A federal district court in Colorado was asked to exclude two expert witnesses — a claims adjuster and an attorney — offered by the plaintiff in an insurance coverage dispute. After considering the insurer’s Daubert motion, the court decided that both experts should be allowed to testify.
Donald O’Sullivan purchased auto insurance from Geico’s website. His policy had bodily injury liability limits of $100,000/$300,000 (per injured person/per accident), but only $25,000/$50,000 for uninsured or underinsured motorist (UM/UIM) coverage.
O’Sullivan was in an accident caused by a driver who was underinsured. O’Sullivan had more than $164,000 in medical bills. He asked Geico to pay $100,000 toward those bills. Geico tendered the $25,000 limits of his UM/UIM coverage. O’Sullivan then sued Geico for acting in bad faith, for breach of contract, and for delaying payment of his claim.
Colorado law requires auto insurers to offer the same coverage limits for UM/UIM coverage as the insured purchases for bodily injury coverage. Colorado court decisions require insurers not just to offer UM/UIM coverage in the same amount as bodily injury coverage, but to offer the coverage in a manner that will allow the insured to make an informed choice about whether or not to purchase the coverage.
O’Sullivan alleged in his lawsuit that he believed he had purchased, and intended to purchase, UM/UIM coverage with the same limits as his liability coverage. He contended that Geico failed to comply with Colorado law because it did not give him a chance to make an informed choice about his coverage limits.
Geico’s website included a table with rows listing types of coverage and columns listing coverage limits. Clicking limits for each type of coverage would adjust and display the total cost of the policy.
Hovering over the UM/UIM field produced a brief explanation of the coverage and made a longer explanation available by clicking “learn more.” The website, however, does not assure that users will hover over the UM/UIM field and does not require them to click “learn more.”
After O’Sullivan purchased his policy, Geico sent him a “Colorado Uninsured Motorist Options” form that explained his right to purchase UM/UIM coverage in an amount that did not exceed his bodily injury coverage. The form also explained that Colorado requires motorists to specifically reject UM/UIM coverage if they don’t want it. O’Sullivan did not recall receiving the form and did not read it.
Court Rejects Summary Judgment for Geico
The court decided that whether Geico gave O’Sullivan adequate notice of his right to purchase UM/UIM coverage with the same limits as his bodily injury coverage was a question for the jury to decide. Geico’s website gave O’Sullivan the option to purchase any limits up to the amount of his bodily injury coverage limits, but the court decided that a jury could find that Geico failed to provide notice in a way that was reasonably calculated to permit O’Sullivan to make an informed decision about the UM/UIM coverage limits he should purchase.
The court noted that the only specific notice Geico gave O’Sullivan of his right to purchase UM/UIM coverage that equaled his bodily injury coverage was buried in the middle of the Colorado Options form, one of 40 forms that Geico sent O’Sullivan after he had already purchased the policy. The court decided that a jury could find that the form was not reasonably calculated to inform O’Sullivan of his right to purchase higher coverage.
Opinions of Claims Expert
After deciding that O’Sullivan was entitled to a trial, the court considered Geico’s motion to strike two of O’Sullivan’s expert witnesses. The first, David Torres, is an insurance claims consultant. Through his work, Torres has become familiar with the customs and practices of the insurance industry regarding claims adjustment.
In his expert report, Torres stated that claims adjusters have a greater duty to their own policyholders than to third parties. Unlike claims made by someone who was allegedly injured by the policyholder, a claims adjuster may not take an adversarial stance toward the policyholder. Torres opined that Geico took an adversarial stance toward O’Sullivan and failed to give a clear explanation for its refusal to pay him the full $100,000 he thought he purchased.
The court determined that Torres is qualified to testify as an expert. The court noted that Torres’ methodology (applying his knowledge of industry standard to the evidence he reviewed) was reliable.
While Geico challenged the level of factual detail in Torres’ expert report, the court noted that Geico could have taken his deposition to flesh out the factual basis for his opinions. The wholesale rejection of the expert’s testimony should not be based “merely on lack of specificity regarding some of his written opinions.” In any event, a Daubert analysis examines the admissibility of the expert’s testimony, not the expert’s report, and the bare-bones, generic nature of the report did not establish that the expert’s testimony would be unreliable.
The court did exclude certain opinions as speculative because Torres used speculative language to express them. The assertion, for example, that Geico “may be basing its denial” on certain facts was speculative because Torres did not know whether that was or was not the case. The court’s opinion should therefore act as a reminder to experts that they need to omit speculative opinions while using definitive language to describe opinions that are not speculative. Experts may also choose to use conditional language, such as “If X and Y are found to be true, then my opinion is Z.”
The court also ruled that Torres would not be allowed to provide opinions about Geico’s compliance with Colorado law. An insurance claims expert is an expert on insurance practices, not on insurance law. While the distinction is sometimes blurred when the issue for the jury to decide is whether an insurance company followed the law, the court confined Torres’ testimony to whether Geico followed industry standards, not whether Geico obeyed the law.
Opinions of Legal Expert
Geico designated an attorney as an expert witness. O’Sullivan designated Robert Baldwin as a rebuttal expert. Baldwin is also an attorney.
Geico’s expert planned to testify that Geico complied with its obligation to offer UM/UIM insurance limits equal to O’Sullivan’s bodily injury limits. He also planned to testify that Geico acted reasonably when it declined to pay more than the $25,000 limits that O’Sullivan purchased.
Baldwin proposed to testify that Geico failed to give O’Sullivan adequate notice of his right to purchase higher UM/UIM limits. He also proposed to testify that Geico should have known it could not assert a successful defense and should have paid the full $100,000 in light of O’Sullivan’s extensive injuries.
Unlike Torres, the lawyers designated by Geico and O’Sullivan were qualified to render legal opinions concerning the adequacy of the offer that Geico made to O’Sullivan. However, Geico argued that Baldwin’s proposed opinions went too far. A rebuttal expert must limit testimony to the same subject matter identified by the other party’s expert.
The court concluded that Geico opened the door to a legal analysis of the reasonableness of its coverage offer by designating a legal expert as a witness. By the same token, Baldwin was entitled to testify that Geico unreasonably failed to pay the $100,000 claim, because the opinion was supported by a reasoned analysis and directly rebutted the opinions of Geico’s expert.