Weiser-Brown Operating Company v. St. Paul Surplus , 801 F.3d 512 ( 2015 )


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  •      Case: 13-20442   Document: 00513195229     Page: 1   Date Filed: 09/16/2015
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT
    No. 13-20442                   United States Court of Appeals
    Fifth Circuit
    FILED
    WEISER-BROWN OPERATING COMPANY,                                September 16, 2015
    Lyle W. Cayce
    Plaintiff - Appellee Cross-Appellant                      Clerk
    v.
    ST. PAUL SURPLUS LINES INSURANCE COMPANY,
    Defendant - Appellant Cross-Appellee
    Appeals from the United States District Court
    for the Southern District of Texas
    Before JOLLY, HIGGINSON, and COSTA, Circuit Judges.
    STEPHEN A. HIGGINSON, Circuit Judge:
    This case involves an insurance dispute between Plaintiff Weiser-Brown
    Operating Company (“Weiser-Brown”) and Defendant St. Paul Surplus Lines
    Insurance Company (“St. Paul”). On September 7, 2012, after a four-day trial,
    a jury found that St. Paul breached its insurance contract with Weiser-Brown
    by failing to pay Weiser-Brown’s insurance claim for costs associated with the
    “loss of control” of an oil well that Weiser-Brown operated in Lavaca County,
    Texas. St. Paul was ordered to pay Weiser-Brown $2,290,457.03 in damages
    for its breach of contract. After trial, the district court awarded $1,232,328.14
    in penalty interest to Weiser-Brown under the Texas Prompt Payment of
    Claims Statute (the “Prompt-Payment Statute”), Texas Insurance Code
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    No. 13-20442
    §§ 542.051-.061. The court concluded that St. Paul violated § 542.056 of the
    statute on November 21, 2009, when it failed to accept or reject Weiser-Brown’s
    claim fifteen days after receiving certain requested information, and the court
    calculated interest accruing from the date of that violation. St. Paul timely
    appealed and contends that the district court erred in concluding that St. Paul
    violated the Prompt-Payment Statute and, alternatively, that the district court
    used the wrong accrual date in calculating interest under the statute. Weiser-
    Brown cross-appealed, claiming that the district court erred by granting
    judgment as a matter of law in favor of St. Paul on Weiser-Brown’s bad-faith
    claim. For the reasons that follow, we AFFIRM.
    I.
    Weiser-Brown, a small company based in Arkansas, operates wells that
    explore for oil in Arkansas, Texas, and Louisiana. Weiser-Brown had a control-
    of-well insurance policy with St. Paul, by which St. Paul agreed to, among other
    things, “reimburse [Weiser-Brown] for actual costs and/or expenses incurred
    . . . in regaining or attempting to regain control of any and all Wells Insured
    which get out of control.” The policy explained that “a Well shall be deemed
    out of control . . . when there is an unintended subsurface flow of oil, gas, water,
    and/or fluid from one subsurface zone to another subsurface zone via the bore
    of the Well, which cannot be controlled by the blowout preventer . . . or other
    equipment required.”
    Weiser-Brown was the operator and a working-interest owner of the
    Viking No. 1 well, located in Lavaca County, Texas. In August 2008, while
    drilling the Viking No. 1, Weiser-Brown experienced a loss of control of the
    Viking No. 1. 1 In March 2009, Weiser-Brown notified St. Paul that it was
    1 Whether the Viking No. 1 was ever out of control, as defined by the insurance policy,
    was a point of major contention at trial. The jury, and subsequently the district court, found
    that the Viking No. 1 was out of control and, thus, the costs incurred in attempting to regain
    2
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    interested in making a claim under the insurance policy for the August 2008
    event. St. Paul acknowledged the claim and appointed a loss adjuster, BC
    Johnson Associates, to investigate.            In a letter dated March 9, 2009, BC
    Johnson requested seventeen categories of information from Weiser-Brown,
    including daily drilling reports, the Joint Operating Agreement, and “invoice
    cost documentation.” Within one month, Weiser-Brown sent some, but not all,
    of the requested documentation to BC Johnson. On June 9, 2009, BC Johnson
    sent a letter to Weiser-Brown indicating that it had received the daily drilling
    reports, the Joint Operating Agreement, and some of the invoices, but still
    needed several documents, including any additional invoices, mud logs, and
    noise and temperature logs.
    On September 29, 2009, BC Johnson’s Bob Kachnik informed Weiser-
    Brown, via e-mail, that an independent expert, David Watson, had reached a
    preliminary conclusion that “there was not a subsurface loss of control” of the
    Viking No. 1.        Kachnik noted that Watson requested some additional
    information from Weiser-Brown, including “[a] mud log across the sidetrack
    wellbore”; “[a]ll daily reports prepared by the mud logger”; and “[a]ll daily mud
    reports prepared by Spirit’s mud engineer.” Kachnik asked Weiser-Brown to
    provide the additional information and to “advise” if it believed Watson’s
    conclusion was incorrect. Weiser-Brown continued to send documents to BC
    Johnson in October and November 2009. On November 6, 2009, Weiser-Brown
    sent BC Johnson “the [s]idetrack log.”
    On February 8, 2010, Kachnik informed Weiser-Brown that after
    reviewing the additional information, Watson had not changed his conclusion
    that the Viking No. 1 was never out of control. The e-mail from Kachnik
    control were covered by the insurance policy. Because St. Paul is not appealing this
    determination, we find it unnecessary to detail the events that took place at the well in 2008.
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    concluded: “Again, please review this report and if you believe that the
    conclusions reached in the report are incorrect, please advise accordingly and
    provide any information or documentation in support.” In March and April
    2010, St. Paul sent two letters to Weiser-Brown explaining that it had not
    received a response from Weiser-Brown to Watson’s report and that it would
    close the claim in thirty days if no response was received. On April 26, 2010,
    Weiser-Brown responded that it was “studying the matter” and would “respond
    to that report shortly.”     On June 7, 2010, Weiser-Brown sent a one-page
    response to Watson’s report, challenging his neutrality and conclusion. On
    June 23, 2010, St. Paul acknowledged receipt of Weiser-Brown’s response and
    indicated that it would forward the response to Watson “for further review and
    comment.” On July 16, 2010, Weiser-Brown filed the present lawsuit.
    Weiser-Brown alleged that St. Paul breached the insurance agreement
    and brought claims for breach of contract and for bad faith, in violation of Texas
    Insurance Code § 541. 2 As part of its breach-of-contract claim, Weiser-Brown
    asserted that St. Paul was liable under the Prompt-Payment Statute for 18%
    interest on any damages awarded. During trial, the parties agreed to submit
    the Prompt-Payment Statute issue to the court if the jury returned a verdict
    in favor of Weiser-Brown. At the close of Weiser-Brown’s case, St. Paul moved
    for judgment as a matter of law on Weiser-Brown’s § 541 bad-faith claim. The
    district court granted St. Paul’s motion, stating “I do not believe there’s been a
    showing of bad faith, and I’m not going to have that go to the jury.” The breach-
    of-contract claim went to the jury in the form of four questions, which
    essentially asked: (1a) Did Weiser-Brown comply with the insurance policy’s
    submission requirements relating to loss, damage, occurrence and a “sworn
    2   Initially, Weiser-Brown asserted only a breach of contract claim. However, on
    January 19, 2012, Weiser-Brown filed a third amended complaint in which it added a bad-
    faith claim against St. Paul.
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    proof of loss”? (1b) If not, did St. Paul waive compliance with these conditions?
    (2) Did St. Paul breach the insurance policy by not paying Weiser-Brown’s
    claim? (3) What are Weiser-Brown’s damages? While the jury found that
    Weiser-Brown had not complied with the contract’s conditions, the jury also
    found that St. Paul had waived compliance with those conditions. It further
    found that St. Paul breached the insurance agreement and awarded Weiser-
    Brown $2,290,457.03 in damages.
    The parties then submitted the prompt-payment issue to the court. After
    extensive briefing and oral argument, the district court issued Findings of Fact
    and Conclusions of Law. The district court concluded that St. Paul violated
    the Prompt-Payment Statute, specifically § 542.056(a), when it failed to accept
    or reject Weiser-Brown’s claim within fifteen days of receiving “all items,
    statements, and forms required by the insurer to secure final proof of loss.”
    Tex. Ins. Code § 542.056(a). The court found that “[b]y November 6, 2009,
    Weiser-Brown had complied with ‘most,’ but not all, of the requests for
    information in Watson’s report.”      The court also held that, despite any
    omission, “St. Paul and its adjusters did not indicate in the February 8, 2010;
    March 30, 2010; or April 21, 2010 correspondence that any request for
    information remained unfulfilled or that determination of coverage was
    contingent upon receiving such information.” Because St. Paul did not accept
    or reject Weiser-Brown’s claim fifteen days later, on November 21, 2009, the
    district court held that St. Paul was liable to Weiser-Brown for “interest on the
    amount of the claim at a rate of 18 percent a year” from that date. Tex. Ins.
    Code § 542.060(a). The court subsequently entered a final judgment ordering
    St. Paul to pay $1,232,328.14 in interest under the Prompt-Payment Statute.
    St. Paul timely appealed and argues that the district court erred in
    concluding that St. Paul violated the Prompt-Payment Statute or,
    alternatively, the district court miscalculated the statutory interest. Weiser-
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    Brown cross-appealed, arguing that its bad-faith claim should have gone to the
    jury and that the district court improperly excluded evidence of bad faith.
    II.
    In this diversity case, this court applies state substantive law, but
    federal procedural law. Symetra Life Ins. Co. v. Rapid Settlements, Ltd., 
    775 F.3d 242
    , 248 (5th Cir. 2014). “We review the district court’s conclusions of law
    de novo and its findings of fact for clear error.” RecoverEdge L.P. v. Pentecost,
    
    44 F.3d 1284
    , 1290 (5th Cir. 1995); see also Flowers Transp., Inc. v. M/V
    Peanut Hollinger, 
    664 F.2d 112
    , 113 (5th Cir. 1981) (“[T]he trial judge’s
    findings of fact are not to be overturned unless they are clearly erroneous.”
    (citing Fed. R. Civ. P. 52(a))); In re Matter of Complaint of Settoon Towing,
    L.L.C., 
    720 F.3d 268
    , 276 (5th Cir. 2013) (“[W]e review interpretations of state
    law de novo.”). We must interpret Texas’s statutes the way we believe the
    Texas Supreme Court would. See F.D.I.C. v. Shaid, 
    142 F.3d 260
    , 261 (5th Cir.
    1998). “When the highest state court is silent on an issue we must make an
    Erie guess, using the sources of law that the state’s highest court would look
    to.” 
    Symetra, 775 F.3d at 248
    .
    III.
    St. Paul contends that the district court misinterpreted and misapplied
    § 542.056 of the Prompt-Payment Statute when it determined that St. Paul
    violated that section of the statute.
    A.
    The Prompt-Payment Statute, 3 “provides for additional damages when
    an insurer wrongfully refuses or delays payment of a claim.” Lamar Homes,
    3  The Prompt-Payment Statute was formerly codified as article 21.55 of the Texas
    Insurance Code. The statute was re-codified without substantial change. See Lamar Homes,
    Inc. v. Mid-Continent Cas. Co., 
    242 S.W.3d 1
    , 16 (Tex. 2007).
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    Inc. v. Mid-Continent Cas. Co., 
    242 S.W.3d 1
    , 16 (Tex. 2007). As the Texas
    Supreme Court has summarized,
    [t]he prompt-payment statute provides that an
    insurer, who is “liable for a claim under an insurance
    policy” and who does not promptly respond to, or pay,
    the claim as the statute requires, is liable to the policy
    holder or beneficiary not only for the amount of the
    claim, but also for “interest on the amount of the claim
    at a rate of eighteen percent a year as damages,
    together with reasonable attorney’s fees.”
    
    Id. (quoting Tex.
    Ins. Code. § 542.060(a)). In order to recover interest under
    the Prompt-Payment Statute, an insured must establish: “(1) a claim under an
    insurance policy; (2) that the insurer is liable for the claim; and (3) that the
    insurer has failed to follow one or more sections of [the Prompt-Payment
    Statute] with respect to the claim.” GuideOne Lloyds Ins. Co. v. First Baptist
    Church of Bedford, 
    268 S.W.3d 822
    , 830-31 (Tex. App.—Fort Worth 2008, no
    pet. 2008) (citing Allstate Ins. Co. v. Bonner, 
    51 S.W.3d 289
    , 291 (Tex. 2001),
    modified on other grounds, No. 00-0282, 
    2001 WL 1412951
    , at *1 (Tex. 2001)).
    The statute is to be “liberally construed to promote the prompt payment of
    insurance claims.” Tex. Ins. Code § 542.054.
    The statute establishes a series of claim-handling and claim-payment
    deadlines for insurers. See Tex. Ins. Code §§ 542.055-.058. First, § 542.055,
    entitled “Receipt of Notice of Claim,” provides that within fifteen days of
    receiving notice of a claim, the insurer must acknowledge receipt of the claim,
    commence an investigation, and request “all items, statements, and forms that
    the insurer reasonably believes, at that time, will be required from the
    claimant.” Tex. Ins. Code § 542.055(a). Next, § 542.056, entitled “Notice of
    Acceptance or Rejection of Claim,” requires the insurer to “notify a claimant in
    writing of the acceptance or rejection of a claim not later than the 15th business
    day after the date the insurer receives all items, statements, and forms
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    required by the insurer to secure final proof of loss.”                    Tex. Ins. Code
    § 542.056(a).      The statute allows insurers to extend this deadline for an
    additional forty-five days if “the insurer is unable to accept or reject the claim”
    and “notif[ies] the claimant of the reasons that the insurer needs additional
    time.” Tex. Ins. Code § 542.056(d). If the insurer accepts the claim and
    “notifies a claimant under [§] 542.056 that the insurer will pay a claim or part
    of a claim,” it has five days to do so. Tex. Ins. Code § 542.057(a). Finally,
    § 542.058, entitled “Delay in Payment of Claim,” provides that “if an insurer,
    after receiving all items, statements, and forms reasonably requested and
    required under [§] 542.055, delays payment of the claim . . . for more than 60
    days, the insurer shall pay damages and other items as provided by [§]
    542.060.” Tex. Ins. Code § 542.058(a).
    Section 542.060 provides the “enforcement mechanism” for the statute’s
    deadlines. Cox Operating, L.L.C. v. St. Paul Surplus Lines Ins. Co., 
    795 F.3d 496
    , 505 (5th Cir. 2015). That section provides that “[i]f an insurer that is
    liable for a claim under an insurance policy is not in compliance with this
    subchapter, the insurer is liable to pay the holder of the policy . . . interest on
    the amount of the claim at a rate of 18 percent a year as damages, together
    with reasonable attorney’s fees.” Tex. Ins. Code § 542.060(a). This court
    recently held that although § 542.058 is the only section that explicitly refers
    to the penalties in § 542.060, “a violation of any of the Act’s deadlines . . . begins
    the accrual of statutory interest under § 542.060.” 4 Cox 
    Operating, 795 F.3d at 509
    . Accordingly, if St. Paul violated § 542.056, as the district court found,
    4 St. Paul’s secondary argument before us is that a violation of § 542.056 does not
    trigger the penalty provision in § 542.060. St. Paul asks us to reform the judgment so that
    interest does not begin to accrue until 60 days after the district court’s chosen accrual date,
    when St. Paul would have been in violation of § 542.058, rather than § 542.056. Our recent
    holding in Cox Operating forecloses this argument. See Cox 
    Operating, 795 F.3d at 509
    .
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    then the correct accrual date for statutory interest was the date of that
    violation, consistent with the district court’s calculation. See 
    id. at 509
    n.4.
    B.
    The parties do not dispute that St. Paul never accepted or rejected
    Weiser-Brown’s claim until after the present lawsuit was filed. The question
    presented on appeal is whether St. Paul received “all items, statements, and
    forms required by the insurer to secure final proof of loss” such that § 542.056’s
    fifteen-day deadline was triggered, and subsequently violated. See Tex. Ins.
    Code § 542.056(a). St. Paul argues that the district court “improperly changed
    the wording in 542.056” and urges us to look at “the plain meaning of the
    statute’s language.” St. Paul concedes, however, that “[t]he statute does not
    define what items are necessary to constitute a ‘final proof of loss.’”
    In addition to a lack of statutory guidance, there has been little guidance
    from Texas courts about information covered by § 542.056. See Colonial Cnty.
    Mut. Ins. Co. v. Valdez, 
    30 S.W.3d 514
    , 523 (Tex. App.—Corpus Christi 2000,
    no pet.) (“We are unaware of any Texas case examining what documents are
    ‘required by the insurer to secure final proof of loss’ for purposes of triggering
    the deadlines in [§ 542.056].”). The clearest statement was made by the Texas
    Court of Appeals in GuideOne Lloyds Insurance Company v. First Baptist
    Church of Bedford, 5 which, interpreting the “plain language of” § 542.056,
    concluded that “final proof of loss” did not require information regarding the
    extent of the loss, only information proving that a loss 
    occurred. 268 S.W.3d at 834-35
    . 6 In GuideOne, which involved an insurance claim for roof damage, the
    5  “In making an Erie guess in the absence of a ruling from the state’s highest court,
    this Court may look to the decisions of intermediate appellate state courts for guidance.”
    Howe ex rel. Howe v. Scottsdale Ins. Co., 
    204 F.3d 624
    , 627 (5th Cir. 2000).
    6 The GuideOne court cited the previous version of the Prompt-Payment Statute,
    article 21.55 of the Texas Insurance Code. See 
    GuideOne, 268 S.W.3d at 834-35
    . The current
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    trial court determined that the insurer violated § 542.055 when it failed to
    request any items, statements, or forms from the insured within fifteen days
    of receiving notice of the claim. 
    Id. at 834;
    § 542.055(a)(3). The trial court used
    the date of this § 542.055 violation to calculate statutory interest under the
    Prompt-Payment Statute. 
    Id. at 834
    n.7. On appeal, the insurer shifted focus
    to § 542.056 of the Prompt-Payment Statute and argued that because it had
    an outstanding request for information required to determine final proof of
    loss, penalty interest should not have begun to accrue according to the district
    court’s calculation. 
    Id. at 833-35.
    Specifically, the insurer contended that
    nearly six months after receiving notice of the claim it sent a written request
    for “core samples to determine the extent of the damage.” 
    Id. at 834
    . Rejecting
    the insurer’s argument, the GuideOne court reasoned:
    Taking core samples of [the insured’s] roof may have
    been required to determine the extent of [the
    insured’s] loss, but it would not have been required to
    prove that [the insured] in fact suffered a loss, which,
    according to the plain language of [§ 542.056], is
    required for an insurer to make its decision to accept
    or reject the claim.
    
    Id. at 835.
    By this logic, § 542.056’s reference to information “required by the
    insurer to secure final proof of loss” refers to information demonstrating that
    the insured in fact suffered a loss. According to the GuideOne court, the extent
    of the loss is not determinative of § 542.056 and the fifteen-day
    acceptance/rejection deadline.         
    Id. at 834
    -35 (explaining that “GuideOne’s
    reason for sending the letter was for a purpose other than what is relevant to
    this issue”).
    version of the statute, re-codified as § 542 of the Texas Insurance Code, remains largely the
    same. See supra note 3.
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    The GuideOne court relied on Colonial County Mutual Insurance Co. v.
    Valdez, as support for its statutory interpretation. See 
    GuideOne, 268 S.W.3d at 835
    . Colonial County involved an insurance claim for car theft and an
    alleged violation of the Unfair Settlement Practices Act, rather than the
    Prompt-Payment 
    Statute. 30 S.W.3d at 516
    , 522.         However, because the
    parties urged the court to interpret the terms of the Unfair Settlement
    Practices Act in light of the deadlines established by the Prompt-Payment
    Statute, the court interpreted and discussed § 542.056. 
    Id. at 522.
    The insurer
    had requested eight pieces of information from the insured and argued that
    because it did not receive all of the requested information, it never received all
    “items, statements, and forms required by the insurer to secure final proof of
    loss” and, therefore, did not fail to promptly accept or reject the claim. 
    Id. at 522-23
    (quoting Tex. Ins. Code § 542.056). Noting that it was “unaware of any
    Texas case examining what documents are ‘required by the insurer to secure
    final proof of loss,’” the court relied on “[c]ommon sense,” to find that “materials
    such as service records, sets of keys, and photographs of the vehicle are
    irrelevant to proving the loss of the vehicle.” 
    Id. at 523.
    Because these missing
    materials were irrelevant to proving that the claimed loss occurred, the court
    reasoned, they did not excuse the insurer’s failure to affirm or deny coverage
    within the deadline provided by § 542.056. 
    Id. St. Paul
    relies heavily on the Texas Supreme Court’s decision in Lamar
    Homes, Inc. v. Mid-Continental Casualty Co., 
    242 S.W.3d 1
    (Tex. 2007). In
    Lamar Homes, the Texas Supreme Court, answering a question certified by
    this court, held that the Prompt-Payment Statute applies to an insurer’s
    breach of the duty to defend. 
    Id. at 16,
    20. The court acknowledged that some
    Texas courts found application of the Prompt-Payment Statute to defense
    claims “unworkable,” as it was difficult to calculate and apply interest to a
    claim that “has no finite value at the time the insurer denies it.” 
    Id. at 19.
    The
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    court responded that in the context of a claim for defense, where the insured
    has not yet suffered a quantifiable loss when it makes the claim, the insured
    “would have to submit his legal bills to the insurance company, as received, to
    mature its rights under the prompt-payment statute.”                        
    Id. The court
    explained:
    [W]hen the insurer wrongfully rejects its defense
    obligation, the insured has suffered an actual loss that
    is quantified after the insured retains counsel and
    begins receiving statements for legal services. These
    statements or invoices are the last piece of information
    needed to put a value on the insured’s loss. See Tex.
    Ins. Code. § 542.056(a). And when the insurer, who
    owes a defense to its insured, fails to pay within the
    statutory deadline, the insured matures its right to
    reasonable attorney’s fees and the eighteen percent
    interest rate specified by the statute. 
    Id. § 542.060.
    Id. at 19.
    
           St. Paul indicates that the reference in Lamar Homes to the “last piece
    of information needed to put a value on the insured’s loss” means that, under
    § 542.056, Weiser-Brown needed to provide “evidence of the dates and amounts
    of its costs demonstrating loss” and “proof that it incurred the out-of-pocket
    costs for the loss.” When read in context, however, Lamar Homes does little to
    guide our analysis of § 542.056 in this case. In describing how the Prompt-
    Payment Statute would apply to an insurer’s wrongful denial of a claim for
    defense, and subsequent failure to pay within the statutory deadlines, the
    Lamar Homes court was analyzing a violation of § 542.058 rather than
    § 542.056. 7 See Lamar 
    Homes, 242 S.W.3d at 19
    . Further, the court was
    7 As previously explained, § 542.056 requires the insurer to accept or reject a claim
    within fifteen days of receiving certain information. The rejection of a claim, even if wrongful,
    does not violate § 542.056, if done timely. See Tex. Ins. Code § 542.056(a). If an insurer
    wrongfully rejects a claim, the insurer will violate § 542.058 of the statute when it
    subsequently fails to pay the claim within the statutory deadline. See Higginbotham v. State
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    explaining how statutory interest would accrue with respect to a unique type
    of claim, “which typically has no finite value at the time the insurer denies it.”
    
    Id. The court
    recognized that even though the insured is injured when his
    claim for defense is wrongfully denied, his injury is not quantifiable until “after
    the insured retains counsel and begins receiving statements for legal services.”
    
    Id. It follows
    logically then that the insured would need to submit those
    invoices, and thus quantify a loss, before the insurer could be penalized for
    failing to timely pay the claim.
    Finally, the district court relied on Lee v. Caitlin Specialty Insurance Co.,
    
    766 F. Supp. 2d 812
    (S.D. Tex. 2011), a case involving roof damage under a
    wind-storm insurance policy. After hiring a roofing consultant to inspect the
    roof, the insurer’s adjuster concluded in a report, dated March 20, 2009, that
    the roof damage was not caused by wind. 
    Id. at 816.
    In a motion for summary
    judgment, the insurer argued that it did not have to notify the insured of its
    rejection of the claim because it never received certain pieces of information
    that it requested, including an invoice for roof repair and leases between the
    building owner and tenants.           
    Id. at 826.
        The district court rejected this
    argument. Emphasizing that the insurer’s adjuster had already finished his
    investigation and had done so without the missing documentation, the court
    found that the insurer had “not demonstrated that such documentation was
    required for it to make its determination.” 
    Id. Accordingly, the
    court denied
    summary judgment, finding that there was a genuine issue of fact as to
    whether all documentation “required for the insurer to secure final proof of
    loss,” under § 542.056, had been submitted, even in the absence of the invoice
    and leases. 
    Id. Farm Mut.
    Auto. Ins. Co., 
    103 F.3d 456
    , 461 (5th Cir. 1997) (“A wrongful rejection of a claim
    may be considered a delay in payment for purposes of the 60-day rule and statutory
    damages.”).
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    While these decisions are helpful in analyzing the contours of the proof-
    of-loss documentation described in § 542.056, we do not today endorse as
    determinative the approach taken in any one decision. Instead, we find that
    common to all of these decisions is the understanding that the information and
    documentation “required by the insurer to secure final proof of loss” under
    § 542.056 will depend on the facts and circumstances involved in a given case.
    See 13 Couch on Ins. § 189:1 (“[I]n most cases, there is no objective measure of
    exactly what information the insurer does and does not need, and the universe
    of information available in any given case varies considerably.”).             The
    documents required to prove a loss with respect to a defense claim might differ
    from the documents required to prove a loss with respect to a roof-damage
    claim that the insurer has already determined is only partially covered.
    Compare Lamar 
    Homes, 242 S.W.3d at 19
    , with 
    GuideOne, 268 S.W.3d at 834
    -
    35, and 
    Lee, 766 F. Supp. 2d at 826
    ; see also 13 Couch on Ins. § 189:4 (“More
    so than the notice of loss, the contents of proofs of loss tend to vary by type of
    insurance. The common thread to proofs, of course, is that the information
    supplied must establish that the loss falls within the coverage terms of the
    policy.”). Rather than embark on the challenging, perhaps impossible, task of
    listing each piece of information for purposes of § 542.056(a), we think it
    appropriate to turn to the specific facts and contract in this case, as examined
    and found by the district court.
    C.
    On March 9, 2009, BC Johnson, St. Paul’s appointed loss adjuster, sent
    a letter to Weiser-Brown requesting seventeen categories of information. By
    June 9, 2009, BC Johnson had received a significant amount of information,
    though not all of the information it requested. BC Johnson’s Bob Kachnik
    wrote a letter to Weiser-Brown indicating that it had received: 1) “IADC or
    contractor daily drilling reports from date of spud through the end of the claim
    14
    Case: 13-20442         Document: 00513195229         Page: 15   Date Filed: 09/16/2015
    No. 13-20442
    period”; 2) “Joint Operating Agreement or other Participating Agreement
    including division of interests and insurance provisions, if any”; 3) “[w]ritten
    explanation outlining what Weiser-Brown believes caused the underground
    well out of control event”; 4) “[o]riginal well plan” and “AFE and well permit”;
    5) “[w]ell bore schematic”; 6) “Drilling Contract including any modifications or
    amendments”; 7) confirmation that Weiser-Brown did not plan to re-drill the
    well; and 8) some “[c]opies of invoice cost documentation.” The letter indicated
    that BC Johnson still needed several documents, including additional invoices,
    mud logs, and noise and temperature logs. An e-mail and spreadsheet, dated
    June 10, 2009, showed that BC Johnson had received dated invoices from
    Weiser-Brown, with vendor, service, and cost descriptions, totaling $4.5
    million. In addition to the $4.5 million worth of invoices, BC Johnson also
    received “a lot of field tickets/delivery tickets not attached to invoices,” which
    Kachnik informed Weiser-Brown were incomplete without the “[a]ctual
    invoices” attached.
    On September 29, 2009, BC Johnson informed Weiser-Brown that an
    independent expert decided, based on the information provided, that there had
    not been a covered “subsurface loss of control” of the Viking No. 1 well. At that
    time, Kachnik noted that the expert requested three pieces of additional
    information, and Weiser-Brown responded by sending additional information.
    On October 29, 2009, Kachnik explained that “the information is incomplete.”
    Kachnik stated that “[t]he mud log across the sidetrack hole stops at
    approximately 7,970 feet. We would like to see the rest of this log through the
    total depth of 10,757 feet.” Kachnik also asked for “the mud check sheets filled
    out every day by the mud engineer.” On November 6, 2009, Weiser-Brown sent
    “the Sidetrack log” to BC Johnson. 8               On February 8, 2010, BC Johnson
    8   BC Johnson later referred to this as the “mud log.”
    15
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    No. 13-20442
    informed Weiser-Brown that Watson’s conclusions had not changed based on
    the additional information received from Weiser-Brown. After November 6,
    BC Johnson did not indicate that any specific information was missing until
    after the lawsuit was filed. BC Johnson did instruct Weiser-Brown that if it
    disagreed with the expert’s conclusions, it could submit a response and provide
    “any information or documentation in support,” but BC Johnson did not
    indicate that any specific additional information was necessary or missing.
    The district court found very precisely that as of November 6, 2009,
    “Weiser-Brown had complied with ‘most,’ but not all, of the requests for
    information in Watson’s report.” As the district court emphasized, neither St.
    Paul nor its adjuster requested additional information in its later
    correspondence or ever indicated that the determination of coverage was
    dependent on missing documentation. Based on all of the provided documents,
    St. Paul’s retained expert concluded in September 2009 that there had been no
    covered event at all. St. Paul maintained this position through the entire
    claims-handling process and through the trial. The district court concluded
    that St. Paul’s request that Weiser-Brown respond to Watson’s report if it
    disagreed, “was not a reasonable request for information necessary or required
    to determine whether the Viking No. 1 was a well ‘out of control.’” St. Paul
    contends, however, that three pieces of information were missing, such that
    the fifteen-day deadline provided by § 542.056 never began to run. First, St.
    Paul claims that although Weiser-Brown submitted invoices, it did not submit
    evidence, such as checks, showing that it actually paid those invoices, and thus
    did not establish that it experienced an out-of-pocket, compensable loss, until
    after the lawsuit was filed. Second, St. Paul claims that it requested, but never
    16
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    No. 13-20442
    received, “proof of the claimed insurable interest.” 9 Finally, St. Paul contends
    that Weiser-Brown failed to provide “the engineering data that it relied upon
    to prove its loss.” Specifically, St. Paul claims that the “mud reports and check
    sheets” were missing.
    We affirm the district court’s factual finding that these few additional
    items did not operate to nullify application of § 542.056. By November 6, 2009,
    Weiser-Brown had repeatedly answered St. Paul’s numerous requests,
    providing information that established that an actual loss occurred, when,
    where, and how it occurred, as well as $4.5 million dollars of supporting
    invoices. St. Paul’s expert assessed this information to conclude that the loss
    was not covered by the insurance policy, a position that St. Paul never
    communicated as notification of rejection of Weiser-Brown’s claim yet pursued
    into the lawsuit as its reason for denying the claim, which the jury rejected.
    Not only was information alleged to have been missing not requested in
    communications from St. Paul—notably, “checks evidencing an out-of-pocket
    loss” and “documentary evidence of owners opting in or out of the insurance”—
    this information also was not determinative of St. Paul’s position refusing
    9 It is unclear what additional documentation Weiser-Brown would have been
    expected to submit to prove the “claimed insurable interest.” BC Johnson requested Weiser-
    Brown to provide the “Joint Operating Agreement or other Participation Agreement
    including division interests and insurance provisions.” The Joint Operating Agreement
    governed the relationship among the operator, Weiser-Brown, and the non-operating interest
    owners. As St. Paul admits, the Joint Operating Agreement required Weiser-Brown to carry
    well-control insurance for the other owners, and owners who did not want to be covered by
    Weiser-Brown’s insurance had to opt-out. Weiser-Brown complied with BC Johnson’s
    request, provided a copy of the Joint Operating Agreement. Further, a comprehensive report
    by BC Johnson, dated March 2010, indicates Weiser-Brown “advised in writing that no non-
    operating interest owners opted out of the coverage.” On appeal, St. Paul argues that Weiser-
    Brown did not provide “documentary evidence of owners opting in or out of the insurance.”
    But because no owners opted out of coverage, there was no documentary evidence to provide.
    St. Paul claims that Weiser-Brown did not establish the insurable working interest until
    January 2012, when lawyers for Weiser-Brown sent an e-mail stating “we confirm that there
    were no opt outs.” This overlooks the previously-received written advisement that there were
    no opt-outs.
    17
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    Weiser-Brown’s claim. Accordingly, based on the facts in this case, we hold
    that the district court correctly found that the fifteen-day deadline under
    § 542.056 began to run on November 6, 2009.
    St. Paul’s reliance on Kachnik’s trial testimony does not change our
    conclusion.   At trial, Kachnik claimed that St. Paul did not have enough
    information from Weiser-Brown until after the lawsuit was filed. Kachnik
    stated: “[A]gain, it takes that back and forth between the adjuster and the oil
    company to sort out any questions. That hadn’t taken place. So, we weren’t in
    a position to come to any kind of final numbers on it at that point.” Kachnik’s
    testimony underscores why St. Paul’s argument is flawed. There had been no
    “back and forth between the adjuster and the oil company” to sort out a final
    loss amount because St. Paul concluded, and maintained, based on items of
    information requested and received, that the event was not covered. Such
    negotiations and finalization would have been futile in the face of Watson’s
    position that there was no coverage, which is a chronology that may underlie
    the jury verdict finding that St. Paul waived the policy “conditions” relating to
    submissions of loss and proof of loss. Indeed, St. Paul offered the waiver
    question for the jury and suggested to the district court that the jury charge
    already included the necessary instruction on that point. Moreover, St. Paul
    acknowledges that it is not the case that the insured must comply with all
    document requests made by the insurer, no matter how irrelevant. The insurer
    cannot avoid liability under § 542.056 by pointing after-the-fact to missing
    information, the absence of which did not affect the insurer’s decision. See
    generally Devonshire Real Estate & Asset Mgmt., LP v. Am. Ins. Co., No. 3:12-
    CV-2199-B, 
    2014 WL 4796967
    , at *22-23 (N.D. Tex. Sept. 26, 2014) (tying the
    15-day acceptance/rejection deadline, under § 542.056, to the insurer’s
    obligation, under § 542.055, to “request from the claimant all items . . . that
    the insurer reasonably believes, at that time, will be required from the
    18
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    No. 13-20442
    claimant”); see also Tex. Ins. Code § 542.058 (giving an insurer 60 days to pay
    a claim “after receiving all items, statements, and forms reasonably requested
    and required under Section 542.055” (emphasis added)).            Instead, Texas’s
    prompt-payment statutory scheme contemplates several alternatives available
    to insurers, including, (1) requesting additional time, pursuant to § 542.056(d);
    (2) rejecting an insufficiently supported claim, pursuant to § 542.056(a); or (3)
    accepting a claim, but agreeing to only “pay . . . part of a claim” because of
    insufficient information of loss, pursuant to § 542.057(a).
    IV.
    Weiser-Brown cross-appeals claiming that the district court erred in
    granting St. Paul’s motion for judgment as a matter of law on Weiser-Brown’s
    bad-faith claim, under Texas Insurance Code § 541. Weiser-Brown contends
    that it presented evidence at trial that St. Paul violated the Insurance Code by
    engaging in bad-faith claims handling and that this claim should have gone to
    the jury.
    A.
    We review the district court’s decision to grant a motion for judgment as
    a matter of law de novo. DP Solutions, Inc. v. Rollins, Inc., 
    353 F.3d 421
    , 427
    (5th Cir. 2003). “Judgment as a matter of law is proper after a party has been
    fully heard by the jury on a given issue, and ‘there is no legally sufficient
    evidentiary basis for a reasonable jury to have found for that party with respect
    to that issue.’” Foreman v. Babcock & Wilcox Co., 
    117 F.3d 800
    , 804 (5th Cir.
    1997) (quoting Fed. R. Civ. P. 50(a)). We must consider all of the evidence in
    the light most favorable to the non-movant, here Weiser-Brown. 
    Foreman, 117 F.3d at 804
    . However, “there must be more than a mere scintilla of evidence
    in the record to render the grant of JMOL inappropriate.” Wallace v. Methodist
    Hosp. Sys., 
    271 F.3d 212
    , 219 (5th Cir. 2001). We will affirm the district court
    19
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    No. 13-20442
    if the result is correct, “even if our affirmance is upon grounds not relied upon
    by the district court.” 
    Foreman, 117 F.3d at 804
    .
    Texas Insurance Code § 541.003 provides that “[a] person may not
    engage in this state in a trade practice that is defined in this chapter as or
    determined under this chapter to be an unfair method of competition or an
    unfair or deceptive act or practice in the business of insurance.” The Insurance
    Code lists several “unfair method[s] of competition” and “unfair or deceptive
    act[s] or practice[s],” such as: “failing to attempt in good faith to effectuate a
    prompt, fair, and equitable settlement”; “failing within a reasonable time to . . .
    affirm or deny coverage of a claim to a policyholder”; “refusing to pay a claim
    without conducting a reasonable investigation with respect to the claim.” Tex.
    Ins. Code §541.060(a). The “reasonable-basis test” applies to a cause of action
    against the insurer for bad faith under the Insurance Code. See Henry v. Mut.
    of Omaha Ins. Co., 
    503 F.3d 425
    , 428-49 (5th Cir. 2007). The insurer “will not
    be faced with a tort suit for challenging a claim of coverage if there was any
    reasonable basis for denial of that coverage.” 
    Id. at 429
    (emphasis added)
    (citation and internal quotation marks omitted); see also Higginbotham v. State
    Farm Mut. Auto. Ins. Co., 
    103 F.3d 456
    , 459 (5th Cir. 1997) (“A cause of action
    for breach of the duty of good faith and fair dealing exists when the insurer has
    no reasonable basis for denying or delaying payment of a claim.”). 10 “Evidence
    establishing only a bona fide coverage dispute does not demonstrate bad faith.”
    State Farm Fire & Cas. Co. v. Simmons, 
    963 S.W.2d 42
    , 44 (Tex. 1998).
    10 While the court in Higginbotham was describing the elements of a bad-faith claim
    under common law, the court explained that “Texas courts have clearly ruled that these
    extra-contractual tort claims require the same predicate for recovery as bad faith causes of
    action in Texas.” 
    Id. at 460.
                                                20
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    B.
    On January 19, 2012, over one year after filing the present lawsuit,
    Weiser-Brown filed a third amended complaint adding claims for breach of
    duty of good faith and deceptive insurance practices, under Texas Insurance
    Code § 541. 11 In its motion for leave to amend the complaint, Weiser-Brown
    cited events that took place during the course of the litigation as the basis for
    the new bad-faith claim. Specifically, Weiser-Brown claimed that based on St.
    Paul’s corporate deposition and motion for partial summary judgment, it was
    evident that St. Paul was basing its decision to deny coverage on reasons that
    it knew to be false. Shortly before trial, the district court ruled on several
    motions in limine. Relevant here, the district court excluded evidence of post-
    litigation conduct by St. Paul. The district court also excluded testimony of
    Weiser-Brown’s expert, Bill Arnold. At the close of Weiser-Brown’s case, the
    district court granted St. Paul’s motion for judgment as a matter of law on the
    bad-faith claim.
    C.
    We find that the district court properly granted judgment as a matter of
    law, as there was no legally sufficient evidentiary basis for a reasonable jury
    to have found that St. Paul violated Texas Insurance Code § 541. See 
    Foreman, 117 F.3d at 804
    . As previously described, a claim of bad faith under the Texas
    Insurance Code requires a showing that there was no reasonable basis to deny
    or delay payment of the claim. See 
    Henry, 503 F.3d at 428-29
    . The evidence
    presented at trial, however, established a bona fide coverage dispute between
    Weiser-Brown and St. Paul. See 
    Simmons, 963 S.W.2d at 44
    . The control-of-
    well insurance policy at issue required “an unintended subsurface flow of oil,
    11 At trial, Weiser-Brown’s counsel made clear that it was not pursuing a common law
    bad-faith claim, only a statutory bad-faith claim, under § 541.
    21
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    gas, water, and/or fluid from one subsurface zone to another subsurface zone
    via the bore of the Well, which cannot be controlled by the blowout preventer
    . . . or other equipment required.” Determining whether such a covered event
    took place at the Viking No. 1 well required analysis of complex subsurface
    geological conditions. In fact, Weiser-Brown did not submit a claim until seven
    months after the incident because it did not know if it had coverage for what
    had occurred. Therefore, seven months after the incident in question, St.
    Paul’s adjuster, BC Johnson, had to reconstruct what happened at the well.
    Weiser-Brown emphasizes that in June 2009, BC Johnson’s Bob Kachnik
    reached a preliminary conclusion that there was no coverage but did not inform
    Weiser-Brown of a potential coverage issue until September 2009. 12 As noted
    above, Weiser-Brown does not dispute that in June 2009, BC Johnson was still
    waiting to receive documents from Weiser-Brown.                At that time, Kachnik
    requested that St. Paul hire an expert “to take a second look at his conclusion
    that the insured has not supported . . . that a [control-of-well] event occurred.”
    The expert, David Watson, wrote an eighteen-page report in which he
    concluded that “[t]he available evidence does not demonstrate an underground
    blowout in either the original or the sidetrack wellbore.” Watson indicated,
    however,    that    additional    pieces    of   information     “would    benefit    my
    interpretation of the well operations and my opinions may change or be
    supplemented.” Upon receipt of Watson’s report, Kachnik acknowledged that
    Watson’s “definition of an underground blowout may be a bit strict.” However,
    Kachnik stated that “he makes some good points and asks for additional
    information,” and, with St. Paul’s permission, sent the report to Weiser-Brown
    on September 29, 2009, soon after it was written. Rather than support a bad-
    12 At trial, Kachnik denied having reached such a conclusion and asserted St. Paul’s
    claim notes mischaracterized his position.
    22
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    No. 13-20442
    faith finding, the evidence of St. Paul’s and BC Johnson’s conduct from June
    to September 2009 demonstrates an effort on their part to obtain an expert
    opinion on a complicated coverage issue.
    Of course, the jury ultimately disagreed with Kachnik and Watson and
    found that the Viking No. 1 well did experience an underground loss of control.
    However, the evidence at trial was insufficient to support a conclusion that
    coverage was obvious or that St. Paul had no reasonable basis to deny Weiser-
    Brown’s claim. 
    Simmons, 963 S.W.2d at 44
    (“Evidence establishing only a bona
    fide coverage dispute does not demonstrate bad faith.”). At trial, Weiser-
    Brown’s own expert described what took place at the well as “quite
    complicated.” While he testified that the Viking No. 1 did experience an
    underground, interzonal flow, he explained that it was “not a raging flow from
    one zone to another,” but an “intermittent partial flow” that the operator could
    only “partially control.”
    Weiser-Brown contends that “St. Paul engaged in an outcome-oriented
    investigation” and that BC Johnson and Watson were not independent.
    However, other than the fact that Kachnik suggested three “minor edits” to
    Watson’s report, there was no evidence at trial that Kachnik and Watson
    worked together, much less that they conspired to deny coverage to Weiser-
    Brown. There was no evidence that either Kachnik or St. Paul influenced
    Watson’s conclusion. While Weiser-Brown contends that “St. Paul permitted
    its engineering consultant to confirm [Kachnik’s] conclusion by using a wrong
    and overly restrictive definition of the term on which it based its denial of
    coverage,” the fact that Kachnik acknowledged this weakness in Watson’s
    report supports the opposite of a concerted effort to deny coverage.         The
    evidence at trial was insufficient to support Weiser-Brown’s allegations of bad
    faith and, thus, the district court properly granted judgment as a matter of
    law. See 
    Foreman, 117 F.3d at 804
    (quoting Fed. R. Civ. P. 50(a)).
    23
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    Further, contrary to Weiser-Brown’s contention, the district court did not
    improperly exclude evidence that would have supported the bad-faith claim.
    As this court has repeated, “[d]istrict courts are given broad discretion in
    rulings on the admissibility of evidence; we will reverse an evidentiary ruling
    only when the district court has clearly abused this discretion and ‘a
    substantial right of [a] party is affected.’” Rock v. Huffco Gas & Oil Co., Inc.,
    
    922 F.2d 272
    , 277 (5th Cir. 1991) (quoting Muzyka v. Remington Arms Co., Inc.,
    
    774 F.2d 1309
    , 1313 (5th Cir. 1985)); see also Sprint/United Mgmt. Co. v.
    Mendelsohn, 
    552 U.S. 379
    , 384 (2008) (“In deference to a district court’s
    familiarity with the details of the case and its greater experience in evidentiary
    matters, courts of appeals afford broad discretion to a district court’s
    evidentiary rulings.”).   Further, “we may not disturb the district court’s
    exclusion of the evidence . . . if that ruling can be upheld on other grounds,
    regardless of whether the court relied on those grounds.” Brazos River Auth.
    V. GE Ionics, Inc., 
    469 F.3d 416
    , 423 (5th Cir. 2006) (citation and internal
    quotation marks omitted).
    Weiser-Brown first argues that the district court erred in excluding
    evidence of St. Paul’s post-litigation conduct, which, Weiser-Brown contends,
    supported its bad-faith claim.      Before the district court, Weiser-Brown
    indicated that it wanted to introduce numerous post-litigation filings, “even
    copies of the answer [St. Paul] might have filed to the complaint.” On appeal,
    Weiser-Brown limits its focus to St. Paul’s unsuccessful summary judgment
    motion, filed in November 2011. Weiser-Brown claims that St. Paul’s motion
    was based on “grounds that [St. Paul] knew were meritless,” such as late notice
    and questions of well ownership. However, Weiser-Brown misconstrues St.
    Paul’s summary judgment motion.         As Weiser-Brown describes, “St. Paul
    moved for partial summary judgment on the bases that (1) Weiser-Brown’s
    notice of loss was untimely and (2) the question about the insurable interest
    24
    Case: 13-20442     Document: 00513195229       Page: 25    Date Filed: 09/16/2015
    No. 13-20442
    was unresolved.” Neither of these descriptions is accurate. In the cited motion,
    St. Paul did state, in the statement of undisputed facts, that “Weiser-Brown
    gave its first notice to St. Paul of the two alleged well control incidents some
    seven months later.” However, St. Paul did not argue that summary judgment
    was warranted on that basis. Further, St. Paul discussed the unresolved
    insurable interest issue in the same context that it has done so before us—
    arguing that the claims-handling deadlines provided by the Prompt-Payment
    Statute had not been triggered. Rather than containing arguments that St.
    Paul “already conceded were baseless,” the motion for summary judgment
    raised complex legal issues involving, among other things, 13 interpretation and
    application of the Prompt-Payment Statute. Faced with a category of evidence
    that, if admitted, could result in extensive post-litigation filings, which, even
    if relevant, would likely confuse the jury, the district court did not abuse its
    discretion by excluding evidence of St. Paul’s post-litigation conduct. Fed. R.
    Evid. 403 (“The court may exclude relevant evidence if its probative value is
    substantially outweighed by a danger of one or more of the following: unfair
    prejudice, confusing the issues, misleading the jury, undue delay, wasting
    time, or needlessly presenting cumulative evidence.”).
    Similarly, we do not find that the district court abused its discretion in
    excluding testimony of Weiser-Brown’s expert, Bill Arnold. Federal Rule of
    Evidence 702 provides:
    A witness who is qualified as an expert by knowledge,
    skill, experience, training, or education may testify in
    the form of an opinion or otherwise if:
    (a)    the expert’s scientific, technical, or other
    specialized knowledge will help the trier of fact to
    13 In the motion for summary judgment, St. Paul also argued that Weiser-Brown’s
    breach-of-contract claim had no merit because “St. Paul did not deny coverage prior to
    Weiser-Brown’s filing suit.” On appeal, Weiser-Brown does not attack that argument as
    being previously-resolved or concededly baseless.
    25
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    understand the evidence or to determine a fact in
    issue;
    (b)    the testimony is based on sufficient facts or data;
    (c)    the testimony is the product of reliable
    principles and methods; and
    (d)    the expert has reliably applied the principles
    and methods to the facts of the case.
    Fed. R. Evid. 702. This rule “imposes a special obligation upon a trial judge to
    ‘ensure that any and all scientific testimony . . . is not only relevant, but
    reliable.’”    Kumho Tire Co., Ltd. v. Carmichael, 
    526 U.S. 137
    , 147 (1999)
    (quoting Daubert v. Merrell Dow Pharms., Inc., 
    509 U.S. 579
    , 589 (1993)). “The
    expert testimony must be relevant, not simply in the sense that all testimony
    must be relevant, Fed. R. Evid. 402, but also in the sense that the expert’s
    proposed opinion would assist the trier of fact to understand or determine a
    fact in issue.” Bocanegra v. Vicmar Servs., Inc., 
    320 F.3d 581
    , 584 (5th Cir.
    2003) (citing 
    Daubert, 509 U.S. at 591-92
    ). With respect to reliability, the
    district court has “broad latitude” when deciding whether such testimony is
    reliable, and thus admissible, as well as when deciding how to test the
    testimony’s reliability. 
    Kumho, 526 U.S. at 141-42
    , 152 (“The trial court must
    have the same kind of latitude in deciding how to test an expert’s reliability . . .
    as it enjoys when it decides whether or not that expert’s relevant testimony is
    reliable.”).
    The district court expressed concerns about both the relevance and
    reliability of Weiser-Brown’s expert’s testimony. We share those concerns.
    Weiser-Brown contends that Arnold’s testimony would have supported its
    claim for bad faith, under § 541 of the Texas Insurance Code, as Arnold would
    have testified that St. Paul violated the “accepted practice” in the insurance
    26
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    No. 13-20442
    industry when it failed to send Weiser-Brown a reservation-of-rights letter. 14
    In his expert report, Arnold stated: “It is clear that sometime between the
    assignment of the claim to BC Johnson Associated (BCJ) by [St. Paul] and the
    engagement of David Watson, [St. Paul] and its adjuster, BCJ, perceived a
    potential coverage issue that should have been disclosed to [Weiser-Brown].”
    Arnold was referring to the delay from June 2009, when Kachnik expressed
    concerns about coverage, to September 2009, when St. Paul’s retained expert
    wrote a report that was forwarded to Weiser-Brown.                   Arnold’s conclusory
    statement that St. Paul should have informed Weiser-Brown of the potential
    coverage problem before obtaining an expert to investigate the issue was based
    on Arnold’s view of “[c]ustom and practice in the industry.” The district court
    was concerned that such an untestable, conclusory statement would not assist
    the jury in evaluating St. Paul’s claim-handling behavior.                    Further, the
    majority of Arnold’s relevant work experience had been as an in-house risk
    manager for various oil and gas companies. Other than his work for Travelers
    Insurance Company, ending in 1978, Arnold’s experience was from the
    perspective of the insured, making insurance claims. Significantly, Arnold did
    not know if there were any local or national standards that adjusters had to
    follow. While Arnold concluded in his expert report that St. Paul did not meet
    the standards “on how insurers are to treat their policy holders” as set forth in
    the Texas Insurance Code, he admitted during his deposition that he did not
    know whether St. Paul was required to send a reservation-of-rights letter
    under the Texas Insurance Code. Given the conclusory nature of his proposed
    testimony, coupled with his lack of knowledge regarding the Texas Insurance
    14  Weiser-Brown also contends that Arnold would have testified that St. Paul’s
    summary judgment motion was improper. However, we have already concluded that the
    district court did not abuse its discretion when it excluded evidence of St. Paul’s post-trial
    conduct.
    27
    Case: 13-20442    Document: 00513195229      Page: 28    Date Filed: 09/16/2015
    No. 13-20442
    Code and lack of recent experience adjusting insurance claims, we find no
    abuse of discretion in the district court’s decision to exclude Arnold’s testimony.
    Accordingly, we find that the district court did not abuse its discretion in
    excluding certain evidence and properly granted judgment as a matter of law
    on Weiser-Brown’s § 541 bad-faith claim.
    V.
    For the foregoing reasons, we AFFIRM the district court in all respects.
    28
    

Document Info

Docket Number: 13-20442

Citation Numbers: 801 F.3d 512

Filed Date: 9/16/2015

Precedential Status: Precedential

Modified Date: 1/12/2023

Authorities (20)

Federal Deposit Insurance v. Shaid , 142 F.3d 260 ( 1998 )

dorothy-l-rock-individually-and-as-administratrix-of-the-estate-of , 922 F.2d 272 ( 1991 )

Foreman v. Babcock & Wilcox Co. , 117 F.3d 800 ( 1997 )

Howe v. Scottsdale Insurance Co. , 204 F.3d 624 ( 2000 )

Veronica A. Wallace v. The Methodist Hospital System , 271 F.3d 212 ( 2001 )

Henry v. Mutual of Omaha Insurance , 503 F.3d 425 ( 2007 )

Bocanegra v. Vicmar Services, Inc. , 320 F.3d 581 ( 2003 )

Brazos River Authority v. GE Ionics, Inc. , 469 F.3d 416 ( 2006 )

RecoverEdge L.P. v. Pentecost , 44 F.3d 1284 ( 1995 )

John Higginbotham v. State Farm Mutual Automobile Insurance ... , 103 F.3d 456 ( 1997 )

Flowers Transportation, Inc. v. M/v Peanut Hollinger, Her ... , 664 F.2d 112 ( 1981 )

Dawn Muzyka v. Remington Arms Co., Inc. , 774 F.2d 1309 ( 1985 )

Daubert v. Merrell Dow Pharmaceuticals, Inc. , 113 S. Ct. 2786 ( 1993 )

Kumho Tire Co. v. Carmichael , 119 S. Ct. 1167 ( 1999 )

Colonial County Mutual Insurance Co. v. Valdez , 30 S.W.3d 514 ( 2000 )

State Farm Fire & Casualty Co. v. Simmons , 963 S.W.2d 42 ( 1998 )

Allstate Insurance Co. v. Bonner , 51 S.W.3d 289 ( 2001 )

Guideone Lloyds Insurance Co. v. First Baptist Church of ... , 268 S.W.3d 822 ( 2008 )

Sprint/United Management Co. v. Mendelsohn , 128 S. Ct. 1140 ( 2008 )

Lee v. CATLIN SPECIALTY INSURANCE COMPANY , 766 F. Supp. 2d 812 ( 2011 )

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