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Valley Forge Insurance Co. v. Hartford Iron & Metal Inc.

United States District Court, N.D. Indiana, Fort Wayne Division

September 5, 2018

VALLEY FORGE INSURANCE COMPANY, Plaintiff,
v.
HARTFORD IRON & METAL, INC., and ALAN B. GOLDBERG, d/b/a Hartford Iron & Metal, Defendants.

          OPINION AND ORDER

          WILLIAM C. LEE WILLIAM C. LEE, JUDGE U.S. DISTRICT COURT

         This matter is before the Court for ruling on three pending motions. Plaintiff Valley Forge filed a Motion to Exclude Certain Testimony of Paul F. Amoruso (ECF 778), to which Defendants Hartford Iron and Alan B. Goldberg filed a brief in opposition (ECF 783) and Valley Forge filed a reply (ECF 786). Hartford Iron and Goldberg each filed a Motion to Exclude Experts under Daubert (ECF 780 and 781, respectively), to which Valley Forge filed briefs in opposition (ECF 784 and 785) and Hartford Iron filed a reply (ECF 787). For the reasons explained below, Valley Forge's motion (ECF 778) is GRANTED in part and DENIED in part; Hartford Iron's motion (ECF 780) is GRANTED in part and DENIED in part; and Goldberg's motion (ECF 781) is DENIED. Specific testimony and opinions by Paul Amoruso and Bernd Heinze are precluded as set forth below. The motions are in all other respects denied.

         STANDARD OF REVIEW

         The admissibility of expert testimony is governed by Federal Rule of Evidence 702 and the Supreme Court's opinion in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). See Lees v. Carthage, 714 F.3d 516, 521 (7th Cir. 2013) (explaining that Rule 702 has superseded Daubert, but that its standard of review is still applicable). In analyzing the reliability of proposed expert testimony, the role of the court is to determine whether the expert is qualified in the relevant field and to examine the methodology the expert has used in reaching his conclusions. See Kumho Tire Co. v. Carmichael, 526 U.S. 137, 153 (1999). An expert may be qualified by “knowledge, skill, experience, training, or education.” Fed.R.Evid. 702. “The purpose of [the Daubert] inquiry is to vet the proposed testimony under Rule 702's requirements that it be ‘based on sufficient facts or data,' use ‘reliable principles and methods,' and ‘reliably appl[y] the principles and methods to the facts of the case.'” Lapsley v. Xtek, Inc., 689 F.3d 802, 804 (7th Cir. 2012) (quoting Fed.R.Evid. 702). Whether to admit expert testimony rests within the discretion of the district court. See Gen. Elec. v. Joiner, 522 U.S. 136, 142 (1997); Lapsley, 689 F.3d at 810 (“[W]e ‘give the district court wide latitude in performing its gate-keeping function and determining both how to measure the reliability of expert testimony and whether the testimony itself is reliable.'”) (quoting Bielskis v. Louisville Ladder, Inc., 663 F.3d 887, 894 (7th Cir. 2011)). “The proponent of the expert bears the burden of demonstrating that the expert's testimony would satisfy the Daubert standard” by a preponderance of the evidence. Lewis v. CITGO Petroleum Corp., 561 F.3d 698, 705 (7th Cir. 2009).

         When the judge is the trier of fact “the usual concerns of [Rule 702]-keeping unreliable expert testimony from the jury-are not present.'” Equal Employment Opportunity Comm'n v. Amsted Rail Co., 2018 WL 587345, at *3 (S.D. Ill. Jan. 29, 2018) (quoting Metavante Corp. v. Emigrant Sav. Bank, 619 F.3d 748, 760 (7th Cir. 2010)). “[W]here the factfinder and the gatekeeper are the same, the court does not err in admitting the evidence subject to the ability later to exclude it or disregard it if it turns out not to meet the standard of reliability established by Rule 702.” Id. (quoting In re Salem, 465 F.3d 767, 777 (7th Cir. 2006)). As this Court explained in BASF Corp. v. Aristo, Inc.:

It is for the [trier of fact] to decide the correctness of the facts that underlie each of these experts' opinions. i4i Ltd. Partnership v. Microsoft Corp., 598 F.3d 831, 856 (Fed.Cir. 2010). These experts are ready to be examined and cross-examined in [court], which will determine who provides the more credible way of accounting for damages in this case. The law of both the Seventh Circuit and the Federal Circuit supports this conclusion. As the Seventh Circuit has stated: “The question of whether the expert is credible or whether his or her theories are correct given the circumstances of a particular case is a factual one that is left for the [trier of fact] to determine after opposing counsel has been provided the opportunity to cross-examine the expert regarding his conclusions and the facts on which they are based.” Smith v. Ford Motor Co., 215 F.3d 713, 719 (7th Cir. 2000).

BASF Corp. v. Aristo, Inc., 2012 WL 2529213, at *4-5 (N.D. Ind. June 29, 2012). Another district court explained this flexible standard as follows:

[T]o the extent that Daubert issues relate to matters that will be tried to the Court, rather than a jury, the Court possesses greater latitude in exercising its gatekeeping function. See Metavante Corp. v. Emigrant Sav. Bank, 619 F.3d 748, 760 (7th Cir. 2010); In re Salem, 465 F.3d 767, 777 (7th Cir. 2006) (“Where the gatekeeper and the factfinder are one and the same-that is, the judge-the need to make such decisions prior to hearing the testimony is lessened. That is not to say that the scientific reliability requirement is lessened in such situations; the point is only that the court can hear the evidence and make its reliability determination during, rather than in advance of, trial. Thus, where the factfinder and the gatekeeper are the same, the court does not err in admitting the evidence subject to the ability later to exclude it or disregard it if it turns out not to meet the standard of reliability established by Rule 702.”).

Client Funding Solutions Corp. v. Crim, 943 F.Supp.2d 849, 860-61 (N.D. Ill. 2013).

         Finally, and perhaps most importantly in this case, when a party's challenges to proposed expert testimony “do not go to admissibility but to the appropriate weight that should be accorded to the evidence[, ] ‘[d]etermination on admissibility should not supplant the adversarial process; shaky expert testimony may be admissible, assailable by its opponents through cross-examination.'” Metavante, 619 F.3d at 760 (quoting Gayton v. McCoy, 593 F.3d 610, 616 (7th Cir.2010)).

         DISCUSSION

         The Court, having reviewed the parties' briefs and exhibits and considered the arguments presented, concludes that the parties' motions to exclude expert testimony will be denied, with the exception of specific opinions or testimony from Hartford Iron expert Paul Amoruso and Valley Forge expert Bernd Heinze as set forth below. In overwhelming part, the parties' arguments are actually criticisms that go to weight (and even credibility, in some instances) rather than admissibility. This is especially true given that this case is scheduled for a bench trial, which affords the Court much more flexibility regarding the admission of expert testimony (all testimony, for that matter). The Court's rulings are intended to ensure that both sides have a fair opportunity to present their expert evidence and challenge opposing experts through cross-examination and contrary evidence. The parties really pick apart the opposing side's experts, and both have some legitimate complaints about certain statements, references, conclusions or opinions included in the expert reports. At the same time, the Court's review of those reports reveals that all of them contain relevant information that would assist the Court in understanding and ruling on the substantive issues to be tried.

         The present motions are easily resolved without the need for the Court to parse through each of the expert reports in an effort to sanitize them of their many alleged defects. Valley Forge and Hartford Iron want the Court to throw the baby out with the bath water. Amoruso's opinions about environmental matters are on their face outside his area of expertise and much of Heinze's proposed testimony is inadmissible for other reasons. All of the parties' other challenges and objections to proposed expert evidence boil down to this: the other side's experts' opinions on almost every issue are inadmissible because they are wrong. The parties go to great lengths to explain why the conclusions and opinions of a particular expert are so bogus that the Court should not waste time considering them. The parties' challenges don't warrant excluding expert evidence; rather, they reveal the need to subject all of the experts to cross-examination at trial.

         I. Valley Forge's motion to exclude certain testimony of Paul F. Amoruso.

         Valley Forge “moves to exclude the testimony of former insurance claims handler Paul F. Amoruso regarding certain opinions disclosed in his written reports dated October 2, 2017 and November 6, 2017, respectively, that concern topics well beyond his knowledge, skill, experience, training, and education.” Motion to Exclude Testimony of Amoruso (ECF 778), p. 1. More specifically, Valley Forge argues as follows:

         The motion is brought on the basis that certain of Amoruso's opinions fail to meet the Rule 702 standard for admissibility of expert testimony because: (1) Amoruso, a former claims handler, is not qualified to opine on matters such as environmental engineering, contract interpretation, and underwriting practices; (2) Amoruso used unreliable methodologies in reaching his conclusions, such as relying on conjecture and baseless supposition concerning a third-party's mindset; and (3) Amoruso's opinions do nothing to assist the trier of fact to understand the evidence or to determine a fact in issue.

Id. Valley Forge takes no issue with Amoruso's proposed testimony “related to claims practices and procedures in this case[, ]” and concedes that “[i]f that were the extent of Amoruso's opinions, then Valley Forge would not question his qualifications under Rule 702[.]” Brief in Support of Motion to Exclude (ECF 779), p. 1. The portions of Amoruso's proposed testimony that Valley Forge challenges involve what it designates as his “environmental opinions” and “contract-interpretation opinions, ” which Valley Forge insists “stray far beyond his area of experience and knowledge[.]” Id., p. 2.

         A. Environmental opinions.

         In his reports, Amoruso includes several statements that Valley Forge contends involve environmental or engineering matters outside his field of expertise. There are nine such statements or opinions, according to Valley Forge, that Amoruso is unqualified to make, which are:

         • On February 26, 2014, IDEM changed its April 17, 2012 instruction that remediation of PCBs should be carried out to the agency's industrial screening level of 7.4 ppm. Instead, the agency set a cleanup level of 1 ppm PCBs ‘due to the recent PCB impacted storm water events.'

         • [Valley Forge hydrogeology expert Robert] Karls makes a single argument about delay of effective stormwater work. The argument provides no valid basis to attribute this delay to Hartford Iron. This issue illustrates broader failures of methodology in the Karls and [Bernd] Heinze reports.

o Karls says nothing about the supposed fault of Hartford Iron regarding this task, including the failure of Insurer's coverage counsel to negotiate terms with Keramida in 2015.
o Effectively and completely capturing stormwater migrating from the Hartford Iron site is ...

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