N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
C R AIG M ILHOUSE a

nd PAM ELA M ILHOUSE, Plaintiffs - Appe lla nts,
v. TR AVELER S C O M M E R C IAL INSUR ANC E C OM PANY, De fe nda

nt - Appe lle e . No. 13-56959 D.C . No. 8:10-c v-01730-C JC -AN
M EM O R ANDUM *

C R AIG M ILHOUSE a

nd PAM ELA M ILHOUSE, Plaintiffs - Appe lle e s, v. TR AVELER S C O M M E R C IAL INSUR ANC E C OM PANY, De fe nda

nt - Appe lla

nt. No. 13-57029

D.C . No. 8:10-c v-01730-C JC -AN

Appe a l from

the Unite d

Stat e s Distric t C ourt for the C e ntra l Distric t of C a lifornia 

# FIL ED FEB 23 2016 M OLLY C. DW Y ER, CLERK U
. S
. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by 9th C ir. R . 36-3.C orm a c J. C arne y , Distric t Judge , Pre siding Argue d a nd Subm itte d Fe brua

ry 1, 2016 Pa sa de n a , C a l ifornia B e fore : PAEZ a

nd M . SM ITH, C irc uit Judge s, a nd SILVER , * * Se n ior Distric t Judge
. C ra ig a

nd Pam e la M ilhouse(“ the M ilhouse s” ) and Tra ve le rs C om

m e rc ia l Insura nc e C om pa ny (“ Trave l e rs” ) c ross-a

ppe a l the distric t c ourt’ s fina l orde r on post-tria l m otions, judgm e nt, first a m e nde d judgm e nt gra

nting re m i ttitur, a

nd
se c o nd a m e nde d judgm e nt a

warding post-judgm

e nt inte re st. The M i lhouse s a rgue that the distric t c ourt e rre d whe n it (1) de c line d to givea jury instruc tion re ga

rding the l e ga lity

of listing the

Inte rna l R e ve nue Se rvic e (“ IR S” ) a s a c o-pa y e e on the M ilhouse s’ insura

nc e be ne fits c he c k; (2) a dm itte d m e diation c om

m unic ations a

t tria l ; (3) fa i le d to e xc l u de de fe nse e xpe rt witne ss C l arke Holla nd’ s te stim ony re ga rding m e diation; a

n d (4) de c line d to a

ward pre j udgm e nt inte re st. The y

re que st
a ne wtria l with re spe c t to the ir bre a c h of the im plie d c ove na

nt of good fa i th a

nd fa ir de a ling c la im
. Trave le rs a rgue s tha t the distric t c ourt e rre d whe n it de te rm ine d that substa ntia l e vide nc e supporte d the jury ’ s lia bility finding a nd its a w ard (a fte r

** The Honora

ble R osly n O. Silve r, Se nior Distric t Judge for the U.S. Distric t C ourt for the Distric t of Ariz ona , sitting by de signa tion. 2re m ittitur) on the M ilhouse s’ bre a c h of c ontra c t c la im . W e have jurisdic tion pursua nt to 28 U.S.C
. § 1291, a

nd we a ffirm
. W e re vie w de novo thedistric t c ourt’ s gra nt or de nia l of a

pa rty ’ s m otion for judgm e nt a s a

m atte r of la

w, a nd we re vie w its gra

nt or de n ia l of a m otion for a
ne w tria l for a

n a buse of disc re tion. Fe d. R . C iv. P. 50, 59(a); Esc r iba v . Foste r Poultry Farms, Inc
. , 743 F.3d 1236, 1242 (9th C ir. 2014); The m ePromotions, Inc
. v . N e w s Am. Mk tg. FSI , 546 F.3d 991, 1000 (9th C ir. 2008) (c ita tions omitte d). B e c a use “ we do not lightly

c a st a side the sole m

nity of the jury ’ s ve rdic t,” we de te rm i ne if substa

ntia l e vide nc e supports the jury ’ s ve rdic t a

nd its c a lc ulat ion of dam a ge s. G rav e

s v . C i ty of C oe ur D’Ale ne , 339 F.3d 828, 844 (9th C ir. 2003), abrogate d on othe r grounds by Hiibe l v
. Six th J

udic ial Dist. C

t. of N e v ada , 542 U.S. 177 (2004); Barnard v
. The obald, 721 F.3d 1069, 1076 (9th C ir. 2013). W e c onstrue the tria l e vide nc e in the light most fa vora ble to the nonm oving pa

rty , re solve a l l c onflic t s in fa

vor of the nonm oving pa

rty , and dra

wa ll re a sona

b le infe re n c e s in fa

vor of the jury ’ s ve rdic t. Harpe r v . C ity of L.A. , 533 F.3d 1010, 1016 (9th C ir. 2008) (c ita tion omitte d). 1. W e re vie w de novo whe the r a jury instruc tion mi ssta

te s the la w, a nd we
re vie w the distric t c o urt’ s form ulat ion of a c ivil jury

instruc tion for a

n a buse of disc re tion. W

ilk e rson v . W

he e le r , 772 F.3d 834, 838 (9th C ir. 2014) (c iting Pe ralta

3v . Dillard

, 744 F.3d 1076, 1082 (9th C ir. 2014) (e n ba nc )); W all Data Inc . v . L.A. C ty . She riff’s De

p’t , 447 F.3d 769, 784 (9th C ir. 2006) (c ita tions omi tte d). The M ilhouse s a sse rte d

se ve ra l the o rie s of lia

bility with re spe c t to the ir ba d fa ith c l a im , inc luding a

the ory tha t Tra ve le rs unla

wfully liste d

the IR S a s a

c opa y e e on the M i lhouse s’ insura nc e be n e fits c he c k a s a

form of re ta lia tion. To pre v a i l on a

bre a c h of the im

plie d c ove na

nt of good fa ith a

nd fa ir de a ling c la im , a pla i ntiff m

ust show tha

t the insure r (1) withhe ld be ne fits due unde r the polic y for (2) re a sons tha

t we re unre a sona

ble or without proper c a

u se . Py ramid Te c hs., Inc
. v . Hartford C

as. Ins. C o . , 752 F.3d 807, 823 (9th C ir. 2014). W e find no e rror in the distric t c ourt’ s de c ision not to ch a rge the jury
re ga rding theproprie t

y of listing the IR S a s a

c o-pa y e e . The le ga l ity

or ille ga lity of inc luding theIR S a s a

c o-pa y e e se rve d a s a pote ntia l ba sis for the“ without prope r c a use ” e le m e nt of a

ba d fa ith insura

nc e c la im , a

nd both pa

rtie s ha d the opportunity

to de ve lop there c ord with re spe c t to tha t the o ry of lia bility . Whe n re vie we d in light of the

distric t c ourt’ s jury

instruc tions a s a

whole , an instruc tion
re ga rding theIR S wa s not re quire d. Eve n if the c ourt e rre d, a ny e rror wa s ha rm le s s in light of a

l l the e v ide nc e . 2. W e re vie w de novo thedistric t c ourt’ s de te rm ination whe the r to a pply sta te or fe d e ra l la

win a dive rsity a c tion, a s we l l a s the distric t c ourt’ s c o nstruc tion of

4sta

te la w. Fe ldman v . Allstate

Ins. C o. , 322 F.3d 660, 665 (9th C ir. 2003) (c ita tion
om i tte d). Although evide ntia ry rulings a re ty pic a lly re vie we d for a

n a buse of disc re tion, there c ognition, a pplic ation, a

n d wa ive r of an e vide ntia ry privile ge are m ixe d que s tions of la

w a nd fa c t tha

t we re vie w de novo. Id. The M ilhouse s a

rgue tha t the distric t c ourt e rre d in a pply ing Fe d e ra l R

ule of Evide n c e 408 inste a d of C a lifornia Evide nc e C ode se c tion 1119 when de t e rm ining whe the r a m e diation privile ge ba

rre d the a dm i ssion of e vide n c e re lat e d to sta te m e nts a nd c onduc t unde rtake n during m e diation proc e e dings. Although both pa rtie s file d m otions in lim

ine to e xc lude e v ide nc e re late d to m e diation, the distric t c ourt did not rule

on the m e rits of thosem otions, denie d a ll of the m otions without pre j udic e , a nd dire c t e d the pa

rtie s to winnow down the num be r of m otions in lim ine . B oth pa

rtie s withdre w the i r m otions in lim ine re g arding m e diation. At no point during the

fina l pre tria l c onfe re nc e or during trial did theM ilhouse s’ c ounse l obje c t on theba sis of them e diation privile ge , nor did hea le rt the distric t c ourt tha t C a lifornia Evide nc e C o de se c tion 1119, not Fe de ra l R ule of Evide nc e 408,
c ontrolle d the a dm ission of e vide nc e from m e diation proc e e dings. Inste a d, c ounse l
ra ise d the issue of m e diation privile ge , a nd of c hoic e -of-la

w, for the first tim e in his m e m orandum

in support of his m

otion for a ne w tria l. B y

fa i ling to obje c t on the b a sis of them e diation privile ge at tria l, the M ilhouse s did not pre se rve for 5a

ppe a l whe the r the distric t c ourt e rre d whe n it a dm itte d

m e diation sta

te m e nts. W e the re fore c onside r the issue wa i ve d a nd de c l ine to a ddre ss the m e rits of the ir ta rdy obje c tion to the

a dm ission of tha

t e vide nc e . The M ilhouse s a lso c onte nd tha t the distric t c ourt e rre d whe n it de c line d to
e xc lude the m e diation sta te m e nts a s he arsay . W e m a y a ffirm the distric t c ourt’ s ruling on a

ny ground supporte d by

the re c ord, “ e ve n

if the distric t c ourt re lie d on the w rong grounds or wrong re a soning.” Muniz v . Unite d Parc e l Se rv ., Inc
. , 738 F.3d 214, 219 (9th C ir. 2013) (quoting C igna Prop. &

C a s. Ins. C o. v . Polaris Pic ture s C orp. , 159 F.3d 412, 418 (9th C ir. 1998)). Fe de ra l R ule of Evide nc e 801(d)(2) provide s tha

t c e rta in sta

te m e nts m ay

be offe re d a ga inst a

pa rty oppone nt
and a re “ not he arsa

y ” within the

m e aning of R

ule 801. At trial , Trave le rs a sse rte d that the M ilhouse s de live re d the ir m e diation offe rs through thepa rtie s’ m e diator, a

“ pe rson whom

the pa rt[ie s] a uthoriz e d to m ake a sta

te m e nt on thesubje c t.” Fe d. R . Evid. 801(d)(2)(C ). Although the distric t c ourt c i te d a

nothe r ba sis for its ruling— Fe d e ra l R ule of Evide nc e 803(3)— i t did not err in ove rruling the M ilhouse s’ obje c tion to the m e diation sta

te m e nts pre se nte d by Trave le rs. 3. W e re vie w the a dm i ssion or e xc lusion of e xpe rt te stim ony at tria l for a

n a buse o f disc re tion. Primiano v . C ook , 598 F.3d 558, 563 (9th C ir. 2010). The M ilhouse s obje c t to thedistric t c ourt’ s a dm ission of de fe nse e xpe rt C la rke 6Holla

n d’ s te stim ony

re g arding his im

pre ssion of theM ilhouse s’ m otive s at
m e diation. Holla

nd did not pa

rtic ipate in tha

t m e diation a

nd only re c e ive d inform at ion re ga

rding the sta

t e m e nts a lle ge dly

m a de during m e diation from de fe nse c ounse l a

nd othe r de fe n se witne sse s. Although Holla nd’ s te stim ony

wa s spe c ulative , its a dm ission did not pre judic e the M ilhouse s in light of the othe r e vide nc e introduc e d re g arding thepa rtie s’ m e diation e fforts. The re wa s no a buse of disc re tion in a dm itting his te stim ony . 4. W e re vie w the grant or de nia l of pre -judgm e nt inte re st for a n a buse of disc re tion, a

n d we a pply the forum

sta te ’ s la w re ga rding pre -judgm e nt inte re st whe n a c a se arise s unde r the c ourt’ s dive rsity jurisdic tion. C

hampion Produc e

, Inc
. v . Ruby

Robinson C

o . , 342 F.3d 1016, 1020 (9th C ir. 2003); Mc C alla v . Roy al Mac C abe e s Life Ins. C o. , 369 F.3d 1128, 1131–32 (9th C ir. 2004). C a lifornia la w re quire s tha

t a c ourt a ward pre j udgm e nt inte re st to a

pa rty who re c e ive s da

m a ge s ba s e d on a

c ontra c t c a

u se of a c tion with re spe c t to the
am ount of da

m a ge s tha t wa s “ (1) due an d owing a nd (2) c e rta i n or c a

pa ble of be ing
m a de c e rta i n by

c a lc ulation.” U

zy e l v . K adisha , 188 C a l. App. 4th 866, 919 (2010) (c ita tions omitte d ); se e C a l . C iv. C ode § 3287(a). Dam a g e s a re c e rta in if the de fe nda nt “ a c tua lly

knows theam ount of da

m a g e s ” or c ould c a lc ulat e the am ount ba se d on “ inform ation re a s ona bly ava ila ble to the de fe nda

nt.” Uzy e l , 188 C a l. 7App. 4th a

t 919
. If c a lc ulation of thedam a ge s a m ount re quire s a fa c tfinde r to de te rm i ne the am ount ba se d on c onflic t ing e vide n c e , a nd the dam a ge s a

m ount c annot be inde pe nde ntly

c a lc ulate d, the n da

m a ge s a re not a sc e rta ina

ble , and no pre j udgm e nt inte re st is a

warde d. Id. As the distric t c ourt note d, the pa rtie s we re una

ble to a g re e on the va l uation of the M ilhouse s’ c l a im s on the ir dwe lling, ordina nc e /la w, a nd pe rsona l prope rty polic ie s. B e c a

u s e the jury wa s re q

uire d to we igh e vide nc e to de te rm ine the va lue of the M ilhouse s’ c l a im s, tha t inform ation wa s not c e rta in prior to the e ntry of judgm e nt. The distric t c o urt did not err in holding tha t dam a g e s we re not c e rta in or
c a lc ula b le , a nd it did not e

rr in de c lining to im

pose pre judgm e nt inte re st. 5. Trave le rs c onte nds it is entitle d to judgm e nt a s a

m atte r of la

w, a rguing tha

t the j ury ’ s ve rdic t a

nd the distric t c ourt’ s re m ittitur order a re not supporte d by substa ntia l e vide nc e in the re c ord a s a whole
. Vie wing a l l of the tria l e vide nc e in the l ight m ost fa

vora ble to the v e rdic t, the distric t c ourt c orre c tly de te rm ine d tha

t substa ntia l e vide nc e supporte d the jury ’ s ve rdic t . The distric t c ourt a lso did not err in its da m a ge s c a lc ulat ion. AFFIRM E D.

8