• Bob Siems

Simmons v. Standard Fire Insurance: Practical Checklist of experts for a 27-1001 Case


Simmons v. Standard Fire Insurance (8:08-cv-01844-PJM, Doc 36, May 7, 2010) is another 27-1001 first party bad faith case out of the Federal District Court. It's unique in that the Court (dealing with a pro se defendant) explains exactly what kind of expert he wants to see to survive a pre-discovery motion for summary judgment.

What This Case Is About

Simmons had an house. The house had a bad fire in October 2006. Simmons had $140,000 in Dwelling Coverage and $42,000 in ALE coverage. Simmons also had an HO-827 (02-03) Endorsement (covering Limited ‘Fungi’, Other Microbes Or Rot Remediation) with a $5000 limit.

Standard Fire paid the Actual Cash Value ("ACV") quickly. The parties disagreed about estimates for the replacement cost. Simmons sent Standard Fire two estimates on November 21. Standard Fire accepted one of them and issued payments for a revised ACV on December 21. On January 11, Simmons hired Reliable, an independent contractor (both in the legal sense and in the sense of being independent from Standard Fire) to do the work on the approved estimate.

In November 2006 (after the fire, before the agreement on an estimate), Simmons noticed mold on the ceiling of her front room. In February 2007, after Reliable removed the ceiling from the front room, Standard Fire did mold tests and found a lot of mold. Standard Fire promptly paid for the mold test, and then (after doing an estimate) tendered their mold coverage limits.

Then litigation broke out. Simmons wanted Standard Fire to pay for costs beyond their limits because of alleged delays in rebuilding the house. Standard Fire refused. Simmons eventually filed a 27-1001 Complaint in March 2008. She (not surprisingly) lost. She then appealed to Circuit Court. Standard Fire promptly removed to Federal Court.

Then her lawyer withdrew, leaving her pro se. (Reviewing PACER, she was too far behind on her bill.) Simmons then asked the Court to appoint a pro bono lawyer. The Court instead had a neutral assess the case. The neutral recommended that it go forward. The Court then asked Standard Fire to file a motion for summary judgment. Standard Fire did so.

What The Court Expected Simmons To Prove

The Court resolved the MSJ by giving Simmons ninety days to produce more evidence to show a material dispute of fact. In doing so, the Court outlined exactly what it was looking for.

  • "A fire appraiser opining as to the cause of the damage to her dwelling."

  • A contractor opining as to the amount of the damage

  • A mold expert opining that the fire damaged caused the mold.

  • A contractor opining as to the cost of remediating the mold.

The Court also asked Simmons to produce evidence of bad faith beyond what was also in the record.

Why This Caught My Interest

On its surface, this is a relatively dull ruling that you need evidence to survive a motion for summary judgment. Old news.

But if you think about the procedural posture, didn't the Court practically deny Simmons her right to discovery? Simmons apparently did not get to depose the adjuster and obtain the claim file (or more specifically, engage in a discovery battle over work-product doctrine for the claim file). Considering the Court talks about its deep concern for pro se rights, it is strange that the Court did not tell her about discovery. (Off the cuff, Simmons should have asked for an extention of time to do discovery, but apparently did not.)

Simmons was also required to obtain and declare her experts up front. In my experience, experts usually get hired mid-way through the litigation process. That's because experts are expensive and parties want to exhaust settlement opportunities (and gather all relevant data to give to the expert) before they pay for the expert. The Court gave Simmons (someone who could not afford a lawyer) ninety days to get four different expert reports. That practically forced Simmons to pay most of her litigation costs up front and in cash. (Experts do not take contingency fee agreements or give plaintiff's much credit.)

This case shows an early Motion for Summary Judgment working as a very effective tactic. It ended the case before the main litigation costs were incurred. It also forced Plaintiffs (who, in most of these cases, are cash-poor and in financial distress because their house burned down) to pay all costs upfront. That large up front cost deters suits (because it means Plaintiffs must have a lot of cash in the bank to launch them) and puts financial pressure on Plaintiffs to settle early without any discovery.

(This description makes it sound like Standard Fire was being a bully. I don't know one way or the other. I do know that Standard Fire's lawyer got Standard Fire a good and relatively low-cost result though.)

What Happened Afterwards

Glancing at PACER, Simmons withdrew the complaint and it was dismissed with prejudice. So apparently it worked.

#HomeownersInsurance #InsuranceBadFaith #BadFaithClaimHandling #CoverageDisputes #LitigationStrategy #CaseLaw

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