Court Opinion

ID: 4304964
Source: CourtListenerOpinion
Date Created: 2018-08-17 16:00:27.992149+00
Date Added: 2024-06-11T14:35:09.965153
License: Public Domain

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

                            FOR THE TENTH CIRCUIT                           August 17, 2018
                        _________________________________
                                                                          Elisabeth A. Shumaker
                                                                              Clerk of Court
 PAUL MACOMBER, JR.; JENNIFER
 MACOMBER,

       Plaintiffs - Appellants,

 v.                                                          No. 17-1194
                                                (D.C. No. 1:15-CV-00484-REB-KMT)
 AMERICAN FAMILY MUTUAL                                       (D. Colo.)
 INSURANCE GROUP, a/k/a American
 Family Mutual Insurance Company,

       Defendant - Appellee.
                      _________________________________

                            ORDER AND JUDGMENT*
                        _________________________________

Before LUCERO, HARTZ, and MORITZ, Circuit Judges.
                  _________________________________

      Paul and Jennifer Macomber appeal the district court’s entry of judgment on a

jury verdict in favor of American Family Mutual Insurance Group (“American

Family”), and the court’s denial of their Fed. R. Civ. P. 59(a) motion for a new trial.

Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

      *
        After examining the briefs and appellate record, this panel has determined
unanimously to honor the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral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.
                                           I

      In June 2012 the Macombers’ house in Colorado Springs was damaged by a

forest fire. They filed a claim with their insurer, American Family. American

Family initially paid for some of the claimed losses but allegedly stopped

communicating with the Macombers about others. In October 2012, the Macombers

engaged a public claims adjuster, Troy Payne, and later an attorney, Evan Wolfe,

both based in Florida. During the time the Macombers engaged Payne and Wolfe,

American Family was required to communicate only with Payne or Wolfe.

      Payne filed a proof of loss on the Macombers’ behalf totaling just over

$528,000. American Family viewed the proof of loss with suspicion because Payne

had contemporaneously filed several strikingly similar claims on behalf of other

American Family insureds for damages from the same fire. Accordingly, it referred

the claims to its Special Investigations Unit. It also asked for documentation

supporting the claimed losses and an examination of the Macombers under oath.

Neither Payne nor Wolfe complied with those requests or informed the Macombers

about them.1 American Family further requested an opportunity to conduct

inspections in the presence of Payne and the engineer on whom Payne claimed to

have relied. Although Payne attended two inspections conducted by an engineer

      1
        At trial there was some evidence that a DVD containing supporting
documentation may have been sent to American Family, but American Family
claimed it never received the DVD, and neither the DVD nor any evidence of its
contents was produced at trial.
                                          2
American Family hired, Payne’s engineer did not. American Family’s engineer

determined that none of the claimed losses were due to the fire.

      After the first of the two inspections by American Family’s engineer,

American Family sent a reservation of rights letter to both Payne and the Macombers.

The letter stated that there was some question whether there was coverage for the

claimed loss and that American Family needed to conduct further investigation. The

letter also suggested that Payne’s proof of loss was possibly fraudulent and requested

an appointment to obtain the Macombers’ recorded statements. Ultimately,

American Family never approved any portion of the proof of loss Payne filed.

      The Macombers complained to American Family and Colorado’s Department

of Regulatory Agencies (“DORA”) about the insurer’s handling of their claims.

DORA asked American Family to file a claim with it for possible fraud, apparently

based on Payne’s proof of loss, and American Family informed other authorities

about the questionable claim. Sometime in early 2014, the Macombers ended their

affiliation with Payne and Wolfe after becoming suspicious of their integrity, forming

the opinion that the two were “storm chasers,” meaning “con men.”

      In March 2014, the Macombers filed the underlying action against American

Family, asserting claims for breach of contract, unreasonable delay in or denial of

benefits payments, and bad-faith breach. They later hired a general contractor, Ken

Murphy. Murphy inspected the house and prepared reports supporting a new claim

for nearly $190,000 in damages due to the fire, some of which were apparently part

of Payne’s proof of loss. Because the Macombers’ suit was pending, American

                                          3
Family was not required to decide the new claim. That claim was the basis for the

breach of contract claim litigated at trial,2 and the jury decided there had been no

breach. As set out in the verdict form, that decision meant the jury was not to decide

the unreasonable delay/denial or bad-faith breach claims. The Macombers

unsuccessfully moved for a new trial, arguing that the district court erred in refusing

to modify a jury instruction on agency. They now appeal.

                                            II

      The Macombers’ primary challenge on appeal is to the district court’s refusal

to modify the jury instruction on agency at trial and its denial of their Rule 59(a)

motion raising the same issue. We review both of those decisions for abuse of

discretion. M.D. Mark, Inc. v. Kerr-McGee Corp., 565 F.3d 753, 762 (10th Cir.

2009) (Rule 59(a) denial); United States v. Gonzales, 456 F.3d 1178, 1181 (10th Cir.

2006) (refusal at trial). “In assessing whether the district court properly exercised its

discretion [at trial], we review the instructions de novo to determine whether, taken

as a whole, they accurately state the governing law.” Gonzales, 456 F.3d at 1181

(italics omitted). Defendants are “entitled to an instruction on [their] theory of the

case if the instruction is a correct statement of the law, and if [they have] offered

sufficient evidence for the jury to find in [their] favor.” Id. (quotation omitted).

      The instruction at issue informed the jury that the Macombers hired Payne and

Wolfe “to act as their agents in connection with their insurance claim,” and stated the

      2
       Before trial, the Macombers stated that they had formally withdrawn Payne’s
submissions and were relying solely upon Murphy’s estimates.
                                            4
general agency rule that “[t]he acts or omissions of the public adjuster and attorney

are the acts or omissions of the plaintiffs.”3 During the jury instruction conference,

the Macombers asked the court to insert “legal and authorized” before “acts or

omissions” based on the theory that a principal is not responsible for intentional

crimes of an agent. The court denied that request, reasoning that although there was

evidence that both parties were suspicious of Payne and Wolfe, there was no

evidence of intentional wrongdoing or illegality, including no evidence of the result

of the investigation by American Family’s Special Investigation Unit.

      The bulk of the Macombers’ appellate argument assumes that the instruction

was legally erroneous, but they offer only conclusory assertions, not evidence, to

support their theory that Payne and Wolfe committed fraud or otherwise acted

illegally or outside the scope of their agency such that their acts or omissions should

not be attributed to the Macombers. The Macombers conceded as much during

closing argument, stating that “Despite these notifications [to DORA and other

authorities], though, . . . there’s no evidence that any fraudulent activity exists.” We

therefore conclude that the district court did not abuse its discretion in rejecting the

Macombers’ proposed modification at trial.

      3
         The instruction was relevant to one element of the breach of contract claim—
whether the Macombers had “substantially performed their obligations under the
insurance policy,” and to American Family’s affirmative defense on the breach claim
that the Macombers “failed to cooperate” with American Family’s investigation and
settlement of the claim, “including the duty to provide information, recorded
statements, and an inspection of the property when requested.”

                                            5
      The Macombers relatedly contend there was insufficient evidence to support

the jury’s verdict because the instruction was legally erroneous.4 They assert after

trial, five jurors approached counsel for both sides and stated that although they

wanted to find for the Macombers on all claims, they were constrained by the agency

instruction to attribute the wrongful acts of Payne and Wolfe to the Macombers. The

Macombers advanced this allegation in their Rule 59(a) motion, and American

Family disagreed with their representation of the jurors’ statements. The district

court denied the motion, reasoning that although there was evidence of the parties’

suspicions about Payne and Wolfe, there had been no evidence that they had acted

outside the scope of their agency, unlawfully, fraudulently, or in their own interests

and adverse to the Macombers’ interests. The court did not address the allegation

about the jurors’ post-trial statements to counsel.

      For the same reasons that we rejected the Macombers’ challenge to the district

court’s ruling at trial on the proposed modification, we see no abuse of discretion in

the district court’s denial of the Rule 59(a) motion. Consideration of the jurors’

alleged statements is barred by Federal Rule of Evidence 606(b)(1), which prohibits a

court, “[d]uring an inquiry into the validity of a verdict,” from “receiv[ing] a juror’s

      4
         To the extent that the Macombers characterize their sufficiency challenge as
something more general than whether there was sufficient evidence to support their
proposed modification of the agency instruction, they have waived appellate review.
First, they did not raise a more general challenge in the district court. See Daigle v.
Shell Oil Co., 972 F.2d 1527, 1539 (10th Cir. 1992). Second, their briefing is
inadequate to merit our review of a more general challenge. See LaFevers v. Gibson,
182 F.3d 705, 725 (10th Cir. 1999).
                                            6
affidavit or evidence of a juror’s statement” on, among other things, “the effect of

anything on [a] juror’s . . . vote . . . or any juror’s mental processes concerning the

verdict.” Fed. R. Evid. 606(b)(1). Although Rule 606(b)(2) lists exceptions to this

rule, the Macombers do not argue that any are applicable here. And we are

unpersuaded by their argument that the prohibition does not apply because the jurors’

alleged statements merely demonstrate the instruction’s prejudicial impact. The

Macombers are using the statements to question the validity of the verdict, which is

what Rule 606(b) guards against. See Peña-Rodriguez v. Colorado, 137 S. Ct. 855,

863–65 (2017) (reciting history and purpose of Rule 606(b) and stating that it “gives

stability and finality to verdicts”).

                                           III

       AFFIRMED.

                                             Entered for the Court

                                             Carlos F. Lucero
                                             Circuit Judge

                                            7