T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on a nd i s notpr e c e de nt * e xc e pta s pr ovi de d by 9th C i r . R . 36- 3. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T C IN D Y C H A R Y U L U , spec i al a d m in is tr a to ro n b e h a lf

o f E s ta te o f

F a tu T aputu, P la in tif

f - A p p e lla n t, v. CALI FORNI A CASUA LT Y I ND EM NI TY EXCHAN GE, D ef

endant- A pp el l ee . N o. 11- 16813 D . C . N o . 2 : 0 8 -cv -0 1 1 9 9 -R C J-R JJ ME MOR AN DU M *

C IN D Y C H A R Y U L U , spec i al a d m in is tr a to ro n b e h a lf

o f E s ta te o f

F a tu T aputu, P l ai nt i ff

- A pp el l ee , v. CALI FORNI A CASUA LT Y I ND EM NI TY EXCHAN GE, D e f

e n d a n t - A p p e lla n t. N o. 11- 16814 D . C . N o . 2 : 0 8 -cv -0 1 1 9 9 -R C J-R JJ



# FI LED APR11 2 013 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALS2 A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt

f orthe D i s tr i c tof

N e va da R obe r tC l i ve J one s , C hi e f D i s tr i c tJ udge , P r e s i di ng A r gue d a nd S ubm i tt e d F e brua ry 12, 2013 S a n F r a n c is c o , C a lif

o rn ia B efo re: S C H R O E D E R , N O O N A N , an d M U R G U IA , C i rcu i tJu d g es. P l a i nt i f f C i ndy C ha ry ul u, s pe c i a l a dm i ni s tr a t orof the E s t a t e of

F a tu T aputu, appe a l s the j udgm e nt , a f t e ra j ury tr i a l , e nt e r e d i n f a vorof the i ns ur a nc e c om pa ny i n he ra c t i on c l a i m i ng tha tthe i ns ur a nc e c om pa ny w a s gui l ty of ba d f a i th i n f a i l i ng t o s e tt l e a c l a i m w i thi n the tw o- w e e k de a dl i ne the pl a i nt i f f’ s c ouns e l i m pos e d. T he in s u r a n c e c o m p a n y c r o s s - ap p e a ls c o s ts a n d f e e s . P l a i nt i f f’ s pr i nc i pa l a r gum e nti s tha tthe di s tr i c tc our te rr e d i n a dm i tt i ng e vi de nc e tha tbor e on the m ot i ve s of the pl a i nt i f

f’ s c ouns e l , i nc l udi ng the dr op d ea d lett eran d th e d em an d to p ro v e th e a b se n ce o f o th erin su ra n ce . P lain ti ff’s a r gum e nti gnor e s the f

a c ttha ti n br i ngi ng the s ui t , P l a i nt i f f ha s puti n i s s ue the r e a s o n ab le n e s s o f

th e c o n d u c t o f

b o th s id e s in th e litig a tio n . Se e A l l s tat e I ns . C o. v. Mi l l er , 212 P . 3d 318, 324 ( N e v. 2009) ( de f i ni ng ba d f

a i th a s the “ a c tua l or i m pl i e d a w a r e ne s s of

the abs e nc e of

a r e a s onabl e ba s i s f

orde ny i ng be ne f

i t s ” ) . T he reaso n ab l en ess o f th e co n d u cto f th e i n su rer’ s co u n sel m u stb e m easu red ag ai n st3

the c orr e s pondi ng a c t i ons of the pl a i nt i f

f’ s c ouns e l i n thi s c a s e . T he r e w a s no error. P l a i nt i f

f a l s o c ont e nds tha tthe di s tr i c tc our tm i s s t a t e d the l a w i n c onne c t i on w i th the du ty of a n i nsurert o sett l e, bu tany m i ss t at em entthatdi d o cc ur w as unr e l a t e d t o e i the rpa r ty ’ s the ory of the c a s e a nd c oul d notha ve i nf l ue nc e d the ou t com e of the ca se . T he di s tr i c tc our tdi d notabus e i t s di s c r e t i on i n pr e ve nt i ng P l a i nt i f f f r om a tt e m pt i ng t o s how tha tthe t a xpa y e r s w oul d ul t i m a t e l y ha ve t o pa y f orthe dece dent ’ s m edi ca l bi l l s, and from pres ent i ng t es t i m on y of aform erho spi t al e xe c ut i ve w ho ha d no pe r s ona l know l e dge of the a c c i de ntorthe m ot i ve s of c o u n s e l. T h e p r o f

f e r e d e v id e n c e h a d little o rn o r e le v a n c e to th e is s u e in th e c a s e . T he di s tr i c tc our tw a s notr e qui r e d t o f i nd tha tthe ve r di c tw a s a ga i ns tthe w ei gh tof the evi dence. T he w i tness es w ho t es t i fi ed for P l ai nt i ff thatthe i nsurance c om pa ny ’ s a c t i ons vi ol a t e d i ns ur a nc e i ndus try s t a nda r ds w e r e notdi s i nt e r e s t e d, a nd the j ury c oul d c ons i de rthe w i tne s s e s pos s i bl e bi a s e s w he n de t e r m i ni ng how m u c h w e ig h t to g iv e th e irte s tim o n y . See U ni t ed Stat es v. Mi

gu el , 952 F . 2d 285, 288 ( 9th C i r . 1991) ( hol di ng tha tj ury w a s f r e e t o di s c r e di tw i tne s s ’ s s e l f s e r vi ng v e r s io n o f

e v e n ts ) .4

T h ere i s n o m eri tt o P l ai n t i ff’ s cl ai m o f att o rn ey m i sco n d u ct . D efen se coun se l di d n otm ake a“ go l den rul e a rgum ent , ” see F i eld s v. W o o d f o rd , 309 F . 3d 10 95 , 11 09 (9th C i r. 20 02 ), and P l ai nt i ff fa i l ed t o o bj ec tt o the ar gu m entthatw as m a de . P l a i nt i f

f di d obj e c tt o a n i s ol a t e d que s t i on by de f e ns e c ouns e l r e ga r di ng r e l i gi on, a nd the obj e c t i on w a s s us t a i ne d a nd the que s t i on s tr i c ke n f r om the r e c or d. T he defendanti nsurance c om pany cr oss- appeal s the deni al of cost s und er F e de r a l R ul e s of

C i vi l P r oc e dur e 54 a nd 68. R ul e 68 pr ovi de s tha t“ [ i ] f the j ud gm entthatthe offer ee fi nal l y obt ai ns i s notm ore f avorabl e than t he un ac ce pt ed o ff er , th e o ff

er ee m u st p ay th e c o sts in cu rr ed af ter th e o ff

erw as m ad e.” A p ar ty’s pre- offe r c ost s a re on l y c on si dere d “ i f [ cost s] ar e a w ar ded. ” C ha m pi on P rodu ce , Inc. v. R ub

y R ob i nson C o. , Inc. , 3 4 2 F .3 d 1 0 1 6 , 1 0 2 0 ( 9 th C ir . 2 0 0 3 ) . U n d e rR u le 54 , a pre vai l i ng party i s e nt i t l ed t o cost s, other than att orneys ’ fe es , un l es s afe dera l st atut e, rul e, or courtorder provi des otherw i se . A s a r e s ul tof

thi s tr i a l , P l a i nt i f

f r e c e i ve d a $15, 000 j udgm e nt , r e pr e s e nt i ng the i nsurance proce eds due on i t s bre ac h o f c on tra ctcl ai m . T he i nsurance c o m p a n y h a d o f

f e r e d to s e ttle th e c a s e b e f o r e tr ia l f o r$ 5 0 ,0 0 0 , a n a m o u n t w e ll ab o v e P lain ti ff’s re co v er y. T h e d istrict co u rt er ro n eo u sly c re d it ed P lain ti ff’s arg u m en tth ati th ad ex p en d ed $ 3 6 , 0 0 0 i n co st s t o co n cl u d e th atP l ai n t i ff’ s co st s, coup l ed w i th the re covery , exce eded the offe r of s ett l em ent . T he di stri ctcourt5

ne ve ra w a r de d P l a i nt i f

f c os t s , s o pr e - of

f e rc os t s s houl d notbe i nc l ude d i n va l ui ng the j ud gm ent . F or R ul e 68 p urpo se s P l ai nt i ff on l y r ec ei ved $ 15 , 00 0, and t here fore th e d e f e n d a n t w a s e n title d to c o s ts . W ith r e g a r d to th e m o tio n f o rc o s ts u n d e rR u le 54 , bo th p art i es w er e pre vai l i ng part i es un der the R ul e. T he di stri ctcourtthere fore di d notabus e i t s di s c r e t i on i n de ny i ng the de f e nda nti ns ur a nc e c om pa ny ’ s m ot i on f o rc o s ts u n d e rR u le 5 4 . T he di stri ctcourtdeni ed the defendanti nsurance c om pany’ s r equestfor f ee s as san ct i o n s u n d er 2 8 U . S . C . § 1 9 2 7 an d N ev ad a R ev i sed S t atu t e 1 8 . 0 1 0 . T h o se s t a tut e s pr ovi de tha tf

e e s a nd c os t s m a y , i n the c our t ’ s di s c r e t i on, be a w a r de d f or v e x a tio u s a n d b a s e le s s litig a tio n . W e f in d th a t th e d is tr ic t c o u r t d id n o t ab u s e its di sc re t i on i n d enyi ng sa nct i on s w i th res pectt o the fi l i ng of the ca se i n d i stri ct c o u r t, b e c a u s e th e r e w e r e tr iab le is s u e s . See W i n t erro w d

v. A m . G en . A n n u i t

y In s. C o. , 5 5 6 F .3 d 8 1 5 , 8 2 8 (9 th C ir. 2 0 0 9 ). O n ap p ea l, h o w ev er , i n li g h t o f th e ju ry ’s ve r di c t , the a r gum e nt s r a i s e d a r e f r i vol ous a nd ha ve t a xe d the pa t i e nc e of both the de f e nda nta nd thi s c our t . W e the r e f or e a w a r d f

e e s unde r28 U . S . C . § 1927 t o the ap p e lle e , to g e th e rw ith c o s ts o n th e ap p e a l. D e te r m in a tio n o f th e ap p r o p r ia te a m o u n t o f

th e a w a r d is r e f

e rr e d to o u rC o m m is s io n e rf o rf u r th e rp r o c e e d in g s . T h e ju d g m e n t o f

th e d is tr ic t c o u r t a n d th e d e n ia l o f th e m o tio n f

o rc o s ts un der R ul e 54 are A FFI R M ED . T he a w a r d of f e e s on appe a l i s r e f

e rr e d t o the6

A p p el l at e C o m m i ssi o n er. T h e o rd er d en yi n g co st s u n d er R u l e 6 8 i s VA C A TED a nd R EM A N D ED f

o rd e te r m in a tio n o f

p o s t- R u le 6 8 ju d g m e n t o f f e rc o s ts .