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Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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1

The Honorable Rodney S. Webb, United States District Judge for the District

of North Dakota.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 05-4439

___________

Katherine Tweedle, *

* Appeal from the United States

Appellee, * District Court for the

* Eastern District of Arkansas.

v. *

* [UNPUBLISHED]

State Farm Fire & Casualty Company, *

*

Appellant. *

___________

Submitted: September 29, 2006

Filed: October 18, 2006 

___________

Before WOLLMAN, BOWMAN, and BENTON, Circuit Judges.

___________

PER CURIAM.

State Farm Fire & Casualty Company appeals from the judgment of the District

Court,1

 entered upon a jury verdict, awarding damages, interest, attorney fees, and a

statutory penalty to Katherine Tweedle. We affirm.

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I.

During the nighttime hours of June 15–16, 2003, a fire occurred at Katherine

Tweedle's home in Benton, Arkansas, followed by a second fire the morning of

June 16. The home was insured under a homeowners policy issued by State Farm. 

State Farm denied Tweedle's claim for the policy proceeds, contending that

Tweedle (or her agent) intentionally set the fires and that Tweedle had misrepresented

material facts during the course of State Farm's arson investigation. Tweedle filed this

diversity suit to recover the policy proceeds, seeking a declaratory judgment and

damages for breach of contract, breach of the implied covenant of good faith and fair

dealing, tortious bad faith, slander, extreme and outrageous conduct resulting in

emotional distress, and negligence. State Farm alleged arson and misrepresentation

in defense. The District Court granted partial summary judgment in favor of State

Farm on the bad faith, slander, outrage, and negligence claims. After trial, the jury

returned a verdict in Tweedle's favor on the breach of contract claim. State Farm

appeals. 

II.

State Farm first challenges the District Court's admission of the testimony of

John Youngblood, Tweedle's expert witness. Tweedle originally designated

Youngblood as an expert on the insurance industry who would testify about State

Farm's alleged bad faith. Over State Farm's objection, however, the District Court

permitted Youngblood to opine about Tweedle's breach of contract claim, reasoning,

"[Youngblood's testimony] may be of some assistance to the jury[;] . . . [he] is a

qualified expert in the insurance industry . . . and if the jury chooses to give [his

testimony] any weight[,] they can." Tr. at 376, 380. We review the District Court's

admission of expert testimony for abuse of discretion. Wash Solutions, Inc. v. PDQ

Mfg., Inc., 395 F.3d 888, 894 (8th Cir. 2005). 

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State Farm presented two witnesses, a firefighter and a cause-and-origin

investigator, who testified that the fires were separate and intentional.

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Youngblood testified that State Farm's investigation fell below insurance

industry standards because State Farm had conducted a "negative investigation," that

is, it searched for avenues to avoid paying Tweedle's claim. Tr. at 374. Youngblood

based this conclusion on his belief that: (1) State Farm did not sufficiently investigate

alternative explanations for the first fire, including asking neighbors whether anyone

had entered the house during the nighttime hours of June 15–16; (2) Tweedle did not

have the opportunity to set the second fire, based on the fact that when she went back

into the house to retrieve her cat she had already called the fire department and it had

arrived; (3) Tweedle did not have a financial motive to commit arson, as the cost of

repairing the house could have been deducted from proceeds received upon its sale;

(4) the second fire could have been a result of leftover sparks from the first fire;2

 and

(5) Tweedle's statement to the insurance investigator that her house was previously in

"good condition" was not a material misrepresentation. Id. at 379. Youngblood also

testified that "material" means "an important factor that could have a bearing on the

outcome [of the claim]." Id. at 380. 

State Farm argues: (1) Youngblood's testimony was not necessary to the jury's

understanding of the evidence or determination of the facts in issue for the breach of

contract claim, (2) Youngblood gave an improper legal opinion on the meaning of

material misrepresentation, and (3) Youngblood was not qualified as an expert to give

an opinion as to the cause of the second fire. 

Federal Rule of Evidence 702 provides, "If scientific, technical, or other

specialized knowledge will assist the trier of fact to understand the evidence or to

determine a fact in issue, a witness qualified as an expert . . . may testify thereto in the

form of an opinion or otherwise . . . ." Whether testimony is necessary to the jury's

understanding of the evidence or determination of the facts in issue has historically

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been described as a "common sense inquiry"—whether laypersons can determine the

particular issue involved. Fed. R. Evid. 702 advisory committee's note (citation to

quoted source omitted); United States v. French, 12 F.3d 114, 116 (8th Cir. 1993)

("Where the subject matter is within the knowledge or experience of laymen, expert

testimony is superfluous." (quoting Bartak v. Bell-Galyardt & Wells, Inc., 629 F.2d

523, 530 (8th Cir. 1980))).

A district court is afforded broad discretion in evidentiary issues, and we cannot

say that the District Court abused its discretion in allowing Youngblood's testimony.

Youngblood's testimony was offered to show that these collective facts could not have

provided State Farm a legitimate basis to deny Tweedle's claim, and therefore, that

State Farm's "negative investigation" and denial of the claim amounted to a breach of

contract. This deduction was not readily ascertainable by a layperson without the

assistance of expert testimony; thus we cannot say Youngblood's testimony was not

necessary to determine whether State Farm breached its contract. 

Turning to State Farm's next argument, an expert ordinarily may not testify on

legal matters; it is the trial court's job to instruct the jury as to the law. Southern Pine

Helicopters, Inc. v. Phoenix Aviation Managers, Inc., 320 F.3d 838, 841 (8th Cir.

2003). Although Youngblood defined the term "material" to the jury, his definition

did not conflict with the District Court's jury instruction. Youngblood defined

"material" as "an important factor that could have a bearing on the outcome." Tr. at

380. The District Court correctly instructed the jury, "A fact or circumstance is

material if it pertains to the facts that are relevant to the insurer's right to decide upon

its obligations and to protect itself against false claims. Misrepresentations that have

no relevance to the insurance claim are not material." Id. at 777. Because

Youngblood's generic definition did not conflict with the District Court's more precise

formulation, there was no prejudicial effect. Reversal is not required where an

evidentiary error is harmless; that is, where the error has only a slight influence or no

influence at all on the jury verdict. McKnight ex rel. Ludwig v. Johnson Controls,

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Inc., 36 F.3d 1396, 1405 (8th Cir. 1994). Even assuming it was error to allow

Youngblood to define "material," his definition could not have influenced the jury

verdict and reversal is not required.

Similarly, while Youngblood was not qualified as a cause-and-origin

investigator and therefore lacked the expertise to opine about how the second fire

started, any error in allowing this testimony was harmless. Youngblood's testimony

concerning an alternative explanation for the second fire came as mere elaboration on

Youngblood's central theme: that State Farm had directed its investigation in such a

way as to attempt to avoid liability, resulting in a breach of contract. State Farm

presented ample evidence to convince the jury that Tweedle committed arson, but the

jury rejected that contention. We will not reverse the jury verdict on account of

Youngblood's testimony. 

III.

State Farm's second point on appeal concerns the District Court's comments

during Tweedle's testimony. Tweedle testified that after she and a neighbor entered,

inspected, and exited her house the morning of June 16, she called the fire department

and then her insurance agent. Tweedle testified that she was still on her cell phone

with the insurance agent when Bruce Armstrong (the firefighter with whom she had

spoken) arrived and that she had not reentered the house since speaking to the fire

department. Tweedle's cell phone records indicated that she placed a call to the fire

department at 10:37 a.m., which lasted five minutes, and placed a call to the insurance

agent at 10:42 a.m., which lasted six minutes. Tweedle testified that after Armstrong

arrived, he noticed smoke coming from the house indicating the second fire. 

State Farm questioned Tweedle about whether she had misrepresented this

sequence of events to State Farm in her original statement—specifically as to the short

amount of time (six minutes) her testimony suggested Armstrong had traveled from

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the fire station to her house—and whether she was on her cell phone with the

insurance agent when Armstrong arrived. Tweedle reiterated that she was on her cell

phone with the insurance agent when Armstrong arrived. At this point, the District

Court stated:

There is nothing that I have received that State Farm has indicated that

they are depending upon [Tweedle's] misstatement or misrepresentation

as to whether she was on the phone when Bruce Armstrong drove up as

a material misrepresentation vitiating fire insurance. . . . I rule that this

is not a material misrepresentation that would vitiate insurance. . . . In

my view anybody can be mistaken about that kind of thing. 

Tr. at 353–54.

State Farm contends that the District Court erred in its material

misrepresentation ruling and in failing to grant a mistrial. State Farm argues that the

District Court's statements were erroneous in fact and law and that these statements,

coupled with Youngblood's testimony, deprived State Farm of a fair trial. 

We first consider whether the District Court properly ruled that Tweedle's

statements about the timing of her cell phone conversations and Armstrong's arrival

were immaterial as a matter of law. We review conclusions of law de novo. Bowman

v. White, 444 F.3d 967, 974 (8th Cir. 2006). 

Under Arkansas law, a fact or circumstance is material if "it pertains to facts

that are relevant to the company's rights to enable the company to decide upon its

obligations and to protect itself against false claims." Allstate Ins. Co. v. Voyles, 65

S.W.3d 457, 462 (Ark. Ct. App. 2002) (citing Willis v. State Farm Fire & Cas. Co.,

219 F.3d 715, 718 (8th Cir. 2000)). The materiality of a statement is evaluated at the

time the statement was made, not with the benefit of hindsight. Willis, 219 F.3d at

718. The materiality of a misrepresentation is a mixed question of law and fact that

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under most circumstances should be determined by the trier of fact, but materiality

may be decided as a matter of law if reasonable minds could not differ on the

question. Wagnon v. State Farm Fire & Cas. Co., 146 F.3d 764, 768 (10th Cir. 1988);

see, e.g., Willis, 219 F.3d at 718 (holding that a husband's concealment from the

insurance investigator of his suspicion that his wife committed arson was material as

a matter of law, where the husband had told a friend that he suspected his wife had

started the fire).

Any alleged misstatement by Tweedle as to whether she was on her cell phone

when Armstrong arrived was not material. Examining the statement when it was

made, such a minor discrepancy in Tweedle's recollection as to how long she was on

her phone would not have impacted State Farm's investigation in any way. Such

inconsistencies over the precise timing of events are common and

understandable—especially considering the natural excitement from the fires. The

District Court did not err in ruling that the statement was immaterial as a matter of

law.

Nor does the District Court's misstatement concerning State Farm's use of the

term "material" during its cross-examination require reversal. The District Court did

state, "I wouldn't have made the [ruling] had you not used the word material

misrepresentation," even though State Farm had only used the word

"misrepresentation," but not "material," during its cross-examination. Tr. at 353–54.

While this was factually inaccurate, it in no way prejudiced State Farm. It is clear that

State Farm was seeking to prove its material misrepresentation defense with this line

of questioning, and the District Court essentially ruled that the questioning was

irrelevant; therefore, it is of no consequence whether State Farm used the word

"material."

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IV.

State Farm next argues that the District Court's alleged partiality toward

Tweedle, exhibited by the court's comments during Tweedle's and Youngblood's

testimony, warrants a mistrial. A trial judge will not be reversed for excessive

intervention unless the judge was actually biased or projected to the jury the

appearance of advocacy or partiality. Williams v. Fermenta Animal Health Co., 984

F.2d 261, 263 (8th Cir. 1993). We employ a balancing process to determine whether

a district court's comments destroyed the overall fairness of a trial. Harris v.

Steelweld Equip. Co., 869 F.2d 396, 403 (8th Cir.), cert. denied, 493 U.S. 817 (1989).

The District Court's comments did not rise anywhere near a level necessary to

conclude that the overall fairness of the trial was destroyed. A trial judge is given

"considerable" discretion to comment on the evidence at trial. Billingsley v. City of

Omaha, 277 F.3d 990, 997 (8th Cir. 2002). The District Court's ruling before the jury

regarding material misrepresentation did not project an appearance of advocacy or

partiality. Rather, it concluded a line of questioning not relevant to the trial issues.

This is the proper role of a trial judge. The District Court's "comments" during

Youngblood's testimony were actually rulings made in response to State Farm's

objections, and merely reiterated Youngblood's status as an expert. The District

Court's decision not to grant a mistrial based on the comments made during Tweedle's

and Youngblood's testimony was not an abuse of discretion and therefore a new trial

is not warranted. Sanders-El v. Wencewicz, 987 F.2d 483, 484 (8th Cir. 1993)

(standard of review). 

V.

State Farm finally challenges the District Court's denial of its motion for a new

trial, incorporating the aforementioned arguments. For the reasons discussed, we find

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no abuse of discretion. Hite v. Vermeer Mfg. Co., 446 F.3d 858, 864 (8th. Cir. 2006)

(standard of review).

VI.

Had we been the trier of fact in this case, perhaps we would have reached an

outcome different from the one reached by the jury. Nevertheless, we are satisfied

that the jury had a full and fair opportunity to weigh the conflicting evidence. The

District Court did not commit any reversible error, and the judgment therefore is

affirmed.

______________________________

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