Court Opinion

ID: 4505744
Source: CourtListenerOpinion
Date Created: 2020-02-07 18:00:48.549545+00
Date Added: 2024-06-11T13:37:40.412759
License: Public Domain

FILED
                                                                     United States Court of Appeals
                       UNITED STATES COURT OF APPEALS                        Tenth Circuit

                              FOR THE TENTH CIRCUIT                        February 7, 2020
                          _________________________________
                                                                         Christopher M. Wolpert
                                                                             Clerk of Court
 SUNFLOWER CONDOMINIUM
 ASSOCIATION, INC., a Colorado
 nonprofit corporation,

          Plaintiff Counter Defendant -
          Appellant,
                                                             No. 18-1478
 v.                                             (D.C. No. 1:16-CV-02946-WJM-NYW)
                                                              (D. Colo.)
 OWNERS INSURANCE COMPANY,

          Defendant Counterclaimant -
          Appellee.
                        _________________________________

                              ORDER AND JUDGMENT*
                          _________________________________

Before BRISCOE, LUCERO, and EID, Circuit Judges.
                   _________________________________

      This is an insurance case first brought in state court but then removed to

federal court under diversity jurisdiction, 28 U.S.C. § 1332. Plaintiff Sunflower

Condominium Association (Sunflower) filed this action against Owners Insurance

Company (Owners) claiming that Owners breached a policy of commercial property

coverage and commercial general liability insurance, and also engaged in common

law and statutory bad faith, by failing to fully cover an incident of hail damage that

      *
         This order and judgment is not binding precedent, except under the doctrines
of law of the case, res judicata, and collateral estoppel. It may be cited, however, for
its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
occurred to Sunflower’s condominium complex. Owners filed a counterclaim

alleging that Sunflower violated the terms of the policy by (a) failing to timely report

the hail damage, and (b) submitting a claim and proof of loss that grossly overstated

the cost of repairing the hail damage. The district court granted summary judgment

in favor of Owners on all of Sunflower’s claims. The case then proceeded to trial on

Owners’ counterclaim, and the jury found in favor of Owners. The district court

entered final judgment in favor of Owners.

       Sunflower now appeals, arguing that the district court (1) erroneously

instructed the jury to impute fraudulent intent to Sunflower through the conduct of its

independent contractors, (2) erred in denying Sunflower’s Rule 50 motion for

judgment as a matter of law (JMOL), (3) erred in concluding that the policy afforded

Owners a recoupment remedy, (4) denied Sunflower a fair trial as the result of two

erroneous evidentiary rulings, and (5) erred in granting summary judgment in favor

of Owners on all of Sunflower’s claims. Exercising jurisdiction pursuant to 28

U.S.C. § 1291, we reject all of these arguments and affirm the judgment of the

district court.

                                           I

                                 Factual background

       Sunflower is a nonprofit, multi-family homeowners association that is

incorporated under the laws of the State of Colorado. Sunflower oversees twenty-

three separate multi-family condominium buildings containing over 100 individual

housing units, a clubhouse, and six detached garage buildings (collectively the

                                           2
Sunflower Property). Sunflower has a board of directors comprised of volunteer

members.

      Client Preference Realty & Management, LLC (Client Preference), acting

pursuant to a contract with Sunflower, handled the day-to-day management of the

Sunflower Property. Under the terms of the contract between Sunflower and Client

Preference, Sunflower agreed to pay Client Preference a 4% special projects fee for

projects at the Sunflower Property that cost over $300,000.00.

      In 2011, Client Preference assigned employee Denyse Countryman to be the

property manager for the Sunflower Property. Countryman did not maintain an

office on-site at the Sunflower Property, but instead visited the Sunflower Property

approximately three times per month. Countryman regularly conducted property

inspections, but primarily looked for covenant violations during those inspections.

      In 2013, Sunflower purchased from Owners an insurance policy (the Policy)

providing commercial property coverage and commercial general liability coverage.

The term of the Policy extended from November 12, 2013, to November 12, 2014.

Owners, prior to issuing the policy, inspected the Sunflower Property to determine its

condition and verify that it was appropriate to insure.

      On September 29, 2014, a severe wind and hailstorm damaged portions of the

common areas of the Sunflower Property. In particular, the storm resulted in hail

damage to roofs, gutters, and screens on the condominium and garage structures.1

      1
         According to the record, the Sunflower Property was previously damaged by
hail storms in June 2009 and June 2012.
                                           3
Countryman was not at the Sunflower Property at the time of the storm and allegedly

has no recollection of the storm. Further, Countryman was allegedly not contacted

after the storm by anyone at Sunflower regarding property damage sustained during

the storm.

      In April 2015, Countryman hired a roofing contractor, R3NG, Inc. (R3NG), to

prepare a proposal to fix a leaking roof on one of the individual housing units at the

Sunflower Property. Jason Domecq, the R3NG employee/owner who prepared the

proposal, observed what appeared to be hail damage on the roof and made a note to

that effect in his written proposal, immediately below his detailed descriptions of the

items that needed to be repaired. Domecq stated in his note: “There is evidence of

hail impacts on both the flat and steep roofs and it is recommended that your

insurance company be contacted immediately. You may have a claim.” Restricted

App., Vol. 1 at 192. On April 27, 2015, Countryman forwarded R3NG’s proposal to

every board member via email, with instructions to review and approve the proposal.

Every board member responded to Countryman’s email and approved the proposal.

      On September 24, 2015, Countryman was at the Sunflower Property and

observed damage to downspouts and window trims. Countryman contacted Adjusters

International Matrix Business Consulting (Matrix) to inspect the Sunflower Property

and determine the extent and cause of the damages. On October 7, 2015,

Countryman met a Matrix employee, Fred Mahe, at the Sunflower Property for

purposes of conducting an inspection. Mahe concluded that there was significant hail

damage to the Sunflower Property that needed to be repaired.

                                           4
      At a board meeting in late October of 2015, Countryman presented the

information she had received from Matrix and received approval from the Board to

hire Matrix and proceed with filing a claim with Owners for the hail damage. On

November 19, 2015, the Board met and executed a written contract with Matrix.

Under the terms of that contract, Matrix was to receive 10% of any amount paid by

Owners to Sunflower.

      Countryman in turn hired R3NG to help Matrix establish the scope of the

damage and the amount of the claim to be submitted to Owners. Countryman agreed,

on behalf of Sunflower, to pay R3NG for its work.

      Dave Ford, a public adjuster employed by Matrix, worked together with

Domecq from R3NG to prepare a proof of loss for the Sunflower Property. Together,

Ford and Domecq estimated that the cost of repairing the hail damage to the

Sunflower Property was approximately 1.8 million dollars.

      On December 20, 2015, Sunflower notified its insurance agent regarding the

damages resulting from the storm. Owners, after learning of the damages, responded

by hiring an independent adjuster named Gary Stevens. Stevens met Ford at the

Sunflower Property and, after examining the Sunflower Property, agreed on the scope

of damage that was sustained by the Sunflower Property.

      On May 4, 2016, Ford sent Owners a “Sworn Statement In Proof of Loss” that

included the estimate that was prepared by Ford and Domecq. Sondra Kalcevic, the

board president, signed the statement. The statement alleged that the loss occurred

                                          5
“about the 29th day of September 2014” due to “Wind and Hail.” ECF No. 94, Exh.

M at 5.

      After receiving Sunflower’s statement, Owners hired an engineer and a

building consultant to assist in reviewing the statement. The engineer inspected the

Sunflower property and found hail damage to several of the roofs. She was allegedly

unable, however, to determine when the hail damage occurred. More specifically,

she could not differentiate between hail damage from the September 2014 storm and

prior hail storms in 2009 and 2012.

      Stevens, the independent adjuster hired by Owners, ultimately concluded that

the replacement cost value of the damage to the Sunflower Property was

$857,233.89, and that the actual cash value was $590,458.91. In August 2016,

Owners made a payment of $515,458.10 to Sunflower in an attempt to resolve the

claim. This payment represented the actual cash value estimated by Stevens, minus

Sunflower’s $75,000 deductible. In April 2017, Owners made an additional payment

to Sunflower in the amount of $92,000.00.

                               Procedural background

      On September 28, 2016, Sunflower filed a complaint against Owners in

Colorado state district court. The first claim for relief alleged that Owners breached

the insurance contract by failing to pay Sunflower for all damages it sustained from

the September 29, 2014 storm. The second claim for relief sought a declaratory

judgment regarding Sunflower’s right to “coverage for the cost of necessary repairs

to [the Sunflower Property] less the applicable deductible.” Aplt. App., Vol. 1 at 54.

                                           6
      On December 2, 2016, Owners removed the case to the United States District

Court for the District of Colorado on the basis of diversity of citizenship.

      Sunflower amended its complaint three times after removal. The third

amended complaint included the original claims for breach of contract and

declaratory judgment, and included two new claims: statutory bad faith under Colo.

Rev. Stat. §§ 10-3-1115, -1116, and common law insurance bad faith.

      Owners, in its answer to the third amended complaint, asserted as a defense

that Sunflower’s claims were “barred in whole or in part as a result of [Sunflower’s]

misrepresentations, false statements, and non-cooperation with Owners.” ECF

No. 66 at 8. This defense relied on provisions of the Policy that precluded coverage

in the event that the insured concealed or misrepresented a material fact or otherwise

committed fraud (hereinafter Fraud Clauses). The first of those Fraud Clauses stated:

“This Coverage Part [i.e., Commercial Property coverage] is void in any case of

fraud by you as it relates to this Coverage Part at any time. It is also void if you or

any other insured, at any time, intentionally conceal or misrepresent a material fact

. . . .” Aplt. App., Vol. 20 at 5700. A related provision likewise stated, in pertinent

part: “We will not pay for any loss or damage in any case of: 1. Concealment or

misrepresentation or a material fact; or 2. Fraud committed by you or any other

insured (‘insured’) at any time and relating to coverage under this policy.” Id.

at 5718. Owners alleged that Sunflower violated the Fraud Clauses by

misrepresenting the date when it first learned of the hail damage to the Property, and

also by misrepresenting the amount needed to repair the damage. Owners also

                                            7
asserted, in pertinent part, a counterclaim against Sunflower for breach of the Fraud

Clauses.

      The parties filed cross motions for summary judgment. Sunflower moved for

partial summary judgment with respect to Owners’ concealment, misrepresentation or

fraud defense and Owners’ counterclaims for fraud and recoupment. Sunflower

argued that Owners could not prove that the date Sunflower had alleged it first

discovered the hail damage was false, or that Sunflower intended Owners to take any

specific action as a result of the date of discovery. Sunflower also argued that

Owners could not prove that the R3NG/Ford estimate of damages was a material fact

or that Owners was ignorant of its falsity. Owners, for its part, moved for summary

judgment with respect to all of Sunflower’s claims.

      On May 14, 2018, the district court issued a written order addressing both

motions for summary judgment. The district court denied Sunflower’s motion for

summary judgment on Owners’ counterclaims in its entirety. In doing so, the district

court concluded that, as to the alleged untimely reporting of the insurance claims,

Owners’ ignorance of the falsity of Sunflower’s date of discovery was not an element

of Owners’ claim that Sunflower violated the Policy’s Fraud Clauses. The district

court further concluded that the date Sunflower actually discovered the damage was

“‘reasonably relevant’ to [Owners’] investigation, given that it form[ed] the basis of

[Owners’] late notice claim,” and “that ‘reasonable minds could differ’ regarding the

materiality of the misrepresentations.” ECF No. 149 at 10-11. The district court also

concluded that, based upon the evidence before it, “a reasonable jury could find that

                                           8
[Sunflower] knowingly and deliberately misrepresented the date of discovery to

[Owners], implying that [Sunflower] acted with the intent to deceive.” Id. at 11.

      As for Owners’ defense and counterclaim that Sunflower knowingly

misrepresented the cost of repairing the damages in its proof of loss, the district court

concluded it was immaterial whether, in fact, Owners attached any importance to

Sunflower’s estimate. Instead, the district court concluded the question was

“whether a reasonable insurance company would attach importance to the matter.”

Id. at 12. The district court concluded that “a reasonable jury could find that a

reasonable insurance company could attach importance to [Sunflower’s] cost of

repair estimate.” Id. The district court rejected as immaterial Sunflower’s argument

that Owners was long wary of the truthfulness of Sunflower’s estimate. And,

ultimately, the district court denied Sunflower’s motion for summary judgment after

concluding that genuine issues of material fact existed that precluded granting

summary judgment on this defense/counterclaim.

      As for Owners’ motion for summary judgment, the district court first

concluded that “a reasonably diligent property manager” in Countryman’s position

“would have read the e-mail [from Domecq regarding the hail damage] at the time it

was received,” and that, consequently, Sunflower “was on notice of the damage” at

the time Countryman “received Domecq’s “April 2015 e-mail” and “the prompt

notice provision [of the Policy] was [also] triggered.” Id. at 16. The district court

further concluded “that no reasonable jury could find that [Owners] waived its late

notice defense.” Id. at 17. The district court also concluded that Owners “met its

                                            9
burden to show that it was prejudiced by the delayed notice” from Sunflower. Id.

at 20. The district court thus concluded that “there [wa]s no genuine issue of

material fact that [Sunflower] violated the notice-prejudice rule” and that,

consequently, Owners was entitled to summary judgment in its favor “with respect to

[Sunflower’s] breach of contract claims.” Id. at 21. The district court also concluded

that, because Sunflower’s breach of contract claims failed, Owners was entitled to

summary judgment with respect to Sunflower’s bad faith claims as well.

       On October 15, 2018, the case proceeded to trial on Owners’ counterclaim for

breach of the Fraud Clauses. After hearing five days of evidence, the jury found in

favor of Owners on its counterclaim.

       Final judgment in the case was entered on November 15, 2018. The judgment

stated, in pertinent part: “judgment is entered in favor of Defendant-Counterclaimant

Owners Insurance Company and against Plaintiff-Counterclaim Defendant Sunflower

Condominium Association, Inc., in the principal amount of $608,409.96 with

prejudgment interest of $105,352.18, for a total of $713,762.14, with post-judgment

interest at the federal statutory rate of 1.52% until paid.” ECF No. 237 at 1.

       Sunflower filed a timely notice of appeal.

                                           II

       Sunflower raises five issues on appeal. We conclude, as discussed in greater

detail below, that all five issues lack merit. Consequently, we affirm the judgment of

the district court.

                                          10
      1) Did the district court err in instructing the jury to impute fraudulent
         intent to Sunflower through the conduct of R3NG and Domecq?

      In its first issue on appeal, Sunflower argues that the district court erred in

instructing the jury to impute fraudulent intent to Sunflower through the conduct of

R3NG and Domecq, both of whom Sunflower refers to as its independent contractors.

Sunflower asserts that “[t]he lynchpin of Owners’ counter-claim [wa]s that Sunflower

breached the contract’s fraud clause by offering what Owners claims was an

intentionally inflated estimate.” Aplt. Br. at 29. As noted, the Policy’s Fraud

Clauses stated, in pertinent part, that the commercial property coverage portion of the

Policy was “void in any case of fraud by you as it relates to this Coverage Part at any

time. It is also void if you or any other insured, at any time, intentionally conceal or

misrepresent a material fact . . . .” Aplt. App., Vol. 20 at 5700. Sunflower argues

that, because this policy language makes no reference to “agents” of the insured, it is

therefore limited to concealments or misrepresentations made directly by Sunflower.

Sunflower argues that “Owners’ entire counter-claim, however, turned on Owners’

argument that Sunflower’s agents fraudulently inflated the Ford/R3NG Estimate.”

Aplt. Br. at 30 (emphasis in original). Sunflower in turn argues that “Owners did not

introduce evidence that anyone at Sunflower, its management, or its own employees

were aware the independent adjuster or roofers had falsely inflated the estimate.” Id.

“Consequently,” Sunflower argues, “Owners insisted upon and received numerous

instructions that the jury should impute the intent of any ‘agent’ appointed to act on

behalf of Sunflower to Sunflower.” Id. “Further,” Sunflower argues, “the court

                                            11
expressly instructed the jury to consider Matrix and Ford the legal agents of

Sunflower and to impute Ford’s state of mind and intent to Sunflower as a matter of

law, regardless of whether Sunflower was actually aware the Ford/R[3]NG Estimate

was intentionally inflated.” Id. “Though the court’s instructions did not expressly

tell the jury to consider R3NG an ‘agent’ of Sunflower,” Sunflower argues “there

were several instructions on agency that allowed the jury to impute the knowledge

and intent of the third-party roofing contractor to Sunflower as well.” Id.

      In order to properly address Sunflower’s arguments regarding the instructions,

it is necessary to review the history of the district court proceedings and several

related rulings made by the district court. Owners, in its answer to the Sunflower’s

third amended complaint, asserted, as both an affirmative defense and a

counterclaim, that Sunflower violated the Fraud Clauses of the Policy by knowingly

misrepresenting the costs of repairing the hail damage. Sunflower filed a written

reply to that counterclaim and asserted a number of affirmative defenses, but did not

allege that the Fraud Clauses were limited strictly to actions taken by Sunflower and

its employees, as opposed to its agents.

      When Sunflower moved for summary judgment in October of 2017, it

maintained that Owners “ha[d] not paid the full amount of . . . damages” that was

owed to Sunflower under the Policy, and it argued that Owners could not “provide

evidence” to support its counterclaim “that Sunflower . . . committed fraud against

Owners.” ECF No. 93 at 1. More specifically, Sunflower argued that Owners could

not “prove either that the R3NG/Ford estimate [wa]s a material fact, or that Owners

                                           12
was ignorant of its falsity.” Id. at 8. Sunflower asserted in support that Owners

attached no importance to the R3NG estimate, and it further asserted that “Owners

was aware, since before it paid the undisputed payment, that it did not trust the

estimate submitted by Sunflower.” Id. at 9. Nowhere in its summary judgment

motion, however, did Sunflower argue that the Policy’s Fraud Clauses were limited

by their language to actions committed by Sunflower, nor, for that matter, did

Sunflower make any other arguments regarding agency (e.g., that R3NG and Domecq

were independent contractors and not agents of Sunflower).

      Approximately four months later, in early March 2018, the parties met with the

magistrate judge to prepare the final pretrial order. Owners asserted in the final

pretrial order, as both a defense and a counterclaim, that Sunflower “all but

encouraged its authorized agents to commit insurance fraud” by submitting a

knowingly inflated proof of loss to Owners. ECF No. 131 at 6. Sunflower, for its

part, asserted that Owners did not rely on, and indeed effectively ignored, the proof

of loss submitted by R3NG and Matrix on Sunflower’s behalf. Nowhere, however,

did Sunflower assert that Owners’ agency theory was precluded by the language of

the Fraud Clauses, nor did Sunflower otherwise assert that there were any pending

issues regarding agency.

      On September 17, 2018, approximately one month prior to trial, the parties

filed three sets of proposed jury instructions. Included among Sunflower’s proposed

jury instructions was an instruction defining the term “independent contractor” and

effectively asking the jury to determine whether R3NG and/or Matrix were

                                          13
independent contractors. ECF No. 164 at 10. Nowhere in this proposed instruction

was the term “agent” defined or even mentioned. Likewise, Sunflower’s proposed

verdict form contained no mention of the word agent. And, again, Sunflower made

no mention of the Policy strictly limiting fraudulent conduct to Sunflower alone.

      Owners’ set of proposed jury instructions included a number of instructions

that addressed agency. For example, Owners’ proposed instruction I described how

an agency relationship is created and defined the terms agent and principal. ECF

No. 167 at 14. There was also a proposed instruction on the apparent authority of an

agent, another stating that any misrepresentations or omissions made by an agent are

deemed misstatements or omissions of the principal, and, finally, an instruction

stating that Matrix, Ford, Client Preference, Countryman, R3NG, Domecq, and every

board member were agents of Sunflower. Id. at 15–16. Although the caption of

Owners’ proposed instructions stated they were “DISPUTED,” Owners did not

identify Sunflower’s precise objection to the instructions, nor did Sunflower file a

written objection to Owners’ proposed instructions.

      Lastly, Owners filed what it described as a set of proposed stipulated jury

instructions. One of those instructions stated that “[a]n agent is acting within the

scope of its authority when the agent is carrying on business for its principal which

the principal has expressly authorized or which is within the incidental, implied, or

apparent authority of the agent.” ECF No. 166 at 4. Others discussed incidental and

implied authority of an agent. Id. at 5. The final stipulated proposed instruction

stated that “[a] principal is considered to know or have notice of information if the

                                           14
principal’s agent, while acting within the scope of the agent’s authority, learns or

receives notice of the information.” Id. at 7.

      The case proceeded to trial on October 15, 2018. At the close of Owners’

case-in-chief, Sunflower moved for JMOL, arguing that (a) policyholders may legally

present inaccurate proofs of loss without conscious dishonesty or intent to defraud,

and (b) that Owners’ evidence failed to establish that Sunflower submitted a

knowingly inflated proof of loss. With respect to this latter argument, Sunflower

asserted that Owners presented the testimony of its independent adjuster Gary

Stevens, and that Stevens never talked to Ford or Domecq, the two people who

prepared Sunflower’s proof of loss. Again, however, Sunflower made no mention of

any issues regarding agency. The district court took Sunflower’s motion for JMOL

under advisement.

      Sunflower presented the testimony of three witnesses in defense of Owners’

counterclaim: Countryman, Edward Fronapfel, an engineer who was hired by

Sunflower during the litigation to assess the property and determine if the damages

were caused by the September 29, 2014 hail storm, and Domecq. Countryman

conceded on cross-examination that Matrix was speaking for Sunflower when it

submitted the claim for damages to Owners and that Sunflower could not “pass the

buck” by claiming that it did not know of any misrepresentations in the proof of loss.

Aplt. App., Vol. 19 at 4999. She also conceded that, under the terms of the contract

between Sunflower and Client Preference, Client Preference was to receive a “special

projects fee” of 4% of the gross amount of the total cost of repairs to the Sunflower

                                           15
Property, and that she personally would receive 35% of that 4% special projects fee.

Id. at 5001. Domecq, for his part, had no explanation for numerous categories of

damages alleged in the proof of loss and, on several occasions, conceded that certain

charges listed in the proof of loss were unjustified. He also contradicted his

deposition testimony on multiple occasions. Ultimately, and perhaps most damaging

to Sunflower, Domecq conceded that the multiple errors that Owners identified in his

proof of loss could reasonably suggest that the errors were intentional rather than

random. Id. at 5348.

      At the close of all the evidence, Sunflower renewed its motion for JMOL and

argued, for the first time ever in the proceedings, that the Policy required that any

concealment, misrepresentation or fraud have been committed directly by the insured,

and not by the insured’s agents. Id., Vol. 20 at 5371. Sunflower in turn argued that

Owners presented no evidence that “anyone on behalf of Sunflower . . . was involved

whatsoever in the conduct which is the . . . inflation of the estimate.” Id. at 5373.

The district court responded: “What you’re effectively asking me to rule as a matter

of law that the only way” that Owners’ “counterclaim goes to the jury is if I rule as a

matter of law that the intentional misrepresentation or concealment could only have

been done by Sunflower and none of its agents.” Id. at 5373–74. Sunflower’s

counsel responded: “Correct.” Id. at 5374. The district court then stated: “Can I ask

you why you’ve waited to this point to raise this issue?” Id. Sunflower’s counsel

responded: “I don’t think it’s a matter of waiting as much as a matter of discovering

it as we were doing more research, Your Honor.” Id. Owners’ counsel argued, in

                                           16
part, that Sunflower had waived these arguments by failing to raise them at an earlier

stage of the proceedings. Id. at 5377. The district court noted that Sunflower was

“springing this on me at the last moment.” Id. at 5384. Consequently, the district

court took the matter under advisement and directed the parties to file supplemental

briefs addressing the issue raised by Sunflower, including whether Sunflower had

waived or forfeited the issue that Sunflower could only be liable for concealment,

misrepresentation or fraud that it committed.

      Owners also moved for JMOL on the issue of whether Matrix, Ford, Client

Preference, Countryman, R3NG and Domecq were Sunflower’s agents as a matter of

law such that their statements in relation to the insurance claim and proof of loss

were binding on Sunflower. Id. at 5391. The district court concluded, as a matter of

law, that Client Preference, Matrix and Ford were agents of Sunflower. Id. at

5418-20. But the district court concluded that genuine issues of material fact existed

regarding whether R3NG and Domecq were agents of Sunflower. Id. at 5421. Thus,

the district court granted in part and denied in part Owners’ motion for JMOL.

      At the end of the fourth day of trial, shortly after the parties made their oral

JMOL motions, the district court conducted an instruction conference. During that

conference, Sunflower objected to the district court’s proposed instructions regarding

agency, which included instructions on agency relationship, scope of authority,

incidental authority, implied authority, apparent authority, and knowledge imputed to

principal. Sunflower argued: “The basis for the objection is that under the explicit

terms of the contract [i.e., the Policy], Owners must prove that Sunflower breached

                                           17
the fraud provision, not anything related to one of its agents. What Sunflower’s

agents did or didn’t do are entirely unrelated to this case.” Id. at 5440. The district

court took that objection under advisement.

      The next morning, on the fifth and final day of trial, Sunflower filed its brief in

support of its renewed motion for JMOL, and also filed objections to the district

court’s proposed agency instructions. Sunflower argued in its brief that, “[a]ccording

to the plain language of the Policy, Owners must prove that Sunflower, rather than its

agents, violated the fraud clause,” and that “Owners ha[d] failed to present any

evidence at trial that Sunflower intentionally misrepresented either the amount of the

loss by submitting an inflated claim, or the date of loss.” ECF No. 218 at 1. “As a

result,” Sunflower argued, it “should be granted judgment as a matter of law on

Owners’ claim for Breach of Contract.” Id.

      The district court denied Sunflower’s renewed motion for JMOL and overruled

its objections to the proposed agency instructions. In doing so, the district court

concluded that “Sunflower’s written submission entirely fail[ed] to address the

waiver question that the Court and Owners repeatedly raised during oral argument on

the motion,” and “thus deem[ed] Sunflower to have conceded the issue.” ECF

No. 231 at 2. The district court also concluded that, in any event, Sunflower forfeited

its arguments by failing to raise them “at an appropriate time.” Id. at 3. Had

Sunflower raised its arguments at an earlier stage, the district court noted, it might

“have obviated most of the testimony and evidence presented at trial.” Id. The

district court concluded “it would be fundamentally unjust to put Owners to its proof

                                           18
on its counterclaim at a week-long jury trial, and then consider at this late date

arguments from Sunflower which, if now accepted by the Court, would render the

entire trial a nullity.” Id. In sum, the district court concluded “that Sunflower

forfeited both arguments,” i.e., that agency principles did not apply and that

recoupment was not a remedy allowed under the Policy, “for failure to timely raise

them before trial.” Id.

      Sunflower’s opening appellate brief entirely ignores this procedural history

and, more significantly, the district court’s forfeiture ruling. We have long and

consistently held that “[a]n issue or argument [that is] insufficiently raised in the

opening brief is deemed waived.” Becker v. Kroll, 494 F.3d 904, 913 n.6 (10th Cir.

2007); see Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007) (“[W]e

routinely have declined to consider arguments that are not raised, or are inadequately

presented, in an appellant’s opening brief.”). Adhering to this rule, we conclude that

Sunflower has effectively waived any challenge to the district court’s forfeiture

ruling regarding the agency instructions by failing to acknowledge or challenge that

ruling in its opening appellate brief.

      2) Did the district court err in denying Sunflower’s Rule 50 motion?

      In its second issue on appeal, Sunflower challenges the district court’s denial

of its motion for JMOL at the close of all the evidence, arguing that there was no

evidence that it intentionally misrepresented or concealed a material fact, aside from

erroneously imputing the acts of its independent “agents.” Aplt. Br. at 34.

According to Sunflower, “the only reason the many instructions on ‘agency’ were

                                           19
included in the charge was because there was otherwise nothing showing Sunflower

itself ‘intentionally’ misrepresented the amount of the loss.” Id. (emphasis in

original). “Thus,” Sunflower argues, “this case presents the secondary problem that

the only evidentiary basis the jury could have relied on for finding a breach of

contract by Sunflower was the intent of persons or entities other than Sunflower,

which . . . is not supported by the contractual language as a matter of law.” Id. at

34-35 (emphasis in original). “Under these circumstances,” Sunflower argues, this

“Court should reverse and render a take nothing judgment on Owners’ counter-claim

because there is legally insufficient evidence Sunflower or ‘another insured’

‘intentionally’ violated the fraud clause.” Id. at 35.

      Sunflower’s challenge to the district court’s denial of its motion for JMOL is,

at bottom, essentially the same as Sunflower’s challenge to the district court’s agency

instructions. Specifically, Sunflower is asserting that it was entitled to JMOL

because (a) the plain language of the Policy’s Fraud Clauses limited the scope of

those clauses to actions taken directly by Sunflower and its employees, and does not

apply to actions taken by agents working on behalf of Sunflower, such as R3NG and

Domecq, and (b) Owners presented no evidence at trial establishing that Sunflower or

its employees were responsible for the misrepresentations contained in the proof of

loss. As discussed above, however, Sunflower fails in its opening appellate brief to

address the district court’s conclusion that it forfeited these arguments by failing to

raise them in a timely fashion prior to trial. We therefore conclude that, as with its

                                           20
challenge to the district court’s instructions on agency, Sunflower has effectively

waived any challenge it may have to the district court’s forfeiture ruling.

       3) Does the Policy provide a recoupment remedy?

       In its third issue on appeal, Sunflower argues that the Policy does not provide

any recoupment remedy, and thus does not allow Owners to recoup the amounts that

it paid to Sunflower. In other words, Sunflower argues that Owners “seeks to insert a

remedy into the Policy that it does not provide – return or recoupment of an

Undisputed Payment the insurer already made on a claim.” Aplt. Br. at 40.

Sunflower argues that “[t]his is not just a waiver problem,” but also “a basic contract

interpretation problem” and “[t]he remedy provided by the District Court is not in the

Policy.” Id. at 41. Sunflower in turn argues that we “must interpret the Policy

language as written resolving any ambiguity in favor of the insured under the well-

established rules” governing contracts of insurance. Id.

       Notably, Sunflower makes no attempt to identify what ruling of the district

court it is actually challenging. As previously discussed, Sunflower first argued that

the Policy does not allow for recoupment when it renewed its motion for JMOL at the

close of all the evidence. The district court concluded that Sunflower had forfeited

this argument by failing to raise it in a timely fashion prior to trial.

       Because Sunflower once again fails to acknowledge, let alone directly

challenge, the district court’s forfeiture ruling in its opening brief, we conclude that

Sunflower has effectively waived any challenge to that ruling. See Becker, 494 F.3d
21
at 913 n.6 (“An issue or argument [that is] insufficiently raised in the opening brief is

deemed waived.”).

      4) Did the district court deny Sunflower a fair trial as a result of two
         evidentiary rulings?

      In its fourth issue on appeal, Sunflower argues that it was denied a fair trial as

a result of the district court’s decision to (a) admit contractor’s invoices and bids that

were prepared before the 2014 storm, and (b) exclude evidence of Owners’

investigation of Sunflower’s claim. We review for abuse of discretion the trial

court’s evidentiary rulings. Ryan Dev. Co., L.C. v. Ind. Lumbermens Mut. Ins. Co.,

711 F.3d 1165, 1170 (10th Cir. 2013).

      a) Admission of contractor’s bids and invoices

      During Owners’ case-in-chief, the district court permitted Geoffrey Page, a

senior claims adjuster employed by Owners, to testify about the amounts of written

bids and invoices that Sunflower received from roofing contractors in 2007. Those

bids and invoices, which were prepared approximately seven years prior to the storm

that caused the damage claimed by Sunflower in this case, related to various roof

repairs at the Sunflower Property. Page also testified that he used Xactimate

software2 to change Sunflower’s 2016 estimate of damages resulting from the 2014

storm to reflect 2007 pricing and in turn gave that altered pricing report to Gary

      2
        According to the record, Xactimate software is commonly used by
contractors and insurance adjusters to determine the cost of repairs.
                                            22
Stevens, the independent adjuster who was hired by Owners to review Sunflower’s

proof of loss and estimate in this case.

      Stevens also testified about the 2007 bids and invoices. Stevens explained

that, as part of his investigation in this case, he attempted to determine how much the

repairs requested by Sunflower in its proof of loss would have cost in 2007 dollars.

Stevens contrasted the amounts requested by Sunflower from Owners, adjusted to

reflect 2007 pricing, with the amounts contained in the bids and invoices that

Sunflower actually received from contractors in 2007. Stevens testified that he had

never before seen such a “massive” difference in prices, i.e., the difference between

the amounts that Sunflower actually paid for roof repairs in 2007 and the amounts

that Sunflower requested from Owners in 2016. Aplt. App., Vol. 18 at 4813.

      Although Sunflower objected to the admission of the 2007 bids and invoices,

the district court overruled that objection and admitted them for the limited purpose

of serving as “evidence of Sunflower’s notice of the amount it was invoiced to

replace the roofs in 2007 and Sunflower’s willingness to pay such price.” ECF

No. 225 at 13 (jury instructions). The district court specifically instructed the jury

regarding the limited purpose of this evidence. Id.

      Sunflower argues in its appeal that, contrary to the district court’s limiting

instruction, the 2007 “invoices/bids were intended to be used—and were exclusively

used—as proof of the alleged ‘truth’ stated in them: that the roofs were less

expensive to repair at a previous time in order to have the jury compare them to the

Ford/R3NG Estimate.” Aplt. Br. at 48. Sunflower in turn argues that “the

                                           23
invoices/bids were completely irrelevant and highly prejudicial.” Id. at 49.

Sunflower asserts that “the invoices/bids lack[ed] any detail about the itemized

materials costs, labor costs and other critical elements necessary to make a

comparison to the detailed Xactimate estimate they were used to attack.” Id.

“Additionally,” Sunflower argues, “they were not related to Storm damage because

they predated the [2014] Storm entirely.” Id. Sunflower also argues that the limiting

instruction given to the jury by the district court “failed to cure [the] prejudice” that

resulted from the documents’ admission. Id. at 50. Sunflower asserts that “[o]nce

the court allowed Owners to publish the numbers from these bids and invoices to the

jury and invited its witnesses and the jury to speculate about their relevance to the

cost of repairs for damage from the Storm, that comparison permeated the entire

case.” Id. Thus, Sunflower argues, “the admission of such irrelevant and prejudicial

evidence and its extensive use throughout the case demonstrates reversible harm just

from the admission of this evidence.” Id. at 51.

       We reject Sunflower’s arguments and conclude that the district court acted

within its discretion in admitting the 2007 bids and invoices for the limited purpose

outlined in its instruction to the jury. In admitting this evidence, the district court

noted that Sunflower “failed to explain why [Owners’] proposal to have Gary Stevens

explain how to compare the estimates [wa]s improper.” ECF No. 204 at 7. The

district court also explained that Sunflower was “free to challenge [Stevens’]

comparison technique on cross examination,” and it therefore agreed with Owners

“that [Sunflower’s] argument [went] to the weight attributable to the proffered

                                            24
testimony, but d[id] not preclude its admission altogether.” Id. Notably, Sunflower

makes no mention of these rationales in its opening appellate brief.

      Even assuming, for purposes of argument, that the district court abused its

discretion by admitting the 2007 bids and invoices, it is clear that the admission of

this evidence was harmless in light of the evidence presented at trial by both Owners

and Sunflower. For its part, Owners presented extensive testimony from Stevens, the

independent adjuster it hired to review Sunflower’s proof of loss. Stevens testified,

independent of the evidence of the 2007 bids and invoices, about multiple categories

of items in Sunflower’s proof of loss that, based upon his experience and expertise,

were inflated and unreasonably excessive. Sunflower, during its case, presented

testimony from Jason Domecq of R3NG, one of the two people who prepared and

submitted the proof of loss on behalf of Sunflower. As previously discussed,

Domecq proved to be a disastrous witness for Sunflower. Domecq offered no

explanation for numerous line items contained in the proof of loss. He also, on

several occasions, conceded that certain charges listed in the proof of loss were

unjustified. And, perhaps most surprisingly, he conceded that the multiple errors that

Stevens identified in the proof of loss could reasonably indicate that the errors were

intentional rather than random. Thus, the 2007 bids and invoices were but a small

part of the evidence supporting Owners’ counterclaim for fraud and

misrepresentation.

      b) Exclusion of evidence of Owners’ investigation of Sunflower’s claim

                                          25
      Sunflower also asserts that the district court abused its discretion by

“exclud[ing] evidence of [three] detailed reports prepared by Stevens for Owners

related to the Storm damage, which would have been relevant for the jury to conduct

an apples-to-apples comparison.” Aplt. Br. at 51. Owners objected to admission of

these reports on the grounds that they went “to the claims handling” issues raised by

Sunflower “that the [district court] ha[d] already” resolved. Aplt. App., Vol. 18

at 4747. Sunflower argued in response that the reports were relevant for purposes of

impeaching Stevens. Id. at 4749. The district court sustained Owners’ objection

“because [the reports] [we]re matters directly [involving] the claims handling,” but it

informed Sunflower that it “w[ould] allow in a limited form [the reports] to be used

as potential impeachment of . . . Stevens” (i.e., without actually admitting the

reports). Id.

      Sunflower cross-examined Page, Owners’ senior claims adjuster, about eleven

items that Stevens failed to include in his initial estimate of damages. Id. at 4750–51.

During that cross-examination, Page conceded that Stevens had to prepare a revised

estimate to incorporate those eleven items and that the revised estimate was greater

than the initial estimate. Id. at 4751–52. During Sunflower’s cross-examination of

Stevens, it did not ask him similar questions, nor did it otherwise attempt to impeach

him using any of the three reports that were excluded by the district court. At the

conclusion of Sunflower’s cross-examination of Stevens, the district court stated on

the record: “Because the case law is clear that documents can be used for

impeachment purposes that have not been received into evidence, I am not precluding

                                           26
you [Sunflower] from using any of the exhibits you referenced in your offer of proof

or any of the exhibits . . . as to which I’ve sustained objections . . . in an appropriate

attempt to impeach a witness provided that the foundation has been laid.” Id.

at 4923–24. Thereafter, Sunflower made an offer of proof to the district court

regarding the excluded exhibits. Sunflower stated that its “offer of proof relate[d] to

cross-examination of Gary Stevens,” and that “[h]ad [it] been allowed, [it] would

have introduced evidence of Exhibits 71, 76, and 80,” which “were various

documents that were prepared by . . . Stevens while he was serving as independent

adjuster during the claims process. They were a status report, a reserve report, and

then what he’s referred to as a closing report.” Id. at 4930. Sunflower in turn stated

that those reports “would have been significant” because “they talk[ed] about, on

multiple occasions, the need to meet with [Sunflower’s] public adjuster to try and

reach a resolution; that the two parties had essentially agreed to the scope of the

damage, and that it was just a matter of amount of damage; that the parties should

meet and reach an agreement as to the amount.” Id. at 4930–31. Sunflower also

stated that it would have “cross examine[d] [Stevens] on the fact that the information,

which [was] in the reports that he prepared, sa[id] nothing about inflated estimate,

fraud, or raise[d] any red flags whatsoever, which goes to his credibility as an expert

now testifying that clearly looking at an estimate that he had dating back to May of

2016 it shows evidence of clear massive fraud.” Id. at 4931.

       Sunflower argues in its appeal that “[a]llowing the jury to hear the total

amount of Stevens’ estimate upon which the Undisputed Payment was based, without

                                            27
admitting Stevens’ own detailed reports, prohibited the jury from fully comparing

and understanding the reasons behind the difference in the total values of these

estimates.” Aplt. Br. at 52 (emphasis in original). Sunflower also argues that the

“[a]dmission of those documents would have helped the jury understand how

Owners’ stories about fraudulent inflation and late notice causing prejudice were not

based [on] actual concerns of Owners’ [sic] during the claims process, and were

fabricated only after suit was filed.” Id.

      We conclude, contrary to Sunflower’s assertions, that the district court did not

abuse its discretion in excluding the exhibits. To begin with, the district court

expressly ruled that Sunflower was free to cross-examine Stevens regarding the

exhibits, even though the exhibits would not be admitted. Nevertheless, Sunflower

chose not to do so, and it offers no explanation in its opening appellate brief for this

failure. Thus, as Owners correctly observes in its appellate response brief,

“Sunflower’s failure to use the exhibits” to impeach Stevens “is not the district

court’s error,” but rather “Sunflower’s” error. Aple. Br. at 42. In any event,

Sunflower did cross-examine Page regarding the excluded exhibits and elicited from

him that Stevens’ initial estimate erroneously omitted eleven different items of

damages.

      5) Did the district court err in granting partial summary judgment in favor
         of Owners on Sunflower’s claims for breach of contract and bad faith?

      In its fifth and final issue on appeal, Sunflower argues that the district court

erred in granting partial summary judgment in favor of Owners on Sunflower’s

                                             28
claims for breach of contract and bad faith. We review de novo the “district court’s

summary-judgment ruling, applying the same standard that applied in district court.”

Greer v. City of Wichita, 943 F.3d 1320, 1322 (10th Cir. 2019). We also “have

discretion to affirm” the district court’s summary judgment ruling “on any ground

adequately supported by the record, so long as the parties have had a fair opportunity

to address that ground.” Hasan v. AIG Prop. Cas. Co., 935 F.3d 1092, 1099 (10th

Cir. 2019) (quotations and brackets omitted).

      Owners argues in response that the jury’s verdict supplies an independent basis

for affirming the district court’s summary judgment ruling on Sunflower’s breach of

contract and bad faith claims. Aple. Br. at 45–46. We agree. Because the jury found

that Sunflower violated the Policy’s Fraud Clauses, that determination effectively

voids the Policy. As a result, Owners could not, consistent with that verdict, be

found to have either breached the Policy or engaged in bad faith by failing to pay the

full amount of damages claimed by Sunflower, since Sunflower’s violation and the

resulting voidance of the contract preceded any alleged breach by Owners. See

generally Wilson v. Muckala, 303 F.3d 1207, 1219 (10th Cir. 2002) (concluding

“that, even if it was error to grant summary judgment for the board members, any

error was harmless” because “[p]laintiffs could not have sustained a cause of action

in negligence against these individuals when the alleged perpetrator himself was

exonerated of negligence”); Fraser v. Major League Soccer, LLC, 284 F.3d 47, 60-61

(1st Cir. 2002) (concluding that the grant of summary judgment on a particular claim

was harmless in light of the jury’s subsequent verdict).

                                          29
                                       III

      The judgment of the district court is AFFIRMED. Sunflower’s motion to

maintain district court documents under seal is GRANTED.

                                        Entered for the Court

                                        Mary Beck Briscoe
                                        Circuit Judge

                                       30