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United Investors Life Insurance Co. v. Grant

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA


September 25, 2008

UNITED INVESTORS LIFE INSURANCE COMPANY, PLAINTIFF,
v.
DONNA GRANT, INDIVIDUALLY AND AS ADMINISTRATOR OF THE ESTATE OF GEORGE H. GRANT, HELEN FAUERBACH, JIM GRANT, KENNY GRANT, BRANDON GRANT, AND DOES 1 THROUGH 20, INCLUSIVE, DEFENDANTS.
DONNA GRANT, INDIVIDUALLY AND AS ADMINISTRATOR OF THE ESTATE OF GEORGE H. GRANT, CROSS-PLAINTIFF,
v.
UNITED INVESTORS LIFE INSURANCE COMPANY, AND DOES 1 THROUGH 100, INCLUSIVE, CROSS DEFENDANTS.

The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

ORDER DENYING MOTION FOR NEW TRIAL

Cross Defendant United Investors Life Insurance Company ("United Investors") moves for a new trial, pursuant to Federal Rule of Civil Procedure 59(a), following the jury's verdict in favor of Cross Plaintiff Donna Grant ("Ms. Grant") on November 5, 2007, and judgment rendered in accordance with that verdict on November 9, 2007.

United Investors makes several arguments. It first argues that the evidence, both with respect to its investigation of Ms. Grant's claim and any causal link between the purported deficiencies of that investigation and Ms. Grant's alleged damages, did not support the jury's conclusion that United Investors' delay in filing an interpleader action was a substantial factor in causing harm to Ms. Grant. Second, United Investors also argues that Ms. Grant impermissibly changed her theory of recovery from that previously identified during the course of discovery and pre-trial preparation. Third, United Investors claims that the jury instructions as to causation were inadequate. Finally, United Investors urges the court to either strike, or reduce as excessive by way of remittitur, the damages awarded by the jury.

Under Rule 59(a), the Court may grant a new trial if "the verdict is contrary to the clear weight of the evidence, or is based upon evidence which is false, or to prevent, in the sound discretion of the court, a miscarriage of justice." Silver Sage Partners, Ltd. v. City of Desert Hot Springs, 251 F.3d 814, 818-819 (9th Cir. 2001) (citation omitted). This stringent standard can be met only if "it is quite clear that the jury has reached a seriously erroneous result."

Digidyne Corp. v. Data General Corp., 734 F.2d 1336, 1347 (9th Cir. 1984), see also Venegas v. Wagner, 831 F.2d 1514, 1519 (9th Cir. 1987). It would amount to an abuse of discretion on the part of the court to grant a new trial on any lesser showing, and the court should not extend relief simply because it would have arrived at a different verdict. Silver Sage Partners, LTD v. City of Desert Hot Springs, 251 F.3d at 818-19.

The Court cannot grant a new trial given these rigorous requirements. In its view, there was sufficient evidence from which the jury could have reached its decision finding United Investors liable for damages claimed by Ms. Grant. Contrary to United Investors' claim that the verdict was based on little more than argument and unsupported speculation, there was evidence that United Investors delayed in performing the investigation necessary to determine whether the policy proceeds payable as a result of George Grant's death should have been interpled, and that Ms. Grant as the named beneficiary under that policy suffered damages as a result. Denise Oliver, who was in charge of supervising the claim on behalf of United Investors, testified that claims for which interpleader is necessary are ordinarily identified and referred to the company's legal department for filing within 90 days, far less than the 13 months it took here for the interpleader process to be commenced. The jury determined this delay to be unreasonable, and the Court cannot conclude that its decision in that regard was seriously erroneous so as to justify a new trial.

In addition, the jury heard evidence from which it could adduce that United Investors' delay caused Ms. Grant damage.

Ms. Grant testified that she would not have made certain financial decisions had she been informed that the process for adjudicating her entitlement to the insurance proceeds would be so protracted. She opined that she may have sold the family business, Vallejo Glass, had she known sooner about United's intentions with respect to interpleader. She identified substantial business losses and personal loans to keep the business afloat during that period. Ms. Grant's expert witness, Richard Carl, totaled Ms. Grant's business losses at approximately $266,000.00, and Ms. Grant herself testified that she had to make personal advances of some $35,000.00 to keep Vallejo Glass in operation. Ms. Grant further testified that she would not have bought an $850,000.00 house during the months following her husband's death, and incurred some $50,000.00 in connection with the purchase, had she been informed about any delay in payment of the life insurance proceeds through interpleader. The alleged damages from these events alone substantially exceeds the $265,000.00 in economic damages awarded by the jury.

The Court is similarly unpersuaded by United Investors' other arguments in support of its contention that a new trial is warranted. The Court properly instructed the jury that, in order to establish a breach of United Investors' duty of good faith and fair dealing in properly investigating her claim, Ms. Grant had to show not only that United Investors unreasonably failed to investigate and consequently unreasonably delayed the filing of its interpleader action, but also that such unreasonable failure to investigate/delay was a "substantial factor" in causing Ms. Grant's alleged harm. The instruction at issue, Jury Instruction No. 20, is a pattern jury instruction derived from the Judicial Council of California Civil Jury Instruction ("CACI") No. 2332, and correctly instructed the jury as to causation.

Also unavailing is United Investors' argument that Ms. Grant relied on allegations at trial that were not properly disclosed beforehand. Her addendum to the [Proposed] Final Joint Pretrial Conference Statement, filed July 23, 2007, provided the following statement of her testimony, which is consistent to that actually offered in trial:

"Ms. Grant will testify about her husband's death and her efforts to obtain the policy proceeds. She will testify about how the defendant's dilatory claims handling practices and the failure to accurately and reliably inform her about the status of her claim affected her business decisions and decisions to buy and sell property.....

Id. at 3-4.

Finally, the Court rejects the argument that Ms. Grant's damage award was excessive given the evidence adduced at trial.

Based on the foregoing, United Investors' Motion for a New Trial is DENIED.

IT IS SO ORDERED.

20080925

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