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Elk City Golf and Country Club, Inc. v. Philadelphia Indemnity Insurance Co.

United States District Court, W.D. Oklahoma

January 3, 2020

ELK CITY GOLF AND COUNTRY CLUB, INC., Plaintiff,
v.
PHILADELPHIA INDEMNITY INSURANCE COMPANY, Defendant.

          ORDER

          Timothy D. DeGiusti Chief United States District Judge

         Before the Court is Defendant's Combined Motions in Limine [Doc. No. 80]. Plaintiff has responded in opposition [Doc. No. 87], and Defendant has filed a reply [Doc. No. 93]. The matter is fully briefed and at issue.

         Plaintiff's breach of contract and bad faith claims arise out of an insurance policy issued by Defendant to Plaintiff. Plaintiff alleges that its real and personal property was damaged or destroyed by a tornado on May 16, 2017. The factual and procedural background of the case appears in the Order of October 24, 2019 [Doc. No. 97], denying summary judgment, and will not be repeated here.

         Defendant seeks to exclude evidence, testimony, or argument regarding sixteen subject areas: 1) an insurer's legal duties to insureds; 2) alleged fiduciary duties owed by Defendant; 3) the Oklahoma Unfair Claim Settlement Practices Act; 4) Defendant's post-litigation conduct; 5) claims of privilege; 6) expert opinions of lay witnesses or opinions of an expert outside the reasonable confines of his area of expertise; 7) expert testimony not previously disclosed or based on documents or evidence not produced in discovery; 8) Defendant's loss or expense reserves; 9) news articles and related media, including comments on social media; 10) comparisons to the Moore tornadoes or other tornadoes; 11) deaths or bodily injuries incurred from the May 16, 2017 tornado; 12) stereotypes of “wealthy insurance companies” and “poor” or “disadvantaged” insureds; 13) the construction and interpretation of the insurance agreement at issue; 14) duration of Plaintiff's relationship with Defendant and the amount of premiums paid; 15) financial information of Defendant during the liability phase of the trial; and 16) testimony by counsel whether through questioning or other means.

         In response, Plaintiff states that it does not intend to comment or argue about a fiduciary duty, privilege or claims of privilege, or present testimony from counsel. Plaintiff also does not anticipate presenting evidence of news articles or related media; comparisons to the Moore tornadoes or other tornadoes; deaths or bodily injuries sustained in the Elk City tornado; stereotypes of “wealthy insurance companies” and “poor” or “disadvantaged” insureds; the duration of its relationship with Defendant or the amount of premiums paid; or Defendant's financial information in the liability phase of the trial. Further, Plaintiff agrees that neither party should present lay or expert testimony purporting to interpret the terms of the insurance policy at issue.[1]

         Therefore, the Court finds that the only issues presented for decision by Defendant's motion concern the following five categories of evidence (renumbered for convenience): 1) Defendant's legal duties; 2) the Oklahoma Unfair Claim Settlement Practices Act; 3) Defendant's post-litigation conduct; 4) expert testimony; and 5) Defendant's loss and expense reserves.

         1. Evidence concerning Defendant's legal duties

         Defendant contends that evidence of the legal duties it owes Plaintiff and evidence of its claims handling practices, including questions of its own adjusters, should be excluded pursuant to Fed.R.Evid. 403, 701, and 702. Plaintiff asserts that asking Defendant's adjusters about their knowledge and training regarding claims handling practices, or about the industry's claims handling standards, does not invade the province of the Court or jury. Further, Plaintiff maintains that Defendant's adjusters are mixed fact/expert witnesses, and that if they do not state a legal conclusion, they may refer to the law in expressing their opinions.

         The Court finds that the evidence Defendant seeks to exclude may be relevant to Plaintiff's breach of contract and bad faith claims. Plaintiff is permitted to establish whether Defendant breached its contractual duties or acted in bad faith and, to the extent Defendant's claims handling demonstrates a breach of its contractual duties or indicates unreasonableness or bad faith on Defendant's part, such evidence may be admissible. Plaintiff may inquire of Defendant's adjusters about Defendant's claims handling practices and the industry standards based on the adjusters' training and experience.

         Moreover, there are limitations on the adjusters' testimony.[2] “In no instance can a witness be permitted to define the law of the case.” Specht v. Jensen, 853 F.2d 805, 810 (10th Cir. 1988). The adjusters cannot testify as to the legal parameters for bad faith under Oklahoma law, because it is the duty of the Court to instruct the jury on the law. In addition, the adjusters are not permitted to offer any opinion of the ultimate conclusion as to whether Defendant acted in bad faith or breached the contract.

         2. Evidence concerning the Oklahoma Unfair Claim Settlement Practices Act

         Defendant moves to preclude Plaintiff from referencing or introducing into evidence the Oklahoma Unfair Claim Settlement Practices Act (“UCSPA”), Okla. Stat. tit. 36, § 1250.1 et seq. Defendant argues that no private right of action exists under the UCSPA and to allow Plaintiff to argue the UCSPA establishes industry standards or imposes certain standards on Defendant with respect to claims handling is irrelevant, misleading, and unfairly prejudicial. Plaintiff asserts that Defendant's claims handling expert, Arthur Bates, has previously testified that the UCSPA sets a minimum standard of conduct for insurers and provides guidance in determining whether an insurer's actions were in good faith. Plaintiff does not identify any provision of the UCSPA it intends to rely on at trial; thus, the Court cannot make a meaningful determination of what evidence, if any, to exclude.

         The UCSPA “does not establish standards of care or standards of conduct for measuring whether an insurer has violated its duty of good faith and fair dealing, ” nor does it provide a private right of action. Aduddell Lincoln Plaza Hotel v. Certain Underwriters at Lloyd's of London, 348 P.3d 216, 223 (Okla.Civ.App. 2014). Further, the UCSPA “may provide guidance to a trial court in determining whether to grant summary judgment, but it does not function as an appropriate guide for a jury to determine bad faith.” Id. at 224. Considering Aduddell, it appears that any evidence that Defendant's conduct allegedly violated the UCSPA would be unfairly prejudicial. See Fed. R. Evid. 403.

         With these admonitions, the Court reserves ruling on this matter. Without citation to any specific provision of the UCSPA, or the nature of any ...


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