Doyle v. Allstate Texas LLoyd's

Southern District of Texas

ENTERED

IN THE UNITED STATES DISTRICT COURT April 0S, 2023

FOR THE SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk

HOUSTON DIVISION

DAVID DOYLE, §

Plaintiff, :

VS. CIVIL ACTION NO. 4:21-CV-00679

ALLSTATE TEXAS LLOYD’S, □

Defendant. :

ORDER

Defendant Allstate Texas Lloyd’s (“‘Allstate” or “Defendant’’) filed a Motion to Exclude

and/or Limit the Testimony of Gary Johnson (“Johnson”). (Doc. No. 21). Plaintiff David Doyle

(“Doyle” or “Plaintiff”) filed a Response. (Doc. No. 23). Defendant filed a Reply. (Doc. No. 24).

I. Background

Johnson is an insurance adjuster. He attended the University of Houston. (Doc. No. 23-1

at 11, Johnson’s Report) and has worked as an insurance adjuster for over two decades. (Doc. No.

23-1 at 1, Johnson’s Report). During that time he has inspected, appraised, and consulted on more

than 15,000 individual insurance claims. (Doc. No. 23-1 at 1, Johnson’s Report). He previously

worked for Allstate, serving as its representative at mediations for several years. Johnson currently

maintains his adjuster’s licenses in Texas, Florida, and Oklahoma. (Doc. No. 23-1 at 8, Johnson’s

Report).

This Court need not go into more detail about Johnson’s education or background in the

field as his qualifications are not the focus of Defendant’s Motion to Exclude. Instead, the Motion

challenges the adequacy of Johnson’s report. Specifically, Defendant contends the report does not

meet the requirements of Rule 26(a)(2)(B). More specifically, it claims that Johnson does not

provide a sufficient basis or analysis on any of the subjects he is designated to testify on in

accordance with Federal Rule of Evidence 702. The Court will address each challenged subject.

II. Legal Standard

Under Federal Rule of Civil Procedure 26(a)(2)(B) a retained expert is required to provide

a written report. The write 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;

(iii) any exhibits that will be used to summarize or support them;

(iv) the witness's qualifications, including a list of all publications authored in the

previous 10 years;

(v) alist ofall other cases in which, during the previous 4 years, the witness testified

as an expert at trial or by deposition; and

(vi) a statement of the compensation to be paid for the study and testimony in the

case.

Fed. R. Civ. P 26 (emphasis added). “Rule 26(a)(2) does not allow parties to cure deficient

expert reports by supplementing them with later deposition testimony.” Williams v. Daimler

Chrysler Corp., No. CIV A 4:06CV188-P-S, 2008 WL 4449558, at *5 (N.D. Miss. July 22,

2008), aff'd sub nom. Williams v. Chrysler LLC, 310 F. App'x 747 (5th Cir. 2009) (citations

omitted). Rather, “[t]he purpose of Rule 26(a)(2) is to provide notice to opposing counsel-before

the deposition-as to what the expert witness will testify.” Jd. “If a party fails to provide information

or identify a witness as required by Rule 26(a)..., the party is not allowed to use that information

or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was

substantially justified or is harmless.” Fed. R. Civ. P. 37.

Federal Rule of Civil Procedure 702 allows witnesses who are qualified as experts by

knowledge, skill, experience, training, or education to testify 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.

Fed. R. Evid. 702 (emphasis added). Under Rule 702, a court can exclude an expert’s opinion if it

is conclusory. See Matosky v. Manning, 428 F. App'x 293, 298 (Sth Cir. 2011) (excluding expert

testimony in medical malpractice action based upon conclusory assertion). Testimony is

conclusory when it does not articulate a methodology or reasoned basis. Fulmer v. United States,

No. CV 17-15943, 2019 WL 1989233, at *6 (E.D. La. May 6, 2019), affd, 785 F. App'x 258 (5th

Cir. 2019).

The question for the Court, therefore, is whether Johnson’s report contains a complete

statement of all the opinions he will express and the factual basis for each opinion.

III. Discussion

As mentioned, Defendant’s Motion challenges multiple portions of Johnson’s opinions,

contending he “failed to include support for his opinions as required by Federal Rule of Evidence

702” and “does not provide the basis or reason for his opinions as required by Federal Rule of

Civil Procedure 26(a)(2)(B).” (Doc. No. 21 at 4). The Court will discuss each of the challenged

opinions.

1. The Insurance Policy or its Coverage of the Damages at Issue

In its Motion, Allstate argues that Johnson’s report has “no analysis regarding the policy

or its coverage of the damages at issue in this suit.” (Doc. No. 21 at 6). Therefore, Allstate contends

Rule 26(a)(2)(B) precludes him from testifying about the policy or the policy’s coverage of any

damages at the property.” (Doc. No. 21 at 7). Defendant further argues that “Johnson provides no

reason or basis for [his] conclusion and provides no analysis or opinions regarding what Plaintiff's

specific policy actually cover[ed].” (Doc. No. 21 at 7).

Plaintiff, on the other hand, maintains that Johnson should be entitled to testify about the

Allstate insurance policy as well as the breadth of its coverage because Johnson reviewed the

policy. In particular, Plaintiff contends he analyzed the policy, “recognizing that both hail and

wind are covered losses under the Policy.” Plaintiff argues, however, that “Johnson isn’t here to

criticize the construction of the contract at issue... he is [instead] designated to testify to claims’

handling and failures of Allstate during the time the policy was in force, as well as the necessary

costs to make the required repairs.” (Doc. No. 23 at 12-13).

As an alternative argument, Plaintiff contends Johnson knew about the policy’s coverage

from his review of the “Bill Worsham Report” (the “Worsham Report”). (Doc. No. 21-2 at App.

44), While the Worsham Report concludes that wind and hail created the damages on Plaintiff's

property, it expressly provides that Worsham “did not review the insurance policy and did not

express an opinion as to the applicability of insurance coverage.” (Doc. No. 23-4 at 7). Therefore,

reliance on the Worsham Report does not cure the problem. Moreover, the fact that Johnson may

“know” something does not cure an otherwise sloppy report.

In addition to the defects noted above, Johnson’s report also does not describe or explain

the Policy or its Coverage Period. Instead, it vaguely states that he reviewed the “Policy and Dec

Page.” (Doc No. 23-1 at 2). The conclusion section of the report does cover a bit more detail. In

that section, Johnson explains that Allstate “failed to extend coverage/payment that would cover

necessary replacement/repairs for the roof and exterior damage,” and therefore, that it is the

“opinion of this expert that this claim including but not limited to roof, vents, and

gutters/downspouts should have been replaced /repaired after the inspections by Allstate.” (Doc.

No. 23-1 at 5). Nowhere in the report does Johnson explain the Insurance Policy’s general coverage

or coverage period, but he does specify what damages were covered.! While Johnson did not do a

model job in explaining this topic, the Court finds that he provided sufficient information to

provide Defendant with a factual basis for his opinion as to the coverage and damages. Therefore,

Defendant’s Motion to Exclude Johnson’s Testimony is denied as it concerns the damage to the

house and the contention that such damage is a risk allegedly covered by the policy. Johnson,

however, is prohibited from further testifying regarding the policy’s provisions because he did not

provide any details of the subject in his report, much less provide the factual basis for those

opinions.

2. Allstate’s Failed Duties, Implications of Failure to Fulfill Duties, and Proper

Claims Handling Standards

According to Plaintiff’s expert designation of Johnson, he intends to testify regarding the

“implications” of Allstate’s “failure to fulfill duties to Plaintiff made the basis of this lawsuit” and

the “proper claims-handling standards.” (Doc. No. 21 -2 at App. 35-36, Plaintiff's Expert

Disclosures). Defendant urges the Court to prohibit Johnson from testifying about Allstate’s

“failed duties or implications of failures to fulfill duties” because “Johnson’s report does not

specifically identify any duty that Allstate failed to fulfill or any facts that the duty was violated.”

(Doc. No. 21 at 9). Additionally, Defendant contends the Court should exclude Johnson from

testifying about the proper claims handling standards because “Johnson’s report does not address

or identify any proper claims handling standards.” Plaintiff simultaneously responds to both of

Defendant’s claims. In response, Plaintiff argues “the duty to conduct a reasonable and thorough

investigation of both the claim and Property, and Allstate’s failure to do so, is referenced multiple

' Defendant also ignores the attached estimate report, in which Johnson details each area that needs to be repaired and

the associated costs. (See Doc. No. 23-3, Johnson’s Estimate).

times within the report.” The Court will discuss the two topics separately, beginning will Allstate’s

failed duties and implications of its alleged failure to fulfill its duties.

Johnson’s report clearly states why he believes Allstate acted unreasonably, albeit in a

conclusory fashion: “Allstate Texas Lloyds failed to perform a reasonable investigation of David

Doyle’s claim.” (Doc. No. 23-1 at 5, Johnson’s Report). Johnson also implies the manner in which

Allstate acted unreasonably was by waiting “7 months between inspections by Allstate Texas

Lloyds vendor Ladder Now and Allstate Texas Lloyd’s adjuster Tim Wesneski after receiving

several requests and photos showing missed damages by their vendor Ladder Now from Mr.

Doyle’s public adjuster, Glen Ruston.” (Doc. No. 23-1 at 5, Johnson’s Report). Johnson’s

conclusion that Allstate acted unreasonably and one basis for his conclusion is sufficiently

identified. Therefore, the Court denies Defendant’s Motion to Exclude as it concerns his opinion

on Allstate’s alleged failure. However, his testimony is limited solely to the alleged time delay as

it is the only factor he mentioned. No other topics, complaints, or conclusions will be admitted.

The outcome is different for Johnson’s opinions about the proper claims handling

standards. Johnson failed to outline what the proper claims handling standards are or explain what

a reasonable insurance company would have done in the same or similar circumstances. Since

Johnson did not identify the proper claim handling standard or specify how it was violated, the

Court grants Defendant’s Motion to Exclude and prohibits Johnson from expressing opinions

about proper claim handling standards.

3. Allstate’s Inspection and Claim Handling

Defendant’s Motion also moves to exclude Johnson’s opinions regarding Allstate’s

inspection and claim handling practices. In particular, Defendant argues “[t]o the extent Plaintiff

intended to designate Johnson to offer opinions regarding Allstate’s investigation, Johnson’s

treatment of Allstate’s inspections in his report amounts to a few conclusory statements that the

first inspection was timely, but the inspections were inadequate and unreasonable.” (Doc. No. 21

at 10). Plaintiff, on the other hand contends “Defendant misses the mark completely by ignoring

Mr. Johnson’s clear and unequivocal opinion that Allstate’s inspections were both inadequate,

unreasonable and the length between the two problematic.” (Doc. No. 23 at 16). The parties make

practically the same argument about claim handling. That is, the Defendant argues Tonneon should

not be allowed to testify regarding its claim handling because “Johnson’s report contains no such

analysis of Allstate’s claim handling or the claims process.” (Doc. No. 21 at 7). According to

Defendant, “Johnson’s report contains nothing more than a list of claim-related documents which

he reviewed” and a “timeline of claim handling events.” (Doc. No. 21 at 7-8). Plaintiff responds

arguing that Johnson reviewed “a multitude of documents” and then made specific conclusions

about Allstate’s handling of the claim.

In making his report, Johnson lists that he reviewed several of Allstate’s documents,

including but not limited to the first notice of loss, Allstate’s vendor Ladder Now’s report by Justin

Johnson, Allstate’s estimate by R. Lang, Allstate’s photos, and Allstate’s letter from adjuster.

(Doc. No. 23-1 at 2, Johnson’s Report). With that information, Johnson created a timeline that

includes all of Allstate’s actions starting from the first notice of loss. Subsequently, in the

conclusion section of his report, Johnson explains that Allstate “failed to perform a reasonable

investigation of David Doyle’s claim (7 months between inspections by Allstate Texas Lloyds

vendor Ladder Now and Allstate Texas Lloyd’s adjuster Tim Wesneski after receiving several

requests and photos showing missed damages by their vendor Ladder Now from Mr. Doyle’s

public adjuster, Glen Ruston).” (Doc. No. 23-1 at 5, Johnson’s Report).

Considering the matter Johnson reviewed and referenced in his report, Johnson provided

sufficient information about Allstate’s inspection and claim handling to testify about it at trial, but

again, all testimony is limited to the alleged 7-month delay because he details no other factors.

4. Bad Faith of Texas Insurance Code

Defendant also challenges Johnson’s opinions regarding alleged acts of bad faith or

violations of the Texas Insurance Code. (Doc. No. 21 at 14). The Court will consider both

objections, starting with the bad faith claim.

Johnson’s report contains one sentence regarding Allstate’s alleged bad faith: “A

reasonable, experienced adjuster acting in good faith and performing a reasonable investigation

would have concluded that the damages occurred during the policy period, were caused by a

covered cause of loss and issued prompt payment for said damages.” (Doc. No. 23-1 at 5). This a

conclusory statement. One is not acting in bad faith merely because one reaches a different

conclusion. Johnson does not outline why a reasonable, experienced adjuster would have

concluded the damage occurred during the policy period, nor does he describe how Allstate failed

to act in accordance with said standard. Simply, he does not account for why reasonable adjusters

might agree or disagree. In sum, there is no basis for Johnson’s opinion on Allstate’s alleged bad

faith. Therefore, the Court grants Allstate’s Motion to Exclude Johnson’s testimony as it relates to

bad faith.

Defendant also argue that “Johnson should be precluded from testifying regarding Texas

Insurance Code Chapters 541 and 542.” (Doc. No. 21 at 11). Conversely, Plaintiff contends the

Court should allow Johnson to testify about Allstate’s alleged Texas Insurance Code violations

because “Johnson specifically points to the code provisions violated.” (Doc. No. 23 at 17).

Specifically, in his report Johnson claims he

reviewed this claim in accordance with the legal standards that apply in Texas

(Chapter 541 & 542 Insurance Code) and have found that the Allstate Texas Lloyds

failed to perform a reasonable investigation of David Doyle’s claim (7 months

between inspections by Allstate Texas Lloyds vendor Ladder Now and Allstate

Texas Lloyd’s adjuster Tim Wesneski after receiving several requests and photos

showing missed damages by their vendor Ladder Now from Mr. Doyle’s public

adjuster, Glen Ruston), and failed to make prompt, fair, and equitable settlement of

the claim (photos submitted by K-3 consulting and Martin Guzman clearly show

hail damage to roof shingles) that a reasonable investigation would have

discovered.

(Doc. No. 31-1 at 5, Johnson’s Report). Merely referencing Chapters of the Texas Insurance Code

is not sufficient to establish a basis for Johnson’s testimony regarding the Texas Insurance Code.

Therefore, the Court grants Defendant’s Motion to Exclude Johnson’s testimony of Texas

Insurance Code violations.

5. Cost of Repairs

Defendant’s next challenge is to Johnson’s testimony regarding cost of repairs. Allstate

urges the Court to exclude Johnson’s opinions regarding the alleged costs of repairs because

“Johnson’s report and estimate fail to include any explanation as to his methodology” for coming

up with the total damages. (Doc. No. 21 at 13). Allstate further takes issue with the fact that

Johnson never inspected the property himself and he does not advise where [some] of the

measurements [in his estimate] came from.” Johnson discusses damages briefly in his report, but

he also provided an entire document which contains estimates of each needed repair. (See Doc.

No. 23-3, Johnson’s Estimate).

While the Court by no means views Johnson’s report as a model report to be followed, it

does include sufficient information on the cost of repairs for Defendant to determine the basis of

his conclusions. If need be, Defendant could have ascertained more information about Plaintiff's

cost of repairs had it deposed Johnson. Considering that, the Court denies Defendant’s Motion to

Exclude as it relates to Johnson’s testimony on costs of repairs.

6. Allstate’s Intent or Knowledge

Lastly, Defendant takes issue with Johnson’s opinion on Allstate’s intent or knowledge. In

particular, Defendant argues that “testimony about ‘corporate intent’ or ‘state of mind’ is

inadmissible.” (Doc. No. 21 at 14) citing In re Rezulin Prod. Liab. Litig., 309 F. Supp. 2d 531

(S.D.N.Y. 2004) (a case from the Southern District of New York that held expert testimony

concerning motive, intent, or state of mind of a defendant is inadmissible). Plaintiff concedes that

it will not use Johnson to discuss intent. (Doc. No. 22 at 17-18) (“Both Mr. Johnson and Plaintiff s

counsel are well aware of the rules of evidence and have no intention of offering speculative

testimony. Further, nowhere in Mr. Johnson’s expert designation is Allstate’s intent even alluded

to.”).

The Court, therefore, grants Defendant’s Motion to Exclude as it relates to testimony

concerning Allstate’s intent or knowledge.

IV. Conclusion

For the aforementioned reasons, the Court GRANTS IN PART and DENIES IN PART

Defendant Allstate Texas Lloyd’s Motion to Exclude and/or Limit the Testimony of Gary Johnson.

(Doc. No. 21). Johnson may testify about the damages to the building and the fact that they were

allegedly covered by the policy, how he believes Allstate acted unreasonably by delaying the

second inspection 7-months, and the cost of repairs. He may not testify about any other topics.

Signed at Houston, Texas, this S es of April, \

Andrew S. Hanen

United States District Judge

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