Court Opinion

ID: 50843
Source: CourtListenerOpinion
Date Created: 2010-04-26 00:58:36+00
Date Added: 2024-06-11T09:38:59.494366
License: Public Domain

United States Court of Appeals
                                                                         Fifth Circuit
                  IN THE UNITED STATES COURT OF APPEALS
                                                                      FILED
                            FOR THE FIFTH CIRCUIT                   June 25, 2007
                            _____________________
                                 No. 06-50398                  Charles R. Fulbruge III
                            _____________________                      Clerk

BOB FOSTER; CAROL FOSTER,

                                                    Plaintiffs-Appellants
      v.

ALLSTATE INSURANCE COMPANY,
                                                        Defendant-Appellee

                         ----------------------
             Appeals from the United States District Court
                   for the Western District of Texas
                             (1:03-CV-767)
                         ----------------------
Before HIGGINBOTHAM, DAVIS, and WIENER, Circuit Judges.

PER CURIAM*:

      At the conclusion of the parties’ insurance-coverage trial,

the   jury   returned   a   verdict   finding   that   Defendant-Appellant

Allstate Insurance Company (“Allstate”) had committed a breach of

contract under its Homeowners’ Policy (“the Policy”) insuring

Plaintiffs-Appellants Bob and Carol Foster (collectively, “the

Fosters”).     The jury nevertheless found that this breach caused

the Fosters to suffer no damages.

      Asserting    irreconcilable     inconsistencies     in     the        jury’s

      *
       Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
verdict, the Fosters filed motions seeking a post-trial judgment

as a matter of law and for a new trial.                        The district court

denied   both    these    motions,       concluding     that       (1)   there    was   a

legally sufficient basis for the jury’s verdict, (2) the verdict

was   not   against    the     great     weight   of    the    evidence,        and   (3)

allowing the verdict to stand would not result in a miscarriage

of justice.     We affirm.

                          I.      FACTS AND PROCEEDINGS

      After the Fosters discovered mold infestation in their home

in December 2001, they made a claim under the Policy.                           Allstate

determined that the mold was caused by a covered peril and began

adjusting the claim.

      Mold Restoration, Inc. (“MRI”) was hired to perform the mold

remediation     process      on    the   Fosters’      home.       As    part    of   the

process, the Fosters’ personal property had to be removed from

the home.       It ended up in three different locations: (1) the

Fosters’ temporary residence; (2) a storage unit at Lakeline

Storage; and (3) a storage unit at Public Storage.

      While the remediation process was in progress, the Texas

Attorney General’s Office began investigating MRI for fraud.                          MRI

eventually      went   into       receivership.          As    a    result       of   its

predicament,     MRI     failed     to   pay   rent    at     Public     Storage.       A

substantial portion of the Fosters’ personal property that was

                                           2
being held there was sold at auction.

     The remediation work in the Foster’s house was eventually

completed,    but     the   Foster’s         house      remained    in    need     of

considerable restoration work.               Despite multiple estimates and

offers of payment between the parties, the Fosters and Allstate

were unable to agree on a cost for the restoration work, so it

was never completed.

     In July 2003, the Fosters filed suit against Allstate in

Texas state court, which was subsequently removed to the district

court.    In their complaint, the Fosters sought damages arising

from the uncompleted restoration work and the auction sale of

their personal      property.      They      grounded     their    claims   in    (1)

breach of contract, (2) negligence, (3) violation of Article

21.21 of the Texas Insurance Code, (4) violation of Article 21.55

of the Texas Insurance Code, and (5) breach of the common law

duty of good faith and fair dealing.             Only the breach of contract

claims concerning damage to the Fosters’ personal property are

relevant to this appeal.

     The case proceeded to jury trial in April 2004, at the

conclusion of which the jury returned a special verdict.                     Among

other    things,    the   jury   found       Allstate    guilty    of    breach   of

contract but also determined that the Fosters had suffered no

damages as a result of this breach.

                                         3
     Following the verdict, both parties made post-trial motions.

Allstate    asked    the    district   court   to    enter   a   take-nothing

judgment, and the Fosters sought a judgment as a matter of law,

asking that the district court disregard the jury’s “zero damage”

award for Allstate’s breach of contract and enter a judgment for

either $447,000.00 (the value of their lost personal property

including its sentimental value) or $191,400.00 (the value of

their lost personal property excluding its sentimental value).

Determining that there was a sufficient evidentiary basis for a

reasonable juror to award a $0.00 verdict, the district court

denied     the   Fosters’    motion    and   granted   Allstate’s    motion,

entering a take-nothing judgment.

     After the district court rendered its judgment, the Fosters

filed a motion for new trial on the issue of their personal

property loss.      The district court denied this motion, concluding

that (1) the verdict was not against the great weight of the

evidence and (2) allowing the verdict to stand would not result

in a miscarriage of justice.           The Fosters timely filed a notice

of appeal.

                            II.   LAW AND ANALYSIS

A.   Standard of Review

     On appeal, the Fosters challenge the district court’s denial

of their post-trial motions for judgment as a matter of law and

                                       4
new     trial,      contending        that       the    jury’s         answers   to   special

interrogatories were conflicting and against the great weight of

the evidence.           We review a district court’s denial of a motion

for     judgment        as   a   matter      of      law      de    novo,    affording      much

discretion to the jury’s verdict.1                         Accordingly, judgment as a

matter       of   law    will    be   granted          only    if      the   facts,   and   the

inferences to be drawn from them, are so strongly in favor of the

moving party that a reasonable juror could not reach a contrary

conclusion.2

        Our standard of review for a denial of a motion for new

trial is more deferential than for a judgment as a matter of

law.3       We must affirm a district court’s denial of a new trial

motion unless the court abused its discretion.4

B.      Merits

        Special verdicts, such as that employed by the district

court       here,   are      useful    in    clarifying            a   jury’s    verdict    and

focusing          its     attention         on       the      disputed        fact    issues.5

        1
            Coffel v. Stryker Corp., 284 F.3d 625, 630 (5th Cir. 2002).
        2
            Id.
        3
       DP Solutions, Inc. v. Rollins, Inc., 353 F.3d 421, 431 (5th
Cir. 2003).
        4
            Id.
        5
            FDIC v. Munn, 804 F.2d 860, 866 (5th Cir. 1986).

                                                 5
Nevertheless, special verdicts simultaneously present the risk of

conflicting answers.6     When a jury’s answers present an apparent

conflict, it is our duty to reconcile the conflicts if at all

possible in an effort to uphold the jury’s verdict.7      Only when,

after a concerted effort, we cannot reconcile the answers, may we

grant a new trial.8

     The question on appeal here is whether it is possible to

reconcile the jury’s findings that (1) Allstate breached its

contract and (2) the Fosters suffered no monetary damages from

that breach.       We conclude that such reconciliation is legally

plausible.

     The Fosters asserted three separate claims for breach of

contract.      First, the Fosters claimed that Allstate’s refusal to

pay for the lost personal items breached the Policy (a failure-

to-indemnify claim).     Second, the Fosters asserted that Allstate,

as an alleged bailee of the Fosters’ personal property, failed to

return such property, as required under either an express or

implied contract (i.e., that Allstate either hired or controlled

MRI and was thus liable under a bailment theory).        Third, the

Fosters contended, as a separate breach of contract claim, that

     6
         Id.
     7
         Id.
     8
         Id.

                                   6
Allstate failed to accept or reject their personal property claim

in a timely manner, as Allstate was required to do under Texas

law.9       Tellingly, counsel for the Fosters argued at closing:

             The next question you’re asked is, do you find
        from a preponderance of the evidence that Allstate
        Insurance Company failed to comply with the homeowners
        policy provision to pay policy benefits as to Bob and
        Carol Foster’s personal property? I’m sorry, I didn’t
        put that up there well.   A little typo in there, but
        that’s the questions. Did they fail to comply with the
        terms of the policy by not covering the personal
        possessions? Did they breach the contract?

             And the answer is yes, and there’s a number of
        ways. The first way they breached the contract with us
        on the personal possessions was, they made —— the
        Fosters made the claim, and within 15 days, Allstate
        did nothing. I think you’ll find that the evidence is,
        the Fosters remembered it was about six weeks before
        Allstate said no.    I think you’re going to find the
        evidence is, Allstate actually waited closer to almost
        three months before they said no. But that’s the first
        breach. (Emphasis ours).

Thus, the Fosters not only argued that Allstate breached the

Policy, viz., its contract with the Fosters, when it failed to

(1) pay for the lost personal property, and (2) return their

personal property as bailee, but (3) also charged Allstate with

breaching a contractual duty imposed by state law.

        Under this last theory —— the first one mentioned by the

        9
        Under Texas law, an insurer generally has 15 days after
receipt of all required items and forms to give notice of its
acceptance or rejection of a claim. Tex. Ins. Code § 542.056. Our
review of the Policy fails to find a stipulated date by which
Allstate was required to accept or reject the Fosters’ claims.

                                     7
Fosters’ counsel at closing argument —— the jury could well have

found that Allstate’s only breach of its contract was by failing

to act timely in accepting or rejecting the claim.                         At the same

time, the jury could have rejected the Fosters’ other two breach-

of-contract      claims.         It   follows,    then,      that    the       jury   could

plausibly      have   awarded     the   Fosters    $0.00       in    damages      for   the

breach    of    timeliness,       classifying      it     as    only       a    technical

violation of a state timing statute that produced no damage.

This is     certainly      one    viable    reading     of     the   jury’s       verdict.

Given the concerted reconciliation effort that we must make and

the   substantial       discretion         we    must     afford      a        potentially

irreconcilable special verdict, we are bound to conclude that, as

there is a plausible explanation for the jury’s verdict here, it

was not irreconcilable and need not be reversed and remanded for

a new trial.

      The Fosters also contend that the jury’s verdict was against

the weight of the evidence and thus the district court should

have ordered a new trial.               After an independent review of the

record on appeal, however, we find more than sufficient evidence

supporting the jury’s verdict to conclude that the district court

did not abuse its discretion in denying the Fosters’ motion for a

new trial.

                                           8
                         III.   CONCLUSION

     Based on the applicable law and our extensive review of the

parties’ briefs and the record on appeal, we hold that the jury’s

verdict was neither irreconcilable nor against the great weight

of the evidence.   We therefore affirm the jury’s verdict and the

district court’s judgment based on it.

AFFIRMED.

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