Opinion ID: 1295519
Heading Depth: 1
Heading Rank: 5

Heading: Burden of Proof Instruction.

Text: The district court's instruction on Rain and Hail's affirmative defense stated in relevant part: The defendants voided the plaintiffs' 1998 Multi-Peril Crop Insurance policies.... In connection with those insurance policies, you must determine whether the defendants have proved each one of the following: 1. That the plaintiffs, or anyone assisting them, misrepresented facts; and 2. That the misrepresentations were intentionally made; and 3. That the misrepresentations were material. If the defendants have proved each of the above, you will answer the Special Interrogatory Yes. If the defendants have failed to prove each of the above, you will answer the Special Interrogatory No. (Emphasis added.) In another instruction, the district court instructed the jury that [w]henever a party must prove something, they must do so by the preponderance of the evidence. The instruction defines a preponderance of evidence as evidence that is more convincing than opposing evidence and states that [t]o prove something by the preponderance of the evidence is to prove that it is more likely true than not true. Taking these two instructions together, the jury could find for Rain and Hail on its affirmative defense if it found Rain and Hail proved its defense by a preponderance of the evidence. The Hollidays contend the court should have instructed the jury that Rain and Hail had to prove its affirmative defense by a preponderance of clear, satisfactory, and convincing evidence rather than by a preponderance of evidence. And the district court's failure to so instruct the jury was a material misstatement of the law and for that reason was prejudicial, warranting reversal. For reasons that follow, we disagree. Our law is clear that all the elements of common-law fraud must be established by a preponderance of evidence that is clear, satisfactory, and convincing. Lockard v. Carson, 287 N.W.2d 871, 874 (Iowa 1980). The reason for this heavier burden is to give deference to the presumption of fair dealing. Id. `[C]lear and satisfactory' refers to the character or nature of the evidence, whereas `preponderance' of the evidence is a quantitative measure. Id. What Rain and Hail had to prove here was not common-law fraud for damages. Rather it had to prove a contractual defense, pursuant to paragraph twenty-seven of the policy, to void the policies based simply on intentional concealment or misrepresentation of any material fact relating to the policies. Thus, all that Rain and Hail had to prove was either one of two elements: intentional concealment or misrepresentation; there was no language indicating that Rain and Hail had to prove all the elements of common-law fraud. See Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 400 (Iowa 2001) (listing elements necessary to establish common-law fraud claim: (1) defendant made a representation to the plaintiff, (2) the representation was false, (3) the representation was material, (4) the defendant knew the representation was false, (5) the defendant intended to deceive the plaintiff, (6) the plaintiff acted in reliance on the truth of the representation and was justified in relying on the representation, (7) the representation was a proximate cause of plaintiff's damages, and (8) the amount of damages). In its ruling on the Hollidays' motion for new trial, the district court addressed the issue squarely and in accord with our reasoning here: The plaintiffs urge that the Court erred in instructing the jury regarding the burden of proof required of the defendants in their affirmative defense. The plaintiffs are correct that the burden of proof in a cause of action for damages sustained as a result of fraud is proof by a preponderance of the clear and convincing evidence. However, there was no claim for damages for fraud submitted to the jury in this case. In this case, the cause of action was for breach of contract. The burden of proof on the plaintiffs was to prove a breach of contract by a preponderance of evidence. Part of the proof required of the plaintiffs was the existence of a contract of insurance, insuring against the plaintiffs' losses. The defendants raised the affirmative defense that, pursuant to the terms of the contract, there was no policy and no coverage for the plaintiffs' losses. The same burden of proof fell upon the defendants in their affirmative defense. The defendants were required to prove, by a preponderance of the evidence, that pursuant to its terms, there was no policy in effect and hence no coverage. In this case, the defendants, to prove their affirmative defense, were required to prove that the plaintiffs intentionally misrepresented material facts. The insurance policies provided that they were void if those facts were proved. The fact that the policy language included some, but not all, of the elements of a cause of action for fraud, did not however, require the defendants to prove their entitlement to a judgment for damages for fraud in order to prove their defense. The district court did not err in instructing the jury on Rain and Hail's burden of proof regarding its affirmative defense.