Garcia v. State Farm Insurance Company et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
LORENZO GARCIA,
Plaintiff,
v. 	Civ. No. 24-1286 KK/KRS
STATE FARM INSURANCE
COMPANY, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
Before the Court is Defendants’ Motion to Exclude Certain Opinions of Plaintiff’s Expert
Elliott Flood (Doc. 110) (“Motion”), filed January 12, 2026. Plaintiff responded in opposition to
the Motion on January 30, 2026, and Defendants replied in support of it on February 20, 2026.
(Docs. 115, 119.) The Court, having reviewed the parties’ submissions, the record, and the
relevant law, and being otherwise sufficiently advised, FINDS that the Motion is well taken and
therefore GRANTS it as set forth below.
I. 	Factual Background and Procedural History
On October 23, 2024, Plaintiff Lorenzo Garcia (“Plaintiff”) filed his original Complaint
for Insurance Bad Faith, Unfair Trade Practices, Unfair Insurance Practices, Breach of Contract,
Breach of the Duty of Good Faith and Fair Dealing, and Declaratory Relief (Doc. 3-2)
(“Complaint”) in state court against Defendants State Farm Insurance Company (“State Farm”)
and adjuster Randy Carney (“Defendant Carney”). Defendant Carney removed the Complaint to
this Court on December 20, 2024. (Docs. 1, 3.)
In his Complaint, Plaintiff alleges that he was lawfully stopped at a red light when the
vehicle Kenneth Childress was driving collided with the vehicle Pasty Ration was driving,
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causing Ms. Ration’s vehicle to strike the rear of Plaintiff’s vehicle. (Doc. 3-2 at 3 ¶¶ 15-16.)
Plaintiff further alleges that as a result of the accident he sustained permanent, disabling injuries
requiring extensive medical treatment. (Id. at 3 ¶ 18.)
According to the Complaint, at the time of the collision, Plaintiff held a valid automobile
insurance policy with State Farm, which included uninsured/underinsured motorist (“UM/UIM”)
coverage with policy limits of $600,000. (Id. at 3 ¶ 20.) Plaintiff alleges that the other drivers’
auto insurance coverage was insufficient to compensate him for his injuries. (Id. at 4 ¶ 27.)
Plaintiff further alleges that he timely submitted a claim for UM/UIM benefits to State Farm but
that State Farm failed to pay him the full benefits he is owed under the policy. (Id. at 3 ¶¶ 21-22.)
In his Complaint, Plaintiff asserts claims against State Farm for UIM benefits (Count I),
violations of the New Mexico Unfair Trade Practices Act (“NM UTPA”) (Count II), breach of
contract and the duty of good faith and fair dealing (Count III), bad faith failure to pay a first-
party claim (Count IV), and violations of the New Mexico Unfair Insurance Practices Act (“NM
UIPA”) (Count V). (Id. at 4-8.) Against Defendant Carney, Plaintiff asserts claims for breach of
contract and the duty of good faith and fair dealing (Count III). (Id. at 6-7.) Plaintiff also requests
a judgment declaring “the respective rights and obligations of the parties” (Count VI). (Id. at 9.)
On June 30, 2025, Plaintiff disclosed Elliott Flood (“Mr. Flood”) as an expert who may
testify on Plaintiff’s behalf at trial and produced Mr. Flood’s report. (Doc. 48; Docs. 110-1, 110-
2.) Mr. Flood has “more than 35 years of experience in the insurance industry” and is also
inactive attorney. (Doc. 110-2 at 2 ¶ 2(a); Doc. 110-3 at 4; Doc. 110-4 at 1-2.) In his report, Mr.
Flood stated that Plaintiff has retained him to “provide expert testimony on insurance industry
customs, practices, and standards.” (Doc. 110-2 at 2.) Specifically, Mr. Flood stated that his
testimony will:
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 	Provide background information on the insurance business and explain
technical jargon and insurance concepts as necessary to understand the
insurance records pertaining to this case[;]
 	Describe the standard practices a reasonable insurer would have applied
under the circumstances[;]
 	Render [his] opinions on whether [State Farm] complied with generally
accepted industry customs, practices, and standards for proper claim
handling[; and,]
 	Rebut, if necessary, the opinions expressed by State Farm’s witnesses
concerning their opinions whether it complied with generally accepted
industry customs, practices, and standards for proper claim handling.
(Id.)
By “appl[ying] the principles of proper claim handling to the facts” of the case, Mr. Flood
has arrived at the following eleven opinions:
1. 	No reasonable insurer would value [Plaintiff’s] UM claim at $2,500 after
receiving 	detailed 	records 	showing 	permanent 	impairment, 	comparative
imaging, and long-term lifestyle disruption.
2. 	It is inconsistent with industry standards to disregard the insured’s medical
records simply because of prior conditions or comorbidities. Reasonable
insurers distinguish aggravation of a condition from unrelated health issues.
3. 	Industry standards require UM carriers to favor prompt and fair evaluation
once damages are reasonably clear. Here, the radiological evidence and
uncontroverted narrative support at least a good faith discussion of full policy
limits.
4. 	Insurers handling first-party claims owe a heightened standard of fairness and
transparency. State Farm’s failure to articulate specific rebuttals to [Plaintiff’s]
deformity at L2, [his] use of a cane, or his diminished physical capacity
reflects an absence of serious evaluation.
5. 	Offering a nuisance value settlement under these facts is outside standard
claims practice. It fails to reflect the fiduciary-like responsibility insurers
carry when handling UM claims for their policyholders.
6. 	State Farm did not adequately explain the basis for its settlement offer or
denial. 	Industry 	standards 	require 	that 	insurers 	clearly 	and 	thoroughly
communicate their valuation process to the insured, especially when denying
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substantial elements of a first-party claim. The vague and conclusory rejection
letters fail to meet that standard.
7. 	The medical records confirm new and acute findings consistent with traumatic
injury, including a Grade 2 wedge deformity at L2 not present in pre-accident
imaging. Any reasonable insurer would recognize this objective evidence as
proof of new trauma.
8. 	It is standard practice in the insurance industry to treat aggravation of pre-
existing conditions as compensable damages. The majority of claims involve
individuals with prior medical history. Dismissing [Plaintiff’s] injury claim
based on his age or prior cancer treatment is inconsistent with how a
reasonable insurer is expected to evaluate causation and damages.
9. 	Reasonable 	insurers 	are 	expected 	to 	differentiate 	between 	pre-existing
conditions and post-accident aggravations. The ED records detail a sudden
onset of pain at the moment of impact and confirm objective clinical findings,
including spinal deformity and loss of vertebral height, none of which were
present before the crash.
10. State Farm’s failure to consider these objective radiographic findings and the
treating provider’s clinical narrative constitutes a deviation from accepted
practices in injury claim evaluation, where both subjective complaints and
objective imaging must be integrated into the assessment of damages.
11. Lowballing is a claims handling tactic in which the insurer makes an
unreasonably low settlement offer that bears little relation to the actual value
of the claim. Rather than engaging in a fair evaluation of the insured’s injuries
and damages, the insurer minimizes or disregards credible evidence and offers
a nominal amount in hopes of forcing a quick resolution. This practice is
inconsistent with industry standards, especially in first-party claims, where
insurers are expected to give the benefit of the doubt to their policyholders
and conduct an honest, good faith assessment of the claim’s value.
Lowballing is a negotiating tactic by which a claim representative knowingly
offers far less than the merits of the claim warrant. Lowballing is undeniably
effective in forcing claimants and insureds to accept settlements that may be
lower than their claims deserve. Lowballing is ethically indefensible, even in
response to an outrageously high settlement demand. As a tactic, lowballing
may be effective yet it remains ethically unsupportable.
(Id. at 3-4 (emphasis in original) (quotation marks and ellipses omitted).) Defendants now move
the Court to exclude portions of Mr. Flood’s proffered testimony at trial. (Doc. 110.)
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II. Analysis
In the present Motion, Defendants ask the Court to “confine Mr. Flood’s testimony to
industry standards and customs relevant to this matter” and to prohibit him from “testify[ing] to
any legal conclusions” and from “apply[ing] the law to the facts as part of his testimony at trial.”
(Doc. 110 at 1.) In his response, Plaintiff counters that all of Mr. Flood’s proffered testimony is
relevant and admissible. (Doc. 115 at 3.) As explained below, the Court concludes that some
portions of Mr. Flood’s proffered opinions would not be helpful to the jury and will limit his
testimony accordingly.
Federal Rule of Evidence 702 provides that
[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 the proponent
demonstrates to the court that it is more likely than not that: (a) the expert’s
scientific, technical, or other specialized knowledge will help the trier of fact to
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’s opinion reflects a reliable application of the
principles and methods to the facts of the case.
Fed. R. Evid. 702. Under this rule, trial courts perform a gatekeeping role, “ensuring that an
expert’s testimony both rests on a reliable foundation and is relevant to the task at hand.”
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 597 (1993); Kumho Tire Co., Ltd.
v. Carmichael, 526 U.S. 137, 141 (1999); United States v. Rodriguez-Felix, 450 F.3d 1117, 1122
(10th Cir. 2006). The proponent of expert testimony bears the burden of showing the proffered
testimony is admissible. United States v. Nacchio, 555 F.3d 1234, 1241 (10th Cir. 2009).
In evaluating the admissibility of expert testimony, courts employ a two-part test,
determining (1) whether the expert is qualified by knowledge, skill, experience, training, or
education to render the expert opinions at issue, and (2) whether the proffered testimony is
reliable and relevant. Sanderson v. Wyo. Hwy. Patrol, 976 F.3d 1164, 1172 (10th Cir. 2020);
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Ralston v. Smith & Nephew Richards, Inc., 275 F.3d 965, 969 (10th Cir. 2001). “The relevance
of such testimony also must be weighed against the danger of unfair prejudice, confusion of the
issues, or misleading the jury as well as considerations of undue delay, waste of time, or needless
presentation of cumulative evidence.” Am. Auto. Ins. Co. v. First Mercury Ins. Co., Civ. No. 13-
439, 2017 WL 4410780, at *2 (D.N.M. Sept. 30, 2017) (citing Fed. R. Evid. 403) (quotation
marks omitted).
Defendants do not challenge Mr. Flood’s qualifications as an expert in insurance industry
customs, practices, and standards. (Doc. 119 at 1.) Moreover, “[b]oth the language of Rule 702
and Tenth Circuit precedent make clear that the specialized knowledge required for expert
testimony can be acquired through experience.” O’Sullivan v. Geico Cas. Co., 233 F. Supp. 3d
917, 924 (D. Colo. 2017) (quotation marks omitted). And according to his report and curriculum
vitae, Mr. Flood has 35 years of professional experience in the insurance industry, including in
positions of significant responsibility, as well as over a decade of professional experience as an
attorney specializing in insurance law. (Doc. 110-2 at 2; Doc. 110-4 at 1-2.) His report also
documents extensive experience as an expert witness in other insurance cases. (Doc. 110-2 at 2.)
In short, at this juncture, it appears that Plaintiff will easily be able to qualify Mr. Flood as an
expert witness at trial.
Defendants likewise do not challenge the reliability of Mr. Flood’s proffered testimony in
their Motion. (See generally Docs. 110, 119.) Trial courts have “broad discretion in deciding how
to assess an expert’s reliability, including what procedures to utilize in making that assessment,
as well as in making the ultimate determination of reliability.” Rodriguez-Felix, 450 F.3d at 1122.
The reliability of expert testimony regarding insurance industry standards and best practices is
generally “dependent upon the witness’s knowledge of, and experience within, the insurance
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industry.” Am. Auto. Ins. Co., 2017 WL 4410780, at *8 (quotation marks omitted). Such
testimony is deemed reliable when the expert’s knowledge of industry standards is “grounded in
his experience.” Id. And here, Plaintiff will likely present evidence at trial that Mr. Flood has
significant knowledge of and professional experience in the insurance industry and that his
knowledge and opinions are grounded in his experience. Thus, at this juncture, it appears that
Plaintiff will be able to establish the reliability of Mr. Flood’s opinions.
This leaves the disputed question of whether Mr. Flood’s proffered opinions are relevant,
i.e., whether they will “help the trier of fact to understand the evidence or to determine a fact in
issue.” Sanderson, 976 F.3d at 1172 (quoting Fed. R. Evid. 702) (brackets omitted). In this
regard, “[a]n opinion is not objectionable just because it embraces an ultimate issue.” Fed. R.
Evid. 704(a). But it is generally not helpful for an expert to “state legal conclusions drawn by
applying the law to the facts.”1 United States v. Richter, 796 F.3d 1173, 1195 (10th Cir. 2015)
(quoting United States v. Bedford, 536 F.3d 1148, 1158 (10th Cir. 2008)); Hansen Constr. Inc. v.
Everest Nat’l Ins. Co., Civ. No. 16-2902, 2019 WL 2602510, at *3 (D. Colo. June 25, 2019). In
other words, “[w]hile testimony on ultimate facts is authorized … testimony on ultimate
questions of law is not favored.” Specht v. Jensen, 853 F.2d 805, 808 (10th Cir. 1988).
The basis for this distinction is that testimony on the ultimate factual questions
aids the jury in reaching a verdict; testimony which articulates and applies the
relevant law, however, circumvents the jury’s decision-making function by telling
it how to decide the case.
Id. It also infringes on the trial judge’s “role of adjudicating the law for the benefit of the jury.”
Id. “In no instance can a witness be permitted to define the law of the case.” Id. at 810.
1 “[A]n expert may refer to the law in expressing his or her opinion,” however. United States v. Richter, 796 F.3d
1173, 1195 (10th Cir. 2015).
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Here, Defendants argue that the Court should exclude portions of Mr. Flood’s proffered
opinions because they infringe on the Court’s duty to define the law of the case and the jury’s
duty to apply that law to the facts and are thus unhelpful. (Doc. 110 at 4-7.) Specifically,
Defendants seek exclusion of any opinions that they acted “unreasonably,” in “bad faith,” or “in
violation of any contractual, common law, or statutory duty.” (Id. at 1, 8.) Plaintiff counters that
expert testimony may “refer to the law” and that “[a]ny testimony Mr. Flood provides regarding
legal issues will aid the jury in understanding the facts of this case as to Defendants’ conduct
even though they are couched in legal terms.” (Doc. 115 at 3.)
Plaintiff is correct that expert testimony is not objectionable merely because it refers to
legal concepts and Mr. Flood’s opinions are not excludable on that basis. For example, Mr.
Flood’s opinions are not excludable merely because they address the legal concepts of
“damages” and “causation.” (See Doc. 110-2 at 3-4.) Nevertheless, Plaintiff fails to refute
Defendants’ charge that some of Mr. Flood’s opinions impermissibly state legal conclusions that
he has drawn by applying the law to the facts of the case. (Id.; see Doc. 115 at 3-4.) And based
on his report, it certainly appears that Mr. Flood proposes to opine about the propriety of
Defendants’ conduct in relation not only to insurance industry customs, practices, and standards,
but also to Defendants’ legal duties as he defines them.
Three analogous cases cited in Defendants’ Motion highlight the problematic nature of
such opinions. In the first case, American Automobile Insurance Company v. First Mercury
Insurance Company (“American Automobile”), both parties’ experts proposed to testify about the
parties’ legal duties as insurers and whether they breached those duties. See 2017 WL 4410780,
at *5, *8. However, the court observed that whether an insurer had a legal duty “is a question of
law to be determined by the [c]ourt,” and “whether an insurer breached that duty is a matter to be
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determined by the jury upon application of the law to the facts.” Id. at *8. The court therefore
held that the parties’ experts could not testify as to whether a party owed a duty under statutory
or common law, whether it breached that duty, and whether its actions were in good or bad faith
or reasonable or unreasonable. Id. Instead, the court held that the experts could testify “as to facts
relevant to good faith, such as industry standards for claims handling, typical practices and
procedures, and the facts behind the parties’ claims handling in [the] case” and the parties’
“actions vis á vis … statutory requirements and the methods used by insurers to comply with the
statute.” Id.
In the second case, Hansen Construction Inc., a proffered expert’s report read like “a
legal brief,” with “numerous pronouncements regarding the law that [the expert] believes applies
to this case” and “legal conclusions drawn by applying law to facts.” 2019 WL 2602510, at *4.
For example, the expert opined that the defendant’s “claim-related conduct was unreasonable.”
Id. at *3. “[N]oting the inadmissibility of such opinions,” the court “declined to parse out the
admissible portions of [the expert’s] proposed testimony from the inadmissible portions,” and
precluded him from testifying at trial. Id. at *4 (brackets and quotation marks omitted). The court
also excluded two other experts’ proffered testimony for similar reasons. Id. at *5.
And finally, in the third case, Smith v. Liberty Mutual Fire Insurance Co., the court
discussed and delineated the proper scope of the parties’ insurance experts’ testimony. Civ. No.
18-739, 2020 WL 6162986, at *3-*4 (D.N.M. Oct. 21, 2020). Specifically, having reviewed the
principles discussed in Specht and American Automobile, the court held that the experts could
“testify to claims handling standards and to the facts of how [the defendant insurer] handled [the
plaintiff’s] claims.” Id. at *3-*4. But the court prohibited them from opining that the defendant’s
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conduct was “reasonable,” “unreasonable,” or “in good faith or bad faith,” or that the defendant
did or did not violate a statute. Id.
Some of Mr. Flood’s proffered opinions are materially indistinguishable from those the
courts excluded in the above cases. For example, Mr. Flood proposes to opine that “[i]nsurers
handling first-party claims owe a heightened standard of fairness and transparency” and have a
“fiduciary-like responsibility … when handling UM claims for their policyholders.” (Doc. 110-2
at 3 ¶¶ 4-5.) These opinions appear to concern Defendants’ legal duties rather than industry
standards. But whether a legal duty exists is a question for the Court to decide, and it would not
be helpful to the jury for Mr. Flood to opine on this topic. See Am. Auto. Ins. Co., 2017 WL
4410780, at *8.
In addition, Mr. Flood frequently appears to draw legal conclusions by directly or
indirectly 	characterizing 	Defendants’ 	conduct 	as 	unreasonable 	or 	in 	bad 	faith, 	where
unreasonableness and bad faith are elements of claims asserted in Plaintiff’s Complaint. (See,
e.g., Doc. 3-2 at 6-8.) In Paragraph 1, he opines that “[no] reasonable insurer would value this
UM claim at $2,500.” (Doc. 110-2 at 3 ¶ 1.) In Paragraph 2, he states that “[r]easonable insurers
distinguish aggravation of a condition from unrelated health issues.” (Id. at 3 ¶ 2.) In Paragraph
3, Mr. Flood opines that certain evidence “support[s] at least a good faith discussion of full
policy limits,” thus implying that Defendants did not act in “good faith” because they did not
engage in such a discussion.2 (Id. at 3 ¶ 3.) In Paragraph 7, Mr. Flood concludes that “any
reasonable insurer would recognize [Plaintiff’s] objective evidence as proof of new trauma.” (Id.
at 3 ¶ 7.) And he opines in Paragraph 8 that Defendants’ dismissal of Plaintiff’s claim was
“inconsistent with how a reasonable insurer is expected to evaluate causation and damages.” (Id.
2 In Paragraph 3, Mr. Flood also characterizes certain evidence as “uncontroverted,” which appears to further
impinge on the jury’s fact-finding role. (Doc. 110-2 at 3 ¶ 3.)
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at 4 ¶ 8.) Finally, in Paragraph 9, he states that “[r]easonable insurers are expected to
differentiate between pre-existing conditions and post-accident aggravations.” (Id. at 4 ¶ 9.)
In the above opinions, Mr. Flood appears to define the scope of Defendants’ legal duties,
including the duties to act reasonably and in good faith, and to apply the law regarding these
duties to the facts of the case, impinging on the Court’s and the jury’s performance of these
functions. Such testimony is not helpful, and it is also more unfairly prejudicial than probative.
The Court will therefore exclude it under Rules 403 and 702.
III. Conclusion
In his report, Mr. Flood does more than opine about insurance industry customs,
practices, and standards and whether Defendants’ handling of Plaintiff’s claim conformed to
such norms. Rather, he frequently appears to define the law of the case and apply that law to the
facts to draw ultimate legal conclusions about Defendants’ conduct. However, such testimony
would usurp the Court’s and the jury’s roles and would be unhelpful and more unfairly
prejudicial than probative. Mr. Flood is therefore precluded at trial from testifying about: (a) the
existence or scope of any contractual,3 common law, fiduciary, or statutory duty that Defendants
owed to Plaintiff, or that an insurer in Defendants’ position owes to an insured in Plaintiff’s
position; (b) whether Defendants breached any such duty; (c) whether Defendants acted
reasonably or unreasonably; and, (d) whether Defendants acted in good or bad faith.
IT IS SO ORDERED.
____________________________________
KIRTAN KHALSA
UNITED STATES MAGISTRATE JUDGE
3 “Absent an ambiguity in the contract, interpretation of a contract is a matter of law to be conducted by the Court.”
Am. Auto. Ins. Co., 2017 WL 4410780, at *6.
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