Guarantee Trust Life Insurance v. American Medical & Life Insurance

Citations: 291 F.R.D. 234; 2013 WL 4714146; 2013 U.S. Dist. LEXIS 126553Docket: No. 10 C 2125

Court: District Court, N.D. Illinois; July 26, 2013; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

The Court, presided over by Magistrate Judge Maria Valdez, addressed Plaintiff Guarantee Trust Life Insurance Company's (GTL) Motion to Bar Expert Testimony and Defendant American Medical and Life Insurance Company's (AMLI) Motion to Compel Payment of Travel Expenses and Deposition Fee. GTL's motion is denied while AMLI's motion is granted.

The case involves two reciprocal reinsurance treaties between GTL and AMLI from 2008 and 2009. A key issue is whether AMLI properly disclosed their expert, Scott McGregor, as a non-retained expert under Fed. R. Civ. P. 26(a)(2)(C). McGregor served as AMLI's Chief Financial Officer until June 2010 and later as a consultant. GTL contends that McGregor is a retained expert, thus requiring detailed disclosures per Fed. R. Civ. P. 26(a)(2)(B), particularly since he is a former employee, was retained for his opinions, and is seeking a fee. AMLI, in response, argues that McGregor qualifies as a non-retained expert under the "treating physician" exception, necessitating only a summary disclosure, which they assert was appropriately provided.

AMLI also claims that GTL must cover McGregor's travel expenses due to a court order mandating his deposition in Chicago and must pay for the expert deposition fee under Rule 26(b)(4)(E). While GTL agrees to pay for travel expenses, it disputes the necessity of the deposition fee, arguing the court did not specifically order this payment.

The order clarifies that expert witness disclosures vary based on classification. Retained experts must provide detailed reports, as outlined in Rule 26(a)(2)(B), ensuring their opinions and reasoning are adequately detailed and not merely sketchy or conclusory.

Any expert witness not classified as “retained” must provide a less detailed summary disclosure as stipulated by Fed. R. Civ. P. 26(a)(2)(C). This requirement was introduced in a 2010 amendment to Rule 26, which previously did not mandate disclosures for non-retained experts. Non-retained experts are only required to disclose: (i) the subject matter of their expected testimony under Federal Rules of Evidence 702, 703, or 705, and (ii) a summary of the facts and opinions on which they will testify. The determination of whether an expert, such as McGregor, is retained impacts the adequacy of disclosure prior to deposition. 

The retained versus non-retained distinction typically occurs in cases involving healthcare providers. A physician is deemed non-retained if sought solely for treatment, even if they later offer causation opinions, unless they were explicitly engaged to review materials for litigation. Treating physicians are considered retained only when they provide opinions outside their direct observations. This principle has been extended to other expert witnesses, where non-retained experts acquire knowledge through direct observation, while retained experts gather information through other means.

The Court finds this distinction applicable universally under Rule 26. A former employee may qualify as a non-retained expert if they testify based on personal knowledge relevant to the case. In this instance, AMLI regarded McGregor as a non-retained expert, requiring only summary disclosures. McGregor had firsthand knowledge of the mutual reinsurance treaty between AMLI and GTL from 2008 to 2011 and was sought for his understanding of the transactions, not for reviewing new materials for litigation. Consequently, the Court concluded that he was not retained for litigation purposes, necessitating only a summary disclosure. McGregor’s summary included both the subject matter and a summary of his expected testimony, thus fulfilling the requirements of Rule 26.

Non-retained expert witnesses may only provide testimony based on opinions formed during their involvement in the relevant events and those opinions must have been properly disclosed. McGregor is permitted to testify only about opinions developed during his employment with AMLI, not those formed later or in anticipation of litigation. The admissibility of testimony at trial can be influenced by the scope of deposition questions, as established in related case law. GTL alleges that McGregor exceeded the bounds of permissible testimony by addressing events after his employment and forming opinions not related to his time at AMLI. However, the Court finds these claims unsubstantiated. McGregor's testimony regarding a cash call from February 2010 is deemed valid as it pertains to his participation in the mutual reinsurance treaty. He clarified that while he could assess the accuracy of documents presented on the deposition date, he did not form new opinions at that time. Additionally, his references to a 2012 spreadsheet and erroneous calculations were based on his understanding of the treaty during his employment, not on post-employment information. McGregor confirmed that he reviewed documents only while at AMLI and did not formulate opinions based on new data post-employment. The assertion that McGregor could provide future calculations if asked does not indicate formation of new opinions outside the scope of his employment. The Court declines to issue a ruling merely to reinforce compliance with procedural rules.

Parties seeking discovery must pay experts a reasonable fee for responding, as mandated by Rule 26(b)(4)(A) and further clarified in Rule 26(b)(4)(E) of the Federal Rules of Civil Procedure. The party taking the deposition generally bears the expert's fees, and this applies equally to both retained and non-retained experts. In the case at hand, McGregor's fee of $150 per hour for five hours is deemed reasonable, resulting in a total fee of $750, which the Plaintiff is required to pay. Additionally, the Court authorized the deposition to occur in Chicago based on the Plaintiff's agreement to cover McGregor's travel expenses, amounting to $1,272.73. Therefore, the total financial obligation for the Plaintiff is $2,022.73. The Court denied the Plaintiff's motion to bar and granted the Defendant’s motion to compel, ordering the payment for the deposition costs. Furthermore, the Court found that McGregor's testimony remained within the scope of permissible knowledge for a non-retained expert, despite GTL's claims to the contrary. His review of documents during the litigation does not retroactively classify him as a retained expert, as this was part of his preparation for deposition related to events from 2010.