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Ferrell v. Liberty Mutual Group, Inc.

United States District Court, E.D. Kentucky, Southern Division, Pikeville

July 18, 2014

WILLIAM FERRELL, Plaintiff,
v.
LIBERTY MUTUAL GROUP, INC. and LIBERTY INSURANCE CORPORATION, Defendants.

OPINION AND ORDER

KAREN K. CALDWELL, Chief District Judge.

This matter is before the Court on two motions filed by the defendant Liberty Insurance Corporation (DE 52 and 53). The first motion seeks to exclude the testimony of plaintiff's building expert. The second seeks to disqualify plaintiff's counsel.

I. Background

Plaintiff's house in Harold, Kentucky was damaged in a fire. The defendant Liberty insured the house. Pursuant to the policy, Liberty has paid plaintiff $295, 719.16, which it asserts was the actual cash value of the house at the time of the damage. (DE 24-1, Mem. at 2.) Plaintiff asserts the actual cash value was higher.

Plaintiff's complaint asserts a claim for replacement cost, not actual cash value. In the pleadings on summary judgment, however, both parties treated the complaint to also assert a claim for actual cash value. In its summary judgment opinion, this Court dismissed any claim for replacement cost, agreeing with both of the parties that the replacement-cost claim was not ripe because plaintiff had not rebuilt the house. Nevertheless, because, in their summary judgment motions, the parties argued about the actual cash value of the house and had taken discovery on the issue, the Court construed the complaint to assert a claim for actual cash value.

II. Analysis

There are three individuals central to these motions. The first is Austin Mehr, plaintiff's counsel. The second is Mike Cottrell, plaintiff's retained expert regarding the cost to rebuild plaintiff's house. And the third is Mike Warner, who Liberty retained as an expert but will not be testifying on its behalf. All three live in the same neighborhood.

Cottrell and Warner each did estimates regarding the cost to rebuild plaintiff's house. Plaintiff argues that actual cash value can be determined by replacement cost less depreciation. (DE 54, Response at 1.) Liberty does not dispute that. Accordingly, informed estimates regarding the rebuilding cost are relevant to this dispute.

Liberty's motions to disqualify plaintiff's counsel and to exclude Cottrell's testimony are both based, at least in part, on the fact that, in developing his estimate, Cottrell used Warner's estimate. There is no dispute about this. In his deposition, Cottrell testified:

My estimate was based on two things. I had a preliminary sketch of the site plan and house. I had some photographs. I also had a friend who is also a builder that also bid the job, and I received his bid.

(DE 52-6, Cottrell Dep. at 6.)

Cottrell testified that, in formulating his own estimate, he used Warner's estimate. (DE 52-6, Cottrell Dep. at 52.) He testified that he compared "what [Warner] plugged into the amount of certain items that he had calculated and whether or not I thought they were high or low or the same." (DE 52-6, Cottrell Dep. at 52.) Cottrell testified that it took him a total of two hours to prepare his estimate. (DE 52-6, Cottrell Dep. at 36.)

As to how Cottrell received Warner's estimate, in response to the motion to disqualify, Mehr states that "Warner picked up the phone and contacted counsel to advise that Liberty had hired him and decided not to use Warner as a testifying expert since Warner's estimate supports Plaintiff's position." (DE 55-Response at 10.) Mehr also states in the response that Warner advised him during the conversation that "he had performed said estimate for Liberty." (DE 55, Response at 2-3.) Mehr states in his affidavit that he asked Warner in this conversation if Liberty told him to keep his opinions confidential and that Warner said it had not. (DE 54-4, Mehr Aff.)

After Mehr's conversation with Warner, Mehr told Cottrell that Warner had prepared an estimate to rebuild the house. (DE 52-6, Cottrell Dep. at 52.) Cottrell testified that he told Mehr that he (Cottrell) would call Warner and "ask him about it, and that's what I did." (DE 52-6, Cottrell Dep. at 51-52.) Cottrell testified that Mehr did not tell him that he could not contact Warner. (DE 52-6, Cottrell Dep. at 51.) Cottrell testified that he did not know if he requested Warner's estimate or if Warner volunteered to give it to him. (DE 52-6, Cottrell Dep. at 51-52.) Cottrell also testified that, at the time he obtained Warner's estimate, he believed that Warner had done the ...


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