Opinion ID: 706879
Heading Depth: 2
Heading Rank: 2

Heading: Any bad faith conduct by Allstate in 1990 was

Text: 26 inadmissible 27 The district court ruled after trial that Allstate did not negotiate in bad faith. The Aceveses argue that the court excluded their best evidence of Allstate's bad faith negotiation, the way in which Joyce Almeida, their adjuster from August 1989 until denial, handled their claim. They assert that she received a coverage letter in January 1990 opining that Allstate could not invoke the one-year suit limitation as a defense, but stalled negotiations to buy time for a more favorable coverage letter, which she received in July 1990. This evidence, they argue, would have constituted evidence that Allstate's representative negotiated in bad faith. 28 The district court excluded the evidence because it found that all of the acts alleged and attributed to Almeida occurred after the cutoff date. To be relevant to the bad faith negotiation theory rather than the bad faith denial theory, Almeida's conduct needed to have occurred before the cutoff date. See Fed.R.Evid. 401. 29 In determining the negotiation-denial cutoff date, the district court, consistent with its earlier grant of partial summary judgment, as affirmed on reconsideration, looked to when Allstate first began to rely on outside legal advice that it could legally deny the Aceveses coverage because of the one-year suit limitation. See 827 F.Supp. at 1487-88. In other words, the relevance of Almeida's conduct to Allstate's bad faith negotiation depended on when Allstate first relied on the advice of counsel. See Fed.R.Evid. 104(b). Since the suit was tried without a jury, the district court made the factual determination as to when Allstate started to rely on advice about the suit limitation, and we review its finding for clear error. See Fed.R.Civ.P. 52(a). 30 The trial record indicates that Allstate first received the advice of counsel about the suit limitation on January 12, 1990. The outside counsel's letter advised that Allstate has a very good chance of ultimately prevailing on the insureds' claim based on the one year policy limitation. 2 The district court did not clearly err when it determined that January 12, 1990, was the cutoff date between Allstate's bad faith negotiation conduct, on which the district court had denied summary judgment, and its bad faith denial conduct, on which it had granted summary judgment. 31 All of the Aceveses' evidence regarding Almeida's conduct falls on or after January 12, 1990. Thus, the district court did not abuse its discretion in excluding evidence along this line of inquiry as irrelevant to whether Allstate stalled negotiations with the Aceveses in bad faith until it could find a plausible reason to deny them coverage. 32