Sims v. Great American Life Ins. Co.
| Decision Date | 07 November 2006 |
| Docket Number | No. 04-5135.,04-5135. |
| Citation | 469 F.3d 870 |
| Parties | Clara A. SIMS, an individual, Plaintiff-Appellee, v. GREAT AMERICAN LIFE INSURANCE COMPANY, a Foreign Insurance Company, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
David M. Gunn (Russell S. Post, Beck, Redden & Secrest, L.L.P., Houston, Texas, and Timothy T. Trump, Conner & Winters, P.C., Tulsa, OK, with him on the briefs), Beck, Redden & Secrest, L.L.P., Houston, TX, for Appellant.
Steven L. Andrew (D. Kevin Ikenberry with him on the brief), Andrew, Williams & Ikenberry, A Professional Corporation, Tulsa, OK, for Appellee.
Before HARTZ, ANDERSON, and TYMKOVICH, Circuit Judges.
Lawrence Sims died when the speeding car he was driving sailed off a rural road. Prior to his untimely death, he had obtained life insurance from Great American Life Insurance Company. Sims's wife made a claim on this policy, but after an investigation Great American denied the claim under its non-accidental death provision concluding that Sims committed suicide. Mrs. Sims then filed suit against Great American alleging breach of contract and bad faith for its failure to pay her husband's life insurance policy. A jury found the death was accidental and awarded Mrs. Sims $1.4 million in compensatory and punitive damages. Great American argues on appeal that the district court made numerous evidentiary and procedural errors when it precluded Great American from introducing relevant evidence pertaining to the crash and Sims's state of mind at the time of his death.
This case requires us to consider the interplay between the Erie doctrine and the Federal Rules of Evidence in diversity cases tried in federal district court. The district court refused to admit evidence that would have been inadmissible in state court, concluding that state policy trumps the Federal Rules of Evidence. Although we conclude that the Erie doctrine does not govern the admissibility of evidence under the Federal Rules, we find that the Rules still require diversity courts to analyze substantive state policy in considering the admissibility of evidence.
Exercising jurisdiction under 28 U.S.C. § 1291, we REVERSE the district court's denial of judgment as a matter of law on both the bad faith and punitive damages claims. We otherwise AFFIRM.
On September 3, 2001, Lawrence and Clara Sims attended a golf tournament at their local country club. Sims became extremely intoxicated during the course of the day. He was still quite intoxicated when the couple returned home that evening to an unkempt kitchen. Over this seemingly minor issue, Sims expressed unexpected agitation and anger in front of his wife and daughter. He stormed out of the kitchen, jumped in his car, and sped away.
Concerned for her husband's well-being, Mrs. Sims immediately called 911. She told the 911 operator that Sims "was upset and that we were afraid that he was going to get hurt or hurt himself." R. at 807. By the next morning when her husband had still failed to return home, Mrs. Sims phoned family, friends, and local hospitals to no avail. She then filed a missing persons report. In her sworn statement to the police, she described Sims's state of mind on the evening of September 3:
Drinking—but in a good mood. Got home around 9:00, got angry because the house was a mess ... Got angrier [and] angrier—slammed dining room chair to floor [and] stormed out—saying he's "out of here." Mentioning driving off a cliff. Called 911 to let you know.
R. at 85. The official missing persons report, drafted by the police and signed by Mrs. Sims without her review, editorialized on this language, noting instead that "Mr. Sims was enraged over the cleanliness of their home ... [and] may be suicidal, because when he left his residence, Mr Sims mentioned something about driving off a cliff." R. at 84 (emphasis added).
Two days later police recovered Sims's body. Based on evidence at the accident scene, police surmised that his car had careened off the main road onto a right-of-way toward a creek. The car, traveling at an excessively high rate of speed, clipped a fence and then hit a bump that caused it to sail some 115 feet over a creek bed, before landing in a pasture. No skid marks were visible at the scene nor any other evidence suggesting that Sims swerved before clipping the fence. Although Sims habitually wore his seat belt, on this occasion his seat belt was not fastened. Post-mortem examination revealed a blood-alcohol content (BAC) of 0.19%, well over the legal limit.
Despite Mrs. Sims's sworn police statement to the contrary, she has steadfastly held in these proceedings that she intentionally lied about her husband's intent to drive off a cliff. This lie, she claims, was merely an effort to encourage the police to act quickly to locate her missing husband. Mrs. Sims adamantly asserts that she never believed her husband was truly suicidal.
In August 2000, Sims obtained a life insurance policy from Great American in the amount of $300,000. This policy expressly excluded recovery for non-accidental death. Following Sims's death, Mrs. Sims made a claim.
As was its typical practice, Great American hired an independent claim investigator, Broyles Claim Service Agency, to review the claim. Broyles examined a number of documents as part of its investigation, including (1) the missing persons report, (2) the accident report, (3) the medical examiner's report, (4) the death certificate, and (5) Sims's medical and pharmaceutical records. Additionally, Broyles conducted telephone interviews with the medical examiner, the investigating police officer, Mrs. Sims, and Mrs. Sims's counsel.
Both the police department accident report and the county's death certificate listed suicide as the manner of death. The investigating officer and the coroner relied heavily on the missing persons report in making their cause of death determination. In preparing the accident report, for example, the investigating officer reviewed the missing persons report as well as the physical circumstances of the accident. But the officer conceded at trial that he had never examined the car to determine if the brakes failed or showed other mechanical deficiencies which could have caused a loss of control. Although the officer did not know Sims's BAC when he originally prepared the report, he was adamant that he would still have listed suicide as the cause of death.
The medical examiner also attributed the death to suicide. However, the medical examiner did not perform an autopsy to determine if Sims suffered a stroke or exhibited symptoms of some other ailment that could have caused him to lose consciousness or control of the vehicle. When asked by Broyles why he ruled the death a suicide, the medical examiner replied "that if [Broyles had seen the] missing persons report and the accident report, we would see the reason for his [conclusion]." R. at 1764.
Broyles also obtained a recorded statement from Mrs. Sims, with her counsel present, and a separate statement from counsel as he had known Sims from the country club. Unsurprisingly, both parties insisted that Sims did not commit suicide. While Mrs. Sims did not explicitly recant her sworn police statement until after filing this lawsuit, Broyles never asked why her sworn statement contradicted her statement to him. Nor did Broyles question Mrs. Sims regarding any possible motive Sims had to commit suicide. Broyles's investigation revealed that Sims's medical and pharmaceutical records showed no indication of mental depression.
Finally, Mrs. Sims claims Broyles was aware that another officer involved at the scene believed Sims's crash was accidental. Broyles denies this charge. But in any event, Broyles did not interview this officer or any other officer with the exception of the investigating officer. Broyles never interviewed Sims's daughter, who saw him the night of the incident.
Based on this investigation, Broyles recommended that Great American deny accidental life insurance coverage and pay the claim under the suicide provision. Two agents of Great American reviewed this recommendation and concurred, tendering a return of the policy premiums that had been paid to date—$2,964.67.
Following the denial of the insurance claim, Mrs. Sims filed suit in federal court, alleging both breach of contract and bad faith. The district court denied Great American's summary judgment motion on the bad faith claim and similarly denied Great American's motion for judgment as a matter of law at the close of the trial. The jury awarded Mrs. Sims $300,000 for the breach of contract claim, $600,000 for the bad faith claim, and $500,000 in punitive damages. Following the verdict, Great American renewed its motion for judgment as a matter of law or, in the alternative, a new trial, which the district court rejected. Great American's timely appeal is now before this court.
On appeal, Great American asserts that the district court committed numerous errors, each constituting grounds for reversal:
(1) the court improperly excluded relevant evidence under Oklahoma's seat belt law that would have helped support the defense theory that Sims was suicidal on the night of the crash;
(2) the court should have admitted evidence that the coroner and investigating officer believed Sims's death a suicide;
(3) the court erred in excluding evidence of Sims's father's suicide;
(4) the jury's finding of bad faith and punitive damages was not supported by sufficient evidence at trial; and
(5) the court should have permitted Great American's accident reconstruction expert to testify at trial.1
At the heart of Great American's appeal is its argument that the Federal Rules of Evidence...
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