Liberty Mutual wins based on unreliable expert witness

A federal appeals court upheld dismissal of litigation filed against Liberty Mutual Insurance Group based on a policy pollution exclusion, after agreeing with the lower court that the testimony of the plaintiff’s expert witness should be excluded.

Varlen Corp., which has since been acquired by Chicago-based Amsted Industries Inc., owned and operated two industrial sites that were found to have significant amounts of groundwater contamination related to the sites’ operations, according to Thursday’s ruling by the 7th U.S. Circuit Court of Appeals in Chicago in Varlen Corp. v. Liberty Mutual Insurance Co.

The site contamination cost Varlen millions of dollars in damages and remediation expenses, according to the ruling. Varlen’s insurer, Liberty Mutual, denied coverage based on its policy’s pollution exclusion, and Varlen filed suit against the insurer in U.S. District Court in Chicago.

The district court determined that an expert witness’ testimony that the pollution was sudden and accidental, and should therefore be covered under the policy, was not based on reliable methods or principles, and excluded his testimony.

The court granted Liberty Mutual summary judgment in the case, which was upheld by a unanimous three-judge appeals court panel. 

The expert’s testimony “is the only evidence that Varlen offered as to whether the contamination occurred in a sudden and accidental fashion,” said the ruling.

But his testimony was “lacking,” it said. He “failed to demonstrate that his conclusions were anything more than guesses,” said the ruling, in affirming the lower court’s judgment.

Varlen’s attorney said the ruling is still being evaluated. Liberty Mutual’s attorney could not immediately comment.