Construction Litigator Permitted to Provide Insurance Expert Testimony in Bad Faith Case

    Court: United States District Court for the District of Arizona
    Jurisdiction: Federal
    Case Name: Adams Craig Acquisitions LLC v. Atain Specialty Ins. Co.
    Citation: 2019 U.S. Dist. LEXIS 129537


    This case involves an insurance claim dispute. The plaintiff construction company was contracted to construct a residence. The homeowners eventually noticed a leak in the garage of the home. The discovery of this leak revealed construction problems that were subsequently repaired by the plaintiff. The defendant specialty insurance company denied coverage for the property damage, the plaintiff’s management, and overhead costs related to the repairs. The plaintiff hired an insurance expert witness, and the defendant challenged the expert’s testimony.

    The Insurance Expert Witness

    The plaintiff’s insurance expert witness was an attorney with 25+ years of experience in commercial and residential construction litigation. His other areas of expertise included transactional practice, representing municipalities, colleges and school districts, insurance coverage, commercial litigation, and insurance defense. The insurance expert received his J.D. from the University of Virginia School of Law in 1995.

    He had experience advising clients in litigation involving insurance coverage for construction-related claims, the sufficiency of insurance coverage, insurance coverage decisions, and subrogation cases. The insurance expert engaged in site reviews, construction inquiries, and insurance investigations.


    The defendant noted that the plaintiff’s insurance expert witness had never worked directly for an insurer. As such, the defendant argued the insurance expert was not qualified to discuss insurance company practices in bad faith claims. In response, the court held that although the expert had never worked for an insurance company, his extensive experience with insurance disputes in the construction industry satisfied the minimal foundation of “knowledge, skill, and experience” required to give expert testimony, citing Hangarter v. Provident Life and Acc. Ins. Co.

    The insurance expert opined that the defendant’s insurance coverage was unreasonable concerning certain elements of the property damage. Part of the expert’s testimony pertained to adequacy of defendant’s insurance investigation and reasonableness of its insurance coverage. As such, he discussed the causation of the water damage in the building.

    The court further observed the plaintiff hired the insurance expert to discuss the reasonableness of the defendant’s insurance coverage positions. The expert was also hired to opine on the adequacy and timeliness of the defendant’s insurance investigation. Furthermore, the insurance expert was to investigate prejudice claims made by defendant and resulting prejudice to the plaintiff.

    The court rejected the defendant’s argument that the insurance expert had not been hired as a construction expert. The court also disagreed that the insurance expert’s opinion exceeded the scope of his testimony. The court deemed the expert’s opinion related to management expenses and voluntary payments to be relevant.

    The court noted that the expert reviewed all case materials for this insurance matter. Furthermore, he attended an inspection of the concerned site in order to arrive at his conclusion. As such, his opinion was sufficiently reliable as per the standards of Daubert. Because the expert did not opine as to whether the defendant acted in bad faith, his opinion could not be considered as legal conclusion. The court found that the expert only addressed subsidiary questions that would be helpful to the trier of fact.


    The defendant’s motion to exclude the testimony of the insurance expert witness was denied.