McDonnel Group, LLC v. Starr Surplus Lines Insurance Company

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

THE MCDONNEL GROUP, LLC CIVIL ACTION NO: 18-1380 c/w 19-

2230; 19-10462

VERSUS (Applies to All Cases)

STARR SURPLUS LINES INSURANCE

COMPANY AND LEXINGTON SECTION: T (1)

INSURANCE COMPANY

ORDER AND REASONS

The Court has before it Defendants Starr Surplus Line Insurance Company and Lexington

Insurance Company’s (collectively “Defendants) Motion in Limine to exclude the testimony of

Plaintiff The McDonnel Group, LLC’s (“McDonnel”) expert witness Joe Caldarera. R. Doc. 913.

Defendants assert that Caldarera’s expert report and the testimony he is expected to give at trial

are “replete with impermissible legal assertions and conclusions[,]” that Calderara is “not

qualified” to give many of the opinions he offers, and that Caldarera’s methodology is “flawed

and unreliable.” R. Doc. 913-1 at 2. McDonnel has responded in opposition, R. Doc. 938, and

Defendants have filed a reply memorandum, R. Doc. 965. Having considered the parties’ briefing,

the record, and the applicable law, the Court will DENY IN PART and GRANT IN PART

Defendants’ Motion.

I. BACKGROUND

This litigation arises out of six loss events at the Jung Hotel (the “Hotel”) that occurred

during 2017 while the Hotel was undergoing renovations. Intervenor Plaintiff The Jung, LLC

(“Jung”)1, the owner of the Hotel, hired McDonnel in 2014 as its general contractor for the Hotel’s

redevelopment and renovation (the “Project”). McDonnel purchased Completed Value

1 Jung’s claims have been previously dismissed. See R. Doc. 990.

Construction All Risks Policies from Defendants, which provided property damage coverage for

the Project. Each Defendant insured 50% of the risks under the Policy. The Policy’s effective

period ran from February 23, 2015, through February 23, 2017, but was extended by multiple

endorsements to August 22, 2017.

McDonnel filed the instant suit against Defendants on February 9, 2018, claiming property

remediation and repair costs related to the six loss events, as well as additional costs allegedly

incurred because of delays to the Project caused by the loss events, and bad faith penalties under

La. R.S. §§ 22:1973 and 22:1892. In support of its claims, McDonnel proffered the report of Joe

Caldarera, who McDonnel asserts is an expert in construction, claims adjusting, and project

scheduling, with over four decades of experience. See R. Doc. 913-4 at 3–14. McDonnel seeks to

have Caldarera testify as an expert at trial in support of its claims that (1) Defendants acted in bad

faith in failing to adjust and pay out properly McDonnel’s covered claims; (2) the Project was

delayed as a result of the loss events, causing McDonnel to incur costs, and; (3) McDonnel is

entitled to $2,921,768.62 from Defendants to cover those costs, a figure calculated using the

“Caldarera Formula[.]” See R. Doc. 938; see also R. Doc. 913-5. Defendants now move this Court

to exclude Caldarera’s expert testimony as unreliable and unfounded on his actual qualifications.

R. Doc. 913.

II. APPLICABLE LAW

Federal Rule of Evidence 702 provides: “A witness who is qualified as an expert by

knowledge, skill, experience, training, or education, may testify in the form of opinion or

otherwise, if: (a) the expert’s scientific, technical, or other specialized knowledge will assist 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.” See also

Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 588 (1993).

In Daubert, the Supreme Court established a two-part test for judges to perform in

determining the admissibility of expert testimony. Daubert, 509 U.S. at 588. First, the court must

determine whether the expert’s testimony reflects scientific knowledge, is derived by the scientific

method, and is supported by appropriate validation. Id. at 590. Therefore, the court must examine

the expert’s methodology. Second, the court must determine whether the testimony will assist the

trier of fact in understanding the evidence. Id. at 591. “A district court should refuse to allow an

expert witness to testify if it finds that the witness is not qualified to testify in a particular field or

on a given subject.” Huss v. Gayden, 571 F.3d 442, 452 (5th Cir. 2009) (quoting Wilson v. Woods,

163 F.3d 935, 937 (5th Cir. 1999)). However, courts should use caution, because “[v]igorous cross-

examination, presentation of contrary evidence, and careful instruction on the burden of proof are

the traditional and appropriate means” of challenging an expert’s testimony. Daubert, 509 U.S. at

596. “These conventional devices, rather than wholesale exclusion . . . are the appropriate

safeguards where the basis of scientific testimony meets the standards of Rule 702.” Id. When

expert testimony is challenged under Daubert, the party offering the expert’s testimony bears the

burden of proving its reliability and relevance by a preponderance of the evidence. Moore v.

Ashland Chem. Co., 151 F.3d 269, 276 (5th Cir. 1998).

III. DISCUSSION AND ANALYSIS

Defendants assert this Court should exclude Caldarera’s expert testimony in whole or in

part on several grounds. The Court will examine each argument in turn.

A. Impermissible Legal Conclusions

Defendants assert that Caldarera’s expert report “include[s] a litany of impermissible legal

conclusions[.]” R. Doc. 913-1 at 7. The United States Court of Appeals for the Fifth Circuit has

explained that “courts must remain vigilant against the admission of legal conclusions, and an

expert witness may not substitute for the court in charging the jury regarding the applicable law.”

United States v. Milton, 555 F.2d 1198, 1203 (5th Cir. 1977). McDonnel does not dispute that

experts may not offer legal conclusions; however, it argues that the specific phrases in Caldarera’s

report to which Defendants object are not legal conclusions, but “clearly simply factual

statements.”2 R. Doc. 938 at 6.

As another section of this Court has explained, “distinguishing between admissible

testimony regarding the inferences that can be drawn from facts of a certain case and an

inadmissible ultimate legal conclusion . . . is often a fine line.” Cordes v. OSG Ship Management,

Ltd., 2013 WL 1992178, at *4 (E.D. La. May 10, 2013). Accordingly, while the Court agrees that

Caldarera will not be permitted to offer legal conclusions in his testimony, the Court will defer

ruling on what precise testimony constitutes impermissible legal conclusions until it can hear the

parties’ arguments in situ at trial. Thus, Defendants’ Motion is DENIED as to this issue, without

prejudice to any parties’ right to reraise the issue at trial should it be necessary.

2 For example, Defendants object to Caldarera’s statement that Defendants “ignored the [Flood Policy] Sublimit

when applying the Deductible . . .” R. Doc. 913-5 at 4, as an impermissible legal conclusion because it “opine[s]

on the meaning or interpretation of insurance policy terms.” R. Doc. 965 at 1–2; see also McHugh v. United Serv.

Auto. Ass’n, 164 F.3d 451, 454 (9th Cir. 1999) (expert testimony “cannot be used to provide legal meaning or

interpret [insurance] policies . . ..”); Dabbs v. Shelter Mut. Ins. Co., 2019 WL 4747711, at *3 (W.D. Okla. Sept. 27,

2019) (“statements regarding the meaning of Plaintiff’s insurance policy” are impermissible legal conclusions). On

the other hand, McDonnel asserts that this is simply a statement of fact and not an interpretation of the requirements

of the Policy.

B. Qualifications as Expert on Claims Handling/Adjustment

Defendants assert that Caldarera is not qualified to offer expert opinion evidence on

insurance claims handling and adjustment. R. Doc. 913-1 at 10–13. They argue that while

“Caldarera holds an adjuster’s license in Louisiana, there is no indication that he has any real

experience adjusting claims in the role of an adjuster.” Id. at 11 (emphasis original).

It is true that Caldarera’s curriculum vitae indicates that he has never worked as an

independent adjuster or for an adjusting company. See R. Doc. 913-4. But “Rule 702 does not

mandate that an expert be highly qualified in order to testify about a given issue. Differences in

expertise bear chiefly on the weight to be assigned to the testimony by the trier of fact, not its

admissibility[.]” Huss, 571 F.3d at 452. As McDonnel points out, Caldarera is in fact an adjuster

licensed by the state of Louisiana, and Caldarea testified in his deposition that in his role as an

“independent building consultant” he frequently evaluates and adjusts claims for large insurers

and in fact “supervise[s] adjusters.” See R. Doc. 938-1 at 6–8. Additionally, McDonnel has

presented evidence that Caldarera has been performing insurance claim adjustment work since as

early as 1982. See R. Doc. 938 at 8–9. Accordingly, the Court holds that Caldarera is at least

“minimally qualified” to offer expert testimony on claims handling and adjustment.3 See Nasset v.

United States, 2020 WL 3001312, at *2 (E.D. La. June 4, 2020) (quoting Mounce v. Doe, 2014

WL 2587698, at *4 (E.D. La. June 10, 2014) (explaining “[t]he qualification standard for expert

testimony is not stringent, and so long as the expert is minimally qualified, objections to the level

3 This holding should not be read as an endorsement of McDonnel’s argument that Caldarera’s “vast experience as a

construction professional and contractor” in itself “qualif[ies Caldarera] as an adjuster.” R. Doc. 938 at 9. It is

primarily Caldarera’s experience adjusting insurance claims as an independent building consultant, not his

experience as a contractor, that minimally qualifies Caldarera as an expert in claims adjustment. But see also United

States v. Wen Chyu Liu, 716 F.3d 159, 168–69 (5th Cir. 2013), cert. denied, 124 S. Ct. 1011 (2014) (holding that “an

expert witness is not strictly confined to his area of practice, but may testify concerning related applications”).

of the expert's expertise [go] to credibility and weight, not admissibility”). Therefore, Defendants’

Motion is DENIED as to this issue.

C. Methodology and the “Caldarera Formula”

Defendants concede that Caldarera “may be minimally qualified to give scheduling

opinions[,]” but argue that the scheduling opinions Caldarera seeks to offer are “not the product of

accepted scheduling analyses[,]” but rather “are the product of client advocacy.” R. Doc. 913-1 at

13–14. They complain that Caldarera makes “use of a formula of his own creation called the

‘Caldarera Formula’” to support his expert opinion as to the costs McDonnel incurred due to the

delay in completion of the Project caused by the loss events. Id. at 17.

As to Defendants’ argument that Caldarera’s opinions are biased because he is McDonnel’s

“advocate” rather than a true expert, the Court notes that “[o]rdinarily, an expert’s alleged bias is

an issue of credibility and not admissibility.” Conerly Corp. v. Regions Bank, 2010 WL 11538005,

at *3 (E.D. La. Jan. 20, 2010). If Defendants believe that Caldarera’s expert opinions are tainted

by bias in McDonnel’s favor, the “appropriate means” of challenging his testimony is via

“[v]igorous cross-examination” at trial. Daubert, 509 U.S. at 596.

However, this Court has already rejected Caldarera’s theory, based on the “Caldarera

Formula,” that McDonnel is entitled to a set daily rate of $14,114.82 for each day McDonnel

asserts completion of the Project was delayed as a result of the loss events, or a total of

$2,921,768.62. See R. Doc. 995 at 6–7. The Court has entered summary judgment on that claim in

favor of Defendants. See id. at 10. Accordingly, Caldarera’s opinions based on the “Caldarera

Formula” are not relevant to any remaining claim that will be presented at trial, and would thus be

of no help to the jury in its role as factfinder. Therefore, Defendants’ motion is GRANTED to the

extent that Defendants ask this Court to exclude expert testimony from Caldarera based on the

“Caldarera Formula.”

D. Opinions Based on Unproduced Documents

Defendants assert that some or all of Caldarera’s expert opinions are based on documents

which have never been produced to Defendants, and that those opinions are therefore inadmissible.

R. Doc. 913-1 at 20. However, on review of the record the Court is satisfied that the relevant

documents on which Caldarera relied in forming his expert opinions in this matter have in fact

been properly disclosed to Defendants. See R. Doc. 938 at 23-25. Thus, Defendants’ Motion is

DENIED as to this issue.

E. Testimony on Behalf of Other Plaintiffs

Finally, Defendants argue that even if this Court denies their motion to exclude Caldarera

from testifying on McDonnel’s behalf, Caldarera should be excluded from testifying on behalf of

or in support of the claims of other plaintiffs who have not designated Caldarera as one of their

expert witnesses. However, all other plaintiffs have already been dismissed from this action. See

R. Does. 730; 990; 995. Accordingly, Defendants’ motion is DENIED AS MOOT as to this issue.

IV. CONCLUSION

For the foregoing reasons, IT IS ORDERED that Defendants’ Motion in Limine, R. Doc.

913, is DENIED IN PART and GRANTED IN PART as explained herein.

New Orleans, Louisiana, this 25th day of September, 2023.

Sot Gord Gd

UNITED STATES DISTRICT JUDG