Court Opinion

ID: 164483
Source: CourtListenerOpinion
Date Created: 2010-08-14 08:22:45+00
Date Added: 2024-06-11T16:49:07.483073
License: Public Domain

F I L E D
                                                                  United States Court of Appeals
                                                                          Tenth Circuit
                    UNITED STATES COURT OF APPEALS
                                                                          APR 1 2004
                           FOR THE TENTH CIRCUIT
                                                                     PATRICK FISHER
                                                                              Clerk

    ALI BANKI; SHANNON BANKI,

               Plaintiffs-Appellants,

    v.                                                 No. 03-5099
                                                 (D.C. No. 00-CV-886-EA)
    PROVIDENT INDEMNITY LIFE                           (N.D. Okla.)
    INSURANCE COMPANY, a
    corporation; HEALTHPLAN
    SERVICES, INC., a corporation,

               Defendants-Appellees.

                           ORDER AND JUDGMENT           *

Before EBEL , BALDOCK , and LUCERO , Circuit Judges.

*
       After examining the briefs and appellate record, this panel has determined
unanimously to grant 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 This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and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. The court generally disfavors the citation of orders and
judgments; nevertheless, an order and judgment may be cited under the terms and
conditions of 10th Cir. R. 36.3.
      Ali and Shannon Banki appeal from the denial of their renewed motion for

judgment as a matter of law and the denial of their motion for a new trial. The

Bankis’ brief argues the following three issues: (1) whether the jury verdicts

were against the weight of the evidence; (2) whether the district court erred by

instructing the jury on corporate internal negligence; and (3) whether the district

court erred by preventing the Bankis from introducing evidence of the defendants’

alleged violation of the Oklahoma Third Party Administrator Act. We have

jurisdiction pursuant to 28 U.S.C. § 1291 and    AFFIRM .

                                            I

      In August 1996, Ali Banki and his business partner, Sasan Rastami,

subscribed to Provident Indemnity Life Insurance Company (“Provident”)

insurance plans. At the time their insurance plans were initiated, Banki’s and

Rastami’s coverages were placed on a “list bill.” A list bill provides that all

participants in the insurance program are invoiced on a single bill for their

insurance coverage, and that when payments are made by the insureds, the

payments are credited to the total balance owed on the list bill. In February 1998,

Healthplan Services, Inc. (“Healthplan”) entered into a service agreement to

administer claims on Provident’s behalf. Healthplan began serving as a third-

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party administrator of Provident’s insurance programs, including Banki’s policy,

the following month.

      In February 1998, the Bankis and Rastami discontinued paying their

premiums and allowed their insurance coverage to lapse. Neither Banki nor

Rastami notified Provident of their decision to discontinue their medical

insurance. On August 11, 1998, Banki received notification that his policy was in

arrears and had been canceled, but that he was eligible for reinstatement if he

tendered payment for the past due amount of $2,746.50. The Bankis paid the past

due premiums on August 17, 1998. On August 24, 1998, Banki was diagnosed

with colon cancer.

      The Bankis were notified that their payment of $2,746.50 was insufficient

to bring the balance of the list bill account into good standing. Mrs. Banki

contacted a Healthplan representative to inquire about the status of the insurance

plan. The representative explained that the payment was insufficient to reinstate

the policy. Mrs. Banki followed up with multiple phone calls to Healthplan

representatives concerning the Bankis’ insurance plan; the Bankis’ coverage was

reinstated in September 1998. Though the Bankis made payments in September,

October, November, and December 1998, part of each payment was being split to

pay the premiums for Rastami because of the list bill arrangement. The Bankis

submitted claims in 1998 and 1999 that were not paid. In December 1999, the

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Bankis’ attorney contacted Provident regarding the Bankis’ insurance coverage

and payment of the Bankis’ medical bills. The parties corresponded in early

March 2000 but did not resolve the dispute.

      Filing suit against Provident and Healthplan in state court on June 30,

2000, the Bankis alleged that Provident breached the insurance contract, and that

Healthplan and Provident breached their duties of good faith and fair dealing.

The case was removed to federal court in October 2000. In April 2001, the

Bankis filed an amended complaint adding Healthplan as a defendant. On

November 25, 2002, the district court granted Healthplan’s motion for summary

judgment on the Bankis’ claim for breach of contract.

      Although Provident had agreed to reinstate Banki’s coverage retroactively,

to waive the unpaid premiums, and to pay all of the unpaid medical bills, the

Bankis proceeded to trial to establish the defendants’ liability on their claims and

to recover additional unspecified economic damages in addition to damages for

emotional distress and punitive damages. The matter was tried before a jury in

January 2003. At the conclusion of the evidence, all parties orally moved for

judgment as a matter of law; the court denied each motion. On January 24, 2003,

the jury returned verdicts in favor of Provident on the breach of contract and

breach of the duty of good faith and fair dealing claims and in favor of Healthplan

on the breach of the duty of good faith and fair dealing claim. The district court

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denied both the Bankis’ renewed motion for judgment as a matter of law and their

motion for a new trial; this appeal followed.

                                              II

       We review de novo the denial of the Bankis’ renewed motion for judgment

as a matter of law, applying the same standard as the district court.      McKenzie v.

Renberg’s, Inc. , 94 F.3d 1478, 1483 (10th Cir. 1996). “A . . . renewed motion for

judgment as a matter of law must be granted if, viewing the evidence in the light

most favorable to the nonmoving party, all the evidence and the inferences to be

drawn from it are so clear that reasonable persons could not differ in their

conclusions.”    Sanjuan v. IBP, Inc. , 160 F.3d 1291, 1298 (10th Cir. 1998)

(quotation omitted). An abuse of discretion standard governs our review of the

district court’s denial of a motion for a new trial.     Id. at 1296. “Where a party

moves for a new trial on the ground that the jury verdict is not supported by the

evidence, the verdict must stand unless it is ‘clearly, decidedly or overwhelmingly

against the weight of the evidence.’”       York v. Am. Tel. & Tel. Co.   , 95 F.3d 948,

958 (10th Cir. 1996) (quotation omitted).

                                               A

       The Bankis assert that the jury verdict is against the weight of the evidence

on their breach of contract claim because Provident failed to properly credit the

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Bankis’ premium payments, canceled their coverage, and refused to pay medical

claims in a timely manner. They also contend that the jury verdicts on their

claims for breach of the duty of good faith and fair dealing were against the

weight of the evidence because Provident and Healthplan’s conduct demonstrated

a deliberate and reckless disregard for the Bankis’ rights.

       We disagree. It is apparent from the record that the evidence presented at

trial provided a reasonable basis for the jury verdict on the breach of contract

claim. The evidence demonstrated, for example, that the Bankis failed to pay

their premiums from February until August 1998, thereby allowing a significant

balance to accrue. It also showed that Provident credited the Bankis’ premium

payments according to the list bill policy set up by Banki, and that Provident

canceled the policy because Banki’s payments were insufficient to cover the

balance on the list bill.

       At trial, the jury learned that in 1996, Banki signed a list bill request form

for himself and Rastami, that Banki stopped making premium payments beginning

in February 1998, and that by August 1998 he owed $2,746.50. It was

demonstrated, moreover, that at no time did Banki or Rastami notify Provident of

any desire to end the list bill arrangement. Because the list bill arrangement was

still in place, the premium payments submitted by Banki were split between his

policy and Rastami’s policy. Banki’s payments were therefore insufficient to

                                          -6-
bring the policy out of arrears, and as a consequence, the Bankis’ policy was

canceled. Accordingly, it was reasonable for the jury to conclude that Provident

had not breached its contractual duties to the Bankis.

      The jury’s conclusion that defendants did not breach their duty of good

faith and fair dealing is similarly supported by the record. Provident and

Healthcare presented evidence that a legitimate dispute existed concerning the

Bankis’ insurance policy and the coverage provided. Moreover, the defendants

presented evidence that they were responsive to the Bankis’ inquiries.   1
                                                                             We

therefore conclude that the jury verdicts in favor of Provident on the Bankis’

breach of contract claim and in favor of both defendants on the Bankis’ breach of

the duty of good faith and fair dealing claim were not clearly, decidedly or

overwhelmingly against the weight of the evidence.

1
       For example, in September 1998, after Mrs. Banki called to ask about why
the August premium payment had not been credited in full to their account,
Healthplan, on behalf of Provident, reinstated the Bankis’ policy. In December
1999, Healthplan received a letter from the Bankis’ attorney inquiring about the
status of their policy; Healthplan responded in January 2000, explaining that the
Bankis’ policy was part of a list bill. Healthplan asked Banki whether he had
asked to be disassociated from the list bill, and Banki’s attorney wrote back that
the Bankis did not know what a list bill was or what it meant to be disassociated
from it. Healthplan wrote back that it would investigate and respond. Healthplan
then transferred the file to Provident. Provident investigated and concluded that
there had been some confusion regarding the way the premiums were to be paid
on the list bill policy; it therefore reinstated the policy retroactive to January
1998, waived any unpaid premiums, and paid for all of the Bankis’ outstanding
medical claims.

                                           -7-
                                           B

      As to the Bankis’ contention that the district court erred by giving the jury

an instruction on “corporate internal negligence” because it “is not a valid legal

defense to breach of contract,” Aplts’ Br. at 26, “[w]e review the district court’s

decision to give a particular jury instruction for abuse of discretion and consider

the instructions as a whole de novo to determine whether they accurately informed

the jury of the governing law.”   United States v. McClatchey   , 217 F.3d 823, 834

(10th Cir. 2000) (quotation omitted). The instruction at issue stated:

      Corporate internal negligence alone is not bad faith. You must
      consider whether the conduct of the insurer and/or third party
      administrator in determining coverage in the handling of plaintiffs’
      claims rises to the level of bad faith as defined for you in the
      previous instructions.

Aplts’ App. at 245.

      The corporate internal negligence jury instruction accurately states

Oklahoma law.     See Peters v. American Income Life Insurance Co.    , 77 P.3d 1090

(Okla. Ct. App. 2002) . In the instant case, the district court gave this instruction

to provide additional guidance for the jury in its consideration of the claim for

breach of the duty of good faith and fair dealing, not as a defense to breach of

contract. We conclude, therefore, that the district court did not abuse its

discretion in giving this instruction to the jury.

                                          -8-
                                             C

       Finally, the Bankis argue that they should have been allowed to present

evidence to the jury that the defendants violated the Oklahoma Third Party

Administrator Act (“OTPAA”), 36 O.S. § 1449, in order to demonstrate the

defendants’ bad faith. Because the district court found that the Bankis had failed

to present any authority indicating that a violation of the OTPAA is relevant to

the determination of bad faith, the district court did not allow the evidence.

       “We are generally reluctant to overturn evidentiary rulings of the trial

court. We review such rulings only to determine if the trial court abused its

discretion in limiting the scope of the evidence presented.”   Messina v. Kroblin

Transp. Sys., Inc. , 903 F.2d 1306, 1310 (10th Cir. 1990). Because the Bankis

failed to present any authority that a violation of the OTPAA is relevant to the

determination of bad faith, we conclude the district court did not abuse its

discretion in preventing the admission of such evidence.

                                            III

       The Bankis have failed to demonstrate that “viewing the evidence in the

light most favorable to the nonmoving party, all the evidence and the inferences

to be drawn from it are so clear that reasonable persons could not differ in their

conclusions,” Sanjuan , 160 F.3d at 1298 (quotation omitted); as a result, the

                                            -9-
Bankis are not entitled to judgment as a matter of law on their claims.

Accordingly, the judgment of the district court is   AFFIRMED .

                                                      Entered for the Court

                                                      Carlos F. Lucero
                                                      Circuit Judge

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