Holland v. Cypress Ins. Co.

• Decision Date: 12 May 2022
• Docket Number: 20-13538
• Parties: PATRICIA HOLLAND, the surviving mother of Kip Eugene Holland, WAYNE HOLLAND, Administrator of the estate of Kip Eugene Holland, deceased, Plaintiffs-Appellees, v. CYPRESS INSURANCE COMPANY, KERI BELL, Administrator of the Estate of James Wendell Harper, deceased, Defendants-Appellants, JW HARPER FARMS, et al., Defendants.
• Court: U.S. Court of Appeals — Eleventh Circuit

PATRICIA HOLLAND, the surviving mother of Kip Eugene Holland, WAYNE HOLLAND, Administrator of the estate of Kip Eugene Holland, deceased, Plaintiffs-Appellees, v. CYPRESS INSURANCE COMPANY, KERI BELL, Administrator of the Estate of James Wendell Harper, deceased, Defendants-Appellants, JW HARPER FARMS, et al., Defendants.

No. 20-13538

United States Court of Appeals, Eleventh Circuit

May 12, 2022

DO NOT PUBLISH

Appeals from the United States District Court for the Northern District of Georgia D.C. Docket No 2:17-cv-00120-RWS

Before William Pryor, Chief Judge, Jordan, and Anderson, Circuit Judges.

Per Curiam.

This is an appeal of a jury verdict in favor of plaintiffs Patricia Holland and the estate of her son, Kip Holland (collectively referred to as "Holland"). Holland sued the estate of James Harper ("Harper") and his insurer, Cypress Insurance Company ("Cypress"), for negligence. In December 2016, Harper was driving a tractor-trailer when he veered off the road, causing the trailer to detach and then to strike and kill Kip Holland. A jury awarded Holland $13 million for wrongful death, $2 million for pain and suffering, and $29, 363 in medical and funeral expenses. The jury also found that Harper had acted in bad faith, necessitating a second phase of the trial on attorney fees. The jury then awarded Holland $6 million in attorney fees.

Harper and Cypress (collectively referred to as "Appellants") have appealed the jury verdict and damages awards, making five separate arguments. First, the district court erred by denying their motions for a directed verdict and motion for judgment notwithstanding the verdict ("JNOV") because Holland provided insufficient evidence that the accident resulted from anything other than an unforeseen medical emergency. Second, the $6 million attorney fee award must be vacated because (a) no evidence of bad faith justified the award and (b) even if there were bad faith, the amount of the award was unreasonable. Third, the $2 million pain and suffering award must be vacated because the district court improperly instructed the jury that it could award damages for "actual pain and suffering." Fourth, the entire verdict must be set aside because Cypress should not have been forced to appear as a named party at trial under Georgia's direct-action statutes. Fifth, the entire verdict must be set aside because Holland's attorney made an improper statement during his closing argument.

For the following reasons, we conclude that Appellants' arguments lack merit, except we express no opinion on the reasonableness of the amount of the attorney fee award. We affirm the judgment of the district court except with respect to the issue of the $6 million attorney fee award. Accordingly, we affirm the jury verdict and the damages awards for wrongful death, pain and suffering, and medical and funeral expenses. We also hold that there was sufficient evidence of bad faith to warrant a fee award under Georgia law. But we vacate the $6 million attorney fee award for the district court to reconsider its reasonableness in light of two recent opinions from the Georgia Court of Appeals.

I.

On December 8, 2016, Harper was driving a tractor-trailer in Gainesville, Georgia. His daughter, Annette Bell, testified at trial that Harper had to end a phone call with Bell's stepmother that morning because he started coughing. Scott Carpenter, who was driving behind Harper for the 1.5-2 miles before the crash, also testified at trial that Harper was driving "erratically, even to the point of one time crossing over into oncoming traffic" and running another truck "off the road into some gravel." He said the tractor-trailer "[s]eemed to just have a hard time maintaining lane, it was making some jerky motions." Eventually, the tractor-trailer overturned, causing the trailer to detach and to strike and kill Kip Holland. A business's security camera recorded the wreck, and this footage showed that Kip Holland saw the trailer headed towards him before impact. Lew-Anne MacArthur, who lived across the street but who did not see the crash, noticed Kip Holland's body on the ground behind the trailer several minutes after the wreck. She and two other witnesses "heard him moan just once"; she "didn't know whether he was alive," though she said that "he didn't seem to be conscious."

Four months prior to the accident, on August 1, 2016, Harper completed a required Federal Motor Carrier Safety Administration ("FMCSA") Medical Examination to maintain his commercial driver's license. At that time he filled out a Department of Transportation ("DOT") "Medical Examination Report Form." On that form, Harper concealed parts of his medical history, including a past brain aneurysm, lung disease (COPD), sleep apnea, chronic back pain, coughing fits, and blackouts. Harper's primary physician stated that he did not know Harper was a smoker, used a breathing machine in his truck, and had been hospitalized with COPD exacerbation on November 7, 2016. Based in part on his inaccurate DOT form, Dr. Larry Johnston cleared Harper to drive.

Harper also had a prescription for 120 pills of hydrocodone to be taken 4 times a day and refilled every 30 days. But on his DOT form, he said "No" in response to the question, "Are you currently taking medications." Bell testified at trial that Harper told her that he did not take hydrocodone before he drove but would take it on his off days and weekends. But she acknowledged that, based on Harper's notebook where he recorded his fuel stops, he drove approximately 9, 000 miles during the month before the crash.

Holland sued Harper and Cypress in June 2017. Cypress was joined as a party-defendant under Georgia's direct-action statutes. See O.C.G.A. § 40-1-112(c) ("It shall be permissible under this part for any person having a cause of action arising under this part to join in the same action the motor carrier and the insurance carrier, whether arising in tort or contract."); id. § 40-2-140(d)(4) ("Any person having a cause of action, whether arising in tort or contract, under this Code section may join in the same cause of action the motor carrier and its insurance carrier.").

Before trial, Appellants filed a motion in limine seeking, in part, to suppress arguments about, and testimony concerning, Harper's liability insurance-particularly evidence regarding the dollar limit of Harper's policy. However, Appellants "stipulate[d]" that Cypress issued a policy to Harper and that "the policy goes into the record." Per Appellants' understanding of Georgia's direct-action statutes, "Cypress [was] a party solely to act as surety for a verdict against Mr. Harper's estate." They reiterated this view of Georgia's direct-action statutes at the pretrial conference. The district court granted this portion of Appellants' motion in limine. At trial, Appellants never objected that Holland's counsel violated this order.

The parties proceeded to trial on a single count of negligence for compensatory damages plus attorney fees under O.C.G.A. § 13-6-11 based on Harper's bad faith. After Holland's case rested, Appellants moved for a directed verdict on two issues: (1) no evidence was presented regarding Kip Holland's conscious pain and suffering because MacArthur testified that he was nonresponsive and (2) no evidence existed regarding Harper's bad faith, so attorney fees should not be awarded. After Appellants presented their case on the third day of the trial, they again moved for a directed verdict, this time on three issues. First, they reiterated their conscious pain and suffering argument, which the court rejected again.

Second, they argued for a directed verdict for Cypress because Holland failed to prove that the insurance policy Cypress issued to Harper was "on file with the appropriate state agency." According to Appellants, a 1987 Georgia Court of Appeals decision concerning a predecessor of § 40-1-112 required plaintiffs in direct-action cases to prove that the insurance policy existed and was on file with the appropriate state agency. Glenn McClendon Trucking Co., Inc. v. Williams, 359 S.E.2d 351 (Ga.Ct.App. 1987). Holland's counsel responded that the current direct-action statutes-which the Georgia legislature passed after 1987-eliminated this requirement. The district judge deferred ruling on this argument at the time, though he eventually rejected it.^[1] Third, Appellants reraised their argument that bad faith did not exist, and the court rejected it again.

After the third day of trial, Appellants' counsel filed a letter with the court providing another argument for a directed verdict: Harper was an interstate carrier, but O.C.G.A. § 40-2-140 "is only appropriate to intrastate carriers." The letter also says "Cypress is not asserting the defense that [Holland's] claims fail because Cypress did not file the certificate" because Appellants acknowledged that a "provision" in O.C.G.A. § 40-1-112 "eliminate[d] a loophole allowing an insurance company to violate the requirement to file a certificate to avoid direct action."^[2] It then quotes language from the Unified Carrier Registration Act of 2005 and says that language "preempts" O.C.G.A. § 40-1-112. On the fourth day of trial, the district court accepted the letter into the record and rejected its additional argument.^[3]

Before closing arguments on the fourth day of the trial, the parties discussed what stipulated facts should be read to the jury at which time Appellants' counsel said, "I'm just concerned about unduly emphasizing liability insurance in this case." Before Holland's closing argument, Appellants' counsel reiterated the argument from its motion in limine that Holland "cannot introduce the [insurance policy] limits in the case." Appellants' main...