UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

 

PAUL MORTON, 

 Plaintiff-Appellant, 

v. 

PROGRESSIVE NORTHERN 

INSURANCE COMPANY, 

 Defendant-Appellee. 

No. 11-6082 

(D.C. No. 5:09-CV-01406-W) 

(W.D. Okla.)

 

ORDER AND JUDGMENT*

 

Before TYMKOVICH, HOLLOWAY, and MATHESON, Circuit Judges. 

 

 While boating over a Memorial Day weekend, Paul Morton’s boat motor was 

damaged, he claims from a submerged object. His insurer, Progressive Northern 

Insurance Company, concluded the damage was caused by wear and tear and 

mechanical failure, and refused to pay for the repair. Morton sued Progressive for 

breach of duty to deal fairly and to act in good faith. A jury found in favor of 

 

*

 After examining the briefs and appellate record, this panel has determined 

unanimously to grant the parties’ request for a decision on the briefs without oral 

argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore 

ordered submitted without oral argument. This order and judgment is not binding 

precedent, except under the doctrines of law of the case, res judicata, and collateral 

estoppel. It may be cited, however, for its persuasive value consistent with 

Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. 

FILED 

United States Court of Appeals 

Tenth Circuit 

October 10, 2012

Elisabeth A. Shumaker 

Clerk of Court
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Progressive. Mr. Morton appeals, challenging several of the district court’s 

evidentiary rulings and its grant of Progressive’s motion for attorneys’ fees. 

We first address Progressive’s motion to dismiss the appeal as untimely. 

Mr. Morton filed his notice of appeal after the thirty-day deadline imposed by 

Fed. R. App. P. 4(a)(1)(A), a fact that would normally deprive us of jurisdiction to 

entertain his appeal, see Bowles v. Russell, 551 U.S. 205, 214 (2007). But 

Mr. Morton filed a timely Motion for Extension of Time to File Appeal under 

Fed. R. App. P. 4(a)(5), which allows the district court to extend the deadline for 

filing a notice of appeal if “a party so moves no later than 30 days after the time 

prescribed by this Rule 4(a) expires; and . . . that party shows excusable neglect or 

good cause.” Fed. R. App. P. 4(a)(5)(A). 

Mr. Morton’s counsel stated that his wife, who is his law firm’s sole secretary 

and paralegal, was the victim of an assault and battery after the conclusion of 

Mr. Morton’s trial, and the distractions caused by that crime and her related injuries 

and medical treatment negatively affected his law firm such that he filed an untimely 

new trial motion in this matter. Had that motion been timely filed, the time to file the 

appeal would have been tolled. The district court carefully considered all of the 

factors articulated by the Supreme Court as relevant to determining whether a motion 

to extend should be granted, see Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. 

P’ship, 507 U.S. 380, 395 (1993), and found that Mr. Morton had established 

excusable neglect. The district court granted the extension of time, and accepted the 
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notice of appeal as timely filed. We conclude the district court’s extension of time 

did not constitute a “clear abuse of discretion,” Romero v. Peterson, 930 F.2d 1502, 

1505 (10th Cir. 1991), and, accordingly, that Mr. Morton’s notice of appeal was 

timely filed. Thus, we deny Progressive’s motion to dismiss this appeal for lack of 

jurisdiction. For the reasons set forth below, we affirm. 

BACKGROUND

Mr. Morton was boating with friends when they felt a jolt and the boat 

stopped. A portion of the boat motor was broken. Mr. Morton asked a friend and his 

son to repair his boat. Several weeks later, Mr. Morton called Progressive to report 

the claim. 

Progressive’s claims adjustor, Mohammad Qazi, investigated the claim by 

looking at photographs of the boat’s parts and speaking with Mr. Morton and his 

friend. Mr. Qazi had been taught in his training that if a boat had hit a submerged 

object, there would be a trail of damage on the boat’s lower unit. The photographs of 

the boat’s parts and lower unit showed no trail of damage, and he testified that the 

person who made the repairs told him there had been no damage to the lower unit or 

the propeller. From this, Mr. Qazi concluded the damage to the motor part was 

caused by wear and tear and mechanical failure, not by hitting a submerged object. 

Mr. Qazi’s supervisors concurred after reviewing the results of his investigation. 

Because damage to the boat caused by mechanical failure or wear and tear is 

excluded from coverage, Progressive denied Mr. Morton’s claim. 
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Mr. Morton brought suit in Oklahoma state court, but Progressive removed the 

action to federal court. After a four-day trial, a jury found in favor of Progressive. 

Mr. Morton appeals, claiming the district court erred in admitting or excluding 

certain evidence and in awarding Progressive its attorney fees. 

DISCUSSION 

A. Claims of Evidentiary Error 

We review the district court’s decision to admit or exclude evidence, including 

expert witness testimony, for an abuse of discretion. James River Ins. Co. v. Rapid 

Funding, LLC, 658 F.3d 1207, 1213 (10th Cir. 2011). “A trial court’s decision will 

not be disturbed unless this Court has a definite and firm conviction that the trial 

court has made a clear error of judgment or exceeded the bounds of permissible 

choice in the circumstances.” Ralston v. Smith & Nephew Richards, Inc., 275 F.3d 

965, 968-69 (10th Cir. 2001) (internal quotation marks and alterations omitted).

1. Exclusion of Opinion Testimony 

Mr. Morton first contends the district court erred in ruling the two men who 

repaired the boat could not testify about their opinion as to what caused the damage 

to his boat motor. The district court ruled that such causation testimony required 

scientific or specialized knowledge and, because Mr. Morton did not list either of the 

men as expert witnesses, their causation testimony must be excluded. We find no 

error in the district court’s exclusion of the proposed testimony as to causation. 
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It is undisputed that Mr. Morton did not disclose the repair men as expert 

witnesses as required by Fed. R. Civ. P. 26(a)(2). Mr. Morton identified one of the 

men in his initial discovery disclosures as a fact witness who would testify about his 

examination and repair of the motor, but he did not identify the other as a witness. 

After the deadline passed for disclosing expert witnesses, Mr. Morton added the other 

man to his final pretrial witness list to testify that the boat’s damage was caused by 

impact. Further, it appeared from the originally listed witness’s deposition that he 

was going to offer the same opinion testimony. Progressive moved to strike this 

causation testimony for failure to comply with Rule 26(a)(2). The district court 

granted the motion, ruling that the two men could give factual testimony about what 

they observed on the boat and what they repaired, but could not offer any opinion as 

to what they concluded, opined or guessed from those observations. 

The consequence of failing to comply with Rule 26(a)(2) is the mandatory 

exclusion of the expert’s testimony unless the failure was substantially justified or is 

harmless. Fed. R. Civ. P. 37(c)(1). The “duty to disclose a witness as an expert is 

not excused when a witness who will testify as a fact witness and as an expert 

witness is disclosed as a fact witness.” Tribble v. Evangelides, 670 F.3d 753, 759 

(7th Cir. 2012). “Without proper disclosures, a party may miss its opportunity to 

disqualify the expert, retain rebuttal experts, or hold depositions for an expert not 

required to provide a report.” Id. at 759-60. 
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But Mr. Morton argues that he was not required to disclose the men as expert 

witnesses under Rule 26(a)(2) because, as the boat mechanics who repaired his 

motor, they were lay witnesses testifying as observers of the cause of the damage. 

He argues the district court should therefore have admitted their causation testimony 

under Fed. R. Evid. 701. 

Under Rule 701, lay witnesses may give opinion testimony only if the opinion 

is “(a) rationally based on the witness’s perception; (b) helpful to clearly 

understanding the witness’s testimony or to determining a fact in issue; and (c) not 

based on scientific, technical, or other specialized knowledge within the scope of 

[expert testimony] Rule 702.” Id. “Rule 701 ‘does not permit a lay witness to 

express an opinion as to matters which are beyond the realm of common experience 

and which require the special skill and knowledge of an expert witness.’” James 

River, 658 F.3d at 1214 (quoting Randolph v. Collectramatic, Inc., 590 F.2d 844, 846 

(10th Cir. 1979)). Rule 701 only “allows lay witnesses to offer observations that are 

common enough and require a limited amount of expertise, if any.” Id. (internal 

quotation marks and alteration omitted). “[T]he type of evidence contemplated 

by . . . Rule 701 relates to the appearance of persons or things, identity, the manner of 

conduct, competency of a person, degrees of light or darkness, sound, size, weight, 

distance, and . . . items that cannot be described factually in words apart from 

inferences.” Id. (internal quotation marks omitted). 
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We conclude that the district court reasonably ruled that the determination of 

what caused the damage to Mr. Morton’s boat motor is a matter which is beyond the 

realm of common experience and required technical, specialized knowledge and 

professional training. See James River, 658 F.3d at 1214-15. Progressive presented 

evidence that knowledge of what causes failure and damage to boats and boat motors 

requires specialized training and knowledge, which the men admitted they did not 

have. Because the two men were not present when the damage occurred, they could 

not provide any factual testimony about the incident based on their own personal 

knowledge, only their inferences and guesses. They had no personal knowledge 

of the boat’s speed or location, the lake bottom, or weather conditions at the time 

of the incident. 

In sum, the district court did not abuse its discretion in excluding the proposed 

causation testimony under Fed. R. Civ. P. 37(c)(1) and Fed. R. Evid. 701(c). 

2. Evidence of Morton’s Use of Racial Epithets 

Mr. Morton claims the district court should have excluded, as irrelevant and 

prejudicial, evidence that he called Mr. Qazi racially offensive names. Mr. Morton 

argues the racial-epithet evidence was not relevant because he was not on trial and 

does not owe his insurer any duty of good faith. Further, he asserts the prejudicial 

effect of depicting him as prejudiced outweighed any relevance. 

A Progressive manager testified in her deposition that after Mr. Qazi told 

Mr. Morton that Progressive was denying his claim, Mr. Morton called her to 
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complain, during which he referred to Mr. Qazi using a racial epithet and called him 

“a terrorist and demanded that [Mr. Qazi] go back to his own country” and that he 

should never have been here to begin with. Aplee. Suppl. App., Vol. VIII, at 1741-

42. 

Mr. Morton filed a pre-trial motion in limine seeking to exclude this evidence 

under Fed. R. Evid. 401, 402 and 403. Progressive argued this evidence was relevant 

to counter Mr. Morton’s allegations that Mr. Qazi made him feel like an insurance 

cheat and laughed at Mr. Morton’s spouse. The district court denied Mr. Morton’s 

motion in limine, and the manager’s deposition was read to the jury. 

Progressive asserts that Mr. Morton failed to preserve this issue for appellate 

review because he did not renew his objection when the deposition was read to the 

jury. We disagree. Because the district court definitively ruled on the admissibility 

of this evidence, Mr. Morton was not obligated to renew his objection at trial. Fed. 

R. Evid. 103(b) (“Once the court rules definitively on the record--either before or at 

trial--a party need not renew an objection or offer of proof to preserve a claim of 

error for appeal.”). 

Exclusion of evidence under Rule 403 is an extraordinary remedy that should 

be used sparingly. World Wide Ass’n of Specialty Programs v. Pure, Inc., 450 F.3d 

1132, 1139 (10th Cir. 2006). Absent a clear abuse of discretion, we defer to the 

district court as to whether the probative value of evidence is substantially 

outweighed by the danger of unfair prejudice, because the district court is familiar 
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with the full array of evidence in the case. Id. Based on our review of the record and 

the trial transcript, we find no abuse of discretion. Mr. Morton testified that Mr. Qazi 

did not help with Mr. Morton’s claim; inferred Mr. Morton was a liar; treated 

Mr. Morton like a cheat; lied about his conversation with a repair man; and laughed 

when Mr. Morton’s wife asked him to spell his name. Further, Mr. Morton 

introduced evidence about his own character and credibility; testified he did not 

recall calling Mr. Qazi any names; and denied that he referred to Mr. Qazi’s 

Middle Eastern national origin. The evidence is therefore at least marginally relevant 

to rebut Mr. Morton’s character and credibility evidence as well as to rebut his 

characterization of his interactions with Mr. Qazi and other Progressive employees. 

We do not find the district court’s Rule 403 balancing to be arbitrary or 

irrational. 

3. Testimony of Ms. Lair and Mr. Benton 

Next, Mr. Morton claims the district court abused its discretion in denying 

several of his evidentiary objections at trial. First, Ms. Lair, a certified marine 

investigator and Progressive’s corporate trainer, testified she trains claims handlers 

that they need not interview every passenger on a boat at the time of an incident. In 

her experience, these witnesses are unable to discern the difference between 

mechanical failure of the engine versus hitting a submerged object. She was asked to 

provide the reasons for this training, giving relevant personal and professional 

experiences. 
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Mr. Morton’s counsel objected to her describing any of her personal 

experiences, but gave no reason for his objection. On appeal, Mr. Morton contends 

that Ms. Lair’s personal-experience testimony was an unfair surprise. 

Progressive disclosed that Ms. Lair would testify about how to properly 

investigate a boat-related insurance claim. Ms. Lair’s descriptions of both her 

personal and professional experiences supported her assertion that interviewing boat 

passengers was not necessary in a claim’s investigation because mechanical failure 

feels the same to a passenger as hitting a submerged object. Mr. Morton did not 

explain the basis of his objection to Ms. Lair’s personal experiences, and the district 

court cannot be expected to know the basis of an evidentiary objection if it is not 

stated. See Fed. R. Evid. 103(a)(1)(B) (requiring the party to state the specific 

ground of objection, if the specific ground was not apparent from the context). The 

district court did not abuse its discretion in denying this objection. 

Next, Mr. Benton, an independent investigator and marine surveyor, testified 

that in the three-to-four thousand claims he had investigated, he had never taken a 

recorded statement of a mechanic because the boat parts tell the story. Although 

Mr. Morton now claims on appeal this testimony was an unfair surprise, we see no 

objection to this testimony by Mr. Morton’s counsel in the trial transcripts. Nor do 

we discern any plain error. 

Mr. Benton also testified that Progressive’s training materials were superior to 

other insurance companies’ training materials that he had seen. Progressive then 
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sought to introduce the training materials of another insurer. Mr. Morton objected to 

the admission of this exhibit because it was not information Progressive relied upon 

in denying his claim, citing Buzzard v. Farmers Insurance Co., 824 P.2d 1105, 1109 

(Okla. 1991) (“The knowledge and belief of the insurer during the time period the 

claim is being reviewed is the focus of a bad-faith claim.”). The district court denied 

the objection, and allowed the exhibit to be admitted, but allowed Mr. Benton to 

express his opinion only as to these materials compared to Progressive’s. Again, we 

conclude the district court did not abuse its discretion in admitting this exhibit. 

Based upon our review of the record and the trial transcript, it is clear that 

Mr. Morton based much of his bad-faith claim on his allegation that Progressive’s 

investigation fell below industry standards. The training material of another insurer 

was therefore properly-admitted rebuttal evidence. 

B. Award of Attorney Fees 

Mr. Morton also contends the district court should not have awarded 

Progressive attorneys’ fees as a prevailing party under Okla. Stat. tit. 36, § 3629(B) 

because the “core element” of his case was not the insured loss. In diversity cases, 

an award of attorneys’ fees is a substantive legal issue determined by state law. 

N. Tex. Prod. Credit Ass’n v. McCurtain Cnty. Nat’l Bank, 222 F.3d 800, 817 

(10th Cir. 2000). We review the district court’s legal conclusions regarding 

attorneys’ fees de novo and the reasonableness and amount of the award for abuse of 

discretion. Id. 
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Under the Oklahoma Insurance Code, the statute authorizing awards of 

attorneys’ fees to the prevailing party states in part: 

It shall be the duty of the insurer, receiving a proof of loss, to 

submit a written offer of settlement or rejection of the claim to the 

insured within ninety (90) days of receipt of that proof of loss. Upon a 

judgment rendered to either party, costs and attorney fees shall be 

allowable to the prevailing party. For purposes of this section, the 

prevailing party is the insurer in those cases where judgment does not 

exceed the written offer of settlement. 

Okla. Stat. tit. 36, § 3629(B). 

Mr. Morton argues that Progressive may not recover attorneys’ fees under 

§ 3629(B) because the primary focus of his claim was not the benefits he sought 

under the insurance policy, but his damages for the anger, embarrassment and mental 

and emotional distress caused him by Progressive’s unreasonable investigation of his 

claim. But as the district court correctly recognized in awarding § 3629(B) fees to 

Progressive, Oklahoma courts have clearly held that “[r]ecovery authorized by 

§ 3629(B) embraces both contract-and tort-related theories of liability so long as the 

‘core element’ of the damages sought . . . is composed of the insured loss.” Taylor v. 

State Farm Fire & Cas. Co., 981 P.2d 1253, 1256 (Okla. 1999). Mr. Morton’s 

complaint asserted that Progressive wrongfully denied his insurance claim and acted 

in bad faith by denying the benefits he was entitled to under the insurance policy, and 

he sought damages, “including, but not limited to, [the] loss of insurance benefits.” 

Aplt. App., Vol. 1, Ex. 2, at 3-5. Further, it is undisputed that he had to prove that 

Progressive was required to pay his insurance claim under the insurance policy to 
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prevail on his bad-faith claim. Thus, the record supports the district court’s ruling 

that the insured loss was a core element of Mr. Morton’s claim. 

Mr. Morton also argues that after he notified Progressive of his claim, it did 

not send him a proof of loss form and, therefore, Progressive did not comply with 

§ 3629(A), which states that “[a]n insurer shall furnish, upon written request of any 

insured claiming to have a loss under an insurance contract issued by such insurer, 

forms of proof of loss for completion by such person.” The district court rejected 

this argument, relying upon our holding that any notice of a claim that the insurance 

contract requires satisfies any proof of loss requirement in § 3629. Regional Air, Inc. 

v. Canal Ins. Co., 639 F.3d 1229, 1235-36 (10th Cir. 2011) (“if a proof of loss is a 

predicate to recovery under § 3629, it is a requirement easily met: an insured need 

only provide the kind of notice its policy requires for receiving coverage.” (citation 

omitted)). 

Progressive did not require a written proof of loss form from Mr. Morton and 

Mr. Morton did not ask Progressive to provide him with one. We find no error in the 

district court’s holding that Progressive complied with the terms of § 3629. 

 The judgment of the district court is AFFIRMED. 

 Entered for the Court 

 Timothy M. Tymkovich 

 Circuit Judge