Insurance expert excluded for drawing legal conclusions and offering speculative testimony in Louisiana


In a breach of contract suit in Louisiana (SJB Group, LLC v. TBE Group, Inc.), the U.S. District Court for the Middle District granted the Plaintiff’s Daubert motion to exclude or limit the testimony of Defendant’s Insurance expert witness on the grounds that the expert’s opinions drew impermissible legal conclusions and were speculative in nature. A few days back a police procedures expert witness was precluded in New Jersey and a banking expert witness in Connecticut for precisely the same reasons.


It all started with a Louisiana Department of Transportation and Development State Project that involved the widening of a 1.91 mile stretch of Interstate 12. The Defendant, TBE Group, entered into a General Services Agreement with James Construction Group; and agreed to provide certain Subsurface Utility Engineering (“SUE”) specifically locating and identifying underground utilities such as water, sewer, gas mains, fiber optic cables, telephone lines etc. that could impact the project. Defendant was required to prepare and deliver a “Utility Design/SUE Report” and related deliverables to James. Thereon, Defendant subcontracted some of the surveying work to Plaintiff, SJB Group; and the two entered into a Subcontract for Professional Services. Under the contract, the Plaintiff agreed to provide certain surveying services to the Defendant and to prepare and provide a utilities sketch showing the locations of various utilities according to markings and other information provided by the Defendant. Plaintiff contended that Defendant had a contractual obligation to perform Quality Assurance / Quality Control of Plaintiff’s work. Plaintiff further alleged that Defendant’s failure to review the sketch and provide necessary quality assurance and quality control resulted in erroneous plans for bridge work on the project, thereby causing significant delay and additional costs to correct the errors. On March 28, 2012, SJB Group and Catlin Insurance Co., who funded the remedial relocation work, filed this suit against the Defendant asserting claims for breach of contract, professional negligence, detrimental reliance and/or equitable estoppel, reimbursement, indemnity, contribution and/or subrogation, and in the alternative for unjust enrichment.

Expert’s opinions regarding contractual interpretation

Defendant retained an Insurance Expert Witness who, in his report, explained that he was retained as an expert to

consult on matters involving the standard practice and custom of the insurance industry with regard to providing additional insured (AI) status to higher tiered General Contractors (GC’s), and design professionals or engineers, in Professional Liability, General Liability, and Umbrella/Excess Liability policies, by lower tiered Professionals.

Plaintiffs moved to exclude or limit the testimony of Defendant’s insurance expert on the grounds that his opinions drew impermissible legal conclusions. The Court noted that although the expert may not have intended to provide a legal conclusion, that is in fact, what he offered in the “Analysis of the Contracts” section of his expert report, where he interpreted the SJB–TBE Subcontract for Professional Services and the James–TBE General Services Agreement. The Court held that contractual interpretation is a question of law and opinions offered as to the scope of one’s contractual duties amounted to a legal conclusion that invaded the province of the court. The expert’s opinions in this regard were held inadmissible.

Expert’s opinions regarding standards and customs in the insurance industry

The Defendant had pointed out certain other issues regarding standards and customs in the insurance industry on which the expert was to offer an opinion. Plaintiffs contended that none of those points were relevant to any material factual issue in the case and, therefore, would not assist the trier of fact. To this, the Court agreed and held the expert’s opinions in this regard to be inadmissible. The court further noted that the case would ultimately boil down to whether the parties acted in accordance with the terms of the various contracts or agreements and which entity, if any, acted negligently.

Expert’s opinions regarding other issues: Speculative and irrelevant testimony

Defendant also sought to offer the expert’s opinion that he could have obtained additional coverage for the project on SJB’s professional liability policy. The Court held this issue to be irrelevant and purely speculative. The Plaintiffs, further, noted that the expert, during deposition, was unable to provide a response to the inquiry of whether such additional insurance coverage, had it been obtained, would have provided coverage for TBE’s own negligence; and that he acknowledged that it would depend on the particular endorsement form used.

The Court noted that the expert’s testimony that the insurance industry offers project professional policies which would have covered both SJB and TBE on the project was also irrelevant as the coverage required under the contract was uncontested.

The Court also held to be speculative and, therefore inadmissible, the expert’s opinion on Catlin’s practices, something that the expert seemed to lack first-hand knowledge of.

The Defendant also sought to introduce the expert’s testimony regarding a voluntary payee principle or analysis. The expert’s opinion in this regard was that

[t]hat according to insurance industry standards, payments on behalf of parties who are not entitled to coverage under a policy are considered to be voluntary and made on the insurer’s own behalf.

The Court, however, held that the expert (in his report and deposition) failed to show the use of a credible methodology or cite any guidelines or publications that he relied upon to reach this conclusion. The Court also found his opinion in this regard amounting to a legal conclusion, and thus excluded it.

Based on the above, the Plaintiffs’ Daubert motion seeking to exclude or limit the testimony of Defendant’s proposed expert was Granted. Whatever be its impact on this litigation, this judgment by the Louisiana Court certainly goes to warn experts of the dangers of opining on everything under the sun and emphasizes the need to handpick issues relevant to the case at hand and prepare a strong case backed by a sound reasoning and methodology. It also warns experts dealing with breach of contract cases to refrain from going into contractual interpretation bordering on legal conclusiveness.

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  1. […] Distinguishing between admissible and excludable testimony, this was how the Colorado District Court excluded the Defendant’s insurance expert witness in the case of Phoenix Ins. Co. v. Trinity Universal Ins. Co. of Kansas on September 9, 2013. What is more interesting was the fact that this came right after another insurance expert was excluded in Louisiana for exactly the same reasons. […]