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Heartland Catfish Co., Inc. v. Navigators Specialty Insurance Co.

United States District Court, S.D. Alabama, Northern Division

April 24, 2017

HEARTLAND CATFISH COMPANY, INC., et al., Plaintiff,
v.
NAVIGATORS SPECIALTY INSURANCE COMPANY, Defendant.

          ORDER

          CALLIE V. S. GRANADE SENIOR UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the motion of Heartland Catfish Company, Inc. (“Heartland”) to strike Mary Jane Watson as an Expert (Doc. 99), opposition thereto by Navigators Specialty Insurance Company (“Navigators”) (Doc. 113), and Heartland's reply (Doc. 120). For the reasons discussed below, the Court finds that Ms. Watson's proposed testimony is irrelevant. Accordingly, Heartland's motion to strike Watson as an expert will be granted.

         This case arises from an underlying lawsuit brought by Heartland against companies insured by Navigators: SmarterFuel Incorporated and Smarter Fuel South, LLC (collectively “SmarterFuel”). In the underlying lawsuit, Heartland obtained a default judgment against SmarterFuel. In the current action, Navigators intends to have Mary Jane Watson testify as an expert regarding appraisals that were submitted to support the default judgment in the underlying action. Heartland seeks to strike Ms. Watson as an expert under Alabama Code § 27-23-2 and Federal Rules of Evidence 401, 402 and 702.

         Heartland first cites Alabama Code § 27-23-2 as the basis for its motion to strike. Section 27-23-2 provides that when a corporation obtains a judgment against a party for damage to property and that damage was insured at the time the right of action arose, “the judgment creditor shall be entitled to have the insurance money provided for in the contract of insurance.” Ala. Code § 27-23-2. Section 27-23-2 also provides that if the judgment is not satisfied, the judgment creditor may proceed directly against the insurer. Id. However, the parties in this case appear to agree that Pennsylvania law, rather than Alabama law, applies substantively to the claims asserted in this case.[1] “Under the doctrine enunciated in Erie and its progeny, ‘federal courts sitting in diversity apply state substantive law and federal procedural law.' ” Esfeld v. Costa Crociere, S.P.A., 289 F.3d 1300, 1306 (11th Cir. 2002) (citations omitted). “[F]or purposes of Erie, Alabama's statute circumscribing the right of an injured party to sue directly the alleged tortfeasor's insurer is outcome determinative under Erie and is a substantive law.” Canal Ins. Co. v. INA Trucking, LLC, 2017 WL 1146984, at *5 (M.D. Ala. Mar. 10, 2017), report and recommendation adopted, 2017 WL 1147772 (M.D. Ala. Mar. 27, 2017) (citing Esfeld v. Costa Crociere, S.P.S., 289 F.3d 1300, 1306 (11th Cir. 2002)). Even if Alabama law were applicable to this case, § 27-23-2 does not appear to provide any authority to strike Ms. Watson as an expert witness. The statute simply provides a basis for a direct claim against Navigators as the alleged insurer of the tortfeasor.

         Federal Rules 401 and 402 require that evidence must be relevant to be admissible. “To be relevant, evidence must have some “tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” United States v. Hall, 653 F.2d 1002, 1005 (5th Cir. 1981) (citing Fed.R.Evid. 401). “Implicit in that definition are two distinct requirements: (1) The evidence must be probative of the proposition it is offered to prove, and (2) the proposition to be proved must be one that is of consequence to the determination of the action.” Id.

         For expert testimony to be admissible it must be both relevant and reliable. Daubert v. Merrell Dow Pharmaceuticals Inc., 509 U.S. 579 (1993). “[A] district court judge is to act as a ‘gatekeeper' for expert testimony, only admitting such testimony after receiving satisfactory evidence of its reliability.” Dhillon v. Crown Controls Corporation, 269 F.3d 865, 869 (7th Cir. 2001); see also U.S. v. Majors, 196 F.3d 1206, 1215 (11th Cir. 1999). However, “it is not the role of the district court to make ultimate conclusions as to the persuasiveness of the proffered evidence.” Quiet Technology DC-8, Inc. v. Hurel-Dubois UK Ltd., 326 F.3d 1333, 1341 (11th Cir. 2003). “[A] district court's gatekeeper role under Daubert is not intended to supplant the adversary system or the role of the jury.” Id. (citing Maiz v. Virani, 253 F.3d 641, 666 (11th Cir. 2001)). “Quite the contrary, ‘[v]igorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence.' ” Id. (quoting Daubert, 509 U.S. at 596, 113 S.Ct. at 2798).

         Rule 702 of the Federal Rules of Evidence provides:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.

Fed. R. Evid. 702. The rule compels district courts to “conduct an exacting analysis of the foundations of the expert opinions to ensure they meet the standards for admissibility under Rule 702.” United States v. Abreu, 406 F.3d 1304, 1306 (11th Cir. 2005) (quoting United States v. Frazier, 387 F.3d 1244, 1260 (11th Cir. 2004) (internal quotation marks omitted)). Accordingly, under Rule 702, “this Court has an obligation to screen expert testimony to ensure it stems from a reliable methodology, sufficient factual basis, and reliable application of the methodology to the facts.” Whatley v. Merit Distribution Services, 166 F.Supp.2d 1350, 1353 (S.D. Ala. 2001) (citations omitted).

         Heartland contends that Ms. Watson's opinions on the evidence that supported the default judgment in the underlying action are irrelevant because the correctness of the default judgment is irrelevant to the issues before the Court in the instant action. Navigators disagrees, asserting that Watson is not being offered to attack the underlying default judgment but to show that Heartland failed to meet its burden of proving that the underlying judgment is covered by Navigators' pollution policy. Navigators states that Watson will testify that the appraisals submitted as evidence in the underlying motion for default judgment cannot be used to show a diminution in value caused by pollution or environmental issues. According to Navigators, the 2014 appraisal submitted to show a diminution in value only covered 20 acres of the property in question and was compared to a 2008 appraisal that determined the fair market value of 120 acres. Additionally, Navigators ...


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