Sales v. State Farm Fire and Cas. Co., 89-8385

• Decision Date: 05 June 1990
• Docket Number: No. 89-8385,89-8385
• Citation: 902 F.2d 933
• Parties: Wilburt SALES, Jr., and Janice T. Sales, Plaintiffs-Appellants, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 933

902 F.2d 933

Wilburt SALES, Jr., and Janice T. Sales, Plaintiffs-Appellants, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant-Appellee.

No. 89-8385.

United States Court of Appeals Eleventh Circuit.

June 5, 1990.

Richard Wayne Hendrix, Finch, McCranie, Brown & Thrash, Atlanta, Ga., for plaintiffs-appellants.

H. Michael Bagley and Daniel C. Kniffen, Drew, Eckl & Farnham, Atlanta, Ga., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before HATCHETT, ANDERSON and DYER, Circuit Judges.

HATCHETT, Circuit Judge:

We reversed this case and ordered a new trial because the district court improperly instructed the jury on a crucial and controlling element of the law of Georgia. On remand, the district court granted summary judgment to one of the parties based on the factual determinations made by the improperly instructed jury. We reverse and remand.

FACTS

On October 16, 1983, a fire destroyed Janice and Wilburt Saleses' ("the Saleses") home. State Farm Fire and Casualty Co.'s ("State Farm") homeowners policy named both Wilburt and Janice Sales as the insureds. Wilburt Sales submitted a sworn proof of loss statement in which he declared that he did not cause the damage. State Farm, however, refused to pay the claim because it believed that Wilburt Sales had committed arson.

In March, 1984, the Saleses brought this lawsuit in the United States District Court for the Northern District of Georgia to recover the insurance proceeds. At trial, the district court instructed the jury that, under the doctrine of innocent co-insureds, Janice Sales, if innocent of misconduct, could recover even if the jury found that Wilburt Sales had committed arson. ¹ The jury awarded Janice Sales over $70,000 for the property damage and $14,300 in bad-faith damages and attorney's fees. The jury returned a verdict for State Farm on Wilburt Sales's claim. This court reversed the Janice Sales judgments. Sales v. State Farm Fire and Casualty Co., 849 F.2d 1383 (11th Cir.1988) ("Sales I").

This court held that under Georgia law, the specific language of the contract at issue controls the doctrine of innocent co-insureds. After reviewing the language of the contract, this court concluded that Janice Sales could not recover if her husband engaged in forfeitable conduct because the insurance contract applied to both Janice and Wilburt Sales jointly and severally, rather than separably. ² This court remanded the case for a new trial.

Following remand, State Farm filed a petition for rehearing seeking modification of the mandate on the grounds that the order for a new trial was inconsistent with the analysis in the opinion. State Farm argued that no issue remained to be tried and that the district court should have been instructed to enter an order in its favor as a matter of law. We denied the petition.

PROCEDURAL HISTORY

Subsequent to denial of rehearing, State Farm sought summary judgment based on the law of the case doctrine. It argued that factual disputes that were resolved in Sales I entitled them to judgment as a matter of law. After reviewing this court's opinion, the district court concluded that the mandate ordering a new trial did not preclude the entry of summary judgment. The district court further concluded that no issues remained for a jury to resolve and entered summary judgment in favor of State Farm.

CONTENTIONS

The Saleses appeal the district court's grant of summary judgment contending that material factual issues remain which must be resolved at a trial. State Farm, on the other hand, contends that the district court properly ruled that the first trial and this court's opinion resolved all material factual issues.

ISSUES

The issue on appeal is whether the district court erred by granting State Farm's motion for summary judgment.

DISCUSSION

A mandate from this court ordering a new trial does not preclude the district court from entering summary judgment if all of the appropriate requirements are met. See Shelkofsky v. Broughton, 388 F.2d 977 (5th Cir.1968) (reversal for a trial by jury did not preclude the district court from disposing of the case summarily if the evidence offered was insufficient to warrant submission to the jury). ³ Consequently, the district court acted properly in considering State Farm's motion for summary judgment. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A party moving for summary judgment "has the burden of showing that there is no genuine issue of fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986). We conduct a de novo review of the district court's decision to grant summary judgment. Tackitt v. Prudential Insurance Co. of America, 758 F.2d 1572, 1574 (11th Cir.1985).

State Farm does not rely on pleadings, depositions, or affidavits to show the absence of any genuine issues as to material facts. Rather, State Farm relies on the "law of the case" doctrine, arguing that factual disputes that the jury resolved in The law of the case doctrine was created to ensure that authority and responsibility remain properly allocated among the courts. The doctrine is based on the premise that an appellate decision is binding in all subsequent proceedings in the same case unless the presentation of new evidence or an intervening change in the controlling law dictates a different result, or the appellate decision is clearly erroneous and, if implemented, would work a manifest injustice.

Sales I are binding. According to State Farm, where a jury's factual determinations are affirmed on appeal, under the law of the case doctrine, litigants cannot later retry the same issues.

Litman v. Massachusetts Mut. Life Ins. Co., 825 F.2d 1506, 1510 (11th Cir.1987), cert. denied, 484 U.S. 1006, 108 S.Ct. 700, 98 L.Ed.2d 652 (1988). The doctrine underscores the fundamental principle that litigants who choose their trial strategy, litigate accordingly, and lose, are not entitled to resurrect a previously abandoned issue. See Baumer v. United States, 685 F.2d 1318, 1321 (11th Cir.1982).

The law of this case, as established in Sales I, is two-fold. First, the parties are bound by this court's holding that the jury was incorrectly instructed concerning the law governing this case. We held that the district court should afford State Farm a new trial based on this error. Crucial to further proceedings is the fact that this court established, as the law of this case, that one co-insured may not recover on this contract if the other co-insured engaged in forfeitable conduct.

Second, this court ruled against Wilburt Sales in his cross-appeal. We held that the district court properly admitted evidence concerning Wilburt Sales's prior fire losses. Therefore, at the new trial this evidence will again be admissible.

Nothing in Sales I suggests that this court affirmed the factual findings concerning the Saleses. To the contrary, the application of the incorrect law undermined...