An insured homeowner insurance expertbrought action against the property insurer seeking insurance coverage for alleged sinkhole damage to his home. The insurer was successful at trial, and the plaintiff appealed. At issue was the correct burden of proof and expert testimony evidence.

The insured’s property insurance policy issued by the Insurance Co. covered the risk of direct physical loss to the property, and excluded, among other things, coverage for loss caused by earth movement and settlement and loss caused by sinkholes. However, the Insured paid an additional premium for a sinkhole loss coverage endorsement, which added sinkhole loss as a covered peril. It stated that the earth movement and sinkhole exclusions did not apply.

Plaintiff filed a claim for damage to his home, and the insurance Co. retained an engineering firm to evaluate the property for sinkhole activity. The firm investigated and concluded that the damage was not caused by sinkhole activity. The insurance Co. denied Insured’s claim. At trial, Insurance Co. proffered testimony from engineering experts, including an engineer from the firm, and argued that there was no sinkhole activity and no structural damage to the home. The insured likewise presented his own expert witness who argued to the contrary.

Prior to trial, the trial court ruled that the Insured had the burden of showing that the damage was caused by sinkhole activity during the policy period. The jury found that Insured had not established by the greater weight of the evidence that his home had suffered physical damage caused by a sinkhole.

Judge Stevan T. Northcutt of the District Court of Appeal of Florida wrote in his opinion that the trial court erred in allocating the burden of proof. In litigation involving an insurance claim, Northcutt explained that the burden of proof is assigned according to the nature of the policy. Here, the insurance policy at issue was an “all risks” policy. Consistent with the jury instruction requested by Insured in this case, an insured claiming under an all-risks policy has the burden of proving that the insured property suffered a loss while the policy was in effect. The burden then shifts to the insurer to prove that the cause of the loss was excluded from coverage under the policy’s terms.

Judge Northcutt agreed with the Insured, who argued that the trial court erred by excluding evidence that over the previous three years the Insurance Co. paid millions of dollars in fees to the Engineering Firm that employed its expert witnesses. The Insured argued that the evidence was relevant to show bias, and Judge Northcutt agreed that the evidence was relevant and admissible. In Allstate Insurance Co. v. Boecher (Fla. 1999), the Florida Supreme Court held that a plaintiff was allowed to discover the amount of fees paid, over the preceding three years, by his carrier to its expert in accident reconstruction and injury causation. The Court in that case stated that “[t]he more extensive the financial relationship between a party and a witness, the more it is likely that the witness has a vested interest in that financially beneficial relationship continuing.” In Boecher, the Supreme Court also explained that the information sought from the insurance company “does not just lead to the discovery of admissible information. The information requested is directly relevant to a party’s efforts to demonstrate to the jury the witness’s bias.”

The Boecher Court went on to say:

“A jury is entitled to know the extent of the financial connection between the party and the witness, and the cumulative amount a party has paid an expert during their relationship. A party is entitled to argue to the jury that a witness might be more likely to testify favorably on behalf of the party because of the witness’s financial incentive to continue the financially advantageous relationship.”

Here, the Florida Court of Appeal concluded that the trial court abused its discretion by precluding the Insured from cross-examining his Insurance Co.’s expert witness about the fees it had been paid by the Insurance Co. over the previous three years.

The case was reversed and remanded for a new trial.