Allied Property and Cas. Ins. Co. v. Good
| Decision Date | 31 December 2009 |
| Docket Number | No. 85A04-0902-CV-89.,85A04-0902-CV-89. |
| Citation | 919 N.E.2d 144 |
| Parties | ALLIED PROPERTY AND CASUALTY INSURANCE COMPANY, Appellant-Defendant, v. Linda GOOD, Appellee-Plaintiff, and Randall Good, Appellee-Third Party Defendant. |
| Court | Indiana Appellate Court |
Charles T. Jennings, Thomas R. Haley III, Jeffrey W. Ferrand, Jennings Taylor Wheeler & Haley, P.C., Carmel, IN, Attorneys for Appellant.
Mark C. Guenin, Emily C. Guenin-Hodson, Wabash, IN, Attorneys for Appellee, Linda Good.
Kevin W. Marshall, Hobart, IN, Attorney for Appellee, Randall Good.
We conclude that Indiana trial courts possess the inherent power to sanction parties and attorneys for violating orders in limine and causing mistrials. This power is designed to protect the integrity of the judicial system and to secure compliance with the court's rules and orders. In order for a trial court to impose sanctions against a party or attorney, the court must find that the party engaged in egregious misconduct that causes a mistrial. We review a trial court's sanctioning power for an abuse of discretion. Here, the trial court did not abuse its discretion in (1) concluding that Allied Property and Casualty Insurance Company intentionally violated its order in limine when Allied's own employee referenced a party's criminal history and (2) awarding over $26,000 in attorneys' fees and expert witness fees to Plaintiff Linda Good and Third Party Defendant Randall Good and jury costs to the county as compensatory damages. We therefore affirm the trial court.
A fire occurred at Linda and Randall Good's home at 474 Jackson Street in Wabash, Indiana, on March 16, 2003. The fire damaged the structure as well as the contents inside. Allied had issued a Homeowners Policy to Linda which provided coverage for the Jackson Street property. Pursuant to the policy, the dwelling was insured up to $329,518, and the personal property was insured up to $247,138. Randall, as Linda's spouse, was considered an insured under the terms of the policy. Appellant's App. p. 4974.
In March 2004 Linda filed a complaint against Allied in Wabash Circuit Court alleging that it breached the policy by failing to pay proceeds following the fire and that it breached its duty to act in good faith. Allied asserted affirmative defenses, including the common law arson defense, an application fraud defense, a misrepresentation/fraud defense, and other contract defenses based on the insurance policy's intentional act and fraud exclusions. Allied also filed a Counterclaim for Declaratory Judgment requesting the trial court to determine that no coverage existed based on the above grounds and a Third Party Complaint against Randall requesting the trial court to determine that no coverage was afforded to Linda due to Randall's involvement in the intentional setting of the fire.
After years of pretrial motions including several motions for summary judgment, the trial court sua sponte issued an oral order bifurcating the trial into Phase I (breach of contract) and Phase II (bad faith). Allied filed a motion to reconsider this ruling, which the court denied. The parties also filed numerous motions in limine. At the October 6, 2008, final pretrial conference, the trial court orally issued orders on some of Linda's motions in limine. Specifically, the court ordered that Randall's criminal history was inadmissible during Phase I of the trial, subject to Indiana Evidence Rule 609.2 Id. at 4262. Randall's criminal history includes at least one theft conviction from approximately thirty years ago. Further, the court ordered that no mention be made of the Goods' prior fires. Id. at 4475-76.
The trial began on December 12, 2008, with jury selection. At trial, Allied was represented by attorneys Charles Jennings and Jeffrey Ferrand, Linda was represented by attorneys Mark Guenin and Emily Guenin-Hodson, and Randall was represented by attorney Kevin Marshall.
On the third day of trial, Allied witness Arvin Copeland, a fire investigator, responded to a cross-examination question from Mr. Marshall about previous fires he had investigated. He answered that he had investigated a previous fire at the Goods' home in 2000. Mr. Marshall immediately objected because this was in violation of the trial court's order in limine. In addition, the previous fire at the Goods' home was in 1994, not 2000. The trial court reminded Copeland of the order in limine (of which Mr. Jennings assured the court that Copeland had been informed) and instructed Copeland that he was coming very close to being found in contempt of court. Id. at 4749. The trial court then gave the jury the following curative instruction, "Ladies and gentlemen, you are instructed and admonished that there was no house fire at the home of Randall and Linda Good in the year 2000, and that the issue now under consideration is only the fire which occurred on March 16, 2003." Id. at 4761. Allied objected to this instruction and asked for a mistrial, believing that it impugned its witness. The court denied the motion for mistrial.
On the morning of the fourth day of trial, Mr. Guenin expressed concern that scheduled witnesses Cheri Frank or Gregory Keel (Mr. Guenin did not know at that point that Allied's employee Natalie Hornung would be testifying) would testify in violation of the orders in limine by perhaps referencing previous fires or prior convictions. The following colloquy occurred:
Id. at 4914. Then, when it became apparent that Keel was not going to appear for trial, Allied tried to introduce his deposition into evidence. Keel's deposition provided that Randall offered him $3000 to burn down the Jackson Street property. The trial court ruled that Keel's deposition was inadmissible.
Allied's attorneys then called Natalie Hornung as a witness. Hornung testified on direct examination that in 2003 she was a manager for Allied's underwriting department and that she reviewed the application that agent Cheri Frank submitted on behalf of Linda. Id. at 47. The following exchange then occurred:
* * * * * *
JURORS TAKEN OUT
Id. at 48-50 (emphasis added). At this point, an exasperated Mr. Guenin told the trial court that it had been a "[H]erculean task" preparing the case against Allied. Id. at 50. Mr. Guenin said that even before Hornung testified, he reminded Mr. Jennings to go over with his witnesses the orders in limine because he did not want a repeat of what occurred the day before. Mr. Guenin therefore opined that Mr. Jennings was either not doing a good job of advising his witnesses of the orders in limine or sending them letters of the orders in limine to cover it up. Mr. Guenin said that Linda had "$180,000 worth of fees in this case over the last five years" yet Allied was the party Id. at 51.
The trial court continued:
I think what we need to do—well, I'm going to let Mr. Marshall talk at this point. Then we're going to take a break and let the defendants decide what they want to do.
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