I Want One Of Those!
Experts in A Bad Faith Case — Everyone Needs One, Or Do They?
By Michael W. Brewer

I was used to the normal jury instruction from OUJI concerning expert witnesses. However, I was not ready for this judge’s introduction of each and every expert called by the parties. As each expert would take the stand to testify, the judge would advise the jury along the lines of something like this:

The next witness is an expert witness; anybody can pay an expert witness to say anything. You are to consider this testimony and give it the weight that it is worth.

This is as close to a quote as I can get after these many years. At that time, I was a little bit taken aback by this introduction, especially when it was my expert and not the expert retained by the adverse party. However, this trial judge introduced every expert the same way in every case.

After more years of trying jury cases with expert testimony involved and working with focus groups, jury consultants and post-verdict jury surveys, it became abundantly clear to me that this jurist had hit the nail squarely on the head when describing expert testimony as far as jurors were concerned. In many ways, experts are simply witnesses compensated by their respective parties to give testimony favorable to their positions. Otherwise, there would be no reason for them to appear at trial and give testimony. This radically altered my thinking as to whether you would even need an expert to rebut the other side’s expert.

This is especially true in the world of insurance bad faith. Despite the adoption of Daubert and Kumho Tire1 by Oklahoma courts, experts abound in civil jury trials. Many are allowed to testify on the basis that they will aid the jury to find the truth of the matter in dispute. Unfortunately, although this basis does appear to be based on evidentiary rules 2702 or 702, it does not sound much like Daubert or Kumho Tire at all. If in fact the law mandates that the trial judge be the gatekeeper of experts, is this gate ever in a closed position? In the world of bad faith insurance law, does the fact that you are one of 16,076 attorneys licensed by the Oklahoma Bar Association mean that you are qualified to give expert opinions in an insurance bad faith case? Moreover, does it mean that if you are one of the thousands of licensed adjustors by the Oklahoma Insurance Commission, you are automatically qualified to give expert opinions in a bad faith insurance case?

Broken down to its basic foundations, bad faith cases fall into two categories. The issues either have to do with the denial of coverage or the handling of a covered claim, or both. While each matter must be determined on a case-by-case basis, the intent of this article is to give the reader a bird’s-eye view of the process and hopefully some practice pointers you can use in your own practice (for those of you who choose to remain litigators or trial lawyers and not become mediators, arbitrators or trial experts/consultants). In the end, experience tells us that jurors are more inclined to believe the introduction of expert witnesses of the jurist who shocked my world with his pronouncement before my expert could even give his name. After all, my client had paid good money for that expert to appear at trial and give his opinions. 

BACKGROUND

What is the purpose of having experts testify regarding bad faith in insurance cases? The 10th Circuit Court of Appeals has held that jurors are capable of determining whether bad faith exists based on their common sense and their life experiences.2 One does not need to be an expert to recognize the presence or absence of bad faith. The average person knows bad faith when they see it. Expert testimony regarding insurance company bad faith is not a necessity, because whether someone has acted in bad faith is a question of fact that the jury can decide without the opinion of an expert.3 This seems to indicate to us that a so-called bad faith expert is not necessary.

In short, not just anyone can be a bad faith expert. Only when the testimony can add something extra and valuable to the jurors’ understanding of a case and the bad faith elements should the courts allow expert testimony regarding insurance bad faith practices.4 Courts across the country have generally refused to allow expert witnesses to testify in insurance bad faith claims when “it is within the capability of the fact finder, unaided by expert testimony, to assess whether an insurer acted in bad faith or breached its duty of care.”5 Expert testimony is not a “prerequisite to the submission of a bad faith claim.”6

It is the province of the jurors, not the attorneys or the experts, to reach factual conclusions. If expert witnesses are allowed to testify, they better offer something to the case besides a factual or legal conclusion. What would be the purpose of the jury if the experts simply fed them the conclusion?

OKLAHOMA LAW

Oklahoma has adopted Daubert and Kumho Tire, U.S. Supreme Court cases which, taken together, state that experts testifying about any specialized knowledge must be reliable and their testimony must be relevant. In Daubert, the Supreme Court named the trial courts the “gatekeepers,” giving them discretion to allow or exclude expert testimony based on the reliability and relevance of the testimony.7 Experts testifying about insurance bad faith practices must therefore have some specialized knowledge, be reliable and give relevant testimony.

Oklahoma’s evidence rule regarding expert testimony, 12 O.S. § 2702, is the same as Federal Rule of Evidence 702. To satisfy Rule 702, the witness must be an expert, meaning that she must have specialized knowledge, and the expert testimony must “assist the trier of fact to understand the evidence or to determine a fact in issue.”8

Interpreting the first requirement, that the witness must be an expert, Daubert said that to be an expert the witness and her testimony must be reliable and relevant. Daubert identified four factors to consider when determining whether the expert’s proposed testimony is reliable:

• Whether the theory or technique used by the expert can be or has been tested;
• Whether the theory or technique has been subjected to peer review and publication;
• Whether there is a known or potential rate of error of the technique or method; and
• Whether the theory or technique has obtained general acceptance within the scientific community.9

Kumho Tire explained that the Daubert factors should apply to other testimony besides scientific testimony, but the Daubert factors should be considered only to the extent they are relevant to the subject of the testimony.10 The 10th Circuit has held that the methods employed by the expert witness in reaching her factual conclusion must be “scientifically sound” and her opinion must be based on “facts which satisfy Rule 702’s reliability requirements.”11

Once it is established that the testimony is reliable and relevant and being given by a qualified expert, the next test for admissibility is whether the testimony offered by the expert witness will aid the trier of fact in understanding the evidence presented. The 10th Circuit has called the requirement of helpfulness to the trier of fact the “touchstone of admissibility.”12

Several Oklahoma and 10th Circuit cases illustrate how seemingly qualified “experts” are excluded from giving expert testimony because they do not help the jurors understand the evidence. One expert witness was disqualified when the judge ruled that the jury was competent and capable to compare an insurance company’s actions with the industry standard for insurance companies.13 The jury did not need the expert’s opinion to analyze the evidence presented. Several other 10th Circuit cases have held that “[w]hen the normal experiences and qualifications of laymen jurors are sufficient for them to draw a proper conclusion from given facts and circumstances, an expert witness is not necessary” and sometimes even improper. 14

In addition to satisfying the Daubert and Kumho Tire factors of reliability and relevance and the Rule 702 requirement of aiding the jury in understanding the evidence, the expert testimony must also not provide a legal conclusion to the jury. It is the province of the judge, not the expert witness, to instruct the jury on what law to apply.

In a recent U.S. District Court decision in Oklahoma, the court excluded expert testimony which would have given the jury a legal conclusion regarding the evidence offered.15 The expert witness in that case was going to testify as to his opinion of fault in an insurance bad faith case.16 The court went on to say that the expert’s testimony would have “impermissibly invade[d] the province of the jury.”17 This ruling goes to the same proposition stated before: jurors are capable of making their own conclusions based on the evidence presented to them. Expert witnesses are not called upon to decide the case for the jury. Rather, expert witnesses are called on to explain difficult ideas to the jury that the jury would not otherwise understand. The U.S. Supreme Court has held that an expert testimony gives a legal conclusion and should therefore be inadmissible when “there is too great an analytical gap between the data and the opinion offered.”18

Most of the witnesses called to testify as experts in insurance bad faith cases are attorneys, insurance adjusters or claims handlers. Even if an attorney has extensive experience with insurance bad faith claims, the ultimate test for admissibility of her expert testimony is always whether her testimony would assist the trier of fact.19 The same is true for insurance adjusters, claims handlers and any other witness called to testify as an expert in a bad faith case. Remember also that besides having experience in the field, the experts must base their opinions on “reliable facts” and “reliable methodology.”20 Providing the jury with a legal conclusion does not qualify as aiding them. In fact, this more than likely crosses the line of what is reserved for the court as jury instructions on the law.

RECENT OKLAHOMA CASELAW

In a pre-Daubert 1998 decision, the Oklahoma Court of Civil Appeals found in Hall v. Globe Life & Acc. Ins. Co. that it was not error for the trial court to allow testimony in an insurance bad faith case of an expert witness who testified about the adequacy of the insurer’s investigation of the insured’s claim.21 The court allowed the testimony on the narrow issue of adequacy of the insurer’s investigation because it was “relevant to the matter and potentially helpful to the jury.”22

Several other Oklahoma cases have followed suit after Hall in deciding to admit expert testimony in insurance bad faith cases when the expert testifies about a narrow issue that the court deems that the jury cannot understand on its own. Two such cases are Hale v. AG Ins. Co. and Heffron v. District Court of Okla. Co., where the Oklahoma Court of Civil Appeals held that “expert testimony on the adequacy or inadequacy of the carrier’s pre-denial investigation may be relied on by both sides to support their respective positions in the case.”23 24 These last two cases show us that post-Daubert Oklahoma courts allow expert witnesses in insurance bad faith cases, but narrow the scope of the expert’s testimony. Now such testimony must also satisfy the requirements of expert testimony set out in Daubert, Kumho Tire and Rule 2702.

CONCLUSION

Think twice the next time you consider using an expert witness in an insurance bad faith case. Give careful consideration to who your expert is and what areas they are qualified to testify about, as well as the specific issue in the case you intend to have them address. Sometimes less is really more. Ask yourself whether that expert is really offering anything to the jury that the jury could not figure out on its own. Just because the judge allows your bad faith expert to testify does not mean that such testimony will gain you points with the jury. A final consideration may be whether such expert testimony builds a basis for appeal into the trial record.

1. Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993); Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999).
2. Thompson v. State Farm Fire & Cas. Co., 34 F.3d 932 (10th Cir. 1994).
3. Frase v. Henry, 444 F.2d 1228, 1231 (10th Cir. 1971).
4. Thompson at 941.
5. John J. Pappas, “Butler Pappas on Bad Faith,” Mealey’s Litigation Report: Insurance Bad Faith, Vol. 17, #14 (November 2003).
6. Id.
7. Id. at 597.
8. Fed. Rules of Evidence 702.
9. Daubert at 592-595.
10. Kumho Tire.
11. Mitchell v. Gencorp Inc., 165 F.3d 778, 781 (10th Cir. 1999).
12. Werth v. Makita Elec. Works, Ltd., 950 F.2d 643, 648 (10th Cir.1991).
13. Thompson.
14. Seikel v. American Medical Security Life Insurance Co., 2007 WL 4859272 (W.D. Okla. 2007), Wilson v. Muckala, 303 F.3d 1207, 1219 (10th Cir. 2002), citing Frase v. Henry, 444 F.2d 1228, 1231 (10th Cir. 1971).
15. North American Specialty Ins. Co. v. Britt Paulk Ins. Agency, Inc., 2007 WL 2694323 (E.D. Okla. 2007).
16. Id.
17. Id.
18. General Electric v. Joiner, 522 U.S. 136, 146 (1997).
19. Transcontinental Ins. Co. v. Lemons, 2007 WL 4856868 (W.D. Okla. 2007).
20. Combs v. Shelter Mut. Ins. Co., 2007 WL 4748227 (E.D. Okla. 2007).
21. Hall v. Globe Life & Acc. Ins. Co., 968 P.2d 1263, 1266 (Okla. Civ. App. 1998).
22. Id.
23. Hale v. A.G. Ins. Co., 138 P.3d 567, 573 (Okla. Civ. App. 2006).
24. Heffron v. District Court of Okla. Co., 77 P. 3d 1069, 1077 (Okla. Civ. App. 2003).

About The Author

Michael “Mike” Brewer is a shareholder in the law firm of Hiltgen & Brewer P.C. He focuses his practice in the areas of personal injury, business litigation, products liability and insurance defense. He is a past president of the Oklahoma Association of Defense Counsel. He currently serves as chair of the OCBA Fee Grievance and Ethics Committee and is a member of DRI and FDCC. He was honored with the 2007 Outstanding Defense Lawyer Award from OADC. He earned a B.S. in mechanical engineering and a J.D. from the University of Oklahoma.

I Want One Of Those!
Experts in A Bad Faith Case — Everyone Needs One, Or Do They?
Published 79 OBJ 1773 (August 9, 2008)