E. Valley Disaster Servs., Inc. v. Awsienko
| Decision Date | 23 July 2013 |
| Docket Number | 1 CA-CV 12-0565 |
| Parties | EAST VALLEY DISASTER SERVICES, INC., Plaintiff/Counterdefendant/Appellee, v. OLEG AWSIENKO, Defendant/Counterclaimant/Appellant. |
| Court | Arizona Court of Appeals |
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
(Not for Publication
Rule 111, Rules of the
Arizona Supreme Court)
Appeal from the Superior Court of Maricopa County
The Honorable Karen Potts, Judge
AFFIRMED
Knapp & Roberts, P.C.
By David L. Abney
Attorneys for Defendant/Counterclaimant/Appellant
Scottsdale
Law Offices of Kevin Jensen, PLLC
By Kevin Jensen
Attorneys for Plaintiff/Appellee
Mesa
¶1 Oleg Awsienko (Awsienko) appeals the trial court's judgment after a jury trial in favor of East Valley Disaster Services, Inc. (East Valley). Finding no error, we affirm.
¶2 In September 2009, while Awsienko was travelling in Europe, a toilet leak caused water damage to his Phoenix home. The home sustained considerable damage to the structure and there was damage to his personal property. Awsienko insured his home with State Farm. East Valley was hired by Awsienko to do remediation and repair pursuant to State Farm's Premier Service Program (Program), a voluntary State Farm service which listed participating independent contractors. Under the Program, State Farm typically agreed to pay for repairs to the property damage covered under the insured's home owner's policy.
¶3 Awsienko entered into a "Work Order and Authorization Agreement" with East Valley that included emergency services, structural repairs and home-content processing related to the water damage. The Agreement authorized and directed that State Farm would pay East Valley directly on Awsienko's claim. The Agreement also contained language that payment in full was due "upon work completion and receipt of invoice" with interest to accrue at eighteen percent annually and the cost of collections in the event of non-payment.
¶4 Awsienko dismissed East Valley prior to the completion of the job on or around December 2009. Thereafter, East Valley filed suit claiming breach of contract and unjust enrichment.
Awsienko answered and filed a counterclaim for breach of contract with consequential damages.
¶5 East Valley made an offer of judgment in September 2010 pursuant to Arizona Rule of Civil Procedure 68. The matter went to mandatory arbitration and the arbitrator found for Awsienko in the amount of $22,208.57. East Valley appealed the award to the superior court and the parties began to prepare for trial. In February 2012, East Valley disclosed the revised measure of its damages as $56,900.
¶6 Awsienko filed a motion for sanctions pursuant to Rule 72(e) alleging East Valley should have amended their arbitration certificate to show damages exceeding $50,000 before arbitration, a motion in limine to preclude evidence of insurance, and a motion for summary judgment on the issues of breach and unjust enrichment, claiming East Valley's increased damages were precluded. East Valley answered the motions. After briefing, the trial court granted Awsienko's motion for summary judgment as to East Valley's unjust enrichment claim only. The trial court denied Awsienko's remaining claims under the motion for summary judgment, the motion in limine as to insurance, and declined to award sanctions under Rule 72(e) finding both parties "equally shared" in the prejudice of engaging in arbitration.
¶7 Awsienko filed a motion for reconsideration of the motion in limine as to insurance and the trial court held argument prior to trial. During the hearing on this contract matter, the trial court clarified that although Awsienko kept arguing insurance was irrelevant and prejudicial he, himself, intended to call two State Farm adjusters as fact witnesses as to whether East Valley did the work in a workman-like manner and regarding the payments made to East Valley. On reconsideration, the trial court found some exhibits being offered should be redacted and stated that it was open to hearing further objections as the testimony progressed. The trial court, finally, said:
But I don't think you can eliminate the existence of insurance from this case, because it's in the first work order [and] it is tangled into the issue between the parties as to how payments could be made and how invoices could be received. So I don't think we can take that out, and I don't think the issue of insurance prejudices them as long as we don't tell them what the insurance [as a third party to the contract] thought or didn't think about the claim and as long as we don't tell them what the insurance company paid regarding the claim or didn't pay. And then we can give them the standard instruction on how insurance is not to be considered.
¶8 A four day jury trial was held wherein the jury awarded East Valley $57,500. A judgment was entered that included $41,965 for attorneys' fees under Arizona Revised Statutes (A.R.S.) § 12-341.01 (2012), costs in the amount of$3,565.55, Rule 68 sanctions in the amount of $3,095.55 and jury fees. Awsienko timely appealed.
¶9 Awsienko makes three assertions on appeal:
¶10 Awsienko claims on appeal that the jury trial was tainted by "irrelevant and poisonously prejudicial" evidence of insurance that he tried "valiantly" to keep out. To this end, Awsienko cites Swick v. White, 18 Ariz. App. 519, 520, 504 P.2d 50, 51 (1972) (car pedestrian accident), Cervantes v. Rijlaarsdam, 190 Ariz. 396, 949 P.2d 56 (App. 1997) (two car accident) and Muehlebach v. Mercer Mortuary & Chapel, Inc., 93 Ariz. 60, 378 P.2d 741 (1963) () for the principle that the deliberate introduction of insurance createsprejudice and is reversible error.
¶11 We review the grant or denial of a motion in limine under an abuse of discretion standard. Warner v. Southwest Desert Images, LLC, 218 Ariz. 121, 133, ¶ 33, 180 P.3d 986, 998 (App. 2008). As to evidence admitted at trial, "we will not disturb a trial court's rulings on the admission or exclusion of evidence unless a clear abuse of discretion appears, or the court misapplied the law, and prejudice results." Wendland v. AdobeAir, Inc. , 223 Ariz. 199, 202, ¶ 12, 221 P.3d 390, 393 (App. 2009). Preliminarily we note, because this is a contract matter, we find unpersuasive the tort cases cited by Awsienko for the proposition that the deliberate introduction of insurance into a jury trial causes prejudice and requires reversal. Nor, as pointed out by the trial court, does Arizona Rule of Evidence 411, which prohibits the introduction of insurance, apply. This is a case in which both parties--prior to trial--intended to and later did introduce fact evidence through State Farm and stipulated to the introduction of documents from State Farm.
¶12 The issue of insurance was first raised with the trial court as a motion in limine which was denied pursuant to a Rule 403 analysis. The trial court found that in this contract case, where insurance agents were being listed by Awsienko himself "totestify to the result of their inspections of the damage and work performed" and where legal claims and defenses hinged on the payments made to East Valley by State Farm and on invoices submitted to State Farm which Awsienko claimed not to have received, the probative value of this necessary evidence was not outweighed by the prejudice.
¶13 On reconsideration, the trial court held extensive discussion trying to clarify exactly what concerns Awsienko had as regards to evidence of insurance. The trial court stated that one of the reasons the original motion was denied was because it was vague as to what specific testimony or exhibits he was trying to have excluded as insurance was tangled into both parties' claims. Counsel for Awsienko stated:
the Court's correct, we do have witnesses as far as the insurance adjusters and everything else listed as factual witnesses only. And the reason why they're factual witnesses that we plan on using is because they can talk about the events that took place prior to and at that December 10 meeting, which are in dispute as far as we're concerned.
After the trial court clarified that Awsienko was primarily worried about the jury hearing about checks coming from State Farm, it ordered redacted the amounts of any payments issued by State Farm as probably unduly prejudicial and not relevant to what amount Awsienko actually owed because the construction contract was between the parties. The trial court further foundthe insurance company's opinions as to whether a bill was legitimate or not to be irrelevant. The trial court advised the parties that if during the course of trial it appeared that the fact of insurance may be causing prejudice "Defendant shall so inform the Court" and the court would take further action. No such objection occurred.
¶14 We turn first to the trial court's Rule 403 analysis. In conducting a Rule 403 analysis, the trial court should first "assess the probative value of the evidence on the issue for which it is offered." State v. Gibson, 202 Ariz. 321, 324, ¶ 17, 44 P.3d 1001, 1004 (2002). This assessment is weighed against potential prejudice to the opposing party. Girouard v. Skyline Steel, Inc. , 215 Ariz. 126, 129, ¶ 11, 158 P.3d 255, 258 (App. 2007). "Because this is a weighing of factors that...
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