# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

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No. 1 7- 24 10

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W il li am Hatc he r

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

MDOW In su ran ce Co m

pa ny

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Defe nd an t - Ap pe ll ee

W el ls Farg o Ho m e Mo rtg ag e, In c.

ll ll ll ll ll ll ll ll ll ll l

Defe nd an t

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App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Eas te rn Dis tri ct of Ark an sa s - Hel en a

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Su bm it te d: Apri l 1 1, 2 01 8
Fi le d: Sep te m

be r 7, 2 01 8

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Befo re BENTON, MELLOY, an d GRAS Z, Circ ui t J ud ge s.

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MELLOY, Circu it Ju dg e.

W ill ia m H at ch er ap pe al s fo ll owi ng an ad ve rs e jury ve rd ic t on hi s cl ai m se ek ing

ad di ti on al in su ran ce be ne fit s fo r sm ok e an d fir e da m ag e at hi s ho m e. He arg ue s th edi st ric t co ur t m is in te rp ret ed hi s in su ran ce po li cy as an act ua l-c as h- va lu e po li cy rat he r

th an a rep la cem en t-c os t po li cy

. In ad di ti on , he rai se s an ev id en ti ary is su e, arg ui ng th e
di st ric t co ur t im

pr op erl y pr ev en te d hi m fro m te st ifyin g as to th e pr e-fi re, de pr eci at ed

va lu e o f th e d am ag ed po rti on s o f hi s h om e. W e co nc lu de hi s po li cy was a n a ct ua lcas h- va lu e po li cy

. W e al so co nc lu de Mr. Hatc he r i s no t en ti tl ed to rel ie f on hi s

ev id en ti ary cl ai m

. Mr. Hatc he r te st ifi ed as to a pr e-fi re de pr eci at io n am ou nt

, he fai le d

to sh ow th at th e co ur t ad m on is he d th e jury to di sr eg ard hi s te st im on y, h e d i d no t

ot he rwis e m ak e an of

fer of pr oo f as to wha t a d d i ti on al te st im on y he so ug ht to

pr ov id e, an d he fail ed to pr ov id e a tra ns cri pt of th e fin al da y of tri al

. W e affi rm th e jud gm en t o f th e d is tri ct co ur t.

I.

Mr. Hatc he r’s ho m e was da m ag ed by sm ok e an d fir e in 20 15

. He an d hi s so n

ha d bu il t th e ho m e to ge th er ap pr ox im at el y twen ty y ears pr io r to th e fir e. Mr. Hatc he r

own ed an d li ve d in th e ho m e du rin g th e in te rv en in g y ears

. The ho m e ha d ne w

ki tc he n ap pl ia nc es at th e ti m e of th e fir e, bu t m an y co m po ne nt s of th e ho m e (fu rn ace,

carp et

, ro of

, et c.) were twen ty y ears ol d. The ho m e su ffer ed se ve r e f i re da m ag e in

so m e are as an d s m ok e d am ag e th ro ug ho ut m or e ex te ns iv e are as

.

Mr. Hatc he r m ai nt ai ne d cas ua lt y in su ra n c e f o r hi s ho m e wit h de fen da nt

MDOW In su ran ce Co m

pa ny, ren ewin g an nu al ly aft er in it ia l is su an ce o f th e po li cy

in Ja nu ary 20 11

. So on aft er th e fir e, an ad jus te r f r o m M DOW arri ve d at th e sc en e

an d m et wit h Mr. Hatc he r. Mr. Hatc he r in di c at ed he wis he d to rem ai n at th e ho m e
du rin g reco ns tru ct io n. In fact

, he ha d al read y bo rro wed a cam pe r fro m hi s so n, pl aci ng th e cam

pe r in a carp or t at th e d am ag ed ho m e. The a dju st er ag reed to pa y a

pe r di em fo r us e of th e cam pe r an d pr ov id ed a $5 ,00 0.0 0 ad va nc e. Mr. Hatc he r an d

hi s so n co m

m en ced m ak in g rep ai rs at th e ho m e, pe rfo rm in g m uc h of th e te ar-o ut an d

de m ol it io n wo rk th em se lv es an d di sp os in g of m at eri al s i n a rav in e o n t he pro pe rty.

-2

-Less th an on e m on th la te r, th e ad jus te r pr ov id ed Mr. Hatc he r wit h an ad di ti on al

$1 ,04 0.0 0 fo r li vi ng ex pe ns es

.

The ad jus te r in it ia ll y es ti m at ed th e act ua l cas h va lu e of da m ag e to Mr.

Hatc he r’s ho m e as $4 1,5 50 .02

. Mr. Hatc he r di sa gr e e d w i th th e ad jus te r’s es ti m at e

an d i nt erp ret at io n o f th e p ol ic y . Mr. Hatc he r te nd ered an est im at e fro m hi s b ro th er ( a co nt ract or ) fo r $9 2,8 95 .00

. He al so te nd ered an es ti m at e fro m a di ffer e n t

,

un rel at ed co nt ract or for $9 7,0 80 .00 . In ad di ti on , he h ire d a n a tt or ne y

.

The ad jus te r th en in crea se d hi s es ti m at e of da m ag es to th e ho m e to $6 3,5 93 .32

, ack no wled gi ng th at cert ai n it em s he ha d de em ed sa lv ag eab le sh ou ld be rep la ced

. In

Nov em be r 20 15

, MDOW is su ed two ch eck s to Mr. Hatch er’s atto rn ey : $6 3,5 93 .32

,
rep res en ti ng MDOW’ s es ti m at e of th e act ua l-c as h- va l u e da m ag es , an d $1 2,5 56 .77

fo r da m ag e to Mr. Hatc he r’s pe rs on al pr op ert y

. In to ta l, MDOW p ai d Mr. Hatc he r $8 2,1 90 .09

.

The th ird -p art y , un rel at ed co nt ract or pe rfo rm ed rep ai rs to Mr. Hatc he r’s ho m e

fo r th e es ti m at e am ou nt te nd ered by MDOW ($ 63 ,59 3.3 2)

. In ad di ti on , Mr. Hatc he r

al le ge s th at he an d hi s so n pe rs on al ly pe rfo rm ed ap pr ox im at el y $2 0,0 00 of ad di ti on al

rep ai rs an d de m ol it io n wor k. Ult im at el y , th e rep ai rs to Mr. Hatc he r’s ho m e in cl ud ed

so m e rep ai r s a n d s o m e up gr ad es

. Fo r ex am pl e, Mr. Hatc he r in st al le d a m et al ro of
(wh ere p rev io us ly the re h ad be en sh in gl es ) an d h ard woo d fl oo rs (whe re p rev io us ly

th ere ha d be en vi nyl). He al so rep la ced so m e twen ty-y ear- ol d co m po ne nt s wit h ne w

co m po ne nt s. Bu t, as al read y no te d, cert ai n ot he r ex pe ns es were no t in cl ud ed in rep ai r

co s t s pa id to th e un rel at ed co nt ract or be cau se Mr. Hatc he r an d hi s fam il y pr ov id ed

la bo r an d di sp os ed of da m ag ed m at eri al s wit ho ut ch arg e. Mo reo ve r, so m e da m ag ed

co m po ne nt s were m erel y rep ai red

. In rece iv in g th e ch eck s an d m ak in g rep ai rs , Mr.

Hatc he r di d no t ag ree to MDOW’ s es ti m at e o f da m ag es , and MDOW di d no t m ak e

it s p ay m en t co nt in ge nt on su ch ass en t.

-3

-Mr. Hat ch er co m m en ced th is act io n, al le gi ng MDOW act ed in ba d fa it h. He

s o u g h t p u ni ti ve da m ag es as well as ad di ti on al pa y m en t un de r th e po li cy fo r hi s

r e pa irs

. Mr. Hatc he r at ta ch ed to hi s co m pl ai nt th e op erat iv e po li cy fo r 20 1 5

. Th e

at ta ch ed po li cy in cl ud ed an act ua l-c as h- va lu e en do rs em en t as well as a de cl arat io ns

pa ge id en ti fy in g th e act ua l-c as h- va lu e en do rs em en t as a fo rm at ta ch ed to th e po li cy

. To a la rg e ex te nt

, th e po li cy at ta ch ed to th e co m pl ai nt sp eak s fo r it se lf. The 20 15

po li cy , wit ho ut lo ok in g at th e act ua l-c as h- va lu e en do rs em en t, is a h yb r i d p ol ic y

. So m e cat eg or ie s o f ha rm

are co ve red for rep la cem en t co st , and ot he r cat eg or ie s are

co ve red on ly fo r act ua l cas h va lu e. The en do rs em en t, ho wev er, ex pr es sl y de le te s

rep la cem en t co st an d ap pl ie s act ua l cas h v a l u e to al l rel ev an t co ve rag e te rm s.
Dis pu te s in th is cas e rel at e pr im ari ly to wha t was in cl ud ed in earl ie r y ears ’ ve rs io ns

of th e po li cy an d whe th er ch an ge s up on an nu al ren ewal were co nd uc te d in a m an ne r

so as t o m ak e th e act ua l-c as h- va lu e en do rs em en t i n t he 20 15 po li cy effe ct iv e.

Mr. H a t c he r fil ed a m ot io n fo r pa rti al su m m ary jud gm en t, as ki ng “ th at th e

‘actu al cas h va lu e’ en do rs em en t be st ric ke n fro m th e co nt ract

, th at th e Defen da nt be

pr oh ib it ed fro m a r g u i n g th e sa m e to th e jury in th is cas e, an d fo r al l ot he r fit an d

pr op e r rel ie f.” He at ta ch ed to hi s m ot io n an affi da vi t an d a th irt y -s ix -p ag e,

p u r p o r t e d ly co m

pl et e co py of th e “ or ig in al ” po li cy

. The do cu m en t he at ta ch e d

in cl ud ed no de cl a r a t i on s pa ge an d co nt ai ne d no act ua l-c as h- va lu e-en do rs em en t.

Bec au se he att ach ed no de cl arat io ns pa ge to th e p ol ic y acco m pa nyin g h is affi da vi t,

th e at ta ch m en t, in fact

, was m erel y a ba s i c fo rm po li cy

. It refe ren ced no po li cy

pe rio d, fa il ed to id en ti fy th e in su red or th e in su rer, re fere nc ed no li m it s o f li ab il it y , id en ti fie d no pr em iu m , an d id en ti fie d no de du ct ib le s. In o t he r wor ds

, th e po li cy

at t a c h ed to hi s affi da vi t was ob vi ou sl y in co m pl et e. Nev ert he le ss , he sp eci fic al ly

st at ed in hi s af

fid av it th at “ [w]hen I pu rch as ed in su ran ce fo r th e h ou se , I rem em be r
be in g of fere d th e po li cy of in su ran ce whi ch is at ta ch ed to th is affi da vi t at Exh ib it ‘B’

. It ha d 36 pa ge s.” He al so st at ed i n hi s affi da vi t th at “ [t]he en do rs em en t m us t ha ve
be en ad de d aft er I ag reed to th e at ta ch ed po li cy

. . . [ a n d th at he ] ne ve r ag reed to

ch an ge th e te rm s fr om

‘ rep la cem en t co st s’ to ‘ act ua l ca sh va lu e.’”

-4

-MDOW res is te d Mr. Hatc he r’s m ot i on an d fil ed it s own m ot io n fo r pa rti al

su m m ary jud gm en t. In it s own m ot io n, MDOW so ug ht a de fe n s e ju d g men t on th e
ba d- fai th cl ai m , ch arac te riz in g it s own tre at m en t of Mr. Hatc he r’s in su ran ce cl ai m as

in vo lv in g go od -fai th di sa gr eem en ts as to po li cy in te rp ret at io n an d da m ag es am ou nt s.

In res is ti ng Mr. Hatc he r’s m ot io n co nc ern in g po li cy pr ov is io ns an d in pr es en ti ng it s

arg um en t co nc ern in g po li cy in te rp ret at io n as rel ev an t to th e ba d- fai th cl ai m , MDOW

at ta ch ed affi da vi ts , ren ewal -n ot ic e le tt ers , and an nu al po li ci es

.

Each po li cy th at M D O W s u b mitt ed in cl ud ed a de cl arat io ns pa ge , an d each

po li cy in cl ud ed an act ua l-c as h- va lu e en do rs em en t. Fo r th e th ree po li ci es is su ed fo r

20 11

, 20 12

, an d 20 13

, th e de cl arat io ns pa ge in cl ud ed a se ct io n en ti tl ed “ Add it io na l

End or se m en ts Att ach ed to Po li cy. ” F o r th es e th ree y ears , th e act ua l-c as h- va lu e

en do rs em en t was at ta ch ed bu t no t li st ed on th e de cl arat io ns pa ge

. The n, fo r th e 20 14

an d 20 15 po li c i es , th e co rres po nd in g se ct io n on th e de cl arat io n pa ge was ren am ed

“ Fo rm s Att ach ed to Po li cy ” an d th e act ua l-c as h- va lu e en d o r s e m en t was li st ed

. MDOW al so pr ov id ed le tt ers it pu rp or te dl y se nt to Mr. H a tc he r in Decem be r 20 13

as no ti ce of ren ewal fo r th e 20 14 po li cy , an d se nt in 20 14 fo r th e 20 15 ren ewal

. The se le tt ers di d no t ex pr es sl y refe ren ce th e act ua l-c as h

- v a l ue en do rs em en t as a
ch an ge

. The y di d, ho wev er, id en ti fy ot he r ch an ge s to th e po li cy

. In ad d i t i o n , th e
le tt ers were acco m

pa ni ed by de cl arat io ns pa ge s an d in st ru ct ed Mr. Hatc he r to rev ie w
th e p ol ic y if h e in te nd ed to ren ew.

The di st ric t co ur t gr an te d MDOW’ s su m m ary jud gm en t m ot io n as to th e ba dfai th cl ai m , reject in g th ree arg um en ts by Mr. Hatc he r. Fi r s t

, t h e co ur t he ld Mr.

H a t ch er fai le d to crea te a tri ab le qu es ti on of fact reg ard in g ba d fai th rel at ed to t h e
ad jus te r’s in it ia l an d su bs eq ue nt da m ag es es ti m at es

. Seco nd

, th e co ur t he ld Mr.

Hatc he r fai le d to crea te a tri ab le qu es ti on of fact reg ard in g an al le ga ti on th at MDOW

ha d un il at eral ly al te red th e po li cy by ad di ng th e act ua l-c as h- va lu e en do rs em en t. And

fin al ly, th e co ur t he ld MDOW ha d no t act ed in ba d fai th in rel at io n to li vi ng ex pe ns es

-5

-by ag reei ng to pa y a pe r di em fo r us e of th e tra il er rat he r th an pa y in g fo r so m e ot he r

arra ng em en ts

.

Th e c a s e p r oc eed ed to tri al

, whi ch to ok pl ace ov er th e co ur se of th ree da y s

. Late in th e week pr io r to tri al

, th e co ur t he ld a pr et ria l co nf eren ce at whi ch th e co ur t

ad dr es se d qu es ti on s su rro un di ng po li cy in te rp ret at io n. Mr. Hatc he r arg ue d he sh ou ld

be al lo wed to in tro du ce ev i d e n c e o f earl ie r y ears ’ po li ci es to pr ov e MDOW ha d

ad de d th e act ua l-c as h- va lu e en do rs em en t aft er th e in it ia l po li cy is su an ce in 20 11 an d

t o p r o v e it ha d no t be en ad de d in a m an ne r so as to m ak e it effe ct iv e. Th e d i s t r i c t

co ur t res erv ed ru li ng

. The n, on th e fir st da y of tri al

, th e co ur t ag ai n to ok up th e is su e

of earl ie r po li ci es an d t he pr oc es s of po li cy am en dm en t. The co ur t di d so to de ci de

w he th er th e co ur t wou ld or wou ld no t al lo w pa ro l ev id en ce fo r th e pu rp os e o f

in te rp ret in g t he 20 15 po li cy as a tt ach ed to Mr. Hat ch er’s co m pl ai nt

.

The co ur t co nc lu de d th e ev id en ce was ov erwh el m in g th at th e an nu al po li ci es

ha d al way s in cl ud ed an act ua l-c as h- va lu e en do rs em en t. The co ur t no te d th e st at e of

th e reco rd co nc ern in g th is is su e, in di cat in g th at

, al th ou gh th e earl ie r po li ci es di d no t

re fe re nce th e act ua l-c as h- va lu e en do rs em en t on th ei r de cl ar at ion pa ge s, Mr

. H at ch er ’ s

own co nc lu so ry affi da vi t was th e on ly ev id en ce in di cat in g su ch en do rs em en ts ha d not

b e e n i n c l ud ed in th e earl ie r po li ci es

. His affi da vi t, ho wev er, was faci al ly i nf irm in

th at it m ad e rep res en ta ti on s ab ou t th e or ig in al po li cy th at were pa te nt ly in co rrec t, i.e.,

he rep res en te d th at a th irt y -s ix -p ag e do cu m en t wit h n o d ecl arat io ns pa ge (an d

th e r e f o r e no li st in g of in su rer or in su red

, in su red am ou nt s, in su red pr op ert y , de du ct ib le s, et c.) was th e “ or ig in al ” po li c y. Th e co ur t al so de te rm in ed

, in th e

al te rn at iv e, th at e v e n i f t he or ig in al po li cy ha d no t in cl ud ed an act ua l-c as h- va lu e

en do rs em en t, th e la tt er ad di ti on of su ch an en do rs em en t at ti m e of ren ewal

, wit h Mr.

Hatc he r ha vi ng th e op ti on to no t ren ew, su ffi ced to al te r th e po li cy

. The co ur t en te red

a se pa rat e writ te n or de r to th is effe ct

, st at in g it s co nc lu si on th at in te rp ret at io n of th e

ap pl ic ab il it y

of t he en do rs em en t was a qu es ti on of l aw fo r th e co ur t.

-6

-W he n th e tri al co m m en ced

, in li gh t of th e di st r i c t c o u r t ’s pr et ria l ru li ng , th e

pa rti es tri ed th e is su e o f t he fir e-d am ag e lo ss am ou nt un de r an act ua l-c as h- va lu e

an al y si s rat he r th an a rep la cem en t-c os t an al y si s. MDOW el ic it ed te st im on y fro m it s
ad jus te r who was ex pe rie nc ed in us in g so ftwa re fo r cal cu la ti ng de pr eci at io n

. Eve nt ua ll y , Mr. Hatc he r to ok th e st an d an d at te m pt ed to of

fer hi s op in io n, as th e

pr op ert y own er, reg ard in g th e pr e-fi re de pr eci at io n of hi s ho m e. Co un se l as ke d Mr.

Hatc he r, “ And no w, k no win g th at y ou ha ve an act ua l cas h va lu e po li cy , h ow much

wou ld y ou de pr eci at e th e va lu e of y ou r ho m e ? ” M r

. H at ch er an swe red

, “ No m or e

th an 10 pe rcen t.” Co un se l fo r MDOW im m ed ia te ly ob jecte d, an d c ou ns el fo r Mr.

Hatc he r reb ut te d th at Mr. Hatch er was th e own er of th e pr op ert y

. The di st ric t co ur t

cal le d t he pa rti es to a si de ba r.

In th e en su in g di sc us si on , t h e p a rti es di sp ut ed whe th er Mr. Hatc he r was

qu al ifi ed to of

fer an op in io n as to de pr eci at io n an d whe th er an op in i o n as to

de pr eci at io n in th is co nt ex t di ffer ed fro m an op in io n as to va lu e. The co ur t co nc lu de d

th e si de ba r, st at in g:

He can gi ve th at if y ou wan t to go th ro ug h an d la y a fo un da ti on fo r hi m
to ta lk ab ou t de pr eci at io n. The pr ob le m wit h th e way y ou ph ras ed y ou r
qu es ti on is th e va lu e of th e pr op e r t y su bjec t to de pr eci at io n. I do n’t
kn ow – whe n we’re ta lk in g ab ou t th at

, I d o n ’t k no w wha t ex act ly th e
pr op ert y is . I th in k you co ul d g iv e a va lu e as to th e pr op ert y . B ut I’m

no t su re wha t su bjec t to de p r e c i a t i o n m ean s in y ou r qu es ti on fo r th is
wit ne ss

.

. . . I’m no t su re, ag ai n, he ’s qu al ifi ed to do th e su bjec t to de pr eci at io n. I’m

no t su re wha t he di d in hi s pa st li fe or em pl oym en t or h o w h e w o u ld

es ta bl is h a va lu e fo r cert ai n va lu es of th e ov eral l pr op ert y

. If y ou ha ve

so m e way he wou ld ha ve th at fo un da ti on a l kn owl ed ge , y ou kn ow, I
th in k wha t y ou are as ki ng hi m is sl ig ht ly di ffer en t th an th e va lu e of hi s
pr op ert y

.

. . .

-7

-If y ou wan t to go ou t th er e an d try t o do it ag ai n wit h th e wit ne ss , you

can

. Lik e I sa id

, rig ht no w th e way th e qu e s t i o n i s p h ras ed I th in k is
ob jecti on ab le

, an d I’ll su st ai n th e ob jecti on

. You can m ak e an ot he r ru n
at it wit h a di ffer en t qu es ti on in an effo rt t o t ry to ge t t o wh ere you are tryin g t o g o. I wi ll rul e o n c on te m po ran eo us ob

jecti on s th at are m ad e.

Afte r th e s i de ba r, pr oc eed in gs co nt in ue d in op en co ur t, bu t th e co ur t di d no t

in fo rm th e jury as to th e ru li ng on th e ob jecti on , an d th e jury was no t to ld to di sr eg ard

Mr. Hatc he r’s te st im on y th at th e pr e-fi re de pr eci at io n in th e va lu e of hi s ho m e was

“ [n ]o m or e th an 10 pe rcen t.” Su bs eq ue nt ly, Mr. Hatc he r’s co u n s e l a s ke d a few

po in te d qu es ti on s reg ard in g pr ob le m s or de te rio rat i on wit h cab in et s, in su la ti on ,
ap pl ia nc es , ge ne ral wear an d te ar, et c. Co un se l di d no t, ho wev er, as k Mr. Hatc he r to

op in e ag ai n as to a de pr eci at io n am ou nt

. Co un se l’s qu es ti on in g of Mr. Hatc he r as to

th is to pi c co nc lu de d wi th th e fo ll owi ng :

[Co un se l]: You ’ve he ard [th e ad jus te r] te st ify th at si gn ifi can t po rti on s of y ou r pr op ert y ha d de te rio rat ed ov er ti m e. Can y ou te ll th e jury wha t

po rti on s o f y ou r pr op ert y ha d d et eri or at ed si gn ifi can tl y ov er t im e? [Mr . Hatch er]: Not an y th in g. I h ad vi nyl si di ng on th e o ut si de . It was
al l g oo d, o th er t ha n wh at th e fi re d on e. I di dn ’t hav e an y th in g.

Ult im at el y , th e jury ret ur ne d a de fen se ve rd ic t, re jecti ng Mr. Hat ch er’s cl ai m

t ha t he was en ti tl ed to ad di ti on al in su ran ce pr oc eed s. Mr. Hatc he r ap pe al ed to ou r

co ur t an d pr ov id ed a tra ns cri pt o f t h e pr e-t ria l co nf eren ce th at to ok pl ace th e week

pr io r to tri al

. In ad di ti on , he pr ov id ed tra ns cri pt s of th e fir st two da y s of tri al

. He di d

no t pr ov id e a tra ns cri pt of th e fin al da y of tri al

. Th e d i s tri ct co ur t do ck et sh eet

, in

fact

, do es no t sh ow th at ei th er pa rty or de red th e tra ns cri pt of th at da y

. On ap pe al

, Mr.

Hatc he r arg ue s th e di st ric t co ur t im pr op erl y in te rp ret ed th e po li cy as an act ua l-c as hva lu e po li cy an d erre d by pr ev en ti ng hi m fro m te st ifyin g a s t o th e pr e-fi re
de pr eci at io n o f hi s h om e.

-8

-II.

A.

W e fir st ad dr es s Mr. Hatc he r’s ch al le ng e to th e di st ric t cou rt’s det erm in at io n

th at t he 20 15 po li cy in cl ud ed an en fo rcea bl e act ua l-c as h- va lu e en do rs em en t. The

pr oc ed ur al po st ur e su rro un di ng th e in te rp ret at io n o f th e p ol ic y is a bi t op aq ue

. Mr.

Hatc he r at ta ch ed t h e o p e r a ti ve 20 15 po li cy to hi s co m pl ai nt

. The pa rti es , on th ei r

cro ss m ot io ns fo r su m

m ary jud gm en t, dev el op ed a reco rd to co nt es t t he co nt en ts of

th e 20 11 po li cy , an nu al ch an ge s to th e p o li cy th ro ug h th e 20 15 po li cy , an d

co m m un ic at io ns pr ec ed ing re ne wals

. W e rev ie w su m m ary jud gm en t ru li ng s de no vo

. Bal l v. Ci ty of Lin co ln

, Neb

., 87 0 F. 3 d 7 2 2, 72 6 (8 th Ci r. 20 17 ). Bu t th e di st ric t

co ur t di d no t ru le at th e su m m ary jud gm en t st ag e th at th e op erat iv e 20 15 po li cy was

an act ua l-c as h- va lu e po li cy

. Rat he r, th e di st ric t co ur t m erel y reject ed Mr. Hatc he r’s

ba d- fai th cla im

an d d en ie d h is req ue st to rul e as a m at te r of law t ha t t he po li cy

was

a rep la cem en t-c os t po li cy

. The n, th e week be fo re tri al an d a g a i n at th e

co m m en cem en t of tri al

, th e co ur t ad dr es se d po li cy in te rp ret at io n an d po l ic y

am en dm en ts in a co nt ex t ak in to ru li n g o n a moti on in li m in e. The co ur t was
de ci di ng whe th er to al lo w or di sa ll ow pa ro l e v i d e n c e to ch al le ng e th e act ua l-c as hva lu e en do rs em en t at ta ch ed to th e 20 15 po li cy an d id en ti fie d on it s de cl arat io n pa ge

. W e no rm al ly rev ie w su ch ev id en ti ary ru li ng s fo r an ab us e of di sc ret io n. Si m s v. St at e

Farm Mu t. Aut o. In s. Co

., 89 4 F.3 d 94 1, 94 6 (8 th Ci r. 20 18 ). As be twee n th es e two

st an da rd s, t he m os t fa vo rab le po ss ib le st an da rd of r ev ie w we co ul d ap pl y fro m Mr.

Hatc he r’s st an dp oi nt is de no vo rev ie w. Bec au se we affi rm ev en un de r th is st an da rd

,
we ap pl y de no vo rev ie w.

The di st ric t co ur t su pp or te d it s de ci si on wit h two li ne s of reas on in g. Fi rs t, th e

co ur t l o o k e d at th e m at eri al s te nd ered at su m m ary jud gm en t an d refe ren ced by th e

pa rti es at the pr etria l he ari ng s an d de te rm in ed th e an nu al po li ci es ha d al way s in cl ud ed

act ua l-c as h- va lu e en do rs em en ts

, e v e n i f th e de cl arat io n pa ge s fo r 20 11

, 20 12

, an d

-9

-20 13 di d no t refe ren ce th os e en do rs e men t s

. MDOW ha d te nd ered m at eri al s an d

affi da vi ts to th is effe ct , a nd th ey were co ns is te nt w i t h t h e 2 0 15 po li cy Mr. Hatc he r

ha d at ta ch ed to hi s co m

pl ai nt

. The on ly co un te rv ai li ng ev id en ce Mr. Hatc he r of fere d

was hi s own faci al ly i nf

irm affi da vi t cl ai m in g th at th e p art ia l d oc um en t at ta ch ed to

hi s su m m ary jud gm en t affi d a v it co m pr is ed th e en ti ret y of th e or ig in al 20 11 po li cy

. Face d wit h th e un di sp ut ed ly ap pl ic ab le 20 15 po li cy Mr. Hatc he r ha d at ta ch ed to hi s

c om pl ai nt

, th e di st ric t co ur t es se nt ia ll y fo un d Mr. Hatc he r’s in fir m affi d a v i t

in co m pe te nt to crea te a tri ab le qu es ti on of fact as to whe th er th e earl ie r po li ci es ha d

or ha d n ot in cl ud ed th e act ua l-c as h- va lu e en do rs em en t.

Seco nd

, th e co ur t det erm in ed th at

, ev en if th e act ua l-c as h- va lu e en do rs em en t

was fir st ad de d to th e po li cy fo r po li cy y ear 20 14

, it was ad de d in a m an ne r co ns is te nt

wit h req ui rem en ts un de r Ark an sa s la w to pr ov id e an in su red no ti ce an d op po rtu ni ty

to rev ie w po li cy

am en dm en ts pri or to ren ewal . See Ark . Cod e Ann . § 2 3- 88 -1 05

.

W e a g r ee wit h th e di st ric t co ur t th at al l y ears ’ po li ci es co nt ai ne d th e act ua lcas h- va lu e en do rs em en t. Mo reo ve r, th e m at eri al qu es ti on fo r ou r rev ie w is whe th er

th e e n d o r s em en t at ta ch ed to

, an d refe ren ced on th e de cl arat io n pa ge fo r, th e 20 15

po li cy was op erat iv e. As su ch

, th e en fo rcea bi li ty of th e en do rs em en t fo r a n y p r io r

ye a r i s n o t at is su e. Rat he r, th e ot he r y ears ’ po li ci es an d an y ren ewal le tt ers as to

t h o s e ye a r s are m at eri al to th e ex te nt th ey in di cat e whe th er Mr. Hatc he r ha d no ti c e

of th e en do rs em en t fo r t h e 2 0 1 5 po li cy

. As su ch

, we ne ed no t de ci de whe th er th e
ab se nc e o f a refe ren ce to th e en do rs em en t on th e de cl arat io n pa ge s fo r 20 11 , 20 12

,

an d 20 13 m ad e th e en do rs em en t un en fo rcea bl e fo r th os e y ears or whe th er th e ren ewal

le tt er fo r th e 20 14 po li cy su ffi ced to m ak e th e en do rs em en t en fo rcea bl e fo r th at y ear.

Loo ki ng at th e en ti ret y of wha t Mr. Hatc he r rece iv ed

, it i s c l e ar th e 20 15

en do rs em en t was en fo rcea bl e. The de cl arat io n pa ge s fo r 20 14 an d 20 15 refe ren ced

th e en do rs em en t. The le tt er MDOC se nt to Mr. Hatc he r in Decem be r 20 13 in vi ti ng

po li cy ren ewal fo r 20 14 di d no t ex pr es sl y refe ren ce th e en do rs em en t. It di d, ho wev er,

-1 0-refe ren ce th e n eed to rev ie w th e at ta ch ed m at eri al s, whi ch

, in fact

, in cl ud ed th e

en do r s e men t an d th e po li cy wit h a de cl arat io n pa ge li st in g th e en do rs em en t. As to

th e 20 15 po li cy , Mr. Hatc he r rece iv ed a no ti ce in Decem be r 20 14 in st ru ct in g hi m to

rev ie w th e 20 15 po li cy if he in te nd ed to ren ew. The refo re, pr io r to ren ewal in 20 15

, Mr. Hat ch er re cei ve d two no ti ce of renewa l let te rs an d was aff or de d a pp ro xi m at el y
th irt een mo n th s to rev ie w th e m at eri al s pr ov id ed

, in cl ud in g de cl arat io n pa ge s

refe ren ci ng th e en do rs em en t th at ha d be en at ta ch ed to hi s po li cy as far ba ck as 20 11

.

The Ark an sa s Co de ad dr es se s req ui rem en ts fo r wha t an in su rer is to in cl ud e in

a no ti ce to a po li cy ho ld er reg ard in g ch an ge s to a po li cy at ti m e of pr op os ed ren ewal :

(a) Exc ep t fo r no np ay m en t of pr em iu m , th e in su rer sh al l gi ve ei th er a writ te n no ti ce of no nr en ewal o r an of fer of ren ewal at le as t th irt y (3 0)
da y s p rio r to th e ex pi rat io n o f th e p ol ic y ’s exi st in g t erm

.

(b ) The in su rer sh al l se nd th e in su red a writ te n no ti ce

. . . of th e of fer of

ren ewal un de r su bs ect io n (a) of th is se ct io n, in di cat in g th e ne w pr em iu m

an d pr ov id in g a de sc rip t io n of an y ch an ge in de du ct ib le or po li cy
pr ov is io n i n t he ren ewal po li cy

.

Ark . Cod e Ann

. § 23 -8 8- 10 5. If the en do rs em en t had ne ve r be en att ach ed , and if i t

ha d fir st ap pe ared in th e pr op os ed 20 15 po li cy se nt to Mr. Hatc he r pr io r to ren ewal

,

a cl os e qu es ti on m ig ht ex is t as to whet he r Mr. Hat ch er re cei ve d s uf fic ie nt st at ut or y

no ti ce of th e ch an ge

. It is by no m ean s cl ear th at on e ren ewal le tt er acco m pa ni ed by

a po li cy wit h a de cl arat io ns pa ge an d at ta ch ed en d o r s em en t wou ld sa ti sf y th e

“ de sc rip ti on of an y ch an ge ” req ui r e men t li st ed in se ct io n 23 -8 8- 10 5( b)

. Bu t, we

can no t vi ew th e di sc lo su res fo r th e 20 15 ren e w a l i n a va cu um

. W e ag ree wit h th e
di st ric t co ur t th at th e en ti ret y of th e m at eri al s Mr. H a t c h e r r ecei ve d m or e th an
ad eq ua te ly sati sf

ie d t he st at ut or y

req ui rem en ts

.

-1 1-Mr. Hatc he r ne ve rt h e l e s s arg ue s th e ch an ge to hi s po li cy was wit ho ut

co ns id erat io n. To su pp or t hi s arg um en t, he ci te s So ut he rn Farm Bu reau Cas

. In s. Co

.

v. Uni te d St at es , 39 5 F.2 d 17 6 (8 th Ci r. 19 68 ), fo r t h e ge ne ral pr op os it io n th at

c o ns id erat io n is req ui red to am en d po li cy te rm s. In pa rti cu la r, he arg ue s th at h i s

pr em iu m s in crea se d rat he r th an de crea se d ev en th ou gh

, acco rd in g to hi m , th e sc op e

of hi s co ve rag e de crea se d. W e co nc lu de he read s to o m uc h in to So ut he rn

. As ou r

co ur t he ld in Sl au gh te r v. Am . C as . I ns . C o. of Rea di ng , P a., 37 F.3 d 38 5 (8 th Ci r.

19 94 ), So ut he rn in vo lv ed an “ at te m pt [] t o m od if

y a po li cy du rin g a po li cy pe rio d.”

Sl au gh te r, 37 F.3 d at 38 7. In fact

, in Sl au gh te r, we qu ot ed an d em ph as iz ed la ng ua ge

fro m So ut he rn to th e effe ct th at th e in su rer is no t lo ck ed in to ex is ti ng te rm s be y on d

th e p ol ic y ter m :

The in su ran ce co m

pa ny c le arl y co ul d can cel th e po li cy up on pr op er

no ti ce an d co ul d if de si red of fer a di ffer en t po li cy to t h e a s s u red , wh o

wou ld be free to a c c e pt or reject th e pr of fere d po li cy ; or th e co mpa ny

co ul d re fu se to re ne w exce

pt up on al te re d te rms an d co nd it io ns

. The

co m pa ny is no t lo ck ed in fo r an ex te nd ed pe rio d of ti m e or ad in fi ni tu m

so to sp eak in it s con tra ct ob li ga ti on s if pro pe r st ep s are take n t o m ak e

a n ew or alt ered co nt ract wit h i ts ass ur ed

.

Id

. (q uo ti ng So ut he rn , 39 5 F.2 d at 18 1)

. Mr. Hatc he r’s pr em iu m fo r th e 20 15 po li cy , aft er re cei vi ng ad eq ua te no ti ce, s erv ed as c on si de rat io n.

B.

Turn in g to th e ev id en ti ary is su e, we ag ree wit h Mr. Ha t c h e r th at , a t tri al , t he

di st ric t co ur t sh ou ld ha ve ov erru le d MDOW ’ s obj ec tio n to Mr

. H at ch er ’ s de pr eciat io n

te st im on y

. Dep reci at io n, aft er al l, is m erel y th e di ffer en ce b e t w e en two va lu es : an

in it ia l va lu e an d a la te r-i n- ti m e va lu e. See, e.g ., Nw. Nat ’l I ns . C o. v. Nem et z, 40 0

N.W .2d 33

, 40 (Wis. Ct

. A p p

. 1 9 86 ) (“ Rep la cem en t co st m in us de pr eci at io n is a

pe rm is si bl e m et ho d of arri vi ng at th e fai r m ark et va lu e of lo st pr op ert y .”). Alt ho ug h

-1 2-va rio us te ch ni cal m ean s of tra ck in g an d de du ct in g de pr eci at io n ex is t fo r acco un ti ng

an d ta x- cal cu la ti on pu rp os es , th es e tech ni cal m ean s do no t ch an ge th e un de rlyin g fact

th at an op in io n as to de pr eci at io n is no th in g m or e th an an op in io n as to va lu e. And

, in Ark an sa s, a pr op ert y

own er i nt im at el y

fam il ia r wit h h is pro pe rty is co m pe te nt to

te st ify as to it s va lu e. See, e.g ., W al t Benn et t Fo rd

, In c. v. Bro wn, 67 0 S.W .2d 44 1,

44 3 (Ark

. 19 84 ). Test im on y fro m a pr op ert y own er, al th ou gh ad m is si bl e, is su bjec t

to at ta ck an d carr ie s weig ht co m m en su rat e in sc op e wit h t h e p ro pe rty own er’s

ex pl an at io n an d de m on st rat ed kn owl ed ge an d ex pe rie nc e. See Po pe v. Ove rto n, 37 6

S.W .3d 40 0, 40 5 (Ark

. 20 11 ) (“ An own er o f pr op ert y is co m pe te nt to te st ify as to

va lu e of hi s pr op ert y if he h a s a n i n t im at e acq ua in ta nc e wit h hi s pr op ert y , bu t no t

ev ery la nd own er’s te st im on y co ns ti tu te s su bs ta nt ia l ev id en ce.”)

. Here, Mr. Hatc he r
bu il t th e ho m e, li ve d in it fo r t w e n t y ye a rs , an d pa rti ci pa te d in th e po st -fi re

reco ns tru ct io n. He was , th eref or e, well po si ti on ed to cl ai m an ab il it y to te st ify as to

th e p ro pe rty’ s v al ue

.

MDOW ci te s va rio us cas es se em in g to li m it a pr op ert y own er’s ab il it y to op in e

as to va lu e, bu t al l su ch cas es rel at e to un iq ue si tu at io ns no t pr es en t in ou r cas e. Fo r

ex am pl e, co ur ts ha ve li m it ed or ex cl ud ed su ch te st im on y fro m co m m erci al

la nd own ers sh own to be un fam il ia r wit h th ei r pr op ert y or who so ug ht to te st ify as to

th e va lu e of a pr op ert y as pa rt of a la rg er co m m erci al en te rp ris e or fo r a pa rti cu la r

co m m erci al u s e

. See, e.g ., Ja m es Ri ve r In s. Co

. v. Rap id Fu nd in g, LLC, 65 8 F.3 d

12 07

, 12 14 –1 6 (1 0t h Ci r. 20 11 ) (ex cl ud in g a co m m erci al pr op ert y own er’s at te m pt ed

te st im on y as to va lu at io n whe re th e pr op ert y own er of fere d no ba si s in fact to ex pl ai n

a de pr eci at io n pe rcen ta ge an d, in fact , was an ou t-o f-s ta te ab se nt ee o wne r who ha d

acq ui red th e pr op ert y in a di st res s sa le ); Ark

. St at e Hig hwa y Co m m ’n v. Fri sb y , 95 1

S.W .2d 30 5, 30 7 (Ark. 19 97 ) (s ta ti ng th at “ no do ub t” an own er h as th e pr iv il eg e of

of feri ng an op in io n as to va lu at io n, bu t ex cl ud in g su ch an op in io n fro m a co m m erci al

pr op ert y own er whe re th e own er ad m it te d in te st im on y he ha d no ba si s in fact fo r hi s

es ti m at e an d ha d m erel y ba se d i t o n “ hi s ‘feeli ng ’ or wha t he wou ld ha ve as ke d fo r

th e la nd ”); Ark. Stat e Hig hwa y Co m m ’n v. Ham m on d, 4 47 S.W .2d 66 4, 6 65 (Ark.

-1 3-19 69 ) (fi nd in g la nd own er in em in en t do m ai n di sp ut e co ul d no t te st ify as to va lu e of

co m m erci al fis h- rear in g po nd s or in te nd ed co ns tru ct io n pr ojec ts on la nd ta ke n by th e

st at e be cau se la nd own er ha d no ba si s in kn owl ed ge fo r su ch co m m erci al va lu at io ns ).

We s i m pl y fin d no au th or it y fo r th e pr op os it io n th at a ho m eo wne r su ch as Mr

. Hatc he r is un ab le to te st ify as to th e va lu e of hi s ho m e, an d by ex te ns io n, de pr eci at io n

ov er a p eri od of t im e d ur in g wh ic h h e b ui lt an d o ccu pi ed th e h om e.

Tha t do es no t en d ou r an al y si s, ho wev er, be cau se th ree se pa rat e gr ou nd s ex is t

th at ba r Mr. Hatc he r fro m rece iv in g rel ie f du e to th e ab se nc e of an y de m on st rat ed

ha rm

. See St ol zen bu rg v. Fo rd Mo to r Co

., 14 3 F.3 d 40 2, 40 6 (8 th Ci r. 19 98 ) (“ [W] e

c o n c lu de as well th at an y erro r in ex cl ud in g it was ha rm le ss .”). Fi rs t, as di sc u s s e d

ab ov e, th e jury act ua ll y he ard hi s te st im on y th at pr e-fi re de pr eci at io n of hi s ho m e was

“ no m or e th an 10 pe rcen t.” The di st ric t co ur t ru le d on th e MDOW’ s m ot io n on ly in

th e si d e b a r

. The tra ns cri pt pr ov id ed to ou r co ur t do es no t sh ow th at th e jury was

in fo rm ed as to th e ru li ng on th e m ot io n. In an y ev en t, Mr. Hatc he r ha s no t sh own th at

th e jury was ad m on is he d to di sr eg ard hi s de pr eci at io n te st im on y

. The refo re, wit ho ut

res or t to sp ecu la ti on , we can no t co nc lu de th e jury was ev en aw a r e t h at th e di st ric t

co ur t s us ta in ed th e o bjec ti on

.

Seco nd

, ev en if th e jury ha d be en ad m on is he d to di sr eg ard th at te st im on y , Mr.

Hatc he r m ad e no of

fer of pr oo f as to wha t ad di ti on al or a l t e r n a t i v e in fo rm at io n he

wan te d to te ll th e jury bu t was pr ev en te d fro m sa y in g. See St ro ng v. Mer can ti le Trus t

Co ., 81 6 F.2d 42 9, 4 31 (8t h C ir. 1 98 7) (“ Erro r m ay no t b e p red ic at ed up on a ru li ng

ex cl ud in g ev id en ce un le ss a s u b st an ti al rig ht of th e pa rty is affe ct ed an d ‘the

su bs ta nc e of th e ev id en ce was m ad e kn own to th e co ur t by of fer [o f pr oo f] or was

ap pa ren t fro m th e co nt ex t wit hi n whi ch qu es ti on s were as ke d.’” (q uo ti ng Fed

. R.

Evi d. 1 03 (a)( 2) )).

And th ird

, Mr. Hatc he r di d no t pr ov id e to ou r co ur t a tra ns cri pt of th e fin al da y
of tri al

. W it ho ut a tra ns cri pt of th e fin al da y of t h e t r i a l

, w e can no t as se ss ha rm

-1 4-be cau se we can no t kn ow wha t was sa id to th e jury at cl os in g reg ard in g th e pa rti e s’

res pe ct iv e vi ews of pr e-fi re va lu e, r e p l a c e ment co st s, de pr eci at io n, et c. See, e.g ., Kell y v. Om ah a Hou s. Aut h., 72 1 F.3 d 5 6 0

, 56 2 (8 th Ci r. 20 13 ) (d is m is si ng fo r

in ab il it y to rev ie w ba se d on pl ai nt iff ’s fai lu re to or de r th e en ti re tra ns cri pt whe re th e

co ur t de em ed m is si ng tra ns cri pt po rti on s ne ces sa ry ); Brat tru d v. Town of Exl in e, 62 8

F.2 d 10 98

, 10 99 (8 th Ci r. 19 80 ) (p er cu ria m ) (“ The pl ead in gs in cl ud ed in th e reco rd

on ap pe al fai l to pr ov id e an y reco rd req u i r e d f or a m ean in gf

ul rev ie w. Thi s co ur t

can no t ru le on th e is su es rai se d he re wit ho ut a co m pl et e tra ns cri pt of th e pr oc eed in gs

. In th e ab se nc e of a pr op er reco rd whi ch in cl ud es th e tra ns cri pt of te st im on y , we ha ve

no al te rn at iv e bu t to di sm is s th e ap pe al pu rs ua nt to Eig ht h Ci rcu it Ru le 13

, fo r fai lu re

to co m pl y wit h t he Fed eral Ru le s o f App el la te Pro ced ur e.”).

Bec au se th e di st ric t co ur t di d no t err in in te rp ret in g th e po li cy as an act ua lcas h- va l ue po li cy , an d be cau se Mr. Hatc he r ha s sh own no ha rm rel at ed to th e

ev id en ti ary ru li ng on hi s de pr eci at io n te st im on y , we affi rm th e jud gm e nt of th e
di st ric t co ur t.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

-1 5-