Safeco Ins. Co. of America v. Duckett
| Decision Date | 22 July 1988 |
| Docket Number | No. 86-2396,86-2396 |
| Citation | 852 F.2d 1290 |
| Parties | Unpublished Disposition NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not the case, res judicata, or collateral estoppel. SAFECO INSURANCE COMPANY OF AMERICA, a Washington corporation, Plaintiff/Counterdefendant Appellant, v. James R. DUCKETT, aka James Duckett, Defendant/Counterclaimant Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Before GOODWIN and FLETCHER, Circuit Judges and SAMUEL P. KING, District Judge *.
On July 21, 1982, Jim Duckett's restaurant in Bullhead City, Arizona, was severely damaged by fire. At the time of the loss, Duckett had been insured personally by Appellant Safeco Insurance Company of America ("Safeco") for 15 years and his restaurant, Trader Dick's, had been insured with them for six and one half years. The restaurant policy provided for stated value business interruption payments of seventy dollars per day commencing the tenth day after the loss, for repairs of structural damage to the property, and for payment of the actual cash value of the lost contents of the restaurant.
Because there were multiple points of origin and signs of a burglary, the fire was believed by the insurance carrier to have been caused by arson. There is, however, no agreement as to its origin. After initial investigation, Safeco revealed that it suspected Duckett of setting the blaze. Duckett has consistently denied any culpability.
Safeco stresses a number of facts which it contends point to Duckett's involvement in the fire. Trader Dick's had been offered for sale on and off for a number of years. Duckett had recently suffered a heart attack and wanted to retire from the business. Safeco's fire investigator, Thomas Pugh, reported that Duckett had been in the area of the restaurant at the time of the fire, that Duckett had instructed his employees not to set the burglar alarm the night of the fire, that Duckett was significantly in debt, that while some money was stolen from the restaurant, many valuables were left behind, and that more time was spent setting the fire than taking the money. Pugh concluded that there was strong evidence of Duckett's involvement in the fire. Safeco elected not to make payment under the business interruption coverage pending completion of its investigation.
Duckett has consistently maintained that he did not cause the fire. Although the restaurant had been up for sale, he had recently turned down a $280,000 offer and was in the process of revitalizing the business. He testified that on the night of the fire he left the restaurant at 9:40 p.m. Because he expected to return, he asked his managers, as he had similarly done in the past, not to set the burglar alarm when they closed the restaurant. He drove across the river to the Edgewater Casino to meet someone who was interested in buying the restaurant. While he never met up with the prospective buyer, he waited at the Edgewater until 11:00 p.m., drinking and playing Keno. He saved his keno tickets, as he always has for tax purposes, and returned to Trader Dick's just as the fire department was breaking down the door.
In October 1982, Safeco asked Duckett to file a sworn proof of loss and submit to an examination under oath as required by the policy. Duckett provided the proof of loss but filled out only the space in the form calling for replacement value of the restaurant contents, leaving blank the line for actual cash value. Although Safeco had earlier told him that the company would provide an adjuster to help determine actual cash value, it never did so. Duckett submitted to the examination under oath and provided all the requested information about the restaurant. However, he refused to provide his personal financial records or answer any questions about his personal financial status. The insurance company refused to disclose at that time whether it still suspected Duckett of the arson.
Duckett also submitted to a polygraph test at Safeco's request, which he passed. No criminal charges were ever brought against Duckett, and recommendations were made by at least one Safeco employee that the claim be paid.
Safeco commenced a declaratory action against Duckett on November 15, 1987, advancing three reasons why it believed Duckett was not entitled to recover under the policy: 1) Duckett was responsible for the fire; 2) Duckett had submitted a false proof of loss; and 3) Duckett had refused to provide information during his examination under oath.
Duckett filed counterclaims for breach of contract, bad faith, intentional infliction of emotional distress, common law fraud, statutory consumer fraud, unfair insurance claim practices, libel and slander.
The case was bifurcated, Safeco's claims and Duckett's breach of contract counterclaim to be tried in Phase I and the remaining issues to be tried in Phase II. Phase I resulted in a jury verdict in favor of Duckett for $133,870. Subsequently a number of Duckett's remaining claims were either dismissed or voluntarily withdrawn, and Phase II proceeded to trial on the sole issue of Safeco's bad faith. The jury returned a verdict for Duckett in the amount of $402,143.00. Safeco now appeals on a number of grounds, and we affirm.
Safeco asserts that T. Gale Dake, Duckett's attorney, committed prejudicial acts of misconduct during final argument to the jury in the Phase II proceedings. Safeco specifically contends that Dake improperly commented on the evidence, interjected his own personal belief in his client's position, and urged the jury to return a verdict based upon compromise. The district court denied Safeco's motion for a new trial.
We review for abuse of discretion the denial of a post-trial motion for a new trial. Kehr v. Smith Barney, Harris Upham & Co., Inc., 736 F.2d 1283, 1286 (9th Cir.1984). "To warrant reversal on grounds of attorney misconduct, the 'flavor of misconduct must sufficiently permeate an entire proceeding to provide conviction that the jury was influenced by passion and prejudice in reaching its verdict.' " Kehr, 736 F.2d at 1286, quoting Standard Oil Co. of California v. Perkins, 347 F.2d 379, 388 (9th Cir.1965); McKinley v. City of Eloy, 705 F.2d 1110, 1117 (9th Cir.1983). Thus the question before us is not whether the closing argument comments were improper, but whether any such impropriety reached the level set out in Kehr.
Safeco first complains of Dake's use of his own personal opinions and beliefs during closing argument. Dake informed the jury that: "[a]ll I know, and all I've ever known in this case, is that Jim Duckett didn't do it"; that he usually represents insurance companies but took Duckett's case because he "didn't think they had anything, and I think that they had mistreated him...."; and that Safeco's expert witness, Pugh, "will say whatever the insurance company wants him to say." He also commented that he had refused to work with Pugh in other cases because of his low opinion of the witness.
Safeco cites further misconduct in counsel's commenting on his personal knowledge of the contents of Safeco's claims file:
Lastly, Safeco contends that Dake acted improperly in suggesting to the jury that "... if there's any way that without doing an injustice to your conscience that you can compromise this claim, please do it."
Reviewing these comments in light of the Kehr standard set out above, we do not find that the district court abused its discretion in denying the motion for a new trial. We noted in Kehr that the trial court is in a far better position to gauge any prejudicial effect of improper comments than is the appellate court, which must decide upon the cold record. 736 F.2d at 1286; see also, County of Maricopa v. Maberry, 555 F.2d 207, 223 (9th Cir.1977). Here, the court was cognizant of the challenged comments. In denying Safeco's motion for a new trial, the court described the presentation as "inappropriate, unwarranted and prejudicial and ... in the aggregate, of such a nature and degree as to invoke this court's censure of counsel". Thus it is clear that the court accorded significant gravity to counsel's conduct in assessing the question of jury prejudice.
Moreover, the court instructed the jury that:
Lawyers are not permitted to present or argue facts which are not supported by evidence in the case, nor are they permitted to interject or argue their personal opinions as to any fact or other aspect of the case. Accordingly, you are not--you are instructed to disregard any such statements of counsel that may have occurred during closing argument.
In other cases, courts have held that curative instructions given after improper comments by counsel during closing argument may render the comments harmless. Lincoln v. Sunn, 807 F.2d 805, 809-11 (9th Cir.1987); Ramsey v. American Air Filter Co., Inc., 772 F.2d 1303, 1311 (7th Cir.1985); Lenard v. Argento, 699 F.2d 874 (7th Cir.1983), cert. denied, 464 U.S. 815 (). We also note that the comments complained of were confined to the closing argument which comprised approximately one and a half to two hours of a trial spanning three months.
We therefore find no abuse of discretion and accordingly affirm the district court's denial of the motion for a new trial.
Safeco argues that it is entitled to judgment as a matter of law because Duckett refused...
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