Legal Updates

 

Expert Testimony Issues

 

Cox and Tube City, LLC v. Matthews, 901 N.E.2d 14 (Ind. Ct. App. 2009).

 

Plaintiff, Matthews, sustained catastrophic injuries while working at a steel mill when Cox, an employee of Tube City, struck Matthews with a front loader.  Matthews sued both Cox and Tube City.  At trial, Matthews presented expert testimony regarding his future lost earning capacity, which totaled between $656,412.00 and $821,056.00 according to Dr. Gamboa, a vocational rehabilitation expert from Louisville.  After an unfavorable verdict, Tube City appealed. It argued that Dr. Gamboa’s testimony was admitted in error, as it was not based upon reliable medical testimony.

 

Specifically, Tube City objected to Dr. Gamboa’s testimony stating that there was no competent medical evidence to establish Matthews’ decreased work expectancy, and, therefore, Dr. Gamboa’s testimony was merely speculation.  The Court found, based upon Dr. Gamboa’s testimony, that he relied upon information provided by Matthews’s medical doctors, who had previously testified.  As such, the Court concluded that Dr. Gamboa’s opinion was based upon evidence admitted earlier in the trial.  Tube City, for the first time on appeal, claimed that Dr. Gamboa’s  testimony was not admissible under Indiana Evidence Rule 702(b).  The Court stated that Tube City’s objection was limited in its scope, and that the admissibility under IRE 702(b) had not been raised at the trial court, and therefore, was waived.  The Court further noted that Tube City’s vocational expert relied on similar methodology as Dr. Gamboa, and that Tube City could not now complain that the methodology was unreliable.   Clearly, any Rule 702/Daubert objections to such testimony must be made before trial to be preserved.

 

ACV and Replacement Cost Issues and Caps on Contractual Recoveries

 

Rockford Mutual Insurance Company v. Pirtle, 911 N.E.2d 60 (Ind. Ct. App. 2009).

 

This suit stemmed from a fire to a historic building in Terre Haute, Indiana, owned by Plaintiff and insured by Defendant.  Plaintiff obtained a mortgage on the property in the amount of $140,250.00.  Defendant insured the property for replacement coverage up to $193,000.00 for the building and $8,000.00 for personal property. 

 

After the fire, Rockford had an independent adjuster inspect the building, and the adjuster estimated the damage to the building at $79,907.49.  Rockford offered $80,000.00 to settle Plaintiff’s claim, which was rejected as it was insufficient to satisfy the mortgage or repair the building.  As neither party could agree on the actual cash value payment, Plaintiff did not complete repairs to the property, and Rockford accordingly refused to pay Plaintiff under his replacement cost coverage.  At this point, Plaintiff filed suit for breach of contract and bad faith.  The bad faith claim was soon dismissed when Rockford paid $86,146.66 for the building’s actual cash value, which finally occurred over six months after the fire.  The claim then proceeded to trial on the breach of contract claim. 

 

A jury ultimately awarded Plaintiff $124,149.55 under the insurance policy and $406,136.58 in consequential damages.  Rockford filed a Motion to Correct Errors, stating that repairing the building was a condition precedent to receiving replacement cost coverage under the policy, and that consequential damages could not be awarded as they were in excess of the policy limits.  The Court, in rejecting both of Rockford’s arguments stated that while repairing is in fact a condition precedent to replacement cost coverage, compliance with the condition was excused by the insurer’s actions in failing to advance the necessary funds to rebuild under the actual cash value coverage of the policy.  The Court declared that Rockford’s actions, in refusing to pay the actual cash value in a timely fashion, prohibited Plaintiff from beginning his repairs, and, therefore, the requirement was excused.  As such, had Rockford made a more timely payment of the actual cash value coverage, the result would likely have been different. 

 

As to Rockford’s argument that the consequential damages, in excess of the policy limits, the Court definitively stated that Rockford was liable for the consequential damages, not as a result of its contractual obligations, but, instead, for its breach of contract.  As such, the policy limits did not restrict the damages recoverable by Plaintiff.

 

“Bodily Injury” and Bodily Touching Requirement

 

Bush and Bush v. State Farm Mutual Automobile Insurance Company, 905 N.E.2d 1003 (Ind. 2009).

 

Bush’s 56 year-old son was killed as a passenger in a single-vehicle accident caused by the negligence of an uninsured driver.  The son had no insurance coverage for the vehicle or accident.  The deceased’s parents were insured under a policy with State Farm that included uninsured coverage, and they brought suit against State Farm.  State Farm denied coverage, claiming that no “insured” had sustained a “bodily injury” as required by the policy.  The trial court sustained State Farm’s motion for summary judgment, which was later overturned by the Court of Appeals.  The Supreme Court, in an issue of first impression, overturned the Court of Appeals and reinstated the summary judgment order in favor of State Farm.

 

The Supreme Court found that State Farm’s policy language did not violate the terms or spirit of the Uninsured Motorist Statute (I.C. 27-7-5-2), and, further, that its definition of bodily injury was not ambiguous.  Essentially, the parents argued that “bodily injury” could include emotional distress sustained by persons who did not sustain bodily injury, which would allow their claim to go forward.  However, the Court noted that Indiana case law is clear that “bodily injury” includes emotional distress only if it arises from a bodily touching.  As neither parent could satisfy the bodily touching requirement, their claim for uninsured coverage failed. 

 

For more in-depth analysis, please see our spring, 2007, newsletter, archived on this site, which provided an overview of this issue and reviewed a cluster of 2006-2007 cases addressing the effect of emotional distress and the physical touching requirement.

 

 

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