Opinion ID: 2816753
Heading Depth: 3
Heading Rank: 1

Heading: Falsity of the McIntosh Claims

Text: To prove a violation of both § 3729(a)(1) and § 3729(a)(1)(B), the Rigsbys had to show that the claim presented for payment on the McIntosh’s flood policy was false. A claim includes “any request or demand, whether under a contract or otherwise, for money or property.” § 3729(c). 12 And this court has explained that a claim “for money or property to which a defendant is not entitled [is] ‘false’ for purposes of the False Claims Act,” and “whether a claim is valid depends on the contract, regulation, or statute that supposedly warrants it.” United States v. Southland Mgmt. Corp., 326 F.3d 669, 674–75 (5th Cir. 2003) (en banc). Here, the issue is whether State Farm appropriately determined that the flood insurance contract—derived word-for-word from a federal regulation, and containing an exclusion for wind damage—permitted the full $250,000 payout for flood damage to the McIntosh home. State Farm primarily contends that evidence of flood damage permeated the case, and that the Rigsbys failed to adequately support their trial theory that the home was rendered a total loss by wind before the flood waters arrived. We conclude a reasonable jury could find that the McIntosh claim was false, and, more specifically, could have believed that the home was destroyed by Katrina’s winds before the water arrived. 12 The definition has since been amended, but this language is unchanged. 27 Case: 14-60160 Document: 00513113882 Page: 28 Date Filed: 07/13/2015 No. 14-60160 At the outset, we disagree with State Farm that the Rigsbys were required to present expert valuation evidence. We have already held that evidence of valuation can include—besides expert evidence—adjusters’ reports and a plaintiff-insured’s deposition testimony. See Bayle v. Allstate Ins. Co., 615 F.3d 350, 360, 363 (5th Cir. 2010); see also 17A Couch on Insurance § 255:52 (3d ed. 2014) (“The question of value, for purposes of estimating the loss under [a] policy, is more or less one of expert opinion, but witnesses testifying as to the value of property are not required to be expert or skilled in the strict sense of the term in order to express an opinion on value.”). The Rigsbys’ most significant valuation evidence came from Dr. Ralph Sinno, a professor of structural civil engineering. 13 Dr. Sinno, after personally inspecting the property, testified that: [T]he McIntosh house was damaged by the hurricane wind way before even the water got into the threshold of the house. The water did not get into the threshold of the house until two hours after the peak wind. After two hours, after all of the damage has been done, the water got to the house. Dr. Sinno testified in detail about how winds “demolished, twisted, and wracked” the McIntosh home, and he defined wracking as “deform[ing] and mov[ing] [the structure] horizontally due to horizontal forces.” Dr. Sinno’s testimony aligned with that of Brian Ford (the Forensic employee who concluded in a report shortly after the storm that the primary cause of damage to the McIntosh home was wind), and it was corroborated by additional expert 13 State Farm alleges that the district court abused its discretion by permitting Dr. Sinno to testify under Daubert v. Merrell Dow Pharm. Inc., 509 U.S. 579 (1993). “District courts enjoy wide latitude in determining the admissibility of expert testimony, and the discretion of the trial judge and his or her decision will not be disturbed on appeal unless manifestly erroneous.” Hodges v. Mack Trucks Inc., 474 F.3d 188, 194 (5th Cir. 2006) (internal quotation marks and citation omitted). The district court cogently and thoroughly evaluated Dr. Sinno’s qualifications, expertise, and opinions in ruling on State Farm’s motion in limine. There was no abuse of discretion in permitting the jury to hear his testimony. 28 Case: 14-60160 Document: 00513113882 Page: 29 Date Filed: 07/13/2015 No. 14-60160 and witness testimony. While Dr. Sinno is not a valuation expert, as State Farm forcefully argues and Dr. Sinno himself conceded, his expertise in structural engineering qualified him to opine on whether the home was structurally destroyed. See 17A Couch on Insurance § 255:52. State Farm argues that many witnesses—including some of the Rigsbys’ own—testified that there had been flood damage to the home. That is certainly true (though much of that damage could have occurred after the wind rendered the home a total loss, or it could relate to the contents of the home, for which the McIntoshes were reimbursed an unchallenged $100,000). But, as the district court correctly recognized, “it is the function of the jury as the traditional finder of the facts, and not for the Court, to weigh conflicting evidence and inferences, and determine the credibility of witnesses.” Roman v. W. Mfg., Inc., 691 F.3d 686, 692 (5th Cir. 2012) (internal quotation marks and citation omitted). A reasonable jury could have concluded that the house was a total loss before the flood waters arrived. Certainly the evidence does not point “so strongly and overwhelmingly in [State Farm’s] favor that reasonable jurors could not reach a contrary conclusion.” Omnitech, 11 F.3d at 1323. 14 14 The parties dispute whether State Farm’s alleged violation of FEMA directive W5054 can independently support the jury’s verdict. State Farm contends that compliance with W5054 was not an express condition or prerequisite for payment of the claim. See U.S. ex rel. Steury v. Cardinal Health, Inc., 625 F.3d 262, 268 (5th Cir. 2010) (“Not every breach of a federal contract is an FCA problem. We have thus repeatedly upheld the dismissal of false-certification claims (implied or express) when a contractor’s compliance with federal statutes, regulations, or contract provisions was not a ‘condition’ or ‘prerequisite’ for payment under a contract.”). The Rigsbys contend that this is not a false certification case that would require concluding that compliance with W5054 was a prerequisite for payment of a claim. Even were we to agree with State Farm that compliance with W5054 must be a prerequisite for payment in this context, FEMA regulations emphasize that WYO insurers “shall comply with written standards, procedures, and guidance issued by FEMA.” 44 C.F.R. pt. 62, app. A, art. II(G)(1); see also 44 C.F.R. pt. 62, app. A, art. II(A)(2) (“Companies will also be required to comply with . . . guidance authorized by . . . [FEMA].”). Additionally, directive W5054 itself states that the “NFIP’s general adjusters will be involved in closely monitoring the performance and procedures of the WYO carriers utilizing this process,” signifying that 29 Case: 14-60160 Document: 00513113882 Page: 30 Date Filed: 07/13/2015 No. 14-60160