[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
JUNE 3, 2008
No. 07-14228 THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 06-00360-CV-WS-C
RICHARD PREIS,
VICTORIA HEARIN PREIS,
Plaintiffs-Appellants,
versus
LEXINGTON INSURANCE COMPANY,
T&B, LTD,
d.b.a. Thames, Batre', Mattei,
Beville, and Ison, et al.,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Alabama
_________________________
(June 3, 2008)
Before DUBINA and BARKETT, Circuit Judges, and SCHLESINGER,* District
Judge.
PER CURIAM:
Richard and Victoria Preis 1 appeal from an adverse partial summary
judgment in favor of Lexington Insurance Company, providers of Pries’
homeowner’s insurance policy; an adverse summary judgment in favor of Thames,
Batre, Mattei, Beville, and Ison (“T&B”), the insurance agency that issued the
Lexington policy and Allen Ladd, its agent. Pries also appeals from a jury verdict
of $70,000, which the jury awarded to Pries at the conclusion of a three-day trial,
based on purported evidentiary errors and errors in the jury instructions. Pries
seeks reversal of the district court’s summary judgment rulings, and a new trial.
I. Background
Pries’ home on Mobile Bay, in Point Clear, Alabama, was severely damaged
by Hurricane Katrina. According to Pries, the house had a replacement value in
excess of $1,200,000 and the loss on personal property in the house was in excess
of $750,000.
Pries had two sets of insurance policies covering the house and its contents.
First, he had a homeowner’s policy (“the Lexington policy”), originally purchased
*
Honorable Harvey E. Schlesinger, United States District Judge for the Middle District of
Florida, sitting by designation.
1
For ease of discussion, we will hereinafter refer to the Appellants in the singular, “Pries.”
2
in 1995. The Lexington policy was an all-risk policy that insured against any
direct loss of personal or structural property of the home at issue, with certain
exclusions. One of the exclusions of coverage was for loss caused “directly or
indirectly” by “water damage”, defined as “flood, surface water, wave, tidal water,
overflow of a body of water, or spray from any of these, whether or not driven by
wind . . . .” The Lexington policy is the only insurance policy at issue in this
appeal.
The second relevant set of insurance policies covering the property at issue
at the time of Hurricane Katrina was for flood damage. Preis had a primary flood
policy with Hartford Insurance Company, and an excess flood insurance policy
with WNC Insurance Services. Following Hurricane Katrina, Pries submitted a
claim to both Hartford Insurance and to WNC Insurance Services. Pries received a
total of $587,659.71 from these flood insurance providers for the damage incurred
as a result of floods caused by the hurricane. This amount constituted the full
policy limits of both policies.
Pries also notified Lexington of the loss in order to recover for wind damage
under the homeowners’ policy and submitted the same claim of loss to Lexington
that had been submitted to the flood insurance carriers. Within one week of Preis’
notification of the loss, Lexington retained an independent adjuster, Reid Jones
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McRorie & Williams, to investigate Pries’ claim. Reid Jones issued a final report
several months later, indicating that the majority of the damage to the house was a
result of “storm surge”, and that the “[moderate] wind damage was primarily
limited to the roof.” Reid Jones estimated that Pries was due a payment in the
amount of $72,155.96 for the damage that had not been caused by flood waters.
Based on this assessment, Lexington made Pries an unconditional tender for
$53,135.97, which reflected Reid Jones’ estimate less the policy’s wind deductible
of $19,020.00.
Preis rejected Lexington’s tender of $53,135.97 and notified Lexington of
his intent to file this lawsuit against Lexington. Lexington then retained the
engineering services of Project Time & Cost (“PT&C”) to determine the cause and
origin of Preis’ losses. PT&C’s report confirmed that the majority of the house
was damaged as a result of storm surge, but that some damage was attributable to
wind damage. Based on PT&C’s report, Reid Jones readjusted Pries’ estimated
loss, and increased their unconditional tender by $11,031.90 to $64,167.86. Pries
again rejected the loss amount, and proceeded to file the instant suit.
A three-day jury trial was held in August 2007. At the close of the evidence,
and prior to the case being submitted to the jury, the district court granted
Lexington’s Rule 50 motion for judgment as a matter of law on Preis’ claim for
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damage to the contents of the house, finding that Pries had failed to present facts
sufficient to allow the trier of fact to segregate the amount of damages to the
home’s contents attributable to wind from those damages due to water from the
storm surge. After deliberating, the jury awarded Pries $70,000 for damages to the
structure attributable to wind.
II. Discussion
Preis challenges several aspects of the trial, as well as two of the district
court’s rulings on summary judgment. We address each issue in turn.
1. Evidentiary Rulings2
Preis argues that the district court erred in admitting evidence of “the
amount of the flood settlement in the amount of $587,659.71,” and contends that
evidence of the flood payments is barred under Federal Rule of Evidence 408.3 We
have held that “[f]or Rule 408 to apply, there must be an actual dispute, or at least
an apparent difference of opinion between the parties, as to the validity of a claim.”
Dallis v. Aetna Life Ins. Co., 768 F.2d 1303, 1307 (11th Cir. 1985). We have
2
We review the district court’s evidentiary rulings under a deferential abuse of discretion
standard. United States v. Frazier, 387 F.3d 1244, 1258 (11 Cir. 2004) (en banc).
3
Rule 408 provides in pertinent part: “Evidence of (1) furnishing or offering or promising to
furnish, or (2) accepting or offering or promising to accept, a valuable consideration in
compromising or attempting to compromise a claim which was disputed as to either validity or
amount, is not admissible to prove liability for or invalidity of the claim or its amount.” Fed. R.
Evid. 408.
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specifically rejected the notion that “the payment of a claim by an insurance
company, where there is no evidence that the insurance company ever disputed the
claim, qualifies as a compromise within the meaning of Rule 408.” Id. 1306–07.
Since Pries submitted his claim to the flood insurers and received the full policy
limits from both of them absent any dispute as to the validity of his claim, the
district court did not abuse its discretion in finding that Rule 408 did not bar
admissibility of the payments.
Pries also argues that the lay testimony of insurance adjusters James Gibson
and Tracy Clark should not have been admitted into evidence under Federal Rule
of Evidence 701 because they did not have personal knowledge of the facts and
because their testimony was based on “scientific, technical, or other specialized
knowledge within the scope of Rule 702,” which governs expert testimony. The
testimony offered by both Clark and Gibson specifically related to the damage to
the home they observed during the inspections they personally conducted, the
reports they each individually prepared regarding their assessments of the damage
to the Pries’ home, and the procedures they employed to reach their loss estimates.
Given the nature of their testimony, the district court did not abuse its discretion in
allowing the adjusters to testify as lay witnesses.4
4
Moreover, our review of the trial transcript indicates that any opinion testimony offered by
Clark or Gibson was in fact solicited by Pries. See Doc. 236, p. 403, ll. 9–11 (Clark asked on
6
2. Burden of Proof: Directed Verdict and Jury Instructions
Preis contends that the district court’s application of an erroneous burden
of proof resulted in two errors: 1) the court erroneously granted Lexington a
directed verdict on the question of Lexington’s liability for the damage to the
contents of the home; and 2) the jury instruction regarding the burden of proof was
an erroneous statement of the law. We review the allocation of the burden of proof
de novo. Guajardo v. Texas Dept. of Crim. Justice, 363 F.3d 392, 395 (5th Cir.
2004); see also United States v. DeVegter, 439 F.3d 1299, 1303 (11th Cir. 2003)
(“We generally review de novo questions of law.”).
The Louisiana Supreme Court has stated that, “[i]n an action under an
insurance contract, the insured bears the burden of proving the existence of the
policy, and the coverage.” Turnstall v. Stierwald, 809 So.2d 916, 921 (La. 2002).
The insured also bears the threshold burden of proving an accidental direct
physical loss to the insured property, and the amount of the loss. See Pelas v.
Amer. Emp. Ins. Co., 299 So.2d 815, 817 (La. App. 1974) (“As in any action on an
insurance policy, the burden is upon the plaintiff to prove the loss insured
cross, “Hypothetically, Mr. Clark, if windows blew out in this house, would you consider the
contents that would have been damaged?”); Doc. 235, p. 231, ll. 22–24 (Gibson asked on cross,
“What would have been your loss if you had to assume that the whole thing had to be torn
down?” Gibson responded, “You know, I wouldn’t even wing that.”). The admission of
inadmissible testimony, “when responding to an inquiry by [appellant’s] counsel, creates ‘invited
error’.” United States v. Parikh, 858 F.2d 688, 695 (11th Cir. 1988). “[I]nvited error constitutes
neither plain nor reversible error.” Id.
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against.”) (Schott, J., dissenting); Brouillette v. Phoenix Assur. Co., 340 So.2d 667,
672 (La. App. 1977) (“Plaintiff had the burden of proof on the amount of the
loss.”). Once an insured has met this initial burden, the burden then shifts to the
insurer to prove by a preponderance of the evidence that the loss falls within a
policy exclusion. Turnstall, 809 So.2d at 921 (“The insurer, however, bears the
burden of showing policy limits or exclusions.”). The segregation or allocation of
the causes of the loss is left to the finder of fact once the parties have met their
initial burdens. See Broussard v. State Farm Fire & Casualty Co., No. 07-60443,
2008 WL 921699, at *5–6 (5th Cir. Apr. 7, 2008). It is with this appropriate
burden of proof in mind that we now turn to Preis’ arguments.
A. Directed Verdict
We review a district court’s ruling on a judgment as a matter of law under
Rule 50 de novo, examining the evidence in the light most favorable to the non-
moving party. Optimum Tech. v. Henkel Consumer Adhesives, Inc., 496 F.3d
1231, 1251 (11th Cir. 2007). “Judgment as a matter of law is appropriate when a
plaintiff presents no legally sufficient evidentiary basis for a reasonable jury to find
for him on a material element of his cause of action.” Proctor v. Flor Enterprises,
Inc., 494 F.3d 1337, 1347 n.5 (11th Cir. 2007).
Preis argues that the district court erroneously granted Lexington’s Rule 50
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motion with regards to the contents because “the Plaintiffs have not identified any
evidence that affords the jury a reasonable basis for separating losses due to wind
from losses due to flood.” Preis contends that this placed an inappropriately high
and erroneous burden of proof upon him, arguing that all he needed to do was
establish the coverage, the loss and the loss amount, and not the cause of the injury.
We agree with Preis regarding his burden, but agree with the district court that this
initial burden was not met by Preis in this case. Had Preis simply established that
he had the requisite accidental damage coverage and that he had been damaged in a
specific amount, he would have met his burden of proof under his all-risk policy.
Lexington would then have the burden to prove that the damages claimed were the
result of water, which was a cause explicitly excluded by the coverage.
Here, however, Preis failed to initially establish a basis from which the jury
could have awarded an amount for the personal property in the house that was
covered by the Lexington policy. Each of Preis’ witnesses in his case-in-chief
conceded that there was water damage and debris on the inside of the home from
the flooding, and the parties do not dispute that water damage is not covered under
the Lexington policy. None of Preis’ witnesses testified regarding any damage to
the contents of the home not caused by water, and Preis conceded that he submitted
identical claims for the contents to both his flood insurers and to Lexington. In
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short, Preis did not present any evidence in his case-in-chief which would support
a jury finding that the contents were destroyed by anything but water. Given the
absolute lack of evidence that the contents of the house were damaged by a
covered peril, no reasonable jury could find that Preis had met his burden of
proving the amount of covered loss by a preponderance of the evidence. Under
these circumstances, we cannot find that the district court erred by granting
Lexington’s motion for judgment as a matter of law regarding the contents of the
Preis’ home.
B. Jury Instructions Regarding Burden of Proof
We review the challenged jury instructions under a deferential standard of
review. United States v. Puche, 350 F.3d 1137, 1148 (11th Cir. 2003). We do,
however, review them de novo to “determine whether they misstate the law or
mislead the jury to the prejudice of the objecting party.” Brochu v. City of Riviera
Beach, 304 F.3d 1144, 1155 (11th Cir. 2002).
Having reviewed the jury instructions delivered by the district court in their
entirety, we cannot agree with Preis that the district court misstated the law. The
district court accurately recited the burden of proof under Louisiana law. The court
instructed the jurors that the initial burden is on the plaintiffs to prove “the
existence of the policy sued on, its terms and provisions, that their claim is within
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its coverage, and the amount of their covered damage.” The district court also
instructed the jury that “it is the insurer who bears the burden of proving the
applicability of any exclusion from coverage of the policy.” Thus, the district
court’s jury instructions regarding the applicable burden of proof was an accurate
statement of law.
3. Jury Instruction Based on Debris
Preis next argues that the district court erred by instructing the jury that
“wind driven wood debris was water damage and not covered.” The actual
instruction the court delivered follows:
The exclusion for water damage excludes loss resulting either directly or
indirectly from flood, and loss from debris that strikes covered property
when carried there by flood waters is loss caused indirectly by flood and is
thus excluded.
We again review the challenged jury instruction under a deferential standard of
review. Puche, 350 F.3d at 1148.
The instruction given by the court limits the exclusion from coverage to
debris damage caused by flood waters, and does not implicate “wind driven wood
debris” as suggested by Preis. Though the word “debris” does not appear in the
language of the water damage exclusion, the language of the policy unambiguously
excludes damage caused directly or indirectly from flood. Thus, the district court
did not err in instructing the jury that damage from debris which strikes the
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covered property as a result of floods is excluded under the clear language of the
water damage exclusion.
4. Summary Judgment Rulings5
Finally, we have carefully reviewed this record and find no error in the
district court’s grant of summary judgment against Preis on his claim that
Lexington acted in bad faith or on his claims against T&B and Ladd.
AFFIRMED.
5
We review a district court’s rulings on summary judgment de novo. Mega Life and Health Ins.
Co. v. Pieniozek, 516 F.3d 985, 989 (11th Cir. 2008). “Summary judgment is appropriate when
the evidence, viewed in the light most favorable to the nonmoving party, presents no genuine
issue of material fact and compels judgment as a matter of law.” Id.; Fed. R. Civ. P. 56(c).
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