Summary
The United States Court of Appeals for the Eighth Circuit affirmed summary judgment for USAA Casualty Insurance Company in the Scobees’ Kentucky Unfair Claims Settlement Practices Act claim. The court held that the insurer’s liability was not beyond dispute before the underlying negligence verdict, that the record did not establish outrageous or bad-faith conduct, and that the district court properly limited the plaintiffs’ expert testimony. The court also upheld the denial as moot of the plaintiffs’ motion to exclude USAA’s expert.
Topics
Practice areas
Questions Presented
- Whether the district court abused its discretion by limiting the Scobees' insurance-industry expert from offering legal conclusions, ultimate opinions on KUCSPA violations and bad faith, and opinions based on an allegedly erroneous interpretation of Kentucky comparative-fault law.
- Whether the district court properly granted summary judgment to USAA on the Scobees' KUCSPA bad-faith claim.
- Whether the denial of the Scobees' motion to exclude USAA's expert should be reversed as moot if the summary judgment ruling were reversed.
Holdings
- The district court did not abuse its discretion by admitting testimony concerning insurance-industry claim-handling standards and their factual basis while excluding opinions that USAA violated the KUCSPA, acted in bad faith or with legally defined misconduct, or was required to tender policy limits based on Kentucky's comparative-fault law.
- Summary judgment for USAA was proper because the Scobees lacked evidence from which a rational factfinder could find that USAA violated the KUCSPA or acted outrageously or in bad faith.
- The district court properly denied the Scobees' motion to exclude USAA's expert as moot because summary judgment for USAA was properly granted.
Key quotations
“A rational factfinder could not find that the Scobees satisfied the Wittmer elements or that USAA acted outrageously or in bad faith.” (-8-)
“A rational factfinder could not conclude that USAA acted outrageously or in bad faith when it offered to pay the Scobees $100,000—the full amount owed—and received no response.” (-13-)
Factual background
Michael Scobee was seriously injured in a 2015 motorcycle accident involving William Norris, a USAA insured. Before the underlying negligence litigation, the Scobees demanded $5.25 million or the policy limit, but USAA disputed Norris's negligence and requested additional proof; the Scobees did not respond or renew the demand. A Missouri state-court jury later returned a $7 million verdict, after which USAA offered the $100,000 policy limit conditioned on satisfaction of the judgment and eventually deposited the policy limit plus interest into a federal court registry.
Procedural history
The Scobees sued USAA after obtaining a $7 million Missouri jury verdict against USAA's insured arising from a motorcycle accident. Their Kentucky Unfair Claims Settlement Practices Act and common-law bad-faith claims were removed and transferred to the Eastern District of Missouri. The district court dismissed the common-law bad-faith claim, granted USAA summary judgment on the KUCSPA claim, limited the Scobees' expert testimony, and denied as moot the motion to exclude USAA's expert. The Eighth Circuit affirmed.