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UFP Eastern Division, Inc. v. Selective Insurance Co. of South Carolina

United States District Court, D. South Carolina, Florence Division

April 6, 2017

UFP Eastern Division, Inc., f/k/a Universal Forest Products Eastern Division, Inc., Plaintiff,
Selective Insurance Company of South Carolina, Defendant.


          Richard Mark Gergel, United States District Court Judge

         This matter is before the Court on Plaintiff UFP Eastern Division, Inc.'s motion in limine and motion to strike, and Defendant Selective Insurance Company of South Carolina's motion in limine. For the reasons set forth below, the Court grants in part and denies in part Selective's motion in limine, denies as moot UFP's motion in limine, and grants in part and denies in part UFP's motion to strike.

         I. Background

         UPF, a Michigan corporation, was a framing contractor to Beazer Homes for the development of 59 single- and multi-story residential buildings in Horry County, South Carolina (the "Park West" project). UFP used several subcontractors on Park West, including VF Builders, which performed the framing scope of work on 13 of the 59 buildings and which was insured by Defendant Selective and two other insurers, Nationwide Mutual and Frankenmuth Mutual. UFP required VF Builders to include UFP as an additional insured on its commercial general liability insurance policy. (Dkt. No. 34-2 § 3.5.)

         After the completion of Park West, the Park West Horizontal Property Regime and Park West Homeowners' Association of Myrtle Beach, Inc. (the "Owners") claimed that damaging water intrusion into the buildings had occurred and that the framing scope of work contributed to that water intrusion. The Owners filed suit against Beazer on January 31, 2013, Beazer in turn filed a third-party complaint against its subcontractors, including UFP, and UFP in turn asserted claims against its subcontractors, including VF Builders (the "Underlying Litigation").

         On April 17, 2015, UFP filed the present action in state court against its three insurers. (Dkt. No. 1-1 at 1.) UFP asserts two causes of action. The first cause of action seeks both a declaratory judgment regarding Selective's duty of defense in the underlying litigation and compensatory damages for Selective's alleged breach of that duty of defense. The second cause of action alleges that Selective failed to process UFP's claims in good faith. On June 23, 2015- after the complaint in this action was filed but before it was served-a settlement was reached in the Underlying Litigation. VF Builder's three insurers paid $230, 000 in settlement to UFP; Selective contributed $120, 000 of that amount. (Dkt. No. 72-1 at 4.) The settlement was allocated as $41, 089 for construction defects and $188, 911 for attorney's fees. (Id. at 7.) UFP released Frankenmuth from all possible claims, but specifically excluded from the settlement were UFP's claims to insurance benefits, including both defense and indemnification, under commercial general liability policies issued by Selective or Nationwide to VF Builders, and UFP's bad faith claims against Selective or Nationwide. (Id. at 5-7.) Also excluded were the insurers' defenses against those claims. Those excluded issues are the subject matter of the present litigation. The settlement agreement, however, does provide UFP's insurers an offset of $188, 911 in this litigation. (Id. at 7.)

         UFP's action originally named all three insurers-Selective, Nationwide, and Frankenmuth-as Defendants. (Dkt. No. 1-1). Frankenmuth was dismissed on June 29, 2015, shortly after the settlement agreement and before this action was removed from state court. (Dkt. Nos. 1-2 at 1; Dkt. No. 1-3 at 1 (removal on July 16, 2015).) Nationwide was dismissed on February 20, 2016, leaving Selective as the sole Defendant. (Dkt. No. 28.) After the complaint was amended to name the proper Selective legal entity, both parties filed renewed motions for summary judgment, which were denied on February 13, 2017. This case is scheduled for jury trial beginning April 18, 2017. Both parties have filed motions in limine, and UFP has filed a motion to strike Robert Gagnon as a witness.

         II. Legal Standard

         Although not specifically provided for in the Federal Rules of Evidence, motions in limine "ha[ve] evolved under the federal courts' inherent authority to manage trials." United States v. Verges, Crim. No. 1:13-222, 2014 WL 559573, at *2 (E.D. Va. Feb. 12, 2014). "The purpose of a motion in limine is to allow a court to rule on evidentiary issues in advance of trial in order to avoid delay, ensure an even-handed and expeditious trial, and focus the issues the jury will consider." Id. "Questions of trial management are quintessentially the province of the district courts." United States v. Smith, 452 F.3d 323, 332 (4th Cir. 2006); see also United States v. McBride, 676 F.3d 385, 403 (4th Cir. 2012) ("[A]ssessing [whether evidence is] relevan[t] is at the heart of the district court's trial management function."). A district court therefore has "broad discretion" in deciding a motion in limine. Kauffman v. Park Place Hosp. Grp,, 46S F.App'x 220, 222 (4th Cir. 2012). Nonetheless, a motion in limine "should be granted only when the evidence is clearly inadmissible on all potential grounds." Verges, 2014 WL 559573, at *3.

         III. Discussion

         A. Defendant's motion in limine

         Selective moves to bar expert opinion testimony from UFP witnesses Jason Gregorie and Kelvin Causey, including any opinion testimony about the cause of damages observed in buildings on which VF Builders worked or the repair costs for any consequential damages arising from VF Builder's work. (Dkt. No, 83.) The bases of Selective's motion are 1) neither witness was identified as an expert witness, and 2) Mr. Gregorie, a professional engineer who was an expert witness in the Underlying Litigation but is a fact witness in this case, testified in his deposition that he "ha[s] personal knowledge as to the [Park West] facility as a whole, but not as to the individual buildings or specifics of individual buildings." (Id. at 3.)

         Regarding Mr. Gregorie, UFP argues that he worked with the Owners and with Beazer Homes to develop the scope of repair for Park West and that he has personal knowledge about the property damage at Park West and the scope of repair costs. (Dkt No. 91 at 2.) In reply to that, Selective argues that a lay witness is prohibited from relying on his own professional experience or on the reports or analyses of other persons with specialized knowledge and information. (Dkt. No. 95 at 2 (citing James River Ins. Co. v. Rapid Funding, LLC, 65 F.3d 1207, 1214 (10th Cir. 2011).)

         Selective's argument is sound but overreaching. Mr. Gregorie may testify from his personal knowledge about Park West, including the damages he observed and the repairs that were deemed necessary, to the extent his "inferences do not require any specialized knowledge and could be reached by any ordinary person." James River Ins., 658 F.3d at 1214. That he is identified as lay witness and not an expert certainly limits the potential scope of his testimony, but the Court does not find that specialized knowledge is required in order to make any personal observations of damages in ...

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