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Daniels v. Erie Insurance Group

United States District Court, M.D. Tennessee, Nashville Division

December 4, 2017



          ALETA A. TRAUGER United States District Judge.

         Before the court is the defendant's Motion for Summary Judgment. (Doc. No. 16.) The motion has been fully briefed and is ripe for review. For the reasons set forth herein, the motion will be denied.


         On or about July 28, 2015, plaintiffs Debra Daniels and Dennis Daniels submitted a claim to defendant Erie Insurance Group (“Erie”), seeking coverage under their homeowner's insurance policy (“Policy”) for damage to their residence caused by an alleged sinkhole. In response, Erie retained Rimkus Consulting Group (“Rimkus”) to perform an inspection of the Daniels' property to determine the cause of the damage to the residence and specifically to determine if a sinkhole was present. The parties agree that, if a sinkhole caused the damage, then the damage is covered by the Policy. (See Policy, Sinkhole Collapse Endorsement - Tennessee, Doc. No. 16-2, at 33.)

         Rimkus performed tests and inspections of the plaintiffs' residence, under the direction and supervision of a licensed Professional Engineer and a licensed Professional Geologist, and issued a report dated December 22, 2015 (the “Rimkus Report”) summarizing their findings. The Rimkus Report concluded, in a nutshell, that “sinkhole activity can be eliminated within a reasonable professional probability as a cause of the distress noted in the building.” (Rimkus Report, Doc. No. 16-1, at 4.) The Rimkus Report ascribes the damage to the Daniels' residence to (1) differential foundation settlement, (2) soil erosion, and (3) decomposition of organic material. (Id.) Based on these conclusions, Erie notified the Daniels on February 1, 2016 that it was denying their claim. (Denial Letter, Doc. No. 16-3.)

         The plaintiffs filed this lawsuit on June 30, 2016, asserting claims for breach of the Policy and bad faith in violation of Tenn. Code Ann. § 56-7-105, and seeking compensatory damages, a statutory bad faith penalty, and punitive damages.

         The court entered an Initial Case Management Order in October 2016, setting deadlines for the identification and disclosure of expert witnesses and reports and rebuttal reports and dispositive motions, among others. (Doc. No. 10.) Trial was set to begin January 9, 2018. (Doc. No. 11.) On May 4, 2017, the parties filed a Joint Motion to Modify Initial Case Management Order (Doc. No. 14), requesting that the plaintiffs' expert disclosure and report deadline be extended until August 1, 2017 and that the defendant's rebuttal deadline be extended to August 15, 2017. Expert depositions would be completed by September 15, 2017. The parties noted that it was “wholly unlikely” that any dispositive motions would be filed, but they agreed that the deadline for such filing could be extended to September 27, 2017. They also agreed to an abbreviated briefing schedule in order to ensure that any dispositive motion would be fully briefed by or before October 11, 2017, thus “keep[ing] the trial date at least 90 days from the close of dispositive motions.” (Doc. No. 14, at 2.) The court granted the motion. (Doc. No. 15.)

         The plaintiffs' expert, Sonny Gulati of Florida Testing & Environmental, Inc. (“FTE”), completed his initial Report on June 2, 2016 and a Revised Report on May 9, 2017, well within the plaintiffs' disclosure deadline. FTE's Reports state that FTE disagrees with the Rimkus Reports and opine that the structural damage to the plaintiffs' house was caused by a sinkhole.

         Erie filed its Motion for Summary Judgment, supporting Memorandum, Statement of Undisputed Facts, and numerous exhibits (Doc. Nos. 16-18) on September 13, 2017, arguing, primarily, that FTE's Reports should be excluded and that, without any expert's testimony, the plaintiffs lack admissible evidence to counter the Rimkus Report regarding the cause of the damage to their residence.

         On September 29, 2017, two days after the agreed-upon fourteen-day deadline for responding, the plaintiffs filed a Motion to Extend Time to Respond to the Motion for Summary Judgment. (Doc. No. 20.) There, they explained that they had been confused about the deadline for responding and that the Florida office of lead counsel had been in chaos following the September 11 landfall of Hurricane Irma. In addition, they disclosed that Erie, on September 15, 2017, had submitted to them a supplemental Report from Rimkus dated September 14, 2017, and that the depositions of their experts had not taken place prior to September 15, 2017, as the parties had agreed in the modified Case Management Order. Instead, they had been moved, by agreement, to September 20, 2017 (Erie's expert depositions) and September 28, 2017 (Gulati deposition). In other words, the defendant voluntarily filed its Motion for Summary Judgment prior to deposing the plaintiff's expert.

         Further, in light of this court's July 2017 ruling regarding Gulati's proffered expert testimony in an unrelated case, Walsh v. State Farm Fire & Cas. Co., No. 3:15-cv-1036, 2017 WL 3025592, at *6 (M.D. Tenn. July 17, 2017), and the supplemental Rimkus Report produced on September 14, the plaintiffs had FTE prepare a supplement to its Revised Report, dated September 20, 2017. The plaintiffs expressed their hope that the Supplemental Report as well as the plaintiffs' cross-examination of Gulati during his deposition would alleviate the concerns expressed by the court in Walsh about the methodology employed by Gulati in drawing his conclusions about the cause of the damage to the plaintiffs' residence. The plaintiffs therefore requested that they be granted until ten days after Gulati's deposition transcript was made available to file their Response to the Motion for Summary Judgment. (Doc. No. 20, at 3.) The plaintiffs attached to their motion both the Rimkus September 14, 2017 Supplemental Report and FTE's September 20, 2017 Supplemental Report. (Doc. Nos. 20-1, 20-2.)

         Erie did not oppose the request to extend the filing deadline, but it did oppose the Daniels' use of FTE's Supplemental Report in responding to the Motion for Summary Judgment, on the basis that this Report was not provided to them before they filed their Motion for Summary Judgment and, in fact, was not produced until 9:30 a.m. on the day they were to depose Gulati. Erie also explained the delay in its filing of the Rimkus Supplemental Report: plaintiffs' counsel had granted Erie an extension of the time to submit a rebuttal report until after the plaintiffs provided a complete copy of FTE's job file, including photos, logs, notes and other documents prepared by or relied upon by Gulati that were not contained in FTE's initial and revised reports. On August 15, 2017, Erie was provided the drilling logs from Richard Simmons Drilling, upon which Gulati had relied. “Assuming all job file materials had been produced by Gulati, on September 14, 2017, Erie submitted to counsel for Plaintiffs a rebuttal report from Rimkus” (Doc. No. 21, at 2), the day after filing its Motion for Summary Judgment.

         The court granted the plaintiffs' request to extend the filing deadline, setting November 13, 2017 as the new deadline for filing their opposition to the Motion for Summary Judgment and allowing the defendant until November 27, 2017 to file a reply. In addition, however, while noting that the plaintiffs would be permitted to use Gulati's deposition transcript in support of their position on summary judgment, the court made it clear that it would exclude from consideration any opinions offered by Gulati in the late-filed Supplemental Report in ruling on the Motion for Summary Judgment. (Doc. No. 22.)

         The plaintiffs' Response, filed on November 13, 2017, was timely, and the defendant promptly filed a Reply on November 22, 2017.


         A. Motion for Summary Judgment

         Rule 56 requires the court to grant a motion for summary judgment if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). To win summary judgment on a particular claim, the moving defendant must show that, as a matter of undisputed material fact, the plaintiff cannot establish at least one essential element of that claim. Once the moving defendant makes its initial showing, the burden shifts to the plaintiff to provide evidence beyond the pleadings, “set[ting] forth specific facts showing that there is a genuine issue for trial.” Moldowan v. City of Warren, 578 F.3d 351, 374 (6th Cir. 2009); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). “In evaluating the evidence, the court must draw all inferences in the light most favorable to the non-moving party.” Moldowan, 578 F.3d at 374 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).

         At this stage, “‘the judge's function is not . . . to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial.'” Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). But “[t]he mere existence of a scintilla of evidence in support of the [non-moving party's] position will be insufficient, ” and the party's proof must be more than “merely colorable.” Anderson, 477 U.S. 242, at 252. An issue of fact is “genuine” only if a reasonable jury could find for the non-moving party. Moldowan, 578 F.3d at 374 (citing Anderson, 477 U.S. at 252).

         B. Daubert and the Federal Rules

         Although styled as a motion for summary judgment, the defendant's motion depends in large part upon an argument that the plaintiffs' proffered expert witness's testimony violates Rule 702 of the Federal Rules of Evidence and Rule 26(a) of the Federal Rules of Civil Procedure, which together govern the admissibility of an expert witness's testimony at trial.

         Under Rule 702, A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:

(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.

         The district court acts as the “gatekeeper” on opinion evidence, Gen. Elec. Co. v. Joiner, 522 U.S. 136, 142 (1997), and must exercise its gatekeeping function “with heightened care.” United States v. Cunningham, 679 F.3d 355, 380 (6th Cir. 2012) (citation omitted).

         “As gatekeeper, the trial judge has discretion in determining whether a proposed expert's testimony is admissible based on whether the testimony is both relevant and reliable.” Palatka v. Savage Arms, Inc., 535 F. App'x 448, 453 (6th Cir. 2013) (quotation marks and citation omitted). The court's task is to assess “whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning or methodology properly can be applied to the facts in issue.” Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 592-93 (1993).

         However, the court will not exclude expert testimony “merely because the factual bases for an expert's opinion are weak.” Andler v. Clear Channel Broad., Inc., 670 F.3d 717, 729 (6th Cir. 2012) (quotation marks and citations omitted). Indeed, rejection of expert testimony is the exception rather than the rule-the gatekeeping function established by Daubert was never “intended to serve as a replacement for the adversary system.” Rose v. Matrixx Initiatives, Inc., No. 07-2404-JPM/tmp, 2009 WL 902311, at *7 (W.D. Tenn. March 31, 2009) (quoting Fed.R.Evid. 702 advisory committee's note).

         Rule 702 does not “require anything approaching absolute certainty.” Tamraz v. Lincoln Elec. Co., 620 F.3d 665, 671-72 (6th Cir. 2010). Under Daubert, “experts are permitted wide latitude in their opinions, including those not based on firsthand knowledge, so long as the expert's opinion has a reliable basis in the knowledge and experience of the discipline.” Dilts v. United Grp. Servs., LLC, 500 F. App'x 440, 445 (6th Cir. 2012) (internal quotation marks and citation omitted). “Daubert and Rule 702 require only that the expert testimony be derived from inferences based on a scientific method and that those inferences be derived from the facts of the case at hand, not that they know the answer to all the questions a case presents. . . .” Jahn v. Equine Servs. PSC, 233 F.3d 382, 390 (6th Cir. 2000) (internal citation omitted). By the same token, “the ‘knowledge' requirement of Rule 702 requires ‘more than subjective belief or unsupported speculation.'” Tamraz, 620 F.3d at 670 (quoting Daubert, 509 U.S. at 590). Lastly, the “party proffering expert testimony must show by a ‘preponderance of proof' that the expert whose testimony is being offered is qualified and will testify to scientific knowledge that will assist the trier of fact in understanding and disposing of issues relevant to the case.” Pride v. BIC Corp., 218 F.3d 566, 578 (6th Cir. 2000) (quoting Daubert, 509 U.S. at 592 n.10).

         In conjunction with Rule 702, Rule 26 requires disclosure of all expert witnesses, along with a written report prepared and signed by the expert. Fed.R.Civ.P. 26(a)(2). The written report must contain “a complete statement of all opinions the witness will express and the basis and reasons for them” and “the facts or data considered by the witness in forming them.” Fed.R.Civ.P. 26(a)(2)(B)(i)-(ii).

         IV. ...

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