Allstate Insurance Company v. Ralph Breeden , 410 F. App'x 6 ( 2010 )


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  •                                                                               FILED
    NOT FOR PUBLICATION                                NOV 17 2010
    MOLLY C. DWYER, CLERK
    UNITED STATES COURT OF APPEALS                         U .S. C O U R T OF APPE ALS
    FOR THE NINTH CIRCUIT
    ALLSTATE INSURANCE COMPANY,                        No. 09-35626
    an Illinois corporation,
    D.C. No. 3:01-cv-01686-KI
    Plaintiff - Appellee,
    v.                                               MEMORANDUM *
    RALPH B. BREEDEN,
    Defendant - Appellant.
    Appeal from the United States District Court
    for the District of Oregon
    Garr M. King, Senior District Judge, Presiding
    Argued and Submitted October 5, 2010
    Portland, Oregon
    Before: TASHIMA, PAEZ and CLIFTON, Circuit Judges.
    Ralph Breeden (“Breeden”) appeals the district court’s judgment in favor of
    Allstate Insurance (“Allstate”) following a jury’s verdict in favor of Allstate. He
    challenges several of the district court’s rulings relating to the trial. Breeden also
    argues that the court erred in granting summary judgment in favor of Allstate on
    *
    This disposition is not appropriate for publication and is not precedent
    except as provided by 9th Cir. R. 36-3.
    his counterclaim, and appeals the district court’s denial of his post-verdict motion
    for judgment as a matter of law and a new trial. We have jurisdiction pursuant to
    
    28 U.S.C. § 1291
    . Finding no error in any of the district court’s rulings, we affirm.
    We address each of Breeden’s contentions below.
    1.    First, Breeden contends that the district court’s jury instructions on the issue
    of reliance were erroneous, and that the court erred in rejecting his proposed
    instructions. We reject these arguments.
    Breeden’s fire insurance policy with Allstate is governed by its terms and
    Oregon’s Fire Insurance Code, 
    Or. Rev. Stat. § 742.200
     et seq. (“Code”). To the
    extent that the policy—as drafted by Allstate—does not include provisions
    required under Oregon law, it must be construed and applied as if it were in full
    compliance with the Code. 
    Or. Rev. Stat. § 742.038
    . To avoid payment of a claim
    on a policy because of the insured’s misrepresentations, “the insurer must show
    that the representations are material and that the insurer relied on them.” 
    Or. Rev. Stat. § 742.208
    (3). In such circumstances, the “entire policy shall be void.” 
    Or. Rev. Stat. § 742.208
    (1).
    The phrase “relied on” means “what it ordinarily means in the common law
    fraud context.” Eslamizar v. Am. States Ins. Co., 
    894 P.2d 1195
    , 1198-1200 (Or.
    Ct. App. 1995). Thus, to prevail on its claim of misrepresentation under §
    2
    742.208(3), Allstate was required to present “some evidence of a detrimental
    action or change in position.” Id. at 1199.
    At trial, the court rejected Breeden’s jury instructions regarding the element
    of reliance on Allstate’s misrepresentation claim. We review a district court's
    formulation of jury instructions for an abuse of discretion, and we review de novo
    whether a jury instruction misstates the law. Wall Data Inc. v. L.A. County
    Sheriff's Dep't, 
    447 F.3d 769
    , 784 (9th Cir. 2006).
    The district court’s Jury Instruction No. 12 recited 
    Or. Rev. Stat. § 742.208
    (1) nearly verbatim. Similarly, Jury Instruction No. 15 was closely
    patterned on language from Eslamizar. Contrary to Breeden’s argument,
    Eslamizar does not require Allstate to show it believed Breeden’s
    misrepresentations in order to establish that it relied on those misrepresentations.
    Nothing in the court’s other jury instructions misstated the law with respect to the
    question of reliance. Therefore, we conclude that the district court’s instructions
    were proper and that the court did not err in rejecting Breeden’s proposed jury
    instructions.
    2.    Next, Breeden challenges the district court’s denial of his motion for
    judgment as a matter of law under Federal Rule of Civil Procedure 50(b), and
    alternative motion for a new trial under Federal Rule of Civil Procedure 59. When
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    the evidence—viewed in the light most favorable to the non-moving party—allows
    only one reasonable conclusion as to the verdict, a judgment as a matter of law is
    proper. Rudiger Charolais Ranches v. Van De Graaf Ranches, 
    994 F.2d 670
    , 672
    (9th Cir. 1993). We review de novo a denial of a motion for judgment as a matter
    of law. Harper v. City of L.A., 
    533 F.3d 1010
    , 1021 (9th Cir. 2008).
    We review the denial of a motion for a new trial for an abuse of discretion.
    Merrick v. Paul Revere Life Ins. Co., 
    500 F.3d 1007
    , 1013 (9th Cir. 2007).
    We look to Eslamizar for guidance on what evidence satisfies the reliance
    requirement in 
    Or. Rev. Stat. § 742.208
    . Viewing the evidence presented at trial in
    the light most favorable to Allstate, the evidence established that Allstate relied on
    Breeden’s misrepresentations for some period of time. Allstate continued to give
    him the benefit of the doubt after suspicions arose when it advanced him money
    that it would not otherwise have given him. Allstate also lost the opportunity to
    investigate adequately the cause of the fire and ultimately incurred extra
    investigative expenses as a result of Breeden’s misrepresentations. Therefore, the
    district court properly denied Breeden’s Rule 50(b) and Rule 59 motions as to the
    issue of Allstate’s reliance.
    3.    Breeden also argues that the district court should have granted his Rule
    50(b) and 59 motions because, under Oregon law, his insurance policy should be
    4
    treated as divisible and therefore any misrepresentations on his part should have
    voided only the personal property coverage and not the coverage for his real
    property. The policy’s language—which is required by 
    Or. Rev. Stat. § 742.208
    (1)—is plain with respect to Allstate’s ability to avoid payment due to
    misrepresentation: “[T]his entire policy shall be void.” It is a bedrock principle of
    statutory interpretation that courts “best effectuate the legislative intention by
    giving effect to the plain, natural, and ordinary meaning of” words. State v. Clum,
    
    171 P.3d 980
    , 986 (Or. Ct. App. 2007) (internal quotations omitted). Thus, there is
    little room for disagreement about the phrase at issue. The “entire policy shall be
    void” has a clear and natural meaning. Breeden’s policy was not divisible between
    real and personal property; the governing statute required that the
    misrepresentations about his personal property also void his real property
    coverage. Therefore, we find no error with the district court’s denial of his
    motions on this issue.1
    4.    Breeden next argues that the district court should have granted his Rule
    50(b) and 59 motions because it abused its discretion when it granted Allstate’s
    motion to amend its complaint. Breeden only raised this issue in a heading in his
    1
    Because Breeden’s policy was void and not divisible, we need not address
    (1) whether Allstate must pay the policy limits without proof of loss and (2)
    whether the policy covered Ms. VanAntwerp’s personal property.
    5
    opening brief before this court; he made no additional argument and cited no
    authority for his position. Because Breeden did not argue his “contentions and the
    reasons for them, with citations to the authorities and parts of record on which [he]
    relie[d],” we have no basis for concluding that the district court erred. Federal
    Rules of Appellate Procedure, 28(a)(9)(A). Even overlooking this deficiency in
    Breeden’s brief, we conclude that the district court did not abuse its discretion
    when it denied Breeden’s motion to strike Allstate’s third amended complaint, but
    allowed Breeden to file a motion in limine and only admitted the evidence Breeden
    objected to for the purpose of showing misrepresentation. Therefore, we find no
    error with the district court’s denial of his motions on this issue.
    5.    Breeden also challenges the district court’s ruling on his Rule 50(b) and 59
    motions with respect to its decision to bifurcate the trial. The court, on its own
    motion, bifurcated the trial between liability and damages phases. We review the
    district court’s decision to bifurcate a trial for abuse of discretion. Counts v.
    Burlington N. R. Co., 
    952 F.2d 1136
    , 1139 (9th Cir. 1991). Federal Rule of Civil
    Procedure 42(b) provides that, “[f]or convenience, to avoid prejudice, or to
    expedite and economize, the court may order a separate trial of one or more
    separate issues.” See generally, M2 Software, Inc. v. Madacy Entm’t, 
    421 F.3d 1073
    , 1088 (9th Cir. 2005); Exxon Co. v. Sofec, Inc., 
    54 F.3d 570
    , 575 (9th Cir.
    6
    1995), aff’d, 
    517 U.S. 830
     (1996).
    Allstate’s liability under the disputed insurance policy was a dispositive
    issue; the jury’s verdict on Allstate’s misrepresentation claim obviated the need for
    a jury trial on Breeden’s claims for damages, which properly served the goals of
    Rule 42(b). We therefore conclude that the district court did not abuse its
    discretion in bifurcating the trial and did not err in denying Breeden’s Rule 50(b)
    and Rule 59 motions on this issue.
    6.     Breeden also challenges an evidentiary ruling by the district court. The
    court ruled that the evidence relating to Breeden’s foreclosure and mortgagee was
    not relevant to any issue remaining in the case at the time of the trial, and excluded
    it. We review a district court's decisions to admit or exclude evidence for abuse of
    discretion, Sprint/United Mgmt. Co. v. Mendelsohn, 
    552 U.S. 379
    , 384 (2008).
    Having carefully reviewed the record, we find no abuse of discretion here because
    the evidence excluded bore no relationship to whether Breeden made material
    misrepresentations regarding his personal property losses.
    7.    Finally, Breeden argues that the district court erred in granting summary
    judgment on his counterclaim for intentional infliction of emotional distress
    (“IIED”). We review de novo a district court's grant of summary judgment,
    viewing the evidence in the light most favorable to the nonmoving party. Long
    7
    Beach Area Chamber of Commerce v. City of Long Beach, 
    603 F.3d 684
    , 689 (9th
    Cir. 2010). Oregon courts have previously rejected IIED claims where the conduct
    at issue was an insurance company denying benefits to an individual. State Farm
    Mut. v. Berg, 
    689 P.2d 959
     (Or. Ct. App. 1984); Rossi v. State Farm Mut., 
    752 P.2d 1298
     (Or. Ct. App. 1988). Breeden’s IIED claim against Allstate cannot be
    meaningfully distinguished from the claims the Oregon Court of Appeals rejected
    in Berg and Rossi. The material undisputed facts alleged in Breeden’s IIED claim
    are equivalent: an insurance company disputing the amount of coverage it owes to
    a beneficiary, and that dispute resulting in significant financial and emotional
    hardship for the beneficiary. Thus, in light of Berg and Rossi, the district court did
    not err in granting summary judgment to Allstate on Breeden’s IIED claim.
    AFFIRMED.
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