Court Opinion

ID: 9456733
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:01:12.228825+00
Date Added: 2024-06-11T17:39:58.689091
License: Public Domain

USCA11 Case: 22-12626    Document: 26-1      Date Filed: 08/04/2023    Page: 1 of 12

                                                [DO NOT PUBLISH]
                                    In the
                 United States Court of Appeals
                         For the Eleventh Circuit

                           ____________________

                                 No. 22-12626
                           Non-Argument Calendar
                           ____________________

        ALEX HAND,
        EMILY DRUMMOND HAND,
                                                     Plaintiffs-Appellants,
        versus
        ALLSTATE INSURANCE COMPANY,

                                                     Defendant-Appellee.

                           ____________________

                  Appeal from the United States District Court
                     for the Northern District of Alabama
                      D.C. Docket No. 6:19-cv-00453-LSC
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        2                      Opinion of the Court               22-12626

                            ____________________

        Before JORDAN, BRANCH, and BLACK, Circuit Judges.
        PER CURIAM:
               This case arises from an incident on June 30, 2017, when a
        tree fell on a home owned by Alex and Emily Hand in Jasper, Al-
        abama. On February 11, 2019, the Hands filed a civil action
        against Allstate Insurance Company for breach of contract and
        bad faith in Alabama state court, which Allstate later removed to
        the Northern District of Alabama based on diversity jurisdiction.
        In Allstate’s answer, it asserted a variety of affirmative defenses,
        including misrepresentation after loss. The case proceeded to a
        four-day jury trial. The jury found in favor of Allstate—finding
        that Allstate did not breach the insurance contract or operate in
        bad faith—and that the Hands made material misrepresentations
        of their claim to Allstate.
               The Hands contend the district court abused its discretion
        by (1) allowing evidence on Allstate’s affirmative defense of mis-
        representation after loss; (2) precluding the testimony of Jess
        Drummond; and (3) allowing disclosure to the jury that the
        Hands originally retained certain experts called by Allstate. We
        address each issue in turn and, after review, affirm the district
        court.
                   I. MISREPRESENTATION AFTER LOSS
              The misrepresentation after loss defense was asserted based
        on Allstate’s Additional Living Expenses (ALE) payments to the
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        22-12626               Opinion of the Court                      3

        Hands. Allstate asserted the Hands misrepresented the amount
        spent on ALE. The Hands contend the district court erred in al-
        lowing evidence of misrepresentation after loss, asserting they
        were denied a fair opportunity to discover the facts known to All-
        state to support the defense.
        A. Additional Living Expenses
                Allstate approved a lease for the Hands to stay in a four-
        bedroom, two-bath house for $4,500 per month while they were
        out of their home. The lease was with Gloria Redus, whom All-
        state later learned was Emily Hand’s mother. Redus came up
        with the $4,500 amount by “look[ing] at how much it cost [Emily
        Hand] to stay at the Holiday Inn for two little tiny rooms that had
        beds in it and a bath, and they were over $150 a day. And they
        had to rent two of them.” The lease with Redus provided pay-
        ments could be made in cash or check. On the same day the lease
        was supplied to Allstate, the Hands submitted a copy of a check
        Emily Hand wrote to Redus for $11,000—$4,500 for the first
        month’s rent, $4,500 deposit, and $2,000 pet deposit. However,
        there is no evidence that check was ever cashed. Emily Hand tes-
        tified her mother never cashed the check, and she went and got
        her mother $11,000 in cash instead. Allstate continued paying the
        Hands $4,500 per month for around twenty months, totaling
        $85,500. There was no evidence that any check during that twen-
        ty-month period was paid to a landlord. Redus testified she
        “like[d] to deal in cash,” and Emily Hand would bring her $4,500
        in cash each month for rent. Additionally, Redus testified the
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        4                     Opinion of the Court               22-12626

        Hands quit paying her rent on the property although they were
        still living there once Allstate cut off ALE expenses.
                The Hands also submitted invoices for laundry done at a
        laundromat, because the Hands did not have a washer and dryer
        available to them. Emily Hand called Allstate regarding an option
        for washing clothes because the Hands were not allowed to use
        the $5,000 washer and dryer in their rental home. Redus testified
        she “did not want [Emily Hand] using my washer and dryer.”
        This led to Allstate making an $800 monthly payment to the
        Hands for laundry charges—totaling close to $17,000 during the
        ALE period. When Allstate inquired if the Hands could move
        their own washer and dryer into the rental home, the Hands stat-
        ed the landlord would not allow them to move their washer and
        dryer. When the Hands’ bank records were subpoenaed, only
        three checks totaling $1,100 to the cleaners were found. Emily
        Hand testified that the rest of the over $15,000 was paid in quar-
        ters to a laundromat.
               The Hands also submitted invoices for around $100,000 for
        rugs and drapes damaged in the home. Allstate paid for these
        items that the Hands stated were damaged as a result of the loss.
        However, Allstate never inspected the items, and when Allstate
        inquired, the Hands had already thrown them away. Emily Hand
        sent the rugs to a business in Birmingham to be inspected, and
        Hand made a report they were not salvageable.
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        22-12626                Opinion of the Court                        5

        B. District Court’s Evidentiary Ruling
              At the beginning of trial, the district court noted the Hands’
        pending motion to prevent Allstate from presenting any evidence
        of misrepresentation, acknowledging that Allstate’s corporate
        representative was not allowed to answer specific questions about
        the misrepresentation defense because the investigation was on-
        going. However, the court asked the Hands’ counsel to inform
        him “what did they not . . . know that you could have obtained
        from a 30(b)(6) witness.” The court stated:
               [I]t was very clear to me from the objections filed in
               October of ’21 from my summary judgment ruling,
               from various other motions that have been asserted,
               that this was known to be an issue in the case, that
               Allstate, the defendant, felt like your client was not
               telling the truth about the forty-five hundred dollar
               [per month] rental claim and the seven hundred dol-
               lar[s per month] to do her laundry and the washing
               and drying machines of her mother, am I missing
               that? . . . .
               So you need to tell me what it is you were not able
               to get from them as far as either the discovery or in-
               formation or testimony so that I can consider keep-
               ing them from asserting that defense.
               Counsel responded that while they knew of the existence
        of the affirmative defense, Allstate never answered the question of
        what facts they had to support the misrepresentation after loss de-
        fense. However, they knew “this broad category, we think there
        is a problem with the rent, we think there is a problem with the
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        6                      Opinion of the Court               22-12626

        laundry, we think there is a problem with the rugs.” The Hands’
        counsel agreed that in February or March of 2021, they had a re-
        port from an expert of Allstate that “indicated that he believed the
        rental amount was way over the amount that should have been
        paid.” However, the Hands never took that expert’s deposition.
        They also knew from their own depositions that Emily Hand was
        paying her mother cash for the $4500 per month rental, which the
        court noted “could be used to argue that your client was lying.”
        Further, Emily Hand’s bank records, which were produced, show
        no checks that she claimed under oath were paid. Allstate de-
        posed Emily Hand’s mother, who claimed there were no bank
        records, everything was handled in cash. Because the district
        court found the Hands had access to all the evidence that would
        be used to show misrepresentation after loss, the district court al-
        lowed the evidence.
        C. Analysis
               While the Hands argue the district court “shift[ed] the bur-
        den to the Hands to establish prejudice for Allstate’s discovery
        abuses,” Allstate did not abuse discovery. Although Allstate did
        object to certain questions at the corporate representative’s depo-
        sition because of the ongoing investigation with regard to ALE,
        the Hands failed to articulate what they did not have access to
        that they could have obtained from a 30(b)(6) witness.
              The evidence relied upon for the misrepresentation defense
        came from other witnesses at trial including Mark Burchfield (the
        Hands’ dwelling adjuster), Emily Hand, and Gloria Redus. The
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        22-12626               Opinion of the Court                        7

        Hands point to no evidence about the $4,500 paid in cash each
        month to Redus, the almost $17,000 in laundry expenses, and
        around $100,000 in damage to rugs and drapes that they did not
        already have access to. It was not an abuse of discretion for the
        district court to allow this evidence. See United States v. Clay, 832
        F.3d 1259, 1314 (11th Cir. 2016) (reviewing for abuse of discretion
        the district court’s evidentiary decisions).
                          II. WITNESS PRECLUSION
                 The Hands contend the district court abused its discretion
        in excluding the testimony of Jess Drummond based on the
        Hands’ failure to disclose him. Jess Drummond is Emily Hand’s
        ex-husband and a former owner of the home on which the tree
        fell. The Hands did not disclose Drummond as a witness during
        the first discovery period or the reopened discovery period. He
        was not disclosed until months after discovery was closed. They
        argue the fact Drummond was identified during the deposition of
        Emily Hand as a prior owner of the house who had participated
        in renovations was effective supplementation. The district court
        disagreed and disallowed Drummond’s testimony.
               Rule 26 of the Federal Rules of Civil Procedure requires a
        party to disclose “the name . . . of each individual likely to have
        discoverable information—along with the subjects of that infor-
        mation—that the disclosing party may use to support its claims or
        defenses, unless the use would solely be for impeachment.” Fed.
        R. Civ. P. 26(a)(1)(A)(i). Rule 26(e) requires a party who has made
        a disclosure under Rule 26(a) to supplement or correct its disclo-
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        8                      Opinion of the Court                 22-12626

        sure if it learns the disclosure is incomplete or incorrect if the ad-
        ditional or corrective information has not otherwise been made
        known to the other parties during the discovery process. Fed. R.
        Civ. P. 26(e).
               The district court did not abuse its discretion in not allow-
        ing Drummond to testify. See Romero v. Drummond Co., 552 F.3d
        1303, 1322 (11th Cir. 2008) (holding the district court did not
        abuse its discretion in excluding testimony from a late-disclosed
        witness where the plaintiffs lacked a good explanation for the de-
        lay in disclosing the witness). The Hands knew of the existence of
        Drummond throughout discovery and did not disclose him—
        even through an extended discovery period. Emily Hand’s men-
        tion of him during her deposition was not effective supplementa-
        tion. It was not an abuse of discretion for the district court to
        preclude Drummond’s testimony at trial.
                  III. RETENTION OF EXPERT WITNESSES
               The Hands moved in limine to preclude Allstate from call-
        ing engineers originally retained by the Hands, but later with-
        drawn, or if called by Allstate, from disclosing who hired the en-
        gineers. During the claims process, the Hands consulted several
        engineers to inspect the premises, but the Hands did not intend to
        call them as witnesses. Allstate reimbursed the Hands for the ex-
        pense incurred in retaining the engineers. The district court al-
        lowed Allstate to call those engineers originally retained by the
        Hands, but did not allow Allstate to introduce evidence that the
        Hands originally retained them.
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        22-12626                Opinion of the Court                         9

        A. Patrick Edwards’ Testimony
                During the testimony of one of the engineers, Patrick Ed-
        wards, the Hands asked if he was being paid for his testimony.
        Edwards answered, “I hope I am. I wasn’t paid for the original
        inspection[.]” After the conclusion of Edwards’ testimony, the
        district court invited the attorneys to a sidebar, inquiring whether
        the Hands paid Edwards’ engineering firm for their services. The
        Hands’ counsel responded that he did not know, and the court
        stated if Edwards was not paid, it was “fair game for Allstate to
        say we paid her to pay them. Right now it appears that Allstate
        did not pay the guy.” The court opted to give the following in-
        struction to the jury:
               Ladies and gentlemen, I need to clear one thing up.
               Allstate did not hire the last witness to do the initial
               inspection and was not then responsible for paying
               him. He made some statement that he wasn’t paid.
               And I don’t want you to—I don’t want to leave that
               hanging there.
               The Hands contend the district court erred by giving the
        curative instruction to Edwards’ non-responsive answer, because
        “[t]he instruction leaves only the conclusion that the Hands hired
        [Edwards] and did not pay him.” They contend allowing the wit-
        ness to open that door was “explosive and prejudicial error” and
        merits setting aside the verdict and granting a new trial.
               We disagree. Assuming the district court was required to
        limit evidence of retention of experts, see Peterson v. Willie, 81 F.3d
        1033, 1037-38 (11th Cir. 1996), the district court’s curative instruc-
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        10                     Opinion of the Court                 22-12626

        tion did not leave only the conclusion that the Hands hired Ed-
        wards and did not pay him. Instead, it clarified that Allstate did
        not hire Edwards and was not responsible for paying him. While
        the jury could infer the Hands hired Edwards and did not pay
        him, it is not the only conclusion that could be made from the cu-
        rative instruction. We cannot say that Edwards’ remarks and the
        information given in the curative instruction “were such as to im-
        pair gravely the calm and dispassionate consideration of the case
        by the jury.” See Allstate Ins. Co. v. James, 845 F.2d 315, 318 (11th
        Cir. 1988).
        B. Exhibit 58
               During trial, Allstate offered “Defendant’s Exhibit 58”
        which was a report from Alabama Foundation Specialists (AFS).
        The Hands objected because the exhibit contained a reference
        that AFS recommended the Hands contact Carlysle Gibbs, which
        is one of the engineering firms the Hands originally retained.
        When cross-examining Emily Hand regarding AFS, Allstate’s
        counsel inquired whether she recalled telling AFS that she would
        be hiring an engineer. The Hands’ counsel requested a sidebar
        because Allstate was “slip[ping] in there the thing about the engi-
        neer. When he slips that in there . . . he can’t get into prior reten-
        tion.” When Allstate resumed cross-examination of Emily Hand,
        Allstate’s questioning and Hand’s answers showed that AFS di-
        rected Hand to hire an engineer, and that Hand did not initiate
        that conversation with AFS.
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        22-12626               Opinion of the Court                      11

               Then, during closing arguments, Allstate presented an un-
        redacted version of Defendant’s Exhibit 58. Right after the exhibit
        was presented, the Hands’ counsel stated, “[p]ull that down.” All-
        state’s counsel apologized and took the exhibit down. The
        Hands’ counsel approached and objected that Allstate had shown
        “[t]he retention—the part of the AFS records that you said were
        going to be excluded. And they agreed to redact them and now
        they have shown them to the jury.” The judge found the exhibit
        “was up for a matter of less than ten seconds . . . [and there were]
        easily over one hundred words from the top down to the bottom
        before they would get to, I referred David Carlysle.” The district
        court noted it had already stated it was a close call whether the
        information should be redacted, and had only decided not to let
        Allstate go into who retained the experts “out of an abundance of
        caution.” The Hands’ attorney declined the judge’s offer to say
        something to the jury, and closing arguments resumed.
               The Hands contend a new trial is warranted because All-
        state twice violated the district court’s order excluding evidence
        of expert retention.
               The Hands’ argument is without merit. As to the cross-
        examination of Emily Hand, Allstate did not disclose anything
        about retention of the experts testifying at trial. Allstate merely
        asked if AFS recommended she hire an engineer, and then further
        questioning clarified AFS directed Hand to hire an engineer, and
        that Hand did not initiate that conversation with AFS.
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        12                     Opinion of the Court                22-12626

               As to an unredacted Exhibit 58, the district court was cor-
        rect in finding the exhibit, in the middle of a lengthy paragraph,
        states “I referred David Carl[y]sle . . . .” The district court ob-
        served “there is no way a human being could read down and get
        to that part of it,” in the time the exhibit was visible. The exhibit
        was up so briefly that it is doubtful the jury had time to read the
        offending four words, which were buried amid several other lines
        of text. Further, there is no evidence Allstate intentionally
        showed the exhibit. We conclude the brief display of the unre-
        dacted exhibit did not affect the Hands’ substantial rights, and a
        new trial is not warranted. See Ad-Vantage Tel. Directory Consult-
        ants, Inc. v. GTE Directories Corp., 37 F.3d 1460, 1465 (11th Cir.
        1994) (explaining a party is entitled to a new trial if the jury was
        influenced by inadmissible evidence because it affects a party’s
        substantial rights).
                               IV. CONCLUSION
               The district court did not abuse its discretion by (1) allow-
        ing evidence on Allstate’s affirmative defense of misrepresenta-
        tion after loss; (2) precluding the testimony of Jess Drummond;
        and (3) allowing disclosure to the jury that the Hands originally
        retained certain experts called by Allstate.
              AFFIRMED.