Texas Federal Court Bars Coverage Attorney’s Expert Testimony

In Corinth Investor Holdings, LLC v. Evanston Insurance Co., 2014 U.S. Dist. LEXIS 172647 (E.D. Tex. Dec. 15, 2014), the United States District Court for the Eastern District of Texas granted the plaintiff’s motion to strike the “expert” report of Michael W. Huddleston, an expert witness designated by the defendant insurer. Homeland Insurance Company (“HIC”) had designated Huddleston, an attorney with experience in insurance law, as an expert witness. Notably, HIC’s main coverage defenses were based on the policy’s “claims made” requirement and prior knowledge exclusion. In Mr. Huddleston’s report, he testified to insurance company practice with regard to notice, the legal standard for denying coverage in bad faith, application of the “eight corners” rule to the terms of the policy, and the relevance of extrinsic evidence and whether reliance on the evidence was reasonable.

The district court agreed with the plaintiff and excluded Mr. Huddleston’s testimony based on the Daubert standard. The court found compelling that Mr. Huddleston was not a claims adjuster, but rather an experienced insurance coverage attorney whose opinions were clearly formed from a legal analysis rather than from experiences in the insurance industry. The report was also found to contain legal arguments and analysis that the court expected HIC’s attorneys to make regarding the applicable law.  The district court concluded that Huddleston’s report improperly invaded the province of the jury and the court.

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