Free Objection - District Court of Arizona - Arizona

DAWSON & ROSENTHAL, P.C. _____________________
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Steven C. Dawson, State Bar No. 006674 Anita Rosenthal, State Bar No. 006199 6586 Highway 179, Suite B-2 Sedona, AZ 86351 (602) 494-3800) Gregg H. Temple, State Bar No. 009866 GREGG H. TEMPLE, P.C. 4835 E. Cactus Road, Suite 225 Scottsdale, AZ 85254-4196 (602) 808-0508 Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA (1) Brett D. Leavey, Plaintiff, vs. (2) UNUM/Provident Corporation, a foreign corporation, and(3) Provident Life and Accident Insurance Company, a foreign corporation, Defendants. PLAINTIFF'S OBJECTIONS TO DEFENDANTS' PROPOSED JURY INSTRUCTIONS Case No. CIV-02-2281 PHX SMM

Pursuant to the Court's August 11, 2005 Order, Leavey provides his objections to four punitive damages jury instructions proposed by defendants: Defendants' Proposed Instruction No. 1 Punitive Damages: Leavey proposes that the Court give the entire RAJI (Civil) 4th instruction on punitive damages. See Plaintiff's Proposed Jury Instruction No. 12. The RAJI instruction requires that plaintiff prove that defendants acted with an "evil mind," which is defined as "intent to cause injury," "wrongful conduct motivated by spite or ill will," or that "defendants acted to serve their own interests, having reason to know and consciously disregarding a substantial risk that
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DAWSON & ROSENTHAL, P.C. _____________________
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their conduct might significantly injure the rights of others." Defendants' proposed instruction number 1 deletes the first two definitions of "evil mind." Defendants' support for the proposed modification of the RAJI instruction is the statement in the March 31, 2005 Order that "The evidence reviewed by the Court for purposes of the pending Motion for Partial Summary Judgment does not demonstrate either an intent to cause injury or engagement in wrongful conduct motivated by spite or ill will." Defendants' proposed modification of the RAJI standard instruction is improper for two fundamental reasons: First, "evil mind" is a legal term that has been defined by the Arizona Supreme Court to include three different mental states. If the entire instruction is not given, the jury will not fully comprehend the legal meaning of "evil mind" and will therefore not be properly instructed on the law that they are ordered to apply. If "evil mind" is not fully defined in the instruction, the legal term should not be used at all and the jury should be instructed: "To recover such damages, the plaintiff has the burden of proving by clear and convincing evidence, either direct or circumstantial, that the defendants acted to serve their own interests, having reason to know and consciously disregarding a substantial risk that their conduct might significantly injure the rights of others." Second, the March Order acknowledges that the Court's analysis was based on the evidence presented in the summary judgment proceedings. Plaintiff did not present his entire case in response to defendants' motion for partial summary judgment, nor can the Court assess the demeanor and credibility of witnesses through deposition transcripts. Additional evidence of defendants' corporate scheme to deny valid claims and the live and videotaped testimony of witnesses may show that defendants had an intent to cause harm or that they committed wrongful acts motivated by spite or ill will. Defendants' Proposed Instruction No. 2 Punitive Damages ­ Not Required: Defendants propose that the jury be instructed that it is "not required to award punitive

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damages." The only source for the proposed instruction is the first paragraph of the RAJI
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DAWSON & ROSENTHAL, P.C. _____________________
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(Civil) 4th punitive damage instruction, which provides that the jury "may" award punitive damages. As discussed above, the parties agree that the first paragraph of the RAJI instruction should be given as written. Defendants' proposed instruction is redundant because the jury will be instructed that it "may" award punitive damages, and it is incomplete because it does not provide the other information included in the RAJI instruction. If the jury is separately instructed that it is not required to award punitive damages, it should also be separately instructed that it has the right to punish defendants for their misconduct and the right to deter the defendants and other insurance companies from similar misconduct in the future by awarding punitive damages. Defendants' Proposed Instruction No. 3 Punitive Damages ­ Proper Considerations: Leavey's proposed instruction 13 and defendants proposed instruction 3 are identical except that Leavey's instruction advises the jury that, in assessing the amount of punitive damages, it may consider the relationship of punitive damages to any actual or potential harm to the plaintiff. The potential harm to the plaintiff is relevant to the constitutional analysis of punitive damages: Thus, both State Supreme Courts and this Court have eschewed an approach that concentrates entirely on the relationship between actual and punitive damages. It is appropriate to consider the magnitude of the potential harm that the defendant's conduct would have caused to its intended victim if the wrongful plan had succeeded.... TXO Production Corp. v. Alliance Resources, Corp., 509 U.S. 443, 460 (1993)(plurality opinion)(emphasis in original). In BMW of North America, Inc. v. Gore, 517 U.S. 559, 582 (1996), the Court considered whether the plaintiff or any other BMW purchasers were "threatened with any additional potential harm" by BMW's wrongful acts. Finally, the Supreme Court described the relevant constitutional inquiry in State Farm v. Campbell as

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"the ratio between harm, or potential harm, to the plaintiff and the punitive damages
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DAWSON & ROSENTHAL, P.C. _____________________
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award." State Farm Mut. Auto. In. Co. v. Campbell, 538 U.S. 408, 424 (2003). The jury must therefore consider the potential losses to plaintiff if defendants' "wrongful plan had succeeded." Plaintiff will argue, and the jury could agree, that defendants' intent in sending the December 4, 2001 letter was to convince Leavey that he was required to undergo cognitive behavioral therapy, that he would receive no further benefits, and that he would have to resume paying premiums. If defendants' wrongful plan had succeeded, plaintiff would have been deprived of ongoing benefits, he would have paid premiums, and he would have suffered additional emotional distress and anxiety. As to the cognitive behavioral therapy, defendants' consulting psychiatrist, Dr. Stonnington, informed defendants that if the treatment "experiment" failed, it would "lead to more depression and anxiety and inability to function generally." Defendants were also aware that Leavey was vulnerable and that he had talked of suicide. All of these potential damages, which were avoided by the filing of this lawsuit, are relevant to the constitutional inquiry on punitive damages. If the jury is instructed that it may consider the relationship of punitive damages to actual damages, it must also be instructed that it may consider the relationship of punitive damages to potential damages. Defendant's Proposed Instruction No. 4 Punitive Damages ­ Proportionate Relationship to General Damages: Defendants propose to instruct the jury that the punitive damages award "must be proportionate to the amount of damages, if any, that you award the plaintiff on his bad faith claim." As discussed above, the parties agree that the jury should be instructed that it may consider the relationship of any award of punitive damages to any actual (and potential) compensatory damages. Defendants' proposed instruction number 4 therefore conflicts with language that both parties agree should be given. Defendants' only source for this proposed instruction is State Farm v. Campbell. Campbell provides that lower courts are to conduct de novo reviews of the

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constitutionality of punitive damages awards. Since the jury does not determine
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DAWSON & ROSENTHAL, P.C. _____________________
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constitutional proportionality, there is no reason to ask it to undertake a constitutional analysis in the first instance. If the jury is to be instructed on the constitutional standard, it should receive the entire proportionality analysis of Campbell: that an award of punitive damages up to nine times the amount of actual and potential damages is more likely to comport with due process than an award with a ratio of 500 to 1, that there are no rigid benchmarks that a punitive damages award may not surpass, and that higher ratios are allowed where a particularly egregious act has resulted in only a relatively small amount of economic damages. Defendants' proposed instructions should be rejected. Dated August 17, 2005. DAWSON & ROSENTHAL, P.C. and GREGG H. TEMPLE, P.C. By /s/ Gregg H. Temple Steven C. Dawson Anita Rosenthal 6586 Highway 179, Suite B-2 Sedona, AZ 86351 Attorneys for Plaintiff

Copy served on counsel for defendants through the Court's electronic filing service.

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