether to admit or exclude an
expert’s testimony for abuse of discretion.” Id.
1. Gatekeeping Function
We turn first to whether the district court actually performed its gatekeeping
role with respect to Dr. Broker’s testimony. “For purposes of appellate review, a
natural requirement of [the gatekeeping] function is the creation of ‘a sufficiently
developed record in order to allow a determination of whether the district court
properly applied the relevant law.’” Goebel, 215 F.3d at 1088 (quoting United States
v. Nichols, 169 F.3d 1255, 1262 (10th Cir. 1999)). “Absent specific findings or
17
discussion on the record, it is impossible to determine on appeal whether the district
court ‘“carefully and meticulously” reviewed the proffered scientific evidence’ or
instead made an ‘off-the-cuff’ decision to admit or deny the expert testimony.”
Burlington N. & Santa Fe Ry. Co. v. Grant, 505 F.3d 1013, 1031 (10th Cir. 2007)
(alteration omitted) (quoting Goebel, 215 F.3d at 1088).
To put this rule in context, we pause to discuss two decisions from this court.
In the first, Goebel, the district court denied a motion in limine to exclude an expert’s
testimony without “a single explicit statement on the record to indicate that the
district court ever conducted any form of Daubert analysis whatsoever.” 215 F.3d at
1088. Although the district court stated it had “fully considered the matter” and found
“sufficient foundation” for the testimony, beyond these two statements, the district
court did not provide findings explaining the basis for its decision. Id. We held, “In
the absence of such findings, we must conclude that the court abused its discretion in
admitting such testimony.” Id.
In our second decision, Dodge, the district court provided slightly more detail,
but we again found the findings insufficient to uphold its decision. 328 F.3d at 1223–
28. There, the district court had reviewed limited briefing, seeking to exclude the
testimony of several expert witnesses, and had held an abbreviated Daubert hearing
during which the parties submitted proffers of the witnesses’ testimony. Id. at 1223–
24. On appeal of the district court’s decision to admit the challenged testimony, we
concluded the district court had failed to perform its gatekeeping function. Id. at
1225. Although the district court briefly explained its reasons for admitting the
18
experts’ testimony, its oral findings “lack[ed] the degree of specificity that would
allow” a determination of whether the district applied the proper legal standard. Id. at
1226. Consequently, we reversed and remanded for a new trial. Id. at 1229.
Here, the district court excluded the testimony of American Family’s
biomechanical engineering expert, Dr. Jeffrey Broker, without providing any
meaningful analysis. In response to the district court’s announcement at the final
pretrial conference that it would not accept motions in limine, Mr. Adamscheck’s
counsel explained he had planned to file a motion to exclude Dr. Broker’s testimony.
He then described Dr. Broker as “a biomechanical engineer who I think his opinion is
that, given the forces from the accident, [Mr. Adamscheck] couldn’t have been hurt
in the type of accident that occurred.” Based on this statement alone, the district court
ruled it would exclude the testimony. Despite assurances from American Family’s
counsel that she could lay the proper foundation, the district court reiterated it would
not allow Dr. Broker to testify and instructed counsel to make a proffer of the
expert’s testimony at trial.
In excluding Dr. Broker’s testimony, the district court did not ask for or
review his qualifications or proposed opinions.6 Rather, without the benefit of a
6
Mr. Adamscheck contends the district court had all the information it needed
in American Family’s proffer to reject Dr. Broker’s testimony. But nothing in the
record suggests the district court ever reviewed or evaluated Dr. Broker’s expert
report after Mr. Adamscheck offered it as a proffer. Rather, the district court
indicated the proffer would be made part of the record and then stated, “I don’t need
it.” Moreover, the district court excluded the expert testimony months before it
19
motion to exclude Dr. Broker’s testimony or a Daubert hearing, the district court
made an off-the cuff decision based solely on an equivocal, one-sentence description
of Dr. Broker’s testimony provided by the party opposing its admission. And the
district court failed to make any findings of fact or to otherwise explain why it
excluded Dr. Broker’s testimony, stating only that all rear-end accidents are different.
Under these circumstances, we agree with American Family that the district court
failed to perform its gatekeeping function and, therefore, exceeded its discretion in
excluding Dr. Broker’s testimony. See United States v. Roach, 582 F.3d 1192, 1207
(10th Cir. 2009) (concluding that in the absence of “any factual findings indicating
the basis of the court’s determination” to admit expert testimony, “[a] conclusory
statement that the court had made such a determination will not suffice”).
2. Relevance
At oral argument, Mr. Adamscheck asserted that, even if the district court
failed to fulfill its gatekeeping obligations under Rule 702, we should affirm the
exclusion of Dr. Broker’s testimony on the alternative ground that it was not relevant.
Although we “may affirm on any ground apparent in the record, affirming on legal
grounds not considered by the trial court is disfavored.” Rimbert v. Eli Lilly & Co.,
647 F.3d 1247, 1256 (10th Cir. 2011). Here, Mr. Adamscheck did not challenge the
testimony in the district court on the basis of relevance and there is no indication
relevance was the reason the district court excluded it.
received the proffer, based solely on Mr. Adamscheck’s one-sentence
characterization of Dr. Broker’s opinions.
20
However, as part of its Rule 702 analysis, American Family discussed the
relevance of Dr. Broker’s testimony in its opening brief to this court.7 Mr.
Adamscheck did not respond to this argument or otherwise address the relevance of
Dr. Broker’s testimony in his appellate brief. Instead, he raised relevance as an
alternative basis to affirm the district court’s decision for the first time at oral
argument. The issue is therefore “considered waived.” Fed. Ins. Co. v. Tri-State Ins.
Co., 157 F.3d 800, 805 (10th Cir. 1998). See also Burlington, 505 F.3d at 1031
(declining to review an issue on appeal where the appellant “failed to provide
arguments or authorities in support of th[e] issue” because “[w]e will not review an
issue in the absence of reasoned arguments advanced by the appellant as to the
grounds for its appeal”); Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007)
(“[W]e routinely have declined to consider arguments that are not raised, or are
inadequately presented, in an appellant’s opening brief.”).
7
In its brief, American Family correctly stated that Rule 702 requires an
analysis of relevance. See Daubert, 509 U.S. at 589 (“[U]nder the Rules the trial
judge must ensure that any and all scientific testimony or evidence admitted is not
only relevant, but reliable.”); id. at 591 (recognizing Rule 702’s requirement that
expert evidence “assist the trier of fact” and concluding that “[t]his condition goes
primarily to relevance”). In fulfilling its gatekeeping function, a district court must
decide first, whether the expert testimony is reliable, and second, whether it is
relevant to the task at hand. Bitler v. A.O. Smith Corp., 400 F.3d 1227, 1233-34 (10th
Cir. 2004). Thus, to establish that it properly performed its Daubert assessment,
“[t]he district court must . . . make specific factual findings on the record which are
sufficient for an appellate court to review the trial court’s conclusion concerning
whether the testimony was scientifically reliable and factually relevant.” Id. at 1232
(emphasis added).
21
3. Harmless Error
Next, Mr. Adamscheck argues we should affirm despite the district court’s
failure to fulfill its gatekeeping function, because the error was harmless. Relying on
our decisions in Storagecraft Tech. Corp. v. Kirby, 744 F.3d 1183, 1190–91 (10th
Cir. 2014), and Kinser v. Gehl Co., 184 F.3d 1259 (10th Cir. 1999), abrogated on
other grounds by Weisgram v. Marley Co., 528 U.S. 440 (2000), Mr. Adamscheck
argues the record contains sufficient information supporting the district court’s
decision to exclude Mr. Broker’s testimony and thus renders the absence of findings
of fact harmless.8 Under the present facts, we are not persuaded. See, e.g.,
Burlington, 505 F.3d at 1031 (reversing and remanding where district court failed to
make adequate record explaining the reasons it excluded expert’s testimony despite
appellee’s request for appellate court’s independent evaluation of gatekeeping factors
based on the record); Goebel, 215 F.3d at 1089 (declining to express an opinion on
the admissibility of the expert’s testimony and instead reversing and remanding for a
8
Mr. Adamscheck also cites Schultz v. Wells, 13 P.3d 846 (Colo. App. 2000),
to argue Dr. Broker’s testimony was inadmissible because biomechanical testimony
should be excluded when used to explain the cause of a person’s injuries. But Schultz
does not stand for the broad conclusion that biomechanical evidence can never be
used to determine whether a person was injured in a particular accident. The trial
court in Schultz excluded evidence of the injury potential of low-speed accidents but
did so because the tests relied upon by the expert were used to design cars, not to
“assess[] a threshold of applied force for injury in rear-end car accident.” Id. at 852.
Thus, the holding in Schultz was based on the defects in the scientific methodology
employed, and therefore does not support the conclusion that biomechanical
testimony is inadmissible whenever the expert plans to testify about the probability of
injury in low-impact collisions. Rather, the admission of such testimony is dependent
upon the trial court’s careful assessment of whether it is reliable and will be helpful
to the jury.
22
new trial). Here, the district court excluded Dr. Broker’s testimony without providing
any explanation, making factual findings, or holding a Daubert hearing at which the
parties could present legal argument. Under these circumstances, the record is simply
inadequate to allow us to assume the gatekeeping function of the district court by
conducting an independent review of Dr. Broker’s qualifications or the reliability of
his opinions.
Storagecraft and Kinser do not support a contrary conclusion. In both cases,
the district court admitted, rather than excluded, the expert’s testimony; and in both
cases, the record contained independent, admissible evidence establishing the same
proposition to which the expert had testified. Storagecraft, 744 F.3d at 1191; Kinser,
184 F.3d at 1271–72. By contrast, Dr. Broker’s excluded testimony was materially
different than any other evidence introduced at trial.
American Family planned to offer Dr. Broker to support its theory that Mr.
Adamscheck’s alleged injuries could not have been caused, at least to the extent
claimed, by the relatively minor rear-end collision with Ms. Agan. It is true that
American Family introduced non-expert evidence to support its theory, including
evidence showing the low-impact nature of the accident, the lack of significant
property damage, the lack of injuries reported at the scene, and video surveillance
which, according to American Family, showed Mr. Adamscheck engaging in
activities he claimed he was unable to do. But Dr. Broker would have provided
testimony based on his expertise and training as a biomechanical engineer, explaining
23
why those facts supported his opinion that the injuries claimed by Mr. Adamscheck
could not have been caused by the accident.
If allowed to testify, Dr. Broker would have provided analyses of
musculoskeletal complaints, vehicle dynamics, occupant biomechanics, general
injury mechanisms involving the spine, lumbar spine injuries in rear-end motor
vehicle accidents, and intervertebral disc injuries. Analyzing these specific topics and
the factual evidence in this case, Dr. Broker would have testified “[t]o a reasonable
degree of biomechanical engineering probability, Mr. Adamscheck’s low-speed
motor vehicle accident was not consistent with generating the type of significant low
back problems from which he suffered.” And Dr. Broker would have attributed “Mr.
Adamscheck’s lumbar spine condition . . . , logically and scientifically from a
biomechanical perspective,” to “his pre-accident condition and exposures (notably
the injury-producing lifting event in early 2010), and independent of the subject June
7, 2011 motor vehicle accident.” Although the other evidence introduced at trial may
have supported Dr. Broker’s opinions, it was not a substitute for or cumulative of Dr.
Broker’s expert opinion based on that evidence.
Indeed, Dr. Broker’s testimony was critical to American Family’s causation
theory, which it intended to offer as an alternative to Mr. Adamscheck’s and his
medical experts’ opinion that his debilitating injuries were caused by the accident.9
9
Mr. Adamscheck also maintains American Family admitted causation and
therefore cannot dispute the issue through Dr. Broker. In support, he relies on
American Family’s admission to a request which asked to “admit Darian Agan [sic]
24
By excluding Dr. Broker’s testimony, the district court left the jury with expert
evidence that exclusively supported Mr. Adamscheck’s theory of the case. Where Dr.
Broker’s opinions would have provided an alternative explanation of causation to that
offered by Mr. Adamscheck’s medical experts, we cannot conclude the exclusion of
Dr. Broker’s testimony was harmless. See Graham v. Wyeth Labs., 906 F.2d 1399,
1410–11 (10th Cir. 1990) (exclusion of causation expert “effectively vitiated a
relevant theory which Wyeth was entitled to establish” and as a result, the error
“inevitably had to prejudice Wyeth’s defense, and cannot be considered harmless”).
See also Werth v. Makita Elec. Works, Ltd., 950 F.2d 643, 654 (10th Cir. 1991)
(exclusion of “critical” expert testimony on causation “created an undue hardship,
affecting plaintiffs’ substantial rights”).10
In sum, the exclusion of Dr. Broker’s testimony left American Family without
evidence to counter the causation testimony from Mr. Adamscheck’s medical experts.
Accordingly, we cannot conclude the district court’s error in failing to conduct a
proper review of Dr. Broker’s testimony was harmless. And as previously discussed,
negligent driving caused injuries to Plaintiff.” Although American Family
“[a]dmitted” the accident caused “injuries” to Mr. Adamscheck, the request did not
ask American Family to admit, and it therefore did not admit, that the accident
caused all of the injuries Mr. Adamscheck now claims.
10
For the first time at oral argument, Mr. Adamscheck argued Dr. Broker’s
alternative causation theory was deficient because it did not address his theory that
the accident aggravated, rather than caused, his injuries. This argument is waived.
See Fed. Ins. Co., 157 F.3d at 805.
25
we cannot conduct an independent Daubert review on appeal, due to the inadequacy
of the record. We turn now to the question of how to remedy this prejudicial error.
4. Remedy
Mr. Adamscheck asks us to remand for the limited purpose of allowing the
district court to conduct a retrospective Daubert hearing to determine whether Dr.
Broker’s testimony was properly excluded. As we explained in Dodge, “we think no
district court would be well positioned to make valid findings given the
overwhelming temptation to engage in post hoc rationalization of [excluding] the
expert[].” 328 F.3d at 1229 (citing Mukhtar v. Cal. State Univ., 319 F.3d 1073, 1074
(9th Cir. 2003), amending 299 F.3d 1053, 1066 (9th Cir. 2002)).11 We therefore reject
Mr. Adamscheck’s suggestion that we place the district court in that difficult
position.
We hold the district court abused its discretion by excluding Dr. Broker’s
testimony without providing a record of its gatekeeping inquiry under Rule 702. The
record on appeal is inadequate for us to conduct a Daubert review in the first instance
and we consequently, express no opinion on Dr. Broker’s qualifications or the
relevance and reliability of his expert testimony. But we can determine that Dr.
11
In Estate of Barabin v. AstenJohnson, Inc., 740 F.3d 457, 466 (9th Cir.
2014) (en banc), the Ninth Circuit limited the court’s holding in Mukhtar, to require a
new trial only where the failure to conduct a Daubert is not harmless. And the Ninth
Circuit has since clarified that the holding of Barabin mandates a new trial if the
district court fails to conduct a Daubert review before admitting or excluding expert
testimony and that failure cannot be determined to be harmless. United States v.
Christian, 749 F.3d 806, 813 (9th Cir. 2014).
26
Broker’s proffered testimony would not have been cumulative of other evidence
introduced at trial and was offered as American Family’s alternative causation
theory. As a result, we cannot conclude the error in excluding it without proper
consideration was harmless.12 Accordingly, we vacate the verdict, and remand for a
new trial, during which the parties may offer expert testimony. Before admitting or
excluding any challenged expert testimony, the district court should conduct an
appropriate inquiry on the record as to its relevance and reliability under Rule 702 of
the Federal Rules of Evidence and the Supreme Court’s decision in Daubert.
III. CONCLUSION
For the above reasons, we AFFIRM the district court’s decision denying
summary judgment in favor of American Family on Mr. Adamscheck’s statutory
claim for unreasonable delay or denial of insurance benefits, because the district
court is correct that under Colorado law, workers’ compensation benefits may not be
offset against UIM benefits. But because the district court abused its discretion in
excluding Dr. Broker’s testimony without performing a proper review under Rule
12
Because we remand for new trial, we do not reach American Family’s
challenge to the calculation of statutory damages. Although in some instances we
might reach this issue for the purposes of remand, we decline to do so here, because
American Family did not bring the issue to the attention of the district court. When
the district court raised the issue with the parties after the verdict, Mr. Adamscheck’s
counsel explained that the statutory damages in the amount of two-times the
insurance benefit due, was “in addition to the principal,” suggesting that the total
award would be three times the benefit. Contrary to its position on appeal, American
Family’s counsel replied, “That’s my understanding, Your Honor.”
27
702, and because that error was not harmless, we vacate the verdict and REMAND
for a new trial.
28