Brown v. U.S. Fidelity and Guar. Co.

• Decision Date: 10 September 1998
• Docket Number: No. 1CA-CV97-0350,1CA-CV97-0350
• Citation: 977 P.2d 807,194 Ariz. 85
• Parties: 277 Ariz. Adv. Rep. 27 Warren BROWN and Della Brown, husband and wife; Warren Brown and Della Brown, as parents and natural guardians for Charlotte Brown and Annette Brown, their daughters, and Quick Ville, Inc., a foreign corporation, Plaintiffs-Appellants, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, Defendant-Appellee.
• Court: Arizona Court of Appeals

Page 807

977 P.2d 807

277 Ariz. Adv. Rep. 27

Warren BROWN and Della Brown, husband and wife; Warren Brown and Della Brown, as parents and natural guardians for Charlotte Brown and Annette Brown, their daughters, and Quick Ville, Inc., a foreign corporation, Plaintiffs-Appellants, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, Defendant-Appellee.

No. 1CA-CV97-0350.

Court of Appeals of Arizona,

Division 1, Department C.

Sept. 10, 1998.

Reconsideration Denied

Nov. 24, 1998.

As Amended Nov. 25, 1998.

Review Denied May 25, 1999.

Michael P. Fiflis, Phoenix, for Appellants.

Struckmeyer and Wilson by Donald R. Wilson, William, G. Caravetta, Phoenix, for Appellee.

OPINION

LANKFORD, Judge.

¶1 Warren and Della Brown (the "Browns") claimed their insurer, United States Fidelity and Guaranty Company ("USF & G"), breached their homeowner's insurance contract and acted in bad faith by failing to adequately investigate and pay their fire loss claim. After a five day trial, a jury found in favor of USF & G. The issues on appeal are:

1. Did the trial court properly deny the Browns' motions to exclude certain evidence?

2. Did the trial court abuse its discretion when it allocated trial time between the parties and conditioned additional time for the Browns upon the consent of USF & G?

3. Did the trial court properly deny the Browns' motions for directed verdict, judgment notwithstanding the verdict and new trial as to USF & G's misrepresentation and arson defenses?

4. Did the trial court err when it entered partial summary judgment against the Browns as to their bad faith and punitive damage claims?

5. Did the trial court err when it failed to instruct the jury on innocent insureds?

For the reasons discussed below, we affirm.

¶2 Although we discuss specific facts as they relate to each issue, a brief summary follows. This case arises from the Browns' attempt to collect for a fire loss under a homeowner's insurance policy issued by USF & G.

¶3 A fire destroyed the Browns' residence in 1992. USF & G denied their claim. Its investigation revealed that Mr. Brown had intentionally started the fire using acetone as an accelerant. The Browns claimed that their neighbor, Charles Bland ("Bland"), had started the fire.

¶4 The Browns brought this action against USF & G alleging breach of contract and bad faith. USF & G defended by claiming that the Browns had breached the contract. It asserted both that the Browns had misrepresented or concealed material facts on the insurance policy application and that Mr. Brown had intentionally set the fire.

¶5 The trial court granted USF & G's motion for summary judgment as to the bad faith claim and the case proceeded to trial on the breach of contract claim. After the jury found in favor of USF & G, the Browns timely appealed. We have jurisdiction pursuant to Arizona Revised Statutes Annotated ("A.R.S.") section 12-2101(B).

I.

¶6 We begin with the trial court's evidentiary rulings. The Browns first complain that the trial court improperly denied their motion in limine to exclude evidence relating to polygraph tests. They also challenge the trial court's denial of their motion in limine to exclude evidence of their prior fire losses and related insurance claims. Third, they attack the trial court's exclusion of evidence that their neighbor possessed acetone at the time of the fire.

¶7 We will affirm the trial court's rulings on the exclusion or admission of evidence absent an abuse of discretion or legal error and prejudice. Gasiorowski v. Hose, 182 Ariz. 376, 382, 897 P.2d 678, 684 (App.1994). The improper admission of evidence is not reversible error if the jury would have reached the same verdict without the evidence. Id.; Davis v. Cessna Aircraft Corp., 182 Ariz. 26, 35, 893 P.2d 26, 35 (App.1994).

¶8 We first address the trial court's denial of the Browns' motion in limine to exclude polygraph evidence. The court imposed a January 1996 deadline for filing motions in limine, but the Browns failed to file any. The Browns filed a motion to reconsider a prior order barring motions in limine, attaching as an exhibit a motion in limine. The proposed motion in limine sought to exclude evidence that Bland had taken and passed a polygraph test and that the Browns had not taken a polygraph test. The trial court denied the motion to reconsider, declaring the motion in limine untimely. The trial court made no other ruling on the admissibility of the polygraph evidence.

¶9 Because the trial court did not rule on the merits of the polygraph evidence, the Browns could have objected to it when USF & G offered it during trial. Rather than objecting, however, the Browns' attorney made the tactical decision to introduce the evidence first. The failure to object waives the issue on appeal, Maxwell v. Aetna Life Ins. Co., 143 Ariz. 205, 214, 693 P.2d 348, 357 (App.1984), and the Browns cannot now complain that the court improperly admitted the evidence that they offered. See Goldthorpe v. Farmers Ins. Exchange, 19 Ariz.App. 366, 368, 507 P.2d 978, 980 (1973) ("Having made a tactical decision, appellant will have to live with it and cannot use it as an excuse for failure to object.").

¶10 Citing Davis v. Cessna Aircraft Corp., supra, the Browns argue that their failure to object did not constitute a waiver. In Davis, the trial court ruled on the merits that certain evidence was admissible. Id. at 36, 893 P.2d at 36. Even though the plaintiffs first referred to the evidence, they did not waive their objection. Id. Rather, plaintiffs were entitled "to draw the sting from the damage already done by the trial court's erroneous ruling." Id. The Browns argue they too were entitled to "draw the sting."

¶11 Davis is distinguishable, however. While in that case the court ruled that the evidence was admissible, in this case there was no ruling on admissibility. Instead, the court had merely denied the Browns' motion in limine as untimely. By presenting testimony regarding their failure to take a polygraph test, instead of objecting if and when USF & G offered it, the Browns waived any objection.

¶12 We now turn to the Browns' challenge to the denial of their motion in limine to exclude evidence of their prior fire losses and related insurance claims. Like their motion to exclude the polygraph evidence, this motion was denied as untimely. Because the trial court did not rule on the merits, the Browns had to object when USF & G offered the evidence during trial to preserve the issue for appeal.

¶13 USF & G first mentioned evidence of the Browns' prior fire losses and insurance claims during its opening statement, when USF & G's counsel referred to the Browns' "long history of fire loss claims." The Browns' counsel objected. For the purposes of our review, we assume this objection was timely and preserved this issue for appeal.

¶14 The trial court overruled the objection without explanation. Unlike the situation with the polygraph evidence but similar to the situation in Davis, the Browns faced an adverse ruling on the merits. After objecting, the Browns were entitled to "draw the sting" from the admission of the evidence. Id. We now consider whether admission of this evidence was reversible error.

¶15 The Browns argue that the evidence is inadmissible character evidence. See Ariz. R. Evid. ("Rule") 404(b). ¹ Further, they contend that the prejudicial nature of the evidence outweighs its relevance. See Rule 403. USF & G counters that the evidence is admissible and relevant to "[establish] a pattern of behavior and in establishing a continuing plan or scheme to collect insurance premiums." USF & G also says the evidence was not unduly prejudicial.

¶16 Inadmissible character evidence is evidence offered to prove conduct in conformity with prior bad acts. See Rule 404(b). If offered for a permissible purpose, however, evidence of other acts may be admissible. Id.

¶17 The prior fire loss and insurance claims evidence was as follows. Mr. Brown filed a claim for a pick-up truck fire in Colorado in 1972. In Kansas, Mr. Brown filed claims for a house fire in June 1977, a haystack fire in December 1977, a tractor fire in March 1978, a pellet mill fire in July 1979, a field fire in July 1983, and a farm building fire in September 1983. Mr. Brown filed a claim for a shed fire in Arizona in October 1988.

¶18 USF & G offered this evidence to show that the Browns misrepresented their prior fire loss history on their application. ² Nothing indicates that USF & G offered the evidence for any other purpose. Thus, it was not inadmissible character evidence.

¶19 Relying on Rule 403, ³ the Browns also claim that this evidence unfairly prejudiced them. They argue that it allowed USF & G to introduce false evidence of fraudulently duplicative proofs of loss for a 1988 fire claim and this claim.

¶20 We need not review the trial court's balancing of prejudice and relevancy. Even if we accept the Browns' claims of unfairness, the jury would have reached the same result. The remaining evidence indicated overwhelmingly that Mr. Brown intentionally started this fire.

¶21 Investigators determined that the fire was started with acetone used as the accelerant. Mr. Brown purchased four gallons of acetone prior to the fire. Someone had turned off the propane and electricity to the house before the fire. The day before the fire, Mr. Brown and Annette Brown removed sentimental and non-replaceable personal property from the house and placed it in a vault at the family business. They also removed a non-operational vehicle from the attached garage and parked it in the driveway. Less than 30 minutes before a neighbor reported the fire, Mr. Brown entered the house alone and remained inside for five to ten minutes. The fire marshal found boxes containing clothes, books and other household items in an outbuilding untouched by the fire. He also testified that the Browns deliberately interfered with his investigation. Moreover, the...