Jamison et al v. Depositors Insurance Company

Filing 186

ORDER denying 168 Motion in Limine; granting in part and denying in part 171 Motion in Limine. The plaintiffs' motion in limine 168 is denied without prejudice. The defendant's motion in limine 171 is granted in part and denied in part. Ordered by Judge John M. Gerrard. (DCD)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
NELLE JAMISON and JOHN PAUL
JAMISON,
4:14-CV-3009
Plaintiffs,
vs.

ORDER

DEPOSITORS INSURANCE
COMPANY,
Defendant.
This matter is before the Court on motions in limine filed by the
plaintiffs (filing 168) and the defendant (filing 171). The plaintiffs' motion
will be denied in its entirety, without prejudice to reasserting those objections
at trial. The defendant's motion will be granted in part and denied in part, as
set forth below.
PLAINTIFFS' MOTION IN LIMINE
1.

Vieau Reports
The plaintiffs object to "[t]he Vieau reports dated August 13, 2013
(Trial Ex. 20), and August 28, 2013 (Trial Ex. 22) and any and all opinions
contained therein." Filing 168 at 1. "The foundation for this request is that
Depositors never had the Vieau letters at the time it made its decision to
deny the Jamison's claim. Indeed, the Vieau letters were not received until
AFTER Mike Stumberg and Depositors made a conclusive decision that the
Jamisons' claim would be denied." Filing 169 at 2.
This objection is overruled, without prejudice to reassertion at trial. In
considering whether an insurer acted in bad faith, the Nebraska Supreme
Court has looked at the adjustment process as being a series of denials. See
Radecki v. Mut. of Omaha, 583 N.W.2d 320, 325-27 (Neb. 1998); see also
LeRette v. Am. Med. Sec., Inc., 705 N.W.2d 41, 48-49 (Neb. 2005). The issues
in this case include whether there was an arguable basis for Depositors'
initial denial of coverage and whether there continued to be an arguable
basis for denial of coverage. The Vieau reports are relevant to the subsequent
denial of coverage, and will be admitted, subject to appropriate foundation at
trial and either appropriate redaction, or a limiting instruction, or both.

2.

Legal Opinions of Defendant's Counsel
The plaintiffs object to "[t]he legal opinion and any and all legal
opinions obtained by Depositors from both in house and outside counsel.
Filing 168 at 1. The Jamisons contend that "[n]one of the legal opinions have
been produced by Depositors, under claims of attorney client privilege." Filing
169 at 6.
This objection will be overruled without prejudice to reassertion at
trial, because it is not clear to the Court at this point what evidence is
expected to be adduced. Whether the defendant consulted with counsel
regarding the denial of the plaintiffs' insurance coverage may be relevant to
the plaintiffs' bad faith claim: while evidence of advice of counsel is
insufficient by itself to act as an affirmative defense to a bad faith claim,
seeking the advice of counsel may be relevant to such a claim. Graske v. AutoOwners Ins. Co., 647 F. Supp. 2d 1105, 1110 (D. Neb. 2009).
But generally, using advice of counsel as a defense implicitly waives
attorney-client privilege with respect to the communications upon which the
defense is based. See, Garcia v. Kids, No. 8:14CV119, 2016 WL 199413, at *3
(D. Neb. Jan. 15, 2016); GP Indus., LLC v. Eran Indus., Inc., No. 8:06CV50,
2006 WL 3290306, at *3 (D. Neb. Nov. 13, 2006); see also Sedco Int'l, S. A. v.
Cory, 683 F.2d 1201, 1206 (8th Cir. 1982). "The attorney client privilege
cannot be used as both a shield and a sword," and a party cannot claim in its
defense that it relied on advice of counsel without permitting the opposing
party to explore the substance of that advice. United States v. Workman, 138
F.3d 1261, 1264 (8th Cir. 1998); accord, United States v. Beckman, No. CRIM.
11-228, 2012 WL 1870247, at *1-2 (D. Minn. May 22, 2012); Sedillos v. Bd. of
Educ. of Sch. Dist. No. 1 , 313 F. Supp. 2d 1091, 1093 (D. Colo. 2004). And
that principle is implicated when an insurer uses consultation of counsel as
evidence that it did not deny coverage in bad faith. See Lee v. Med. Protective
Co., 858 F. Supp. 2d 803, 808-09 (E.D. Ky. 2012). As the Maryland Court of
Appeals has said in a similar context,
[W]hat defendants cannot do is defend a charge of bad faith by
referencing specific communications with attorneys that
purportedly provided a good-faith basis for certain actions, and
then refuse to allow any further investigation into those
communications. This is because allowing a defendant to make
the naked assertion that they consulted with their attorneys
leaves the fact finder with the impression that they had shown
good faith even in a situation where they had not. Such tactics
would allow the defendant to use the attorney-client
communication to his benefit and then refuse to answer more
-2-

questions about it. This would be an abuse of the privilege—using
it both as a sword and a shield.
CR-RSC Tower I, LLC v. RSC Tower I, LLC, 56 A.3d 170, 207 (Md. 2012)
(citations, quotations, and emphasis omitted); see United States v. Bilzerian,
926 F.2d 1285, 1294 (2d Cir. 1991).
But it is not clear, at this point, whether the evidence to be expected at
trial will present the defendant's consultation with counsel as a defense in a
manner that implicates the attorney-client privilege with respect to the
substance of that consultation. Accordingly, the plaintiffs' objection is
overruled: the Court will rule on any objections presented at trial,
considering the principles set forth above.
DEFENDANT'S MOTION IN LIMINE
1.
Use of Insurance Slogans
The defendant objects to "[a]ny statement or argument intended to
inflame or arouse feelings of hostility or resentment to Depositors Insurance
Company" or "Nationwide Insurance," or "to use any advertising or
advertising slogans in a derogatory manner." Filing 171 at 1. The defendant's
primary concern, expressed at argument on the motions, is the use of
advertising slogans such as Nationwide's in argument to the jury. The
plaintiffs represent that they do not intend to make such an argument;
therefore, the objection is sustained: the plaintiffs are directed not to make
use of the defendant's advertising slogans, or other insurance company
advertising.
2.

Relative Size and Wealth of Parties
The defendant objects to "[a]ny statement or argument related to the
difference in status, size, and strength of the plaintiffs as individuals and
Depositors Insurance Company as a corporation." Filing 171 at 1. The
plaintiffs do not oppose the objection, so long as it goes both ways, and the
defendant also refrains from discussing the plaintiffs' financial resources. On
those terms, the objection is sustained: neither party shall refer to the size or
wealth of the other party.
3.

Prior Rulings of Court
The defendant objects to "[a]ny reference to the prior rulings of the
Court in this lawsuit, including as to prior rulings on any of Defendant's
affirmative defenses." Filing 171 at 1. The plaintiffs represent that they
intend no such reference. Accordingly, the objection is sustained.

-3-

4.

"Golden Rule"
The defendant objects to "[a]ny statement or argument asking the
jurors to place themselves in the position of the plaintiffs and imagine their
feelings, motivations, intentions, or emotions." Filing 171 at 2. The objection
is sustained: neither party shall make so-called "Golden Rule" arguments.
See United States v. Palma, 473 F.3d 899, 902 (8th Cir. 2007).
5.

"Send a Message" argument
The defendant objects to "[a]ny reference to 'sending a message' to
Depositors Insurance Company." Filing 171 at 2. The plaintiffs do not resist
the objection, and it is sustained. See, Caudle v. D.C., 707 F.3d 354, 361 (D.C.
Cir. 2013); Smith v. Kmart Corp., 177 F.3d 19, 26-27 (1st Cir. 1999).
6.

Surprise Evidence as to Source of Water
The defendant objects to "[a]ny evidence regarding the source of the
water leak other than what plaintiffs disclosed in discovery." Filing 171 at 2.
That objection is sustained: the plaintiffs are directed not to present any
"surprise" evidence as to another source for the water that flooded the
plaintiffs' house.
7.

Evidence of Second Floor Leak
The defendant objects to "[a]ny reference to a second-floor source for
the water leak in Plaintiffs' dwelling, and any reference regarding the
discoloration of wood shakes as a result of a second-floor source for the water
leak" without the proper foundational support. Filing 171 at 2; filing 172 at 4.
This objection is overruled without prejudice: the Court will take this subject
up when ruling on the parties' objections to designated deposition testimony.
8.

Other Complaints about Defendant
The defendant objects to "[p]rior grievances, complaints, or suits
against Defendant in any manner related to other claims or actions by the
plaintiffs or others." The plaintiffs do not oppose this objection, and it is
sustained. See, W.V. Realty, Inc. v. N. Ins. Co., 334 F.3d 306, 315 (3d Cir.
2003); Jones v. Auto. Ins. Co., 917 F.2d 1528, 1537 (11th Cir. 1990).
9.

Tibble Opinion on Repair or Reconstruction.
Defendant objects to "[t]estimony by William Tibble as to what he
would have done relating to repair or reconstruction of the Plaintiffs'
seasonal home." Filing 171 at 2. This objection is overruled without prejudice:
the Court will take this subject up when ruling on the parties' objections to
designated deposition testimony.
-4-

10.

Claims Practices
Defendant objects to "[a]ny evidence relating to claims practices or the
Unfair Insurance Claims Settlement Practices Act (or failure to comply with
same)." Filing 171 at 2. The plaintiffs represent that they do not intend to
present testimony or argument based on the Nebraska Unfair Insurance
Claims Settlement Practices Act, Neb. Rev. Stat. §§ 44-1536 to 44-1544, but
do intend to adduce evidence relating to the defendant's "property best claims
practices" manual, which appear to be marked as Exhibits 41 and 42.
This objection is sustained in part and overruled in part: the plaintiffs
may adduce evidence relating to the "best practices" manual, but not as to the
Unfair Insurance Claims Settlement Practices Act.
11.

Defendant's Reserves
The defendant objects to "[a]ny reference to whether or not the
Defendant has set any reserves for this loss or any discussion of the amount
of any potential reserve." Filing 171 at 2. The plaintiffs do not oppose this
objection, and it is sustained.
12.

Settlement Discussions
The defendant objects to "[r]eference to any settlement discussions that
may have occurred between the parties, when said discussions may have
occurred, or the lack of any settlement offer from Depositors." Filing 171 at 2.
The defendant refers specifically to demand letters sent by plaintiffs' counsel
to the defendant, marked as Exhibits 28 and 29. Filing 172 at 7.
The plaintiffs represent that although Exhibits 28 and 29 have been
marked, they do not intend to actually offer them into evidence, but that they
do intend to adduce evidence of the claims process, i.e., that demands were
made of the defendant, and the defendant's responses to those demands.
With that understanding, this objection is overruled, but at this point,
Exhibits 28 and 29 would not, if offered, be accepted into evidence.
13.

Comment on Redactions
The defendant objects to "[a]ny reference to or comment upon any
redaction contained in an exhibit, any inference to be drawn from the
existence of the redaction, or any speculation as to what was redacted." Filing
171 at 2. That objection will be sustained.
14.

Evidence of Replacement Cost
The defendant objects to "[a]ny evidence regarding the replacement
cost of any property damaged in the water leak discovered on May 15, 2013
which has not been replaced." Filing 171 at 2. The argument on the motion
-5-

focused on evidence of the purchase price or replacement cost of personal
property damaged in the flooding.
It is well-established in Nebraska that the opinion of a personal
property owner is competent evidence of its value, solely because of his or her
status as owner. See, e.g., Kristensen v. Reese, 371 N.W.2d 319, 320 (Neb.
1985); Jeffres v. Countryside Homes of Lincoln, Inc., 367 N.W.2d 728, 731
(Neb. 1985); Borden v. Gen. Ins. Co. of Am., 59 N.W.2d 141, 144-45 (Neb.
1953). And the purchase price of the property is an appropriate part of the
foundation for such an opinion. See, Peck v. Masonic Manor Apartment Hotel,
278 N.W.2d 589, 594 (Neb. 1979); State v. Rush, 275 N.W.2d 834, 836 (Neb.
1979); Cox v. Greenlease-Lied Motors, 277 N.W. 819, 821 (Neb. 1938); see
Meisner v. Patton Elec. Co., 781 F. Supp. 1432, 1446 (D. Neb. 1990).
In sum, the plaintiffs may opine as to the value of their personal
property, and the purchase price or replacement cost of that property may
serve as a "starting point" for that opinion. This objection is overruled.
15.

Evidence as to the Meaning of Policy Language
The defendant objects to "[e]vidence regarding the meaning of any
particular law or any particular provision or word contained in the insurance
policy." Filing 171 at 3. This objection is sustained in part and overruled in
part: while a layperson cannot be asked to define the terms in an insurance
policy, an insurance policy claims adjuster can be asked, particularly with
reference to a bad faith claim, to explain his or her understanding of what an
insurance policy required.
This ruling is not meant to preclude any witness from explaining what
they meant by their own use of a word in a document or prior testimony.
16.

Time to Progress to Trial
The defendant objects to "[a]ny reference to the time it took for the
lawsuit to progress to trial. Filing 171 at 3. The plaintiffs do not oppose this
objection, and it is sustained.
17.

Reference to INSPRO as defendant's agent
The defendant objects to "[a]ny reference to INSPRO as Defendant's
agent or acting on behalf of Defendant, as opposed to Plaintiffs' agent or
acting on behalf of Plaintiffs, for any purpose other than the receipt of the
notice of loss." Filing 171 at 3. At argument on the motions, it became
apparent that the purpose of the objection was to preclude any argument by
the plaintiffs that representations made to them by INSPRO were, in fact,
attributable by agency principles to the defendant. The plaintiffs, as the
Court understands their representations, do not intend such argument.
-6-

Accordingly, on that understanding, this objection is sustained, and
neither party shall refer to INSPRO as an agent of the defendant.
IT IS ORDERED:
1.

The plaintiffs' motion in limine (filing 168) is denied
without prejudice.

2.

The defendant's motion in limine (filing 171) is granted in
part and in part denied.

Dated this 22nd day of August, 2016.
BY THE COURT:

John M. Gerrard
United States District Judge

-7-