Feldman v. Allstate Ins. Co.

• Citation: 322 F.3d 660
• Decision Date: 05 March 2003
• Docket Number: No. 01-56718.,01-56718.
• Parties: Marc FELDMAN, Plaintiff-Appellant, v. ALLSTATE INSURANCE COMPANY; Vicki Weed, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

322 F.3d 660

Marc FELDMAN, Plaintiff-Appellant, v. ALLSTATE INSURANCE COMPANY; Vicki Weed, Defendants-Appellees.

No. 01-56718.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 3, 2003.

Filed March 5, 2003.

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Raymond C. Dion, Koletsky, Mancini, Feldman & Morrow, Los Angeles, CA, for the Appellant.

Wayne E. Beaudoin and James E. Fitzgerald, Luce, Forward, Hamilton & Scripps LLP, Los Angeles, CA, for the Appellee.

Appeal from the United States District Court for the Central District of California; Consuelo B. Marshall, Chief Judge, Presiding. D.C. No. CV-00-10029-CBM.

Before: FERGUSON, HALL, and BERZON, Circuit Judges.

CYNTHIA HOLCOMB HALL, Circuit Judge:

Marc Feldman appeals the district court's grant of summary judgment in favor of Allstate Insurance Company. The district court admitted, over Feldman's objection, testimony by his former wife, as well as taped conversations recorded in violation of California law. Based in part on this evidence, the district court held that Allstate had not breached the implied covenant of good faith and fair dealing, and that Feldman was entitled to neither declaratory relief nor damages.

We have jurisdiction pursuant to 28 U.S.C. § 1291. We REVERSE the district court's decision to admit the illegally-recorded conversations into evidence, but nonetheless AFFIRM the district court's grant of summary judgment on the issue of breach of the implied covenant of good faith and fair dealing. We REVERSE as to Feldman's claim for declaratory relief, and REMAND for further proceedings consistent with this opinion.

FACTS

Appellant Feldman purchased a standard homeowner's insurance policy from Appellee Allstate Insurance Company, effective July 30, 1998. On February 22, 1999, Appellant's home was burglarized.

That evening, Appellant telephoned his then-wife, Lauren Feldman, to discuss the burglary and the items that had been stolen. At this time, the Feldmans were separated and engaged in an unpleasant custody dispute. In the context of the custody dispute, the Los Angeles Superior Court entered an order in 1997 authorizing the Feldmans to record telephone conversations with one another. Although the court order had expired on May 4, 1998, Lauren Feldman nonetheless secretly recorded the February 22, 1999 conversation.

Shortly after speaking with his wife, Appellant filed a police report with the LAPD, claiming the following losses: cash ($1,500), two jackets ($400 and $1,000), five paintings (total value $22,000), a diamond ring ($20,200), and a drive-way remote ($20). The next day, Appellant filed a claim with Allstate for all items except the ring, which was covered under a separate policy.

Allstate contacted Appellant on February 25, 1999 to request proof of the losses claimed. Appellant told Allstate that he did not personally purchase the paintings and referred Allstate to Lauren Feldman for more information. On March 10, 1999, the Feldmans spoke for a second time by telephone about the value of the stolen items. The conversation was again recorded by Lauren Feldman without Appellant's knowledge. On April 1, 1999, Appellant gave a sworn statement to Allstate, which declared that the stolen paintings, jackets, cash, and garage door opener were valued at a total of "approximately" $24,900.

On August 19, 1999, Lauren Feldman was examined under oath by Allstate. She testified that the jackets were valued at approximately $75 each and that the paintings were purchased for amounts between $50 and $1500. Lauren Feldman also produced tapes of her conversations with Appellant, which she incorrectly asserted were recorded pursuant to court order.

On August 30, 1999, Allstate informed Appellant by letter that his claim was being denied for misrepresentation of value¹ and failure to submit written documentation.² Appellant filed suit against Allstate in Los Angeles Superior Court on July 13, 2000. Allstate subsequently removed the case to federal court, where both parties filed motions for summary judgment. On July 3, 2001, the district court entered its Order granting summary judgment to Allstate and denying summary judgment to Feldman. This appeal followed.

STANDARDS OF REVIEW

The timeliness of a notice of appeal is reviewed de novo. In re Delaney, 29 F.3d 516, 517 (9th Cir.1994). We review a district court's grant of summary judgment de novo. Ventura Packers, Inc. v. F/V JEANINE KATHLEEN, 305 F.3d 913, 916 (9th Cir.2002). The determination of whether state or federal law applies in a diversity action is also reviewed de novo, and the de novo standard of review extends to the district court's construction of state law. Olympic Sports Prod., Inc. v. Universal Athletic Sales Co., 760 F.2d 910, 912 (9th Cir.1985).

Generally, evidentiary decisions made in the context of summary judgment motions are reviewed for an abuse of discretion. Maffei v. Northern Ins. Co., 12 F.3d 892, 897 (9th Cir.1993). However, whether a party has waived an otherwise applicable privilege is a mixed question of law and fact and is reviewed de novo. United States v. Amlani, 169 F.3d 1189, 1194 (9th Cir.1999).

JURISDICTION

As a threshold issue, this court must determine whether it has jurisdiction over the appeal. A notice of appeal "must be filed with the district clerk within 30 days after the judgment or order appealed from is entered." FED. R. APP. P. 4(a)(1). Failure to timely file a notice of appeal necessarily results in dismissal for lack of appellate jurisdiction. Scott v. Younger, 739 F.2d 1464, 1466 (9th Cir. 1984).

The district court entered judgment in favor of Allstate on July 3, 2001. On July 13, Feldman filed a timely motion for reconsideration pursuant to Federal Rule of Civil Procedure 59(e). On July 30, the district court rejected Feldman's motion for reconsideration for failure to comply with Local Rule 7.4.1, which requires a statement that the parties conferred prior to filing. The following day, Feldman filed a corrected Rule 59 motion. On September 10, the district court denied Feldman's motion. Feldman filed a notice of appeal on September 21.

Feldman's notice of appeal was not filed within 30 days of the district court's entry of judgment. However, a timely motion for reconsideration tolls the time for filing the notice of appeal until the district court rules on the motion. Scott, 739 F.2d at 1467; FED. R. APP. P. 4(a)(4). In order to be timely, a Rule 59(e) motion must be filed within 10 days after entry of the judgment to be appealed. The parties agree that Feldman's July 13 motion was filed in a timely manner, but dispute whether the motion's failure to comply with Local Rule 7.4.1 rendered it incapable of tolling the time for appeal.

The tolling provision of the Federal Rules of Appellate Procedure, Rule 4(a)(4), states only that a motion must be "timely," and is silent as to whether a motion must be otherwise valid in order to toll the time for appeal. The Ninth Circuit has previously refused to read a validity requirement into the Rule. See Cabrales v. County of Los Angeles, 864 F.2d 1454, 1459 n. 1 (9th Cir.1988), vacated on other grounds, 490 U.S. 1087, 109 S.Ct. 2425, 104 L.Ed.2d 982 (1989) (holding that a procedurally invalid motion for JNOV can toll the time for appeal); Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1420 (9th Cir.1984) ("Even if a motion is inartfully drawn or so defective that it could not properly be granted it is still enough to toll the time for appeal.") (internal quotations omitted). In the spirit of these guiding precedents, we hold that Feldman's July 13, 2001 Rule 59(e) motion, despite its technical noncompliance with Local Rule 7.4.1, tolled the time for appeal until September 10, 2001, the date on which the district court ruled on its merits. Accordingly, Feldman's September 21 notice of appeal conformed to Rule 4(a). Having found jurisdiction over the instant appeal,³ we turn to its merits.

ADMISSIBILITY OF THE TAPED CONVERSATIONS

In the district court, Appellant argued that admission of conversations recorded by Lauren Feldman without Appellant's knowledge would violate § 632 of the California Penal Code, which provides, "[e]xcept as proof in an action or prosecution for violation of this section, no evidence obtained as a result of eavesdropping upon or recording a confidential communication in violation of this section shall be admissible in any judicial, administrative, legislative, or other proceeding." CAL. PENAL CODE § 632(d). The district court rejected this argument as contrary to the law of this circuit. As the district court correctly noted, the Ninth Circuit has previously held that evidence obtained in contravention of state law is admissible in federal court, so long as no federal law is thereby violated. E.g., United States v. Cormier, 220 F.3d 1103, 1111 (9th Cir.2000); United States v. Adams, 694 F.2d 200, 201 (9th Cir.1982), cert. denied, 462 U.S. 1118, 103 S.Ct. 3085, 77 L.Ed.2d 1347 (1983) ("[E]vidence obtained from a consensual wiretap conforming to 18 U.S.C. § 2511(2)(c) is admissible in federal court proceedings without regard to state law"). The instant case is distinguishable, however, because it is a diversity action. In diversity cases, a federal court must conform to state law to the extent mandated by the principles set forth in the seminal case of Eric R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Pursuant to Erie and its progeny, federal courts sitting in diversity apply state substantive law and federal procedural law. Erie, 304 U.S. at 78, 58 S.Ct. 817; Wray v. Gregory, 61 F.3d 1414, 1417 (9th Cir.1995).

Most evidentiary rules are procedural in nature, and the Federal Rules of Evidence "ordinarily govern in diversity cases." Wray, 61 F.3d at 1417. However, the Federal Rules do not supplant "all state law evidentiary provisions with federal ones." Id. (emphasis in original). Rather,...