Claims involving property losses usually do not require expert testimony. But, if they do require expert testimony, it is important for an insurance lawyer to know how present the expert. This is illustrated in the 2019, opinion from the Southern District of Texas, Corpus Christi Division, styled, Mt Hawley Insurance Company v. TFP Properties III LLC.
Mt. Hawley filed this lawsuit against TFP asserting it had paid all sums owing under the commercial policy at issue. After the lawsuit was filed, Mt. Hawley filed a motion to exclude the testimony of TFP’s property evaluation expert.
The courts are to act as gatekeepers by making preliminary assessment of whether the reasoning or methodology underlying an experts testimony can be properly applied to the facts at issue in the case. Testimony that is based purely on the ipse dixit of the expert is not allowed. The court’s determination regarding the admissibility of the expert evidence is subject to an abuse of discretion standard.
Mt. Hawley challenges the expert testimony of Sean Wiley,a general contractor doing business as JW Construction and who has experience as an insurance adjuster, having previously performed work for Mt. Hawley’s parent company. Mt. Hawley does not complain of Wiley’s experience, qualifications, or the relevance of his opinion. Instead, Mt. Hawley contends there is a lack of foundation for Wiley’s valuation.
Wiley testified that he used the internet and called supply houses to investigate pricing of materials. For specific tasks, he called subcontractors who do the specific tasks to learn the labor costs of the required work. Wiley compiled his results into a task specific unit cost, which combined labor and materials. He submitted an itemized bid of unit costs per square foot, along with a calculation of the total that sets out the square footage involved for each task. He testified that this is the ordinary practice for compiling construction bids. Mt. Hawley has not shown that the standard of the industry requires any other methodology for researching and assessing costs or for assembling bids.
Mt. Hawley’s complaint is that Wiley did not keep detailed notes detailing his research to reveal the specific sources of his cost estimates. Also, that Wiley could not testify whether he included certain items such as architectural fees, permit fees, sales tax, and overhead or profit.
In this case, the property is available for inspection to determine what work is necessary. There is no challenge to Wiley’s methodology. Wiley has itemized the proposed work and his estimate of the unit prices for performing that work. These are numbers that can be tested if Mt. Hawley chooses to have its expert also look into the cost of materials and labor for the listed tasks and confirm the square footage. The fact that Wiley does not keep a record of the specific sources for his estimate does not preclude Mt. Hawley from consulting appropriate sources to see if the numbers are supportable.
Mt. Hawley’s motion to exclude the testimony of Wiley was denied.