Professional Documents
Culture Documents
Filed: Patrick Fisher
Filed: Patrick Fisher
JAN 9 2002
PATRICK FISHER
Clerk
Defendant-Appellant.
ORDER AND JUDGMENT
Murray so quickly that he had no recourse but to cross the wake created by the
second boat. Murrays boat became airborne and upon re-entering the water
experienced engine failure. The Murrays eventually brought suit against their
insurer, defendant First Marine Insurance Company (First Marine). A jury
awarded the Murrays $5800 in damages, and the court awarded plaintiffs $2100 in
costs and $33,000 in attorneys fees. In case No. 00-5194 First Marine appeals
from the verdict, and in companion case No. 00-5233 First Marine appeals the
award of attorneys fees. We affirm both judgments.
I
First Marine offers five reasons for this Court to set aside the jury verdict:
the district court gave an erroneous jury instruction, the plaintiff failed to submit
a statutorily required proof of loss, the court improperly struck the testimony of
one of First Marines experts, the court failed to grant First Marines motion of
judgment as a matter of law, and the Oklahoma statute under which the Murrays
were awarded prejudgment interest is unconstitutional.
A
We are urged to set aside the jury verdict because of an alleged error in one
of the instructions given to the jury. Before we can review this issue, however,
we must be satisfied that First Marine properly preserved it by lodging a
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contemporaneous objection in the district court. Our record review suggests the
lack of proper objection.
In support of its contention that it objected to the offending instruction,
First Marine directs our attention to a portion of the transcript in which the
district court and the parties attorneys were discussing the instructions generally.
The discussion at pages 422 through 425 of appellants appendix, however, does
not establish First Marines objection. In that colloquy, the court and the
attorneys discussed the propriety of giving two standard contract instructions
dealing with construction in favor of a promisee and against a drafter. Whether
these instructions were appropriate depended on whether the insurance policy was
ambiguous. After discussing the provisions of the policy relating to accidental
loss and mechanical breakdown, the court stated that it had interpretive problems
with the language and was inclined to give the two standard instructions. In the
materials identified to us, First Marines counsel did not object to what eventually
became an instruction on causation.
We are presented with only portions of the transcript, and given that we are
not required to comb through the evidence to help make First Marines case,
v. Thomas , 965 F.2d 825, 827 (10th Cir. 1992), without a contemporaneous
objection we are not required to review the propriety of the challenged
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SEC
Fire Insurance Co. , 236 F.3d 1260 (10th Cir. 2001), forecloses this argument.
In Stauth , the insureds were covered by two directors and officers liability
policies, with the newer policy providing greater coverage. When the directors
and officers (the plaintiffs) were sued in two class action lawsuits, they notified
the defendant insurer of the claims and provided it with copies of the complaints.
The defendant agreed to cover the plaintiffs but only under the older policy.
The plaintiffs brought a declaratory judgment action seeking a determination that
the defendant was obliged to indemnify them under the more generous newer
policy. The district court held that the newer policy provided coverage. The
1
Title 36, section 3629(B) of the Oklahoma Statutes states in pertinent part:
It shall be the duty of the insurer, receiving a proof of loss, to
submit a written offer of settlement or rejection of the claim to the
insured within ninety (90) days of receipt of that proof of loss. Upon
a judgment rendered to either party, costs and attorney fees shall be
allowable to the prevailing party.
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plaintiffs then sought attorneys fees under section 3629(B), which the district
court denied on the premise that section 3629(B) requires the submission of a
proof of loss, which the plaintiffs had not submitted. On appeal we reversed,
concluding that section 3629(B) applies to declaratory judgment actions,
id. at
126364, and that the absence of a formal proof of loss was not a bar to recovery,
id. at 126465.
In attempting to distinguish
declaratory judgment action and does not apply to first party actions where no
proof of loss is submitted. That reasoning is meritless. The court in
Stauth
simply determined that the statute, which had been applied in first party actions
and indemnity actions, also applied to declaratory judgment actions. Noting that
Oklahoma courts have construed the statute broadly,
way cut back on already-existing law which has long held that section 3629
applies to actions by insureds against their insurers.
Ins. Co. , 637 P.2d 583, 586 (Okla. 1981). The lesson to be taken from
Stauth for
our purposes relates not to the role of the statute in first party actions, but to its
holding regarding the proof-of-loss requirement.
First Marine argues that, while policy requirements regarding proof of loss
may be waived, the statutory requirement of section 3629(B) cannot.
Stauth holds
copies of the class action complaints to the defendant. We held that this
compliance with the policy regarding notice, followed by the institution of the
declaratory judgment action, was all that was necessary to satisfy a proof of
loss requirement. 236 F.3d
After the accident, Mr. Murray contacted his insurance agent. The agent
submitted to First Marine what the company calls an Accord Property Loss Notice
which, according to one of First Marines corporate representatives, provided
policy information, the name of the insured, phone numbers, contact information,
and a brief description of the loss. Under the terms of the Murrays policy, this
notice was all that was required. A sworn proof of loss would only have been
necessary under the policy if First Marine had requested one, which all parties
agree did not happen.
Thus, just as in Stauth , where notice of the class action suits and
submission of the complaints was sufficient proof of loss for purposes both of the
policy and the statute, here the Murrays submission of information to their agent
who generated an Accord Property Loss Notice was sufficient to comply both
with their obligations under the policy and with the statutory requirement.
C
In support of the argument that the district court improperly struck the
testimony of its expert, Mike Hunter, First Marine points to evidence indicating
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that the district court, prior to trial, had approved Mr. Hunter as an expert
witness, knew the basic opinions he would render, and knew of the contents of his
report. It was only after Mr. Hunter had testified that the court decided to
exclude his testimony.
The fact that the district court misunderstood the basic problem with
Mr. Hunters appearance at this trial does not mean that the court erred in
eventually excluding the testimony. To the contrary, and to its credit, when the
district court understood the crux of the problem it acted quickly and entirely
properly in striking Mr. Hunters testimony.
Despite the rather unclear presentation in the briefs regarding this issue, it
is a simple one. Under Rule 26(a)(2)(B) of the Federal Rules of Civil Procedure,
an expert witness is required to submit a written report. The report shall contain
a complete statement of all opinions to be expressed and the basis and reasons
therefor; the data or other information considered by the witness in forming the
opinions; [and] any exhibits to be used as a summary of or support for the
opinions . . . . Fed. R. Civ. P. 26(a)(2)(B). Mr. Hunters testimony was based in
large part on photographs taken of engines similar to that of the Murrays, but his
Rule 26 report made no mention of such photographs and, as such, was not in
compliance with the rule. The Murrays had consistently objected to any
testimony from Mr. Hunter based on the photographs.
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592 (10th Cir. 1998). Such abuse will be found only where the trial court makes
an arbitrary, capricious, whimsical, or manifestly unreasonable judgement.
Nalder v. W. Park Hosp. , 254 F.3d 1168, 1174 (10th Cir. 2001). Here, the district
court was faced with an obvious violation of Rule 26 compounded by the fact
that, when he testified, Mr. Hunter went well beyond the opinions expressed in
his written report. Additionally, First Marine had the benefit of the testimony of
another expert, Frank Johnson, thus minimizing the damage to it from the
exclusion of Mr. Hunter. We hold that, under these circumstances, the exclusion
of Mr. Hunters testimony was not an abuse of discretion.
D
First Marine contends that the district court should have granted its Rule 50
motion for judgment as a matter of law, formerly referred to as a directed verdict.
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Cir. 1996).
Applying this standard, and after reviewing the provided portions of the
trial transcript and drawing inferences therefrom in the light most favorable to the
Murrays, see Hidalgo Props. , 617 F.2d at 198, we conclude that the district court
properly denied the motion for judgment as a matter of law. Specifically, the jury
heard testimony from the mechanic who examined the Murrays engine and
eventually repaired it that the damage to the engine was caused by overrev
when the boat suddenly became airborne. There was also evidence from
Mr. Murray and his passenger on the boat, Mr. Smith, that immediately after
returning to the water the engine ceased to operate. This evidence certainly
provides a legally sufficient evidentiary basis for the jury to find for the Murrays.
There can be no [judgment as a matter of law] where there is evidence tending to
support a partys theory of recovery.
E
In its motion for new trial and amendment of judgment, First Marine argued
that title 36, section 3629 of the Oklahoma Statutesthe section under which the
Murrays were eventually awarded prejudgment interestis unconstitutional.
After the Oklahoma Attorney General declined the district courts invitation to
weigh in on this question, the court rejected the constitutional challenge to
section 3629. We do as well.
Ordinary economic and commercial regulations are subject only to rational
basis scrutiny under the Equal Protection Clause.
Inc. , 508 U.S. 307, 31314 (1993). The Supreme Court has admonished that
rational-basis review in equal protection analysis is not a license for courts to
judge the wisdom, fairness, or logic of legislative choices.
Heller v.
Doe , 509 U.S. 312, 320 (1993). Moreover, under rational-basis review, the
legislature need not actually articulate the legitimate purpose or rationale that
supports the classification at issue. Instead, a statute must be upheld against
equal protection challenge if there is any reasonably conceivable state of facts
that could provide a rational basis for the classification.
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See
take one step at a time, addressing itself to the phase of the problem which seems
most acute to the legislative mind.). The district court properly held
section 3629 to be constitutional.
II
After the jury awarded the Murrays $5800 in damages, the court also
awarded the Murrays $33,000 in attorneys fees and affirmed the award of costs
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by the court clerk to the Murrays in the amount of $2100. In case No. 00-5233
First Marine appeals these awards. We affirm.
Our role in reviewing the district courts fee award is quite limited.
We customarily defer to the District Courts judgment because an appellate court
is not well suited to assess the course of litigation and the quality of counsel.
Mares v. Credit Bureau of Raton
(quotation omitted). We did not see the attorneys work first hand, and thus are
not as well situated as the district court, which has far better means of knowing
what is just and reasonable than an appellate court.
omitted). Accordingly, an attorneys fee award by the district court will be upset
on appeal only if it represents an abuse of discretion.
Id.
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, 9 F.3d 855,
1977), the trial court had awarded fees to both parties after the defendant had
secured summary judgment on two of the plaintiffs claims and the plaintiff had
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obtained a verdict on its remaining two claims. The Oklahoma Court of Appeals
reversed.
Adopting reasoning from other jurisdictions,
can be but one prevailing party in an action at law for the recovery of a money
judgment . . . . [T]he party in whose favor the verdict compels a judgment is
the prevailing party.
(Mo. Ct. App. 1910)). The words prevailing party can have no other meaning
except the party in whose favor judgment should be entered. Where there is one
plaintiff and one defendant, there can be but one prevailing party and but one
judgment. Id. (quoting Hansen v. Levy , 248 N.Y.S. 200, 201 (N.Y. App. Div.
1930)) (internal quotation omitted). The prevailing party is regarded as that
party who has affirmative judgment rendered in his favor at the conclusion of the
entire case.
Id. (quoting Sharpe v. Ceco Corp. , 242 So. 2d 464, 465 (Fla. Dist.
Quapaw holds
explained that recovery of attorneys fees is possible only when the insured loss
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is the core element of the prevailing litigants recovery. 981 P.2d 1253, 1258
(Okla. 1999). The insured loss was the core element of the Murrays recovery on
their contract claim. That First Marine successfully defeated an alternative
remedy on this claim does not invest it with prevailing party status.
First Marine points to language in
score, but the one with the most points at the end of the contest is the winner
and . . . is entitled to recover his costs. 566 P.2d at 167 (quotation omitted).
First Marine argues that by securing summary judgment on the claim for bad faith
it won 70,000 points compared to the 5800 points won by the Murrays. The
points identified in Quapaw , however, are calculated from affirmative judgments
rather than from a mere defense against a plaintiffs claim. We have found no
case, and First Marine identifies none, in which a defendant who is granted
summary judgment or otherwise successfully defends on less than all of
a plaintiffs claims has been deemed the prevailing party.
There are cases in which the Oklahoma courts have recognized exceptions
to the Quapaw one prevailing party rule, but those cases do not apply here. In
them, a plaintiff suing for damages is met with a counterclaim (or its equivalent)
for damages by the defendant. When both parties prevail and are awarded money
damages at the end of the case, Oklahoma courts allow there to be two prevailing
parties and award costs and/or fees to each party.
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& Sheet Metal Co. , 617 P.2d 206, 210 (Okla. 1980). In the case at bar, First
Marine did not assert a claim for money damages against the Murrays and was not
awarded any damages or any affirmative judgment at the end of the trial.
First Marine was not a prevailing party for purposes of an award of
attorneys fees. It has advanced no authority to support a claim for costs in the
absence of prevailing-party status. The district court was correct to deny First
Marine costs and fees relating to this case.
B
As noted above, we will not overturn a fee award unless we are convinced
that the district court made a clear error of judgment or exceeded the bounds of
permissible choice in the circumstances.
of the parties arguments and the order of the district court persuades us that the
court was well within the bounds of reasonableness in making the fee award.
First Marine complains primarily that the court failed to consider the
relationship between the amount the Murrays recovered, $5800, and the amount of
attorneys fees awarded, $33,000. We disagree. When read in its entirety, the
order of the court reveals careful consideration of the dynamics of the case and
In reviewing First Marines arguments, we note that the record citations in
its brief do not correspond to evidence in the record pertaining to the award of
fees.
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the factors which contributed to the fees incurred by the Murrays. The court
carefully applied the factors outlined in
Standard Insurance Co. , 615 P.2d 291, 29495 (Okla. 1980), in reaching
its decision.
We note that the court reduced the fee request by approximately one-third
to account for the Murrays lack of success on their claim for bad faith and their
withdrawal of their claim for hull damage. Contrary to First Marines contention,
the court was well within its authority to then multiply the hours spent by the
Murrays attorney by his undisputed hourly rate.
Okla. City , 598 P.2d 659, 66061 (Okla. 1979) (characterizing such computation
as the lodestar of the courts fee determination).
First Marine attempts to blame the Murrays for the amount of fees because
they brought a claim for bad faith that it characterizes as unfounded and
unsupported. The opinion of the trial judge who heard this case, however, was to
the contrary. The court examined the several factors which gave rise to a
legitimate belief on behalf of [the Murrays] that they should proceed with a bad
faith claim. (Dist. Ct. Order filed Nov. 13, 2000, at 5.) Despite the grant of
summary judgment to First Marine on this claim, the court noted that the claim
was not frivolous and was not one that should have been ignored. We note that it
was First Marine who removed the case to federal court after the addition of the
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claim for bad faith, thereby lengthening the litigation process and the resultant
fees.
Nor do we find fault with the emphasis placed by the district court on the
fact that the Murrays attempted to settle all claims early in the litigation for the
same amount they recovered at trial, an amount which compensated them for their
contract loss and did not include any payment for the claim for bad faith. First
Marine never responded to this offer, not even to propose a counter-offer. Even
after the district court urged it to settle, First Marine refused to do so. We agree
with the district court that by proceeding, as was its right, to a judicial
determination First Marine ran the risk that under 3629, it would ultimately be
assessed [the Murrays] costs and attorney fees. (
the fee determination as awarded by the district court. Its careful weighing of all
the appropriate factors reveals no basis upon which the award can be overturned.
III
The judgment is AFFIRMED .
ENTERED FOR THE COURT
Carlos F. Lucero
Circuit Judge
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