United States District Court, D. Arizona
MURRAY SNOW CHIEF UNITED STATES DISTRICT JUDGE.
before the Court is the Motion to Preclude Expert Testimony
(Doc. 52) of Defendant Atain Specialty Insurance Company. For
the following reasons the motion is denied.
case is a dispute over an insurance claim. Plaintiff Adams
Craig Technology (“ACT”), a Nevada LLC,
contracted for the construction of a residence in Paradise
Valley, Arizona in 2014. In August 2016, the homeowners
noticed a leak in the garage of the home, which ultimately
led to the discovery of problems with the construction.
Defendant Specialty Insurance Company Atain determined that
it would cover $36, 416 in costs associated with work
undertaken by Plaintiff Adams Craig Acquisitions, LLC
(“ACA”) to resolve the issues in the home. But
Atain denied coverage for $42, 900 in property damage. Atain
similarly declined to cover ACA's management and overhead
costs associated with the repairs. A few months after the
initial coverage decision, Atain readjusted the amount they
were willing to pay downward to $27, 362.97. ACA was
dissatisfied with that outcome and filed suit in the Superior
Court for Maricopa County. Atain timely removed the action to
this court in March 2018.
Rule of Evidence 702 governs the admissibility of expert
testimony, and permits the presentation of “scientific,
technical, or other specialized knowledge” by a
qualified expert if it will “assist the trier of fact
to understand the evidence or to determine a fact in issue,
” it is “based on sufficient facts or data,
” it is “the product of reliable principles and
methods, ” and “the expert has reliably applied
the principles and methods to the facts of the case.”
Expert testimony must be relevant and reliable to be
admitted. Daubert v. Merrell Dow Pharms., Inc., 509
U.S. 579, 589 (1993). “Rule 702 contemplates a broad
conception of expert qualifications.”
Hangarter v. Provident Life and Acc. Ins. Co., 373
F.3d 998, 1015 (9th Cir. 2004) (internal quotation marks
omitted) (emphasis in original).
test under Daubert is not the correctness of the
expert's conclusions but the soundness of his
methodology.” Primiano v. Cook, 598 F.3d 558,
564 (9th Cir. 2010), as amended (Apr. 27, 2010).
Offering “only the expert['s] qualifications, [her]
conclusions[, ] and [her] assurance of reliability” is
insufficient. Daubert v. Merrell Dow Pharmaceuticals,
Inc., 43 F.3d 1311, 1319 (9th Cir. 1995). Criteria for
reliability of methodology include “testability,
publication in peer reviewed literature, and general
acceptance, but the inquiry is a flexible one.”
Primiano, 598 F.3d at 564; see also
Daubert, 509 U.S. at 592-94. Other criteria may include
how often the methodology produces erroneous results and
whether the testimony is based on “legitimate,
preexisting research unrelated to the litigation.”
In re Apollo Grp. Inc. Sec. Litig., 527 F.Supp.2d
957, 961 (D. Ariz. 2007) (internal citation omitted).
However, these factors are neither exhaustive nor applicable
to every case. Kumho Tire Co. v. Carmichael, 526
U.S. 137, 141 (1999); United States v. Hankey, 203
F.3d 1160, 1168 (9th Cir. 2000). Trial courts have broad
discretion in performing their gatekeeping function under
Daubert. United States v. Alatorre, 222
F.3d 1098, 1101 (9th Cir. 2000) (citing Hankey, 203
F.3d at 1168).
ACT's expert is sufficiently qualified.
first asserts that ACT's expert, Kirk Hays, is not
qualified to offer testimony. Rule 702 contemplates expertise
resulting from multiple areas: “knowledge, skill,
experience, training, or education.” Fed.R.Evid. 702.
“In certain fields, experience is the predominant, if
not sole, basis for a great deal of reliable expert
testimony.” Hangarter, 373 F.3d at 1015
(quoting Fed.R.Evid. 702 advisory committee's note)
(quotation marks omitted).
an attorney with experience in legal fields related to
“construction-related insurance claims.” (Doc. 58
at 3.) He has represented clients in proceedings regarding
insurance coverage for construction-related claims; the
adequacy of insurance coverage and coverage decisions by
insurance carriers; and subrogation cases that included
insurance investigations. (Doc. 58-1 at 2-4.) Hays also
states that he has participated in site inspections,
construction investigations, and insurance investigations,
during which he has apparently worked closely with claims
adjusters regarding coverage decisions. (Id. at 3.)
Although he has never actually worked for an insurance
company, as had the expert in Hangarter, Hays'
experience with the insurance industry in the context of
construction is sufficient to meet “the minimal
foundation of knowledge, skill, and experience required
in order to give ‘expert' testimony on the
practices and norms of insurance companies in the context of
a bad faith claim.” Hangarter, 373 F.3d at
1016 (quotation marks omitted) (emphasis in original)
(quoting Thomas v. Newton Int'l Enters., 42 F.3d
1266, 1269 (9th Cir. 1994)).
Hays' opinions in the report do not exceed the identified
scope for his opinions.
next argues that Hays' opinions exceed the scope
identified by ACT in its expert witness disclosure. Under the
Federal Rules of Civil Procedure, parties “must
disclose to the other parties the identity of any witness it
may use at trial to present [expert] evidence.”
Fed.R.Civ.P. 26(a)(2)(A). Additionally, parties must
accompany their expert disclosures with written reports from
the expert witness. Id. (B). As relevant here, such
a report must contain “(i) a complete statement of all
opinions the witness will express and the basis and reasons
for them; (ii) the facts or data considered by the witness in
forming them; . . . [and] (iv) the witness's
qualifications.” Id. (B)(i)-(iv). Evidence
beyond the scope of the opinions identified in the disclosure
and expert report is subject to exclusion under Federal Rule
of Civil Procedure 37(c)(1) (“If a party fails to