MEC&F Expert Engineers : 12/23/14

Tuesday, December 23, 2014

ACCIDENT INVESTIGATION REPORT- SANDRIDGE ENERGY OFFSHORE: EMPLOYEE INJURY DUE TO UNEXPECTED WAVE ACTION



ACCIDENT INVESTIGATION REPORT- SANDRIDGE ENERGY OFFSHORE: EMPLOYEE INJURY DUE TO UNEXPECTED WAVE ACTION

INVESTIGATION FINDINGS
At approximately 22:30 hours on 17 September 2014, an employee for Quality Construction & Production (QCP) suffered an ankle injury during abandonment operations of Well A002 for McMoRan Oil & Gas LLC (McMoRan) at the South Marsh Island (SMI) Block 147A platform operated by Fieldwood Energy (Fieldwood).

McMoRan contracted QCP and several other construction companies to remove nine conductor casings at the SMI-147A platform.  The procedures employed for the removal of the SMI-147A conductor casings were as follows: 1) install support beams for the conductor casing at the Jacket Level located at +13 feet (ft) above water line; 2) cut a shackle hole in the conductor casing and install a 55-ton shackle at the Cellar Deck situated +46 ft above the water line; 3) rig up crane and pull tension on conductor casing; 4) cut conductor casing at the +13 Jacket Level and pull to Main Deck; 5) burn hole in top of conductor casing at Main Deck and insert flat pin through side of conductor casing; 6) lower conductor casing to rest on the +13 Jacket Level support beams and change out long sling for a shorter sling; 7) pull up on conductor casing between 10 to 20 ft and pin at the +13 Jacket Level; 8) cut conductor casing at the +13 Jacket Level; and 9) remove 80 foot section of conductor casing to the material barge.

The injury was sustained by the QCP employee when he was assisting with the installation of the flat pin into the Well A002 conductor casing as it was being held by the derrick barge crane with assistance from the platform crane.  An unforeseen wave action caused a shift in tension on the derrick barge crane and the flat pin slid out striking the left ankle of the QCP employee.  The injured QCP employee walked up to the living quarters for medical attention by placing ice on his left ankle to reduce swelling.  The following day on 18 September 2014, increased swelling and bruising of the left ankle was observed, therefore, the injured QCP employee was transported by a crew boat to the shore for medical attention.

On 19 September 2014, the injured QCP employee was treated at a medical clinic but was referred to an Orthopedist for further evaluation.  On 20 September 2014, an
Orthopedist determined that the injured QCP employee sustained a hairline fracture in his left ankle and was treated by putting a hard splint boot over the injured left ankle.  The Orthopedist released the injured QCP employee to full duty; however, he did not return to the SMI-147A platform, but was assigned to work at QCP's shop until his left ankle healed.

According to the McMoRan Incident Investigation Report, the probable cause of the accident was attributed to the derrick barge crane's balance and tension forces on the load that shifted due to an unexpected wave action.

The McMoRan Incident Investigation Report and BSEE findings attributed the contributing cause for the accident to an unforeseen weather-related wave action event that resulted in the flat pin being dislodged from the conductor casing striking the IP who was in the area providing assistance.



LIST THE PROBABLE CAUSE(S) OF ACCIDENT:
According to the McMoRan Incident Investigation Report, the probable cause of the accident was attributed to the derrick barge crane's balance and tension forces on the load that shifted due to an unexpected wave action.

LIST THE CONTRIBUTING CAUSE(S) OF ACCIDENT:
The McMoRan Incident Investigation Report and BSEE findings attributed the contributing cause for the accident to an unforeseen weather-related wave action event that resulted in the flat pin being dislodged from the conductor casing striking the IP who was in the area providing assistance.

LIST THE ADDITIONAL INFORMATION:

PROPERTY DAMAGED:        No property was damaged during this incident
NATURE OF DAMAGE:                  
SPECIFY VIOLATIONS DIRECTLY OR INDIRECTLY CONTRIBUTING. NARRATIVE: None

FLORIDA COURT OF APPEALS: EVIDENCE OF MILLIONS IN FEES BY AN INSURER TO AN ENGINEERING INSPECTION FIRM IS RELEVANT AND ADMISSIBLE TO SHOW BIAS



FLORIDA COURT OF APPEALS: EVIDENCE OF MILLIONS IN FEES BY AN INSURER TO AN ENGINEERING INSPECTION FIRM IS RELEVANT AND ADMISSIBLE TO SHOW BIAS 
In Mejia v. Citizens Prop. Ins. Corp., 2014 Fla. App. LEXIS 19526 (Fla. Dist. Ct. App. 2d Dist. Nov. 26, 2014), the Second District reversed a Pasco County trial court’s determination on the burden of proof applicable to a sinkhole lawsuit. Mr. Mejia reported a claim for suspected sinkhole damage to his insurer Citizens. In response, Citizens retained an engineering firm to determine the cause of damage to the home. After investigating the claim, the engineering firm determined that the damage was not caused by sinkhole activity. Based upon this determination, Citizens denied the claim.

Mejia then filed suit against Citizens, alleging the denial was a breach of contract. Prior to trial, the court ruled that Mejia had the burden to prove that the damage to the home was caused by sinkhole activity during the policy period. The trial court also excluded evidence that over the previous three years Citizens had paid approximately $9.5 million to the engineering firm that performed the investigation. The jury ultimately found that Mejia failed to meet his burden and final judgment was entered in favor of Citizens.

On appeal, the Second District reversed, stating that “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.” The Court found it irrelevant that Mejia’s sinkhole coverage was provided by an endorsement to the policy, holding that the endorsement did not change the all-risk nature of the policy. According to the Second District, the trial court’s determination improperly placed the burden of proof on Mejia to prove that his home was damaged by a sinkhole; the proper allocation would require Citizens to prove that the damage was caused by an excluded peril.

The Second District also found that the trial court erred in excluding evidence regarding payments made by Citizens to the engineering firm. Citing the seminal case on expert financial discovery, Allstate Ins. Co. v. Boecher, 705 So. 2d 106 (Fla. 4th DCA 1998), the Court stated such information was directly relevant to a party’s efforts to demonstrate a witness’s bias and should have been allowed. Consequently, the case was reversed and remanded for a new trial placing the burden of proof on Citizens and allowing cross-examination relating to the prior payments to the engineering firm.


"Because we are remanding for retrial, we must also address an evidentiary issue. Mejia argues that the trial court erred by excluding evidence that over the previous three years Citizens had paid approximately $9.5 million in fees to BCI, the engineering firm that employed Citizens' expert witnesses.  Mejia argued that the evidence was relevant to show bias, while Citizens argued that it was not relevant.  We conclude that the evidence was relevant and admissible."

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NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED

IN THE DISTRICT COURT OF APPEAL OF FLORIDA
SECOND DISTRICT

ALFREDO MEJIA,                                             )
)
Appellant,                                   )
)
v.                                                                           )                 Case No. 2D13-2248
) CITIZENS PROPERTY INSURANCE ) CORP.,            )
)
Appellee.                                       )
                                                                              )

Opinion filed November 26, 2014.

Appeal from the Circuit Court for Pasco County; Linda Babb, Judge.

Raymond T. Elligett, Jr., of Buell & Elligett, P.A., Tampa; Michael Laurato and Laura Datz of Austin & Laurato, P.A., Tampa; and Thomas W. Thompson, Jr., and A. Lee Smith of The Thompson Trial Group, P.A., Tampa, for Appellant.

Kara Berard Rockenbach of Methe & Rockenbach, P.A., West Palm Beach, for Appellee.


NORTHCUTT, Judge.

Alfredo Mejia appeals a final judgment in favor of Citizens Property Insurance Corp. following a jury trial on his insurance claim for damages to his home allegedly caused by sinkhole activity.  The trial court erred in allocating the burden of


proof between the parties, and it erred in excluding evidence that tended to impeach the credibility of an expert witness who testified for Citizens.  Accordingly, we reverse and remand for a new trial.
Mejia owned a home that was insured under a policy issued by Citizens.1 The standard policy insured against risk of direct physical loss to the property.  It excluded, among other things, coverage for loss caused by earth movement and settlement and loss caused by sinkholes.  Mejia, however, had paid an additional premium for a Sinkhole Loss Coverage endorsement.2  This endorsement added sinkhole loss as a covered peril, and it stated that the earth movement and sinkhole exclusions did not apply.
During the policy term, Mejia reported a claim for damage to his home.

Citizens retained BCI, an engineering firm, to evaluate the property for sinkhole activity. BCI investigated and concluded that the damage was not caused by sinkhole activity, and Citizens denied Mejia's claim.  At trial on Mejia's breach-of-contract claim, Citizens relied on testimony from experts, including an engineer from BCI, to argue that there was no sinkhole activity and no structural damage to the property. Mejia presented his own expert evidence that his home had suffered structural damage due to sinkhole activity.
Prior to trial, the court ruled that Mejia had the burden of showing that the damage was caused by sinkhole activity during the policy period. This was contrary to the jury instructions requested by Mejia, which required him to show only that his home was damaged while the insurance policy was in force and then shifted to Citizens the
1The form of insurance was CIT HO-3 07 08.

2Form CIT 23 94 07 08.


burden to show that the cause of the damage was not covered by the policy. Instructed otherwise pursuant to the pretrial ruling, the jury found that Mejia had not established by the greater weight of the evidence that his home had suffered physical damage caused by a sinkhole.  Final judgment was thereafter entered in favor of Citizens, and this appeal followed.
Mejia argues on appeal, and we agree, that the trial court erred in allocating the burden of proof. In litigation involving an insurance claim, the burden of proof is assigned according to the nature of the policy. Without dispute, the insurance policy at issue here is an "all risks" policy.  An all-risks policy provides coverage for "all losses not resulting from misconduct or fraud unless the policy contains a specific provision expressly excluding the loss from coverage." Hudson v. Prudential Prop. &
Cas. Ins. Co., 450 So. 2d 565, 568 (Fla. 2d DCA 1984) (contrasting an all-risks policy

from a specific peril policy which insures only against named risks). Consistent with the jury instruction requested by Mejia 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. Id.
As we held in Hudson, it makes no difference that the sinkhole coverage

at issue was provided in an endorsement to the underlying policy.  In Hudson, as here,

the homeowner had an all-risks policy with a sinkhole endorsement.  This court held that the "endorsement did not change the 'all risks' nature of the underlying policy; it merely narrowed the earth sinking exclusion."  Id. at 568.  And in that case, as here, the
jury instructions "had the effect of improperly placing the burden on the Hudsons to


prove that their home was damaged by a sinkhole." Id. Based on that error, we

reversed and remanded for a new trial.

Neither does it matter that the sinkhole endorsement in Hudson was

obtained under an earlier version of the applicable insurance statute.  In Hudson, the

statute provided that every property insurer in Florida "shall make available coverage for insurable sinkhole losses on any structure."  § 627.706(1), Fla. Stat. (1981). The
version of the statute applicable to Mejia's policy was substantially identical save for specifying that every property insurer in Florida "shall make available, for an appropriate
additional premium, coverage for sinkhole losses." § 627.706(1), Fla. Stat. (2009)

(emphasis added). Significantly, in both versions of the statute the insurer was required to make available coverage for sinkhole losses "to the extent provided" in the form to which the sinkhole coverage attaches.  Compare § 627.706(1), Fla. Stat. (1981), with
§ 627.706(1), Fla. Stat. (2009).  In both cases, the form to which the endorsement was attached was an all-risks insurance policy.
The trial court erred in allocating the burden of proof between Mejia and Citizens.  We reverse and remand for a new trial in which the jury must be properly instructed on the burden of proof consistent with the foregoing.
Because we are remanding for retrial, we must also address an

evidentiary issue. Mejia argues that the trial court erred by excluding evidence that over the previous three years Citizens had paid approximately $9.5 million in fees to BCI, the engineering firm that employed Citizens' expert witnesses.  Mejia argued that the evidence was relevant to show bias, while Citizens argued that it was not relevant.  We conclude that the evidence was relevant and admissible.


In Allstate Insurance Co. v. Boecher, 733 So. 2d 993, 997 (Fla. 1999), the

supreme court held that a plaintiff was allowed to discover the amount of fees paid, over the preceding three years, by his uninsured motorist carrier to its expert in accident reconstruction and injury causation.  The court 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." Id.
Citizens maintains that Boecher addressed only the discovery of such

information and not its admission at trial and that the opinion is mere dicta outside the context of discovery. Although it is true that Boecher involved a discovery dispute, this
argument misses the mark. Even though Boecher addressed discovery rather than

admissibility at trial, we have previously observed that "dictum of the highest court of this State, in the absence of a contrary decision by that court, should be given persuasive weight in this court." Milligan v. State, 177 So. 2d 75, 76 (Fla. 2d DCA
1965).

In Boecher, the supreme court observed that the information sought from

Allstate "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."  733 So. 2d at 997 (emphasis added).

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.


Id. at 997-98 (emphasis added). The supreme court echoed the Fourth District's

assessment that the "information would be 'indisputably relevant and meaningful.' "  Id.

at 998 (quoting Allstate Ins. Co. v. Boecher, 705 So. 2d 106, 107 (Fla. 4th DCA 1998),

approved, 733 So. 2d 993).

We have previously cited Boecher to support our conclusion that evidence

of a doctor's financial interest in a case, by way of a letter of protection, was properly admitted to attack the doctor's credibility as a witness. Carnival Corp. v. Jimenez, 112
So. 3d 513, 520 (Fla. 2d DCA 2013) (analyzing admissibility of evidence to determine propriety of closing argument).  We reject Citizens' attempt to limit Carnival Corp. to an
inquiry into the witness's financial interest only in the present case.  See Flores v.

Miami-Dade Cnty., 787 So. 2d 955, 959 (Fla. 3d DCA 2001) ("The inquiry extends not

just to the compensation arrangements for the current case but also allows inquiry into the expert's work in other cases." (citations omitted)).
Similarly, the Fourth District relied on Boecher when affirming an order

permitting the plaintiff to ask defense experts about sums paid to them in the previous three years by the defendants' insurer, the twist in that case being that the insurance company was not identified as such.  Herrera v. Moustafa, 96 So. 3d 1020, 1021 (Fla.
4th DCA 2012).  Here, we conclude that the trial court abused its discretion by precluding Mejia from cross-examining Citizens' expert witnesses about the $9.5 million their company had been paid by Citizens over the previous three years.
Reversed and remanded for a new trial.



SLEET, J., Concurs.
ALTENBERND, J., Concurs with opinion.


ALTENBERND, Judge, Concurring.

I concur in this opinion, but I would do so even if the policy were not treated as an "all risks" policy.  It is likely that the HO-3 insurance policy issued by Prudential Property and Casualty Insurance Company to the Hudsons insuring their home in 1981 was significantly different from the policy issued by Citizens in 2011 to Mr. Mejia. See Hudson v. Prudential Prop. & Cas. Ins. Co., 450 So. 2d 565 (Fla. 2d DCA
1984). When that standard policy was introduced by the Insurance Services Office in the early 1970s, it was a relatively simple policy that insured the dwelling on an all-risks basis and personal property on a named peril basis.
Over time, for reasons that are not important to this case, the policy evolved into a "special form" policy.  At least to this judge, the policy is oddly structured because the "Section I—Perils Insured Against" begins with an all-risks type insuring agreement for the dwelling.  That all-risks language is immediately followed by a statement that "we do not insure, however, for loss: . . ."  This "however" clause is followed by a long list of excluded risks.  Several pages later, the policy in more traditional fashion provides "Exclusions" to the Section I coverage.  In other words, the policy essentially adds exclusions in both the insuring agreement and in the standard section for exclusions.
The HO-policy may never have been an "all risks" policy if one defines "all risks" literally.  But with the addition of the named excluded perils within the insuring agreement, it has become an amalgam that is neither an all risks nor a named peril form.


In the case of sinkhole risks in Florida, the statutorily authorized sinkhole endorsement is intended to eliminate the sinkhole exclusion from the policy.  It is written, however, in language that appears to be coverage for an added named peril and not merely an elimination of the authorized exclusion.  But when litigated, the homeowner maintains that damage has occurred to the home that falls within the sinkhole coverage. The insurance company maintains that the damage is not caused by a sinkhole and is actually damage that is excluded under the main policy's exclusion for earth movement and settlement.
There is no controversy that an insurance company has the burden of proof as to an exclusion like the earth movement and settlement exclusion.  Given the overall complexity of these claims, where sinkhole damage is excluded in the main policy, revived in the endorsement, and then litigated as a matter that is either covered sinkhole damage or excluded earth movement damage, it seems to me that the only practical solution as to the specific issues raised in sinkhole litigation is to place the burden of proof on the insurance company once the insured has established the requisite physical damage to the insured dwelling during the term of the policy.