Moore v. Shelter Mutual Insurance Company

Filing 102

MEMORANDUM OPINION AND ORDER. Signed by Honorable Robert T. Dawson on July 17, 2014. (lw)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF ARKANSAS
FORT SMITH DIVISION
BRENT MOORE

PLAINTIFF

V.

CIVIL NO. 13-2092

SHELTER MUTUAL INSURANCE COMPANY

DEFENDANT

MEMORANDUM OPINION & ORDER
On

this

17th

day

of

July

2014,

there

comes

on

for

consideration Shelter’s Renewed Motion for Partial Judgment as a
Matter of Law (docs. 81-82), Shelter’s Motion for New Trial (docs.
83-84) and Shelter’s Alternative Motion to Alter Judgment (docs.
85-86).

Also before the Court are Plaintiff’s Responses to those

motions (docs. 93-95), and Shelter’s Reply briefs (docs. 98-100).
For the reasons set forth within this memorandum, Shelter’s Renewed
Motion for Partial Judgment as a Matter of Law (doc. 81) is
GRANTED, Shelter’s Motion for New Trial (doc. 83) is DENIED, and
Shelter’s Alternative Motion to Alter Judgment (doc. 85) is DENIED.
Background
Plaintiff filed his Complaint on February 15, 2013, in the
Circuit Court of Crawford County contending Shelter exhibited bad
faith in connection with his claim for underinsured motorist
insurance benefits following a motor vehicle accident.

The case

proceeded to jury trial on March 10, 2014, and continued until
-1-

AO72A
(Rev. 8/82)

March 13, 2014, resulting in a verdict for Plaintiff on his
underinsured motorist coverage claim in the amount of $50,000 and
on his bad faith claim in the amount of $93,000.
Standard of Review
In ruling upon Shelter’s motion for judgment as a matter of
law, the Court must find that there is no legally sufficient
evidentiary basis to support a jury verdict in the non-moving
party’s favor.

See Fed. R. Civ. P. 50(a)(1).

All factual

inferences are drawn in favor of the non-moving party, and the
court

avoids

evidence.

making

credibility

assessments

or

weighing

the

Hortica-Florists’ Mut. Ins. Co. v. Pittman Nursery

Corp., 729 F.3d 846 (8th Cir. 2013)(citation omitted).

Judgment as

a matter of law is appropriate only when all of the evidence points
one way and is susceptible of no reasonable inference sustaining
the position of the nonmoving party.

Id. (citation omitted).

Pursuant to Rule 59 of the Federal Rules of Civil Procedure,
the decision to grant a new trial lies within the sound discretion
of the trial court.

Howard v. Missouri Bone and Joint Center,

Inc., 615 F.3d 991, 995 (8th Cir. 2010)(citation omitted).

Where

the basis of the motion for a new trial is that the jury’s verdict
is against the weight of the evidence, the court should only grant
a new trial to avoid a miscarriage of justice.
omitted).

-2-

AO72A
(Rev. 8/82)

Id. (citation

Analysis
Shelter contends it is entitled to judgment as a matter of law
on Plaintiff’s bad faith claim as Plaintiff’s allegations amount to
mere negligent claim-handling that is insufficient to establish bad
faith and that Shelter’s hiring of an allegedly biased expert
witness amounts to an insurer’s litigation activities that cannot
be used to support a bad faith claim under Arkansas law.1
Through

the

tort

of

bad

faith,

an

insurer

may

be

held

accountable for failing to investigate and settle a claim. Watkins
v. S. Farm Bureau Cas. Ins. Co., 370 S.W.3d 848 (Ark. App. 2009).
In order to state a claim for bad faith, Plaintiff must allege that
the insurance company engaged in affirmative misconduct that was
dishonest, malicious, or oppressive.

Unum Life Ins. Co. of Am. v.

Edwards, 210 S.W.3d 84 (8th Cir. 1985).
Based upon the current status of insurance bad faith law in
Arkansas, to include an analysis and review of the recent Eighth
Circuit Court of Appeals opinion in the Hortica case, supra, as
well as a review of the evidence presented at trial; the Court has
no choice but to set aside the portion of the jury verdict finding
Shelter liable for bad faith.
While the jury may have concluded that Shelter’s claim review
policy weighs heavily against policyholders from the outset of the

1

Shelter made an identical motion during trial at the conclusion of
Plaintiff’s evidence and again at the conclusion of all the evidence. The
Court denied the motion both times.

-3-

AO72A
(Rev. 8/82)

review process, this does not rise to the level of bad faith under
current Arkansas law.

While the manner in which Plaintiff’s claim

was handled was unfortunate, poor business policies alone do not
meet the threshold of bad faith.
In

connection

with

Dr.

Peeples,

Plaintiff’s

counsel

was

permitted to conduct a rigorous examination to identify any and all
biases held by the witness.

However, the mere fact that Dr.

Peeples testifies almost solely for defendant insurance companies
is insufficient to meet the stringent standard for bad faith in
Arkansas.

This was a contentious dispute prior to the filing of

any lawsuit, and those attitudes on the part of the parties and
their counsel alike, unfortunately continued throughout the trial.
That atmosphere was readily apparent to the jury and likely had an
effect on the verdict. Accordingly, Shelter’s motion for judgment
as a matter of law (doc. 81) is GRANTED, and the jury’s verdict on
Plaintiff’s bad faith claim is SET ASIDE.
A district court may grant a new trial when the first trial
resulted in a miscarriage of justice, through a verdict against the
weight of the evidence, an excessive damage award, or legal errors
at trial.

Trickey v. Kaman Indus. Technologies Corp., 705 F.3d

788, 807 (8th Cir. 2013)(citations omitted). With respect to legal
errors, a “miscarriage of justice” does not result whenever there
are inaccuracies or errors at trial; instead, the party seeking a
new trial must demonstrate that there was prejudicial error.

-4-

AO72A
(Rev. 8/82)

Id.

(citation omitted).

Errors in evidentiary rulings are prejudicial

only where the error likely affected the jury’s verdict.

Id.

(citation omitted).
Much of Shelter’s motion seeking a new trial concerns the bad
faith verdict that the Court set aside.

However, as it may relate

to the UIM claim, the Court finds the motion should be DENIED.
Shelter contends it is entitled to a new trial as the Court
permitted Plaintiff to introduce evidence of Shelter’s reserve
amount of $44,000 for Plaintiff’s UIM claim.

The Court finds that

this does not entitle Shelter to a new trial as Shelter cannot
demonstrate it was prejudiced by this evidence. As acknowledged by
Shelter, its claim supervisor, Paul Thompson, was permitted to
explain that the amount set for Plaintiff’s reserve was required to
be set by Shelter policy and that even if the maximum amount of UIM
coverage were a smaller amount (such as in this case), the reserve
could not be set any lower than $44,000.

The witness testified at

length about how the reserves are determined, and Shelter’s counsel
was permitted to explain the reserve amount again in closing
argument.
The Court concludes that the verdict does not amount to a
miscarriage

of

justice,

and

a

new

trial

would

be

improper.

Defendant’s motion seeking a new trial (doc. 83) is DENIED.
Finally, Shelter moves the Court pursuant to Rule 59(e) of the
Federal Rules of Civil Procedure to amend the Judgment (doc. 73) in

-5-

AO72A
(Rev. 8/82)

this

matter

to

remove

the

pre-judgment

interest

awarded

to

Plaintiff on his UIM claim contending Plaintiff’s personal injury
damages were not determinable in 2006 without relying on opinion or
discretion.
“[P]re-judgment interest is allowable where the amount of
damages is definitely ascertainable by mathematical computation, or
if the evidence furnishes data that make it possible to compute the
amount without reliance on opinion or discretion.”

Woodline Motor

Freight v. Troutman Oil Co., 938 S.W.2d 565, 568 (1997).

The

Arkansas Supreme Court has “emphasized the requirement that damages
be capable of exact determination both in time and amount.”

Id.

citing Stein v.Lukas, 823 S.W.2d 832 (1992) (“prejudgment interest
is not recoverable where damages are inexact and uncertain”)
(additional citations omitted).
In this case, at the time Plaintiff made a demand for his
policy limits of $25,000, he provided ample proof that his injuries
exceeded the policy limits of $25,000.
quantifiable

to

the

maximum

amount

Therefore, the amount was
of

$25,000,

and

the jury

determined Shelter was liable for that amount at the time the
demand was made and Shelter denied the claim.

For that reason, the

Court finds the award of pre-judgment interest was proper, and
Shelter’s Alternative Motion to Alter Judgment (doc. 85) is DENIED.
Conclusion
Based on the foregoing, Shelter’s Renewed Motion for Partial

-6-

AO72A
(Rev. 8/82)

Judgment as a Matter of Law (doc. 81) is GRANTED, and the bad faith
verdict is SET ASIDE, Shelter’s Motion for New Trial (doc. 83) is
DENIED and Shelter’s Alternative Motion to Alter Judgment (doc. 85)
is DENIED.
IT IS SO ORDERED.
/s/ Robert T. Dawson
Honorable Robert T. Dawson
United States District Judge

-7-

AO72A
(Rev. 8/82)