State Farm Fire & Casualty Company v. Miller

Filing 27

MEMORANDUM OPINION re 22 MOTION in Limine . IT IS ORDERED that the plaintiffs motion in limine (Doc. 22) is GRANTED in part. Signed by Magistrate Judge Martin C. Carlson on March 7, 2017. (kjn)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
STATE FARM FIRE &
CASUALTY CO.,

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Plaintiff
v.
DAVID MILLER,
Defendant

Civil No. 1:16-CV-1974

(Magistrate Judge Carlson)

MEMORANDUM OPINION
I.

INTRODUCTION
This civil action comes before us for resolution of a motion in limine (Doc.

22), filed by the plaintiff, State Farm Fire & Casualty Company, which seeks to
define the scope of damages evidence in this insurance subrogation case. With
respect to this motion, the pertinent facts are as follows:
This is a subrogation action brought by State Farm against David Miller
arising out of a fire damage claim relating to an October 9, 2014 accidental fire at
431 and 433 3d. Street, Steelton, Pennsylvania. On October 9, 2014, David Miller
resided at 433 3d. Street. State Farm’s insured, in turn, lived at 431 3d. Street. It
is alleged that, on October 9, 2014, a kitchen fire started at Miller’s residence due

to the defendant’s negligence. That fire then spread to the adjoining property
causing damages which State Farm was obliged under its insurance policy to
reimburse for its insured. These insurance reimbursements made by State Farm
allegedly totaled approximately $255,000 and included repair costs for damages to
431 3d. Street, which amounted to $107,545.00.

It is this component of the

payments made by State Farm, which it seeks to recover from Miller in this
subrogation action, that is the subject of the instant motion in limine.
In its motion, State Farm argues that, under Pennsylvania law, the proper
measure of damages in this property damage case is the cost of repair for the
property, $107,545.

Asserting a belief that Miller may attempt to introduce

evidence relating to the depreciated value, or actual cash value of the property
located at 431 3d. Street, evidence which State Farm argues would confuse the
jury, State Farm seeks a pretrial ruling excluding any such evidence from the trial
of this case. (Docs. 22 and 23) For his part, Miller has responded to this motion in
limine by conceding that the jury should not be presented with “bald valuations
made by some insurance adjuster,” but argues that in some instances measures of
loss beyond repair costs may be appropriate, and seeks leave to present such
evidence of alternate loss measurements at trial.
Upon consideration of the positions of the parties, for the reasons set forth
below, the motion in limine will be granted, in part, and denied, in part, and we
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will conditionally preclude the defendant from presenting evidence regarding
matters extraneous to the cost of repair, unless the defendant makes an offer of
proof which shows that the proffered evidence satisfies the alternate measure of
damages accepted by Pennsylvania courts; that is, the defendant proffers evidence
which tends to show that the market value of the property was less than the cost of
repairs.
II.

DISCUSSION
A.

Legal Standards-Motion in Limine

The Court is vested with broad inherent authority to manage its cases, which
carries with it the discretion and authority to rule on motions in limine prior to trial.
See Luce v. United States, 469 U.S. 38, 41 n.4 (1984); In re Japanese Elec. Prods.
Antitrust Litig., 723 F.2d 238, 260 (3d Cir. 1983), rev’d on other grounds sub
nom., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (the
court exercises its discretion to rule in limine on evidentiary issues “in appropriate
cases”). Courts may exercise this discretion in order to ensure that juries are not
exposed to unfairly prejudicial, confusing or irrelevant evidence. United States v.
Romano, 849 F.2d 812, 815 (3d Cir. 1988). Courts may also do so in order to
“narrow the evidentiary issues for trial and to eliminate unnecessary trial

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interruptions.” Bradley v. Pittsburgh Bd. of Educ., 913 F.2d 1064, 1069 (3d Cir.
1990) (citation omitted). However, courts should be careful before doing so.
In considering motions in limine which call upon the Court to engage in
preliminary evidentiary rulings under Rule 403 of the Federal Rules of Evidence,
we begin by recognizing that these “evidentiary rulings [on motions in limine] are
subject to the trial judge's discretion and are, therefore, reviewed only for abuse of
discretion ... Additionally, application of the balancing test under Federal Rule of
Evidence 403 will not be disturbed unless it is ‘arbitrary and irrational.’ ” Abrams
v. Lightolier Inc. 50 F.3d 1204, 1213 (3d Cir.1995) (citations omitted); see
Bernardsville Bd. of Educ. v. J.H., 42 F.3d 149, 161 (3d Cir.1994) (reviewing in
limine rulings for abuse of discretion). Yet, while these decisions regarding the
exclusion of evidence rest in the sound discretion of the district court, and will not
be disturbed absent an abuse of that discretion, the exercise of that discretion is
guided by certain basic principles.
One of the key guiding principles is reflected in the philosophy which
shapes the rules of evidence.

The Federal Rules of Evidence can aptly be

characterized as evidentiary rules of inclusion, which are designed to broadly
permit fact-finders to consider pertinent factual information while searching for the
truth. The inclusionary quality of the rules, and their permissive attitude towards
the admission of evidence, is embodied in three cardinal concepts. The first of
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these concepts is Rule 401's definition of relevant evidence. Rule 401 defines what
is relevant in an expansive fashion, stating:
“Relevant evidence” means evidence having any
tendency to make the existence of any fact that is of
consequence to the determination of the action more
probable *197 or less probable than it would be without
the evidence.
Fed. R. Evid. 401.
Adopting this broad view of relevance it has been held that: “Under [Rule]
401, evidence is relevant if it has ‘any tendency to make the existence of any fact
that is of consequence to the determination of the action more probable or less
probable than it would be without the evidence.’ [Therefore] ‘It follows that
evidence is irrelevant only when it has no tendency to prove the fact. Thus the
rule, while giving judges great freedom to admit evidence, diminishes substantially
their authority to exclude evidence as irrelevant.’ ” Frank v. County of Hudson,
924 F. Supp. 620, 626 (D.N.J.1996) citing Spain v. Gallegos, 26 F.3d 439, 452 (3d
Cir.1994) (quotations omitted).
This quality of inclusion embraced by the Federal Rules of Evidence,
favoring the admission of potentially probative proof in all of its forms, is further
buttressed by Rule 402, which generally defines the admissibility of relevant
evidence in sweeping terms, providing that:

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All relevant evidence is admissible, except as otherwise
provided by the Constitution of the United States, by Act
of Congress, by these rules, or by other rules prescribed
by the Supreme Court pursuant to statutory authority.
Evidence which is not relevant is not admissible.
Fed. R. Evid. 402.
Thus, Rule 402 expressly provides that all “[r]elevant evidence will be
admissible unless the rules of evidence provide to the contrary.” United States v.
Sriyuth, 98 F.3d 739, 745 (3d Cir.1996) (citations omitted). While these principles
favoring inclusion of evidence are subject to some reasonable limitations, even
those limitations are cast in terms that clearly favor admission of relevant evidence
over preclusion of proof in federal proceedings. Thus, Rule 403, which provides
grounds for exclusion of some evidence, describes these grounds for exclusion as
an exception to the general rule favoring admission of relevant evidence, stating
that:
Although relevant, evidence may be excluded if its
probative value is substantially outweighed by the
danger of unfair prejudice, confusion of the issues, or
misleading the jury, or by considerations of undue delay,
waste of time, or needless presentation of cumulative
evidence.
Fed. R. Evid. 403 (emphasis added).
By permitting the exclusion of relevant evidence only when its probative
value is “substantially outweighed” by other prejudicial factors, Rule 403

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underscores the principle that, while evidentiary rulings rest in the sound discretion
of the court, that discretion should consistently be exercised in a fashion which
resolves all doubts in favor of the admission of relevant proof in a proceeding,
unless the relevance of that proof is substantially outweighed by some other factors
which caution against admission.
These broad principles favoring the admission of relevant evidence also
shape and define the scope of this Court's discretion in addressing motions in
limine like those filed by the parties here, which seek a pre-trial ruling excluding
evidence largely on relevance and prejudice grounds. In the past the United States
Court of Appeals for the Third Circuit has cautioned against such preliminary and
wholesale exclusion of evidence, noting that it has “made clear that rulings
excluding evidence on Rule 403 grounds should rarely be made in limine.”
Walden v. Georgia–Pacific Corp., 126 F.3d 506, 518 n. 10 (3d Cir.1997). The
reason for this caution is evident: oftentimes a court “cannot fairly ascertain the
potential relevance of evidence for Rule 403 purposes until it has a full record
relevant to the putatively objectionable evidence.” Id.; see also In re Diet Drugs
Products Liability Litigation, 369 F.3d 293, 314 (3d Cir.2004).
The Third Circuit has thus cautioned that “pretrial Rule 403 exclusions
should rarely be granted. . . . Excluding evidence as being more prejudicial than
probative at the pretrial stage is an extreme measure that is rarely necessary,
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because no harm is done by admitting it at that stage.” In re Paoli R. Yard PCB
Litig., 916 F.2d 829, 859 (3d Cir. 1990); see also Spain v. Gallegos, 26 F.3d 439,
453 (3d Cir. 1994) (noting that the Third Circuit’s “cautious approach to Rule 403
exclusions at the pretrial stage . . . .”).

Moreover, the Third Circuit has

characterized Rule 403 as a “trial-oriented rule” such that “[p]recipitous Rule 403
determinations, before the challenging party has had an opportunity to develop the
record, are . . . unfair and improper.” In re Paoli R. Yard PCB Litig., 916 F.2d at
859.
Accordingly, the principles which guide our consideration of motions in
limine that seek the exclusion of evidence on Rule 402 relevance or Rule 403
undue prejudice grounds consistently urge that courts to exercise their broad
discretion sparingly in this field, and avoid precipitous pre-trial rulings excluding
evidence on these relevance and prejudice grounds. It is against the backdrop of
these guiding legal tenets that we consider the parties’ motions in limine.
B.

The Plaintiff’s Motion In Limine Will Be Granted in Part

As we have observed, in its motion in limine, State Farm argues that, under
Pennsylvania law, the proper measure of damages in a property damage case is the
coast of repair for the property, $107,545. Asserting a belief that Miller may
attempt to introduce evidence relating to the depreciated value, or actual cash value
of the property located at 431 3d. Street, evidence which State Farm argues would
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confuse the jury, State Farm seeks a pretrial ruling excluding any such evidence
form the trial of this case. (Docs. 22 and 23)
As a federal court exercising diversity jurisdiction in this case, we are
obliged to apply the substantive law of Pennsylvania to this dispute. Chamberlain
v. Giampapa, 210 F.3d 154, 158 (3d. Cir. 2000). In this case, the parties appear to
agree that the legal standards governing recoverable damages in real property
injury cases are those articulated by the Supreme Court of Pennsylvania in
Pennsylvania Dep't of Gen. Servs. v. U.S. Mineral Prod. Co., 587 Pa. 236, 246,
898 A.2d 590, 596 (2006), where the Court stated that: “In Pennsylvania, the
general measure of damages for permanent harm to real property is the diminution
in market value attributable to the conduct, product, or instrumentality giving rise
to liability, and in situations in which the harm is reparable, damages are assessed
according to the lesser of the cost of repair or the market value of the affected
property. See Lobozzo v. Adam Eidemiller, Inc., 437 Pa. 360, 369 & n. 6, 263 A.2d
432, 437 & n. 6 (1970).” Pennsylvania Dep't of Gen. Servs. v. U.S. Mineral Prod.
Co., 587 Pa. 236, 246, 898 A.2d 590, 596 (2006).
This guiding tenet of Pennsylvania law, which is conceded by all parties in
this case, dictates the course we should follow in addressing this motion in limine,
as it relates to State Farm’s efforts to recover the cost of repairs on its insured’s
real property.

Given Pennsylvania case law that cost of repair is the proper
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measure of damages, unless the market value of the property is less than the cost of
repair. Id. Therefore, consistent with this settled tenet of Pennsylvania law, we
will grant this motion in limine in part, and conditionally preclude the defendant
from presenting evidence regarding matters extraneous to the cost of repair, unless
the defendant makes an offer of proof which shows that the proffered evidence
satisfies the alternate measure of damages accepted by Pennsylvania courts; that is,
the defendant proffers evidence which tends to show that the market value of the
property was less than the cost of repairs. If the defendant intends to rely upon
such evidence to argue for a lesser measure of loss in this case, that evidence and
any expert analysis of that evidence, must be disclosed in accordance with the case
management schedule previously set by the Court.
An appropriate order follows:
III.

ORDER
In accordance with the foregoing memorandum, IT IS ORDERED

that the plaintiff’s motion in limine (Doc. 22) is GRANTED in part, in that the
defendant is conditionally precluded from presenting evidence regarding matters
extraneous to the cost of repair, unless the defendant first makes an offer of proof
at trial which shows that the proffered evidence satisfies the alternate measure of
damages accepted by Pennsylvania courts in property damage cases; that is, the
defendant proffers evidence which tends to show that the market value of the
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property was less than the cost of repairs. If the defendant intends to rely upon
such evidence to argue for a lesser measure of loss in this case, that evidence and
any expert analysis of that evidence, must be disclosed in accordance with the case
management schedule previously set by the Court.
So ordered this 7th day of March, 2017.

s/Martin C. Carlson
Martin C. Carlson
United States Magistrate Judge

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