The Tenth Circuit published its opinion in Ryan Development Company v. Indiana Lumbermens Mutual Insurance Company on Wednesday, March 27, 2013.
This case arose from a fire that destroyed a Texas manufacturing facility in April 2009. The owner of the facility, Agriboard, manufactured building panels made of compressed straw. At the time of the fire, Agriboard was insured under a fire and related losses insurance policy issued by Indiana Lumbermens Mutual Insurance Company (“ILM”) with various coverages, including lost income. ILM paid $450,000. Agriboard sued ILM for breach of an insurance contract, and ILM paid $1.8 million. Agriboard continued to seek recovery under the policy, but ILM refused to pay the amount requested. Agriboard re-filed suit, seeking $2.4 million in unpaid coverage.
The jury awarded Agriboard $2,261,166 for breach of contract. ILM renewed its motion for judgment as a matter of law, or in the alternative, for a new trial, asserting four grounds for relief: (1) prejudicial remarks in Agriboard’s closing arguments; (2) confusing and inappropriate jury instructions; (3) inadmissible expert testimony; and (4) a verdict unsupported by the evidence. The trial court denied the motion. ILM appealed.
At issue on appeal was ILM’s motion for a new trial.
First, ILM argued it was entitled to a new trial because Agriboard’s accountants offered expert testimony after the trial court ruled in limine that such testimony was inadmissible. Because the district court admitted the accountants’ testimony under FRE 701, where a non-expert witness may offer opinions not based on scientific, technical, or other specialized knowledge within the scope of Rule 702, the Tenth Circuit held that the district court did not abuse its discretion in admitting the accountants’ testimony.
Second, ILM challenged certain jury instructions, asserting they were (1) inappropriate because Agriboard never elicited testimony that the policy was ambiguous, and (2) designed to confuse the jury. The Tenth Circuit’s review of the record confirmed the district court’s finding that the instructions on how to interpret an insurance policy and what to do when the policy and endorsement conflict were suitable for the jury.
Third, ILM argued a new trial was warranted because Agriboard’s counsel made improper remarks during closing arguments. The decision to grant a new trial based upon counsel’s misconduct is left largely to the discretion of the district court. A new trial is appropriate only if the moving party shows that it was prejudiced by the attorney misconduct. Because the jury was instructed that closing arguments are not evidence, any remarks were brief and unlikely affected Agriboard’s substantial rights, particularly given that the jury was instructed to follow the law as the judge explained.
Finally, ILM argued the verdict was not supported by the evidence. When a new trial motion asserts that the jury verdict is not supported by the evidence, the verdict must stand unless it is clearly, decidedly, or overwhelmingly against the weight of the evidence. Absent an award that shocks the judicial conscience or raises an irresistible inference that passion, prejudice, corruption or other improper cause played a part in the jury’s damage award, an appeals court will not disturb the jury’s damage award. Ample evidence was introduced at trial for the jury to conclude that ILM breached its contract. Thus, the trial court did not abuse its discretion.