Insurance Co. of North America v. Musa

• Decision Date: 06 March 1986
• Docket Number: Nos. 84-1758,84-1759,s. 84-1758
• Citation: 785 F.2d 370
• Parties: INSURANCE COMPANY OF NORTH AMERICA, Plaintiff, Appellee, v. Hassan A. MUSA, Defendant, Appellee. Appeal of Jamal A. MUSA, D/B/A Bargain Shop, Defendant, Appellant. INSURANCE COMPANY OF NORTH AMERICA, Plaintiff, Appellant, v. Hassan A. MUSA, et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 370

785 F.2d 370

INSURANCE COMPANY OF NORTH AMERICA, Plaintiff, Appellee, v. Hassan A. MUSA, Defendant, Appellee.

Appeal of Jamal A. MUSA, D/B/A Bargain Shop, Defendant, Appellant.

INSURANCE COMPANY OF NORTH AMERICA, Plaintiff, Appellant, v. Hassan A. MUSA, et al., Defendants, Appellees.

Nos. 84-1758, 84-1759.

United States Court of Appeals First Circuit.

Argued Nov. 15, 1985.

Decided March 6, 1986.

Harry Anduze Montano, Santurce, P.R., for appellant Jamal A. Musa d/b/a Bargain Shop and appellees Hassan A. Musa, et al.

Charles A. Cordero with whom Cordero, Colon & Miranda, Old San Juan, P.R., was on brief, for Insurance Co. of North America.

Before CAMPBELL, Chief Judge, BREYER and TORRUELLA, Circuit Judges.

BREYER, Circuit Judge.

This appeal arises out of a civil suit brought by the Insurance Company of North America (INA), in which it claims that defendants Jamal and Hassan Musa deliberately set fire to their store in Ponce, Puerto Rico, in order to collect insurance proceeds. A jury found for the defendants on certain key matters. On this appeal we basically must decide whether the evidence supporting INA was so overwhelming that the district court should have directed a jury verdict or entered judgment notwithstanding the verdict in INA's favor. Having reviewed the record, including exhibits and the transcript of the six-day trial, in light of the governing legal standards, we conclude that the evidence does not allow us to overturn the jury's findings. We therefore accept the district court's similar conclusions and affirm its judgment.

I

The background of this appeal is as follows: INA filed a civil suit in federal district court against the Musas seeking a declaratory judgment that they had committed arson and fraud and that INA therefore owed them nothing under their fire insurance policy with INA. Jamal Musa counterclaimed for the proceeds of the insurance policy; he sought compensation under the policy for 1) damage to the building, 2) loss of business profits, and 3) loss of inventory. The parties stipulated that the first two of these losses amounted to $127,000. They agreed that the Musas would receive this amount, if the jury found the insurance company liable. Jamal claimed that the inventory loss amounted to $1.37 million--a figure that INA strongly disputed.

After trial, the court submitted special interrogatories to the jury. The jury answered them as follows:

1. Do you believe by a preponderance of the evidence that the Bargain Shop fire in Ponce was the result of arson?

Answer: Yes.

2. Do you believe by a preponderance of the evidence that defendant Hassan A. Musa, either directly or indirectly, engaged in a plan with one or more persons so that the fire at Bargain Shop in Ponce could occur?

Answer: No.

3. Do you believe by a preponderance of the evidence that defendant Jamal A. Musa, either directly or indirectly, engaged in a plan with one or more persons so that the fire at Bargain Shop in Ponce could occur?

Answer: No.

4. Do you believe the Insurance Company of North America should be caused to pay any money to defendants under its insurance policy?

Answer: Yes.

5. Do you believe by a preponderance of the evidence the aforesaid claim filed by Jamal A. Musa in the amount of $1,370,000 against the Insurance Company of North America was fraudulent and was intended to deceive the insurance company?

Answer: No.

6. Do you believe defendant Jamal A. Musa proved by a preponderance of the evidence the damages he claims?

Answer: No.

7. If your answer to Queston No. 6 is Yes, then proceed to write the amount of damages you believe he proved at trial.

$_____.

Consequently, the district court entered judgment in favor of the Musas for $127,000, the stipulated amount of noninventory damages.

INA appeals on the ground that the district court should have entered judgment n.o.v. in its favor 1) because it proved the Musas were involved in arson, or 2) because it proved they committed fraud in respect to their claim for loss of inventory. Jamal Musa cross-appeals, saying there is an inconsistency between the jury's finding that INA is liable and its refusal to award any damages for lost inventory; he seeks a new trial limited to the amount of inventory damages. We shall consider these issues in turn.

II

We turn first to INA's claim that the district court should have directed in its favor a verdict that the Musas committed arson. As INA recognizes, it bears a heavy burden in asking us to insist that the district court reverse the jury's findings on a matter of fact. When we review the denial of a motion for a directed verdict or judgment n.o.v., we view the evidence and draw related factual inferences in the manner most favorable to the verdict winner (here, the Musas). See, e.g., Borras v. Sea-Land Service, Inc., 586 F.2d 881, 885 (1st Cir.1978). In doing so, we must recognize that it is for jurors, not judges, to weigh the evidence and determine the credibility of witnesses. See, e.g., Hubbard v. Faros Fisheries, Inc., 626 F.2d 196, 199 (1st Cir.1980); Rios v. Empresas Lineas Maritimas Argentinas, 575 F.2d 986, 990 (1st Cir.1978). Ultimately, we must uphold the jury's verdict unless the evidence and accompanying inferences "point so strongly and overwhelmingly in favor of the movant that a reasonable jury could not have arrived at [the] conclusion" actually reached. Chedd-Angier Production Co. v. Omni Publications International, Ltd., 756 F.2d 930, 934 (1st Cir.1985); see deMars v. Equitable Life Assurance Society of United States, 610 F.2d 55, 57 (1st Cir.1979). Where the jury's factual conclusion itself takes the form "The plaintiff failed to prove ...," it is particularly difficult for a court to say the jury was wrong; thus, we are especially reluctant to require a directed verdict or the entry of judgment n.o.v. in favor of a party with the burden of persuasion. See Jordan v. United States Lines, Inc., 738 F.2d 48, 49 (1st Cir.1984) (party with burden of persuasion can obtain directed verdict only where he has established his case by "testimony that the jury is not at liberty to disbelieve"); Mann v. Cannon, 731 F.2d 54, 55 (1st Cir.1984); Service Auto Supply Co. v. Harte & Co., 533 F.2d 23, 24-25 (1st Cir.1976); Federal Insurance Co. v. Summers, 403 F.2d 971, 975-76 (1st Cir.1968); Roche v. New Hampshire National Bank, 192 F.2d 203 (1st Cir.1951); 9 C. Wright & A. Miller, Federal Practice and Procedure: Civil Sec. 2535, at 591 (1971).

INA nonetheless believes it has met these stringent standards. And, we must admit that its evidence, much of it consisting of the Musas' own testimony, is strong. First, the evidence showed a motive to set the fire--namely, money. Jamal Musa, who owned the burned store, testified that he owed $1 million at the time of the fire. His accountant stated that, as of a few months before the fire, Jamal had overdrawn his checking account by $652,000. Jamal owed his brother Hassan $58,000, and he also owed money to his landlord.

Second, INA presented evidence suggesting the defendants had engaged in a 'pattern' or 'practice' of setting fires to collect insurance proceeds. It pointed out that Hassan Musa, after moving to Puerto Rico from Jordan in 1961, opened several different stores called Bargain Shops. He arranged to give, to sell, or to rent various individual Bargain Shops to his brothers and cousins. Over the years, fires occurred at several of these stores. The store belonging to Hassan's cousin Abraham burned, after which Abraham eventually paid off a debt to Hassan of about $60,000; the store belonging to Hassan's cousin Mohammed burned, after which Mohammed paid off a debt to Hassan of about $65,000; and the store belonging to Hassan's brother Hussein burned, after which Hussein paid off a debt to Hassan of about $80,000. Moreover, in 1975, a fire occurred at the store in Rio Piedras owned by Hassan's brother and co-defendant Jamal Musa; Hassan testified that he could not remember whether or not Jamal had owed him money (or paid him) at the time.

Third, INA presented evidence of specific acts by Jamal suggesting an intent to set the fire here in dispute. The fire at Jamal's store in Ponce took place just after midnight on Thanksgiving Day, November 25, 1981. Until April of that year Hassan had carried $800,000 insurance on the store's merchandise. In April Hassan added Jamal as a beneficiary under the policy, and Jamal increased the coverage to $1,450,000. And, according to Jamal's books and his testimony, the Ponce store bought lots of merchandise in 1981, sharply increasing its inventory from about $300,000 at the end of 1980 to nearly $800,000 in mid-1981 to about $1.4 million at the time of the fire. Yet, the store's recorded sales did not increase during this period. Moreover, INA argued these 'purchases' were fictitious. The store's warehouseman testified that the store contained fewer goods than normal in mid-1981 and that it contained "quite less" merchandise at the time of the fire. He said that, aside from a shipment of drapes and bedspreads, he could not recall any other large deliveries in the weeks before the fire, even though Christmas was approaching. Another employee testified that almost all of these drapes and bedspreads had been carried away from the store by Jamal's "fellow countrymen" sometime before the fire. She also said that Jamal appeared "worried" and "in a hurry" the night before the fire.

Fourth, INA presented evidence showing that Jamal had an almost unique opportunity to set (or to arrange the setting of) the fire. Jamal said he had the only known sets of keys. Bystanders did not hear the burglar alarm sound; Jamal, who knew how to turn it off, said he had been the last person to leave the store before the fire occurred. Moreover, a witness saw a car speed off minutes after the fire started, and took down its license number. The car belonged to George Saba, a friend of Hassan and Jamal, who...