Val Smith and Gwen Smith v. American Strategic Insurance Corp.

Summary

The United States District Court for the Western District of Kentucky addresses an insurer’s motion for summary judgment and the parties’ motions to exclude expert testimony in a dispute involving alleged mine-subsidence damage. The court denies the expert-exclusion motions, grants summary judgment in part, and denies it in part. The opinion analyzes expert disclosure requirements under Federal Rule of Civil Procedure 26, admissibility under Federal Rule of Evidence 702, and claims for breach of contract, statutory bad faith, common-law bad faith, negligence, and related statutory violations.

Holdings

1. Gaston may testify because his deposition testimony and disclosed materials were within the scope of the opinions in his reports, the late disclosure was harmless under the applicable Rule 37 factors, and his reliance on visual inspection, core samples, mine maps, and professional experience supplied a sufficiently reliable and relevant foundation.
2. Garrigan may testify regarding the estimated cost of repairing the property because his extensive residential-construction experience qualified him to provide a repair estimate, and his reliance on a visual inspection, construction experience, building-code knowledge, and Gaston's causation opinions was sufficiently reliable.
3. Meeks was qualified to testify regarding subsurface conditions and mine-subsidence causation, and his opinions were sufficiently reliable despite plaintiffs' disagreement with his reliance on standard penetration testing and his treatment of contrary evidence.
4. Smith was qualified to testify as a structural engineer regarding structural movement and damage attributable to soil behavior and construction-related issues, but he could not independently opine on the existence or cause of coal mine subsidence beyond relying on Meeks's geological analysis.
5. Summary judgment was inappropriate on the breach-of-contract claim because a reasonable jury could find that mine subsidence caused covered damage during the policy period, and the policy's existing-damages exclusion did not clearly exclude ongoing damage merely because the underlying cause predated policy inception.
6. ASIC was entitled to summary judgment on plaintiffs' common-law bad-faith and UCSPA claims because plaintiffs failed to produce evidence that ASIC lacked a reasonable basis for denying the claim or acted with intentional misconduct or reckless disregard.

Questions Presented

1. Whether the parties' proposed expert testimony satisfied the qualification, relevance, reliability, disclosure, and supplementation requirements of Federal Rules of Evidence 702 and 703 and Federal Rules of Civil Procedure 26 and 37.
2. Whether a genuine dispute existed as to whether mine subsidence caused covered damage to the property during the ASIC policy period.
3. Whether the policy's existing-damages exclusion, anti-concurrent-causation clause, loss-in-progress doctrine, or concealment-or-fraud provision barred the breach-of-contract claim as a matter of law.
4. Whether plaintiffs presented sufficient evidence that ASIC lacked a reasonable basis for denying the claim and acted knowingly or recklessly, as required for common-law and statutory bad faith.

Disposition

other