Riverside Ins. Co. v. Pedigo

Decision Date20 January 1982
Docket NumberNo. 2-1279A378,2-1279A378
Citation430 N.E.2d 796
PartiesRIVERSIDE INSURANCE CO., Appellant (Defendant Below), v. Roger D. PEDIGO and Linda I. Pedigo, Appellees (Plaintiffs Below).
CourtIndiana Appellate Court

Thomas J. McKeon, John R. Hiner, Osborn & Hiner, Indianapolis, for appellant.

Michael J. Stapleton, Ball, Eggleston, Bumbleburg & McBride, Lafayette, for appellees.

MILLER, Presiding Judge.

Appellant-defendant, Riverside Insurance Company, is appealing from a jury verdict against it for $51,000 in compensatory damages and $50,000 in punitive damages. The award was based on Riverside's failure to pay, pursuant to its policy, for damages sustained by Roger D. Pedigo and Linda I. Pedigo, husband and wife, when their home was totally destroyed by fire.

The issues raised by Riverside on appeal concern:

1) the failure of the trial court to instruct the jury specifically on Riverside's defense of fraud and false swearing;

2) with respect to compensatory damages, an erroneous instruction on actual cash value, the proper measure of damages for personal property, and sufficiency of the evidence regarding the value of the lost realty and personalty;

3) sufficiency of the evidence to permit an instruction on, and the award of punitive damages; and

4) the admissibility of an exhibit showing Riverside's net worth.

Finally Riverside also claims error with respect to objectionable and improper comments made by the Pedigos' counsel in final argument. For the reasons which follow we affirm.


In 1972 the Pedigos purchased a 50-to-100-year-old farmhouse for $9,900. The farmhouse and its contents, both of which were insured by Riverside, were destroyed by fire on February 22, 1978. The policy limits were $30,000 for the house, $15,000 for unscheduled personal property and $6,000 for additional living expenses.

At the time of the fire the exterior of the house was in a state of disrepair and decay; however, the Pedigos had renovated portions of the interior, principally the kitchen. The record is silent with respect to the value of the renovations.

On March 6, 1978, Riverside's adjuster recommended to the company that it set aside a reserve for the policy limits on the house and its contents, and a reserve for 2/3 of the policy limit on additional living expenses. Unknown to the Pedigos, Riverside began an arson investigation in mid-March regarding the fire. From March to July, 1978 the Pedigos submitted several claims to Riverside in an effort to recoup their losses in accordance with the policy. Riverside rejected the claims, each time citing alleged technical defects in the proof of loss forms. Perceiving they were making no headway in dealing directly with Riverside, the Pedigos filed suit and the case was tried before a jury.

Riverside's conduct in processing the Pedigos' claim was sharply disputed at trial. The dispute is set out in some detail below at the discussion on the punitive damages issue. The only evidence in the record with respect to the value of the farmhouse is testimony by a contractor that at the time of the fire it would have cost approximately $46,000 to replace the farmhouse with a new house of the same or similar dimensions using the least expensive materials available. Riverside did not object to this testimony at trial on the grounds that replacement cost is an erroneous measure of damages for determining the "actual cash value" of real estate in a total loss case. The evidence with respect to the value of the personal property lost in the fire consisted of a written property inventory and a valuation statement made by Riverside's adjuster. The inventory asserted the personal property had a value in excess of $25,000. The adjuster's valuation statement was that the Pedigos' personal property loss exceeded the policy's $15,000 limit.

The jury returned a verdict of $51,000 in compensatory damages and $50,000 in punitive damages. The trial court entered judgment accordingly plus interest on the compensatory damages in the amount of 8% from the date of loss until the day judgment was entered. The Pedigos agreed to a remittitur of $4,400 because the evidence only showed a $1,600 loss for additional living expenses.

Issue One: Instruction on False Swearing

Riverside contends the trial court erred in not instructing the jury as to its defense of "Fraud and False Swearing ... Willful Concealment and/or Misrepresentation of Material Facts" (hereafter referred to as false swearing).

The trial court's entry on instructions reveals, as conceded by Riverside on appeal, that Riverside withdrew its detailed false swearing instruction (Defendant's proposed final instruction No. 4) and merely by oral suggestion to the court requested a modified instruction as follows:

"Mr. Bovey (counsel for Riverside): Your Honor, the defendant also would respectfully direct the Court's attention to the defendant's other affirmative defense as set forth in defendant's proposed final jury instruction No. 4. (previously withdrawn) (t)he defense of fraud and false swearing, willful concealment, and/or misrepresentation of material facts. I would like to suggest a few modifications to that proposed instruction."

The court responded:

"Court: Mr. Bovey, I think we're just out of time, that instruction is so long, and there were so many things I found at fault in that, that it's just going to take too much time to get that corrected. I'm not going to consider any thing further on that."

Because Riverside failed to tender a modified instruction, we have no idea what modifications it was proposing. Consequently there is nothing on this record to review concerning a "modified" false swearing instruction. Having tendered and then having withdrawn this instruction, Riverside is in the same position it would have been had it never tendered the instruction-without an issue on appeal. Anderson v. Taylor, (1972) 154 Ind.App. 217, 289 N.E.2d 781.

The trial court did generally instruct the jury on Riverside's defense of false swearing. 1 However, on appeal, Riverside contends that despite its failure to tender an instruction, the trial court's failure to instruct the jury in detail as to the specific legal meaning of fraud and false swearing constitutes error.

Although not mentioned by Riverside in either its initial brief or reply brief, a proper discussion of the trial court's affirmative duty to instruct the jury would begin with Ind. Rules of Procedure, Trial Rule 51(B) which provides: "After argument the judge shall instruct the jury as to the law upon the issues presented by the evidence. Such instructions given by the court of its own motion shall be in writing when any party so requests. This request must be made before the commencement of the argument." Basically, the rule describes when final instructions are given and what they encompass. The rule is silent, however, with respect to the nature of the trial court's duty to instruct the jury. Case law on this issue is sparse; however, in Universal C.I.T. Credit Corp. v. Shepler, (1975) 164 Ind.App. 516, 329 N.E.2d 620, Judge Garrard, in his concurring opinion, analyzed the rule as follows:

"Prior to adoption of the new rules of civil procedure, it was said that such an affirmative duty existed as to general but not as to special instructions. However, no Indiana case ever really defined those terms. This appears to have occurred for two reasons. It appears to have been generally presumed that the court must have given proper general instructions. See, 2 Gavit: Indiana Pleading & Practice §§ 392, 393. Secondly, at a very early date, the Supreme Court decided that no error was available on appeal addressed to the court's failure to instruct (assuming the affirmative obligation existed) unless the appellant raised the issue by specific objection or exception before the instructions were delivered to the jury. Krack v. Wolf (1872), 39 Ind. 88.

The commission comments indicate that the prior law was intended to apply under TR.51(B). Thus, whatever the obligation of the court may be in a particular case, it seems clear that at least where the issue in question is not specifically called to the court's attention and some objection made on the record to the failure of the court to instruct the jury on that issue, no error is preserved for appeal.

Since C.I.T. made no such objection at the trial, it has waived any error that might have thus occurred. Having so ruled, I am nevertheless constrained to emphasize my opinion that it is the function and responsibility of the trial court in the first instance to insure that its jury is properly instructed on the law applicable to the issues in the case. See, Wolff v. Slusher (1974), 161 Ind.App. 182, 314 N.E.2d 758."

Id. at 528-29, 329 N.E.2d at 627-28. We agree with Judge Garrard's analysis of the rule and find that because the trial court in the instant case gave the jury general instructions on the defense of fraud and false swearing, the trial court discharged whatever affirmative duty, if any, it had on the issue. Furthermore, Riverside's failure to object to the absence of a special false swearing instruction when the case went to the jury constitutes a waiver of the issue on appeal. Finally, were we to construe Riverside's modification request as an objection to the effect that the instructions which the trial court was going to give were incomplete because they did not include a specific definition of false swearing, the objection would fail. If a party desires an instruction containing a more detailed statement of the law, that party is required to tender such an instruction. Thornton v. Pender, (1978) 268 Ind. 540, 553, 377 N.E.2d 613, 622; City of Terre Haute v. Deckard, (1962) 243 Ind. 289, 297, 183 N.E.2d 815, 819. Having failed to tender a "complete" instruction on false swearing, Riverside cannot now complain about the general language contained in the instructions given on that subject....

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