Jeanes v. Allied Life Ins. Co.
| Citation | 168 F.Supp.2d 958 |
| Decision Date | 21 September 2001 |
| Docket Number | No. 4-98-CV-90386.,4-98-CV-90386. |
| Parties | Shawn C. JEANES, Wayne K. Mains, individual, Plaintiffs, v. ALLIED LIFE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Iowa |
Natasha Roit, Los Angeles, CA, for plaintiff.
Deborah M. Tharnish, Des Moines, IA, for defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Plaintiffs' Revised Third Amended Complaint (# 125) in this matter was filed on February 12, 2001. In the Complaint, Plaintiffs jointly allege that Defendant Allied Life Insurance Company ("Allied") is liable for breach of contract, fraud by concealment, fraud by intentional misrepresentation, breach of contract for failure to pay commissions due, and willful failure to pay salary. Additionally, Plaintiff Wayne Mains ("Mains") individually alleges that Allied breached insurance policy contracts and is liable for fraud and conversion. In an order dated June 25, 2001 (# 159), the Court entered judgment for Plaintiffs on their claim of failure to pay commissions due. Allied paid the Plaintiffs the amount of commissions it believed were owed. Specifically, Mains received $82,565.94 and Plaintiff Jeanes ("Jeanes") received $60,296.52. See Ex. 106; Ex. 107; Ex. 108. The Court left for determination at trial the issue of whether additional commissions beyond those amounts were owed either Plaintiff.
The parties entered into a stipulation to waive jury trial and present the matter to the Court on July 9, 2001 (# 174). Bench trial in this matter began on July 17, 2001. The parties were ordered at the conclusion of the trial to submit their closing arguments and proposed findings of fact and conclusions of law to the Court by August 8, 2001. Plaintiffs timely filed their closing argument (# 184) on August 8, 2001 (# 183). Defendant, however, did not file its closing argument until August 10, 2001, two days past the court-ordered deadline. While it would be within the Court's discretion to disregard Defendant's closing argument entirely on the basis of untimely filing, the Court declines to do so. The Court accepts the late filing based upon its exercise of discretion. Neither party filed a document specifically entitled "Proposed Findings of Fact and Conclusions of Law," though the Court believes that the contents of such a document are essentially included in the parties closing arguments. The matter is fully submitted.
On July 6, 2001, Defendant Allied filed a motion in limine (# 167) raising several evidentiary issues. The Court deferred ruling on the motion until after trial.
Defendant first seeks to have the Court exclude "any matters relating to statements made by Shawn Jeanes respecting conversations with Tom Van Fossen, concerning statements made by John Evans, Wendall Crosser, Jim Van Elsen, Paul McGillivray, John Duffy, Sam Wells, or any other Allied Life agents or executives regarding the issue of maximizing executive bonuses relating to the second cost of insurance increase." Mot. in Limine at 1. Defendant contends that such statements are inadmissable hearsay not subject to an exception. Evidence at trial indicates that Tom Van Fossen resigned from the employment of Allied Life on April 1, 1997. He remained on the payroll pursuant to the terms of a severance package for approximately six months thereafter. Pursuant to Federal Rule of Evidence 801(d)(2)(D), a statement is not hearsay if the statement is offered against a party and is "a statement by the party's agent or servant concerning a matter within the scope of the agency or employment, made during the existence of the relationship." Because Mr. Van Fossen was not actually employed by Allied after his resignation date of April 1, 1997, any statement made by him after that date would be hearsay and inadmissible. Hence, the Court has not considered any evidence of statements allegedly communicated by Mr. Van Fossen after the date of his resignation for the truth of the matter asserted.
Defendant next seeks exclusion of any statements made by Richard Kaufman regarding conversations with Tom Van Fossen. As indicated supra, the Court agrees that any evidence of statements by Van Fossen after his date of resignation constitutes inadmissible hearsay. Therefore, the Court has not considered any evidence of such conversations with Van Fossen for the truth of the matter asserted.
Defendant also requests that the Court exclude any testimony relating to the policyholder class action suit initiated in California in 1998, including any testimony by Tim Dillon. Because Mr. Dillon did not testify and no issues regarding the 1998 action arose at trial, the Court believes this issue is moot.
Defendant seeks exclusion of any matters relating to claims for damages resulting from the 1991 cost of insurance increase ("COI"). The Court agrees that, pursuant to its Summary Judgment Order dated July 10, 2000(# 81), claims relating to the 1991 increase are barred on statute of limitations grounds. Therefore, the Court will not consider any evidence relating to the 1991 increase.
Defendant seeks to exclude any evidence regarding damages, other than ongoing earned commissions, beyond July 9, 1999, the date on which new Allied policies ceased to be written. The Court believes that Plaintiffs have presented competent evidence that it is possible that they could have earned additional first year commissions on dates after July 9, 1999. The Court believes such evidence is relevant to the issue of damages and therefore, overrules Defendant's motion on this issue.
Defendant's request to exclude all evidence of lost profits is overruled. Plaintiffs, as part of their case in chief, have alleged that their resignations from Allied amounted to constructive discharge rather than voluntary terminations. Should Plaintiffs be able to prove their claims of constructive discharge, evidence relating to lost profits would be relevant and highly probative to any potential award of damages.
Defendant seeks to exclude statements from Plaintiffs and their witnesses, including expert witnesses, regarding Plaintiffs claims for damages for lost commissions, due to "Plaintiffs' failure to provide a foundation for their commission claims and failure to respond to Defendant's discovery requests, and failure to substantiate the amount they believe they are owed." The Court overrules this item of Defendant's motion. Plaintiffs have stated a valid claim pursuant to the Iowa Wage Payment Collection Act and are entitled to present evidence to this Court to prove their claim. The Court does not believe Plaintiffs' answers to Defendant's propounded interrogatories are so lacking as to require exclusion of evidence supporting their claims regarding commissions, particularly in light of the fact that commission statements and other items upon which Plaintiffs would likely base their evaluation of commissions owed are maintained by Allied.
Defendant seeks to exclude any statements or testimony from Plaintiffs and Plaintiffs witnesses, including experts, regarding Plaintiffs' claims for damages apart from the damages expressly contracted for by the parties. The Court refers Defendant to its order of June 25, 2001 (# 159) wherein the Court indicated that there was no provision in the parties' contract governing the rights of the parties upon breach of the contract by Allied and that future lost profits were a reasonable measure of damages in this case, should Plaintiffs be able to prove their claim. Therefore, Defendant's motion as to this issue is denied.
Defendant's motion in limine requests the Court exclude any correspondence or statements between Plaintiff or Plaintiffs' attorneys, and Defendant's present or former attorneys regarding document production and commissions in this case. Defendant claims such items are irrelevant and contain settlement discussions. The Court, however, believes that such documents are highly probative of and relevant to the issue of intent under Plaintiffs' Wage Payment Collection Claim. For that reason, the Defendant's motion to exclude such evidence is denied.
Finally, Defendant requests that the Court exclude the expert testimony of Scott Mowry pursuant to Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). Federal Rule of Evidence 702 provides: "If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise." Fed.R.Evid. 702. The standard for the admissibility of expert testimony was clarified in Daubert. When faced with a challenge to the offer of scientific evidence or testimony, the trial judge must determine that "an expert's testimony both rests on a reliable foundation and is relevant to the task at hand." Id. at 580, 113 S.Ct. 2786. Daubert suggests that judges consider four factors in determining the admissibility of expert testimony: 1) whether the theory or technique has been or can be tested; 2) whether the principle has been subjected to peer review and publication; 3) whether the known or potential error rate of a certain scientific technique has been evaluated; and 4) whether there is general acceptance in the relevant scientific community. Id. at 593-94, 113 S.Ct. 2786.
The Court believes that Mr. Mowry's method of determining lost future profits using a method of projecting income based on historical growth rates is a relatively common technique for predicting lost income and is generally accepted within the scientific community. Defendant's own expert testified that projections are one of the methods used in doing business valuations. See Trial Tr. at 625. The mere fact that ...
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