Opinion ID: 2629304
Heading Depth: 1
Heading Rank: 6

Heading: The district court erred when it instructed the jury on fiduciary duty

Text: Because no special relationship existed between ICW and Gibson, the district court also erred in submitting an instruction on fiduciary duty to the jury. `The district court has broad discretion to settle jury instructions,' and a district court's decision to give a particular instruction will not be overturned absent an abuse of discretion or judicial error. [14] If an instruction is erroneous, it must also constitute prejudicial error for reversal to be warranted. [15] The burden is on the appellant to show, through the trial transcript or a statement of the evidence, the prejudicial effect of the erroneous instruction. [16] We conclude that the fiduciary duty instruction in this case was both erroneous and prejudicial. The insurer-insured relationship is fiduciary in nature, and a jury's finding of a breach of fiduciary duty may support the finding of bad faith. [17] Misrepresenting or concealing facts to gain an advantage over the insured constitutes a breach of fiduciary responsibility. [18] However, because a surety's role in providing bonds on behalf of a principal is distinct from that of an insurance company providing a policy to protect its insured, a surety is not held to owe the same fiduciary duty to its principal. The district court erred in instructing the jury that ICW owed a fiduciary duty to Gibson. Further, ICW met its burden of establishing the prejudicial effect of the fiduciary duty instruction by pointing to numerous instances in the record where Gibson referred to itself as ICW's insured or fiduciary. Gibson, in closing argument, also reminded the jury of the fiduciary duties of an insurance company. The district court erred as a matter of law when it allowed the instruction to go to the jury, and the instruction was unfairly prejudicial toward ICW because it could have supported the jury's finding of bad faith.