[00:00:00] Speaker 03:
I'll call the next case, case number 241110, El Dueno versus mid-century insurance.

[00:00:15] Speaker 04:
May it please the court.

[00:00:17] Speaker 04:
Good morning, Your Honors.

[00:00:17] Speaker 04:
My name is Laura Carlock, and I represent appellate El Dueno LLC.

[00:00:23] Speaker 04:
We are here today to address a critical error in the district court's grant of summary judgment against El Dueno's statutory bad faith claim under Colorado law.

[00:00:33] Speaker 04:
The district court erroneously adopted a bright line rule that an insurer can act reasonably as a matter of law if it relies on a single expert report.

[00:00:44] Speaker 04:
when making a claims decision, despite evidence that that report is flawed.

[00:00:50] Speaker 04:
This approach conflicts with established Colorado precedent, which requires courts to assess the reasonableness of an insurer's actions based on the totality of the circumstances.

[00:01:01] Speaker 04:
We ask this court to reverse the district court's decision and remand this case for trial.

[00:01:07] Speaker 01:
If we determine that the district court's ruling was more nuanced than that and it wasn't just a, if you rely on a third party expert, you have no bad faith.

[00:01:22] Speaker 01:
If we thought it was more nuanced than that, does that basically do away with your case?

[00:01:32] Speaker 01:
I guess, because I sort of view the record as this, that the district court didn't say, anytime you go get a third party engineer to say that there's no hail damage, despite contrary evidence, you cannot be held to have acted in bad faith.

[00:01:51] Speaker 01:
You're not suggesting that's the ruling, are you?

[00:01:54] Speaker 04:
That if the insurer, repeat that, I'm sorry, your honor.

[00:01:57] Speaker 01:
Any time that you get a third party engineering expert to opine that there's no hill damage, despite contrary evidence, that doesn't, the district court didn't say that that is every time going to be no bad faith, did it?

[00:02:15] Speaker 04:
Your Honor, we actually believe that that is the case.

[00:02:19] Speaker 04:
The court was very clear.

[00:02:20] Speaker 01:
Okay, so I guess my question is, if we determined that it was more nuanced than that, that the district court didn't reach that precise of a holding or decision, would that be problematic for your case?

[00:02:39] Speaker 04:
No, Your Honor.

[00:02:40] Speaker 04:
I believe that under the evidence that we presented to the court, we've established a genuine issue of material fact, and that makes this improper for summary judgment.

[00:02:52] Speaker 01:
What is your evidence of bad faith?

[00:02:55] Speaker 04:
First, Your Honor, is the snow cover.

[00:02:57] Speaker 04:
There was Mr. Templeton and Mr. McCourt inspected the roof while it was at least partially covered in snow.

[00:03:07] Speaker 04:
In his claim notes, Mr. McCourt

[00:03:09] Speaker 04:
admits the snow, it covers half of the roof.

[00:03:13] Speaker 04:
And Ms.

[00:03:14] Speaker 04:
Fields, the original mid-century adjuster, had photographed hail damage during her earlier inspection.

[00:03:22] Speaker 04:
And Mr. McCourt admits that that particular damage was covered by the snow when he inspected the roof.

[00:03:31] Speaker 01:
McCourt is the second adjuster.

[00:03:33] Speaker 01:
Yes.

[00:03:33] Speaker 04:
And then Mr. Templeton followed up while there was still snow on the roof.

[00:03:39] Speaker 04:
And mid-century was aware of the snow on the roof, but it still did not question Mr. Templeton regarding whether that snow also covered up the, did not seek clarification regarding whether the snow covered up the damage that Miss Fields had found.

[00:03:54] Speaker 04:
And she does, we have photographic evidence of eight hail hits on the roof.

[00:04:01] Speaker 03:
Do we judge reasonableness by industry standards?

[00:04:06] Speaker 03:
And in this case, they were quite open about the fact that there was snow on the roof on at least a couple of these occasions.

[00:04:15] Speaker 03:
They said how much snow was on the roof.

[00:04:19] Speaker 03:
They didn't try to hide that.

[00:04:20] Speaker 03:
They explained how they arrived at their calculations despite the snow.

[00:04:27] Speaker 03:
Did you present any evidence that that is somehow contrary to industry standards?

[00:04:34] Speaker 04:
Well, Your Honor, we presented that as we believe that it was obvious from the evidence before the insurer at the time it made its claims decision.

[00:04:44] Speaker 04:
that there were problems with this report.

[00:04:47] Speaker 04:
The fact that they recognize the snow, they never tried to reconcile the fact that Ms.

[00:04:51] Speaker 04:
Field's own evidence and photographs demonstrated that there was actual hail hits.

[00:04:58] Speaker 04:
And mid-century admits that just one hail hit on a modified bitumen roof can cause the replacement of the entire

[00:05:08] Speaker 04:
So the fact that she looked at one test square and found eight hits that are suddenly disappeared from the record and not resolved or reconciled with the other evidence on the record, we believe that creates a genuine issue of material fact before the district court.

[00:05:28] Speaker 02:
It sounded to me like you were saying that when Templeton was on the roof, that there was snow covering most all of the roof.

[00:05:38] Speaker 02:
That was not my understanding.

[00:05:40] Speaker 04:
No, Your Honor.

[00:05:40] Speaker 04:
It was partially covered.

[00:05:41] Speaker 04:
I did not give that impression.

[00:05:44] Speaker 02:
And most of it was not covered, correct?

[00:05:47] Speaker 04:
I would not say most of it.

[00:05:49] Speaker 02:
What does the witness say?

[00:05:51] Speaker 02:
What does the evidence say, not what you say?

[00:05:55] Speaker 04:
Just that it was partially covered.

[00:05:56] Speaker 04:
But our point, Your Honor, is that there was no discussion with Mr. Templeton about there was no clarification of whether that snow could have been covering Miss Fields.

[00:06:07] Speaker 04:
prior damage.

[00:06:10] Speaker 04:
And the witness, the corporate representative for mid-century, discusses that he assumed that it was not covered and that he assumed Mr. Templeton brushed the snow off the roof.

[00:06:25] Speaker 02:
Does your witness testify that

[00:06:29] Speaker 02:
a breach in a small part of the roof could cause that whole roof to have to be replaced?

[00:06:37] Speaker 02:
Yes, your honor.

[00:06:38] Speaker 02:
And where does he say that?

[00:06:39] Speaker 04:
Well, it's not, it is the corporate representative for Mid-Century.

[00:06:44] Speaker 02:
No, the guy that you hired, that was hired.

[00:06:48] Speaker 04:
Oh, Mr. Freeman?

[00:06:50] Speaker 04:
Yes.

[00:06:52] Speaker 04:
He does not state in his particular opinion, but his entire opinion... Where is that?

[00:06:58] Speaker 02:
Is it anywhere?

[00:06:59] Speaker 02:
You referenced it.

[00:07:01] Speaker 04:
Yes, sir.

[00:07:01] Speaker 04:
It is in mid-century's corporate representative's deposition testimony that I'm happy to read it for the court.

[00:07:11] Speaker 02:
Okay.

[00:07:12] Speaker 02:
And who is this person?

[00:07:13] Speaker 04:
This person is Damon Gatewood.

[00:07:16] Speaker 02:
Okay.

[00:07:17] Speaker 04:
And it is on the court's reporter record volume 3, page 13, 013.

[00:07:29] Speaker 04:
Actually, 012 and 013, where he is asked whether

[00:07:39] Speaker 04:
Looking at the claim note, the bottom of 845, it says, found hail damage to flat rolled roof in 10 by 10 area, eight hail hits.

[00:07:50] Speaker 04:
And he says, there's a discussion about whether Ms.

[00:07:54] Speaker 04:
Fields observed that.

[00:07:56] Speaker 04:
And he said, so there could have been one hit, you know, on an entire run, and we would have had to replace it.

[00:08:07] Speaker 04:
And that's the testimony.

[00:08:08] Speaker 02:
Whoa, whoa, whoa.

[00:08:10] Speaker 02:
Are you talking about?

[00:08:11] Speaker 02:
It says replace it.

[00:08:12] Speaker 02:
Yeah.

[00:08:12] Speaker 02:
Let's, let's patch this part of the, I don't know.

[00:08:17] Speaker 02:
Is this what's called a built up roof of the membrane?

[00:08:21] Speaker 04:
Yes.

[00:08:21] Speaker 04:
Yes.

[00:08:22] Speaker 04:
But he didn't say patch honor.

[00:08:23] Speaker 04:
He meant replace, replace the root.

[00:08:26] Speaker 04:
Read me the words.

[00:08:27] Speaker 04:
Okay.

[00:08:28] Speaker 04:
Um, so there could have been, there could have been one hit, you know, on an entire run and we would have had to replace it.

[00:08:37] Speaker 02:
whatever Iran is.

[00:08:40] Speaker 04:
Okay.

[00:08:40] Speaker 04:
Let me give a little bit more detail.

[00:08:43] Speaker 04:
I'm sorry.

[00:08:47] Speaker 04:
We, you know, in order to replace that particular slope, we would need to be eight or more hail hits within that test square to get the slope replaced.

[00:08:57] Speaker 04:
And I think she just kind of used that reference because that really doesn't correlate the same to modified bit roofs or flat roofing surfaces because there's no, I mean, shingles you can repair, but these modified bit roofs, you really can't.

[00:09:14] Speaker 04:
So there could have been one hit, you know, on the entire run, and we would have had to replace it.

[00:09:22] Speaker 04:
He's talking about not repairing shingles.

[00:09:24] Speaker 04:
He's talking about replacing the roof.

[00:09:26] Speaker 02:
I understand what a built-up roof is.

[00:09:28] Speaker 04:
Yes, Your Honor.

[00:09:31] Speaker 02:
So that's the evidence we presented.

[00:09:35] Speaker 02:
That's where it says that if you got a little ding that pierces the membrane, you got to replace the whole roof.

[00:09:44] Speaker 04:
In your words, not necessarily a little ding.

[00:09:48] Speaker 04:
We had hail hit.

[00:09:49] Speaker 02:
1.7 inches size.

[00:09:54] Speaker 04:
Well, that adds to another problem, Your Honor.

[00:09:57] Speaker 04:
The original adjuster, Ms.

[00:09:59] Speaker 04:
Fields and Mr. Templeton, both said the hail was 2.5 inches, not 1.7.

[00:10:06] Speaker 04:
And so that is in mid-century's files.

[00:10:10] Speaker 01:
Well, you agree, though, that, I mean, the sizing of the hail was inexact.

[00:10:15] Speaker 01:
I mean, nobody knows how big that hail was.

[00:10:19] Speaker 01:
That's based on weather reports that weren't even from that precise area.

[00:10:25] Speaker 04:
Absolutely.

[00:10:26] Speaker 01:
That's a little nuance in the analysis.

[00:10:30] Speaker 01:
It was two and a half inch hail and they ignored it and said it was 1.75.

[00:10:36] Speaker 01:
Nobody really knew.

[00:10:37] Speaker 01:
Everybody agrees that that was an imprecise estimate.

[00:10:42] Speaker 01:
That's just an estimate.

[00:10:44] Speaker 04:
But Your Honor, don't you think that's for a jury to decide and not the court?

[00:10:49] Speaker 04:
That's why we're here.

[00:10:49] Speaker 01:
You don't think that the court can take judicial notice that, I mean, you're not contesting that nobody measured the hail at the time it occurred.

[00:10:57] Speaker 04:
No, no, Your Honor, I am not.

[00:10:58] Speaker 01:
And so nobody, I mean, it's unprovable.

[00:11:04] Speaker 04:
I honestly don't know how to respond to that.

[00:11:07] Speaker 01:
Let me ask you a different question.

[00:11:09] Speaker 01:
So I've got the pig, do you agree that we have to look at the

[00:11:14] Speaker 01:
Templeton's pictures at the time, he looked at the roof to determine what the snow cover was.

[00:11:22] Speaker 04:
Yes, your honor.

[00:11:23] Speaker 04:
I agree.

[00:11:23] Speaker 01:
And if we look at that and say, gosh, that doesn't look like that much snow in context, I mean, maybe it's possible that there was reasonable for the insurance company not to go behind his report and second guess him.

[00:11:41] Speaker 04:
I disagree.

[00:11:42] Speaker 04:
I believe that there is evidence on the record that demonstrates that there is a question of fact as to the reasonableness.

[00:11:51] Speaker 04:
We may disagree on the snow cover.

[00:11:53] Speaker 01:
What's in the record that... I mean, you don't have a dispute with Templeton, do you?

[00:12:00] Speaker 01:
You're not suggesting that he did something that was not in accordance with industry standards, are you?

[00:12:04] Speaker 01:
No, Your Honor, I'm not.

[00:12:06] Speaker 01:
You're suggesting that the way the insurance company basically adjusted the claim, relying on only Templeton's work, that that is not in accordance with industry standards.

[00:12:19] Speaker 04:
And actually, I would like to actually pull back from my last answer, if I may.

[00:12:23] Speaker 04:
I do think there were issues with Templeton, the way Templeton's inspection took place.

[00:12:28] Speaker 04:
I do believe that there was snow on the roof.

[00:12:30] Speaker 04:
and that it could have been covering Ms.

[00:12:32] Speaker 04:
Field's damage that she had found.

[00:12:34] Speaker 04:
They made a coverage decision of covered hail damage and paid my client.

[00:12:40] Speaker 04:
And then they turn around after just one expert report, which we claim has evidence of being suspect based on the inspection itself.

[00:12:49] Speaker 04:
I'm not saying he did not, he wasn't unqualified.

[00:12:52] Speaker 04:
I believe he was, he was qualified.

[00:12:54] Speaker 03:
Stop you a minute because they didn't just turn around and change their mind.

[00:12:58] Speaker 03:
This was, you know, they came up with this amount and it was sometime later then that your client decided that their entire roof needs to be replaced when it rained the next April and rain comes in and then they decided, oh, well, we've got $300,000 worth of damage here, so they resubmitted the claim.

[00:13:25] Speaker 03:
Isn't that what prompted?

[00:13:27] Speaker 04:
They provided an unchanged estimate that demonstrated... A hugely changed estimate.

[00:13:36] Speaker 03:
Absolutely, but I do... Replacing the entire, all the roof, right?

[00:13:40] Speaker 03:
Yes, yes.

[00:13:41] Speaker 03:
So it's not that they just turned around and said, oh, we're going to get a different estimate.

[00:13:47] Speaker 03:
Everything changed in that time period, everything.

[00:13:51] Speaker 03:
And how is that contrary to industry standards to

[00:13:55] Speaker 03:
to have hired Mr. Templeton, for him to have done his report, even if it varied from the prior report, what makes what they did contrary to industry standards?

[00:14:07] Speaker 04:
I guess what I should clarify here, and I think with Your Honor Justice Carson's initial question to me, I don't think the holding is nuanced here.

[00:14:18] Speaker 04:
I do believe that the district court held, as a matter of law, reliance on an expert report is reasonable.

[00:14:27] Speaker 04:
I believe that he uses that language in his opinion.

[00:14:31] Speaker 04:
He says, as a matter of law, now he rejects our arguments.

[00:14:35] Speaker 04:
There's no question about that.

[00:14:37] Speaker 04:
I'm not arguing that he did not reject our arguments.

[00:14:40] Speaker 04:
But he states, in his opinion,

[00:14:47] Speaker 04:
I apologize.

[00:14:48] Speaker 04:
This is what he says, that he notes that many courts hold.

[00:14:52] Speaker 04:
What page are you reading?

[00:14:54] Speaker 04:
I'm sorry.

[00:14:55] Speaker 04:
Let me pull up his.

[00:14:56] Speaker 04:
I have it in my notes, but let me pull it up exactly in the.

[00:15:02] Speaker 04:
It is on page four of his opinion.

[00:15:04] Speaker 04:
Before he begins his discussion about the reliance on the expert report and whether it was flawed, the court does say,

[00:15:17] Speaker 04:
Multiple courts have held, and of course, I want to disagree with the courts that he's relying on.

[00:15:22] Speaker 04:
We can also discuss that.

[00:15:25] Speaker 04:
But multiple courts have held, reliance on an engineering report prepared by qualified professionals according to established and reliable methods is reasonable as a matter of law and cannot be the basis of a bad faith claim.

[00:15:40] Speaker 03:
So this is a two tiered- And then it goes on, and then the court goes on to consider this particular report.

[00:15:47] Speaker 03:
And it talks about this particular report.

[00:15:50] Speaker 03:
So I'm not seeing the absolute language that you're referring to here, other than saying multiple courts have held.

[00:15:59] Speaker 03:
And those cases also don't support a bright line rule.

[00:16:04] Speaker 04:
May I respond to one point?

[00:16:06] Speaker 03:
Well, you're out of time, but you can respond.

[00:16:09] Speaker ?:
OK.

[00:16:09] Speaker 04:
The judge, Judge Domenico, he states that mid-century deferred to the expert, period.

[00:16:19] Speaker 04:
He recognizes.

[00:16:20] Speaker 03:
And he continues on to say that they relied on the information that they had at the time, talks about that being reasonable.

[00:16:27] Speaker 03:
So I'm going to, unless the others have, yep.

[00:16:30] Speaker 02:
Well, the point that there was nothing

[00:16:36] Speaker 02:
else, except what the district court calls was an adjuster, not a professional engineer.

[00:16:51] Speaker 02:
And so there was no other evidence in the summary judgment chemistry.

[00:16:59] Speaker 02:
then it seems like it was appropriate that he said that relying upon this in the face of no reasonable opposition, then it was appropriate to rely upon him and it was not unreasonable.

[00:17:16] Speaker 04:
I understand.

[00:17:17] Speaker 04:
I do understand what you're saying.

[00:17:19] Speaker 04:
May I respond?

[00:17:20] Speaker 04:
Again, it is a question of reasonableness.

[00:17:23] Speaker 04:
And it is a fact-intensive inquiry.

[00:17:25] Speaker 04:
And we believe, Your Honors, that we have presented enough evidence and argument that summary judgment should be interpreted in our favor that causes enough of a genuine dispute of material fact that it is inappropriate for summary judgment.

[00:17:43] Speaker 04:
Thank you.

[00:17:45] Speaker 04:
Any other questions?

[00:17:52] Speaker 00:
May it please the court, Mike Brooks for Mid-Century Insurance Company.

[00:17:57] Speaker 00:
Judge Domenico's decision was more nuanced than the Brightline rule that counsel presents.

[00:18:03] Speaker 00:
The district court correctly held that Mid-Century reasonably relied on the expert report of Mr. Templeton that was reviewed and validated through another expert report by

[00:18:15] Speaker 00:
John Peterson, another professional engineer, to show a genuine issue of material fact on reasonableness, El Dueno had to show that Templeton's analysis was inconsistent with industry standards.

[00:18:30] Speaker 00:
and industry standards based on some law, regulation, or through expert testimony.

[00:18:35] Speaker 00:
El Duano's summary judgment evidence consisted of the unsworn report of Kerry Freeman, a Texas-based roofer and insurance adjuster, who opined simply about his inspection of the condition of the roof and his disagreement with certain factual statements made in the Rimkus report.

[00:18:54] Speaker 00:
by Templeton, but failed to articulate any statement whatsoever that Templeton violated any industry standards in his inspection or evaluation of the report.

[00:19:06] Speaker 01:
Can't that be inferred from the disagreement?

[00:19:09] Speaker 01:
I mean, presumably their expert is of the opinion that he's following industry standards.

[00:19:15] Speaker 01:
So if he disagrees, can we infer that that was some evidence of not complying with industry standards?

[00:19:25] Speaker 00:
I don't believe so.

[00:19:27] Speaker 00:
First of all, mere disagreement is not enough to show unreasonableness.

[00:19:33] Speaker 00:
The case of Crum versus Chubb that was decided in 2024, I think Judge Moritz wrote that opinion specifically, talked about that issue.

[00:19:42] Speaker 01:
A slightly different point.

[00:19:45] Speaker 00:
A slightly different point, but moving to the more detailed point.

[00:19:49] Speaker 00:
In specific, the Freeman report noted questions about whether Mr. Templeton could have seen the entire roof surface.

[00:19:58] Speaker 00:
But he did not opine that Templeton couldn't.

[00:20:01] Speaker 00:
He simply raised the question and then did not make any more affirmative statements.

[00:20:07] Speaker 00:
a basis for an inference that he was challenging Templeton's application of industry standards.

[00:20:15] Speaker 01:
Assuming that he couldn't see the entire surface of the roof, which we know he couldn't because there is some snow on there, was there anything in the opposing party's opposition to summary judgment that that in and of itself

[00:20:35] Speaker 01:
would violate industry standards to rely on a report?

[00:20:39] Speaker 00:
There is no evidence whatsoever.

[00:20:42] Speaker 00:
And frankly, there is no statement in the plaintiff's response to mid-century's motion for summary judgment that that was a violation of industry standards.

[00:20:53] Speaker 00:
Their response brief references industry standards, the words industry standards, only twice.

[00:20:58] Speaker 00:
And that's in a quote of a case.

[00:21:01] Speaker 00:
In our opening brief on summary judgment and on our reply,

[00:21:05] Speaker 00:
We frequently and repeatedly reference the need for evidence of industry standards by the plaintiff in order to rebut our summary judgment argument.

[00:21:15] Speaker 00:
And not just the question whether mid-century was acting consistently with industry standards.

[00:21:23] Speaker 00:
But whether the expert, Mr. Templeton, was acting consistently, because that's what the case law is.

[00:21:29] Speaker 00:
In our papers, we cited the Sandoval versus Unum case, which was decided, Judge Baccarat wrote that opinion back in 2020.

[00:21:37] Speaker 00:
And in that case, it wasn't just the question about whether Unum, the insurance company, had violated industry standards.

[00:21:45] Speaker 00:
but whether the internist who performed the additional medical examination of the plaintiff and made the final recommendation on which the insurance company relied, whether that internist had relied on industry standards.

[00:21:58] Speaker 00:
And the Musil master case on which Judge Domenico relied in his opinion also addressed the question whether the Hale expert in that case relied on industry standards.

[00:22:09] Speaker 00:
and the Bell Advisors case, the non-published Colorado Court of Appeals opinion on which Judge Jackson relied when he issued his opinion in Musil Master, that case too talked about whether the underlying expert had violated industry standards.

[00:22:25] Speaker 00:
So the industry standards question is twofold.

[00:22:27] Speaker 00:
One, with respect to the actions

[00:22:29] Speaker 00:
of the insurance company and the other with respect to the actions of the expert here, Mr. Templeton.

[00:22:36] Speaker 00:
And to Judge Carson's question, I don't believe that the Freeman report addressed in any way whether Mr. Templeton enacted consistently with industry standards.

[00:22:47] Speaker 01:
So you raised something.

[00:22:48] Speaker 01:
I'm wondering what we need to consider.

[00:22:50] Speaker 01:
Is our inquiry related to whether the insurance company

[00:22:57] Speaker 01:
followed industry standards in relying on the report or whether the expert did because, I mean, isn't the whole reason the insurance company hires an expert is because they don't have the technological expertise themselves.

[00:23:18] Speaker 00:
Yes.

[00:23:20] Speaker 00:
The answer to the short question is yes, that is correct.

[00:23:22] Speaker 00:
But to go to the more detailed question behind it, there are two levels of industry standards inquiry.

[00:23:28] Speaker 00:
The ultimate question here is the reasonableness of the insurance company's claim decision.

[00:23:35] Speaker 00:
And the determination of the reasonableness of that claim decision is based on industry standards.

[00:23:40] Speaker 00:
Peden versus State Farm said that.

[00:23:43] Speaker 00:
Fisher versus State Farm at the State Supreme Court level said that.

[00:23:46] Speaker 00:
A number of other cases say that.

[00:23:49] Speaker 00:
Industry standards are informed by state law or expert testimony.

[00:23:54] Speaker 00:
Again, this court's opinion in Peden versus State Farm supports that proposition directly.

[00:24:00] Speaker 00:
Then we get to the second level of inquiry, which is the one that you were talking about, Judge Carson.

[00:24:05] Speaker 00:
When you are relying on an expert, an insurance company is reasonably entitled to rely on the opinions of a qualified expert.

[00:24:15] Speaker 00:
Unless the other side, unless the insured has evidence that shows that the expert failed to comply with industry standards.

[00:24:26] Speaker 01:
And that would be, they would have to provide that information to the insurance company before the insurance company made their decision.

[00:24:35] Speaker 00:
Conceivably, yes.

[00:24:36] Speaker 00:
I mean, it can ask for reconsideration under certain facts.

[00:24:40] Speaker 00:
That's not the case here.

[00:24:41] Speaker 00:
Fair enough.

[00:24:42] Speaker 00:
Free lawsuit.

[00:24:43] Speaker 00:
How's that?

[00:24:46] Speaker 00:
Pre-law suit would be the typical way that would happen.

[00:24:49] Speaker 00:
Judge Murphy, I'm sorry.

[00:24:50] Speaker 02:
So we can't use Freeman information because that was submitted well after the decision to decline coverage.

[00:25:00] Speaker 00:
I believe that's correct.

[00:25:02] Speaker 00:
And the Freeman Report, even if the court considers the Freeman Report, frankly, which is post litigation and outside of the period of the pre-claim decision process, but even if the court considers the Freeman Report,

[00:25:18] Speaker 00:
It does not directly reference or even indirectly reference a violation of ministry standards.

[00:25:24] Speaker 00:
But Judge, oh, I'm sorry.

[00:25:27] Speaker 00:
Judge Domenico specifically did note that because the Freeman Report predated the inception of litigation, and this goes to your point, Your Honor, as well, mid-century never had notice

[00:25:42] Speaker 00:
of the specific things that the insured was ultimately stating were violations of industry standards.

[00:25:48] Speaker 00:
And frankly, even today in their briefing on appeal, El Dueno has identified a number of alleged industry standards that were violated by mid-century in its claim decision process through references to multiple district court opinions mostly that are cobbled together.

[00:26:08] Speaker 00:
But none of that was ever presented to Judge Domenico for his consideration.

[00:26:12] Speaker 00:
There was no argument whatsoever in the response to mid-century's motion for summary judgment about violations of industry standards, either by Mr. Templeton or by mid-century.

[00:26:29] Speaker 02:
So reliance, is this correct, that reliance then would have to be had

[00:26:35] Speaker 02:
on Field as Field's findings as to this smaller portion suggested that the insurers should not rely upon Templeton.

[00:26:53] Speaker 02:
Isn't Field the only thing left to question the opinion of Templeton and Peters?

[00:27:03] Speaker 00:
You're asking, is that the only thing that El Duano has left?

[00:27:08] Speaker 00:
It is certainly the only thing that they rely on.

[00:27:11] Speaker 00:
And we believe that reliance is improvident, as I believe the district court did as well.

[00:27:18] Speaker 00:
And the reasons for that are that after Fields completed her report and then the insured resubmitted the claim or submitted this much larger estimate,

[00:27:34] Speaker 00:
That's when it was turned over to the adjuster who had more experience in relation to these types of modified bitumen roofs.

[00:27:45] Speaker 00:
And ultimately that Mr. Templeton was assigned to the matter and he was able to fully inspect the roof and determine that there was no evidence of hail hits.

[00:27:57] Speaker 00:
The record contains evidence through Ms.

[00:28:00] Speaker 00:
Field's own deposition testimony that while she was an experienced adjuster and had been working as a commercial adjuster, she did not have a lot of experience with adjusting Hale claims on modified bitumen roofs.

[00:28:14] Speaker 00:
And so when she performed this test score methodology, she later determined and learned that that was not

[00:28:22] Speaker 00:
the appropriate way to do that kind of a roof inspection.

[00:28:27] Speaker 00:
And so when the full inspection was done by Mr. Templeton later on, that inspection revealed that there were no hail hits, that the granular disturbances that were noted by Ms.

[00:28:41] Speaker 00:
Fields were not evidence of hail hits.

[00:28:45] Speaker 00:
Now, he didn't comment specifically on Fields' analysis because when Mr. Templeton was retained,

[00:28:51] Speaker 00:
He was not provided that so that he could do his own independent analysis.

[00:28:56] Speaker 02:
Did Freeman opine that this Templeton testimony about that not being held amici, notwithstanding what Field said, that was incorrect or that that determination violated industry standards?

[00:29:18] Speaker 00:
He did say that he disagreed.

[00:29:22] Speaker 00:
This is Freeman talking in his report.

[00:29:25] Speaker 00:
He disagreed with Templeton's assessment that the granular disturbances on the roof were evidence of hail hits.

[00:29:35] Speaker 00:
He did not opine that that was a violation of industry standards or even suggest that.

[00:29:45] Speaker 03:
I'm wondering why industry standards wouldn't require when you've had an experienced adjuster like Fields and you have accepted her findings, but then you decide, well, we need somebody.

[00:30:01] Speaker 03:
We've got a bigger claim here.

[00:30:02] Speaker 03:
We're going to look at this again.

[00:30:03] Speaker 03:
We're going to hire somebody else with more experience.

[00:30:07] Speaker 03:
Why shouldn't you need to at least explain in Mr. Templeton's report

[00:30:12] Speaker 03:
why you discounted those findings that Spiel was originally made.

[00:30:20] Speaker 03:
Nothing.

[00:30:22] Speaker 00:
Well, I think the decision, and in the 30B six-step position, I think there was some reference to it, but the decision was made to retain Templeton and essentially have him provide a completely new evaluation of the roof.

[00:30:38] Speaker 03:
I understand the decision was made.

[00:30:39] Speaker 03:
I'm asking why you wouldn't clarify in the second estimate, which is

[00:30:45] Speaker 03:
basically says, yeah, she was all wrong.

[00:30:48] Speaker 03:
I mean, well, that's the conclusion, but it's not explained.

[00:30:51] Speaker 03:
Nothing is explained in that report.

[00:30:54] Speaker 00:
Well, Mr. Templeton's report goes through in detail about what he found and what he did not find.

[00:31:00] Speaker 00:
But he did not comment on Field's report.

[00:31:04] Speaker 00:
And that was by design so that he wasn't influenced one way or the other.

[00:31:08] Speaker 00:
And he wasn't provided with any information by Mr. McCourt, the second adjuster who went up on the roof

[00:31:15] Speaker 00:
prior to Templeton's inspection.

[00:31:19] Speaker 00:
So after Fields went up there in April of 2019 and then the claim was resubmitted, Mr. McCourt did a field inspection of his own on December 12th.

[00:31:32] Speaker 00:
and did not observe what he saw to be hail damage on the roof based on his inspection.

[00:31:38] Speaker 00:
That's when he retained Templeton, who inspected the roof on the 20th of December and did not find hail.

[00:31:45] Speaker 00:
So there was an effort to insulate Templeton from the differing opinions of the original adjuster and Mr. McCourt, the second adjuster.

[00:31:57] Speaker 00:
Depositions have not been taken of

[00:32:00] Speaker 00:
Mr. Templeton was not to post, correct.

[00:32:04] Speaker 00:
Mr. Peterson was not to post either.

[00:32:08] Speaker 00:
That is correct.

[00:32:15] Speaker 00:
There were some references made to the photographs.

[00:32:20] Speaker 00:
Oh, I have very little time left.

[00:32:22] Speaker 00:
I'll just note the photographs are on page 269 and 271 of volume two, the only two that show very small amounts of hail on the roof.

[00:32:31] Speaker 00:
The vast majority of the roof was completely visible.

[00:32:34] Speaker 00:
You mean snow.

[00:32:36] Speaker 00:
Did I say hail?

[00:32:37] Speaker 00:
I meant snow.

[00:32:39] Speaker 00:
Thank you, Judge.

[00:32:41] Speaker 00:
I apologize for that error.

[00:32:45] Speaker 00:
If there are no further questions, we would ask that this court affirm Judge Domenico's correct decision, granting summary judgment to mid-century.

[00:32:53] Speaker 00:
Thank you for your time.

[00:32:54] Speaker ?:
Thank you, counsel.

[00:33:01] Speaker 03:
The case will be submitted.

[00:33:02] Speaker 03:
Appreciate your arguments today.

[00:33:03] Speaker 03:
They've been helpful, and counsel were excused.

[00:33:06] Speaker 03:
Thank you.

[00:33:06] Speaker 03:
And we're going to take about a 10-minute break.

[00:33:10] Speaker 03:
We'll be back about 10.25.