from the United States District Court for the Eastern
District of Oklahoma (D.C. No. 6:16-CV-00519-RAW)
Ted Ledford of Ledford Law Firm, Owasso, Oklahoma, for
Darrell W. Downs and Jacob R. Daniel (R. Stratton Taylor and
Mark H. Ramsey with them on the brief), of Taylor, Foster,
Mallett, Downs, Ramsey & Russell, P.C., Claremore,
Oklahoma, for Defendant-Appellee/Cross-Appellant.
TYMKOVICH, Chief Judge, McKAY, and CARSON, Circuit Judges.
Hamilton appeals the district court's order granting
summary judgment in favor of defendant Northfield Insurance
Company as to Mr. Hamilton's claim for breach of the
implied duty of good faith and fair dealing and his
accompanying request for punitive damages. Mr. Hamilton also
challenges the court's conclusion, following a jury
verdict in his favor on his breach of contract claim, that he
was not the prevailing party for purposes of attorney fees
and prejudgment interest under Oklahoma statute. Lastly,
anticipating remand of the bad faith claim, Mr. Hamilton
argues the court erred in prohibiting certain
cross-examination of Northfield's expert witnesses.
Northfield, in turn, cross-appeals the court's denial of
its motion for judgment as a matter of law as to Mr.
Hamilton's breach of contract claim. The insurance
company also challenges the court's rulings on Mr.
Hamilton's expert witness report and testimony. For the
following reasons, we affirm.
March 2015, Mr. Hamilton purchased a Northfield insurance
policy for a commercial building in Council Hill, Oklahoma.
Northfield had a third party inspect the property for
underwriting purposes in May. The underwriting survey report
concluded the risk was "Satisfactory with Recommendation
Compliance" and identified eight recommendations,
including that potholes be filled, graffiti be removed, and a
broken window be repaired. (Appellant's App. at 249.) The
insurance policy included a limitation for:
The interior of any building or structure, or to personal
property in the building or structure, caused by or resulting
from rain, snow, sleet, ice, sand or dust, whether driven by
wind or not, unless:
(1) The building or structure first sustains
damage by a Covered Cause of Loss to its roof or walls
through which the rain, snow, sleet, ice, sand or dust
(2) The loss or damage is caused by or
results from thawing of snow, sleet or ice on the building or
(Id. at 173.)
Hamilton's tenant informed him the roof was leaking in
June 2015. Because Mr. Hamilton had some experience
installing and repairing metal roofs, he inspected the roof
himself, noticing that he "could feel the metal moving
because of numerous loose screws which were sticking up from
the metal roofing." (Id. at 308.) Mr. Hamilton
and his brothers tightened the loose screws, coated any
screws that would not tighten with tar and installed new
screws near these screws, and applied another coat of tar at
a transition point on the roof where it appeared to be
leaking. A few months later, the tenant again notified Mr.
Hamilton the roof was leaking, and Mr. Hamilton again made
the same efforts to repair the leak. Finally, after the
tenant informed him the roof was leaking in December 2015,
Mr. Hamilton reported the leak and the resulting interior
damage to Northfield.
Hamilton's claim was assigned to a Northfield claims
adjuster. The claims adjuster contacted Mr. Hamilton, who
told him about the roof and his attempted repairs. The claims
adjuster did not "ask him about the type of repairs he
tried to make" or keep a record of what repairs Mr.
Hamilton said he had made. (Id. at 205.) That same
month, a field adjuster went to the property to take
photographs and collect data for submission to the claims
adjuster. The field adjuster found "an opening in the
exterior of [the] building which would allow water in"
at the transition point on the roof and determined that was
where the water had entered. (Id. at 390-93.) The
parties dispute whether the field adjuster knew Mr. Hamilton
had applied tar to the roof earlier that year.
claims adjuster concluded that the damage was not covered
under the insurance policy because "[v]isibly [they]
could not see any wind damage." (Id. at 206.)
In February 2016, the claims adjuster sent Mr. Hamilton a
letter informing him that Northfield was denying his claim.
The letter stated Northfield had made this decision because
"there was no evidence of any openings caused by storm
damage" and the policy did not cover damage caused by
"[w]ear and tear"; "corrosion, decay, [or]
deterioration"; "cracking, shrinking[, ] or
expansion"; or "faulty[, ] inadequate[, ] or
defective . . . workmanship[ or] repair, . . . [, m]aterials
used in repair, construction, renovation[, ] or remodeling[,
or m]aintenance." (Id. at 208, 210.) The letter
also noted that Northfield's position was based on
"the information presently available" and invited
Mr. Hamilton to send Northfield further information he
considered relevant. (Id. at 210.)
week later, Northfield sent Mr. Hamilton a letter notifying
him that it would not renew his policy when it expired the
following month. The notice identified the reason for
nonrenewal as "Underwriting Guidelines."
(Id. at 501.) According to Mr. Hamilton, Northfield
told him the nonrenewal decision had come from a third party.
Northfield's response to one of Mr. Hamilton's
requests for production also stated, "The decision to
nonrenew the Plaintiff's policy was made by Graham
Rogers, Inc.[, which] . . . was the underwriting agent for
the subject insurance policy." (Id. at 506.)
During a deposition, however, a Graham Rogers employee stated
Northfield had made the nonrenewal decision. Internal
Northfield emails from February 2016 also indicate a
Northfield employee suggested nonrenewal upon noting Mr.
Hamilton's insurance claim and a lack of information
regarding his fulfillment of the underwriting
Northfield denied the claim, Mr. Hamilton contacted a roofer,
Bernie Akles, to obtain his opinion regarding the cause of
the leaking roof. When Mr. Akles inspected the roof, he found
that he "was able to move some of the metal panels up
and down with [his] hand." (Id. at 435.) Based
on his experience as a roofer, his inspection of the roof,
and Mr. Hamilton's explanation of his repair efforts, Mr.
Akles "determined that wind had caused the damage."
(Id.) He stated he could "easily see that wind
had caused the screws holding the metal roofing to
raise" and "[w]ind whipping across the roof in an
uneven up and down direction (like the way wind causes a flag
to move) overstressed the tar at the high-to-low transition
causing an opening at the tar which allowed rainwater to
enter the building." (Id. at 435-36.)
Hamilton informed Northfield of Mr. Akles' opinion in
March 2016, prompting Northfield to ask for a letter from the
roofer. Mr. Hamilton then sent Northfield a letter from Mr.
Akles' roofing company, which stated, "Upon
inspection of the roof there is evidence of extreme winds
stripping screws up from the decking up to 3/4" and more
allowing water to come through damaging many areas in the
building." (Id. at 437.) The claims adjuster
forwarded this letter to someone else at Northfield, who
agreed "that it is not likely that wind would lift the
roof and set back down with screws intact and no other
damages present," "but also agreed that given the
size of the roof and the potential size of the claim, an
engineer opinion [wa]s warranted." (Id. at
point, Northfield retained Rimkus Consulting Group, Inc.,
"to determine if wind damage to the roofing had
occurred, and if so, the extent of that damage, from storms
reportedly occurring in the month of December 2015."
(Id. at 215.) A Rimkus engineer, inspected the roof
with Mr. Hamilton and Mr. Akles present. Based on his
inspection, the engineer concluded "[w]ind did not cause
damage to the metal roofing or its attachments" and
"[t]he water intrusion is from a failed sealant joint in
the roofing at the high-to-low roofing connection."
(Id. at 216.) In April 2016, Northfield sent Mr.
Hamilton a second notice informing him it was denying his
claim because the engineer's inspection indicated the
roof leak was caused by "lack of or deferred
maintenance." (Id. at 499.)
November 2016, Mr. Hamilton sued Northfield in Oklahoma state
court, alleging breach of contract and breach of the implied
covenant of good faith and fair dealing. Northfield removed
the case to federal court. In May 2017, Northfield filed a
motion to strike Mr. Akles' expert report or in the
alternative to preclude his testimony under Daubert v.
Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993). The
district court denied both requests. Northfield also filed a
motion for summary judgment, which the court granted as to
bad faith and punitive damages but denied as to breach of
Hamilton's attorney sent Northfield's attorneys an
email including a revised draft pretrial order in June 2017.
In that communication, Mr. Hamilton's counsel asked
Northfield's attorneys to send him "a serious
settlement offer" the following week, noting that he had
"almost $12k in hard costs invested in this case thus
far" and was conveying that information "because
that figure impacts how much of any settlement Mr. Hamilton
would receive." (Id. at 938.) Counsel for
Northfield responded that the insurance company was
"willing to offer $45, 000 to settle this case,"
observing that they "believe[d] this [wa]s a fair offer
as it [wa]s more than three times the actual damages in this
case." (Id. at 939.) Northfield's counsel
also stated, "Based upon your out of pocket litigation
expenses, this ...