United Heritage Property and Casualty Company v. Farmers Alliance Mutual Insurance
Filing
105
MEMORANDUM AND ORDER denying 88 Motion in Limine. Signed by Judge William B. Shubb. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by dks)
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
FOR THE DISTRICT OF IDAHO
10
----oo0oo----
11
12
13
UNITED HERITAGE PROPERTY AND
CASUALTY COMPANY, an Idaho
corporation,
14
15
16
17
18
NO. CIV. 1:10-456 WBS
MEMORANDUM AND ORDER RE:
MOTION IN LIMINE
Plaintiff,
v.
FARMERS ALLIANCE MUTUAL
INSURANCE COMPANY, a foreign
corporation,
Defendant.
/
19
----oo0oo---20
21
Plaintiff United Heritage Property and Casualty Company
22
(“United Heritage”) brought this action against defendant Farmers
23
Alliance Mutual Insurance Company (“FAMI”), arising out of FAMI’s
24
refusal to accept United Heritage’s tender of an insurance-
25
related suit (the “Zarate case”) on behalf of its insured,
26
Rentmaster of Rexburg (“Rentmaster”).
27
is FAMI’s motion in limine to exclude evidence of or any
28
reference to damages claimed by plaintiff.
1
Presently before the court
(Docket No. 88.)
1
Plaintiff seeks to introduce evidence at trial
2
concerning damages in the form of policy limits paid by plaintiff
3
on behalf of Rentmaster in the underlying Zarate case.
4
argues that evidence relating to plaintiff’s policy coverage of
5
Rentmaster is inappropriate because plaintiff has been reimbursed
6
for such payments by its own reinsurer.
7
moves to prevent plaintiff from offering this evidence pursuant
8
to Federal Rule of Evidence 402.
9
10
11
12
Defendant
Defendant therefore
Federal Rule of Evidence 402 states that:
All relevant evidence is admissible except as otherwise
provided by the Constitution of the United States, by act
of Congress, by these rules or other rules prescribed by
the Supreme Court pursuant to statutory authority.
Evidence which is not relevant is not admissible.
13
Fed. R. Evid. 402.
14
money paid by plaintiff to settle the underlying Zarate case is
15
not relevant because plaintiff has been compensated for the
16
payments, meaning that the evidence is not relevant in
17
calculating damages.
18
plaintiff for the payments would result in a “windfall” for
19
plaintiff.
20
Pl.’s Damages at 3 (Docket No. 88-1).)
21
Defendant argues that evidence regarding
Defendant further argues that compensating
(Mem. in Supp. of Mot. In Limine Regarding Proof of
The court has previously held that plaintiff, as
22
Rentmaster’s excess insurance carrier, has the ability to assert
23
claims for breach of duty to defend and breach of duty to
24
indemnify, via equitable subrogation, against defendant,
25
Rentmaster’s primary insurance carrier.
26
at 18:9-19:7 (Docket No. 71.))
27
in this motion in limine, therefore, is whether plaintiff’s
28
reinsurance policy affects plaintiff’s ability to assert its
(Sept. 22, 2011, Order
The only issue before the court
2
1
damages claim.
2
Defendant presents evidence regarding plaintiff’s
3
reinsurance policy to prove that plaintiff is not required to
4
reimburse its reinsurer for any money that it receives in the
5
present case.
6
only requires plaintiff to reimburse its insurer for salvage
7
rights and that “there is no mention of reimbursement for
8
subrogation rights.”
9
Proof of Pl.’s Damages at 4.)
Defendant specifically contends that the policy
(Mem. in Supp. of Mot. In Limine Regarding
Defendant argues that because
10
plaintiff does not have to reimburse its reinsurer, awarding it
11
damages based on its payments to settle the Zarate case would
12
result in a windfall for plaintiff.
13
The court has reviewed the reinsurance policy and
14
concludes that defendant’s interpretation of the policy is
15
mistaken.
The relevant portion of the reinsurance policy states:
16
Article VIII -- Salvage and Subrogation
17
The Reinsurer shall be credited with salvage (i.e.
reimbursement obtained or recovery made by the Company,
less the actual cost, excluding salaries of officials and
employees of the Company and sums paid to attorneys as
retainer, of obtaining such reimbursement or making such
recovery) on account of claims settlements involving
reinsurance hereunder. . . . The Company hereby agrees to
enforce its rights to salvage or subrogation relating to
any loss, a part of which loss was sustained by the
Reinsurer, and to prosecute all claims arising out of
such rights.
18
19
20
21
22
23
(High Aff. Ex. A at 6 (Docket No. 88-2).)
24
does not specifically state in a single sentence that subrogation
25
claims must be credited back to the reinsurer, the article read
26
as a whole strongly suggests such a conclusion.
27
specifically addresses subrogation, the policy clearly requires
28
plaintiff “to enforce . . . subrogation” rights and “to prosecute
3
Although the policy
The article
1
all claims arising out of such rights,” and the policy’s
2
definition of “salvage” encompasses any “reimbursement obtained
3
or recovery made by the Company.”
4
purpose in requiring plaintiff to enforce its subrogation rights
5
if the proceeds from such rights were not required to be credited
6
back to the reinsurer.
7
contract therefore suggests that awarding plaintiff damages for
8
any violations of defendant’s right would not result in a
9
windfall for plaintiff because at least a portion of the monies
10
(Id.)
There would be no
The plain language of the reinsurance
would be credited to plaintiff’s reinsurer.
11
Defendant fails to provide authority, and this court is
12
unable to find any, suggesting that an excess carrier’s
13
reinsurance policy functions to prevent it from pursuing
14
subrogation against the primary insurer.
15
plaintiff’s reinsurance policy does not change the nature of
16
Rentmaster’s assignment of its claims to plaintiff.
17
of adopting such a policy would be to provide a windfall to
18
primary insurers that breach their duties in circumstances in
19
which the excess insurer has the foresight to carry its own
20
insurance.
The existence of
The result
Even if plaintiff’s damages evidence is relevant,
21
22
defendant contends that it should be excluded pursuant to Federal
23
Rule of Evidence 403.
24
relevant, evidence may be excluded if the probative value is
25
substantially outweighed by the danger of unfair prejudice,
26
confusion of the issues, or misleading the jury. . . .”
27
Evid. 403.
28
mislead and confuse the jury to think that the settlement payment
Rule 403 provides that, “although
Fed. R.
Defendant argues that the damages evidence would
4
1
was an out of pocket expense for plaintiff.
2
Mot. In Limine Regarding Proof of Pl.’s Damages at 4.)
3
discussed above, which insurer actually made the payments is
4
irrelevant for the purposes of the jury trial because plaintiff’s
5
reinsurance policy requires it to pursue subrogation in the
6
present action.
7
unlikely to result in unfair prejudice or the jury being confused
8
or mislead.
9
(Mem. in Support of
As
The presentation of such evidence is therefore
IT IS THEREFORE ORDERED that defendant’s motion in
10
limine regarding proof of plaintiff’s damages be, and the same
11
hereby is, DENIED.
12
DATED:
February 27, 2012
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
5
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?