A Plaintiff Policyholder's Expert Witness was stricken as a sanction in Download Bray & Gillespie Mgt. v. Lexington Insurance Co. (M.D. Fla. Order of Magistrate Judge Filed August 3, 2009).
The Policyholder's Expert Witness was proffered in that case on what was apparently the main element of its Claim, which was the Policyholder's Business Interruption Loss Claim at one of its hotels. That particular element of the Claim involved Business Interruption Loss due to unrentable rooms at the Policyholder's hotel located in Daytona Beach, Florida after Hurricane Jeanne made landfall in Daytona Beach, Florida in September, 2004.
Parenthetically, the same Property Insurance Company had already paid out Policy Limits for the Policyholder's earlier Property Damage Claims resulting from Hurricane Charley which made landfall in Florida in August, 2004, and from Hurricane Frances which struck Florida in September, 2004, before Hurricane Jeanne also struck that month.
The Property Insurance Company served a request for production, in pertinent part, of the Policyholder's records including room bills or "folios" showing how many rooms were rented by the Policyholder's hotel before Jeanne, after Jeanne, by whom, etc. The Property Insurance Company did not receive the requested records until after its own Expert Witness was deposed on the Business Interruption Claim. "In sum, [the Policyholder] unabashedly contends that it is entitled to benefit from the prejudice to [the Defendant Property Insurance Company] resulting from [the Policyholder's] late production of Treasure Island room folios." Download Bray & Gillespie Mgt. v. Lexington Insurance Co. (M.D. Fla. Order of Magistrate Judge Filed August 3, 2009), attached Official Slipsheet Opinion at 33.
The prejudice to the Property Insurance Company in that case was clear to the United States Magistrate Judge who ruled upon the Carrier's motion for sanctions. The Property Insurance Company's own Business Interruption Expert did not have the benefit of the requested production when the Expert was formulating his Opinions, and they were not made available to him when he was deposed. (In fact, according to the Court's Order in this case, the records in question were not produced until after that Expert's deposition.) Download Bray & Gillespie Mgt. v. Lexington Insurance Co. (M.D. Fla. Order of Magistrate Judge Filed August 3, 2009), at 41-42.
After announcing that several possible alternative sanctions were considered, and rejected, in that peculiar case, the Magistrate Judge entered an Order which in pertinent part prohibited the Plaintiff-Policyholder "from presenting any evidence in support of a motion or response, at a hearing, or at trial regarding business interruption losses". This ruling included the sanction of striking that part of the Expert Witness Report filed by the Policyholder's Expert Witness concerning Business Interruption Losses. Further, the Order provides that the Policyholder will be prohibited from presenting that Expert's "testimony or otherwise relying on his opinion or other evidence regarding these damages in support of a motion or response, at a hearing, and at trial." Download Bray & Gillespie Mgt. v. Lexington Insurance Co. (M.D. Fla. Order of Magistrate Judge Filed August 3, 2009), at 47-48. In addition, see id. at 52.
Expert Witnesses in Insurance cases generally, including in cases involving issues of Good Faith and Fair Dealing, are examined by Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" § 8:17 (Third-Party or Liability Insurance Cases) and § 12:18 (First-Party including for example Property Insurance Cases) (Second Edition, Shepard's/McGraw-Hill; 2009 Supplement in process West Publishing).
A related post involving the same United States Magistrate Judge's Report and Recommendations on other relief requested in the same motion for sanctions in this case, can be found at www.insuranceclaimsbadfaith.typepad.com.
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