WILLIAM H. STEELE, District Judge.
This matter comes before the Court on Plaintiffs' Motion to Strike Opinions of Defendant's Experts Joseph Cowan and Michael T. Ryan (doc. 51). The Motion has been briefed and is now ripe for disposition.
Plaintiffs, Hibbett Patient Care, LLC and Hibbett Patient Care II, LLC (collectively, "Hibbett"), brought this action against their general liability insurer, Pharmacists Mutual Insurance Company ("PMIC"), asserting claims of breach of insurance contract, bad faith failure to investigate, and bad faith denial of claim. All such claims arise from PMIC's denial of coverage, including defense and indemnification, to Hibbett with respect to an underlying lawsuit styled Hibbett Sporting Goods, Inc. et al. v. Hibbett Patient Care, LLC, et al., filed in the U.S. District Court for the Northern District of Alabama (the "Hibbett Sporting Goods case").
Hibbett maintains that the centerpiece of its action against PMIC is "whether PMIC owed Plaintiffs a defense for the claims asserted" in the Hibbett Sporting Goods case. (Doc. 51, at 1-2.) To address that issue, PMIC has designated two attorneys, Joseph Cowan and Michael Ryan, as expert witnesses. Cowan's report reflects that he is a partner at the Hand Arendall firm in Birmingham, Alabama, and that he intends to offer the following expert opinions, among others: (i) PMIC "acted reasonably and properly investigated the claim" prior to denying it; (ii) PMIC reasonably relied on Ryan's analysis in denying Hibbett's claim for defense and indemnity; (iii) none of the information provided to PMIC triggered a duty to defend; (iv) Hibbett's coverage arguments are "incorrect or inapplicable;" (v) PMIC's coverage counsel's analysis "was fair, competent and correct;" (vi) the Hibbett Sporting Goods complaint did not assert a trade dress claim; (v) the policy's trademark exclusion (exclusion m) excludes all claims arising out of allegations of trademark violations; (vii) a summary/synopsis of decisional authority on certain legal issues; (viii) opinions as to how Alabama courts would decide certain purely legal questions; and (ix) opinions as to the customary fees charged by Alabama firms in the Birmingham area for intellectual property litigation. (Doc. 51, Exh. 1, at Exh. A.) As for Ryan, he is a Michigan lawyer who served as coverage counsel for PMIC on the Hibbett claim and who authored the May 2014 letter to Hibbett denying all defense and indemnification coverage for the Hibbett Sporting Goods action. (Doc. 51, Exh. 1, at Exh. B.) Defendant has not submitted a separate expert report for Ryan; however, it has identified him as an expert witness in this matter and has explained that his May 2014 letters "regarding his coverage opinion . . . contain an outline of his opinions and the bases therefor." (Doc. 51, Exh. 1, at 2.) Thus, it appears that PMIC intends to call Ryan at trial to testify as an expert to the opinions set forth in the denial-of-coverage letter he wrote to Hibbett in his capacity as PMIC's coverage counsel.
Plaintiffs now request that the opinions of both Cowan and Ryan be excluded on four separate grounds, to-wit: their opinions are improper legal conclusions, they do not satisfy Daubert reliability principles, Ryan's expert opinions amount to unauthorized practice of law in Alabama, and PMIC is barred from contesting Hibbett's damages.
A. Objections to Cowan Expert Report.
Beginning with the Cowan report, Hibbett's initial objection is that Cowan's opinions are inadmissible legal conclusions. The Eleventh Circuit has remarked that "the law in this circuit pertaining to the admissibility of an expert's opinion couched in legal terms is not crystal clear." Hanson v. Waller, 888 F.2d 806, 811 (11
In light of these principles, expert opinions are inadmissible to the extent that they contain legal conclusions regarding the expert's interpretation of contracts, insurance policies, or other legal documents.
Notwithstanding the foregoing, it is proper for a qualified expert witness to testify about insurance industry practices and procedures. See, e.g., Camacho v. Nationwide Mut. Ins. Co., 13 F.Supp.3d 1343, 1366 (N.D. Ga. 2014) ("[B]ecause the average juror is not likely to be familiar with the practices and procedures involved in insurance claims handling, expert testimony on these matters is admissible to assist the trier of fact. . . . An insurance expert may testify regarding what duties are owed by an insurance company during the claims handling process and whether the actions of the insurance company complied with those duties without offering improper legal conclusions."); Royal Marco Point 1 Condominium Ass'n v. QBE Ins. Corp., 2011 WL 470561, *4 (M.D. Fla. Feb. 2, 2011) (allowing expert opinions comparing defendant insurer's claims handling practices to what is standard and typical in the industry).
In large part, Cowan's proffered expert opinions "merely tell the jury what result to reach" and recast PMIC's own interpretation of the relevant documents. He interprets various aspects of the insurance policy as well as the Hibbett Sporting Goods complaint.
However, several aspects of the Cowan report do not simply parrot PMIC's interpretation of the policy and the Hibbett Sporting Goods complaint, and do not invade the province of the Court by instructing the jury as to the law. In particular, Cowan's report includes opinions concerning PMIC's claims handling procedures, such as where he opines that PMIC "acted reasonably and properly investigated the claim by requesting information from [Hibbett] in addition to the [Hibbett Sporting Goods] Complaint and obtaining a coverage opinion from competent legal counsel prior to denying the claim." (Cowan Report, at 3.) As noted by the authorities cited supra, expert testimony may permissibly be used to assist the jury in understanding insurance claims handling procedures. The Court notes that Hibbett has raised a Daubert objection; however, nothing in Hibbett's Daubert analysis would impugn the reliability of this aspect of Cowan's report. Accordingly, the Motion to Strike is
Another portion of Cowan's expert report that does not run afoul of the proscription against legal conclusions and telling the jury what result to reach is the section in which he offers opinions as to the customary fees charged by proficient lawyers at Alabama firms for intellectual property litigation in the Birmingham legal market. (Cowan Report, at 11.) PMIC apparently intends to use these opinions to show that the more than $160,000 in legal fees incurred by Hibbett in defending the Hibbett Sporting Goods action are excessive and unreasonable, such that any legal fees awarded to Hibbett as damages herein should be discounted to reflect customary rates in the appropriate legal market. In its Motion to Strike, Hibbett insists that PMIC "is barred from contesting Plaintiffs' damages" (doc. 51, at 6); however, the authorities it cites do not support that proposition. Where a party seeks recovery of attorney's fees for a breach of contract claim, Alabama law imputes a reasonableness limitation to the resulting fee award, as a matter of law.
B. Objections to Ryan Expert Report.
As to Michael Ryan, Hibbett reiterates its objection to expert testimony concerning legal conclusions. In the Court's view, however, Ryan is not similarly situated to Cowan on this issue. Here is why: Ryan's "expert report" consists of the denial-of-coverage letter he wrote to Hibbett on PMIC's behalf in May 2014. That letter identifies Ryan as "coverage counsel for the Pharmacists Mutual Insurance Company," states that PMIC "now denies all defense and indemnification coverage for this claim," and sets forth in some detail the grounds for that denial-of-coverage decision. (Doc. 51, Exh. 1 at Exh. B.) Unlike Cowan, Ryan has not been retained by PMIC to offer a post hoc justification for the challenged coverage decision; rather, he was the lawyer who worked with PMIC to make that coverage decision in the first place. Viewed in its proper context, then, the Ryan letter is not an expert report at all, and Ryan is not testifying as an expert; rather, Ryan's statements regarding the contents of the May 2014 letter and the reasons for PMIC's denial of the claim are fact-witness testimony. Particularly given the bad-faith denial of coverage claim interposed by Hibbett, critical issues joined for trial in this case include not only what actions PMIC took but
Next, Hibbett challenges Ryan's opinions as failing to satisfy Daubert reliability standards.
Finally, Hibbett objects to Ryan testifying at trial on the grounds that he is a Michigan lawyer who "is not licensed to practice law in the State of Alabama." (Doc. 51, at 6.) Hibbett's position is that Ryan's appearance and testimony at trial in this case would be tantamount to "practicing law in the State of Alabama." (Id.) Plaintiffs cite no authority for the dubious proposition that a lawyer licensed to practice in one state cannot testify in a different state about certain legal conclusions he has reached. The Court is aware of none. Even if Hibbett were correct that Ryan's testimony at this trial amounts to the practice of law in Alabama, the appropriate remedy would not be wholesale exclusion of his testimony, but the ministerial action of having the witness complete a pro hac vice application and submit it to the Clerk of Court. The Court will not devote further attention to this baseless objection.
For all of the foregoing reasons, it is
DONE and ORDERED.