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U.S. Specialty Insurance Co. v. Atlantic Biologicals Corp.

United States District Court, S.D. Florida, Miami Division

January 13, 2020

U.S. SPECIALTY INSURANCE COMPANY, Plaintiff,
v.
ATLANTIC BIOLOGICALS CORPORATION,

          ORDER ON DEFENDANT'S DAUBERT MOTION TO PRECLUDE THE OPINIONS OF PLAINTIFF'S EXPERTS BURL DANIEL AND DR. MICHAEL LIEBSCHNER

          JONATHAN GOODMAN UNITED STATES MAGISTRATE JUDGE

         In this insurance coverage declaratory judgment action, Defendant Atlantic Biologicals Corporation (“Atlantic”) has filed a Daubert motion designed to preclude specific opinions of Plaintiff U.S. Specialty Insurance Company (“USSIC”)'s experts Burl Daniel and Dr. Michael Liebschner. [ECF No. 53]. USSIC filed a response in opposition [ECF No. 58');">58] and Atlantic filed a reply [ECF No. 61]. For the reasons outlined below, the Court grants in part and denies in part Atlantic's Daubert motion as it relates to Daniel and denies Atlantic's Daubert motion as it relates to Liebschner.

         I. Factual Background

         This is a case about insurance coverage for losses relating to Hurricane Maria and Hurricane Irma under a marine insurance policy issued by Plaintiff U.S. Specialty Insurance Company (“USSIC”). USSIC issued a marine insurance policy to Atlantic. [ECF No. 29-2, ¶ 1]. The Policy provides insurance coverage for all physical damage to Atlantic's “Goods Insured” during transit from warehouse to warehouse and while being housed in certain warehouse locations. [ECF No. 46-1, pp. 2, 51]. Specifically, “Goods Insured” is defined as: “[c]onsisting principally of: New Pharmaceutical Products and other goods incidental to the business of the Assured [(Insured)], professionally packed for export.” Id. at p. 2.

         On September 29, 2017, Atlantic reported a claim to USSIC due to Hurricane Maria for loss to implant trays and surgical implants at a storage unit located at Avenida 65 Infanteria #7500, Carolina, Puerto Rico 00987 (“Carolina, PR Claim”). [ECF No. 29-2, ¶¶ 30, 32]. On November 9, 2017, Atlantic reported a claim due to Hurricane Irma for water damage to non-invasive surgical endoscopy equipment and parts at 16000 N.W. 49t');">16000 N.W. 49th Avenue Miami Gardens, Florida 33014 (“Miami Gardens Claim”). Id. at ¶¶ 31, 33.

         USSIC denied coverage for the Carolina, PR Claim due to its position that the damaged goods were not “Goods Insured” under the Policy. Id. at ¶ 45. And USSIC denied coverage for the Miami Gardens Claim because Atlantic failed to provide requested additional information regarding the claim and its position that endoscopy instruments are not “Goods Insured” under the Policy. [ECF Nos. 29-2, ¶ 47; 9-3]. USSIC also challenges Atlantic's position that the damaged goods were a total loss and cannot be re-processed. [ECF No. 58');">58, pp. 8-9].

         USSIC subsequently filed this lawsuit seeking a declaration from the Court that there is no coverage under the Policy for the Carolina, PR Claim and the Miami Gardens Claim because the damaged goods do not fit within the definition of “Goods Insured, ” and that the doctrine of uberrimae fidei voids the policy because Atlantic failed to volunteer a material fact to it -- that it was involved in a prior loss. [ECF No. 46, pp. 23-24]. As alleged in USSIC's Second Amended Complaint, the uberrimae fidei doctrine “is an established rule of federal marine insurance law which holds that an insured party has a duty of utmost good faith to disclose all information known to it that materially affects the risk insured against.” [ECF No. 46, ¶ 98].

         Recently, the Court denied USSIC's summary judgment motion and found that (1) the “Goods Insured” provision is ambiguous here, and if interpreted in Atlantic's favor, does not bar coverage for Atlantic's claims; and (2) the parties likely contracted out of the uberrimae fidei doctrine, but, even if they had not, the questions of whether the purported omission was material and relied upon by USSIC are disputed questions of fact. [ECF No. 57].

         II. The Daubert Legal Standard

         The admission of expert testimony is governed by Federal Rule of Evidence 702, as explained and refined by the United States Supreme Court in Daubert and Kumho Tire Co., Ltd. v. Carmichael, 26 U.S. 137');">526 U.S. 137 (1999). Under this framework, district courts are charged with a gatekeeping function “to ensure that speculative, unreliable expert testimony does not reach the jury.” McCorvey v. Baxter Healthcare Corp., 298 F.3d 1253');">298 F.3d 1253, 1256 (11th Cir. 2002). The district court has “broad discretion in determining whether to admit or exclude expert testimony, and its decision will be disturbed on appeal only if it is manifestly erroneous.” Evans v. Mathis Funeral Home, 2d 266');">996 F.2d 266, 268 (11th Cir. 1993).

         Rule 702 provides that:

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 ...

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