Schoen v. State Farm Fire & Cas. Co.

638 F.Supp.3d 1339

Randy SCHOEN, Plaintiff, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant.

CIVIL ACTION NO. 21-00264-JB-N

United States District Court, S.D. Alabama, Southern Division

Signed November 1, 2022

Andrew Glenn York, Neal C. Townsend, Townsend Law, LLC, Fairhope, AL, for Plaintiff.

James B. Newman, Thomas Ryan Luna, William W. Watts, III, Helmsing, Leach, Herlong, Newman & Rouse, P.C., Mobile, AL, for Defendant.

ORDER

JEFFREY U. BEAVERSTOCK, CHIEF UNITED STATES DISTRICT JUDGE

A. Factual Background

1. In this action for alleged breach of a homeowner's insurance policy issued by Defendant State Farm Fire and Casualty Company ("State Farm") to the Plaintiff Randy Schoen ("Schoen"), State Farm has filed a motion, based on Fed. R. Civ. P. 702 and 703, to exclude the expert testimony of Plaintiff's designated expert, Darrell Steward, who has been identified as providing expert testimony regarding the reasonable and necessary costs to repair damages allegedly caused by Hurricane Sally to Schoen's insured premises (the "Property") (Doc. 28). See Plaintiff's Expert Disclosures at page 2 (Doc. 28-1, PageID.199). Schoen disclosed that Steward would testify as reflected on a two-page spreadsheet attached as Exhibit E to Plaintiff's expert disclosures (Doc. 28-1, PageID.203-205) (hereinafter the "Nielsen estimate"). His opinions included both the cost and scope of the repairs needed (Steward Deposition at 51:1-6, PageID.215).

2. At his deposition, Steward testified that he did not prepare the Nielsen estimate (Darrell Steward Depo. at 42:6-24, Depo. Ex. 7) (Doc. 28-1, PageID.210, 311-312). Nor did he prepare a similar spreadsheet of costs of repair for the property of his brother Jerry Schoen who has also filed an action in this Court, Case No. 2021-265-JB-N (Id., Depo. Ex. 2) (Doc. 28-1, PageID.220-221). Both were prepared in their "entirety" by his estimator, Jay Nielsen, using a combination of Nielsen's own personal knowledge and some in-house information. (Steward at 27:23-28:1, 29:5-7, 31:21-23, 42:6-24, 45:12-19, 77:23-78:6) (Doc. 28-1, PageID.208-210). Nielsen sent his estimate to Steward. Without looking at the Property himself, Steward then called Nielsen to confirm that Nielsen felt good about the numbers on the estimate and then emailed that estimate to Schoen's counsel, Andrew York, without making any changes to it. (32:6-25, 77:20-78:9) (Doc. 28-1, PageID.209, 212). York then produced the Nielsen estimate as part of Plaintiff's Expert Disclosures on February 11, 2022. (Doc. 19, Doc. 28-1, PageID.198-202). Nielsen was not disclosed as a testifying expert in those expert disclosures.

3. Several weeks later, on March 3, 2022, 5 days before his deposition on March 8, Steward visited the Property for the first time, reviewing the information on Nielsen's estimate (Steward at 33:6-22, 78:7-9) (Doc. 28-1, PageID.209, 212) Steward did not take any notes during his visit to the Property (39:11-12; 76:7-14) (Doc. 28-1, PageID.211, 213). Any information he obtained during this walk-through did not impact the estimate prepared earlier by Nielsen and emailed to Schoen's counsel (33:16-22) (Doc. 28-1, PageID.209). Steward made no changes to the Nielsen estimate as a result of his visit (45:20-22) (Doc. 28-1, PageID.210).

4. Because most of the repairs had been completed at Schoen's Property before Nielsen or Steward ever visited the Property (Steward at 38:7-9) (Doc. 28-1, PageID.213), Nielsen used receipts produced by Schoen (Steward Depo. Ex. 5) (Doc. 28-1, PageID.251-310) and the public adjuster estimate prepared by NTX Claim Consulting (Steward Depo. Ex. 4) (Doc. 28-1, PageID.222-250) to prepare his estimate (Steward at 78:12-79:3) (Doc. 28-1, PageID.212). Steward never compared the information in the receipts and the public adjuster estimate to Nielsen's estimate to see if they matched up (Steward at 79:4-11) (Doc. 28-1, PageID.212).¹ Steward did not believe Nielsen made any measurements but pulled them from the public adjuster's report (Steward at 48:4-13) (Doc. 28-1, PageID.214).

5. At his deposition, Steward was questioned about the Nielsen estimate, marked as Exhibit 7, line item by line item (Doc. 28-1, PageID.208-214, 311-312). As shown below, he displayed little memory of the conditions of the Property, and little understanding of fundamental aspects of the Nielsen estimate, including how costs were derived, and he admitted that the estimate contained numerous errors, including items that were not damaged in the hurricane.

a. Steward did not know the meaning of some of the categories of information shown on both the Jerry Schoen and Randy Schoen estimates by Nielsen, such as the columns labelled "U.P.L.M." and "U.P.L." which are categories of some costs (Steward at 46:4-15; 77:20-22; Depo. Ex. 2 and Depo Ex. 7) (Doc. 28-1, PageID.214, 211, 220, 311). He confused the "QTY." (quantity) column with the cost of repairs (Steward at 51:24-52:7) (Doc. 28-1, PageID.215). He believed "MTLM." was an abbreviation for materials but testified that "I don't know why [Nielsen] categorized it as MTLM, but that's the way he's got it characterized. I don't know." (Steward at 46:18-23, 77:20-22) (Doc. 28-1, PageID.214, 211).

b. The Nielsen estimate included the removal, replacement and painting of 75 linear feet of soffit and fascia (Doc. 28-1, PageID.311). Steward did not know where that damage was located (Steward at 79:12-19) (Doc. 28-1, PageID.212). The Nielsen estimate included painting two hundred square foot of "Fiber Board" (Doc. 28-1, PageID.311). Steward did not know what that was referencing (80:1-12) (Doc. 28-1, PageID.212). When asked whether the vinyl siding on the estimate was for the garage attached to the house or a second detached garage, Steward testified, "I think this is the detached garage" (Steward at 80:13-15) (Doc. 28-1, PageID.212).

c. The Nielsen estimate included the replacement of 60 feet of vinyl fence (Doc. 28-1, PageID.311). Steward did not know where that fence was located (Steward at 80:24-9) (Doc. 28-1, PageID.212). The estimate included replacement of 50 feet of wood fence (Doc. 28-1, PageID.322). Asked where that fence was, Steward replied "I think it's in the back" (81:10-11) (Doc. 28-1, PageID.212). As for the replacement of 225 feet of chain link fence in the estimate, Steward did not know if the entirety of the fence had been damaged or if certain sections could be replaced (Steward at 81:12-19) (Doc. 28-1, PageID.212).

d. The Nielsen estimate contained the cost to repair a metal shop roof (Doc. 28-1, PageID.311). Steward did not know if Nielsen measured the roof or used the information in the public adjuster's report (Steward at 83:6-22) (Doc. 28-1, PageID.216). Steward did not look at the metal roof himself during his visit to the Property (Steward at 84:18-19) (Doc. 28-1, PageID.216) and when asked why the square footage of the metal roof to be replaced was different from the square footage of the ice and water shield that would go under it, he testified, "I have no idea." (Steward at 84:11-14) (Doc. 28-1, PageID.216).

e. The Nielsen estimate included the installation of spray-in foam insulation in the attic (Doc. 28-1, PageID.311). Steward did not know if Schoen had spray-in foam insulation in the attic before the storm (Steward at 84:20-25:2) (Doc. 28-1, PageID.216). In fact, Schoen had installed foam insulation only after the storm (Schoen at 142:13, 143:5) (Doc. 28-1, PageID.316).

f. The Nielsen estimate included the removal and replacement of 70 linear feet of crown molding (Doc. 28-1, PageID.311). Steward did not know where that measurement came from (Steward at 85:3-13) (Doc. 28-1, PageID.216). As for the removal and replacement 800 square feet of wood flooring included in the estimate, Steward did not know: (1) how much of the house had wood flooring; (2) whether the flooring was hardwood or laminate - despite vouching for Nielsen's material cost; or (3) how much of the flooring was actually damaged (Steward at 85:14-86:3) (Doc. 28-1, PageID.216-217). When asked whether he agreed with the testimony of Schoen's engineering expert, Martin Shields, that there were only two spots of minor warping that he identified in the flooring and both could be spot repaired, Steward testified "I don't know. I've never seen it, so I don't know" (Steward at 86:4-10) (Doc. 28-1, PageID.217).

g. Nielsen guessed the home was 1700 or 1800 square feet (Steward at 86:14-16) (Doc. 28-1, PageID.217). The Nielsen estimate included installing 3,000 square feet of popcorn texture on the ceiling (Doc. 28-1, PageID.312). When asked why there would be 3000 square feet of popcorn texture if the house was only 1700 square feet, Steward responded, "That's a good question" and changed his speculation as to the square footage of the house to 3000 square feet, admitting "I don't have an answer for that" (Steward at 86:21-23 87:1) (Doc. 28-1, PageID.217). The estimate itself shows only 1500 square feet of drywall to be replaced (Doc. 28-1, PageID.312), which Steward confirmed was for ceilings only. (Steward at 87:13-17, PageID.217)

h. The Nielsen estimate included replacing the HVAC system and removing/installing 9 new light fixtures and 30 new wall outlets (Doc. 28-1, PageID.312). Steward did not know what was wrong with the HVAC system other than what he was told (Steward at 88:9-18) (Doc. 28-1, PageID.217). As for the electrical work, Steward testified that that information was probably pulled off the public adjuster's report (Steward at 89:3-15) (Doc. 28-1, PageID.217).

i. The Nielsen estimate included removing and replacing all drywall ceilings in the house, based on water staining. (Doc. 28-1, PageID.312). Steward agreed that not every water stain requires the entire sheetrock piece to be replaced; some water stains can be scraped, repainted and popcorn finish reapplied (Steward at 70:24-71:4; 106:3-14) (Doc. 28-1, PageID.218-219). He did not test the integrity of the drywall where the staining was...