Yesterday afternoon, Jean Niven was presenting an in-house Merlin Law Group continuing legal education seminar about expert witnesses and the exacting standards for their allowance to testify in federal court. During the presentation, I thought about how a lost insurance coverage case1 could have ended differently if the policyholder’s expert witnesses had been allowed to testify about the damages. Jean is our firm’s expert witness authority. She works with our clients’ expert witnesses to make sure they are able to testify.

The appellate brief filed by the policyholder’s counsel set out the following facts:

Berries owns and operates a restaurant….in Miami, Florida…The restaurant was insured…under an “all risk” commercial insurance policy…The Policy covered “direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss”… “Covered Causes of Loss” means “direct physical loss unless the loss is” excluded or limited…The term “direct physical loss” is not defined in the Policy.

On June 7, 2018, the parties filed a Joint Pretrial Stipulation…which, among other things, stipulated that (1) “[t]here was roadwork on S.W. 27th Avenue which is adjacent to Berries’ restaurant” and that (2) “[d]ust and debris generated by roadway construction migrated onto Berries’ premises”. It is undisputed that Berries was forced to continually clean its restaurant during the roadwork… In December 2014, Berries reported the claim to Sparta…Berries hired Epic Group Public Adjusters (“Epic”) to assist them with the claim…Epic prepared a preliminary damage estimate of $16,275.58, which included cleaning and painting portions of the restaurant, cleaning the restaurant’s awning, and striping the parking lot…Epic also submitted a Sworn Statement in Proof of Loss to Sparta for $13,775.58 (the amount of the estimate minus the $2,500.00 deductible), $292,550.84 for lost business income, and $4,000.00 for claims data expenses…Sparta denied the claim in January 2017. Id. Berries thereafter filed suit. [D.E. 1].

During the course of litigation, Berries retained an awning expert and audio/lighting expert to assess the damage at the restaurant. Upon rendering their expert opinions, Berries learned that the damage to its awning system was more severe than previously thought and that there was damage to its audio/lighting system that was attributable to the roadwork… Berries supplemented its damage claim to include $318,688.57 in property damage, $187,000.00 for business income losses (less than previously demanded), and $4,000.00 for claims data expenses… The primary reason for the increase in Berries’ damage model was the difference between repair (or cleaning) versus replacement of Berries’ sophisticated awning system, which consists of fixed canopies, roll-up curtains, a retractable roof, and related hardware….

[T]he parties filed cross-motions for summary judgment and to exclude the testimony of the other’s experts… [T]he district court granted Sparta’s motion for summary judgment and excluded the testimony of Berries’ experts, Alex Posada (audio/lighting), Chris Thompson (awning), and Al Brizuela (engineering/causation). The district court concluded that, although they were qualified to testify as experts, (1) Alex Posada’s testimony should be excluded because he did not conduct quality control (QC) diagnostic testing, (2) Chris Thompson’s testimony should be excluded because his visual testing and personal experience were not enough to raise his testimony beyond ‘unexplained assurances and unsupported speculation’, and (3) Al Brizuela’s testimony should be excluded because he did not conduct chemical testing and was ‘unable to attribute damage to the construction dust with any degree of certainty.’

Given the exclusion of these experts, the district court found that summary judgment in Sparta’s favor was appropriate because ‘[Berries] cannot show that the construction dust and debris from 2014 caused the alleged ‘direct physical loss’ to their awnings, retractable roof, HVAC system, railings, and audio and lighting system’….The district court implicitly acknowledged that Berries could still proceed with its initial claim for cleaning notwithstanding the striking of Messrs. Posada, Thompson, and Brizuela….The district court also entered summary judgment on Berries’ business income loss claim because it felt that (1) Berries ‘has not established a direct physical loss or damage’ to the restaurant and (2) Berries ‘cannot show that there was any suspension of operations by ‘physical damage’’ because the ‘restaurant remained open every day.’

Without evidence, how can a policyholder win a case? Getting your expert witness thrown out before a trial even starts is like a bomb exploding on your coverage case. As noted in, Great Expert Witnesses Are Important to Property Insurance Cases:

Expert Witnesses are important. In order to obtain a favorable verdict, policyholder lawyers must be able to perform exhaustive pre-trial preparation while also being able to effectively present evidence at trial, including expert-opinion evidence.

Effective presentation of expert witness testimony truly begins at the moment an attorney vets the expert’s credentials. Therefore, it is important to review all the materials in the expert’s file and discuss all matters concerning their opinions and the basis of the opinion before deposition to solidify a strong foundation for trial.

The case ruling is an unpublished opinion, but I expect it to be cited by numerous insurance company coverage attorneys in the future as “persuasive” authority even though it has no binding value on other cases since it is “unpublished.” Bad case facts can make for bad case law. I will discuss legal coverage reason tomorrow afternoon in my Chip @ 2 Livestream and with a special Friday afternoon blog.

Still, the point of this blog post is that experts and the quality of their work, reports, and testimony matter a lot. Courts throughout the country have stiffened the requirements of expert opinion testimony. This trend has made our firm spend a lot more time to make experts work harder at their expertise so that they can present evidence to judges and juries. It has also led to an increase in the expense and uncertainly of litigation.

Jean Niven is another secret weapon in our firm. In this day of legal specialization, it is obvious that having a specialist lawyer in this area of expert witness law helps us win more cases.

Thought For The Day

Nothing we do is more important than hiring and developing people. At the end of the day, you bet on people, not on strategies.
—Lawrence Bossidy
1 Mama Jo’s, Inc. v. Sparta Ins. Co., No. 18-12887 (11th Cir. Aug. 18, 2020).