Fluor Corp. v. Zurich Am. Ins. Co.
| Decision Date | 16 July 2021 |
| Docket Number | No. 4:16CV00429 ERW,4:16CV00429 ERW |
| Parties | FLUOR CORPORATION, Plaintiff/Counterclaim Defendant, v. ZURICH AMERICAN INSURANCE COMPANY, Defendant/Counterclaim Plaintiff. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter comes before the Court on Defendant Zurich American Insurance Company's Motion in Limine (No. 1) to exclude argument that Fluor demanded Zurich settle the Bronson Smoger cases [528]; Zurich's Motion in Limine (No. 2) to preclude argument or evidence that it owed a duty to settle claims of uncovered plaintiffs [529]; Zurich's Motion in Limine (No. 3) to preclude argument or evidence that Plaintiffs' $60 million settlement offer remained open [530]; Zurich's Motion in Limine (No. 4) to preclude reference or argument that Zurich should have told Fluor the Doe Run settlement number [531]; Zurich's Motion in Limine (No. 5) to exclude reference to discovery disputes and discovery sanctions [532]; Zurich's Motion in Limine (No. 6) to preclude evidence of its reinsurance [533]; Zurich's Motion in Limine (No. 7) to preclude evidence of its size, ownership, financial condition, and net worth [534]; Zurich's Motion in Limine (No. 8) to exclude evidence of other bad faith claims [551]; Zurich's Motion in Limine (No. 9) to preclude evidence of reserves and settlement authority [535]; Zurich's Motion in Limine (No. 10) to preclude improper witness testimony [536]; Zurich's Motion in Limine (No. 11) to exclude Zurich's attorney' recommendations and legal opinions [537]; Zurich's Motion in Limine (No. 12) to exclude legal opinions regarding policy limits [538]; Zurich's Motion to Bifurcate Punitive Damages [550]; and Fluor Corporation's Motion in Limine Number One [540]; Fluor's Motion in Limine Number Two [541]; Fluor's Motion in Limine Number Three [542]; Fluor's Motion in Limine Number Four [543]; Fluor's Motion in Limine Number Five [544]; Fluor's Motion in Limine Number Six [546]; Fluor's Motion in Limine Number Seven [547]; and Fluor's Motion in Limine Number Eight [548]. This Court notes any rulings on motions in limine are advisory. Parties attempting to introduce evidence or reference any of the relevant issues associated with any motions in limine that are granted should first approach the bench and raise the issue with the Court outside the presence of the jury.
Zurich seeks to preclude Fluor and its attorneys and witnesses from arguing Fluor made a demand on Zurich to settle, and from describing the communications they had with Zurich as demands. Zurich argues the communications Fluor describes as "demands" are not demands under Missouri law or this Court's rulings. Zurich argues although John Wilson averred in his Declaration (submitted in opposition to Zurich's motion for summary judgment) he made three oral demands to settle, his subsequent deposition testimony establishes his alleged "demands" are insufficient under Missouri law to constitute a demand for settlement. Zurich contends permitting Fluor to refer to these communications as "demands" would mislead and confuse the jury about one of the key facts bearing on Fluor's bad faith refusal to settle claim. In response, Fluor claims it made sufficiently specific demands as Missouri does not impose the hyper-technical requirements as suggested by Zurich. Fluor argues it will present evidence of at least four occasions which can fairly be considered demands.
The Missouri Supreme Court in Scottsdale Ins. Co. v. Addison Ins. Co. recognized that if an insurer disregards an insured's demand to settle, this fact is "highly relevant in determining whether an insurer acted in bad faith in refusing to settle." Scottsdale Ins. Co. v. Addison Ins. Co., 448 S.W.3d 818, 827 n.5 (Mo. banc 2014). As noted previously by the Court in its September 21, 2020 Order, under Missouri law, a demand for settlement must be clear and specific, not general or vague. The Court cited to Bonner v. Automobile Club Inter-Insurance Exchange, in which the Missouri Court of Appeals determined no demand for settlement had been made where the insured's statements regarding settlement were "overly vague as to what settlement is sought" and did not "contain[] any information from which an amount of settlement can be gleaned." Bonner v. Automobile Club Inter-Insurance Exchange, 899 S.W. 2d 925, 928 (Mo. Ct. App. 1995). Although Bonner preceded Scottsdale, which clarified a demand for settlement is a highly relevant factor, not an essential element of bad faith failure to settle as asserted in Bonner, the Court found Bonner instructive in evaluating whether a demand is sufficient under Missouri law.1
In its Order ruling on Zurich's motion for summary judgment, the Court examined the evidence offered by Fluor to support its assertion it demanded Zurich settle the Bronson/Smoger suits. Specifically, Fluor offered a letter from John Wilson to claims handler Bradley Rausa, the claims notes of Bradley Rausa, a letter from John Wilson to Zurich's coverage counsel, and a letter from Zurich's coverage counsel Randy Sinnott to other Zurich representatives. Fluor alsooffered the Declaration of John Wilson, which contained Wilson's averments of three oral demands for settlement from Zurich. Other than Mr. Wilson's averments of three oral demands in his Declaration, the Court found Fluor's evidence of its purported demands too vague to constitute definitive demands for settlement. For example, Fluor claimed its requests for prompt updates on the status of settlement negotiations, its objections to a settlement excluding Fluor, its warnings that any settlement must provide for a release of both Doe Run and Fluor, and its insistence Zurich safeguard Fluor were all proper demands for settlement. The Court rejected this evidence as too vague under Bonner to constitute demands for settlement in Missouri. Although the Court was clear in its ruling, in opposition here to Zurich's motion in limine, Fluor again proffers the same four communications as evidence of its demands Zurich settle. The Court again rejects Fluor's argument.
On summary judgment, the Court found a genuine dispute as to whether Fluor demanded settlement based upon Mr. Wilson's averments of three oral demands. However, Mr. Wilson's recent deposition testimony following his Declaration establishes his alleged oral demands are insufficient under Missouri law. When asked during his deposition about the allegations of demand in his Declaration, Mr. Wilson provides non-responsive testimony that wholly fails to establish a legally sufficient demand for settlement. In response to pointed inquiries about whether he demanded contribution from Zurich in his communications with Randy Sinnott, Mr. Wilson merely testifies he asked that Fluor be included in settlement and its interests be protected. Moreover, the Court compelled production of Mr. Wilson's emails and notes corresponding to the dates of his alleged oral demands in his Declaration. Although Fluor initially claimed to the Court that these documents were consistent with Wilson's Declaration, they conspicuously contained no mention of any demand.
Fluor intends to offer the above communications as evidence of its demand for settlement at trial. The Court finds the evidence provided by Fluor does not constitute a demand for settlement in accordance with Missouri law and would therefore mislead and confuse the jury. Zurich's motion on this point is granted.
Zurich asserts Fluor should be precluded from referring to, or presenting evidence or argument regarding any alleged duty on the part of Zurich to settle the claims of plaintiffs who were not alive and living in Herculaneum, Missouri, between February 4, 1981, and June 1, 1985, when Zurich provided the insurance coverage at issue in this litigation. Zurich anticipates Fluor may attempt to suggest to the jury that Zurich had a duty to settle the claims of plaintiffs who could not possibly have been covered by its policies. Zurich states its concern is based on the deposition testimony of Fluor's counsel John Wilson, who testified that if Zurich had a duty to defend a lawsuit, he believed Zurich had a duty to settle all the claims in that lawsuit, even those of plaintiffs who could not possibly have triggered coverage. Zurich asserts this opinion is contrary to Missouri law, the Policies' language and the parties' course of dealing.
In response, Fluor contends Zurich's motion seeks to exclude evidence concerning an argument Fluor does not intend to advance at trial. Fluor asserts it does not argue Zurich was required to pay settlement amounts allocated to non-covered plaintiffs. Fluor further states Zurich's Motion should also be denied because it targets deposition testimony elicited by Zurich that Fluor will not seek to introduce. Fluor notes Mr. Wilson was responding to Zurich's question at his deposition concerning the scope of the duty to settle—and he noted his view under California law. Fluor notes it has not advanced Wilson's view of California law in thiscase which is governed by Missouri law. Fluor argues Zurich's motion to exclude this evidence is moot as Fluor does not seek to admit testimony Zurich was obligated to pay settlement amounts allocated to uncovered plaintiffs.2
Based upon Fluor's representations, the Court denies Zurich's motion on this point as moot.
Zurich asks the Court to preclude Fluor from presenting evidence or arguing the Bronson/Smoger plaintiffs' $60 million global settlement offer remained open until December 13, 2010. Zurich contends both black letter contract law and...
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