Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_99-cv-05583/USCOURTS-caed-1_99-cv-05583-18/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

UNITED STATES FIDELITY &

GUARANTY COMPANY, a Maryland

corporation,

Plaintiff,

v.

LEE INVESTMENTS LLC d.b.a THE

ISLAND, a California limited

liability company and DIANA

CONLEY, an individual,

Defendants.

________________________________

AND RELATED COUNTERCLAIMS,

CROSS-CLAIMS AND THIRD-PARTY

COMPLAINTS.

 

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1:99-cv-5583 OWW SMS

ORDERS ON LEE INVESTMENT

LLC’S MOTIONS IN LIMINE

MOTION NO. 1 = DOC. NO. 423

MOTION NO. 2 = DOC. NO. 424

MOTION NO. 3 = DOC. NO. 425

MOTION NO. 4 = DOC. NO. 426

MOTION NO. 5 = DOC. NO. 427

MOTION NO. 6 = DOC. NO. 428

MOTION NO. 7 = DOC. NO. 429

MOTION NO. 8 = DOC. NO. 431

MOTION NO. 9 = DOC. NO. 432

MOTION NO. 10= DOC. NO. 439

MOTION NO. 11= DOC. NO. 441

MOTION NO. 12= DOC. NO. 442

MOTION NO. 13= DOC. NO. 443

MOTION NO. 14= DOC. NO. 444

MOTION NO. 15= DOC. NO. 445

MOTION NO. 16= DOC. NO. 446

MOTION NO. 17= DOC. NO. 447

MOTION NO. 18= DOC. NO. 448

MOTION NO. 19= DOC. NO. 449

Lee Investment LLC’s (“Lee”) Motions in Limine came on

regularly for hearing before the undersigned on January 12, 17,

and 18, 2007. Having considered the papers, evidence, and

arguments submitted in support and in opposition to the motions,

and good cause appearing,

IT IS ORDERED as follows:

1. Lee’s Motion in Limine No. 1 is denied insofar as it

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seeks to dismiss this action at this time for lack of subject

matter jurisdiction, but United States Fidelity & Guaranty

Company (USF&G) shall be required to establish subject matter

jurisdiction at trial.

2. Lee’s Motion in Limine No. 2 is denied upon counsel for

USF&G and American Specialty Insurance Services, Inc. (ASI)

confirming the conditional stipulation of the parties that a

judgment against American Specialty Insurance Services, Inc.,

will include American Specialty Insurance & Risk Services, Inc. 

Otherwise the motion is granted and the new party should be

substituted for ASI. The parties further stipulated that

reference to “American Specialty Insurance Services, Inc.” during

the trial will include reference to “American Specialty Insurance

& Risk Services, Inc.” and it is so ORDERED.

3. Lee’s Motion in Limine No. 3 is granted without

prejudice to the parties making a showing outside the presence of

the jury that Mr. Ehrlich’s conviction is relevant and that the

probative value of it substantially outweighs the prejudicial

effect and that this is one of the very rare and exceptional

circumstances that warrant admitting evidence of a thirty-year

old conviction.

4. Lee’s Motion in Limine No. 4 is granted in part and

denied in part. Upon proper foundation, the Fresno Bee article

in question may be admitted in its redacted form as attached

hereto. If further foundation is properly laid outside the

presence of the jury as to the relevance and admissibility of the

redacted language, then it may be admitted into evidence.

5. Lee’s Motion in Limine No. 5 is granted in part and

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denied in part. USF&G/ASI and Aon may make inquiry into Ms.

Ehrlich’s relevant experience in litigating insurance cases The

actual pleadings related to these disputes shall not be

introduced into evidence, but may be used for impeachment and/or

to refresh recollection.

6. Lee’s Motion in Limine No. 6: Withdrawn experts are the

subject of a separate stipulation of the parties and Lee’s Motion

in Limine No. 6 is therefore withdrawn.

7. Lee’s Motion in Limine No. 7 is granted. Zygner’s

report is not relevant and contains inadmissible hearsay. It was

never provided to Lee until discovery in this matter, thus it

cannot serve as the basis for what Lee knew or did not know

regarding the reasons for cancellation of the Industrial

Indemnity policy. The parties are free to admit testimony from

Zygner as far as what he observed. The report may be used to

refresh recollection if Zygner testifies. To the extent that any

party can show the report was in the possession of or reviewed by

any other party, the report may be admissible against the party

that had possession of the report and/or reviewed it, subject to

further rulings by the Court. Upon proper foundation, portions

may be read into evidence, but it will be considered on a

paragraph by paragraph basis. Otherwise, the report is

inadmissible.

8. Lee’s Motion in Limine No. 8 is granted. The OSHA

report is not admissible and its exhibits/attachments, including

the citation, are not admissible. They are irrelevant since the

mechanism of Conley’s accident is not an issue herein as

discussed in more detail in the Court’s Order on Lee’s Motion in

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Limine No. 14. The parties stipulate to the following: “On

February 22, 1999, at approximately 1:00 p.m., Diana Conley

received serious head and neck injuries when a ‘spreader bar’

used for lifting large fiberglass water slide sections, fell on

her back and neck. The incident occurred in a maintenance and

storage yard outside the main park.

9. Lee’s Motion in Limine No. 9 is granted. Lee’s

accident reports are not admissible. They are hearsay and

irrelevant since the mechanism of Conley’s accident is not an

issue herein as discussed in more detail in the Court’s Order on

Lee’s Motion in Limine No. 14 below (they may be used to refresh

witnesses recollection and/or impeach, but shall not be

admitted). 

10. Lee’s Motion in Limine No. 10 is denied without

prejudice to Lee objecting to the introduction by any party of

forms, policies, rules and procedures of USF&G, the program

Manual, and ASI’s Underwriting Manual referenced at pages 4 and

15 of the Producer Agreement between Underwriters and American

Specialty Consortium to the extent such documents are not on the

exhibit list or are on the exhibit list but were not previously

produced if request was made for their production. 

11. Lee’s Motion in Limine No. 11 is denied. On a related

matter, the Court finds that there is no dispute that ASI was the

managing general agent for USF&G and for the policy in dispute,

but the scope of ASI’s authority and whether ASI assumed duties

to Lee remains in issue.

12. Lee’s Motion in Limine No. 12 is granted in part and

denied in part. The pleadings concerning the litigation between

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Rexford Development Corporation (“Rexford”) and Lee Investments,

LLC, on the one hand, and Whitewater West Industries, LTD

(“Whitewater”) on the other hand are inadmissible. The parties,

however, may offer testimony concerning the dispute between

Whitewater and Rexford and Lee, and the settlement of the same. 

USF&G, ASI, and/or Aon may, if the document is otherwise

admissible, also introduce into evidence the statement in the

“Outline Settlement Agreement” between Rexford Properties, LLC

and Whitewater West Industries, LTD that reads,

“Any and all additional construction required to finish

the construction of the slides and/or appurtenances of

the slides to receive code approval including a

permanent certificate of occupancy will be the

responsibility of Rexford Properties, LTD. Whitewater

West Industries, LTD will have no further

responsibility to construct, fabricate, or assemble,

any structures at the facility “The Island.”

And USF&G, Aon and ASI may introduce a sufficient number of

additional pages of the Settlement Agreement to allow a witness

to authenticate it, and to make the document, and the context of

the dispute and settlement, understandable to the jury.

13. Lee’s Motion in Limine No. 13 is granted as to Paul

Leslie’s letter dated June 25, 1998, to Richard Ehrlich and Geoff

Chutter’s letter dated February 24, 1999, to Richard Ehrlich. It

is denied as to Paul Leslie’s letter dated August 12, 1998, to

Richard Ehrlich, Lisa Ehrlich’s letter dated August 12, 1998, to

Paul Leslie, and Lisa Ehrlich’s letter dated October 28, 1998, to

Paul Leslie. As to the letters that have been excluded, there

shall be no evidence, argument or reference before the jurors or

prospective jurors to the letters or their contents.

14. Lee’s Motion in Limine No. 14 is granted in part and

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denied in part. The motion is granted to the extent that there

will be no testimony or documentary evidence concerning the exact

mechanism of Ms. Conley’s injuries or the nature and extent of

her injuries. Specifically, there will be no evidence concerning

the “reason” the cable fell, no close up pictures of the forklift

tines, etc. It is denied insofar as counsel will be able to

introduce evidence concerning the task(s) that Ms. Conley was

performing at or near the time of the accident at issue, what

kind of equipment was present, and what, in a very general sense,

happened that caused the injury.

15. Lee’s Motion in Limine No. 15 is granted in part and

denied in part. The following matters have not been removed from

the case by Judge Coyle’s Order, or otherwise:

a. Whether or not USF&G, ASI and/or Aon understood

Lee’s August 12, 1998 letter to ASI to mean Lee would not do

water slide assembly.

b. Whether or not USF&G, ASI and/or Aon understood

Lee’s August 12, 1998 letter to ASI to mean Lee would not do

water slide repair and maintenance.

c. Whether USF&G and ASI reasonably relied on Lee’s

statements in the August 12, 1998 letter in issuing the policy.

d. Whether Lee’s statements and/or concealments were

made by Lee negligently, whether Lee acted recklessly with regard

to whether they were false, and whether Lee acted intentionally

or knowingly, when the level of scienter, if any, was formed.

e. Whether, on or about August 12, 1998, Lee had

present knowledge of what information ASI and USF&G were seeking

concerning the types of work that would be performed by Lee

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employees at The Island.

f. Whether, on or about August 12, 1998, Lee

appreciated the significance of the information related to it by

Aon concerning what USF&G’s underwriting position was.

g. Whether ASI, in inquiring about the types of work

that would be performed by Lee employees, used conspicuous,

unambiguous and unequivocal language which an ordinary layman

could understand.

h. The court reserves ruling on whether or not the

proposal of or use of a limiting policy endorsement is relevant

to any issue in the case.

i. The Court reserves ruling on USF&G’s right to

restitution pending the determination of the jury upon the issues

in the case.

j. Waiver on all grounds consistent with Lee’s

original affirmative defense remains in issue in this case.

16. Lee’s Motion in Limine No. 16 is denied without

prejudice to Lee submitting a jury instruction that the August

1998 letters may not be considered or used to contradict or vary

the integrated insurance policy insofar as that policy insured

water park classification codes.

17. Lee’s Motion in Limine No. 17 is granted. USF&G, ASI,

Aon and their witnesses are ORDERED not to introduce evidence,

argue or mention to the jurors or prospective jurors that Rexford

Development Corporation, Rexford Properties, LLC or Richard

Ehrlich have been sued in this lawsuit as alleged alter egos for

Lee; there shall be no mention, argument or attempt to introduce

evidence in the first phase trial on the issue whether or not any

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of Rexford Development Corporation, Rexford Properties, LLC, or

Richard Ehrlich are liable in place of Lee, and there shall be no

mention of these parties’ assets or perceived ability to pay a

judgment. The jury shall be instructed at the outset that while

Richard K. Ehrlich, Rexford Development Corporation and Rexford

Properties LLC are parties to the action, the jurors shall not be

presented with any issues to decide as to any of them and Lee is

the only party to the trial who seeks relief or against whom

relief is sought in this phase of the trial.

18. Ruling on Lee’s Motion in Limine No. 18 is deferred

until shortly before jury selection. USF&G’s claim for

restitution of amounts paid in the defense of Lee in the related

Workers’ Compensation Appeals Board proceeding should be

addressed in the second phase trial.

19. Lee’s Motion in Limine No. 19 is granted. There shall

be no mention of and no documentary evidence or testimony before

the jury or prospective jurors relating to any collateral source

of funds for the payment of benefits or damages to Ms. Conley,

including, without limitation, the Uninsured Employer’s Trust

Fund or a civil action by Conley against Lee. The Court will

address by declaratory judgment the rights and liabilities of the

parties as to claims, if any, that might be asserted against Lee

in the future by Conley or any other person or entity.

DATED: February 1, 2007.

_/s/ OLIVER W. WANGER________

Oliver W. Wanger

UNITED STATES DISTRICT JUDGE

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usf&g v. lee les order re mtns in limine

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