Coffeyville Resources Refining & Marketing, LLC v. Liberty Surplus Insurance Corporation et al

Filing 412

MEMORANDUM AND ORDER denying 370 Motion in Limine; taking under advisement 372 Motion in Limine; granting 375 Motion in Limine; granting 376 Motion in Limine; denying 377 Motion in Limine; taking under advisement 378 Motion in Limin e; denying 379 Motion in Limine; denying 380 Motion in Limine; denying 381 Motion in Limine; denying 382 Motion in Limine; denying 383 Motion in Limine; denying 384 Motion in Limine; taking under advisement 385 Motion in Limine; finding as moot 407 Motion to Strike. SEE ORDER FOR DETAILS. Signed by District Judge Monti L. Belot on 9/17/2012. (alm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
COFFEYVILLE RESOURCES REFINING &
MARKETING, LLC,

Plaintiff,
v.
LIBERTY SURPLUS INSURANCE
CORPORATION, ET AL.,

Defendants.

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CIVIL ACTION
No. 08-1204-MLB-KMH

MEMORANDUM AND ORDER
This matter is before the court on numerous motions in limine.
All

of

the

parties

seek

to

prohibit

the

admission

of

certain

evidence at trial. To the extent it can with the information before
it, the court will briefly rule on each motion. The court cautions
the parties, however, that nothing in this order will preclude the
admissibility

of

the

excluded

evidence

if

it

otherwise

becomes

relevant at trial. See Turley v. State Farm Mut. Ins. Co., 944 F.2d
669, 673 (10th Cir. 1991) (“The better practice would seem to be
that evidence of this nature … should await development of the
trial itself.”). By the same token, nothing said herein constitutes
a final ruling admitting evidence to which a valid objection is
made at trial.

1

PLAINTIFF’S MOTION IN LIMINE (Doc. 370).
Plaintiff’s motion to preclude insurer attacks upon damages as
unreasonable or excessive and defendants’ responses.
Plaintiff

contends

defendants

should

be

precluded

from

attempting to attack or reduce plaintiff’s flood damage settlements
as unreasonable, unnecessary or excessive. Doc. 371. It argues both
insurers denied coverage for the claims and are therefore bound by
plaintiff’s settlements. Citing inter alia Waugh v. American Cas.
Co., 190 Kan. 725, 733 (1963). Both insurers sent reservation-ofrights

letters,

but

plaintiff

argues

the

letters

were

invalid

because defendants effectively denied coverage and never tendered a
defense

or

made

payment

and

therefore

are

now

bound

by

the

settlements unless defendants can show the settlements were tainted
by

collusion

or

bad

faith.

Plaintiff

further

argues

defendants

waived any right to object to the settlements by failing to timely
raise objections as the claims were settled.
Plaintiff additionally contends Illinois Union (“Illinois”) is
precluded from challenging the settlements because it breached a
duty to defend plaintiff at least of September 23, 2008, when
Liberty Surplus tendered the final $15 million of its policy limits
and exhausted its primary coverage.
Illinois

seeks

to

have

plaintiff’s

motion

stricken

as

an

untimely dispositive motion and because it exceeds the allowable
page

limit.

(Docs.

407,

408).

Alternatively,
2

it

asks

for

an

extension of time to respond after the completion of discovery on
waiver and estoppel issues.
As for the merits of plaintiff’s arguments, Illinois contends
General Condition E of the Illinois policy precluded any duty to
defend plaintiff. (Doc. 408 at 4). It further says it never denied
coverage

for

indemnity

because

it

sent

a

reservation-of-rights

letter at the outset of plaintiff’s claim, and plaintiff’s motion
is therefore based on a faulty premise. Even if it had a duty to
defend,

Illinois

says

the

obligation

arose

no

earlier

than

September 2008.
Illinois further says plaintiff did not disclose the majority
of

its

cost

allocations

until

October

2011,

and

thus

Illinois

should be allowed its day in court to challenge those allocations.
Illinois contends a failure to defend on its part cannot prevent it
from challenging settlements because waiver and estoppel cannot
create or expand coverage.
National’s
plaintiff

is

position

improperly

is

similar

seeking

to

summary

Illinois.
judgment

It

too

and

a

argues
ruling

should be postponed until after completion of all discovery. (Doc.
406 at 2).
Turning to the merits, National contends it is not bound by
the settlements entered into by plaintiff. National points out it
could not have breached a duty to defend plaintiff because this
court previously determined National has no duty to defend under
3

the terms of the National policy. It also contends a denial of
coverage cannot expand the scope of coverage available to plaintiff
and does not prevent National from challenging the reasonableness
of the settlements. Finally, it contends plaintiff is attempting to
contradict

the

court’s

summary

judgment

ruling

that

there

were

questions of fact regarding covered versus uncovered damages.
As

discussed

below,

the

court

reserves

ruling

on

whether

Illinois breached a duty to defend plaintiff as of September 23,
2008.

But

it

rejects

plaintiff’s

argument

that

Illinois

and

National are thereby precluded from challenging the reasonableness
of plaintiff’s settlements. Kansas and Illinois law both allow an
insurance company which failed to defend to nevertheless challenge
the

reasonableness

Plaintiff’s

motion

of
in

settlements
limine

is

entered

into

therefore

by

the

denied

as

insured.
to

both

Illinois and National.
Illinois’ Duty to Defend; Breach.
A. Duty to defend. The Insuring Clause of the Illinois policy
provided coverage to plaintiff in accordance with the terms of the
followed (Liberty) policy “except as otherwise noted” and subject
to the terms and conditions of the Illinois policy. The Liberty
policy

required

potentially

Liberty

within

the

to

defend

policy’s

plaintiff

coverage

but

on

any

Liberty’s

claims
duty

to

defend ended upon exhaustion of the policy limits. Doc. 1-1 at 3.
The Illinois policy, in turn, provided in the event of exhaustion
4

of the Liberty policy the Illinois policy would “drop down” and
would “continue in force as primary insurance….” Doc. 86-6 at 3.
The

Illinois

policy

included

the

following

condition:

“Claim

Participation: The Insurer shall have the right, but not the duty,
and shall be given the opportunity to effectively associate with
the Insureds in the investigation, settlement or defense of any
Claim even if the Underlying Limit has not been exhausted.” Doc. 12 at 4 (General Condition E).
One can certainly argue that the Illinois policy is ambiguous
as to whether it promised a defense to plaintiff after exhaustion
of the underlying Liberty policy. Plaintiff was expressly promised
a defense in the Liberty policy and the Illinois policy generally
followed form to that policy. In the event of exhaustion of the
Liberty policy, the Illinois policy said it would drop down and
continue in force as primary coverage. These provisions together
could lead a reasonable insured to understand that Illinois was
obligated

to

provide

a

defense

once

the

Liberty

policy

was

exhausted.
Against this background, General Condition E arguably fails to
make

clear

any

contrary

intent.

The

awkward

punctuation

and

phrasing of Condition E makes it unclear what duty Illinois was
even talking about. The language seems to suggest the provision was
merely granting Illinois a right, but not a duty, to participate in
the claims process and defense while Liberty was still in charge of
5

the defense, and it thus granted “the right, but not the duty, … to
effectively associate with the Insureds” in the investigation and
defense “even if” the Liberty policy has not been exhausted.
As far as the duty to defend is concerned, one reasonable
construction may be that Illinois was undertaking no duty to defend
before

the

Liberty

policy

was

exhausted,

while

leaving

intact

Illinois’ duty to defend after exhaustion. See American Family Mut.
Ins. Co. v. Wilkins, 285 Kan. 1054, 1058-59, 179 P.2d 1104 (2008)
(“Because the insurer prepares its own contracts, it has a duty to
make the meaning clear. If the insurer intends to restrict or limit
coverage

under

language;

the

policy,

otherwise,

the

it

must

policy

use

will

be

clear

and

liberally

unambiguous
construed

in

policy

was

favor of the insured.”).
Judge

Brown

previously

determined

the

Liberty

exhausted once Liberty paid in its policy limits. See Doc. 299 at
17, 86. At that point – by September 23, 2008 – Illinois was
arguably

required

to

step

in

and

defend

plaintiff

on

claims

potentially within the policy coverage. See 14 Couch on Insurance §
200:38

(3rd

Ed.

2011)

(excess

insurer

not

obligated

to

defend

“until all primary insurance is exhausted or the primary insurer
has tendered its policy limits”). Despite that obligation, Illinois
apparently undertook no defense of plaintiff and took no active
part

in

subsequent

settlement

of

claims.

However,

a

definitive

ruling on that issue is not necessary at this time because: (1) of
6

the rulings below regarding defendants’ rights to challenge the
settlements and (2) it is not appropriate for a motion in limine,
which is intended to resolve evidentiary, not legal, issues. If
necessary, the matter of Illinois’ breach, if any, can be taken up
at a later date.
B. Consequences of Breach.
Plaintiff argues that Illinois is precluded as a matter of law
from

contesting

the

reasonableness

or

necessity

of

plaintiff’s

settlements. In support, plaintiff cites authority including the
Waugh case and this court’s July 19, 2012 Memorandum and Order. It
is true this court remarked that an insurer which fails to defend
“may

be

precluded”

from

challenging

the

reasonableness

of

settlements. (Doc. 358 at 4, 6)(citing Waugh and one other case).
But that statement was dicta, added to a discussion of whether
plaintiff could assert waiver and estoppel theories in the pretrial
order. The court was not deciding whether Illinois had breached a
duty

to

defend

nor

was

it

deciding

the

legal

consequences

of

breaching that duty. Those issues were simply not before the court
at that time and still aren’t. To the extent the parties may have
construed the court’s statement to say that an insurer which fails
to defend is barred from challenging the reasonableness of the
insured’s settlements (and the court apologizes for not being more
clear), that construction is not supported by Kansas or Illinois
law.
7

Waugh found an insured has a cause of action against its
insurer when it refuses coverage and the insured is forced to
settle claims within the policy’s coverage. Waugh, 190 Kan. at 177.
The court said the insurer in such circumstances “is bound by any
reasonable compromise or settlement made by the insured.” (emphasis
added). Waugh cited for support a Texas case involving an insurer’s
failure

to

defend,

in

which

the

court

rejected

the

insurer’s

challenge to an underlying settlement. The insurer unsuccessfully
argued

there

was

“an

absence

of

proof”

the

settlement

was

reasonable and necessary. (citing Southwestern Fire & Cas. Co. v.
Bendel, 321 S.W.2d 183, Headnote 3, (Tex.Civ.App. 1959)).
But Waugh did not hold an insurer’s failure to defend bars it
from presenting evidence to challenge the reasonableness of the
insured’s settlement. See also United Wats, Inc. v. Cincinnati Ins.
Co., 971 F.Supp. 1375, 1386 (D. Kan. 1997) (noting Waugh held
insurer is bound by a reasonable settlement). Nor does any other
Kansas case cited by plaintiff adopt such a rule. As National
points out, Kansas cases have applied the general rule that an
insurer’s denial of coverage or failure to defend means the insured
is free to settle directly with third parties, but the insurance
company is bound by a resulting settlement only if it is reasonable
and made in good faith. See e.g., Glenn v. Fleming, 247 Kan. 296,
318, 799 P.2d 79 (1990) (endorsing rule that settlement may be
enforced against the insurer “only if it is reasonable in amount
8

and entered into in good faith.”); Associated

Wholesale Grocers,

Inc. v. Americold Corp., 261 Kan. 806, 833, 934 P.2d 65 (1997)
(insurer’s lack of consent did not preclude enforcement of the
settlement “if the amount is reasonable”); Murphy v. Silver Creek
Oil & Gas, Inc., 17 Kan.App.2d 213, 837 P.2d 1319 (1992) (insurer’s
unjustified refusal to defend “does not obligate the insurer to pay
the amount of an unreasonable settlement or a settlement made in
bad faith.”); Aks v. Southgate Trust Co., 1994 WL 171537 (D. Kan.,
Mar. 31, 1994) (“An insurer's denial of coverage may be deemed to
permit the insured to settle with third parties, and the insurer is
bound by the settlement so long as it is reasonable in amount and
made in good faith.”).
Glenn

adopted

the

following

procedural

framework

for

determining whether a settlement is reasonable. First, the insured
has the burden of coming forward with evidence of the settlement’s
reasonableness. This is so because the insured has knowledge of the
operative facts surrounding the settlement. Glenn, 247 Kan. at 318.
At a minimum, it must come forward with enough information for the
district

court

to

make

an

independent

evaluation

of

the

reasonableness of the settlement. See Associated Wholesale Grocers,
261 Kan. at 841. Once the insured makes this showing, the insurer
bears the ultimate burden of persuasion to show the settlement was
not reasonable or was not made in good faith. See Glenn, 247 Kan.
at 318-19 (quoting Griggs v. Bertram, 88 N.J. 347, 368, 443 A.2d
9

163 (1982)). The determination of reasonableness is not to be a
trial on the merits of the underlying litigation. Expert testimony
summarizing

and

evaluating

the

strengths

and

weaknesses

of

the

parties’ positions may well be appropriate. Associated Wholesale
Grocers, 261 Kan. at 841.1
This approach is consistent with the general rule in leading
treatises. Thus, where an insurer fails to defend “the insurer will
be

liable

Insurance

for

any

Claims

&

reasonable
Disputes

settlement.”

(5th)

§6:29.

2

The

Allan

D.

insurer

Windt,

“can

deny

liability only to the extent that the settlement was excessive in
light of the facts known or reasonably available to the insured at
the time of the settlement,” with the burden generally on the
insurer to prove the settlement amount was unreasonable. Moreover,
“if

the

insured

paid

the

settlement

with

its

own

money,

the

settlement amount should be presumed to be reasonable.” See also 46
C.J.S. Insurance §1661 (“The amount paid in such settlement may be
recovered from the insurance company, at least to the extent that
it

is

made

in

good

faith

and

is

reasonable….”);

44

Am.Jur.2d

Insurance §1385 (“Such a settlement will be enforced against the
insurer, therefore, only if it is reasonable in amount and entered
1

The factors for evaluating reasonableness include: “‘[T]he releasing person's
damages; the merits of the releasing person's liability theory; the merits of
the released person's defense theory; the released person's relative faults; the
risks and expenses of continued litigation; the released person's ability to
pay; any evidence of bad faith, collusion, or fraud; the extent of the releasing
person's investigation and preparation of the case; and the interests of the
parties not being released.’ ” Associated Wholesale Grocers, 261 Kan. at 841
(citation omitted).

10

into in good faith, and while the initial burden of proving these
elements is on the insured, because of his or her control of the
case and access to information, the ultimate burden of persuasion
is on the insurer.”).
This

same

approach

is

consistent

with

Illinois

law.

See

Guillen ex rel. Guillen v. Potomac Ins. Co. of Illinois, 203 Ill.2d
141, 163, 271 Ill.Dec. 350, 785 N.E.2d 1 (2003) (“As a majority of
cases have recognized, the risk of collusion and fraud can be
lessened … by placing a requirement upon the plaintiff to prove
that the settlement it reached with the insured was reasonable
before

that

insurer”;
showing

settlement

insurer
of

can

retains

reasonableness

have

the

any

right

with

its

binding
to
own

effect

rebut

any

upon

the

preliminary

evidence);

Universal

Underwriters Ins. Co. v. LKO Smart Pants, Inc., 2011 Ill.App.(1st)
101723, 963 N.E.2d 930, 948-49, 357 Ill. Dec. 532 (2011) (remanding
for determination of reasonableness of settlement).
Finally,

the

same

general

rule

applies

when

an

insurer

contends it is not liable for a portion of a settlement which
resulted

from

non-covered

claims.

See

Kansas

Health

Care

Stabilization Fund. V. St. Francis Hosp., 41 Kan.App.2d 488, 203
P.3d 33 (2009)(citing 1 Windt, Insurance Claims and Disputes §
6:31); R.D. Hursh, Refusal of Liability Insurer to Defend Action
Against Insured Involving Both Claims Within Coverage of Policy and
Claims Not Covered, 41 A.L.R.2d 434, §3[c] (1955) (insurer who
11

fails to defend is liable for so much of compromise settlement as
is allocable to claims covered by the policy and for insured’s
expenses in negotiating the settlement). Whether settlements were
actually for covered claims depends on “how the parties to the
settlement viewed the relative merits of the plaintiff’s claims at
the time of settlement….” Aselco, 41 Kan.App.2d at 504 (quoting 1
Windt, Insurance Claims and Disputes §6:31, pp. 6-244 to 6-250 (5th
ed. 2007)).
A breach of the duty to defend may render the insurer liable
for

the

insured’s

resulting

damages,

including

defense

and

settlement costs. See Miller v. Westport Ins. Corp., 288 Kan. 27,
38, 200 P.3d 419 (2009); K.S.A. §40-256. See also K.S.A. 16-201. It
may estop the insurer from invoking policy defenses such as an
insured’s failure to cooperate or a failure to obtain the insurer’s
approval for settlement. See e.g., Traders & General Ins. Co. v.
Rudco Oil & Gas Co., 129 F.2d 621, 626 (10th Cir. 1942). But it does
not make the insurer liable for an unreasonable settlement or one
for claims outside the policy coverage. This rule follows from the
principle that waiver and estoppel cannot be used to expand the
coverage

of

an

insurance

policy.

Aselco, Inc. v. Hartford Ins. Group

See

Doc.

358

at

3.

See

also

28 Kan.App.2d 839, 851-852, 21

P.3d 1011, 1020 (Kan.App. 2001)(“Like Judge Lungstrum, we believe
the cases decided to this point mean our Kansas Supreme Court would
not adopt a bright line rule that insurers who fail to provide a
12

defense and reserve their rights are inevitably equitably estopped
from raising their coverage defenses. We are persuaded that an
insured in [plaintiff’s] position should not automatically reap
coverage without limits. [Defendant] is therefore free to argue in
the district court that, despite the breach of its duty to defend
and its failure to reserve rights, [the insured] did not contract
for coverage for this loss.”). Cf. Patrons Mut. Ins. Ass’n. v.
Harmon, 240 Kan. 707, 711, 732 P.2d 741 (1987) (where underlying
action proceeded to judgment, principles of collateral estoppel may
preclude

insurer

from

relitigating

facts

determined

in

prior

action).
Accordingly,

plaintiff’s

motion

in

limine

to

preclude

defendants from challenging the reasonableness of settlements will
be denied.
ILLINOIS’ MOTION IN LIMINE (Docs. 372, 373).
A.
between

Any

mention

Liberty

and

of

or

evidence

plaintiff,

and

relating
the

to

the

allocation

of

settlement
Liberty’s

settlement payment among coverage categories. Illinois argues the
allocation of payments agreed to between Liberty and plaintiff as
part of their settlement is not necessarily correct and should be
decided by the jury. It contends the Liberty settlement allocation
is irrelevant and says plaintiff must prove the proper allocation
at trial. (Doc. 373 at 3). Illinois says the correct allocation
matters because its policy is implicated only if Liberty paid $15
13

million for covered property damages. Illinois also asserts that
the Liberty settlement is inadmissible under Fed.R.Evid. 408.
Plaintiff opposes the motion, arguing evidence of the Liberty
settlement will cause no prejudice. It proposes to have the jury
determine

recoverable

amounts

of

damage

in

each

of

plaintiff’s

identified cost categories, followed by a separate proceeding where
the court determines which insurer must pay each category. (Doc.
403 at 2).
National, for its part, makes numerous arguments against any
attempt by Illinois to “undo” the Liberty settlement allocations.
Among other things, it argues Illinois is trying to nullify the
court’s

prior

summary

judgment

ruling,

which

found

the

Liberty

policy was exhausted by its 2008 payment of $15 million for covered
property damage claims.

Doc. 405.

Illinois’ motion will be taken under advisement. At this point
it is not clear to the court that the parties have thought through
how the evidence regarding damages will be presented. Plaintiff’s
cost categories, which appear to be the only practical method of
tracking

the

claims

and

payments

stemming

from

the

flood,

are

themselves tied to the policy provisions of the insurance policies.
Plaintiff

clearly

developed

the

categories

in

conjunction

with

Liberty as the primary insurer on the claims. If defendants intend
to challenge the reasonableness of plaintiff’s settlements, the
jury will have to consider all of the circumstances for plaintiff’s
14

actions,

including

its

explanation

for

developing

the

cost

categories and its allocations of payments under those categories.
And as National points out, plaintiff is now seeking recovery only
for its unreimbursed losses, meaning the Liberty settlement payment
allocations must be taken into account. Illinois has not shown that
evidence

of

plaintiff’s

settlement

and

allocation

of

Liberty

the

Liberty

payments is irrelevant.
Moreover,

the

court

doubts

that

evidence

of

settlement is the type which Rule 408 excludes. Illinois cites no
case which applies Rule 408 to the facts of this case. If Illinois
wants to pursue a Rule 408 argument, it must clarify its position
and cite relevant case authority.
The court notes Illinois argued on summary judgment that its
policy was not triggered because plaintiff failed to prove it had
more than $15 million in non-clean-up costs covered by the Liberty
policy. Doc. 299 at 17. Judge Brown rejected that argument, finding
plaintiff’s

summary

judgment

evidence

was

uncontroverted

and

sufficient to show “that the Liberty policy – including its $10
million sublimit [for clean-up costs] and $25 million aggregate
limit – has in fact been exhausted.” Doc. 299 at 85. This ruling
precludes Illinois from now claiming or attempting to show at trial
that the Liberty policy was not actually exhausted by payment of
$15 million in covered property damage claims.

15

B. Any opinion, interpretation or construction of insurance
policy

language

by

anyone,

including

both

expert

and

fact

witnesses, particularly regarding but not limited to the question
of what constitutes “property damage,” “clean-up costs,” “flood
damage,”

or

a

“claim.”

Illinois

argues

the

policy

language

is

unambiguous and is therefore a question of law for the court.
This motion will be denied. The court recognizes its duty to
construe the terms of the insurance policies and, depending on the
evidence, the court will instruct the jury regarding the applicable
policy terms it must consider. But defendants’ challenge to the
reasonableness of plaintiff’s settlements means plaintiff will be
entitled to fully explain its understanding of the liabilities it
was facing and the reasons for its settlements. The court cannot
say at this point what testimony about the insurance policies will
be helpful to the jury and will be relevant to the reasonableness
inquiry.
C. Any mention of, or evidence relating to, the fact that the
parties filed motions for summary judgment and the disposition of
those motions. This motion will be denied. The court will determine
at trial whether any reference to the summary judgment motions or
rulings is appropriate. The court notes the rulings could possibly
be relevant to the reasonableness of settlements made by plaintiff
after the summary judgment order. Plaintiff may be entitled to show

16

reasonableness

of

such

settlements

by

relying

on

standards

of

liability decided by Judge Brown in his summary judgment order.
D. Any references to the effect of the jurors’ answers to any
question submitted. The court agrees with plaintiff this motion is
vague. The specific questions for the jury have not been determined
and

the

court

explanation

the

cannot

decide

in

the

abstract

jury

should

be

given

what

regarding

or

the

how

much

effect

of

answers to questions.
E. Any reference to this motion and supporting memorandum;
that the motion has been presented to the court for ruling, and
granted or denied in whole or in part; that Illinois has sought to
exclude from proof any matter bearing on the issues in this case or
the rights of the parties to the suit; or that the court has
excluded proof of any particular matter.
The

motion

is

granted

in

part.

Any

testimony

specifically

referencing the motions in limine is likely irrelevant and will be
excluded. Any counsel seeking to invoke references to the motions
in limine should first seek a ruling from the court outside the
presence of the jury.

NATIONAL MOTIONS IN LIMINE (Docs.375-85).
A. Evidence regarding National’s financial condition. (Doc.
375). This motion is granted absent a prior showing that any such
evidence is relevant to any issue to be decided by the jury.
17

B.

Testimony

adjustment

costs

regarding
owed

by

any

defense

National.

(Doc.

obligation

or

376).

motion

This

claims
is

likewise granted in view of the court’s prior determination that
National owes no duty to defend.
C. Testimony regarding National’s alleged obligation to pay
fines or penalties incurred by plaintiff. (Doc. 377). The court
will rule on this issue if, as and when the matter is raised at
trial.
D.

Motion

to

bar

previously

allocated

378).

court

The

plaintiff

pursuant

will

reserve

from

seeking

to

recover

costs

the

Liberty

settlement.

(Doc.

to

ruling

on

this

issue

until

it

determines how allocation issues will be determined.
E. Motion to bar plaintiff from referring to National in a
perjorative or disparaging manner. (Doc. 379). The court has no
idea what National is talking about.
F. Motion to preclude issuance of press releases or media
statements. (Doc. 380). The motion is denied. National makes no
effort to show such an order comports with the First Amendment.
That having been said, the court cannot imagine why any party would
perceive any reason to exercise its First Amendment right to alert
the media about the case. Or, for that matter, why the media would
be interested.
G. Any reference to National Union as “AIG” or “Chartis”.
(Doc. 381). National states it is a member company of what was once
18

known as AIG and is now known as Chartis, Inc. But it says it is a
“separate insurance company which individually and independently
issued a policy to” plaintiff, and it argues any references to AIG
or

Chartis

confuse

the

would

be

jury.

factually

Plaintiff

incorrect

responds

and

that

would

some

mislead

of

and

defendant’s

adjusters were identified only as AIG employees. Doc. 404 at 3. The
court will deny the motion at this time with the admonition that
any unnecessary references to AIG or Chartis should be avoided so
as to avoid confusion. Evidence of the

relationship between these

companies may be relevant if it is necessary to clarify that a
particular witness or document is attributable to National.
H. Any evidence sought but denied to National during discovery
(Doc. 382). The motion identifies no such evidence. The motion is
therefore denied, subject to reconsideration if National shows that
some

specific

item

of

evidence

a

party

seeks

to

introduce

is

inadmissible under the Rules of Evidence.
I.

Any

witness

testimony

about

topics

which

they

were

instructed not to answer in their depositions. (Doc. 383). This
motion is denied as vague. The motion cites no specific item of
evidence that another party is likely to introduce.
J. Any evidence regarding plaintiff’s alleged acts of good
citizenship.

(Doc.

384).

National

objects

to

the

relevancy

and

prejudice from any suggestion that plaintiff’s response to the oil
release “was heroic and/or that [plaintiff] was a good corporate
19

citizen.” This motion will be denied given that a central issue for
trial appears to be whether plaintiff’s settlements were reasonable
in view of the liability it was facing. (Of course, if plaintiff is
foolish enough to declare itself “heroic” to the jury it may suffer
its own prejudice.) But the reasonableness inquiry may require an
examination

of

the

totality

of

the

circumstances

surrounding

plaintiff’s actions.
K. Motion to preclude evidence or argument regarding waiver or
estoppel and breach of contract claims, or, in the alternative,
motion to disqualify Lee Smithyman as trial counsel. (Doc. 385).
The court has not made a final ruling on the waiver and estoppel
issues.
As

to

Mr.

Smithyman,

the

court

will

need

to

know,

at

a

minimum, whether plaintiff intends to call Mr. Smithyman at the
jury

trial

and,

if

so,

the

precise

nature

of

his

anticipated

testimony. Similarly, defendants must specifically explain their
need, if any, to call Mr. Smithyman in their cases and state, in
detail, the evidence they believe only he can provide. It goes
without

saying

that

the

court

will

look

with

disfavor

on

any

attempt to disqualify Mr. Smithyman as a matter of trial strategy.
CONCLUSION.
The parties’ motions in limine (Docs. 370, 372, 375-85, 407)
are GRANTED IN PART, DENIED IN PART, or taken under advisement, as
set forth in this order.
20

National’s motion to conduct limited discovery (Doc. 361) has
been previously GRANTED.
IT IS SO ORDERED.
Dated this 17th day of September, 2012, at Wichita, Kansas.

s/Monti Belot
Monti L. Belot
UNITED STATES DISTRICT JUDGE

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