FIGA v. R.V.M.P. Corp.

• Decision Date: 13 June 1989
• Docket Number: No. 88-5123,88-5123
• Citation: 874 F.2d 1528
• Parties: , 28 Fed. R. Evid. Serv. 1402 FIGA, formerly The American Druggists' Insurance Company, and Ranger Insurance Company, Plaintiffs-Appellants, v. R.V.M.P. CORPORATION, d/b/a B.J.'s Seaside Restaurant, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1528

874 F.2d 1528

13 Fed.R.Serv.3d 1027, 28 Fed. R. Evid. Serv. 1402

FIGA, formerly The American Druggists' Insurance Company and Ranger Insurance Company, Plaintiffs-Appellants, v. R.V.M.P. CORPORATION, d/b/a B.J.'s Seaside Restaurant Defendant-Appellee.

No. 88-5123.

United States Court of Appeals Eleventh Circuit.

June 13, 1989.

John J. Pappas, Frances Maxwell Morris, Butler and Burnette, Tampa, Fla., for plaintiffs-appellants.

Clark Jordan-Holmes, Lyle & Skipper, P.A., Tampa, Fla., for amicus curiae: Fla. Defense Lawyers Assoc.

Ronald Fitzgerald, Fleming, O'Bryan & Fleming, Ft. Lauderdale, Fla., David J. Chesnut, P.A., Stuart, Fla., for defendant-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before JOHNSON and EDMONDSON, Circuit Judges, and TUTTLE, Senior Circuit Judge.

TUTTLE, Senior Circuit Judge:

Plaintiffs in a declaratory judgment action appeal from the denial by the district court of their motion for a mistrial and a new trial following a judgment against them for insurance liability.

I. STATEMENT OF THE CASE

Plaintiffs, the American Druggists' Insurance Company, whose liabilities have been assumed by the Florida Insurance Guarantee Association ("FIGA"), and Ranger Insurance Company filed a declaratory judgment action against their insured, RVMP Corporation, d/b/a B.J.'s Seaside Restaurant, seeking a declaration of non-liability and alleging arson by the insured and breach of the insurance contract. Defendant-appellee counterclaimed for insurance proceeds and for pre-judgment interest.

After a jury trial, the jury found that the insured did not commit arson. The court entered judgment for defendant in the amount of $418,525 plus pre-judgment interest of $255,106. Appellants moved for a mistrial and new trial, arguing that the district court incorrectly admitted evidence of the decision of the fire marshal not to present the case to a state prosecutor or grand jury. The insurers had moved in limine to exclude any such evidence and objected to the admission of that evidence at trial. The court denied the motion.

II. STATEMENT OF FACTS

B.J.'s Seaside Restaurant opened in 1980. Initially unprofitable, it began to turn a profit by 1982, according to the insured. Appellants presented evidence, however, that appellee's business was in a precarious financial situation in May 1982. A fire started at the restaurant on May 2, 1982 at about 2:00 a.m. The bar had just closed, the customers were leaving, and the assistant manager and one of the principals had just restocked the bar. Members of the band which had been playing, along with several witnesses and customers, were still present inside the establishment or in the parking lot. Smoke was detected coming from the ceiling of the banquet room adjacent to the bar area. After considerable delay on the part of the fire department, the fire came under control at about 3:30 a.m. Although all of those present the evening of the fire testified that they observed the fire to have started in the ceiling, the State Fire Marshal, Albert Schiller, who conducted an investigation the following day, concluded that the evidence indicated that the point of origin was at the floor level. Schiller, testifying as an expert, gave his opinion that an accelerant had been used to start the fire intentionally.

III. ISSUES

A. Whether a statement to the jury, in a civil fire insurance case, that the fire marshal, if present, would have testified that there was insufficient evidence to charge the insured with arson constitutes grounds for a mistrial or a new trial.

B. Whether FIGA can be liable for pre-judgment interest as a part of damages on a covered claim.

IV. DISCUSSION

A. Non-prosecution Evidence

The law enforcement investigator for the State Fire Marshal's office, Schiller, who had conducted an investigation of the fire scene, testified for the insurers. He stated that, in his opinion, the fire had been deliberately set. On cross-examination of the witness, the insured's counsel posed the following question:

Sir, at the time you closed the file and concluded the investigation, was it not the consensus of the investigators involved in this case that you had not collected sufficient information to take the case to the State Attorney's office?

Before Schiller could answer, the insurers' counsel objected. After a lengthy discussion (out of the presence of the jury) of the ramifications of admitting or excluding the answer to that question, the court decided not to recall the witness. Instead, the court instructed the jury as follows:

Gentlemen of the jury, let me advise you as follows. Yesterday afternoon we had Fire Marshal Schiller who was testifying when we recessed ... You are advised first of all to disregard the question and answer if one was given the last question and answer of the Fire Marshal. You are advised as follows. You are instructed as follows and you may accept this as the Court's statement on the issue.

Fire Marshal Schiller did not present the results of his investigation to the State Attorney or a grand jury for criminal prosecution because he did not believe that he had sufficient evidence under the standard of law beyond and to the exclusion of all reasonable doubt. That is the standard in a criminal case.

He felt he did not have sufficient evidence under that standard of the identity of the person who set the fire which his investigation determined in his opinion was deliberately set. He has testified in his opinion that the fire was deliberately set.

But if he were to continue testifying, he would testify that that is the reason he did not take the matter for criminal prosecution to the state attorney.

Alright, based on that we are not going to call him back.

Appellants contend that the evidence of non-prosecution, proffered purportedly to rebut Schiller's opinion that the fire had been intentionally set, does not directly rebut his testimony. Schiller's opinion dealt only with how the fire began, not who started it. Appellants rely on several federal appellate decisions which hold that evidence of non-prosecution of criminal arson is inadmissible in an action for civil arson. In Aetna Casualty & Surety Co. v. Gosdin, 803 F.2d 1153 (11th Cir.1986), this Court stated:

In light of our disposition of Gosdin's first claim, we would normally not reach his other claims. But, because the question may arise again in a retrial of this case, we will briefly discuss one other claim.

Gosdin complains that the trial court granted Aetna's motion in limine to exclude any evidence relating to the fact that Gosdin was never charged or convicted of arson in relation to the fire at issue. Aetna argues that the different standards of proof between a criminal prosecutorial decision and a civil case might mislead the jury. We agree. As Gosdin's counsel conceded in oral argument, the case of Williams v. Cambridge Mutual Fire Ins. Co., 230 F.2d 293 (5th Cir.1956), controls this case. In a very similar fact situation, the Fifth Circuit held the desired evidence to be inadmissible. It should be similarly inadmissible here.

803 F.2d at 1160 (emphasis added).

The Williams Court held that evidence of the reversal of the insured's criminal conviction of arson was not admissible in a civil action brought by the insured against the insurance company, because it failed conclusively to determine the issue in the civil case and was irrelevant to the question. 230 F.2d at 294.

In the later case, American Home Assurance Co. v. Sunshine Supermarket, 753 F.2d 321 (3d Cir.1985), the Court of Appeals for the Third Circuit held that the trial court had committed reversible error in admitting evidence of non-prosecution of the insured. The opinion in American Home Assurance Co. cited with approval the Fifth Circuit's Williams case.

The holding by this Court in Gosdin, that the trial court in that case did not err in excluding "any evidence" relating to the fact that Gosdin was never charged or convicted of arson in relation to the fire at issue, clearly includes evidence offered even in rebuttal. The trial court, in the instant case, distinguished between the right of the insured to introduce evidence of non-prosecution in rebuttal from the right of the insured to introduce such evidence on direct. This, however, conflicts with our decision in Gosdin, supra. In fact, it is difficult to understand how such evidence would ever be relevant to the issue of arson in a civil case. The standards of proof are different. Here, while the trial court pointed out to the jury the standard of proof in a criminal case, it did not undertake to describe the standard of proof in the case at issue: merely a preponderance of the evidence. The difference in standards of proof alone was the basis of our decision in Gosdin, because "[it] might mislead the jury." 803 F.2d at 1160.

The trial court recognized the significance of this difference in its published opinion in this case: "a lack of sufficient evidence for a criminal case has no bearing on the issue of whether the defendant committed arson under the lesser evidentiary standard in civil cases." F.I.G.A. and Ranger Insurance Company v. RVMP Corp. d/b/a B.J.'s Seaside Restaurant, 675 F.Supp. 1327, 1329 (S.D.Fla.1988) (emphasis supplied). If the evidence "has no bearing on the issue ... in civil cases," it was obviously irrelevant.

Moreover, as pointed out by the appellant, the court's statement as to what the fire marshal would have testified to if called back to the stand, was not in rebuttal to anything that he had stated on direct. His testimony dealt only with the issue of whether the fire had been set intentionally. It made no mention of any individual who might have been responsible for the alleged arson. Therefore, the court's statement that, if recalled, Schiller would have testified that he did not present the issue to the state prosecutor or a grand jury because he had...