State Farm Fire & Cas. Co. v. Balmer, Civ. A. No. 86-D-742-N.
| Decision Date | 04 November 1987 |
| Docket Number | Civ. A. No. 86-D-742-N. |
| Citation | 672 F. Supp. 1395 |
| Parties | STATE FARM FIRE & CASUALTY COMPANY, Plaintiff, v. George BALMER and Margaret Balmer, Defendants. |
| Court | U.S. District Court — Middle District of Alabama |
Michael B. Beers, with the law firm Miller and Beers, Montgomery, Ala., for plaintiff.
Dexter C. Hobbs, with the law firm of Copeland, Franco, Screws & Gill, Montgomery, Ala., for defendants George and Margaret Balmer.
This cause is now before the Court on the plaintiff's motion for judgment notwithstanding the verdict, said motion being filed herein on August 14, 1987. Pursuant to this motion, the plaintiff seeks an order from this Court setting aside the One Million Eight Hundred Thirteen Thousand Four Hundred Four and 90/100 ($1,813,404.90) Dollars judgment by jury verdict entered herein against the plaintiff/counterclaim defendant on August 5, 1987. As grounds for this motion, the plaintiff alleges, in essence, as follows: (1) The defendants/counterclaimants/insureds failed as a matter of law to prove that the plaintiff/insurer acted in bad faith in refusing to pay the defendants' claim for loss due to the burning of certain insured property, and this Court erred as a matter of law in allowing the defendants' claim for bad faith to be submitted to the jury; and (2) the defendants/counterclaimants/insureds failed to prove that the plaintiff/insurer breached any obligation or duty owed to the defendants under the subject policy of insurance. In support of its motion, the plaintiff filed a memorandum brief on September 3, 1987.
On September 14, 1987, the defendants filed herein their response in opposition to the plaintiff's motion for judgment notwithstanding the verdict. Pursuant to their response, the defendants contend that this Court did not err in submitting the claim for bad faith to the jury and sufficient evidence supports the jury's verdict against the plaintiff for breach of contract and bad faith.
Having fully and carefully considered all of the above, as well as the applicable law and evidence produced at the trial of this cause, this Court is of the opinion that for reasons expressed below, the plaintiff's motion for judgment notwithstanding the verdict is due to be granted to the extent that said motion alleges that this Court erred as a matter of law in submitting to the jury the defendants' counterclaim for bad faith. Accordingly, the jury's verdict of bad faith against the plaintiff/insurer is due to be set aside and the judgment previously entered in this cause reduced in the amount of One Million Seven Hundred Sixty-Five Thousand and No/100 ($1,765,000.00) Dollars. In all other respects, the plaintiff's motion is due to be denied.
This Court has jurisdiction over this cause pursuant to Title 28 U.S.C. §§ 1332 and 2201. The plaintiff's motion for judgment notwithstanding the verdict is timely pursuant to Rule 50(b), Fed.R.Civ.P.
This is a declaratory judgment action, filed herein on August 1, 1986, in which the plaintiff, as the insurer of the defendants, sought a determination concerning certain rights and liabilities under a homeowner's insurance policy issued by the plaintiff to the defendants. The subject of this action involved a claim filed by the defendants pertaining to the said insurance policy which, being in full force and effect on April 13, 1986, insured the defendants' residence from loss due to fire and other such perils. On that date, a fire damaged and destroyed said insured property. The plaintiff contends that inasmuch as the defendants/insureds caused or procured the fire which destroyed the insured premises and intentionally concealed or misrepresented material facts and circumstances concerning the same, the subject insurance policy is void, and the plaintiff has no obligation or duty to satisfy the defendants' claim upon said policy.
On August 19, 1986, the defendants filed herein their answer to the complaint and included therein a counterclaim against the plaintiff for breach of contract. On December 31, 1986, the defendants amended their counterclaim so as also to allege the tort of bad faith against the plaintiff.
On July 27, 1987, this case was called for a trial by jury with both parties being represented by able counsel. At the close of the plaintiff's case-in-chief, the plaintiff moved this Court for a directed verdict on the counterclaims for breach of contract and bad faith. This motion was denied. At the close of all the evidence in the case, the plaintiff renewed its motion for directed verdict, and the defendants/counterclaimants filed herein their separate motion for a directed verdict on the counterclaims. This Court denied said motions to the extent that both sought directed verdicts on the counterclaim for breach of contract, but the Court reserved ruling upon the bad faith claim until after the case had been submitted to the jury. On August 3, 1987, the jury returned a verdict in favor of the defendants on their counterclaim for breach of contract and bad faith.1 On August 5, 1987, this Court entered judgment against the plaintiff in accordance with the jury's verdict and assessment of damages in the amount of One Million Eight Hundred Thirteen Thousand Four Hundred Four and 90/100 ($1,813,404.90) Dollars; said amount representing Forty-Five Thousand Six Hundred Fifty and No/100 ($45,650.00) Dollars for the breach of contract claim, Two Hundred Sixty-Five Thousand and No/100 ($265,000.00) Dollars in compensatory damages, and One Million Five Hundred Thousand and No/100 ($1,500,000.00) Dollars in punitive damages for the bad faith claim.
Rule 50(b), Fed.R.Civ.P., provides in pertinent part as follows:
Whenever a motion for a directed verdict made at the close of all the evidence is denied or for any reason is not granted, the court is deemed to have submitted the action to the jury subject to a later determination of the legal questions raised by the motion. Not later than 10 days after entry of judgment, a party who has moved for a directed verdict may move to have the verdict and any judgment entered thereon set aside and to have judgment entered in accordance with the party's motion for a directed verdict; ....
The standard which regulates a Rule 50(b) motion for judgment notwithstanding the verdict is well-established within this circuit. As recently observed by the United States Court of Appeals for the Eleventh Circuit:
On motions for directed verdict and for judgment notwithstanding the verdict, the court should consider all of the evidence — not just that evidence which supports the non-mover's case — but in the light and with all reasonable inferences most favorable to the party opposed to the motion. If the facts and inferences point so strongly and overwhelmingly in favor of one party that the court believes that reasonable men could not arrive at a contrary verdict, granting of motions is proper. On the other hand, if there is substantial evidence opposed to the motions, that is, evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions, the motions should be denied, and the case submitted to the jury. A mere scintilla of evidence is insufficient to present a question for the jury. The motions for directed verdict and judgment n.o.v. should not be decided by which side has the better of the case, nor should they be granted only when there is a complete absence of probative facts to support a jury verdict. There must be a conflict in substantial evidence to create a jury question.
Michigan Abrasive Co., Inc. v. Poole, 805 F.2d 1001 (11th Cir.1986), citing Neff v. Kehoe, 708 F.2d 639, 641-42 (11th Cir.1983) (quoting Boeing Co. v. Shipman, 411 F.2d 365, 374-75 (5th Cir.1979)). See also Jackson v. Magnolia Brokerage Co., 742 F.2d 1305 (11th Cir.1984); Kaye v. Pawnee Constr. Co., Inc., 680 F.2d 1360 (11th Cir. 1982); and Williams v. United Ins. Co. of America, 634 F.2d 813 (5th Cir.1981). Stated otherwise, a moving party is entitled to a judgment notwithstanding the verdict when the Court is convinced that reasonable persons could not in light of the evidence have found the facts necessary to support the jury's verdict or that the facts properly found cannot in law support that verdict. See Railroad Dynamics, Inc. v. A. Stucki Co., 727 F.2d 1506 (Fed.Cir.), cert. denied, 469 U.S. 871, 105 S.Ct. 220, 83 L.Ed.2d 150 (1984). Having set forth the controlling rules and principles of law which apply to the instant motion, this Court must now apply the same to the evidence produced at the trial of this cause.
A. Contract Claim.2 The plaintiff/counterclaim defendant/insurer (hereinafter referred to as "State Farm") contends that based upon the evidence produced at the trial of this cause, reasonable men would agree that the defendants/counterclaimants/insureds (hereinafter referred to as the "Balmers") failed to prove by a preponderance of the evidence that State Farm breached any duty or obligation owed to the Balmers under the subject policy of insurance. This Court does not agree. Indeed, after having considered all of the evidence produced at the trial, this Court is of the opinion that there exists evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions on the issue of whether State Farm breached its contract of insurance with the Balmers. See Michigan Abrasive, 805 F.2d at 1004. Accordingly, State Farm's motion for judgment notwithstanding the verdict is due to be denied as to that part of the jury's verdict finding that State Farm breached its contract with the Balmers.
In response to the Balmers' counterclaim for breach of contract, State Farm contends that the subject contract of insurance is...
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...916, 924 (Ala. 1981); State Farm Fire & Casualty Co. v. Balmer, 891 F.2d 874, 877 (11th Cir. 1990), aff'g, State Farm Fire & Casualty Co. v. Balmer, 672 F. Supp. 1395 (M.D.Ala. 1987). Although subjective bad faith may be inferred from an insurer's flawed investigation, an improper investiga......
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CHAPTER 6
...basis for denying the claim. Accordingly, the court reduced the award of damages to $48,404.90. State Farm Fire & Cas. Co. v. Balmer, 672 F. Supp. 1395 (M.D.Ala. 1987) aff’d, 891 F.2d 874 (11th Cir. 1990). II. This is a diversity case involving Alabama law. The tort of bad faith failure to ......