Church Mutual Insurance Company, S.I. v. Chabad of New Mexico

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
CHURCH MUTUAL INSURANCE
COMPANY, S.I.,
Plaintiff/Counter-Defendant,
v.
Case 1:24-cv-00090-MIS-SCY
CHABAD OF NEW MEXICO,
Defendant/Counter-Claimant.
ORDER DENYING CHURCH MUTUAL INSURANCE COMPANY’S CORRECTED
MOTION TO EXCLUDE THE TESTIMONY OF S. SETCAVAGE
THIS MATTER is before the Court on Plaintiff/Counter-Defendant Church Mutual
Insurance Company, S.I. (“Church Mutual”)’s Corrected Motion to Exclude the Testimony of S.
Setcavage (“Motion”), ECF No. 64, filed August 14, 2025. Defendant/Counter-Claimant Chabad
of New Mexico (“Chabad”) filed a Response on August 18, 2025, ECF No. 67, to which Church
Mutual filed a Reply on August 28, 2025, ECF No. 75. The Court held a hearing on the Motion
February 4, 2026. See ECF No. 96. After considering the Parties’ submissions, the record, and
the relevant law, the Court will DENY the Motion.
I. Background
On June 2, 2022, Church Mutual renewed an insurance policy issued to Chabad that
covered certain real property Chabad owns in Rio Rancho, New Mexico (“Policy,” ECF No. 1-1).
The Policy contains a loss condition for “Vacancy,” which states, in relevant part:
If the building where loss or damage occurs has been vacant for more than 60
consecutive days before that loss or damage, we will:
a. Not pay for any loss or damage caused by any of the following even if they
are Covered Causes of Loss:
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(1) Vandalism;
. . .
b. Reduce the amount we would otherwise pay for the loss or damage by 15%.
. . .
A building is vacant when it does not contain enough of your personal property to
conduct customary operations. . . .
ECF No. 1-1 at 44-45. The Policy also contains a “Valuation” provision that describes how Church
Mutual will determine the value of loss or damage to covered property. Id. at 45. That provision
states, in relevant part:
7. Valuation
a. Replacement Cost. If Replacement Cost is shown in the
Declarations Page as applicable to Covered Property, we will
determine the value of Covered Property in the event of loss or
damage as follows:
(1) At Replacement Cost (without deduction for depreciation)
as of the time of loss or damage . . .
. . .
(4) We will not pay more for loss or damage on a Replacement
Cost basis than the least of:
(a) The Limit of Insurance applicable to the damaged
property;
(b) The cost to replace “on the same premises” the lost
or damaged property with other property:
1) Of comparable material and quality; and
2) Used for the same purpose; or
(c) The amount you actually spend that is necessary to
repair or replace the lost or damaged property.
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Id. at 45. “Replacement Cost” is shown in the Declarations Page as applicable to the Covered
Property, and limits coverage to $1,412,000. Id. at 9.
On December 28, 2022, there was an act of arson committed on a building covered by the
Policy.1 Compl. ¶ 8, ECF No. 1. On March 5, 2023, there was a second act of arson committed
on the same building. Id. ¶ 9. Chabad submitted claims under the Policy to Church Mutual for
both fires. Id. ¶¶ 1, 10.
On January 18, 2023, Church Mutual sent Chabad a reservation of rights letter
acknowledging Chabad’s claim for the December 28, 2022 fire, stating that it was investigating
the claim, and indicating that the Policy’s “Vacancy” loss condition may be applicable to the claim.
ECF No. 65-11. On July 10, 2023, Church Mutual sent Chabad’s attorney a reservation of rights
letter stating that Church Mutual’s investigation of both claims “remains ongoing, and no coverage
position has been made.” ECF No. 65-14.
On December 12, 2023, the claims adjuster assigned to investigate the fires, Mitch Kies,
submitted a report to Church Mutual’s Property Claim’s Director, Shawn Graybill. See Kies
Report, ECF No. 59-1; Graybill Dep. at 4:9-12, ECF No. 71-1. Mr. Kies’s Report indicates that
Church Mutual investigated the claims under a reservation of rights, quotes the “Vacancy” loss
condition, and states that “while the building was not actively being used, there remained sufficient
contents in the structure for the Insured to continue their normal operations.” Kies Report at 3,
ECF No. 59-1 at 2.
On January 29, 2024, Church Mutual instituted this diversity action, seeking a declaratory
judgment that it owes no duty to cover Chabad’s claims because the property was “vacant” for
1 Under New Mexico law, the term “vandalism” in an insurance contract encompasses acts of arson.
Battishill v. Farmers Alliance Ins. Co., 127 P.3d 1111, 1112 (N.M. 2006).
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more than sixty consecutive days before the acts of arson, and therefore no coverage is owed
pursuant to the Policy’s “Vacancy” loss condition. See Compl. ¶¶ 1-6, 12-20, ECF No. 1.
On March 25, 2024, Chabad filed an Answer to the Complaint and counterclaims for a
declaratory judgment that Church Mutual owes coverage for Chabad’s claims (Count I), breach of
contract (Count II), insurance bad faith and violations of the New Mexico Insurance Code and
Unfair Practices Act (Count III), and fraud and misrepresentation (Count IV). ECF No. 8.
On August 1, 2025, Chabad filed a Motion for Summary Judgment on the Issue of
Coverage (“Chabad’s Motion”). ECF No. 59. On August 14, 2025, Church Mutual filed a
Corrected Consolidated Motion for Summary Judgment, seeking summary judgment on Chabad’s
counterclaims for a declaratory judgment regarding coverage, breach of contract, bad faith,
statutory violations, and Chabad’s request for punitive damages. ECF No. 65 (“Church Mutual’s
Motion”).
On September 23, 2025, the Court issued an Order granting Chabad’s Motion and denying
in part and deferring ruling in part on Church Mutual’s Motion (“First Summary Judgment Order”).
ECF No. 83. Specifically, the Court found that Chabad’s building was “very obviously” not
“vacant” under the unambiguous terms of the Policy, id. at 9, and therefore Chabad was entitled to
summary judgment on the issue of coverage as to both fires, id. at 13-14. The Court deferred
ruling on Church Mutual’s Motion with regard to the other issues and ordered the Parties to attend
a settlement conference before a magistrate judge. Id. The Parties attended a settlement
conference on November 21, 2025, but did not settle the remaining claims. See ECF No. 86.
Chabad seeks to introduce expert testimony “regarding insurance industry standards,
customs and practices and about how Church Mutual Insurance Company deviated from those
standards in its handling of the property damage claims of” Chabad. Resp. at 1. In this regard,
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Chabad has hired Stuart Setcavage who purports to be “an expert in the field of insurance industry
claim handling, policy interpretation and coverage analysis[.]” Setcavage Report at 2, ECF No.
64-1.
On August 14, 2025, Church Mutual filed the instant Motion to exclude Mr. Setcavage’s
testimony. ECF No. 64. Chabad filed a Response, ECF No. 67, to which Church Mutual filed a
Reply, ECF No. 75. The Court held a hearing on the Motion February 4, 2026. See ECF No. 96.
II. Legal Standard
Rule 702 of the Federal Rules of Evidence governs testimony by expert witnesses, and
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 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. This Rule imposes on a district court a “gatekeeper” obligation. See
Schulenberg v. BNSF Ry. Co., 911 F.3d 1276, 1282 (10th Cir. 2018) (quoting Dodge v. Cotter
Corp., 328 F.3d 1212, 1221 (10th Cir. 2003) (quoting Daubert v. Merrell Dow Pharm., Inc., 509
U.S. 579, 589 (1993))). Specifically, “[i]n evaluating the admissibility of expert testimony, ‘the
district court must satisfy itself that the proposed expert testimony is both reliable and relevant, in
that it will assist the trier of fact, before permitting a jury to assess such testimony.’” Id. (citing
United States v. Nacchio, 555 F.3d 1234, 1241 (2009)). “This requires a two-step process. First,
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the district court must ‘determine whether the expert is qualified ‘by knowledge, skill, experience,
training, or education’ to render an opinion.’” Id. (quoting Nachhio, 555 F.3d at 1241 (quoting
Fed. R. Evid. 702)). “Second, if the expert is sufficiently qualified, the district court ‘must
determine whether the expert’s opinion is reliable by assessing the underlying reasoning and
methodology.’” Id. (quoting Nacchio, 555 F.3d at 1241). “[T]he court is not required ‘to admit
opinion evidence that is connected to existing data only by the ipse dixit of the expert. A court
may conclude that there is simply too great an analytical gap between the data and the opinion
proffered.’” Id. (quoting Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997)).
III. Discussion
Church Mutual moves to exclude Mr. Setcavage’s opinion on the grounds that he is
unqualified, his opinion usurps the role of the Court, his opinion is unreliable, and his opinion will
not assist the jury. ECF No. 64 at 5-10.
Mr. Setcavage’s Report offers opinions on the Policy’s Vacancy and Valuation loss
conditions. See id. at 5-9. As to the Vacancy provision, Mr. Setcavage states:
Claim professionals are trained to know that “The vacancy condition of the building
combines suspension of coverage for certain perils with reduction in coverage for
others . . . The approach . . . eliminates coverage only for the perils most affected
by vacancy, and it reduces coverage for damage by other perils.”
Id. at 6.2 Mr. Setcavage notes that “neither the perils of arson nor fire are specifically identified”
in the Vacancy provision, and opines that “the intent of the policy was to reduce coverage by 15%
for perils not specifically listed, not eliminate it altogether.” Id. Mr. Setcavage further opines that
“Church Mutual is attempting to redefine ‘vacancy’ to include factors not set forth in the policy . .
2 Mr. Setcavage does not cite the source of the quotation.
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. . Church Mutual now wants vacant to mean unused.” Id. at 7. In this regard, Mr. Setcavage
states:
Claims professionals are trained to know that the plain meaning of an insurance
policy will prevail unless its terms somehow violate public policy. . . .
Obviously, in property claims, commercial buildings are often unoccupied . . . .
However, unoccupied, or unused, does not necessarily mean vacant. Accordingly
based upon the known facts of this claim and the policy language, the property does
not meet the policy definition of vacancy, so there is an insufficient basis to deny
payment under the property coverage afforded.
Id.
Mr. Setcavage also states that Church Mutual’s renewal of the Policy in June 2022 and
acceptance of premiums paid by Chabad is “outrageous conduct in my professional opinion”
because Church Mutual had previously denied a vandalism claim Chabad made in July 2021 based
on the Vacancy provision.3 Id. at 7-8.
As to the Valuation provision,4 Mr. Setcavage states that “claims professionals are trained
to understanding [sic] ‘Assuming a claim is covered, the insurer will pay an amount to be
determined as specified in the policy.” Id. at 8 (quoting Donald S. Malecki & Eric A. Wiening,
Insurance Contract Analysis 78 (1st ed. 1995)). He states that “calculating the loss differently than
the policy promises to pay violates industry standards.” Id. Mr. Setcavage concludes that because
the Declarations Page specifies “Replacement Cost,” “the loss is payable in an amount to replace
3 Whether Church Mutual owes coverage for the July 2021 claim is not at issue in this case.
4 Church Mutual’s Motion and Reply focus almost entirely on Mr. Setcavage’s opinion regarding the
Vacancy provision, and offer virtually no argument specific to Mr. Setcavage’s opinion regarding the Valuation
provision. At the hearing, Church Mutual argued in passing that Mr. Setcavage should not be permitted to testify
regarding how much Church Mutual should pay for coverage. Counsel for Chabad stated that it did not intend for Mr.
Setcavage to testify regarding the amount of coverage owed, but rather how the amount is determined under the Policy.
He further stated that he would not be asking the jury to determine the amount of coverage in this case. Thus, it is
questionable whether Mr. Setcavage’s opinion regarding the Valuation provision will be relevant to a fact in issue.
However, for purposes of the Motion, the Court will assume that Mr. Setcavage’s opinion regarding the Valuation
provision is relevant.
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the same building with comparable building materials designed for the same land, or the policy
limit, whichever is less.” Id. at 9.
a) Qualification
Church Mutual initially argues that Mr. Setcavage is unqualified to offer expert opinions
in this case because he lacks sufficient knowledge of property insurance policy language and
property insurance adjusting to offer reliable opinions regarding the subject property. Mot. at 6.
Church Mutual notes that Mr. Setcavage’s background is primarily in handling and supervising
automobile insurance claims and most of the cases for which he has provided expert testimony
involved automobile insurance claims. Id.
But Church Mutual does not articulate any difference between industry standards applying
to claims handling under automobile insurance policies and property insurance policies that would
render Mr. Setcavage’s knowledge, experience, education, and training as to the former irrelevant
to the latter. And Church Mutual ignores Mr. Setcavage’s wealth of knowledge, experience,
education, and training regarding the insurance industry in general. From 1988 through 2012, Mr.
Setcavage handled and supervised motor vehicle insurance claims for State Farm Mutual
Automobile Insurance Company. Setcavage Report at 2. He also has “considerable experience in
the handling and management of third-party, contractual and extracontractual lawsuits.” Id. Since
resigning as a litigation team manager in 2012, he has focused on consulting legal counsel
regarding insurance coverage and claims and conducting insurance-related mediations. Id.
Significantly, Mr. Setcavage has “reviewed the claim practices and claim handling
materials from personal lines, property and casualty and commercial lines insurers and ha[s]
become familiar with how various insurers have processed, handled, adjusted and supervised
personal lines and commercial claims in both first and third-party contexts.” Id. (emphasis added).
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He has “learned industry claim handling standards based on personal learning, training, research,
and industry experience for over three decades.” Id. His adjuster’s licenses in Texas, Florida, and
West Virginia “enjoy reciprocal agreements with most every state that requires licensing.” Id. As
an industry expert he was asked to testify before the Pennsylvania Senate Banking & Insurance
Committee for analysis and opinions regarding the impact that proposed changes to Pennsylvania
law would have on the insurance industry in terms of verdicts, settlements, and premiums. Id. He
is a past president of the Pennsylvania Defense Institute and also served as chairman of its
Coverage and Claims Practices committee. Id. Throughout his career he has attended professional
seminars and continuing legal education seminars related to insurance industry claims practices
and procedure, auto law, policy, and coverage bad faith. Id. at 3. He has given many presentations
to both claims and law groups on insurance and claims-related topics, and served as faculty for the
Pennsylvania Association for Justice, the Pennsylvania Bar Institute, the West Virginia Association
for Justice, the Florida Justice Association, and the Kentucky Justice Association. And his expert
testimony has been admitted by courts in several state and federal jurisdictions. See id. at 2.
Based on the foregoing, the Court finds that Mr. Setcavage is qualified by knowledge, skill,
experience, training, and/or education to render an opinion on insurance practices and standards
and whether Church Mutual deviated from those standards in its handling of Chabad’s claims and
in renewing Chabad’s Policy in 2022 with the “Vacancy” loss provision. See Mordhorst Cleaning,
LLC v. Am. Strategic Ins. Corp., Civil Action No. 23-cv-00017-NYW-MEH, 2024 WL 4932505,
at *12 (D. Colo. Dec. 2, 2024) (observing that “insurance experts routinely rely on their experience
in the industry to articulate industry standards” and “an expert witness is permitted to rely ‘solely
on [her] experience’ in forming her opinions” (quoting Nacchio, 555 F.3d at 1258)); Wheatridge
Off., LLC v. Auto-Owners Ins. Co., 578 F. Supp. 3d 1187, 1208-09 (D. Colo. 2022) (finding that
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a witness who had been working in the insurance industry as a claims adjuster, fraud investigator,
and director of claims for almost 25 years was qualified to give an expert opinion on insurance
industry practices and standards); O’Sullivan v. Geico Cas. Co., 233 F. Supp. 3d 917, 924-25 (D.
Colo. 2017) (finding that a witness who “worked for decades in the insurance industry, in a variety
of capacities relevant to matters on which he offers opinions here[,]” and who was familiar “with
the standards and practices used by his former employer, with standards published by industry
bodies, and with statutory law that insurers in Colorado must follow” was qualified to give an
expert opinion as to whether the insurer’s conduct deviated from industry standards). Church
Mutual’s gripe with Mr. Setcavage’s superior experience with automobile insurance claims, as
opposed to property insurance claims, “is a fact which opposing counsel can no doubt highlight on
cross-examination, and which bears on the weight or credibility of Mr. [Setcavage’s] opinions, but
not on their admissibility.” O’Sullivan, 233 F. Supp. 3d at 924.
b) Usurping the role of the Court
Church Mutual next argues that Mr. Setcavage’s interpretation of the Policy’s terms are
legal conclusions that usurp the role of the Court. Mot. at 7 (citing Lone Star Steakhouse & Saloon,
Inc. v. Liberty Mut. Ins. Grp., 343 F. Supp. 2d 989, 1013 (D. Kan. 2004)). The Motion does not
specify which of Mr. Setcavage’s opinions Church Mutual believes are legal conclusions.
However, it appears to object to Mr. Setcavage’s opinion that the plain language of the Policy’s
“Vacancy” provision applies, rather than Church Mutual’s position that “vacancy” means
“unused.” See Mot. at 5.
The Court agrees with Church Mutual that the interpretation and construction of an
insurance policy is a question of law for the Court, see Gamboa ex rel. Gamboa v. Allstate Ins.
Co., 726 P.2d 1386, 1388 (N.M. 1986) (stating that whether an individual was covered by an
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insurance policy’s uninsured motorist clause “is a question of law for the courts to decide”), and
one that the Court performed when it ruled on the Parties’ cross-motions for summary judgment
on the issue of coverage. See First Summ. J. Order at 9-13 (concluding that Chabad’s building
was not “vacant” under the unambiguous terms of the Policy and that therefore Chabad was
entitled to summary judgment on the issue of coverage as to both fires). As such, the Court finds
that this argument is moot.5
c) Reliability
Church Mutual next argues that Mr. Setcavage’s opinion is unreliable because “[n]o
discernible methodology exists to guide Mr. Setcavage’s interpretation of the Policy.” Mot. at 8.
It argues that “[s]omeone more well-versed in the law around interpretation of insurance policies,
like someone with a law degree, would be much better qualified to resolve questions of policy
interpretation than Stuart Setcavage.” Id. It argues that Mr. Setcavage may rely on his experience
to inform his opinion, but he must explain how, and he has not done so. Id. (citing Chaney v. State
Farm Mut. Auto. Ins. Co., Case No: 6:14–cv–1043–Orl–41DAB, 2015 WL 12838839, at *4 (M.D.
Fla. Dec. 9, 2015)).
The Court first finds that Church Mutual’s argument is largely moot because it takes issue
primarily with Mr. Setcavage’s interpretation of the Policy’s “Vacancy” loss condition, see id., and
the Court has already interpreted that provision and found that it does not preclude coverage, First
Summ. J. Order at 9-13. Thus, Mr. Setcavage’s interpretation of the Policy’s “Vacancy” loss
condition will be relevant only to whether Church Mutual’s interpretation of the Policy’s
5 At the hearing, Church Mutual’s counsel conceded that the Court’s First Summary Judgment Order
mooted much of the instant Motion.
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“Vacancy” loss condition was frivolous, unfounded, or otherwise violative of the duty of good
faith and fair dealing.
The Court further finds that Mr. Setcavage has adequately explained how his experience
informed his opinion. Mr. Setcavage explains that his forensic findings, analysis, and professional
opinions are “based upon my specialized knowledge, training, expertise, and experience in the
automobile claim handling industry over the past 35+ years.” Setcavage Report at 1. He states
that
Claim professionals are trained to know that “The vacancy condition of the building
combines suspension of coverage for certain perils with reduction in coverage for
others . . . The approach . . . eliminates coverage only for the perils most affected
by vacancy, and it reduces coverage for damage by other perils.”
Id. at 6. He further states that “[c]laim professionals are trained to know that the plain meaning of
an insurance policy will prevail unless its terms somehow violate public policy” and that “Church
Mutual is attempting to redefine ‘vacancy’ to include factors not set forth in the policy it had
underwritten and sold to this policyholder.” Id. at 7. As to valuation, Mr. Setcavage states that
“[c]laims professionals are trained to know that the plain meaning of an insurance policy will
prevail unless its terms somehow violate public policy. Like ignoring policy definitions relative to
coverage, calculating the loss differently than what the policy promises to pay violates industry
standards.” Id. at 8 (citation omitted).
It is unclear what more of an explanation Church Mutual believes is necessary in this
context. As one court has observed in deciding a motion to exclude Mr. Setcavage’s opinions:
“District courts evaluating the reliability of non-scientific expert testimony do not have to focus
on whether the expert employed an objective standard or methodology and can instead ‘focus on
the reliability of the expert’s personal knowledge or experience.’” Cook v. Erie Ins. Co., 478 F.
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Supp. 3d 658, 666 (S.D. Ohio 2020) (quoting Luna v. Bell, No. 3:11-cv-00093, 2013 WL
12316066, at *5 (M.D. Tenn. Aug. 1, 2013)). See also New Mexico v. Torrez, 210 P.3d 228, 234
(N.M. 2009) (“[W]hen testing the reliability of non-scientific expert testimony, rather than testing
an expert’s scientific methodology as required under Daubert and Alberico, the court must evaluate
a non-scientific expert’s personal knowledge and experience to determine whether the expert’s
conclusions on a given subject may be trusted.”). Here, Mr. Setcavage’s personal knowledge and
experience permits him to offer an expert opinion regarding insurance industry standards, customs
and practices and about how Church Mutual deviated from those standards in its handling of
Chabad’s claims. See O’Sullivan, 233 F. Supp. 3d at 925 (“The Court finds it sufficiently clear
from the overall content and organization of Mr. Torres’s written report that his methodology
amounts to explaining what he knows of insurance industry standards and practices based on his
experience, explaining the facts and evidence he reviewed in this case, then opining on the ways
he believes Geico’s handling of Plaintiff’s claim fell short [of] the relevant industry standards (as
he understands them) and/or differed from handling of similar claims in his experience.”); Stoker
v. State Farm Mut. Auto. Ins. Co., Civil Action No. 19-cv-03569-NYW, 2021 WL 4201583, at *8
(D. Colo. May 6, 2021) (finding insurance industry expert reliable where he “identifies what he
perceives as the relevant insurance industry standards, explains those standards, and states that he
relied on his experience in the insurance industry in forming his opinions as to whether State Farm
met those standards”).
d) Assist the jury
Finally, Church Mutual argues that Mr. Setcavage’s testimony will not assist the jury. Mot.
at 9-10. It argues “[n]ot only are his opinions nothing more than his personal beliefs regarding
what the law should be, how the Policy should read, and what duties Church Mutual should have
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with respect to Chabad, there is nothing about Church Mutual’s claim handling procedures or the
principles of bad faith that would require any real expert opinion.” Id.
In New Mexico, “[a]n insurer acts in bad faith when ‘its reasons for denying or delaying
payment of the claim are frivolous or unfounded.’” Hauff v. Petterson, 755 F. Supp. 2d 1138, 1145
(D.N.M. 2010) (quoting Sloan v. State Farm Mut. Auto. Ins. Co., 85 P.3d 230, 236 (N.M. 2004)).
“A ‘frivolous or unfounded’ refusal to pay is an ‘an arbitrary or baseless refusal,’ a refusal
recklessly lacking any arguable support in the insurance policy or facts of the case.” Id. (quoting
Sloan, 85 P.3d at 236-37. However, “a bad faith claim need not depend on the existence of
coverage.” Albuquerque Ambulatory Eye Surgery Ctr. LLC v. Transp. Ins. Co., 566 F. Supp. 3d
1178, 1196 (D.N.M. Oct. 12, 2021) (quoting Haygood v. United Servs. Auto. Ass’n, 453 P.3d 1235,
1241 (N.M. Ct. App. 2019)). An insured “might establish bad faith in a variety of ways—whether
by proving [the insurer] failed to deal fairly in handling the claim, failed to conduct a fair
investigation, or failed to fairly evaluate coverage, among other possibilities.” Haygood, 453 P.3d
at 1242 (citations omitted).
Here, Mr. Setcavage has offered opinions that may assist the jury in deciding whether
Church Mutual has engaged in bad faith insurance conduct. For example, he opines that Church
Mutual’s handling of Chabad’s claims was “unfair” and “falls well below industry standards.”
Setcavage Report at 9. He further states that “[t]he purported investigation in this matter was
woefully inadequate as is evidenced by the claim notes. In fact, the claim handling or investigation
is indicia of a pre-determination to deny payment for these claims.” Id. at 10. He further states
that Church Mutual’s renewal of the Policy in June 2022 and acceptance of premiums paid by
Chabad is “outrageous conduct in my professional opinion” because Church Mutual had
previously denied a vandalism claim Chabad made in July 2021 based on the Vacancy provision.
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Stated differently, Mr. Setcavage believes it was “outrageous” for Church Mutual to renew a policy
and accept premiums to insure a property which it had already determined was vacant and,
therefore, not covered under the Policy. See id. These opinions (and others) may assist the jury
in determining whether Church Mutual engaged in bad faith insurance conduct under New Mexico
law. See Am. Nat’l Prop. & Cas. Co. v. Cleveland, 293 P.3d 954, 962-63 (N.M. Ct. App. 2012)
(affirming the district court’s denial of a motion in limine to exclude expert testimony regarding
bad faith insurance where the insurance company argued, inter alia, that the expert had not
identified the relevant standards, how the insurer failed to meet those standards, or how the
insurer’s actions differed from industry standards).
IV. Conclusion
The Court is satisfied that Mr. Setcavage’s proposed expert testimony is both reliable and
relevant, in that it will assist the trier of fact. Accordingly, it is HEREBY ORDERED that Church
Mutual Insurance Company’s Corrected Motion to Exclude the Testimony of S. Setcavage, ECF
No. 64, is DENIED.
………………………………………….
MARGARET STRICKLAND
UNITED STATES DISTRICT JUDGE
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