Balazhi et al v. Allstate Property and Casualty Insurance Company

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
LJUMNIE BALAZHI and SHAZIMAN
BALAZHI, for himself and on behalf of
his Minor Child, A.B.,
Plaintiffs,
v.
ALLSTATE PROPERTY AND
CASUALTY INSURANCE COMPANY,
Defendant.
Case No. 3:19-cv-00241-JMK
ORDER ON PLAINTIFFS’ FIRST,
SECOND, AND THIRD
MOTIONS IN LIMINE
(DOCKETS 133, 138, 139)
This matter comes before the Court on three motions in limine filed by
Plaintiffs 	at 	Dockets 	133, 	138, 	and 	139. 	Defendant 	responded 	in 	opposition 	at
Dockets 141, 142, and 143, and Plaintiffs replied at Dockets 141, 147, and 148. The parties
did not request oral argument, nor was it was necessary to the Court’s decision. 	For the
reasons described herein, the Court will deny Plaintiffs’ motions.
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Balazhi, et al. v. Allstate Prop. & Cas. Ins. Co. 	Case No. 3:19-cv-00241-JMK
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I. 	LEGAL STANDARD1
Rule 702 of the Federal Rules of Evidence governs the admissibility of expert
witness testimony in federal civil litigation. The rule provides:
A witness who is qualified as an expert by knowledge,
skill, experience, training, or education may testify in the form
of an opinion or otherwise if:
(a) the expert’s scientific, technical, or other specialized
knowledge will help the trier of fact to understand the evidence
or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and
methods; and
(d) the expert has reliably applied the principles and
methods to the facts of the case.
District court judges must act as “gatekeepers” to ensure that any expert
testimony introduced “both rests on a reliable foundation and is relevant to the task at
hand.”2 This requirement applies not only to “scientific” testimony, but also to testimony
based on “technical” or “other specialized” knowledge.3 	Judges “are entitled to broad
discretion when discharging their gatekeeping function,” and “must . . . be given broad
discretion to decide whether to admit expert testimony.”4 “It is the proponent of the expert
1 A summary of the background facts in this case may be found in the Court’s separate
order on Defendant’s Motion for Partial Summary Judgment (Docket 117), which the Court issued
simultaneously with this order, filed at Docket 159.
2 Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 597 (1993).
3 Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 141 (1999).
4 United States v. Hankey, 203 F.3d 1160, 1168 (9th Cir. 2000) (emphasis removed).
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Balazhi, et al. v. Allstate Prop. & Cas. Ins. Co. 	Case No. 3:19-cv-00241-JMK
Order on Plaintiffs’ First, Second, and Third Motions in Limine 	Page 3
who has the burden of proving admissibility.”5
“Rule 702 ‘contemplates a broad conception of expert qualifications.’”6 The
rule “is broadly phrased and is intended to embrace more than a narrow definition of
qualified expert.”7 District court judges are “supposed to screen the jury from unreliable
nonsense opinions, but not exclude opinions merely because they are impeachable.”8
Ultimately, “[s]haky but admissible evidence is to be attacked by cross examination,
contrary evidence, and attention to the burden of proof, not exclusion.”9
II. 	DISCUSSION
A. 	Plaintiffs’ First Motion
Plaintiffs’ first motion in limine moves to exclude the expert testimony of
Roger Holmes. Plaintiffs assert that Holmes is not qualified to testify as an expert witness
because he is an insurance lawyer who “has no experience as a licensed insurance adjuster.”
Plaintiffs assert that Holmes provides no authority for his deposition testimony regarding
“an insurer’s duties or the industry standard of care” in handling claims. 	Arguing that
Holmes does not meet the Daubert standard for the reliability of expert witnesses, Plaintiffs
move to exclude Holmes’ testimony.10
5 Cooper v. Brown, 510 F.3d 870, 942 (9th Cir. 2007) (quoting Lust v. Merrell Dow
Pharms., Inc., 89 F.3d 594, 598 (9th Cir. 1996)).
6 Hangarter v. Provident Life & Accident Ins. Co., 373 F.3d 998, 1015 (9th Cir. 2004)
(emphasis removed) (quoting Thomas v. Newton Int’l Enters., 42 F.3d 1266, 1269 (9th Cir. 1994)).
7 Id.
8 City of Pomona v. SQM N. Am. Corp., 750 F.3d 1036, 1044 (9th Cir. 2014) (quoting
Alaska Rent-A-Car, Inc. v. Avis Budget Grp., 738 F.3d 960, 969 (9th Cir. 2013)).
9 Id. (quoting Primiano v. Cook, 598 F.3d 558, 564 (9th Cir. 2010)).
10 Docket 133 at 1–6.
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Allstate responds that Holmes is qualified to be an expert witness in this case
because of his long experience in the insurance industry, even though he “never held the
title of ‘claims adjuster’ or ‘employee’ of an insurance company.” 	Allstate argues that
Holmes’s experience, combined with his involvement in “well over two thousand serious
personal injury claims” and experience as an independent arbitrator for “as many as 30 or
40 arbitrations,” makes him “highly qualified, if not actually more qualified than an
insurance adjuster[,] to offer opinions on the value of the plaintiffs’ claims.”11
When parties have sought to call insurance lawyers as expert witnesses in
insurance cases, district courts usually have focused on whether the lawyers had substantial
experience 	in 	the 	insurance 	industry 	beyond 	merely 	representing 	insurers 	and
policyholders.12 In one recent case involving allegations of bad faith against an insurance
company, a district court refused to qualify a lawyer as an expert because, although he had
36 years’ experience advising insurers, he never had represented one in a bad faith suit,
never presented on insurer bad faith at a seminar or conference or published an article on
the subject, and never had adjusted claims or worked directly for an insurance company.13
In another recent insurer bad faith case, however, the court qualified a lawyer as an expert
11 Docket 141 at 1–7.
12 E.g., Butler v. First Acceptance Ins. Co., 652 F. Supp. 2d 1264, 1272 (N.D. Ga. 2009);
McGee v. Zurich Am. Ins. Co., No. CV-17-04024-PHX-DGC, 2021 WL 6070590 at *5–6 (D. Ariz.
Dec. 22, 2021); Lopez v. Allstate Fire & Cas. Ins. Co., No. 14-20654-Civ-Cooke, 2015 WL
5584898 at *5 (S.D. Fla. Sept. 23, 2015); Tactical Stop-Loss LLC v. Travelers Cas. & Sur. Co. of
Am., No. 08-09620-CV-W-FJG, 2010 WL 427779 at *4 (W.D. Mo. Feb. 2, 2010); Novak v.
Progressive Halcyon Ins. Co., No. Civ. A. 04-0632, 2005 WL 5989782 at *3 (M.D. Pa. Sept. 13,
2005). 13 Lopez, 2015 WL 5584898 at *5.
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because the lawyer personally had worked as a claims adjuster, albeit on a fill-in basis
earlier in his career, and had supervised other claims adjusters.14
Holmes’s situation is more like those of the insurance lawyers whom courts
have qualified than those they have excluded. Although he never held the title of “claims
adjuster,” Holmes was the general counsel and corporate secretary of the Medical
Indemnity Insurance Corporation of Alaska from 1975 to 1992.15 In that role, he wrote the
company’s insurance policies and claims procedures, and hired and trained its claims
adjusters.16 Additionally, Holmes has served as an expert witness on insurer bad faith on
at least three occasions, and he has been an independent arbitrator in approximately thirty
or forty underinsured motorist claim disputes.17
In the Court’s view, Holmes’s experience satisfies Rule 702’s threshold
requirement for reliability. His background indicates that his expert testimony on insurer
bad faith will have the requisite “reliable basis in the knowledge and experience of the
relevant discipline.”18 Any shortcomings in his qualifications, such as the fact that he never
held the title of “claims adjuster,” are best addressed by vigorous cross-examination at trial,
not by exclusion. Because his testimony also meets the criteria for relevance,19 the Court
will deny Plaintiffs’ motion to exclude Holmes as an expert witness.
14 McGee, 2021 WL 6070590 at *5–6.
15 Docket 141-1 at 4–6.
16 Docket 141-1 at 4–5.
17 Docket 141-1 at 2–3.
18 Messick v. Novartis Pharms. Corp., 747 F.3d 1193, 1197 (9th Cir. 2014) (quoting
Kumho Tire, 526 U.S. at 149).
19 Regarding the admissibility of a proposed expert witness’s testimony, “[t]he relevancy
bar is low, demanding only that the evidence ‘logically advances a material aspect of the proposing
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Balazhi, et al. v. Allstate Prop. & Cas. Ins. Co. 	Case No. 3:19-cv-00241-JMK
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B. 	Plaintiffs’ Second Motion
Plaintiffs’ second motion in limine moves to strike the expert report of
Hayes & Associates and to exclude the expert testimony of Erik Power. Plaintiffs assert
that Allstate did not timely disclose Power as an expert witness. 	Plaintiffs assert that
Defendant’s 	untimely 	disclosure 	of 	Power 	prejudiced 	their 	ability 	to 	research 	his
background and determine if they needed supplemental witnesses.20
Allstate opposes striking the Hayes expert report and excluding Power’s
expert testimony. First, Allstate asserts that there is no basis for striking the Hayes expert
report because Power is an employee of Hayes & Associates, which Allstate had listed in
its expert witness identification. Allstate says that Power signed the report merely because
he had “contributed to portions of [it].” 	Second, Allstate asserts that because Plaintiffs
chose to take Power’s deposition, “they have waived any objection to Mr. Power testifying
at trial because they can no longer legitimately claim prejudice. 	Moreover, they have
turned him into a witness of record in this matter.” Allstate argues that even if the Court
excludes Power from testifying at trial, it should be allowed to submit his deposition
testimony to the jury.21
The Court sees no basis to strike Hayes’s report or exclude Power as a
witness under Rule 37(c). 	Rule 26(a)(2) requires parties to disclose “the identity of any
party’s case.’” Id. at 1196 (quoting Daubert v. Merrell Dow Pharms., Inc. (Daubert II), 43 F.3d
1311, 1315 (9th Cir. 1995)).
20 Docket 138 at 1–4.
21 Docket 143 at 1–3.
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Balazhi, et al. v. Allstate Prop. & Cas. Ins. Co. 	Case No. 3:19-cv-00241-JMK
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[expert] witness it may use at trial.”22 Rule 37(c)(1) provides if a party fails to identify a
witness or provide information as Rule 26(a) requires, the standard remedy is that “the
party is not allowed to use that information or witness to supply evidence . . . unless the
failure was substantially justified or is harmless.” Allstate has indicated to the Court that
it does not intend to call Power as a witness at trial.23 	Thus, Rule 26(a)(2)(A) did not
require Allstate to disclose Power as an expert witness, and Allstate did not violate the rule
by not disclosing Power’s identity before the disclosure deadline. Accordingly, the Court
needs not exclude Power from testifying at trial.
Nor does the Court need to strike Hayes’s report. Rule 26(a)(2)(B) requires
reports submitted under it to be “prepared and signed by the witness.” 	Power is one of
Hayes’s employees. He merely contributed to Hayes’s report and appears to have signed
it out of an abundance of caution. 	The Court sees no indication that Hayes’s report
inaccurately reflects the opinions he will express at trial and the facts and data upon which
he relied. Accordingly, the Court will deny Plaintiffs’ second motion in limine.
C. 	Plaintiffs’ Third Motion
Plaintiffs’ third motion in limine seeks to strike the deposition testimony and
expert reports of forensic psychologist Mark Zelig and neuropsychologist Paul Craig for
lack of reliability. 	First, Plaintiffs assert that the psychological tests Zelig and Craig
22 Fed. R. Civ. P. 26(a)(2)(A).
23 Docket 143 at 3. In its opposition memorandum, Allstate asserts that Plaintiffs waived
any objection to Power testifying at trial and turned him into a “witness of record” when they took
his deposition, although they provide no authority for this proposition. Because the parties’ trial
witness lists and deposition designations are not yet due, the Court declines to address this issue
at present.
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performed on Mr. Balazhi are not reliable because Zelig and Craig “fail[ed] . . . to ascertain
[Mr.] Balazhi’s proficiency in the English language prior to the administration of
standardized psychological testing in the English language,” and because Zelig and Craig
“injected the examiner’s interpretation of the question and examiner bias” into their testing
when they had to explain the test questions to Mr. Balazhi. Additionally, Plaintiffs assert
that the psychological tests Zelig performed on A.B. are not reliable because Zelig “caused
great upset to [A.B.] during a testing session when he startled [A.B.] by dropping a stack
of books to the floor, so upsetting [A.B.] that he asked to be allowed to leave testing to
compose himself.” 	According to Plaintiffs, “Dr. Zelig then compounded the upset he
created by following [A.B.] into the bathroom, which further upset [A.B.] and impacted
his ability to interact and respond to Dr. Zelig, who he believed dropped the materials on
purpose. Furthermore, [A.B.] believed it was inappropriate for Dr. Zelig to have followed
him into the bathroom such that he felt violated by his presence . . . .”24
Allstate maintains that Zelig’s and Craig’s tests are reliable and should be
admitted. 	Regarding Mr. Balazhi’s tests, Allstate points out that the Court found that
Mr. Balazhi did not need an interpreter for his Rule 35 mental examination in its order at
Docket 71. 	Allstate additionally asserts that Zelig and Craig sufficiently considered
Mr. Balazhi’s proficiency in English, noting that Craig’s report specifically considered
culture and linguistics in its interpretation of Mr. Balazhi’s test results.25 Regarding A.B.’s
tests, Allstate maintains that Zelig “adhered to all appropriate testing standards” and
24 Docket 139 at 1–2.
25 Docket 142 at 2–6.
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“conducted the examinations with regard for [A.B.]’s safety and security.” Allstate says
that the stack of books falling from Zelig’s desk was an accident that “startled Dr. Zelig as
much as it startled [A.B.],” and that when Zelig followed [A.B.] into the bathroom “it was
not an invasion of privacy; it was an act of concern.” Allstate concludes that none of the
issues with Zelig’s testing of [A.B.] affect the reliability of his test results, and that any
faults with Zelig’s testing can be addressed by cross-examination at trial.26
The Court concludes that Zelig’s and Craig’s reports are sufficiently reliable
for admission. 	First, any questions about the influence of Mr. Balazhi potentially
misunderstanding the English-language testing do not rise to the level of requiring
exclusion. 	In ruling on Allstate’s motion for a Rule 35 mental examination, the Court
concluded that Mr. Balazhi was sufficiently proficient in English to not require an
interpreter.27 And Plaintiffs provide no supporting evidence for their assertion that Zelig
and 	Craig 	did 	not 	account 	for 	Mr. 	Balazhi’s 	cultural 	and 	linguistic 	background.
Consequently, the Court concludes that Zelig’s and Craig’s testing of Mr. Balazhi meet the
threshold requirements for reliability and may be admitted.
Next, the Court concludes that the issues surrounding the reports of Zelig’s
testing of A.B. do not rise to the level of exclusion, either. Although Allstate provides no
support for its assertions that Zelig’s actions were innocuous, the Court concludes that the
issues Plaintiffs raise do not lower Zelig’s report below the threshold of reliability, and are
26 Docket 142 at 6–9.
27 Docket 71 at 4–5.
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best dealt with through cross-examination at trial, not exclusion. 	For these reasons, the
Court will deny Plaintiffs’ third motion in limine.
III. 	CONCLUSION
For the reasons described in this order, Plaintiffs’ First, Second, and Third
Motions In Limine at Dockets 133, 138, and 139 each are DENIED.
IT IS SO ORDERED this 16th day of May, 2022, at Anchorage, Alaska.
/s/ Joshua M. Kindred
JOSHUA M. KINDRED
United States District Judge
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