Schoen v. State Farm Fire & Cas. Co.

638 F.Supp.3d 1323

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

CIVIL ACTION NO. 21-00265-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 Jerry 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.197). 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.200-201) (hereinafter the "Nielsen estimate"). His opinions included both the cost and scope of the repairs needed (Steward Deposition at 51:1-6, PageID.209).

2. At his deposition, Steward testified that he did not prepare the Nielsen estimate (Darrell Steward Depo. at 42:6-24, Depo. Ex. 2) (Doc. 28-1, PageID.207, 215-216). Nor did he prepare a similar spreadsheet of costs of repair for the property of his brother Randy Schoen who has also filed an action in this Court, Case No. 2021-264-JB-N (Id.). 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, 45:12-19) (Doc. 28-1, PageID.204-207). 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. (Steward at 32:6-25) (Doc. 28-1, PageID.205). York then produced the Nielsen estimate as part of Plaintiff's Expert Disclosures on February 11, 2022. (Doc. 19, Doc. 28-1, PageID.200-201). 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) (Doc. 28-1, PageID.205). Any information Steward obtained during this walk-through did not impact the estimate prepared earlier by Nielsen and emailed to Schoen's counsel (Steward at 33:16-22) (Doc. 28-1, PageID.205). Steward made no changes to the Nielsen estimate as a result of his visit (Steward at 45:20-22) (Doc. 28-1, PageID.207).

4. At his deposition, Steward was questioned about the Nielsen estimate, marked as Exhibit 2 (Doc. 28-1, PageID.215-216), line item by line item (Steward at 46-72) (Doc. 28-1, PageID.208-214). 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 the costs were derived, and he admitted the estimate contained numerous errors, including costs to repair or replace property that did not exist or were not damaged in the hurricane.

a. Steward did not know the meaning of some of the categories of information shown on the Nielsen estimate, such as the columns labelled "U.P.L.M." and "U.P.L." which are categories of some costs (Steward at 46:4-15; Depo. Ex. 2) (Doc. 28-1, PageID.208, 215). He confused the "QTY." (quantity) column with the cost of repairs (Steward at 51:24-52:7) (Doc. 28-1, PageID.209). 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) (Doc. 28-1, PageID.208).

b. The Nielsen estimate contained a $4200 cost to wash, "repoint" and seal the masonry brick. Steward was not sure what the "repointing" work was, speculating that it may have related to some metal studs around the windows, but admitted ". . . on this one, we're not sure." (Steward at 52:7-18) (Doc. 28-1, PageID.209). And he could not say that this cost was caused by Hurricane Sally; this is just part of their standard procedure in doing any kind of work on such a job (Steward at 51:7-15) (Doc. 28-1, PageID.209). Schoen's engineering expert, Martin Shields, testified that he did not observe any hurricane damage to the masonry (Shields at 84:20-85:3) (Doc. 28-1, PageID.219). Steward testified that he would not disagree if Shields so testified. (Steward at 52:23-53:2) (Doc. 28-1, PageID.209).

c. The Nielsen estimate contained the cost to paint 600 linear foot of fascia. Steward admitted that Nielsen did not measure any damaged fascia and "pulled that off" the public adjuster's report (Steward at 47:17 - 48:3) (Doc. 28-1, PageID.208).¹

d. The Nielsen estimate contained the cost to repair a sliding patio door and a set of French doors through which water had penetrated. But Steward did not know if that was a one-time water intrusion incident during Hurricane Sally or a continuing issue with leaking around those areas (Steward at 53:3-54:6) (Doc. 28-1, PageID.209). He could not recall what was wrong with the double-hung window shown on the repair estimate that would necessitate its replacement (Steward at 54:9-18) (Doc. 28-1, PageID.210). He acknowledged that the Nielsen estimate included the installation of an oval window instead of the gable end vent he believes was damaged by Hurricane Sally (Steward at 54:19-55:9) (Doc. 28-1, PageID.210).

e. Steward did not know why Nielsen believed a new pool liner was needed, at a cost of $7,000; he thought that entry may have come off the public adjuster's report (Steward at 55:11-25) (Doc. 28-1, PageID.210). He did not think the pool even had a pool liner (Steward at 56:1-3) (Doc. 28-1, PageID.210) and submitted an amended estimate at his deposition without that entry (Steward at 55:13) (Doc. 28-1, PageID.210). He does not know why a new pool filter was needed, as shown on the Nielsen estimate. He thought Spencer Cade, another employee, may have spoken to Schoen about this (Steward at 56:4-57:1) (Doc. 28-1, PageID.210). Schoen had testified that the storm had not damaged his pool filter (Schoen at 81:24-82:4) (Doc. 29-1, PageID.324). As for the pool enclosure, Steward testified "I don't have a good answer" as to why a complete removal and replacement of the pool enclosure was needed, at a cost of $18,750.00 as shown on the Nielson estimate (Steward at 57:2-14) (Doc. 28-1, PageID.210). Schoen testified that the pool enclosure needed to be rescreened and have one corner repaired. (Schoen at 10:8-11:21) (Doc. 29-1, PageID.315). Steward did not know how much it would cost to rescreen the pool (Steward at 57:18-21) (Doc. 28-1, PageID.210).

f. The Nielsen estimate contains a cost for insulation board and house wrap behind the vinyl siding. However, Steward did not know what, if anything, was behind the vinyl siding. Assuming there was insulation board and house wrap, Steward did not know if Nielsen looked behind the vinyl siding to evaluate the integrity of the insulation board or house wrap. Nor did Steward do that himself (Steward at 58:1-59:25) (Doc. 28-1, PageID.211).

g. The Nielsen estimate contains a cost of $3,250 for installing 50 feet of a 6-foot vinyl fence although Steward admitted that he did not know what type of fence Schoen had (Steward at 60:1-12) (Doc. 28-1, PageID.211). Schoen had a wooden fence (Shields at 104:6-8) (Doc. 29-1, PageID.558).

h. The Nielsen estimate also calls for replacement of the roof with a new "standing seam roof," at a cost of $31,999. (Steward Depo. Ex 2) (Doc. 28-1, PageID.215-216). Steward agreed that Jerry Schoen did not have a standing seam roof but rather a "screw down" roof (Steward at 66:15-21) (Doc. 28-1, PageID.213). He agreed that the price of a standing seam roof was more costly than a screw down roof, possibly twice as much. (Steward at 66:22-67:12) (Doc. 28-1, PageID.213). Steward did not offer any opinion as to the cost to replace a screw down metal roof, which is what should have been estimated.

i. The Nielsen estimate contains an amount for removing and reinstalling the decking on the roof. Steward testified that they just put that item in there, without knowing whether the decking is damaged or not, so that, if it needs to be replaced, it will be replaced. He also did not know what type of decking was on the house (Steward at 65:14-66:4) (Doc. 28-1, PageID.212).

j. The Nielsen estimate calls for the removal of blown-in insulation. Schoen testified that he had removed all the blown-in insulation immediately after the Hurricane and that what remained was either not wet or had dried and was functional and without issues. (Schoen at 53:17-55:6) (Doc. 29-1, PageID.319-320). Steward was not aware that Schoen had removed all of the wet insulation out of the attic after the storm. (Steward at 69:13-17) (Doc. 28-1, PageID.213). If that were true, they would not need to remove the blown-in insulation (Steward at 69:18-22) (Doc. 28-1, PageID.213). k. The Nielsen estimate calls for removing and replacing all drywall ceilings in the house, based on water staining. 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) (Doc. 28-1, PageID.214). He did not test the integrity of the drywall where the staining was located (Steward at...