January 2006 Bad Faith Cases: Defense Expert Qualified to Testify on Matters that go to Presence or Absence of Bad Faith, Though not on Ultimate Legal Issue of Bad Faith (Western District)

In Gallatin Fuels, Inc. v. Westchester Fire Insurance Company, the U.S. District Court for the Western District of Pennsylvania denied in part and granted in part Plaintiff’s Motion in Limine seeking to exclude an expert’s testimony at trial on various grounds.  Plaintiff argued that the expert was not qualified to testify as to bad faith practices in the industry because he lacked sufficient claims handling or claims adjusting experience. However, the Court cited the liberal policy of Federal Rule of Evidence 702, as well as U.S. Supreme Court case law, broadly granting expert qualification.  Because of the expert’s formal education, experience and knowledge in the field, the Court denied the Motion.  The Court also denied Plaintiff’s motion with regards to expert testimony on bad faith, noting that although expert testimony with respect to the ultimate legal issue of bad faith is inadmissible as a matter of law, it is permitted if it is helpful to the trier of fact and is otherwise admissible.  Nonetheless, the Court precluded the expert from testifying at trial that the cause of Plaintiff’s loss was not external as a matter of law, or that the risk was otherwise per se uninsurable, whether as a matter of economics, public policy, or under the specific terms of the insurance policy.
Date of Decision:  January 19, 2006
Gallatin Fuels, Inc. v. Westchester Fire Ins. Co., U.S. District Court, W. D. Pa, No. 02-2116, 2006 U.S. Dist. LEXIS 1717 (W.D. Pa. Jan. 19, 2006) (Ambrose, C.J.)