Opinion ID: 60392
Heading Depth: 1
Heading Rank: 6

Heading: Negligent Claim Investigation

Text: The district court found that State Farm did not conduct a reasonably prompt investigation of all relevant facts before denying the [Broussards'] claim and, after conducting such an investigation, did not make a realistic evaluation of the claim. To qualify for punitive damages for negligent claim investigation, the level of negligence in conducting the investigation must be such that a proper investigation by the insurer would easily adduce evidence showing its defenses to be without merit. Sobley, 302 F.3d at 342 (internal quotations omitted) (discussing a homeowners insurance policy). In other words, the Broussards must show that further investigation would undercover evidence that would have undermined at least the arguable merit of State Farm's defenses. Id. (internal quotations omitted). This is not a case in which further investigation has easily adduce[d] evidence showing that State Farm's position lacks arguable merit. Even after extensive investigations by both parties, the question of whether the Broussards' property was first destroyed by wind or water remains an extremely close one. See supra, Part II(A). We hold that State Farm's fall 2005 claim investigation did not breach the implied covenant of good faith and fair dealing, and that punitive damages are not appropriate on this ground. We reverse the district court's decision to submit the question of punitive damages to the jury and vacate the jury's award of punitive damages.
State Farm appeals the admission of testimony by James Slider, a civil engineer who testified as an expert on behalf of the Broussards. This Court review[s] the district court's determination of admissibility of expert evidence under Daubert for abuse of discretion. Knight v. Kirby Inland Marine Inc., 482 F.3d 347, 351 (5th Cir.2007). The Daubert factors for evaluating expert testimony include whether the theory or technique the expert employs is generally accepted; whether the theory has been subjected to peer review and publication; whether the theory can and has been tested; whether the known or potential rate of error is acceptable; and whether there are standards controlling the technique's operation. Id. (citing Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 593, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993)). Slider, whose specialty is in structural engineering, opined that wind destroyed the Broussards' home prior to the arrival of the storm surge. He considered and ruled out other causes for the initial damage to the Broussards' home by evaluating data from the Stennis Space Center and eyewitness testimony. He also based his conclusions on physical evidence left on the Broussards' property. State Farm objected to his testimony in part because his work had not been peer reviewed and he did not know of others who had used his methods. The district court evaluated Slider's testimony in a written order and found that the data he relied on was sufficiently reliable to support his opinions. After reviewing the record, we affirm and hold that the district court did not abuse its discretion when it admitted Slider's testimony.
The district court denied State Farm's change of venue motion. This panel reviews the district court's venue rulings for abuse of discretion. In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir.2004). This Court asks three questions: Did the district court correctly construe and apply the relevant statutes; ... Did the district court consider the relevant factors incident to ruling upon a motion to transfer; and... Did the district court abuse its discretion in deciding the motion to transfer. Id. Relevant factors under 28 U.S.C. § 1404(a) include whether the proposed transfer venue is a forum in which the suit could originally have been brought, the convenience of the parties and witnesses, and the interests of justice. Id. We hold that the district court did not abuse its discretion when it denied State Farm's motion for change of venue, notwithstanding the intensive pretrial publicity concerning Hurricane Katrina-related insurance claims. See id. As this Court noted in Mayola v. Alabama, even the broad and intensive public awareness stemming from notorious events like the battlefield execution of Vietnamese civilians by Lt. William Calley, Jr., and other soldiers, and the high level conspiracy to cover up the Watergate break-in, was held not to have created a presumption of juror prejudice in either Calley v. Callaway, 519 F.2d 184, 203-13 (5th Cir.1975) (Lt. Calley) or United States v. Haldeman, 559 F.2d 31, 60-69 (D.C.Cir.1976) (Watergate). See 623 F.2d 992, 998-99 (5th Cir. 1980). The transcript reveals that the district court was very aware of its responsibility to protect the interests of justice by selecting a jury free from prejudice. Media-related matters took up seventeen pages in the voir dire transcript, and the record shows that at least ten prospective jurors were removed for cause in part because of opinions formed by pretrial publicity. In its written order denying State Farm's motion, the district court noted the extensive voir dire and the additional expenses and the great inconvenience that individual plaintiffs would incur if the trial of this action and similar actions were moved to another division of this district. The district court's decision not to grant a change of venue was consistent with the change-of-venue statute, and it adequately weighed the factors set out in 28 U.S.C. § 1404. We affirm the denial of State Farm's motion for change of venue.