Free Motion in Limine - District Court of Arizona - Arizona

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Richard T. Treon (No. 002064) TREON, AGUIRRE & NEWMAN, P.A. 2700 N. Central Avenue, Suite 1400 Phoenix, Arizona 85004-1133 Telephone: (602) 285-4400 Facsimile: (602) 285-4483 Daniel B. Treon (No. 014911) Douglas G. Shook (No. 005950) Stephen E. Silverman (No. 016757) TREON & SHOOK, P.L.L.C. 2700 N. Central Avenue, Suite 1000 Phoenix, Arizona 85004-1133 Telephone: (602) 265-7100 Facsimile: (602) 265-7400 Attorneys for Defendants/Counterclaimants

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA AMERICAN FAMILY INSURANCE COMPANY, Plaintiff/Counterclaim Defendant, v. ROBERT and JOY DUNN, NO. CV2003-1277 PHX SRB

MOTIONS IN LIMINE 1-4

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Defendants/Counterclaimants.

Defendants/Counterclaimaints Robert and Joy Dunn, pursuant to the Court's Order of February 23, 2004, hereby submit their motions in limine. At the present

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time, the Dunns have only been provided a partial list of the exhibits and other evidence that American Family intends to offer at trial. (On the other hand, American Family has notice of the Dunns' case via their summary judgment response.) In the event that American Family supplements its proposed exhibit list with

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additional evidence that the Dunns contend is inadmissible, they may seek leave of the Court to file additional motions in limine. I. Motion in Limine # 1: American Family's insurance law expert, Steven Plitt, should not be permitted to testify at trial because any probative value of his testimony would be outweighed by the danger of confusing the jury and the danger of confusing the issues (Fed.R.Evid. 403), and his testimony would not assist the jury (Fed.R.Evid. 701). American Family retained attorney Steven Plitt, an insurance defense lawyer, to offer opinions that American Family reasonably investigated the Dunns' claim to ascertain whether the damage to their residence was caused by earth movement, and therefore excluded. The problem with Mr. Plitt's testimony is American Family

disavowed the position espoused by Mr. Plitt. Mr. Plitt offered his opinions before the Dunns' obtained deposition testimony from American Family witnesses establishing beyond any doubt that American Family does not interpret its insurance policy as excluding damage caused by earth movement resulting from a covered loss. Once this testimony was discovered (as a result of information American Family supplied Mr. Plitt but not the Dunns), American Family disavowed that it would exclude damage caused by earth movement, so the probative value of his testimony,

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if any, is outweighed by the danger of confusing the jury and confusing the issues. See Fed.R.Evid. 403. Mr. Plitt proposes to testify that: [T]he American Family policy does not provide coverage for any seepage or earth movement related claims for damage...American Family's assertion of those coverage positions throughout the claim handling process was not unreasonable and does not constitute bad faith. In light of these exclusions [including the earth movement exclusion], it was appropriate for American Family to attempt a determination as to what aspect of the loss was caused by land movement versus some other cause which might otherwise be covered under the policy. In this matter, all of the expert opinions agree that to some extent, land movement caused some portion of the damages. It appears that the estimate of loss prepared by American Family is reasonably related to non-land movement caused damage. It appears that seepage or earth movement caused damage would not be covered under the policy, from a legal standpoint. [I]rrespective of the fact that Arizona case law supports a no-coverage position, the coverage position was fairly debatable and was appropriate for American Family's consideration in assessing the scope of potentially covered damage. Earth movement is excluded in all damages it causes under the policy...I do intend to, as part of my opinions, discuss that that calculation of coverage in the mind of the insurance company was reasonable under the state of the law.

[See paragraph 141 to the Dunns' Statement of Facts to their Response to American Family's Motion for Partial Summary Judgment] Although the Dunns previously agreed with the factual predicate of Mr. Plitt's opinions ­ that American Family asserted coverage defenses contrary to its

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interpretation of the insurance policy and its express promises to the Dunns ­ American Family has abandoned this position. At this time, permitting Mr. Plitt to testify will confuse the jury because American Family's position at trial will be that it never took the position that the earth movement exclusion would apply, in the event

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that earth movement was caused by a loss otherwise covered under the insurance policy. Likewise, it will not assist the jury to receive Mr. Plitt's testimony, because it is not applicable to the issues to be decided at trial. As a result, evidence rule 702 also requires that Mr. Plitt not be permitted to testify to the opinions he disclosed in this matter.

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II.

Motion in Limine # 2: American Family never disclosed any evidence to indicate which portion of the appraisal award would be barred by the "Land Stabilization" exclusion in the insurance policy, and should be precluded from introducing evidence that merely speculates on the portion of the "Foundation" portion of the appraisal award that might be attributable to "land stabilization." The Appraisal Award entered in favor of the Dunns established the amount of

loss for Foundation Repairs at $112,633.44. [Exhibit 1] American Family has the burden of establishing that the "Land Stabilization" exclusion bars any portion of the Appraisal Award. Pacific Indem. Co. v. Kohlhase, 9 Ariz.App. 595, 597, 455 P.2d

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277, 279 (1969) ("The insurer ... has the burden of showing that the loss was within a policy exclusion"). American Family has failed to come forward with evidence to separate out the portion of the Appraisal Award it contends is excluded by the "Land Stabilization" exclusion. Although American Family is the plaintiff in this action, it made no expert disclosures as plaintiff, and has come forward with no evidence that would establish which portion of the appraisal award would be barred by the exclusion. Instead, American Family apparently intends to rely upon unsupported speculation. We expect that American Family intends to rely upon the Dunns' appraiser's June 3, 2002 estimate, and testimony from the Dunns' geotechnical engineer, Gary Masterman. Mr. Masterman was deposed on February 2, 2005, well after the August 2004 expert disclosure deadline for American Family. At the deposition, American Family

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asked Mr. Masterman whether "lense grouting" is "a manner of stabilizing the soil."
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He responded: "[i]n a word, yes, because what it does is it reduces the ability for moisture to migrate through the soil." [Exhibit 2, at 114] American Family then pointed to Mr. Hall's estimate, which has a line item for $77,675 for lense grouting. [Exhibit 2, at ex. 5]

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American Family apparently intends to argue that 70% of the Appraisal Award (the amount of Mr. Hall's figures) is for land stabilization, and therefore not covered. This is sheer speculation because Mr. Hall's numbers for foundation repairs do not match the amount ultimately awarded by the appraisal panel. In fact, American Family's position is considerably more tenuous than the Dunns' assertion that American Family's post-appraisal investigation determined that the roof claim was connected to the foundation claim (rejected by the Court), despite a claim file note and Mr. Polson's testimony that American Family had determined that the roof moved because of the foundation. See Order of August 23, 2005, at 16. The Dunns respectfully request that American Family be precluded from using Mr. Masterson's testimony and Mr. Hall's estimate to get around its failure to make any expert disclosure on the subject.

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III.

Motion in Limine # 3: American Family should be precluded from introducing unsubstantiated "other act" evidence regarding the Dunns' public adjuster. In an effort to deflect attention from its unreasonable claims adjusting in this

case, American Family intends to turn the trial into a side-show emanating from its animus to James O'Toole, the public adjuster hired by the Dunns. American Family intends to introduce inadmissible evidence of unsubstantiated "other acts" in violation of evidence rules 401, 403, 404(b), and 609. In particular, American Family intends to introduce Mr. O'Toole's licensing file with the Arizona Department of Insurance (which contains evidence of a 1990 misdemeanor conviction), something plainly prohibited by evidence rule 609. The bulk of the remaining documents are hundreds of pages pertaining to false charges against Mr. O'Toole leveled by a number of insurance companies. These companies (which did not include American Family) acted in concert to manipulate the Arizona Department of Insurance to conduct an investigation into claims arising out of the Rodeo-Chediski fire. A number of insurance companies took the untenable position that there was no smoke damage as a result of the fire, and submitted fraud referrals making this assertion. The Navajo County Attorney squarely rejected the charges, refused prosecution, and rebuffed the insurance companies for making the fraud referrals in the first place: To the extent that this office chooses to prosecute somebody for submitting damage estimates found by a tribunal to be inaccurate, whom do we pursue:
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an insurance company for submitting a low estimate, or O'Toole for submitting a high one? In the absence of falsified evidence or something akin to it which screams "crime!", I don't think we have the basis to pursue either. [Exhibit 3] Further, every insurance company that submitted a "no damages" fraud referral that later agreed to appraisal ended up with the appraisal panel finding smoke damage. These "other acts" are not relevant, are unduly prejudicial, inject cumulative and unnecessary evidence, and simply waste time. Fed.Rs.Evid. 401, 403 and 404(b).

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Further, American Family's intended character assassination is contrary to the evidence in this case. For example, American Family's claims representative who made the decision not to pay a portion of the appraisal award testified that "Mr. O'Toole was a consummate professional and is very knowledgeable on insurance issues." [Exhibit 4]

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IV.

Motion in Limine #4: American Family's refusal to make the original claim file available for inspection warrants prohibiting American Family from introducing what purport to be duplicates of the claim file, per Federal Rule of Evidence 1002. American Family, without explanation, refuses to make the original claim file

available for inspection by the Dunns. As a result, evidence rule 1002 precludes American Family from offering what purport to be duplicates of the claim file. There are a number of problems with the claim file produced by American Family. For one, Mr. Greaves, the front-line adjuster, admitted to keeping a separate

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claim file (against company policy) and testified that he may have even destroyed notes and other documents that should have gone into the claim file. [Compare Exhibit 5 (Mr. Greaves testimony) with Exhibit 6, at 49 (Mr. Semintal's testimony] For another, critical evidence appears to have gone missing. Mr. Greaves was present in the Dunn's residence in 1999, took photographs, and did not document or note any of the substantial damage present in the Dunns' residence in 2000. But American Family apparently lost the color photographs, which may further show that American Family's position that the damage either preexisted or was "ordinary settlement activity" was patently unreasonable. In light of these serious deficiencies, evidence rule 1003 is not applicable and American Family's refusal to produce for inspection the original claim file warrants barring it from introducing its duplicates of the claim file.

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DATED this 12th day of September, 2005. TREON, AGUIRRE & NEWMAN, P.A. By: s/Richard T. Treon Richard T. Treon, Esq. 2700 North Central Avenue, Suite 1400 Phoenix, Arizona 85004 and TREON & SHOOK, P.L.L.C. By: s/Stephen E. Silverman Daniel B. Treon Douglas Shook Stephen E. Silverman 2700 North Central Avenue, Suite 1000 Phoenix, Arizona 85004 Attorneys for Defendants/Counterclaimants ORIGINAL of the foregoing electronically filed this 12th day of September, 2005, with: U.S. District Court Clerk COPY hand delivered this 12th day of September, 2005, to: The Honorable Susan R. Bolton United States District Court By: s/Barbara Bopp

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