Foremost Insurance Company v. Charles Pendleton

Case: 16-60240 Document: 00513835382 Page: 1 Date Filed: 01/13/2017

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit

No. 16-60240 FILED
Summary Calendar January 13, 2017
Lyle W. Cayce
Clerk
FOREMOST INSURANCE COMPANY,

Plaintiff - Appellee

v.

CHARLES PENDLETON,

Defendant - Appellant

Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 3:14-CV-701

Before STEWART, Chief Judge, and JOLLY and JONES, Circuit Judges.
PER CURIAM:*
Defendant-Appellant Charles Pendleton filed an insurance claim with
Plaintiff-Appellee Foremost Insurance Company (“Foremost”) after his 1956
Mercedes-Benz was destroyed. Contending that the car was not destroyed by
accident, Foremost refused to pay out Pendleton’s policy and filed for

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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No. 16-60240
declaratory relief. Following a trial, the jury found in favor of Foremost.
Pendleton appeals the jury’s verdict. We AFFIRM.
I. BACKGROUND & PROCEDURAL HISTORY
Pendleton is an antique vehicle collector. After purchasing a 1956 190SL
Mercedes-Benz convertible on January 3, 2014, 1 he had the car insured
through Foremost on January 14, 2014. The purchased policy explained in
pertinent part that “[Foremost does] not provide coverage for any ‘insured’ who
has made fraudulent statements or engaged in fraudulent conduct in
connection with any accident or loss for which coverage is sought under this
policy.” On January 28, 2014, the car was destroyed in a collision and
subsequent fire. Pendleton and Foremost dispute whether the car’s
destruction was deliberate or accidental.
According to Pendleton, on the day of the incident, he and an
acquaintance, George Reed, met at Pendleton’s home in Vicksburg, Mississippi
to drive to Edwards, Mississippi—approximately twenty miles away 2—to go to
a hardware store. Despite a recent snow and icy road conditions, Pendleton
and Reed took back roads instead of the interstate. En route to the hardware
store, Reed, who was following Pendleton in a Ford F-250, allegedly hit the back
of Pendleton’s Mercedes when the truck slipped on an ice patch. Pendleton claims
that the impact caused the Mercedes to collide with a tree. Approximately ten
minutes later, the Mercedes caught fire and was completely destroyed.

1 Although the bill of sale indicates that Pendleton purchased the Mercedes-Benz for
$165,000, no money ever actually changed hands. The seller, Paul Winfield, needed to divest
himself of certain assets before serving a prison sentence for a bribery offense he committed
while serving as Mayor of Vicksburg, Mississippi.
2 At trial, Pendleton testified that: he (1) “wasn’t going to drive the vehicle in that

type of weather,” (2) that he “was simply . . . going to drive it around the neighborhood to let
the [newly added] coolant circulate through the engine,” and that (3) he decided to drive the
antique car to Edwards, Mississippi to go to the hardware store despite the weather. Mr. Reed
testified that he and Pendleton were going to the hardware store in Edwards “to haul some
hardwood flooring.”
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Deputy Arthur Turner arrived on the scene sometime after the fire
subsided. Contrary to Pendleton’s assertions, Deputy Turner noted that the
damage on the backend of the Mercedes was not consistent with the damage
to the front of the F-250, nor was the damage to either vehicle consistent with
a rear-end collision. He also found that there was no paint transfer between
the two vehicles. Because of this, Deputy Turner concluded that there had
been “no impact at all.” Finally, when Deputy Turner interviewed Reed at the
scene, he denied having any prior relationship with Pendleton. After Deputy
Turner ran the F-250’s plates, however, he discovered that the truck was
registered to Pendleton.
The next day, Pendleton reported a complete loss to Foremost, seeking
full coverage under the policy. Following an investigation, Foremost denied
Pendleton’s claim, determining that the car’s destruction was not accidental.
Accordingly, Foremost brought the instant matter before the U.S. District
Court for the Southern District of Mississippi seeking a declaratory judgment
that it was not obligated to pay Pendleton’s claim. Pendleton counterclaimed,
seeking $185,000 pursuant to the policy. After several months of discovery,
the case proceeded to trial.
At trial, Michael Miller testified as a forensic fire investigator. Miller
explained that the fire originated somewhere near the Mercedes’s front
passenger seat. He then explained that there was not a potential ignition
source in that area of the car. Thereafter, Kevin Brown testified as an expert
mechanic and accident reconstructionist. He explained that the damage to the
Mercedes was “consistent with a relatively minor impact with a push as
opposed to a 35-mile-an-our [sic] impact.” Brown also testified that, contrary
to Pendleton’s assertions, the Mercedes was in extremely poor condition.
Based on photographs of the car’s engine, Brown concluded that even before

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No. 16-60240
the accident occurred, the car would not have been able to start, and even if it
could start, the brakes would not have worked.
Over Pendleton’s objection, Foremost admitted evidence of Pendleton’s
past insurance claims. The district court deemed this evidence admissible
under Federal Rule of Evidence 404(b), as the evidence showed Pendleton’s
“modus operandi.” In so ruling, the district court found that “in the relatively
recent past, Mr. Pendleton and his associates have been involved in similar
accidents surrounded by similar circumstances regarding insurance, which is
obviously relevant to the defendant’s defense in this case.”
At the trial’s close, the jury returned a special verdict, finding that
Foremost proved “by clear and convincing evidence that . . . Pendleton
intentionally destroyed or procured the intentional destruction of the insured
1956 Mercedes.”
II. DISCUSSION
On appeal, Pendleton raises two assignments of error. First, he contends
that because Foremost did not present any evidence of incendiary origin and
motive, two of civil arson’s essential elements, the jury’s verdict must be set
aside. Second, Pendleton contends that the district court’s admitting evidence
of his past insurance claims was unduly prejudicial, requiring this court to
vacate and remand his case for retrial. We address each issue in turn.
A.
Pendleton argues, citing McGory v. Allstate Ins. Co., 527 So. 2d 632, 636
(Miss. 1988), that for the jury to find in favor of Foremost, it must have found
by clear and convincing evidence that: Pendleton (1) had the opportunity to
set (2) an incendiary fire and (3) had motive to do so. He concedes that the first
element is met, but contends that Foremost presented no evidence of the other
two elements. Foremost counters that the jury was not required to find that
the car was destroyed by an intentionally set fire, but rather that Pendleton

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No. 16-60240
deliberately destroyed the car. Because the jury found that Pendleton
“intentionally destroyed or procured the intentional destruction of the
[Mercedes],” we agree with Foremost. Thus, we now evaluate whether there
was sufficient evidence for a rational jury to find that Pendleton purposefully
destroyed the Mercedes, thereby precluding him from collecting on his
insurance policy.
We review the district court’s denial of a motion for judgment as a matter
of law de novo. Foradori v. Harris, 523 F.3d 477, 485 (5th Cir. 2008). A Rule
50 motion in a case tried by a jury, however, “is a challenge to the legal
sufficiency of the evidence supporting the jury’s verdict.” Hiltgen v. Sumrall,
47 F.3d 695, 699 (5th Cir. 1995). Our review of a jury’s verdict is “especially
deferential.” Flowers v. S. Reg’l Physician Servs. Inc., 247 F.3d 229, 235 (5th
Cir. 2001). Accordingly, “[a] jury verdict must be upheld unless there is no
legally sufficient evidentiary basis for a reasonable jury to find as the jury did.”
Heck v. Triche, 775 F.3d 265, 273 (5th Cir. 2014).
Here, there is sufficient evidence for a reasonable jury to find by clear
and convincing evidence that Pendleton intentionally brought about the
destruction of his Mercedes. See cf. Sullivan v. Am. Motorist Ins. Co., 605 F.2d
169, 170 (5th Cir. 1979) (finding sufficient evidence in the record to support a
finding that the insured intentionally set fire to his house). Viewing the
evidence in the light most favorable to Foremost, a rational jury could conclude
that Reed, whose F-250 has three trailer hitches, towed Pendleton’s Mercedes
onto an icy road and pushed it into a tree, causing the car to crash and catch
fire. And although it is not a necessary finding, 3 it is also reasonable for a jury

3 Regardless of how the fire began—whether it was intentionally set or the byproduct
of the F-250’s pushing the Mercedes into the tree—it was nevertheless the result of an
intentional act, precluding Pendleton’s ability to recover under his insurance policy with
Foremost.
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No. 16-60240
to conclude that Pendleton intentionally set the Mercedes on fire, given the lack
of a natural ignition source in the passenger seat where the fire started. Under
either theory, there is a legally sufficient evidentiary basis for a reasonable jury
to find by clear and convincing evidence that Pendleton intentionally destroyed
his Mercedes. See Triche, 775 F.3d at 273.
B.
Next, Pendleton argues that the district court erred when it admitted
evidence of his prior insurance claims. He avers that this evidence was unduly
prejudicial and inappropriately swayed the jury against him.
We review this issue for abuse of discretion. Lyondell Chem. Co. v.
Occidental Chem. Corp., 608 F.3d 284, 295 (5th Cir. 2010). Even if we find that
the district court abused its discretion, the error is not reversible unless the
evidence affects the moving party’s substantial rights, “that is, when it
constitutes harmful error.” Id.; see also Fed. R. Civ. P. 61. “An error is
harmless when ‘the same result would have been reached had it not existed.’”
Heflin v. Merrill, 154 So. 3d 887, 903 (Miss. Ct. App. 2013) (quoting James v.
State, 124 So. 3d 693, 699 (Miss. Ct. App. 2013)).
As detailed above, there is ample evidence in the record supporting the
jury’s verdict sufficient to show that the presence or absence of the evidence in
question would not have affected the jury’s verdict. Id. 903. Therefore, even
assuming arguendo that the district court admitted this evidence in error, any
error was harmless. See id.; see also Fed. R. Civ. P. 61 (“Unless justice requires
otherwise, no error in admitting . . . evidence . . . is ground for granting a new
trial . . . . At every stage of the proceeding, the court must disregard all errors
and defects that do not affect any party’s substantial rights.”).
III. CONCLUSION
For the reasons stated above, we AFFIRM the jury’s verdict.

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