Not All Expert Testimony must be Scientifically Reliable
Post number 5284
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In Church Mutual Insurance Company, S.I. v. Chabad Of New Mexico, No. 1:24-cv-00090-MIS-SCY, United States District Court, D. New Mexico (February 10, 2026) the USDC dealt with a declaratory judgment filed by Church Mutual that it owes no duty to cover Chabad’s claims because the property was “vacant” for more than sixty consecutive days before the acts of arson, and therefore no coverage is owed pursuant to the Policy’s “Vacancy” loss condition.
FACTUAL BACKGROUND
Church Mutual Insurance Company, S.I. (“Church Mutual”) renewed an insurance policy for Chabad of New Mexico (“Chabad”) covering real property in Rio Rancho, New Mexico. The policy included a “Vacancy” loss condition, stating that if the building was vacant for more than 60 consecutive days prior to a loss, Church Mutual would not pay for losses caused by certain events, including vandalism.
The claims adjuster assigned to investigate the fires stated that “while the building was not actively being used, there remained sufficient contents in the structure for the Insured to continue their normal operations.”
The interpretation and construction of an insurance policy is a question of law for the Court and one that the Court performed when it ruled on the Parties’ cross-motions for summary judgment on the issue of coverage concluding that Chabad’s building was not “vacant” under the unambiguous terms of the Policy and that therefore Chabad was entitled to summary judgment on the issue of coverage as to both fires. As such, the Court finds that this argument was moot.
Chabad sought to introduce expert testimony regarding insurance industry standards, customs and practices and about how Church Mutual Insurance Company deviated from those standards in its handling of the property damage claims of” Chabad. Chabad hired Stuart Setcavage who purports to be “an expert in the field of insurance industry claim handling, policy interpretation and coverage analysis.”
As to the Vacancy provision, Mr. Setcavage states: “Claim professionals are trained to know that the vacancy condition of the building combines suspension of coverage for certain perils with reduction in coverage for others . . . The approach . . . eliminates coverage only for the perils most affected by vacancy, and it reduces coverage for damage by other perils. ”
Church Mutual sought to exclude the expert testimony of S. Setcavage.
ANALYSIS/DISCUSSION:
The Court denied Church Mutual’s Corrected Motion to Exclude the testimony of S. Setcavage. The judge found that the motion did not warrant exclusion and permitted the testimony to be presented at trial.
Mr. Setcavage noted that “neither the perils of arson nor fire are specifically identified” in the Vacancy provision, and opines that “the intent of the policy was to reduce coverage by 15% for perils not specifically listed, not eliminate it altogether.” Mr. Setcavage further opined that Church Mutual is attempting to redefine ‘vacancy’ to include factors not set forth in the policy. Church Mutual now wants vacant to mean unused.
District courts evaluating the reliability of non-scientific expert testimony do not have to focus on whether the expert employed an objective standard or methodology and can instead focus on the reliability of the expert’s personal knowledge or experience.
Here, Mr. Setcavage has offered opinions that may assist the jury in deciding whether Church Mutual has engaged in bad faith insurance conduct. In fact, the claim handling or investigation is indicia of a pre-determination to deny payment for these claims. The Court was satisfied that Mr. Setcavage’s proposed expert testimony was both reliable and relevant, in that it will assist the trier of fact.
Church Mutual Insurance Company’s Corrected Motion to Exclude the Testimony of S. Setcavage, was denied.
ZALMA OPINION
Insurance claims handling expert witnesses are not scientists, do not deal with scientific or engineering realities but rather are presented to explain to a jury that actions of an insurer in dealing with a claim, were conducted within the custom and practice of the insurance industry and whether the insurer fulfilled or failed to fulfill the standards of the industry. For that reason, since the court had ruled that the insurer’s attempt to apply a vacancy condition to apply to perils not identified the court concluded the expert would help the jury understand whether the tort of bad faith was involved.
(c) 2026 Barry Zalma & ClaimSchool, Inc.
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Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
The Largest Residential Burglary of All Time
Post 5407
Fraud & the Fear of Bad Faith Suits
Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
After ...
Insurance Requires Fortuity to be an Insured Risk
Post 5485
Posted on September 8, 2026 by Barry Zalma
In Industrial Park Center, LLC, doing business as Mainspring Capital Group v. Great Northern Insurance Company, a foreign insurer, No. CV-25-0330-CQ, Supreme Court of Arizona (September 1, 2026).
The United States Court of Appeals for the Ninth Circuit certified the following question to this Court:
"Is damage to property a “fortuitous” loss when, based on the insured’s knowledge at the time the insurance policy issued, it was reasonably foreseeable that such damage was almost certain to occur if certain preventative measures were not taken?"
FACTUAL BACKGROUND
Mainspring owned commercial property leased to Star Fisheries for decades. Star Fisheries’ use of water and salt allegedly caused structural damage over time. In 2010, Mainspring learned of damage and made some repairs but did not implement all recommended preventive measures. In 2021–2022, additional similar structural damage was discovered, and ...
Qui Tam Relators are not officers of the United States
Posted on September 4, 2026 by Barry Zalma
Attempt to use Constitution to Stop a Qui Tam False Claims Act Case
Post 5486
FCA’s Qui Tam Provisions do not Violate the Appointments Clause.
In United States Of America, Clarissa Zafirov, ex rel; Dr. v. Florida Medical Associates, LLC, d.b.a. Vipcare, Physician Partners, LLC, Anion Technologies, LLC, Freedom Health, Inc., Optimum Healthcare, Inc., Physician Partners Specialty Services, LLC, et al., No. 24-13581, United States Court of Appeals, Eleventh Circuit (September 1, 2026).
The False Claims Act (“FCA”) allows the Attorney General to bring civil suits against perpetrators of fraud against the government. This case involves another portion of the FCA-the qui tam provisions-which allow people, called relators, who have knowledge about fraud against the government to pursue a case against the perpetrator of the fraud.
Dr. Clarissa Zafirov filed a qui tam action under the False Claims Act on behalf of...
Posted on September 3, 2026 by Barry Zalma
You Only Get One Chance to Sue
Post 5484
In David Cromp v. Johnny Harkrider, Monique Harkrider, and their Marital Community, dba Able Plumbing Plus, No. 61678-5-II, Court of Appeals of Washington, Division 2 (August 25, 2026) David Cromp hired Able Plumbing Plus in 2018 to install plumbing, including two toilets, at his residence. In 2019, both toilets allegedly leaked, causing damage. Insurance claims were submitted through Able’s contractor policy, but the insurer eventually denied the claims.
Cromp sued Able in 2022 for breach of contract based on the allegedly defective toilet installation. During that case, Cromp attempted to add claims related to Able’s conduct during the insurance claim process, including fraud, bad faith, tortious conduct, and bond-related claims, but the superior court denied leave to amend. The 2022 breach-of-contract claim was later dismissed with prejudice on summary judgment as time-barred.
On the same day the 2022 case was dismissed, Cromp filed a ...
