Auto Owners Ins. Co. v. Bass

• Citation: 684 F.2d 764
• Decision Date: 01 September 1982
• Docket Number: No. 80-7741,80-7741
• Parties: 11 Fed. R. Evid. Serv. 809 AUTO OWNERS INSURANCE COMPANY, a Michigan Corporation, Plaintiff-Appellee, v. John David BASS and Gloria Jean Bass, Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 764

684 F.2d 764

11 Fed. R. Evid. Serv. 809

AUTO OWNERS INSURANCE COMPANY, a Michigan Corporation Plaintiff-Appellee, v. John David BASS and Gloria Jean Bass, Defendants-Appellants.

No. 80-7741.

United States Court of Appeals Eleventh Circuit.

Sept. 1, 1982.

Hornsby & Schmitt, Steven F. Schmitt, Tallassee, Ala., for defendants-appellants.

Lloyd, Ennis & Lloyd, John T. Ennis, Sr., Birmingham, Ala., for plaintiff-appellee.

Appeal from the United States District Court for the Middle District of Alabama.

Before GODBOLD, Chief Judge, MERRITT ^* and HENDERSON, Circuit Judges.

GODBOLD, Chief Judge:

This is an Alabama diversity suit by Auto Owners Insurance Company against its insureds John David Bass and Gloria Jean Bass seeking to recover amounts it had paid to loss payees for a fire loss on the Bass home and also claiming punitive damages for fraud by the Basses. The precise allegations are significant and will be discussed later in this opinion, but, described in general terms, Auto Owners asserted that John Bass intentionally burned the home and made false and fraudulent claims and statements concerning both the fire and the losses incurred. It charged that Gloria knew of John's setting the fire and participated in false swearing concerning the fire and the loss. John and Gloria counterclaimed for amounts allegedly still owing under the policy. Following a trial in which John appeared pro se for himself and his wife, a jury found for Auto Owners and awarded $82,239 compensatory damages and $50,000 punitive damages. We affirm the judgment against John and reverse the judgment as to Gloria.

I. The defective verdict

The general jury verdict read:

We, the Jury, find for the plaintiff and award $82,239.22 compensatory damages and $50,000.00 punitive damages.

This the 19th day of August, 1980.

There were no special interrogatories. The court entered judgment as follows:

It is hereby the Finding and Judgment of this Court that John David Bass and Gloria Jean Bass did commit willful and malicious fraud against the Plaintiff, Auto-Owners' Insurance Company. It is hereby

ORDERED ADJUDGED and DECREED as follows:

The Defendants shall pay to Plaintiff the sum of $82,239.22 plus six percent interest from the date of this Judgment in compensatory damages. The Defendants shall also pay to Plaintiff the additional sum of $50,000.00 plus six percent interest from the date of this Judgment in punitive damages with costs assessed against the Defendants.

No one objected to the form of the verdict, or the proposed forms submitted to the jury, or the form of the judgment. On appeal the defendants contend the judgment should be set aside and a new trial granted because it is based on a verdict for the plaintiff but against no one. Unquestionably the verdict is defective. If a verdict is so ambiguous a reasonable person cannot determine the jury's intent the verdict cannot stand. See generally Denham v. Yancey, 19 Ala.App. 45, 95 So. 201 (1922).

(T)he sufficiency of a verdict, reasonably interpreted as to its language, depends upon it being capable of definiteness when referred to the pleadings and papers in the case, the pertinent entries, and under the interpretation of the law given by the court to the jury.

In Hopkins v. Duggar, 204 Ala. 626, 628, 87 So. 103, 104, Mr. Justice Sayre observed:

"The real question is whether the verdict was not hopelessly defective and so afforded no proper basis for the judgment.

This point was not raised in the trial court. It is raised now for the first time. In order that the objection should avail it is necessary that the judgment be found to be wholly void. Intendments are indulged in favor of judgments."

Was, then, the verdict rendered void, under the issues of fact submitted by the court and instructions interpreting the law having application thereto, or was it definite and complete when referred to the issues submitted, to support the judgment entered thereon?

Penney v. State, 229 Ala. 36, 155 So. 576, 578 (1934).

(W)here the language of judgments, or verdicts can be reasonably interpreted by reference to the pleadings and papers in the case, and the instructions of the court, then on such basis intendments are indulged in favor of judgments. The real question is whether the verdict was hopelessly defective thereby affording no proper basis for a judgment.

Reynolds Brothers Lumber Co. v. W. S. Newell Construction Co., 284 Ala. 352, 224 So.2d 899, 902 (1969).

One of the few federal cases is Moore v. Harjo, 144 F.2d 318, 321 (10th Cir. 1944) where the court said:

Where a judgment or decree is ambiguous or obscure, and fails to express the final determination of the court with clarity or accuracy, reference may be had to the pleadings, the verdict, the findings, and the entire record for the purpose of ascertaining what was determined.

We need not pause over the argument that the verdict can have no effect because it does not say "against defendants" (or a named defendant). The verdict was intended to be against some one or more persons. John and Gloria were the only defendants and the only persons against whom the damages referred to in the verdict could be awarded. The question rather is whether the verdict can be interpreted reasonably and with sufficient certainty as being against both John and Gloria, or against only one of them, and if one which one. In pursuit of this inquiry we turn to examination of the pleadings, the evidence and events at the trial, and the jury instructions.

The complaint alleged that Auto Owners issued a policy to the defendants on their home. It charged that John committed acts of fraud or false swearing by:

(a) deliberately causing an incendiary fire in their dwelling with intent to defraud;

(b) filing a false and fraudulent inventory;

(c) willfully concealing material facts about the contents of the home and the cause of the fire;

(d) falsely swearing to material facts in a statement given the company.

It charged Gloria knew or should have known ¹ of John's fraudulent conduct or false swearing with intent to defraud the company. Finally, it alleged that as a direct and proximate result of the fraudulent conduct of the defendants the plaintiff paid fire loss proceeds to two loss payees.

The pretrial order restated plaintiff's position to be: that John, with the knowledge of Gloria, set fire to the house; that both committed fraud in causing the fire to be set; alternatively, as to Gloria, if she had no knowledge of a plan to burn the house, she conspired to conceal from the insurance company the facts concerning the loss.

We have read the record. There was sufficient evidence to submit to the jury the issue of liability of Gloria on the basis that she knew of John's setting the fire. She was present at the home with John and her children when the fire occurred during early morning hours. She was dressed when she escaped from the house. There was some inconsistencies in her stories about removal of items from the house. Also the evidence permitted the jury to infer that she assisted in concealing facts on the cause of the fire and the extent of loss. Thus the jury could have found her liable. This is a long way from saying with any degree of certainty that a verdict against her was what the jury had in mind.

John was the primary actor throughout and Auto Owners' primary target at trial. There was no direct evidence of who, if anyone, set the fire. Experts testified that they found evidence that an accelerant-gasoline or a similar means-had been used, and they found other evidence that the fire had been set. Much of the trial was devoted to testimony concerning the family's precarious financial position. Mortgages on the house were in default. John was being pressed for payments. He was overdrawn in his bank accounts, and he was earnestly seeking money. The fire occurred April 17, 1979. On March 12, 1979, John had increased the coverage on the dwelling from $84,000 to $90,000, which increased other coverages under the homeowner's policy as well. Auto Owners' stated theory was that John set the fire. It made no contention that Gloria set it (beyond a single statement in closing argument, discussed below). The inventory of personal property destroyed was prepared by John; Gloria stated that from time to time she told him of items that she had remembered that should be included. The complex financial dealings preceding the fire were carried on by John.

In approximately an hour of oral argument Auto Owners examined minutely John's affairs and conduct before, during and after the fire, and connected up its proof to every theory of liability against him for both compensatory and punitive damages. During this hour there was but a single reference to alleged liability of Gloria. Counsel said "John Bass and Gloria Jean Bass burned that house down."

We have considered the jury instructions not for...