Free Proposed Jury Instructions - District Court of Arizona - Arizona

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Richard T. Treon. # 002064 TREON, AGUIRRE & NEWMAN, P.A. 2700 North Central Avenue, Suite 1400 Phoenix, Arizona 85004 Tel: 602) 285-4400 Fax: 602) 285-4483 Daniel B. Treon, # 014911 Douglas G. Shook, # 005950 Stephen E. Silverman, # 016757 TREON & SHOOK, P.L.L.C. 2700 North Central Avenue, Suite 1000 Phoenix, Arizona 85004 Tel: (602) 265-7100 Fax: (602) 265-7400 Attorneys for Robert and Joy Dunn

IN THE UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA ) ) ) ) ) ) Plaintiff/Counterclaim ) Defendant ) ) ) vs. ) ) ) ROBERT and JOY DUNN, ) ) Defendants/Counterclaimants ) AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Case No. CV2003-1277 PHX SRB

DEFENDANT DUNNS' REQUESTED JURY INSTRUCTIONS

Defendant Dunns request the attached jury instructions in addition to the parties' stipulated jury instructions. RESPECTFULLY SUBMITTED this 21st day of September, 2005.

TREON, AGUIRRE & NEWMAN 1
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By: s/ Richard T. Treon Richard T. Treon 2700 N. Central Avenue, Suite 1400 Phoenix, Arizona 85004 and

TREON & SHOOK, P.L.L.C. By: s/Stephen E. Silverman Daniel B. Treon Stephen E. Silverman 2700 N. Central Avenue, Suite 1000 Phoenix, Arizona 85004 Attorneys for Robert and Joy Dunn

ORIGINAL electronically filed this 21st of September, 2005, with the Clerk of the United States District Court COPY of the foregoing hand-delivered this 21st day of September, 2005, to: The Honorable Susan R. Bolton Judge of the United States District Court

s/ Aly Shomar-Esparza

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Defendant Dunns' Requested Jury Instruction No. 1 CLAIMS AND DEFENSES

To help you follow the evidence, I will give you a brief summary of the positions of the parties: American Family claims that the homeowners insurance policy issued to the Dunns does not cover the alleged damage to the residence, because it was not caused by a covered water leak. The Dunns deny American Family's claim. The Dunns claim that the damage to their house was caused by a covered water leak and that American Family breached the contract of insurance by failing to adequately investigate the cause of the leak and the extent of the resultant damages to their house, The Dunns allege that American Family breached the contract of insurance in the following specific ways: i. That American Family conducted an unreasonable investigation of their water leak and the damage it caused; ii. That American Family failed to investigate their house for mold contamination following the water leak and then failing to timely pay for the repair and remediation of their house and personal property damaged by the mold; iii. That American Family refused to pay them money due under the contract of insurance for the repair of their concrete house slab/foundation, when damage to the house slab/foundation was caused by a covered leak; iv. That American Family wrongfully refused to pay and/or

unreasonably delayed payment to them for damages caused by covered leak as determined in an appraisal award obtained v. That American Family conduct forced them to hire a licensed

insurance adjuster to prosecute their claim with American Family

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In a contract of insurance, there is an implied covenant of good faith and fair dealing. The Dunns also contend that American Family breached the

covenant of good faith and fair dealing in its investigation, evaluation and valuation of their claim. Specifically, the Dunns claim: i. ii. That American Family unreasonably conducted an insufficient investigation of their water leaks and prejudged their claim; That American Family promised the Dunns it would find the cause of the damage, and then broke that promise when it realized its investigation would require it to admit coverage and pay more than it wanted to; That American Family intentionally and/or unreasonably undervalued (low-balled) what it would cost to fix the damages caused by the water leaks; That American Family concealed from the Dunns parts of its investigation which were adverse to American Family's position that the damage to the Dunns' house was caused by something other than a covered water leak; That American Family unreasonably abdicated responsibility for evaluating the claim to biased engineering firms who do significant business with insurance companies; That American Family unreasonably delayed resolution of the Dunns' claim; That American Family jeopardized the Dunns' house; That American Family's conduct caused their house to suffer further damage; That American Family's conduct was a material breach of the insurance contract, which relieved them of duties they had under the contract; That American Family has failed to pay the Dunns the amounts owed under the contract; That American Family's conduct caused the Dunns to endure intolerable living conditions.

iii.

iv.

v.

vi. vii. viii. ix.

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x.
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xi.

American Family denies that it breached the covenant of good faith and fair dealing. American Family also contends that the Dunns' conduct

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contributed to any delay in the claim investigation and that the Dunns failed to mitigate their damages. SOURCE: Ninth Circuit Model Civil Jury Instructions No. 1.2 (Claims and Defenses)

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Defendant Dunns' Requested Jury Instruction No. 2 CLAIMS AND DEFENSES COURT RULINGS

Defendants Dunn request the same instruction as Plaintiff American Family on the subject of the Court's rulings with respect to the Appraisal award, except that the Dunns also request that the following instruction be added: I have not ruled on whether any of American Family's acts or omissions related to its investigation and not paying the Dunns' claim for mold damage constituted breach of the insurance contract. Although you are not to consider whether American Family's acts or omissions related to its investigations and not paying the Dunns' claim for mold damage in determining whether American Family breached the covenant of good faith and fair dealing and/or damages, you may consider American Family's acts or omissions related to its investigations and not paying the Dunns' claim for mold damage in determining whether American Family breached the contract of insurance and/or damages which any breach of the contract may have caused. I also have not ruled on whether any of American Family's acts or omissions related to its investigation of and denial of coverage for the damage to the Dunns' concrete slab constituted breach of the insurance contract. Although you are not to consider whether American Family's acts or omissions related to its investigations and denial of coverage for the damage to the Dunns' concrete slab in determining whether American Family breached the covenant of good faith and fair dealing and/or damages, you may consider American Family's acts or omissions related to its investigations and denial of coverage of the damage to the Dunns' concrete slab in determining whether American Family breached the contract of insurance and/or damages which any breach of the contract may have caused.

Source: Same as stated by Defendants.

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Defendant Dunns' Requested Jury Instruction No. 3 BAD FAITH 1

An insurance contract is not an ordinary commercial contract. Implicit in such a contract and the relationship between an insurance company and its insureds is the insurance company's obligation to play fairly with the insured. The insurance company has special duties that it owes to its insureds as party of the covenant of good faith and fair dealing which is part of the insurance contract. This includes the obligation to give equal consideration to the

insured's rights and interest, act honestly, and provide fair treatment.

Zilisch v. State Farm, 196 Ariz. 234, 237-38, 995 P.2d 276, 279-80 (2000).

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Defendant Dunns' Requested Jury Instruction No. 4 BAD FAITH 2

There is an implied duty of good faith and fair dealing in every insurance policy. The Dunns claim that American Family breached this duty. To prove that American Family breached the duty of good faith and fair dealing, the Dunns must prove: 1. American Family intentionally failed to promptly and adequately investigate the claim; delayed the claim; underpaid the claim or otherwise treated the Dunns unfairly in the processing of their insurance claim without a reasonable basis for such action; and American Family knew that it acted without a reasonable basis, or American Family failed to perform an investigation or evaluation adequate to determine whether its action was supported by a reasonable basis.

2.
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RAJI (Civil) Bad Faith 1 (4th ed) (as modified)
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Defendant Dunns' Requested Jury Instruction No. 5 BAD FAITH 3

In all aspects of investigating or evaluating the Dunns' respective insurance claims, American Family was required to give as much consideration to the Dunns' interests as it did to its own interests. In performing its

investigation and preparing its estimates of the amount of the Dunns' losses American Family was required to make reasonable efforts to obtain all of the relevant facts, including those which might support the Dunns' positions and to give as much consideration to the Dunns' interests as American Family gave to its own interests. RAJI (Civil) Bad Faith 2 (4th ed) (as modified) Rawlings v. Apodaca, 151 Ariz. 149, 157, 726 P.2d 565, 573 (1986) Egan v. Mutual of Omaha Ins. Co. 24 Ca.3d 809, 157 Cal.Rptr 482 (1970)

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Defendant Dunns' Requested Jury Instruction No. 6 BAD FAITH 4

American Family's conduct should be measured against what a reasonable insurer would be expected to do under the same circumstances. If you find that American Family knew that its conduct was unreasonable or failed to determine whether its positions were supportable, then American Family did not have a reasonable basis for such action.

Rawlings v. Apodaca, 151 Ariz. 149, 157, 726 P.2d 565, 573 (1986) Noble v National Am. Life Ins. Co., 128 Ariz. 188, 624 P.2d 866 (1981); and Anderson v. Cont'l Ins. Co., 271 N.W. 2d (Wisc. 1978).

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Defendant Dunns' Requested Jury Instruction No. 7 BAD FAITH 5

An insurer's duty of good faith and fair dealing is a continuing duty that does not stop after all or part of an underlying claim is paid or after a lawsuit has been filed.

Rawlings v. Apodaca, 151 Ariz. 149, 157, 726 P.2d 565, 573 (1986) Franks v. United States Fidelity & Guaranty Co., 149 Ariz. 291, 718 P.2d 193 (Ariz. App. 1985) Maxwell v. Aetna Life Ins. Co., 143 Ariz. 205, 693 P.2d 348 (App. 1984).

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Defendant Dunns' Requested Jury Instruction No. 8 BAD FAITH 6

Where American Family owes a legal duty, like the duty of good faith and fair dealing in the handling of insurance claims, American Family cannot escape liability for failure to perform that duty by delegating its responsibilities to somebody else. While an insurance company may request that others perform necessary investigations, prepare estimates or other functions, the insurance company remains ultimately responsible if the claim is handled in a manner that breaches the duty of good faith and fair dealing owed to its insureds.

Walter v. Simmons, 169 ARiz. 299, 18 P.2d 214 (App. 1991); Cotton States Mut. Ins. Co. v. Trevethan, 390 So.2d 724 (Fla. 1980); Timmons v. Royal Globe Ins. Co., 653 P.2d 907 (Okla. 1982).

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Defendant Dunns' Requested Jury Instruction No. 9 BAD FAITH 7

An insurance company's duty of good faith and fair dealing includes an obligation to immediately conduct an adequate investigation, act reasonably in evaluating the claim, and act promptly in paying a legitimate claim. An

insurance company should do nothing that jeopardizes the insured's security under the policy. It should not force an insured to go through needless

adversarial hoops to achieve its rights under the policy. An insurer should not lowball claims or delay claims hoping that the insured will settle for less."

Zilisch v State Farm, 196 Ariz 234, 237-38, 995 P.2d 276, 279-80 (2000).

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Defendant Dunns' Requested Jury Instruction No. 10 BAD FAITH 8

If you find that Plaintiff is liable to Defendants for insurance bad faith, you must then decide the full amount of money that will reasonably and fairly compensate each of the individual Defendants for each of the following elements of damages proven by the evidence to have resulted from American Family's breach of duty of good faith and fair dealing: (1) The unpaid benefits under the policy; (2) Monetary loss, damage to property, loss of use of property or damage to credit reputation experienced and reasonably probable to be experienced in the future; and (3) Emotional distress, humiliation, inconvenience, and anxiety experienced, and reasonably probable to be experienced in the future. RAJI Bad Faith 7 (4th ed) (as modified).

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Defendant Dunns' Requested Jury Instruction No. 11 Liability for Employees or Agents

As a corporation, American Family can act only through its agents and employees. Any act or omission of any agent or employee done within the scope of his or her authority is, in the law, the same as an act or omission by the principal corporation. The corporation is also bound by its employees or agents' knowledge gathered within the scope of their employment or agency relationship. Knowledge on the part of an employee or agent under such

circumstances is therefore attributable to the employer or principal and must be considered to be the knowledge of the employer or principal."

Southern Pacific v. Barnes 3 Ariz. App. 483, 491, 415 P.2d 59, 587 (1966).

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Defendant Dunns' Requested Jury Instruction No. 12 Non-Economic Damages

No definite standard or method of calculation is prescribed by law to determine reasonable compensation for emotional distress, humiliation, inconvenience and anxiety, nor is the opinion of any witness required as to the amount of such compensation.

Farr v. Transamerica Oxidental Life Ins. Co. 145 Ariz. 1, 699 P.2d 376 (1984).

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Defendant Dunns' Requested Jury Instruction No. 13 Contract Claims and Elements

The Dunns claim that American Family breached the insurance policy that they had with American Family, by failing to timely pay all of the benefits in the manner that each were entitled to receive under the policy of insurance. On this claim, the Dunns must prove there was a contract with American Family (the policy) and that Defendant breached the contract. RAJI (Civil) Contract 2 (4th ed.) (as modified)

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Defendant Dunns' Requested Jury Instruction No. 14 Contract Failure of Consideration ­ Material Breach

Defendants contend in their breach of contract claims against Plaintiff that there has been a material breach of their insurance policy with Plaintiff, namely, the failure to provide insurance benefits in the manner as prescribed by the insurance policy. A material breach occurs when a party fails to do

something required by the contract which is so important to the contract that the breach defeats the very purpose of the contract. Defendants have the burden of proving the material breach. A material breach by one party excuses performance by the other party to the contract. RAJI (Civil) Contract 2 (4th ed.) (as modified)

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Defendant Dunns' Requested Jury Instruction No. 15 Measure of Direct Damages ­ Contract

If you find that American Family is liable to the Dunns for breach of contract, you must then decide the full amount of money that will reasonably and fairly compensate Dunns for the damages proved by the evidence to have resulted naturally and directly from the breach of contract. The damages you award for breach of contract must be the amount of money that will place the Dunns in the position they would have been in if the contract had been performed. To determine those damages, you should consider the following: 1. The full cost to repair or replace the damage in the home in accordance with the policy terms for all damages caused by covered perils and consistent with the manner of repair contemplated by the appraisal award.. 2. The full cost to repair or replace damaged personal property in accordance with the policy terms, including the cost to pack out, clean, store and pack back the Dunns' personal property during the structure repairs, including the remediation of the mold and repair to any damages in the house caused by the mold, repair to the concrete slab/foundation. 3. The amount of any additional living expenses incurred that were not paid in accordance with the policy terms. 4. The reasonable increase in the cost of these repairs and contents handling that has occurred since the date of the appraisal award given any increase in construction and labor costs since the date of the appraisal award issued.

RAJI (Civil) Contract 17 (4th ed.) (as modified)

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Defendant Dunns' Requested Jury Instruction No. 15 Consequential Damages ­ Contract

The Dunns also seek to recover damages for the loss of the use of their home, the loss of use of their personal property and for additional damage to their home and their personal property that occurred as a result of American Family's breach of contract. To recover for these alleged damages, the Dunns must prove: (1) It was foreseeable to the parties when they entered into the contract that these damages would probably result if the contract was breached; (2) These damages were in fact caused by American Family's breach of contract; and (3) The amount of these damages. RAJI (Civil) Contract 2 (4th ed ) (as modified)

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Defendant Dunns' Requested Jury Instruction No. 16 Burden of Proof (more probably true)

Burden of proof means burden of persuasion. On any claim, the party who has the burden of proof must persuade you, by the evidence, that the claim is more probably true than not true. This means that the evidence that favors that party outweighs the opposing evidence. In determining whether a party has met this burden, consider all the evidence that bears on that claim, regardless of which party produced it. RAJI I (Civil) Standard 9 (3rd ed).

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Defendant Dunns' Requested Jury Instruction No. 17 Insurer's Non ­ Delegable Duty

An insurance company has a non-delegable duty of good faith and fair dealing to its insureds in all aspects of its adjustment of the insureds' loss and may not avoid this duty by hiring or referring work to sub-contractors, regardless of whether those sub-contractors are not the insurance company's agents.

Source: Walter v. Simmons, 169 Ariz. 229, 238, 818 P.2d 214, 223 (1991)

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