Free Response to Motion - District Court of Arizona - Arizona

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Lynn M. Allen, State Bar Number 012612 Amy N. Toppel, State Bar Number 022106 ALLEN & LEWIS, PLC 4835 East Cactus Road, Suite 340 Scottsdale, AZ 85254 Telephone: (602) 443-0402 Facsimile: (602) 443-0403 Attorneys for Plaintiff/Counter Defendant

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA American Family Mutual Insurance Company, Plaintiff/Counter Defendant, vs. Robert D. Dunn and Joy Lynn Dunn, Defendants/Counterclaimants. ) ) ) ) ) ) ) ) ) ) ) )

No. CV2003-1277 PHX SRB PLAINTIFF'S RESPONSE TO DEFENDANTS' MOTION IN LIMINE

I.

Motion in Limine #1: Testimony of Steve Plitt. Defendants seek to exclude the testimony of Steven Plitt, American Family's

insurance claims handling expert, on the grounds that his opinions are contrary to American Family's coverage decisions in this case. Defendants are incorrect, and the motion should be denied. Mr. Plitt has issued a 26 page report containing a number of opinions about the way that American Family handled the Dunns' claim (copy attached as Exh. 1). One of his many opinions is that the insurance policy at issue can reasonably be construed to exclude structure damage caused by earth movement or repeated leakage, regardless of its cause.

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In his opinion, American Family could have reasonably denied coverage for the entire claim, yet it voluntarily extended that coverage to the defendants if they could show that the earth movement was the direct result of a covered water leak. Because the defendants claim that American Family acted in bad faith, American Family intends to elicit this testimony to demonstrate that in the course of its investigation and evaluation of the claim, it was not simply looking to deny coverage or benefits to the defendants. Because of the decisions made by American Family's claims adjuster in this case, American Family will not be arguing at trial (and did not argue in the summary judgment motion) that these exclusions operate to exclude coverage for the defendants' claims if defendants are able to prove that the earth movement was the direct result of the covered water leaks. It is not clear from the motion whether defendants seek to exclude Mr. Plitt's

14 15 16 17 18 19 20 21 22 23 24 25 26 Defendants have not provided any reason why these opinions are not admissible. II. Motion in Limine #2: Land Stablization. 2
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unrelated claims handling opinions, and there would be no reason to do so even if the Court precludes his opinions regarding the applicability of the earth movement and repeated seepage exclusions. Mr. Plitt also expresses opinions that American Family complied with acceptable practices and standards in the investigation of the claim, any delays in claims handling resulted from unresolved coverage issues and not poor claim handling, it is not uncommon to have an appraisal award reflect a value different from what the parties believed prior to adjudication, and that the claim was not ripe for appraisal until after the defendants established an actual dispute regarding the cost of repairs.

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This Court has ruled that the insurance policy excludes coverage for the cost of land stabilization. The defendants seeks to prevent American Family from proving at trial the amount awarded by the appraisal panel for land stabilization, based on the flimsy argument that American Family did not disclose any evidence to support a division of the appraisal award. The defendants are incorrect. The appraisal award contains a line item for "foundation repairs" in the amount of $112,633.44 (replacement cost value) and $99,117.43 (actual cash value) (Exh. 1 to defendants' motion). Although the appraisal panel did not indicate which portion of the award was attributable to land stabilization as opposed to repair of slab cracks, there is other evidence in the record from which the jury can make that determination. The defendants' engineer, Gary Masterman, testified that intrusion grouting is a repair method

14 15 16 17 18 19 20 21 22 23 24 25 26 disclosure statement attached as Exh. 2). Furthermore, Mr. Lorenz's report, contained in the American Family claim file provided to defendants, reflects his belief that the umpire 3
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used for soil stabilization (Exh. 2 to defendants' motion). The defendants' appraiser, John Hall, estimated the cost of intrusion grouting (including "mobilization") at $82,175.00 and included it under the "foundation" section of his estimate (Exh. 3 to defendants' motion). American Family's appraiser, Barry Lorenz, is expected to testify that the umpire accepted Mr. Hall's figures for intrusion grouting and included the $82,175.00 in the award under "foundation repairs." Mr. Lorenz was disclosed in American Family's initial disclosure statement as a witness who would testify about the appraisal (copy of relevant pages from initial

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accepted the costs submit by Mr. Hall in arriving at the value of the award (copy of relevant pages of the report attached as Exh. 3). The repair costs were set by the appraisal award. Expert testimony is not required to establish what portion of the award was attributable to land stabilization, particularly in light of Mr. Masterman's testimony that intrusion grouting is a method of soil stabilization that recommended to the defendants. There will be admissible testimony at trial that the amount of Mr. Hall's estimate for intrusion grouting was included in the award for "foundation repairs." American Family's evidence in this regard is not speculative, and there are no grounds for its exclusion. III. Motion in Limine #3: "Other Act" Evidence Relating to James O'Toole. In response to a subpoena duces tecum, the Arizona Department of Insurance produced a large volume of records relating to the licensing of public adjuster James

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O'Toole along with its complaint and fraud referral files. American Family disclosed those records to the defendants as potential trial exhibits. Although those records were included in the first draft of the joint proposed pretrial order, American Family has since removed those exhibits from its list and does not intend to use them as substantive evidence. Although it is possible that some of the documents in that file might be used for impeachment if necessary, objections to specific documents can be addressed when (and

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if) the need arises.1 IV. Motion in Limine #4: The Claim Files. The defendants take the position that the copies of the claim file that American Family produced to defendants more than a year ago are not admissible because American Family will not make the original files available for inspection. The defendants' position is meritless, because they never requested the opportunity to inspect the original files prior to the discovery deadline, and there are no genuine issues regarding the authenticity of the files that preclude this Court from admitting copies of the files. The defendants did not request an inspection of the original claim files until August 31, 2005, long after the discovery deadline, indicating only that counsel "would like to inspect the original claim file, and prepare the exhibits from the original file instead of the

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often re-copied documents" (letter attached as Exh. 4). Counsel did not raise any issue concerning the authenticity of the duplicates in the letter (id.). American Family declined that request because counsel did not see a need to make the original files available for inspection and copying at that time, noting: American Family produced a bates-stamped copy of the claims file that the parties and witnesses have been using throughout discovery in this case. It would be confusing for you to make yet another copy of the claim file, with a new numbering system, for use at trial.

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American Family will not know whether any documents will be used for impeachment until Mr. O'Toole testifies at trial.

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(September 2, 2005 letter, attached as Exh. 5). The defendants then filed a motion in limine to exclude the entire file on the ground of authenticity, an issue that was never raised before. Rule 1003, Fed. R. Evid., provides: A duplicate is admissible to the same extent as an original unless (1) a genuine question is raised as to the authenticity of the original or (2) in the circumstances it would be unfair to admit the duplicate in lieu of the original. The party opposing the admission of the duplicate has the burden of showing that there is a genuine issue as to authenticity of the unintroduced original, or as to the truthworthiness of the duplicate, or as to to the fairness of substituting the duplicate for the original. See U. S. v. Georgalis, 631 F.2d 1199 (5th Cir. 1980). Those issues are not present in this case. By way of background, American Family produced copies of the three claim files at issue in the case on or about April 12, 2004. American Family provided color copies of some of the original photographs from the claim files on December 15, 2004. American Family could not locate the original photographs of five of the black and while copies and

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informed the defendants' attorney of this on November 22, 2004 (copy of letter attached as Exh. 6). There is no evidence that the originals of these photographs were intentionally lost or destroyed. Furthermore, the defendants also took photographs and videotape of the structure, which they have listed as exhibits in the joint proposed pretrial order. The defendants' argument that the company's claims files are inadmissible because the field adjuster, Mr. Greaves, may have maintained what he calls a "field file" misses the point. First, the defendants misrepresent Mr. Greaves' deposition testimony. Mr. Greaves

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was a field property adjuster and worked out of his home office (Exh. 7, p. 220). The original master claim file was kept at the branch office in Scottsdale, Arizona (id.). Mr. Greaves testified that on larger files, he would keep a separate file with "latest information, receipts, bills, estimates, phone notes" (id. at p. 34). The documents he kept in his separate file were duplicates of documents that were maintained in the original master file kept at the branch office (id. at pp. 220-21). At the conclusion of the claim, his practice was to match the documents in his separate file with those in the original claim file and discard any duplicates (id. at pp. 34-35). Importantly, Mr. Greaves testified that he did not know whether he even kept a separate file with respect to the defendants' claim in this case (id. at p. 34). He also refused to speculate that there was any possibility that any documents relating to the defendants' claim could have been in a separate file but not

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in the original claim file (id. at pp. 36-37). Contrary to the defendants' arguments, Mr. Greaves never testified that he discarded any documents relating to their claim (id. at pp. 36-38). There is no reason to believe that there are any documents contained in the original claim files that are not in the copy of the original claim files as produced to defendants in this litigation. The issues raised by defendants have to do with whether the original file contain all documents conceivably generated in connection with the case, which is an entirely different issue having nothing to do with the authenticity of the copies produced to the defendants. Furthermore, there simply is no evidence that any documents exist (except

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for the lost original photographs) that are not contained in the claim files so any argument to the contrary is speculation. Requiring American Family to produce the original files at this late date, after the close of discovery, would be inconvenient and burdensome. American Family continued to add to the file throughout the state and federal litigation, and those documents clearly are protected by the attorney-client privilege and the work product doctrine. Additionally, there were pre-litigation documents withheld or redacted (as noted in the objection log) for the same reasons. In order to make the original available for inspection, counsel will need to go through several expando files of documents to review for privilege for a second time. Without any good reason to believe that the copies are unreliable, there is no need to require American Family to needlessly incur this expense.

14 15 16 17 18 19 20 21 22 23 24 25 26 ORIGINAL electronically filed this 21st day of September, 2005, with: The Clerk of the Court United States District Court 8
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Defendants cannot show a genuine issue as to authenticity of the original files or the truthworthiness of the duplicates. Therefore, the copies of the files are admissible under Rule 1003, Fed. R. Evid. DATED this 21st day of September, 2005. ALLEN & LEWIS, PLC By s/ Lynn M. Allen Lynn M. Allen Amy N. Toppel Attorneys for Plaintiff/Counter Defendant

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COPY hand-delivered this 21st day of September, 2004, to: Honorable Judge Susan R. Bolton United States District Court By: Laura Sakakibara

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