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In Leporace v. N.Y. Life & Annuity Corp. the insurers filed a motion to exclude expert testimony, on plaintiff’s bad faith expert.  The expert was previously by one of the defendants that handle claims for an insurer defendant.  She affied that she has worked in the field of disability insurance for seventeen years, and left the employment of the defendant after having a senior management position. Subsequently she has served as an expert in a number of disability insurance claims.

She has testified in 72 depositions, 43 of which involved cases administered by defendants, and in ten trials which involved defendants. The court stated that the Plaintiff may be able to qualify her as an expert on the topic of industry standards insurers should follow or reasonable determination of disability benefits.

Her affidavit did not specifically state to what extent she gave testimony based on defendants’ policies and practices while she was still employed by defendants or thereafter; and the court ordered the plaintiff’s counsel to provide specific information about cases in which she testified about defendants after her employment.

The court expressed doubts about here expertise on policies and procedures that may have existed when her employment ended (2001), and the time period at issue, 9 years later, “which are doubtfully relevant in this case unless plaintiff can establish these same policies and practices continued to 2010 and forward.

The Court also noted that a good deal of the expert’s opinions were based on two specific studies/reports, from 2003 and 2004; and although she relied heavily on these two apparently separate items, she did not specifically show that she has any knowledge that these were relevant to the plaintiff’s claims for the period 2010 to the present time.

One of the reports appeared to review past events, and without any evidence defendants’ conduct described in that report continued to the present day, this evidence was merely propensity evidence of prior bad acts, and would not admissible under FRE 404(b)(1).

Therefore, the Court would be inclined to reject any reference to this report unless plaintiff can show the conduct found in it continued through the 2010 forward period, with evidence other than defendants’ conduct toward plaintiff.

As to the second report, to the extent that plaintiff can show that it establishes standards for future conduct by defendants, which applied as of 2010 forward, the expert’s testimony about it may be relevant as a benchmark against which the jury may measure what defendants did or should have done in investigating and determining plaintiff’s claims for reinstatement of benefits.

Assuming that plaintiff meets this evidentiary threshold, the expert may be allowed to give opinions, based on her review of defendants’ practices with regard to defendants’ 2010 and forward policies and practices and whether they were in accord with the second report.

The Court also observed that many of the expert’s opinions in her reports were obviously medical in nature, and would not allow her to give opinions that express disagreement with medical opinions, since she is not a physician nor does she have any medical training.

The Court would also likely exclude opinions that exclusively concern events prior to 2010.

The Court has previously noted that it may allow, subject to Federal Rule of Evidence 404(b), limited testimony by plaintiff as to defendants’ pre-2010 conduct vis a vis plaintiff, principally to give Plaintiff an opportunity to prove motive and intent. However, the Court doubted that expert opinions on this period would be proper evidence.

The Court stated that the reports and the expert’s depositions, exhibits, etc. did not meet the standards for admissibility and did not “fit” the issues that will be the subject of the trial under F.R.E. 702. However, the Court gave plaintiff an opportunity to show by competent and admissible evidence that the expert had a factual basis for opinions limited to defendants’ 2010 and forward disability insurance policies and practices, consistent with the Court’s findings and conclusions.

The Court found that the existing reports contained mostly irrelevant material, and stated opinions without providing any appropriate factual basis for the opinions.

The Court determined that the appropriate resolution was to strike the expert report’s in toto, but to give plaintiff leave to submit a concise expert report, limited to fifteen pages doubled spaced, for the period 2010 forward, in which the expert must state her opinions in separately numbered paragraphs and for each opinion state the type of evidence or expertise on which she relies.

Plaintiff need not supply specific testimony or facts, but should give record citations to depositions and other documents in the case, so that the Court and defendants can find the factual source of the opinion in the discovery record in this case.

If the expert relies on any of her knowledge from having been employed by defendants, she must further state what knowledge, and the source of that knowledge, and cite to some evidence that those practices of defendants continued into the period 2010 and forward.

Thereafter, the Court may hold an evidentiary hearing to give the parties an opportunity to present testimony from the expert on the issue of whether her opinions concerning defendants’ practices are admissible.

The court made clear that the expert would not be permitted to give conclusory opinions that defendants exercised bad faith in its treatment of plaintiff: “[A]n expert may not give an opinion as to the ultimate legal conclusion that an insurer acted in ‘bad faith’ in violation of applicable law.”

In sum, the Court determined that “as a matter of case management and fairness to the parties, that the best process to ensure a fair and expeditious trial is a new report. With a revised report, the record will be more appropriate for direct and cross examination of [the expert] and for the jury reaching a verdict, and for this Court and any appellate court ruling on any post-trial motions that may be filed.”

Date of Decision: February 26, 2014

Leporace v. N.Y. Life & Annuity Corp., CIVIL ACTION NO. 11-2000, 2014 U.S. Dist. LEXIS 24764 (E.D. Pa. February 26, 2014) (Baylson, J.)