Court Opinion

ID: 4106829
Source: CourtListenerOpinion
Date Created: 2016-12-13 19:00:59.409988+00
Date Added: 2024-06-11T14:36:42.263534
License: Public Domain

Case: 16-60098      Document: 00513794207         Page: 1    Date Filed: 12/13/2016

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                        United States Court of Appeals
                                                                                 Fifth Circuit
                                      No. 16-60098                             FILED
                                                                       December 13, 2016
                                                                          Lyle W. Cayce
EDDIE J. BRIGGS; REBECCA BRIGGS,                                               Clerk

              Plaintiffs - Appellants

v.

STATE FARM FIRE & CASUALTY COMPANY,

              Defendant - Appellee

                   Appeal from the United States District Court
                     for the Southern District of Mississippi
                              USDC No. 3:14-CV-16

Before CLEMENT, PRADO, and OWEN, Circuit Judges.
PER CURIAM:*
       Eddie J. and Rebecca Briggs (“the Briggses”) appeal following a jury trial
of their insurance-related claims against State Farm Fire & Casualty
Company (“State Farm”). They challenge the district court’s manner of
bifurcation of trial, evidentiary ruling, and grant of judgment as a matter of
law in favor of State Farm. For the reasons set forth below, we AFFIRM.

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 16-60098     Document: 00513794207     Page: 2   Date Filed: 12/13/2016

                                  No. 16-60098
                                        I
      In 2011, a tornado struck Mississippi and damaged the Briggses’ home.
They filed a claim with State Farm, their homeowners insurance provider,
seeking the policy limit of $256,800. State Farm determined that the home
could be repaired for an amount less than the policy limit, ultimately paying
the Briggses $158,778.58.
      The Briggses sued, alleging that State Farm improperly adjusted and
underpaid their claim. In particular, they alleged that State Farm: failed to
use the applicable costs of materials and labor to repair their home; failed to
provide complete pricing information; failed to use a licensed contractor to
make the repair estimate; improperly relied on a computer software program
without verifying its accuracy; improperly passed the Briggses around through
approximately fifteen claims representatives; and attempted to intimidate the
Briggses.
      Prior to trial, State Farm filed a motion to bifurcate the trial between
the Briggses’ breach of contract claim (“Phase One”) and their remaining
claims for extra-contractual and punitive damages (“Phase Two”). The district
court granted State Farm’s motion.
      At trial, the Briggses sought to introduce the Mississippi Homeowner
Insurance Policyholder Bill of Rights as evidence of State Farm’s duty and
breach of duty to properly adjust the claim. The Mississippi Department of
Insurance promulgated these regulations following Hurricane Katrina. They
set forth rights that policyholders have with respect to their insurance policies.
See Miss. Dep’t of Insurance Regulation 2007-1, as amended. The district court
excluded the Policyholder Bill of Rights from evidence during Phase One,
finding that it was not relevant to the Briggses’ breach of contract claim.
      At the conclusion of Phase One, the jury rendered a verdict for the
Briggses on their breach of contract claim and awarded $72,521.42 in damages.
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This amount, in addition to what State Farm had already paid the Briggses,
was still less than the policy limit.
      State Farm moved for judgment as a matter of law on the remaining
claims that were to be tried in Phase Two. The district court held an
evidentiary hearing. It readmitted all evidence that was admitted during
Phase One. The parties also were allowed to proffer any evidence that they
would rely on during Phase Two. The Briggses introduced the Policyholder Bill
of Rights as evidence for purposes of the hearing. After hearing the parties’
arguments, the district court granted State Farm’s motion for judgment as a
matter of law, holding that the Briggses’ evidence was not sufficient for their
remaining claims to be tried during Phase Two.
      The Briggses moved for a new trial, challenging each of the district
court’s rulings described above. The district court denied a new trial, and the
Briggses now appeal.
                                        II
      Motions for bifurcation of trial are governed by Federal Rule of Civil
Procedure 42(b). Rule 42(b) provides: “For convenience, to avoid prejudice, or
to expedite and economize, the court may order a separate trial of one or more
separate issues, claims, crossclaims, counterclaims, or third-party claims.” “A
motion to bifurcate is a matter within the sole discretion of the trial court, and
we will not reverse the court’s decision absent an abuse of that discretion.”
First Tex. Savings Ass’n v. Reliance Ins. Co., 950 F.2d 1171, 1174 n.2 (5th Cir.
1992).
      “This court reviews evidentiary rulings for abuse of discretion.” U.S.
Bank Nat’l Ass’n v. Verizon Commc’ns, Inc., 761 F.3d 409, 430 (5th Cir. 2014).
A “trial court has broad discretion in determining the admissibility of evidence
based on relevance and materiality, and that determination will be overturned
only when the abuse of that discretion is clearly shown from the record.” Id.
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                                  No. 16-60098
Even if the district court abused its discretion, this court “reverse[s] judgments
for improper evidentiary rulings only where the challenged ruling affects a
substantial right of a party. The burden of proving substantial prejudice lies
with the party asserting error.” Id.
       We review rulings on motions for judgment as a matter of law de novo.
Broussard v. State Farm Fire & Cas. Co., 523 F.3d 618, 624 (5th Cir. 2008).
Such a motion should be granted only if “the facts and inferences point so
strongly and overwhelmingly in favor of one party that the Court believes that
reasonable men could not arrive at a contrary verdict.” Id. We must “consider
all of the evidence, drawing all reasonable inferences and resolving all
credibility determinations in the light most favorable to the non-moving party.”
Id.
                                       III
                                        A
       The Briggses first argue that the district court abused its discretion in
the manner in which it bifurcated the trial. They contend that the trial should
have been bifurcated between all claims that could result in compensatory
damages and assessment of punitive damages. The Briggses point to Universal
Life Insurance Co. v. Veasley, 610 So. 2d 290 (Miss. 1992), in which the
Mississippi    Supreme    Court   recognized     a     right   to   extra-contractual
compensatory damages when an insurer lacked an arguable basis for denying
a claim but its conduct was not sufficiently egregious to warrant punitive
damages. Id. at 295; see also Essinger v. Liberty Mut. Fire Ins. Co., 534 F.3d
450, 451 (5th Cir. 2008). Relying on Veasley and its progeny, the Briggses
contend that their claims other than for punitive damages all raise the right to
compensatory damages and should have been tried together.
       The Briggses’ claims for extra-contractual and punitive damages require
a showing that State Farm lacked an arguable basis for its claim position,
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                                       No. 16-60098
unlike their breach of contract claim. The district court recognized this
common element when it decided to bifurcate the trial. 1 In addition, the district
court determined that it made the most economical sense to try the claims for
extra-contractual and punitive damages together during Phase Two, as the
commonality of elements made these claims a natural fit. See Fed. R. Civ. P.
42(b) (allowing bifurcation “[f]or convenience” and “to expedite and
economize”). Further, the district court identified Federal Rule of Evidence 403
concerns in trying breach of contract and non-breach of contract claims
together. See id. (allowing bifurcation “to avoid prejudice”). The district court
did not abuse its discretion in its chosen method of bifurcation. See First Tex.
Savings Ass’n, 950 F.2d at 1174 n.2.
                                              B
       Next, the Briggses argue that the district court abused its discretion in
excluding the Policyholder Bill of Rights from evidence during Phase One. This
evidence was not relevant to the Briggses’ breach of contract claim, the only
claim tried during Phase One. Even if it were relevant, the Briggses have not
met their burden of showing that exclusion of the Policyholder Bill of Rights
violated their substantial rights. See U.S. Bank Nat’l Ass’n, 761 F.3d at 430.
                                              C
       Finally, the Briggses argue that the district court erred in granting State
Farm’s motion for judgment as a matter of law. They contend that the evidence
presented during Phase One and during the evidentiary hearing prior to Phase
Two created a fact issue such that reasonable minds could differ as to whether
State Farm had an “arguable basis” for its claim valuation. “Under Mississippi
law, insurers have a duty to perform a prompt and adequate investigation and

       1In their reply brief, the Briggses contend that they pursued a simple negligence claim
below for which they did not seek extra-contractual damages and which should have been
tried during Phase One. The district court properly found that any such claim was waived.
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                                   No. 16-60098
make a reasonable, good faith decision based on that investigation and may be
liable for punitive damages for denying a claim in bad faith.” Broussard, 523
F.3d at 627 (internal quotation marks omitted). As discussed above, an insured
may also be liable for an intermediate form of compensatory damages if it acted
without a reasonably arguable basis but its actions did not rise to the level of
an independent tort. Id. at 628.
      “[T]he plaintiff bears a heavy burden in demonstrating to the trial court
that there was no reasonably arguable basis for denying the claim.” Windmon
v. Marshall, 926 So. 2d 867, 872 (Miss. 2006). Here, as the district court noted,
there may have been things that State Farm could have done better in its claim
handling. But State Farm never fully denied coverage. Instead, the dispute has
always been whether the home could be repaired for an amount within the
policy limit. Ultimately, the jury found that State Farm should have paid more
than it did but still an amount less than the policy limit. The evidence reflects
that this case presented a pocketbook dispute between the parties and that
State Farm’s claim position was at least arguable. See Tutor v. Ranger Ins. Co.,
804 F.2d 1395, 1398-99 (5th Cir. 1986). As such, the district court did not err
in granting State Farm’s motion for judgment as a matter of law.
                                       IV
      The judgment of the district court is AFFIRMED.

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