Haygood v. Auto-Owners Ins. Co.

• Decision Date: 09 June 1993
• Docket Number: AUTO-OWNERS,No. 92-8770,92-8770
• Citation: 995 F.2d 1512
• Parties: 38 Fed. R. Evid. Serv. 1471 Donald E. HAYGOOD, Sr., Plaintiff-Appellee, v.INSURANCE COMPANY, Defendant-Appellant. *
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1512

995 F.2d 1512

38 Fed. R. Evid. Serv. 1471

Donald E. HAYGOOD, Sr., Plaintiff-Appellee, v. AUTO-OWNERS INSURANCE COMPANY, Defendant-Appellant.^*

No. 92-8770.

United States Court of Appeals Eleventh Circuit.

June 9, 1993.

Clayton H. Farnham, Drew, Jerry C. Carter, Jr., Eckl and Farnham, Atlanta, GA, for defendant-appellant.

George H. Connell, Jr., Parkerson, Shelfer and Connell, Decatur, GA, for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before FAY, Circuit Judge, JOHNSON, Senior Circuit Judge, and MERHIGE ^**, Senior District Judge.

FAY, Circuit Judge:

Appellant, Auto-Owners Insurance Co., defendant in the trial court, appeals the denial of its motion for a new trial after the jury found in favor of its insured, Donald Haygood, Sr., the appellee. Auto-Owners claims that, as a matter of law, it is entitled to a new trial because of various alleged material misstatements by Haygood. It also complains of four evidentiary rulings by the district court, asserting these errors compel us to order a new trial. We find all of Auto-Owners' asserted grounds for relief to be without merit; therefore we AFFIRM the denial of the motion for a new trial.

FACTS

Donald Haygood had a homeowners' insurance policy from Auto-Owners on his home in Lumpkin County, Georgia. On September 7, 1988 that home burned to the ground. After months of investigating the claim, Auto-Owners ultimately denied coverage claiming the policy was void because it believed that Haygood had deliberately caused the fire. In addition, Auto-Owners claimed that Haygood had made several material misstatements to the insurance company in the course of its investigation, misstatements which voided the policy. After demand Auto-Owners refused to pay out on the policy and Haygood sued to enforce it. Auto-Owners raised the affirmative defenses of arson and material misstatements. In light of Auto-Owners' assertion that it is entitled to a new trial on evidentiary grounds, the evidence presented is summarized briefly to place its arguments in context.

Under Georgia law "[a]n insurance company can prevail in an arson defense based solely on circumstantial evidence if it shows that the fire was of incendiary origin and that the [insured] had both the opportunity and motive to have the fire set." Fortson v. Cotton States Mutual Ins. Co., 168 Ga.App. 155, 308 S.E.2d 382, 385 (1983). Accord Massachusetts Bay Ins. Co. v. Hall, 196 Ga.App. 349, 395 S.E.2d 851, 857 (1990). Auto-Owners presented evidence on all three of these elements.

The evidence at trial revealed that Haygood had the opportunity to set the fire as he was the last person on the property before it caught fire. In addition, he told conflicting stories about what time he left the property, giving times ranging from as early as 7:30 P.M. to as late as 11:30 P.M.. There was also evidence that his nephew, who was living with him at the time, made several suspicious trips between his parents' home and Haygood's property to move various belongings. Finally, a neighbor testified that she had seen a moving truck or van in front of the Haygoods' home only a few days before the fire.

The evidence further showed that Haygood may have had a financial motive for burning the property to collect the insurance. In 1986, two years before the fire, Haygood had gone into bankruptcy because his bank was about to foreclose on the house. The evidence showed that just prior to the fire the bank may have been about to foreclose again, this time for Haygood's failure to keep up with his payments as scheduled by the bankruptcy court. Haygood attempted to refute the evidence of motive by evidence that he was not in the financial straits suggested by Auto-Owners, but the evidence clearly suggests that he was indeed still experiencing some financial difficulties.

Nevertheless, the presence of motive and opportunity are not enough. In order to prove its defense Auto-Owners also had to prove that the fire was intentionally set. This proved to be the weakest evidentiary link. The evidence on this point was in conflict. Auto-Owners' expert testified that he found a "pour pattern" indicating intentional burning with some sort of accelerant. Not surprisingly, Haygood's expert testified he found no such evidence of intentional burning. Neither expert had conducted tests for the presence of any accelerant. The case was submitted to the jury which found in favor of the plaintiff Haygood in the amount of $306,750. Auto-Owners then moved for a new trial. That motion was denied and this appeal ensued.

DISCUSSION

The decision to grant or deny a new trial is reviewed under an abuse of discretion standard. Fondren v. Allstate Ins. Co., 790 F.2d 1533, 1534 (11th Cir.1986). In general, in exercising that discretion, trial courts are instructed to grant new trials sought on an evidentiary basis only when the jury verdict "is against the great--not merely the greater--weight of the evidence." Id. (citation omitted). This standard is intended to preserve litigants' right to a jury trial and to ensure that judges will not substitute their own judgment for that of the jury with respect to disputed issues of fact. Id.

I. Material Misrepresentations

On appeal, Auto-Owners asserts that it is entitled to a new trial because various statements made by Haygood constituted material misstatements "as a matter of law." See Appellant's Brief at 18 and passim. Under Georgia law, "[w]hether a misrepresentation is material is a jury question, unless the evidence excludes every reasonable inference except that there was or was not a material misrepresentation." Perry v. State Farm Fire & Casualty Co., 734 F.2d 1441, 1444 (11th Cir.1984) (citing United Family Life Ins. v. Shirley, 242 Ga. 235, 248 S.E.2d 635, 636 (1978)). By arguing these statements are material misstatements as a matter of law, Auto-Owners appears to suggest that this issue was improperly submitted to the jury.

However, Auto-Owners never moved for either a directed verdict or a judgment notwithstanding the verdict on this issue. We are not inclined to order a new trial based on our independent evaluation of evidence which the defendant claims demonstrates how the trial court should have ruled on a motion the appellant never made. Our review is limited to errors allegedly made by the trial court, not those made by counsel. See, e.g., Lattimore v. Oman Const., 868 F.2d 437, 439 (11th Cir.1989) (per curiam ) (appeals court will not consider issue raised for the first time on appeal unless it is a "pure question of law" or a "refusal to consider it would result in a miscarriage of justice") (citation omitted). See also Long v. Insurance Co. of North America, 670 F.2d 930, 933 n. 1 (10th Cir.1982) (arguments not raised in trial court need not be addressed on appeal).

In addition, a review of the alleged misrepresentations and the record evidence convinces us that each was of such a nature that the jury was quite properly given the task of resolving the conflicting testimony and assigning the credibility and weight it found to be appropriate.

II. Disputed Evidentiary Rulings

Auto-Owners' second argument is that it is entitled to a new trial on the basis of what it describes as a number of erroneous evidentiary rulings by the district court. Evidentiary rulings are also reviewed under an abuse of discretion standard. Finch v. City of Vernon, 877 F.2d 1497, 1504 (11th Cir.1989). Moreover, even if Auto-Owners can show that certain errors were committed, the errors must have affected "substantial rights" in order to provide the basis for a new trial. See FED.R.EVID. 103(a). "Error in the admission or exclusion of evidence is harmless if it does not affect the substantial rights of the parties." Perry, 734 F.2d at 1446. See also Allstate Insurance Co. v. James, 845 F.2d 315, 319 (11th Cir.1988).

A. Inclusion of Plaintiff's Exhibit 22

The first evidentiary ruling Auto-Owners challenges as error is the admission of Haygood's Exhibit 22. Exhibit 22 is a portion of the transcript of Haygood's statement made under oath to the insurance company in the course of its investigation of his claim. In this statement he says that, according to a credit bureau report which was destroyed in the fire, he had a "1A" credit rating before he declared bankruptcy. Auto-Owners objected to the admission of this exhibit on several grounds, primarily that it was hearsay. In response, Haygood's counsel argued that since Auto-Owners wanted to admit a portion of the statement, see Defendant's Exhibit No. 74 (other portions of same statement under oath), Haygood was entitled to "supplement or make whole" the entire statement in context under Rule 106. See FED.R.EVID. 106. R7-480. ¹

We agree with Auto-Owners that this exhibit was erroneously admitted. Rule 106 allows a party to enter into evidence any part of a "writing or recorded statement" when "in fairness" that portion should be "considered contemporaneously" with the portion submitted by the adverse party. FED.R.EVID. 106. The obvious import of the rule is to allow a party to put a statement in context where, without the context, the meaning would be distorted. The touchstone for an admission under Rule 106 is that the evidence be necessary in order for some other evidence to be "fairly" considered.

Such was not the case with Exhibit 22. Haygood's statement about his credit rating was not necessary to clarify or put in context anything submitted by Auto-Owners in Exhibit 74. It followed his assertion, given in the statement under oath during the investigation of his claim, that he was current on all of his obligations prior to his bankruptcy. Auto-Owners wanted Haygood's statement that he was "up to date" admitted as evidence of a material misstatement in light of other evidence showing that he was delinquent on some of his obligations at that time. It objected to the statement about his...