F IL E D
United States Court of Appeals
Tenth Circuit
PUBLISH
November 7, 2006
U N IT E D ST A T E S C O U R T O F A PP E A L S
Elisabeth A. Shumaker
Clerk of Court
T E N T H C IR C U IT
CLARA A. SIM S , an individual,
Plaintiff-Appellee ,
v. No. 04-5135
GREAT A M ERICA N LIFE
INSU RANCE COM PA NY , a Foreign
Insurance Com pany,
Defendant-Appellant .
A PPE A L FR O M T H E U N IT ED ST A T ES D IST R IC T C O U R T
FO R T H E N O R T H E R N D IST R IC T O F O K L A H O M A
(D .C . N O . C V -02-538-K )
David M . Gunn (Russell S. Post, Beck, Redden & Secrest, L.L.P., Houston,
Texas, and Timothy T. Trum p, Conner & W inters, P.C., Tulsa, Oklahom a with
him on the briefs), Beck, Redden & Secrest, L.L.P., Houston, Texas for
Appellant.
Steven L. A ndrew (D . K evin Ikenberry w ith him on the brief), A ndrew , W illiam s
& Ikenberry, A Professional Corporation, Tulsa Oklahoma, for Appellee .
Before H A R T Z , A N D ER SO N , and T Y M K O V IC H , Circuit Judges.
T Y M K O V IC H , Circuit Judge.
Lawrence Sims died when the speeding car he was driving sailed off a rural
road. Prior to his untimely death, he had obtained life insurance from Great
American Life Insurance Company. Sims’s wife made a claim on this policy, but
after an investigation Great American denied the claim under its non-accidental
death provision concluding that Sims committed suicide. M rs. Sims then filed
suit against G reat American alleging breach of contract and bad faith for its
failure to pay her husband’s life insurance policy. A jury found the death was
accidental and awarded M rs. Sims $1.4 million in compensatory and punitive
damages. Great American argues on appeal that the district court made numerous
evidentiary and procedural errors when it precluded Great American from
introducing relevant evidence pertaining to the crash and Sims’s state of mind at
the time of his death.
This case requires us to consider the interplay between the Erie doctrine
and the Federal Rules of Evidence in diversity cases tried in federal district court.
The district court refused to adm it evidence that would have been inadm issible in
state court, concluding that state policy trum ps the Federal Rules of Evidence.
Although we conclude that the Erie doctrine does not govern the admissibility of
evidence under the Federal Rules, we find that the Rules still require diversity
courts to analyze substantive state policy in considering the admissibility of
evidence.
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Exercising jurisdiction under 28 U.S.C. § 1291, we REVERSE the district
court’s denial of judgment as a matter of law on both the bad faith and punitive
damages claims. W e otherwise AFFIRM .
I. Background
A . Law rence Sim s’s D eath
On September 3, 2001, Lawrence and Clara Sims attended a golf
tournament at their local country club. Sims became extremely intoxicated during
the course of the day. He was still quite intoxicated when the couple returned
home that evening to an unkempt kitchen. Over this seemingly minor issue, Sims
expressed unexpected agitation and anger in front of his wife and daughter. He
stormed out of the kitchen, jumped in his car, and sped away.
Concerned for her husband’s well-being, M rs. Sims immediately called
911. She told the 911 operator that Sims “was upset and that we were afraid that
he was going to get hurt or hurt himself.” R. at 807. By the next morning when
her husband had still failed to return home, M rs. Sims phoned family, friends, and
local hospitals to no avail. She then filed a missing persons report. In her sw orn
statement to the police, she described Sims’s state of mind on the evening of
September 3:
Drinking— but in a good mood. Got home around 9:00, got angry
because the house was a mess . . . Got angrier [and] angrier— slammed
dining room chair to floor [and] stormed out— saying he’s “out of here.”
M entioning driving off a cliff. Called 911 to let you know.
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R. at 85. The official missing persons report, drafted by the police and signed by
M rs. Sims without her review, editorialized on this language, noting instead that
“M r. Sims was enraged over the cleanliness of their home . . . [and] may be
suicidal, because when he left his residence, M r. Sims mentioned something about
driving off a cliff.” R. at 84 (emphasis added).
Two days later police recovered Sims’s body. Based on evidence at the
accident scene, police surmised that his car had careened off the main road onto a
right-of-way toward a creek. The car, traveling at an excessively high rate of
speed, clipped a fence and then hit a bump that caused it to sail some 115 feet
over a creek bed, before landing in a pasture. No skid marks were visible at the
scene nor any other evidence suggesting that Sims swerved before clipping the
fence. Although Sims habitually wore his seat belt, on this occasion his seat belt
was not fastened. Post-mortem examination revealed a blood-alcohol content
(B AC) of 0.19% , well over the legal limit.
Despite M rs. Sims’s sworn police statement to the contrary, she has
steadfastly held in these proceedings that she intentionally lied about her
husband’s intent to drive off a cliff. This lie, she claims, was merely an effort to
encourage the police to act quickly to locate her missing husband. M rs. Sims
adamantly asserts that she never believed her husband was truly suicidal.
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B . Life Insurance Investigation and D enial of C laim
In August 2000, Sims obtained a life insurance policy from Great American
in the amount of $300,000. This policy expressly excluded recovery for non-
accidental death. Following Sims’s death, M rs. Sims made a claim.
As w as its typical practice, Great American hired an independent claim
investigator, Broyles Claim Service Agency, to review the claim. Broyles
examined a number of documents as part of its investigation, including (1) the
missing persons report, (2) the accident report, (3) the medical examiner’s report,
(4) the death certificate, and (5) Sims’s medical and pharmaceutical records.
Additionally, Broyles conducted telephone interviews with the m edical examiner,
the investigating police officer, M rs. Sims, and M rs. Sims’s counsel.
Both the police department accident report and the county’s death
certificate listed suicide as the manner of death. The investigating officer and the
coroner relied heavily on the missing persons report in making their cause of
death determination. In preparing the accident report, for example, the
investigating officer reviewed the missing persons report as well as the physical
circumstances of the accident. But the officer conceded at trial that he had never
examined the car to determine if the brakes failed or showed other mechanical
deficiencies which could have caused a loss of control. Although the officer did
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not know Sims’s BAC when he originally prepared the report, he was adamant
that he would still have listed suicide as the cause of death.
The medical examiner also attributed the death to suicide. However, the
medical examiner did not perform an autopsy to determine if Sims suffered a
stroke or exhibited symptoms of some other ailment that could have caused him to
lose consciousness or control of the vehicle. W hen asked by Broyles why he
ruled the death a suicide, the medical examiner replied “that if [Broyles had seen
the] missing persons report and the accident report, we would see the reason for
his [conclusion].” R. at 1764.
Broyles also obtained a recorded statement from M rs. Sims, with her
counsel present, and a separate statement from counsel as he had known Sims
from the country club. Unsurprisingly, both parties insisted that Sims did not
comm it suicide. W hile M rs. Sims did not explicitly recant her sworn police
statement until after filing this law suit, Broyles never asked why her sw orn
statement contradicted her statement to him. Nor did Broyles question M rs. Sims
regarding any possible motive Sims had to commit suicide. Broyles’s
investigation revealed that Sims’s medical and pharmaceutical records showed no
indication of mental depression.
Finally, M rs. Sims claims Broyles was aware that another officer involved
at the scene believed Sims’s crash was accidental. Broyles denies this charge.
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But in any event, Broyles did not interview this officer or any other officer with
the exception of the investigating officer. Broyles never interviewed Sims’s
daughter, w ho saw him the night of the incident.
Based on this investigation, Broyles recommended that Great American
deny accidental life insurance coverage and pay the claim under the suicide
provision. Two agents of Great American reviewed this recommendation and
concurred, tendering a return of the policy premiums that had been paid to
date— $2,964.67.
C . Proceedings in D istrict C ourt
Following the denial of the insurance claim, M rs. Sims filed suit in federal
court, alleging both breach of contract and bad faith. The district court denied
Great American’s summary judgment motion on the bad faith claim and similarly
denied Great American’s motion for judgment as a matter of law at the close of
the trial. The jury awarded M rs. Sims $300,000 for the breach of contract claim,
$600,000 for the bad faith claim, and $500,000 in punitive damages. Following
the verdict, Great American renewed its motion for judgment as a matter of law
or, in the alternative, a new trial, which the district court rejected. Great
American’s timely appeal is now before this court.
II. A nalysis
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On appeal, Great American asserts that the district court comm itted
numerous errors, each constituting grounds for reversal:
(1) the court improperly excluded relevant evidence under
Oklahoma’s seat belt law that would have helped support the defense
theory that Sims was suicidal on the night of the crash;
(2) the court should have admitted evidence that the coroner and
investigating officer believed Sims’s death a suicide;
(3) the court erred in excluding evidence of Sims’s father’s suicide;
(4) the jury’s finding of bad faith and punitive damages was not
supported by sufficient evidence at trial; and
(5) the court should have permitted Great American’s accident
reconstruction expert to testify at trial. 1
A . Evidentiary C laim s
At the heart of Great American’s appeal is its argument that the Federal
Rules of Evidence govern questions of admissibility in federal diversity cases,
irrespective of the existence of conflicting state statutes. This argument rests on
the proposition that the doctrine set forth in Erie R.R. v. Tom pkins, 304 U.S. 64
(1938), is inapplicable to these Rules. Based on this premise, Great American
asserts that the district court improperly applied state law, as opposed to the
1
Great American also argued that one of the court’s jury instructions
improperly characterized bad faith as a negligent tort. At oral argument, Great
American conceded that the Oklahoma Supreme Court recently ruled to the
contrary and approvingly cited to the jury instruction used by the district court
below. See Badillo v. M id Century Ins. Co., 121 P.3d 1080, 1093 (Okla. 2005).
Accordingly, we need not address this argument.
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Federal Rules of Evidence, to exclude (1) evidence showing Sims failed to wear
his seat belt on the night he died, as well as (2) reports and testimony from state
officials concerning Sims’s manner of death.
W e are persuaded that the Federal Rules of Evidence are not governed by
the Erie doctrine. Having said that, concepts of federalism still guide our
understanding of the interplay between the Federal Rules and state law. Although
we do not ground our holding in Erie, we conclude that state substantive policy
directs the admissibility of evidence under the relevancy considerations of Rule
401.
1. E rie and F ederal R ules of E vidence
This case presents us with a classic civil procedure question— in the face of
a conflicting state statute, w hen does a federal court sitting in diversity apply
federal law? This question, of course, invokes the Supreme Court’s seminal
decision in Erie Railroad v. Tom pkins and the landmark trilogy which followed.
See G uar. Trust Co. v. York, 326 U.S. 99 (1945) (creating the outcome
determination test); Byrd v. Blue Ridge Rural Elec. Coop., 356 U.S. 525 (1958)
(holding that the outcome determination test is not dispositive in the face of
countervailing federal interests); Hanna v. Plumer, 380 U.S. 460 (1965) (holding
Erie inapplicable to the Federal Rules of Civil Procedure). Collectively, the
“broad command” flowing from these cases requires federal courts “to apply state
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substantive law and federal procedural law.” Hanna, 380 U.S. at 465. However,
the sw eep of this broad command is limited— only federal common law is
governed by the Erie doctrine; congressional acts and the Federal Constitution
fall outside its scope. As the Erie court famously stated:
Except in matters governed by the Federal C onstitution or by acts of
Congress, the law to be applied in any case is the law of the state
. . . . There is no federal general common law. Congress has no power
to declare substantive rules of common law applicable in a state
whether they be local in their nature or “general,” be they commercial
law or a part of the law of torts.
Erie, 304 U.S. at 78 (emphasis added). This seemingly sim ple rule, however, has
a surprisingly complex application when the federal rule at issue is one of the
Federal Rules of Evidence.
Great Am erican argues that the Federal Rules of Evidence are an “act of
Congress,” not federal com m on law, and therefore outside the purview of Erie.
Accordingly, when applying these Rules, Great Am erican continues, federal
diversity courts should not look to Erie but instead should apply the test
form ulated in Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988), which
governs the application of a federal statute to a diversity case. Following
Stewart, a court asks whether the evidentiary rule is both (1) “sufficiently broad
to control the issue before the Court,” and (2) “a valid exercise of Congress’
authority under the Constitution.” Id. To be a valid exercise of congressional
authority, the federal rule m ust be “capable of classification” as a procedural rule.
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Id. at 32 (quoting Hanna, 380 U .S. at 472). If the rule satisfies both conditions,
absent other considerations, the federal evidentiary rule applies. See id. at 26
(noting that a “district court’s decision whether to apply a federal statute . . . in a
diversity action . . . involves a considerably less intricate analysis than that which
governs the ‘relatively unguided Erie choice’”) (quoting Hanna, 380 U.S. at 471).
A brief review of the origins of the Federal Rules of Evidence shows that
Stewart provides the starting point in determining the admissibility of evidence in
this case.
a. Origin of Federal Rules of Evidence
Great American’s argument rises or falls on the premise that the Federal
Rules of Evidence are a product of congressional action. Our review of the
relevant history reveals this to be so.
Prior to the enactment of the Federal Rules of Evidence, Federal Rule of
Civil Procedure 43(a) governed evidentiary matters in federal courts. 19 Charles
Alan W right, Arthur R. M iller & Edward H. Cooper, Federal Practice and
Procedure § 4512 (2d ed. 1996 & Supp. 2005) (“Federal Practice”). Under Rule
43, federal courts typically applied state evidentiary law to questions regarding
the admissibility of evidence. Id. (“[T]he norm was to follow forum state law on
evidentiary matters, not because Erie demanded it, but simply because the Civil
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Rule so directed.”). But in 1972, the Supreme Court started drafting an
independent set of rules governing the admissibility of evidence in federal courts:
the Federal Rules of Evidence.
At the time the Supreme Court was considering the Rules of Evidence,
Congress passed a statute requiring congressional approval before the Court could
promulgate not only these Rules but also amendments that had been proposed in
1972 to the already promulgated Federal Rules of Civil and Criminal Procedure.
See Act of M arch 30, 1973, Pub. L. No. 93-12, 87 Stat. 9. Congress’s concern, in
large part, was based on a desire to protect substantive state law. 19 Federal
Practice § 4512. In this way, Congress became intricately involved in formulating
the Federal Rules of Evidence, and the Rules themselves became an act of
Congress. 2 See Act of Jan. 2, 1975, Pub. L. No. 93-595, 88 Stat. 1926.
Remembering that Erie limits its holding to federal common law and excepts
2
The Act of M arch 30, 1973 required congressional approval only for the
Supreme Court orders in late 1972. Those orders proposed the original Federal
Rules of Evidence as well as certain amendments to both the Federal Rules of
Civil Procedure and the Federal Rules of Criminal Procedure. Congress did not
extend this Act to apply to all future amendments of the Federal Rules. Instead,
under the current system, amendments are made pursuant to a process whereby the
Supreme Court approves a change to the Rules and notifies Congress of such
change. If Congress fails to act, the amended rule goes into effect. In short,
since 1975, amendments to the Federal Rules have not been promulgated by an act
of Congress. As discussed below, our analysis focuses on Rule 401. Because this
Rule has remained unamended since 1975, we need not analyze the effect of Erie
on evidentiary rules amended since that time.
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congressional actions, this history makes clear that Erie does not apply to the
original Federal Rules of Evidence.
Nor can we find that Congress otherwise explicitly limited the applicability
of the Federal R ules of Evidence in the face of conflicting state law. Two
statutes normally limit the effect of evidentiary and procedural rules, the Rules
Enabling Act 3 and the Rules of Decision Act. 4 But these laws do not govern the
Federal Rules of Evidence as originally enacted. 19 Federal Practice § 4512; see
Flaminio v. Honda M otor Co., 733 F.2d 463, 470 (7th Cir. 1984). The Rules
Enabling Act proscribes the ability of the Supreme Court to alter substantive
rights. Here, with the original enactment of the Federal Rules of Evidence, it was
Congress, not the Supreme Court, creating the Rules. Under the Rules of
Decision Act, state law provides for the rule of decision in civil cases except
where Congress or the Constitution provides otherwise. Again, we are dealing
3
The Rules Enabling Act, granting the Supreme Court “the power to
prescribe general rules of practice and procedure and rules of evidence for cases
in” federal courts, simultaneously prohibits the Supreme Court from proscribing
any rule of procedure or practice for cases in the federal courts that shall
“abridge, enlarge or modify any substantive right.” 28 U.S.C. § 2072. This Act
has been used to limit the reach of the Federal Rules of Civil Procedure.
4
The Rules of Decision Act provides that state law, “except where the
Constitution or treaties of the U nited States or Acts of Congress otherw ise require
or provide, shall be regarded as rules of decision in civil actions” in the federal
courts. 28 U.S.C. § 1652.
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with a congressional act. Put simply, there is nothing in these Acts that limits the
scope of the Federal Rules of Evidence as originally enacted. 5
In sum, because Erie does not apply to acts of Congress, the
substance/procedure dichotomy embodied in that doctrine is inapplicable to the
Federal Rules of Evidence as originally enacted. Further, because an act of
Congress is subject to neither the Rules Enabling Act nor the Rules of Decision
Act, these Acts do not work to limit the applicability of the unamended Federal
Rules of Evidence in the face of conflicting state law.
b. Federal Court Application of Erie Doctrine to Federal Rules of
Evidence
W e recognize that numerous federal diversity courts have grappled with
this tricky issue and reached an opposite conclusion. These courts, such as the
district court below, suggest we limit application of the Federal Rules of Evidence
to those matters not implicating substantive state policy. See, e.g., M cInnis v.
A.M .F., Inc., 765 F.2d 240, 245 (1st Cir. 1985); Szantay v. Beech Aircraft Corp.,
349 F.2d 60, 63 (4th Cir. 1965); Potts v. Benjamin, 882 F.2d 1320, 1324 (8th Cir.
1989); M oe v. Avions M arcel Dassault-Breguet Aviation, 727 F.2d 917, 930–33
(10th Cir. 1984). These courts falter, though, because they ground this limitation
5
Again, we note that a number of the Federal Rules of Evidence have been
amended since 1975. W e do not address how these amendments affect the reach
of either the Rules Enabling Act or the Rules of Decision Act.
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in Erie and, as we have just discussed, Erie is inapplicable to the Federal Rules of
Evidence, a product of congressional action.
Under their approach, federal courts apply the Stewart analysis only if the
conflicting state evidentiary rule is procedural. If, however, the state evidentiary
rule is substantive, these courts have held that Erie controls and state law prevails
over conflicting federal evidentiary rules. State substantive rules, then, are
governed by an Erie analysis. Examples of substantive state evidentiary rules
where courts have applied Erie include such diverse topics as (1) the parol
evidence rule; (2) evidence concerning the amount of a plaintiff’s settlement with
other defendants; (3) findings of medical malpractice screening panels; (4) the
objective evidence requirement; (5) burden of proof rules; and (6) as we have
here, the failure to use seat belts. 17A James W m. M oore et al., M oore’s Federal
Practice ¶ 124.09 (3d ed. 2006).
Yet, as previously explained, this Erie approach turns Stewart on its head.
Stew art requires the court to look first at the federal evidentiary rule. If that rule
is arguably procedural, it governs even when a state substantive law is on point.
Simply put, because Erie is inapplicable, we must first look to the Federal Rules
of Evidence.
c. Tenth Circuit Approach
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Our precedent suggests that where a conflict exists between the Federal
Rules of Evidence and state law, we apply the Federal Rules unless the state law
reflects substantive concerns or policies.
The admissibility of evidence in diversity cases in federal court is
generally governed by federal law. Nevertheless, it is well recognized
that Congress did not intend the procedural rules to preempt the
so-called substantive state rules of evidence, such as the parol evidence
rule, the collateral source rule, or the statute of frauds; although the
application of these rules will affect the admissibility of some evidence,
they in reality serve substantive state policies regulating private
transactions.
M acsenti v. Becker, 237 F.3d 1223, 1241 (10th Cir. 2001) (quotations omitted);
see Romine v. Parman, 831 F.2d 944, 944–45 (10th Cir. 1987) (noting that while
“admissibility of evidence in diversity cases in federal court is generally governed
by federal law,” state law must be applied w hen “an evidentiary question is so
dependent on a state substantive policy”).
In our most noteworthy and extensive discussion of this issue, M oe v.
Avions M arcel Dassault-Breguet Aviation, 727 F.2d 917, 930–33 (10th Cir. 1984),
we addressed the applicability of the Federal Rule of Evidence governing
subsequent remedial measures. W e held that state law rather than Rule 407
prevails, thus rejecting the notion that the “admissibility of evidence in diversity
actions is governed exclusively by federal law— that is, the Federal Rules of
Evidence.” Id. at 931. W e employed instead an Erie analysis and categorized the
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state law as one of substance, not procedure. In doing so, we stated such
distinction was necessary to effect the twin goals of Erie— (1) uniformity, and
(2) prevention of forum-shopping. Id. at 932. W e concluded,
If the law of the state supplies the rule of decision, there is no
justification for reliance on Rule 407. We recognize that, by its terms,
Rule 407, when read in conjunction with Rules 401 and 402, does
appear to apply in these cases. However, such a result is an
unwarranted incursion into the Erie doctrine.
Id.
W e are careful to point out, however, that the court’s discussion regarding
the application of the Federal Rules of Evidence was dicta. As the court
observed: “Notwithstanding our view that the trial court erred in ruling that . . .
Rule 407 applies in diversity actions without regard to state law, we hold that no
harm resulted therefrom because the trial court’s actions were proper and correct
on other grounds.” Id. at 933. Indeed, one judge in a concurring opinion refused
to join the court’s Erie discussion, stating,
I concur in [the] result and in the opinion of the court except to the
extent that it purports to resolve the difficult question of possible
conflict between state and federal rules of evidence. As the court’s
opinion makes clear, that discussion is not necessary to our decision
which properly rests on the independent ground of balancing mandated
by Rule 403 and parallel state authority.
Id. at 936 (M cK ay, J., concurring).
d. Effect of Rule 401
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Although the M oe court’s reasoning is tempting, we are persuaded that Erie
is inapplicable to the Federal Rules of Evidence. W e recognize, of course, that a
federal court’s apparently unchecked ability to apply the Federal Rules of
Evidence without any regard for state substantive policy creates considerable
tension with notions of federalism. But this tension is overstated. Congress did
not give federal courts unbridled discretion to preempt state substantive law on all
arguably procedural matters. Instead, the Rules of Evidence expressly provide for
the application of state law in numerous circumstances. See Fed. R. Evid. 302
(presumptions); id. 501 (privileges); id. 601 (competency of witnesses).
M ost pertinent to this case, Rule 401 protects against incursion into state
substantive policy as part of its admissibility assessment. 6 Rule 401 defines
relevant evidence as “evidence having any tendency to make the existence of any
fact that is of consequence to the determination of the action more probable or
less probable than it w ould be without the evidence.” (emphasis added).
This definition requires a dual inquiry: (1) w hether the evidence is
probative or factually relevant to the proposition asserted (i.e., whether the
evidence tends to make the existence of that fact more or less probable), and
6
Rule 401 has not been amended since the Federal Rules of Evidence were
originally enacted. Accordingly, it is clearly the result of an Act of C ongress.
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(2) whether the proposition for which the evidence is offered is properly provable
in the case (i.e., the fact is material— of consequence— to the question of state
law ). 7 19 Federal Practice § 4512; see Fed. R. Evid. 401 advisory committee’s
notes (“Relevancy is not an inherent characteristic of any item of evidence but
exists only as a relation between an item of evidence and a matter properly
provable in the case.”); Olin Guy W ellborn III, The Federal Rules of Evidence
and the Application of State Law in the Federal Courts, 55 Tex. L. Rev. 371,
388–89 (1977). The first inquiry is a procedural question of evidence law and the
second is a substantive question regarding the materiality of the evidence.
W ellborn, supra, at 389; see Telum, Inc. v. E.F. Hutton Credit Corp., 859 F.2d
835, 838 (10th Cir. 1988) (“Substantive law . . . determines which facts are of
consequence in a given action.”).
Under the second inquiry, a fact may be “of consequence” to the
determination only if it is “the kind of fact to which proof may properly be
directed.” Fed. R. Evid. 401 advisory committee’s notes; W ellborn, supra, at
406.
7
W e are careful in our use of the term “material.” In the past, this
terminology was used to describe facts that were of consequence to the relevancy
determination. However, this term is now viewed with disfavor. The drafters of
the current Rules use “the phrase ‘fact that is of consequence to the determination
of the action’ to describe the kind of fact to which proof may properly be
directed” because “it has the advantage of avoiding the loosely used and
ambiguous word ‘material.’” Fed. R. Evid. 401 advisory committee’s notes.
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W here a state law excludes certain evidence in order to effect substantive
policy considerations, Rule 401 acts to exclude the evidence since the proposition
for which the evidence is submitted is not properly provable and, therefore,
irrelevant to the claim. 8 See Huff v. Shumate, 360 F. Supp. 2d 1197 (D. W yo.
2004) (holding that although the Federal Rules of Evidence apply, the Rules
nonetheless bow to state substantive policy based on the relevancy requirement of
Rules 401 and 402); see also Jack B. W einstein & M argaret A. Berger,
Weinstein’s Federal Evidence, § 401.04[3][b] (Joseph M . M cLaughlin ed. 2006).
For example, state law defines the elements and defenses of a cause of action in a
diversity case. If, in such a case, a defendant proffers evidence supporting a
defense that is no longer permitted by state statute, that proffer is of no
consequence to the action and therefore not properly provable.
In sum, although we find that the Federal Rules of Evidence are not subject
to Erie’s substance/procedure distinction, this distinction still has meaning in
making evidentiary determinations in federal diversity cases.
e. Substance versus Procedure
8
W e would be presented with a different case where state law admits
certain evidence, but a Federal Rule of Evidence directly on point excludes the
same evidence. In such a case the Federal Rule likely controls. This is because
Federal Rule of Evidence 402 states: “All relevant evidence is admissible, except
as otherwise provided by the Constitution of the United States, by Act of
Congress, by these rules, or by other rules prescribed by the Supreme Court
pursuant to statutory authority.” (emphasis added).
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The distinction between state substantive and procedural law has proven
elusive, largely because many state rules generally reflect a mix of substantive
and procedural concerns. See D. M ichael Risinger, “Substance” and
“Procedure” Revisited w ith Som e Afterthoughts on the Constitutional Problems
of “Irrebuttable Presumptions,” 30 UCLA L. Rev. 189, 190 (1982) (noting that
“the closest thing there is to a developed school of thought concerning the
m eaning of the procedure-substance dichotom y is really an abdication of analysis,
wilfully em braced.”). N onetheless, som e fundam ental elem ents consistently
define the substance-procedure dichotom y.
“A pure rule of evidence . . . is concerned solely with accuracy and
economy in litigation . . . .” Barron v. Ford M otor Co., 965 F.2d 195, 199 (7th
Cir. 1992). Such rules “are addressed to lawyers and judges in their professional
roles and govern the means by which disputes regarding the content or application
of substantive rules should be resolved. The purpose of these rules is to achieve
accuracy, efficiency, and fair play in litigation, without regard to the substantive
interests of the parties.” M ichael Lewis W ells, The Impact of Substantive
Interests on the Law of Federal Courts, 30 W m . & M ary L. Rev. 499, 504 (1989).
As John Hart Ely observed,
[A] procedural rule is . . . one designed to m ake the process of litigation
a fair and efficient m echanism for the resolution of disputes. Thus, one
way of doing things may be chosen over another because it is thought
to be more likely to get at the truth, or better calculated to give the
parties a fair opportunity to present their sides of the story, or because,
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and this m ay point quite the other way, it is a means of prom oting the
efficiency of the process.
John Hart Ely, The Irrepressible M yth of Erie, 87 Harv. L. Rev. 693, 724–25
(1974).
In contrast, “a substantive rule is concerned with the channeling of
behavior outside the courtroom .” Barron, 965 F.2d at 199. Substantive rules “are
directed at individuals and governm ents and tell them to do or abstain from
certain conduct on pain of som e sanction. Substantive rules are based on
legislative and judicial assessm ents of the society’s wants and needs, and they
help to shape the world of prim ary activity outside the courtroom .” W ells, supra,
at 504. Ely elaborates upon this idea:
The most helpful way . . . of defining a substantive rule . . . is as a right
granted for one or m ore nonprocedural reasons, for som e purpose or
purposes not having to do with the fairness or efficiency of the
litigation process. Thus, in attempting to give content to the notion of
substance, the literature has focused on those rules of law which
characteristically and reasonably affect people’s conduct at the stage of
prim ary private activity.
Ely, supra, at 725 (internal citations and quotations om itted). 9
9
Ely went on to note the state goals these policies serve:
[W ]e probably should give “conduct” a coverage som ewhat broader
than that the term m ost naturally suggests, to include along with the
encouragem ent of actual activity the fostering and protection of certain
states of m ind— for example, the feeling of release, the assurance that
the possibility of ordeal has passed, that a state seeks to create by
enacting a statute of limitations. Beyond that, we surely would want to
(continued...)
-22-
In short, although the distinction between substance and procedure is not
always clear, we can distinguish a substantive rule from a procedural rule by
examining the language and the policy of the rule in question. If these inquiries
point to achieving fair, accurate, and efficient resolutions of disputes, the rule is
procedural. If, however, the prim ary objective is directed to influencing conduct
through legal incentives, the rule is substantive.
f. Summary
The Federal Rules of Evidence are an act of Congress and, thus, subject
neither to the dictates of the Erie doctrine nor to the Rules Enabling Act or Rules
of Decision Act. Yet, we are mindful that Erie “recognized that the scheme of
our Constitution envisions an allocation of law -making functions between state
and federal legislative processes which is undercut if the federal judiciary can
make substantive law affecting state affairs beyond the bounds of congressional
legislative powers.” Hanna, 380 U.S. at 474–75 (H arlan, J. concurring).
9
(...continued)
count as substantive various sorts of im m unizing law s . . . which surely
are not calculated to encourage those im m unized to engage in the
conduct involved, conduct for which the rest of us would be liable.
They are, instead, based upon a judgm ent that although the conduct
involved is undesirable and indeed ought to be deterred, other and, in
context, m ore im portant goals w ill be served by im m unization from
liability.
Ely, supra, at 726.
-23-
But we also recognize that Congress may “prescribe housekeeping rules for
federal courts even though some of those rules will inevitably differ from
comparable state rules.” Id. at 473. This is not to say, however, that Congress
has done so in a manner that disrespects “one of the modern cornerstones of our
federalism.” Id. at 474 (Harlan, J. concurring). Although Erie does not apply, its
reasoning remains instructive. In formulating Rule 401, Congress maintained the
delicate balance between the state and federal systems. W e keep with that goal:
a fact may be “of consequence” in a diversity action only if substantive state
policy so allow s.
W ith this analysis behind us, we now address the district court’s exclusion
of evidence regarding Sims’s failure to use his seat belt and testimony from state
officials concerning Sims’s manner of death. In doing so, the first question we
resolve is w hether, under Rule 401, the evidence offered is “of consequence” to
the action. This inquiry necessarily requires us to consider if the state law
excluding this evidence reflects substantive policy considerations.
2. A dm issibility of Seat B elt E vidence
Great American’s principal evidentiary argument on appeal is that it should
have been permitted to offer evidence showing Sims did not fasten his seat belt
on the night he died.
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The district court relied on Oklahoma’s M andatory Seat Belt Act to exclude
this evidence. See Okla. Stat. tit. 47, § 12-420 (barring evidence of the use or
non-use of a seatbelt in any civil suit). The court reasoned that in a diversity
action, although the admissibility of evidence is generally governed by the
Federal Rules of Evidence, when the “evidentiary question is so dependent on
state substantive policy, state law must be applied.” R. at 467 (quoting Romine v.
Parman, 831 F.2d 944 (10th Cir. 1987)). Great Am erican contends this logic is
flawed for two independent reasons: (1) because the Federal Rules of Evidence
govern, this evidence is admissible, and (2) even if the Rules are not applicable,
the statute does not apply where a defendant is not attem pting to insinuate fault
but, as here, is only attempting to prove a driver’s state of m ind.
Although we hold that the Rules exclusively govern in federal diversity
cases, we still must determ ine, in accordance with our Rule 401 relevancy
assessment, whether § 12-420 is a procedural rule or a substantive one. Because
this determ ination necessarily involves interpretation of O klahom a law , we apply
the most recent pronouncement of the Oklahoma Supreme Court. If, however, the
Oklahoma Supreme Court has not yet spoken on the issue, we predict how that
court would address the issue. Blackhawk-Central City Sanitation Dist. v. Am.
Guar. & Liab. Ins. Co., 214 F.3d 1183, 1188 (10th Cir. 2000). W e review de
novo the district court’s interpretation of O klahom a law. Burton v. R.J. Reynolds
Tobacco Co., 397 F.3d 906, 910 (10th Cir. 2005).
-25-
a. M andatory Seat Belt Act
Oklahom a enacted its M andatory Seat Belt Act to encourage seat belt use
on the roads of O klahom a. See Bishop v. Takata Corp., 12 P.3d 459, 464 (Okla.
2000) (noting that “the obvious purpose[] of the Act [is] to codify public policy
of encouraging seat belt use”); see generally §§ 12-416 to 420. To this effect, the
Act requires drivers and front-seat passengers to fasten their seat belts. However,
the Act is careful to lim it the civil court ramifications for failure to wear a seat
belt, directing that evidence of the use or non-use of seat belts is inadm issible “in
any civil suit in Oklahom a.” Okla. Stat. tit. 47, § 12-420.
Even though the Oklahoma Supreme Court has not squarely addressed
whether § 12-420 is a substantive rule, a careful review of decisions from that
court persuades us that it is. 1 0 In Bishop v. Takata Corp., the court described the
purpose and scope of the A ct in holding it inapplicable to products liability cases:
Considering the Act as a whole, and the context from which it was
enacted, the obvious purposes of the Act are to codify public policy of
encouraging seat belt use and to m ake seat belt use mandatory for
drivers and front-seat passengers by providing a penalty for nonuse.
Section 12-420 expressly clarifies that the sole legal sanction for the
10
Numerous courts agree that a state statute excluding evidence of seat belt
use or non-use is substantive, not procedural, law. See, e.g., Dillinger v.
Caterpillar, Inc., 959 F.2d 430, 435 n.11 (3d Cir. 1992) (Pennsylvania); Sours v.
Gen. M otors Corp., 717 F.2d 1511, 1519 (6th Cir. 1983) (Ohio); Barron, 965 F.2d
at 199 (North Carolina); Potts v. Benjamin, 882 F.2d 1320, 1324 (8th Cir. 1989)
(Arkansas); Pasternak v. Achorn, 680 F. Supp. 447, 449 (D. M e. 1988) (M aine);
M ilbrand v. DaimlerChrysler Corp., 105 F. Supp. 2d 601, 604 (E.D. Tex. 2000)
(Texas).
-26-
failure to wear a seat belt is the fine imposed by the Act and that a
person will not be penalized in a civil proceeding, by connotations of
fault, for choosing to refrain from wearing a seat belt. To read the
statute any m ore broadly would defeat the legislative intent. The entire
Act is confined to the regulation of the conduct of the driver or the
passenger of a passenger vehicle as seat belt users or nonusers.
12 P.3d at 464 (emphasis added). A few years later, the court in Clark v. M azda
M otor Corp., 68 P.3d 207, 208 (Okla. 2003), further clarified the scope of the
Act, stating that the public policy encouraging seat belt use “protects persons in
civil proceedings from connotations of fault.”
W hile not completely clear, the language in Bishop and Clark suggests that
§ 12-420 reflects substantive state policy to the extent that drivers and passengers,
while required by law to wear their seat belts, should not be penalized, through
connotations of fault, beyond a small statutory fine. 1 1 The rule is not concerned
with how seat-belt evidence might affect the accurate resolution of litigated
disputes. Nor is it concerned with the efficient resolution of disputes. To the
contrary, the rule was designed to protect drivers from being blamed in a court of
law for failure to wear a seat belt. Cf. Barron, 965 F.2d at 199 (A state law that
11
In his concurring opinion in Clark, Justice Opala stated that the court’s
decision in Bishop “militates strongly in favor of an opposite view.” 68 P.3d at
210. W hile this statement certainly bears on our analysis, we do not think it
changes our conclusion. In both Bishop and Clark, the court held that § 12-420
does not bar the admission of evidence of the use or non-use of a seat belt in a
products liability case. The court never specifically resolved whether the law
reflects substantive state policy to the extent that it precludes such evidence in a
negligence case.
-27-
bars admission of seat belt evidence “is a rule of evidence if it is motivated by
concern that jurors attach too much weight to a plaintiff’s failure to wear his
seatbelt [but] is a substantive rule if it is designed not to penalize persons who
fail to fasten their seatbelts.”).
A negligence action arising from a car accident illustrates how § 12-420
acts to avoid penalizing litigants with connotations of fault. In this scenario, a
driver not wearing his seat belt is injured in a car accident caused by another
vehicle. The injured driver sues. At trial, the defendant wants to argue that had
the plaintiff been wearing a seat belt, plaintiff’s injuries would have been
minimized and, accordingly, plaintiff’s recovery should be reduced. Section
12-420 clearly precludes this argument.
W e are not presented with such a case here. Instead, Great American, the
defendant, wishes to present evidence of non-use of a seat belt as proof of Sims’s,
the driver’s, suicidal intent. Section 12-420 was not created to apply to such
facts. The Oklahoma Supreme Court currently limits the application of
§ 12-420 to negligence cases. See Bishop, 12 P.3d at 466 (noting that the
Oklahoma Supreme Court held that the Act clearly “precludes the introduction of
evidence of the use or nonuse of seat belts to support a claim of negligence in a
wrongful death action . . . .”) (citing Comer v. Preferred Risk M ut. Ins. Co., 991
P.2d 1006, 1008 (Okla. 1999)); Clark, 68 P.3d at 208 (Okla. 2003) (“Section
-28-
12-420 . . . prohibits introduction of [evidence of the use or non-use of seat belts]
to impute negligence or fault to a person who elects not to wear a seat belt.”).
That is not to say that the court might not later expand its application, but
the court has indicated a preference to limit the Act to disputes where the conduct
of the driver is at issue. See Bishop, 12 P.3d at 464 (noting that the Act “is
confined to the regulation of the conduct of the driver.”). For that reason, a
number of Oklahoma decisions find the Act inapplicable in cases involving
products liability. Clark, 68 P.3d at 210 (Opala, J. concurring); Bishop, 12 P.3d
at 466.
Great American does not argue that Sims was negligent for failing to wear
his seat belt or otherwise insinuate fault for this omission. It argues he was
suicidal. Whether a mandatory seat belt law exists in Oklahoma is irrelevant to
this argument. In a negligence case, the existence of a seat belt law could be
critical to a damages assessment because it imparts a duty on the injured party to
wear a seat belt. See, e.g., Gardner ex rel. Gardner v. Chrysler Corp., 89 F.3d
729, 733 (10th Cir. 1996) (noting that the Kansas legislature modified earlier law
in order to clarify the extent of the duty owed under a mandatory seat belt law ).
But here duty is not an element of the claim. Great American frankly is
unconcerned whether Sims could have avoided his injuries had he been wearing
his seat belt. Great American is only concerned with how his failure to w ear a
-29-
seat belt reflects on his mental state. In this sense, the evidence does not speak to
the conduct of the driver but instead to the driver’s state of mind.
Because Great American introduced this evidence for purposes of showing
Sims’s state of mind, not to insinuate fault, we hold that Oklahoma’s M andatory
Seat Belt Act is inapplicable to the present case, and the district court should have
admitted this evidence at trial. Cf. Barron, 965 F.2d at 198–200 (holding that
North Carolina’s seat belt exclusionary rule, w hile a substantive law , is
inapplicable to the present case because the use of evidence “was not to show that
[Plaintiff] failed to mitigate the consequences of the accident but to show that
[D efendant] had been reasonable”).
Having concluded the seat belt evidence was admissible, we turn to what
effect the court’s preclusion of this evidence had at trial.
b. Harmless Error
Although we find error here, reversal is not appropriate unless the error
prejudicially affected a substantial right of a party or if we reasonably conclude
that the exclusion of this evidence led the jury to reach a contrary result.
Praseuth v. Rubbermaid, Inc., 406 F.3d 1245, 1253 (10th Cir. 2005); see Fed. R.
Civ. P. 61. W e look to “the particular jury in the particular circumstances of the
trial.” United States v. Hedgepeth, 418 F.3d 411, 421 (4th Cir. 2005) (quotation
omitted); see also United States v. Crawford, 130 F.3d 1321, 1324 (8th Cir.
-30-
1997). Put another way, after reviewing the entire record, we must reverse unless
we find that this jury’s verdict more probably than not was unaffected by the
error. Obrey v. Johnson, 400 F.3d 691, 699–701 (9th Cir. 2005); see Mehojah v.
Drummond, 56 F.3d 1213, 1215 (10th Cir. 1995) (requiring review of entire
record). W e note that an “important factor in determining whether an error was
harmless is the strength of the case in support of the verdict . . . . The risk is
greater that a particular error tipped the scales in a close case than in one in which
the evidence was extremely one-sided.” 1 2 11 Charles Alan W right, Arthur R.
M iller & Edward H. Cooper, Federal Practice and Procedure § 2883 (2d ed. 1995
& Supp. 2005).
Here, Great American planned to offer testimony that Sims habitually wore
his seat belt but failed to do so on the night he died. 1 3 W e agree this evidence is
probative of Sims’s state of mind. W hile the jury surely could have found Sims
failed to buckle up, not because he was suicidal but because he was intoxicated,
the very nature of habit evidence is that it is done reflexively. Habit “is the
person’s regular practice of meeting a particular kind of situation with a specific
12
Admittedly, this “principle . . . has greater application in criminal cases
. . . than it does in a civil case” since civil cases only go to the jury “if
reasonable people could reach different conclusions as to the outcome.” 11
Charles Alan W right, Arthur R. M iller & Edward H. Cooper, Federal Practice and
Procedure § 2883 (2d ed. 1995 & Supp. 2005).
13
Great American proffered that M rs. Sims, if called to testify, would state
that Sims habitually wore his seat belt.
-31-
type of conduct.” Fed. R. Evid. 406 advisory committee’s notes (quotation
omitted); accord United States v. Serrata, 425 F.3d 886, 906 (10th Cir. 2005).
Accordingly, the jury might have weighed this habit evidence along with the lack
of skid marks at the scene, the car’s high rate of speed, and Sims’s alleged
mention of driving off a cliff, and found Sims intended to commit suicide.
W e nonetheless find the exclusion harmless. At trial, Great American had
the burden of proving Sims committed suicide and it, along w ith M rs. Sims,
presented extensive evidence on this issue. Indeed, this issue was the crux of the
case. Great American offered testimony that Sims was traveling at an excessive
rate of speed, testimony that he did not attempt to avoid the accident, testimony
from M rs. Sims’s daughter that Sims left the house crying, and M rs. Sims’s sworn
statement to police that Sims intended to drive off a cliff. Yet, the jury
unequivocally rejected Great American’s characterization of the evidence when it
not only found for M rs. Sims on the breach of contract claim but also on the bad
faith and punitive damages claims. It is fair to say that if the question had been
close, the jury would not have awarded both bad faith and punitive damages.
-32-
Therefore, we cannot reasonably conclude that the seat belt evidence, by
itself, would have led the jury to find in favor of Great American on the breach of
contract claim. 1 4
3. A dm issibility of E vidence from State O fficials
Great American next asserts the district court improperly limited the jury’s
consideration of evidence offered to refute the breach of contract claim: (1) the
medical examiner’s report, (2) the death certificate, (3) the accident report, and
(4) statements made by the investigating officer concerning Sims’s manner of
death. 1 5 The court erred, Great American argues, in applying
14
As to the bad faith and punitive damages claims, Great American has
raised sufficiency arguments. Because we reverse both these claims on
sufficiency grounds, any further harmless error analysis is unnecessary. See infra
Part II.B.
15
The jury instruction reads:
The court has permitted you to consider evidence that is normally not
admissible in a breach of contract claim. That evidence includes the Oklahoma
Official Accident Report, the R eport of Investigation by the M edical Examiner,
the Death Certificate, and statements made by investigating officers concerning
the speed of the vehicle and cause of Lawrence Sims’ accident and death. The
only portions of this evidence you may rely upon in considering the breach of
contract claim are the factual observations and the measurements personally made
by the officers.
The Oklahoma O fficial Accident Report, the Report of Investigation by the
M edical Examiner, the Death Certificate, and statements made by investigating
officers concerning the speed of the vehicle and cause of Lawrence Sims’
accident and death are inadmissible as to the breach of contract claim for two
reasons. First, this evidence is inadmissible because the evidence includes
conclusions as to M r. Sims’ cause of death that the officers are not qualified to
(continued...)
-33-
Oklahoma law rather than the Federal Rules of Evidence. As w ith the seat belt
evidence, this claim requires us to determine whether the evidence is of
consequence under Rule 401, or stated differently, whether the Oklahoma law at
issue reflects substantive state policy.
a. Expert Reports
W e begin with an examination of the two expert reports: the medical
examiner’s report and the death certificate. Pursuant to Oklahoma law, such
15
(...continued)
make. These conclusions would require the investigating officers to know M r.
Sims’ state of mind, which they could not know. Second, it is inadmissible
because the evidence comes from officials, or is in an official document, which
might cause you to believe that it is accurate or unquestionable. The Court does
not regard this evidence as conclusive on the cause of death of M r. Sims and nor
should you.
The only reason you are allowed to consider this evidence is because Great
American Life Insurance Company claims it reasonably relied on this information
in paying Plaintiff’s claim under the suicide provision of the policy. You may
only consider this evidence in determining whether G reat American Life
Insurance Com pany acted in good faith in investigating, evaluating, and paying
Plaintiff’s claim. You may not consider it as to Plaintiff’s breach of contract
claim .
You must make your own independent determination as to whether Great
American Life Insurance Company has met its burden of proving that M r. Sims
comm itted suicide. In making this determination, you may not consider the
Oklahoma O fficial Accident Report, the Report of Investigation by the M edical
Examiner, the D eath Certificate, and statements made by investigating officers
concerning the speed of the vehicle and cause of Lawrence Sims’ accident and
death. Defendant cannot meet its burden to prove M r. Sims committed suicide
through this evidence.
R. at 322–23 (emphasis added).
-34-
reports generally are excluded either as hearsay or improper opinion testimony.
See Travelers Protective Ass’n v. M ansell, 540 P.2d 1178, 1180 (Okla. 1975)
(excluding death certificate as hearsay); Fed. Life Ins. Co. v. M aples, 228 P.2d
363 (O kla. 1951) (excluding proof of death as hearsay and conclusion); N.Y. Life
Ins. Co. v. Gibbs, 56 P.2d 1179, 1180 (Okla. 1936) (excluding verdict of
coroner’s jury as hearsay); M etro. Life Ins. Co. v. Plunkett, 264 P. 827, 828 (Okla.
1928) (excluding statement by attending physician in proof of death and death
certificate as hearsay); Okla. Aid Ass’n v. Thom as, 256 P. 719, 721–22 (Okla.
1927) (excluding death certificate as hearsay).
In holding these types of records inadmissible for the purpose of showing
suicide, the Oklahoma Supreme Court has stated,
It is our opinion that the L egislature provided for the keeping of vital
statistics . . . for the purpose of keeping an accurate record of births and
deaths and of the diseases causing death, and so that the health
authorities may be better enabled to combat diseases. The attending
physician or coroner might be able to state the cause of death, just as
was stated here, gunshot wound. But to go further and state by whom
inflicted w ould change all the rules of evidence in cases in which this
certificate could be admitted.
Thom as, 256 P. at 721–22 (emphasis added). The court was clearly troubled that
a jury in such circumstances could be influenced by hearsay testimony. See id. at
721 (noting that admitting such testimony would “permit hearsay evidence”).
Indeed, the court later reiterated: “To know . . . how the deceased received the
injury that caused his death would require the testimony of an eyewitness, because
-35-
the injury was of the type which could have been incurred either accidentally or
intentionally.” M aples, 228 P.2d at 367. Therefore, evidence as to cause of death
is “inadmissible for the reason that they [are] based on hearsay and conclusion.”
Id.
Based on this precedent, we are persuaded that Oklahoma law barring such
testimony reflects a procedural rule. The court’s objective in precluding such
evidence is to promote accuracy in its courtrooms. See Thomas, 256 P. at 721
(noting that the case illustrates “the danger of permitting [a] death certificate to
be introduced to make out a prima facie case of suicide.”). Therefore, because
the state rules are procedural under Federal Rule of Evidence 401, the district
court should not have relied on state law in conducting its admissibility
determination.
Nevertheless, we find no error in the exclusion of these reports. Under
Rule 702, reports from experts, such as a m edical exam iner, are adm issible only if
necessary to aid in the interpretation of scientific, technical, or other specialized
facts. Although any witness m ay offer an opinion as to an ultim ate issue to be
decided by a jury, this opinion should not unduly invade the province of the jury
when the assistance of the witness is unnecessary. See United States v. Dazey,
403 F.3d 1147, 1172 (10th Cir. 2005); see Fed. R. Evid. 704 advisory com m ittee’s
notes (“Under Rules 701 and 702, opinions m ust be helpful to the trier of fact,
-36-
and Rule 403 provides for exclusion of evidence which wastes tim e. These
provisions afford ample assurances against the admission of opinions which
would m erely tell the jury what result to reach, som ewhat in the manner of the
oath-helpers of an earlier day.”).
Here, the jury was fully capable of assessing the facts to determine
causation. The experts did not offer any opinion that was based on scientific or
technical facts outside the jurors’ comm on knowledge or experience. To the
contrary, this is the very type of fact determination a jury is equipped to make.
Accordingly, although the district court incorrectly applied state law , the court’s
analysis nonetheless conforms to the appropriate analysis under Federal Rule of
Evidence 702, which would have limited the admissibility of the medical
examiner’s report and the death certificate.
b. Evidence from Investigating Officer
The district court also limited the investigating officer’s accident report as
well as his testimony relating to Sims’s cause of death. 1 6 The court relied on
16
Great American did not appeal the portion of the limiting instruction
concerning the investigating officer’s statement as to the speed of the vehicle.
Even if we could read their appeal broadly to cover this issue, Great American
admitted that the speed testimony was being offered only as evidence of Great
American’s lack of bad faith. In pretrial conference, Great American argued, “Is
[the speed evidence] being offered for the truth of the matter as to w hether [Sims]
was going 115 miles an hour; . . . No, it’s being offered based on the good faith
issue as to what Great American relied upon. And whether that information is
(continued...)
-37-
Gabus v. Harvey, 678 P.2d 253, 257 (Okla. 1984), to exclude this evidence. In
that case, the court emphasized the capability of the jury in assessing certain
facts:
[The evidence] concerned facts that could be readily appreciated by
any person who drives an automobile or crosses streets. N o special
skill or know ledge w as needed to understand these facts and draw a
conclusion from them. In such a case as this, where the normal
experiences and qualifications of laymen jurors permit them to draw
proper conclusions from the facts and circumstances, expert
conclusions or opinions are inadmissible. The expert conclusion here
w as not helpful and should not have been admitted . . . . It w as not
useful since the jury was just as capable of drawing a proper
conclusion from those facts as was the officer.
Id. at 256–57; see Maben v. Lee, 260 P.2d 1064 (Okla. 1953) (holding that an
investigating officer without personal knowledge cannot offer an opinion as to
causation at trial when the jury is as capable of doing so as is the officer); see
also Diaz v. State, 728 P.2d 503, 514 (Okla. Crim. App. 1986) (“It is only where
the fact of death and its cause is beyond the understanding of the average layman
that expert testimony may be necessary.”) (quotation omitted).
Based on this language, we believe that the Oklahoma rule precluding a
police officer’s opinion about causation is a procedural rule concerned solely with
accuracy and economy in the courtroom. Therefore, the district court should not
16
(...continued)
true or not, Great American relied upon it. And that shows good faith, not bad
faith, and it’s relevant to that issue.” R. at 517.
-38-
have grounded its conclusion in Oklahoma procedural law , but instead should
have relied exclusively on the appropriate Federal Rule of Evidence to guide its
admissibility determination.
Nonetheless, we find no error in the exclusion of this evidence. The
holding from the Gabus court relied extensively on Oklahoma Rules of Evidence
§ 2403 and § 2702. Gabus, 678 P.2d at 254–55; see Okla. Stat. tit. 12, § 2403
(“Although relevant, evidence may be excluded if its probative value is
substantially outweighed by the danger of unfair prejudice, confusion of the
issues, misleading the jury, undue delay, needless presentation of cumulative
evidence, or unfair and harmful surprise.”); id. § 2702 (“If scientific, technical or
other specialized knowledge will assist the trier of fact to understand the evidence
or to determine a fact in issue, a witness qualified as an expert by knowledge,
skill, experience, training or education may testify in the form of an opinion or
otherw ise.”). These rules are identical to Federal Rules of Evidence 403 and 702.
Under the Federal Rules, statements by investigating officers as to accident
causation are generally not admitted unless (1) perceived by the witness and
helpful to a determ ination of a fact in issue, see Fed. R. Evid. 701, or (2) in the
case of an expert, necessary to aid the jury in the interpretation of scientific,
technical, or other specialized facts, see id. 702. Neither of these conditions are
met here. As we stated earlier, the jury was fully capable of concluding whether
-39-
or not Sims committed suicide. See Dazey, 403 F.3d at 1172. The investigating
officer’s opinion on this matter was no more than speculation based on the same
facts that the jury had before it. W e therefore find that had the district court
properly applied the Federal Rules, it would have excluded the officer’s testim ony
concerning causation. In short, there was no error in the court’s exclusion of the
testim ony under state law .
4. Father’s Suicide
Great American’s last evidentiary argument is that the district court
improperly excluded evidence showing that Sims’s father comm itted suicide. The
court concluded that the danger of unfair prejudice substantially outweighed the
probative value of the evidence under Federal Rule of Evidence 403. Because
this evidence is both irrelevant 1 7 and highly prejudicial, the district court did not
abuse its discretion. See Christiansen v. City of Tulsa, 332 F.3d 1270, 1283 (10th
Cir. 2003).
B . Sufficiency of the E vidence
In addition to its evidentiary claims, Great American asserts that the
evidence was insufficient to support the bad faith and punitive damages awards.
W e review de novo a district court’s denial of a motion for judgment as a matter
17
Great American argues that this evidence suggests a “like father, like
son” inference. However, Great American has produced no reliable scientific
evidence to support this proposition.
-40-
of law , view ing the evidence in a light most favorable to the opposing party and
drawing all reasonable inferences therefrom. Hardeman v. City of Albuquerque,
377 F.3d 1106, 1112 (10th Cir. 2004). W e do “not weigh the evidence, pass on
the credibility of the witnesses, or substitute [our] conclusions for that of the
jury.” Id. at 1116 (internal quotation marks omitted). Only if “there is no legally
sufficient evidentiary basis for a reasonable jury to find for the issue against that
party” do we reverse a jury’s verdict. Fed. R. Civ. P. 50(a)(1).
1. B ad Faith
Under Oklahoma law, “an insurer has an implied duty to deal fairly and act
in good faith with its insured.” Christian v. Am. Home Assurance Co., 577 P.2d
899, 904 (Okla. 1977). If an insurer fails to fulfill this duty, a bad faith action in
tort can arise. Id. This is not to say, however, that an insurer may never dispute
coverage; to the contrary, an insurer needs only a legitimate basis for doing so.
Id. at 905; Timberlake Constr. Co. v. U.S. Fid. & Guar. Co., 71 F.3d 335, 343
(10th Cir. 1995). The Oklahoma Supreme Court cautions:
W e recognize that there can be disagreements between insurer and
insured on a variety of matters such as insurable interest, extent of
coverage, cause of loss, amount of loss, or breach of policy conditions.
Resort to a judicial forum is not per se bad faith or unfair dealing on the
part of the insurer regardless of the outcome of the suit.
Christian, 577 P.2d at 905.
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The simple presence of a legitimate dispute does not necessarily end the
inquiry. Instead, it shifts the burden to the insured to present additional evidence
of bad faith. M ost commonly, the insured asserts an insurer’s failure to “conduct
an investigation reasonably appropriate under the circumstances.” Buzzard v.
Farmers Ins. Co., 824 P.2d 1105, 1109 (Okla. 1991). An investigation does not
meet this standard if (1) the manner of investigation hints at a sham defense or
otherwise suggests that material facts were overlooked, or (2) the insurer
intentionally disregarded undisputed facts supporting the insured’s claim. Oulds
v. Principal M ut. Life Ins. Co., 6 F.3d 1431, 1442 (10th Cir. 1993).
The “essence” of such a claim, though, is always the “insurer’s
unreasonable, bad-faith conduct.” M cCorkle v. Great Atl. Ins. Co., 637 P.2d 583,
587 (O kla. 1981); accord Willis v. M idland Risk Ins. Co., 42 F.3d 607, 612 (10th
Cir. 1994). “The decisive question is whether the insurer had a good faith belief,
at the time its performance was requested, that it had justifiable reason for
withholding payment under the policy.” Buzzard, 824 P.2d at 1109 (quotation
omitted). Put simply, “tort liability may be imposed only where there is a clear
showing that the insurer unreasonably, and in bad faith, withholds payment of the
claim of its insured.” Christian, 577 P.2d at 905.
“W hen there is conflicting evidence from which different inferences may be
drawn regarding the reasonableness of the insurer’s conduct, then what is
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reasonable is always a question to be determined by the trier of fact . . . .” Peters
v. Am. Incom e Life Ins., 77 P.3d 1090, 1097 (O kla. 2002).
W ith these principles in mind, we now turn to the facts of this case.
a. Legitimate Dispute
Our first inquiry is whether Great American had a legitimate basis to deny
coverage. The facts here allow two plausible interpretations of the events that
transpired: (1) Sims perished in an unintended and tragic accident, as the jury
found, or (2) Sims committed suicide. Great American presented ample evidence
to suggest the latter. Foremost, the jury review ed M rs. Sims’s sw orn statement to
the police, where she stated that her husband “mention[ed] driving off a cliff” and
had become “angrier and angrier.” The police officer who took this statement
interpreted it to imply that Sims was not only enraged but suicidal. Indeed,
Sims’s apparent conduct lends credence to this interpretation. No skid marks or
other evidence at the scene indicated any intent to avoid the accident. Nor did
Sims take his routine precaution to avoid injury— he failed to fasten his seat belt.
Finally, although he did not drive off a cliff per se, within moments of leaving his
home, Sims did launch his vehicle off an incline that propelled him some 115 feet
across a river bed.
Aside from this evidence, every official report listed suicide as the cause of
death: the accident report, the medical examiner’s report, and the death
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certificate. Even the official missing persons report indicated that Sims might be
suicidal. W hile it may be true that these reports were primarily based on M rs.
Sims’s sworn statement to the police, a statement she later recanted, this fact does
not negate the conclusion reached in these reports for the purpose of determining
whether a legitimate dispute existed. Notably, the conclusions in these reports
were not made at the behest of Great American— the medical examiner and
investigating officer had no connection with Great American. An insurer can
reasonably rely on such evidence when making its preliminary decision to dispute
coverage.
Given the evidence before Great American at the time a decision on
payment was required, the evidence clearly demonstrates a legitimate dispute
concerning coverage. Therefore, M rs. Sims had to present additional evidence of
bad faith to survive a motion for judgment as a matter of law.
b. Adequate Investigation
M rs. Sims argues that Great American did not perform an investigation
reasonably appropriate under the circumstances. Great American counters that a
more thorough investigation would not have produced additional relevant
information that would nullify the undisputed evidence of suicide.
Great American cites to our decision in Timberlake Construction Co. v.
United States Fidelity & Guaranty Co. for this proposition:
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[W ]hen a bad faith claim is premised on inadequate investigation, the
insured must make a showing that material facts were overlooked or
that a more thorough investigation w ould have produced relevant
information. [The insured] made no such showing. For example, w hile
[the insured’s] expert, testified that [the insurer] breached the duty of
good faith by not questioning [the insured’s] representatives
[concerning the dispositive issue], [the representatives’] view s on this
subject would not have changed the underlying facts already known to
[the insurer] , facts from which [the insurer] was entitled to form a
reasonable belief [about the dispositive issue] .
71 F.3d at 345 (emphasis added).
Extending this logic here, Great American asserts that it conducted an
investigation reasonably appropriate under the circumstances and that no amount
of additional evidence would have changed the underlying facts. It overlooked no
material facts; it did not intentionally disregard undisputed facts in favor of the
insured; and any additional facts could not have changed the conclusions drawn in
the various state officials’ reports. W e agree.
The key failure, according to M rs. Sims, is the lack of any investigation
into motive. In particular, she argues, Great American should have explored this
issue with her and her daughter. 1 8 To be sure, Great American was aware the
18
Additionally, she argues that Great American could have examined the
car, requested an autopsy to be performed, or visited the accident site. But
nothing suggests that additional material evidence would have been discovered
inconsistent with what the parties already knew. If the facts suggested a
mechanical malfunction or health problem— which they do not— then this
argument might have more force. A failure to investigate theory must be based on
more than hypothetical loose ends.
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Sims family adamantly rejected any assertion that Sims committed suicide. Great
American also knew that Sims’s medical history did not reveal any evidence of
depression and that he was drunk when he left in his car that evening. And it is
hardly necessary to concede that committing suicide over a messy kitchen is
improbable.
Yet, the operative inquiry is whether additional questioning of M rs. Sims
regarding a motive and questioning her daughter for the first time would have led
to new or significant information. W e think not. In the first place, M rs. Sims and
her daughter had every reason to contest a finding of suicide: a $300,000 life
insurance benefit hung in the balance. M oreover, M rs. Sims told police her
husband mentioned “driving off a cliff.” It is true she told Broyles that Sims did
not commit suicide, and Broyles did not ask for further clarification. But even if
it had, only a few additional questions could have been asked, and these would
have revealed nothing new.
Great American could have further investigated by asking M rs. Sims about
the obvious inconsistency between her sw orn police statement and her statements
to Broyles. Yet this inquiry would not have changed the underlying facts upon
which Great American was entitled to rely: the missing persons report, the death
certificate, the medical examiner’s report, and the accident report. See
Timberlake, 71 F.3d at 345.
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M rs. Sims also contends that the fact an officer added language to a police
form she signed in blank should have changed the underlying facts already know n
to Great American. But the officer testified that he interpreted her body language
and her statement to suggest Sims possessed a suicidal state of mind. Just as
importantly, this fact does not present anything new, as M rs. Sims repeatedly told
Broyles she did not think her husband was suicidal. We cannot draw from this
alleged failure any suggestion that Broyles or Great American conducted a
superficial investigation.
In sum, we conclude that the district court improperly submitted the issue
of bad faith to the jury and reverse the jury verdict awarding damages on this
claim.
2. Punitive D am ages
Great American argues that the evidence was also insufficient to support a
punitive damages verdict. Because a finding of punitive damages necessarily
entails a finding of bad faith, Willis, 42 F.3d at 614–15, and because we find the
evidence insufficient to support bad faith, we reverse the punitive damages
verdict.
W e note that even were we to have left the bad faith verdict intact, punitive
damages still would have been inappropriate. Punitive damages are awarded
“only when the evidence plainly show s oppression, fraud, malice, or gross
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negligence.” M cLaughlin v. Nat’l Ben. Life Ins. Co., 772 P.2d 383, 386 (Okla.
1988) (quotation omitted). Stated differently, an insurer must “recklessly
disregard” or “intentionally and with malice breach[] its duty to deal fairly and act
in good faith with its insured.” Okla. Stat. tit. 23, § 9.1 (B), (D) (2005); see
Badillo v. M id Century Ins. Co., 121 P.3d 1080, 1106 (O kla. 2005).
The evidence in this case plainly does not support this conclusion. In
addition to the evidence supporting its claim denial, Great American did not
engage in conduct that has supported punitive damages in other cases. It did not
falsify any documents. See, e.g., Timmons v. Royal Globe Ins. Co., 653 P.2d 907,
917 (Okla. 1982). Nor did it offer to settle the claim if M rs. Sims fired her
counsel. See, e.g., id. Great American did not simply deny coverage based on
skeletal information. It hired an experienced, independent claim investigation
agency to review the evidence and interview witnesses. The investigator
reviewed Sims’s medical and pharmaceutical history, interviewed numerous
individuals with knowledge of the accident, and obtained relevant documentation
from government officials. See, e.g., Buzzard, 824 P.2d at 1115 (“Farmers was
notified of the claim the day after the accident but failed to conduct any
investigation.”) (emphasis added).
Great American remained steadfast in its reasoning for denying the claim.
It never argued that the denial was appropriate for any reason other than the
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alleged suicide. See, e.g., id. (“At trial, [the insurer] raised the issue of [the
insured’s] negligence, asserting that denial of the claim was based on [this
negligence]. However, nowhere in [the insurer’s] file was comparative
negligence mentioned as a reason for denial.”). Finally, Great American did not
attempt to conceal the identity of its investigator or obtain confidential
information without M rs. Sims’s permission. See, e.g., Timmons, 653 P.2d at
917. In short, because we find that the evidence does not support a finding of
bad faith, we also cannot affirm a finding of punitive damages. Even were we to
have affirmed the jury’s finding on bad faith, Great American’s conduct does not
demonstrate the elements of fraud or evil intent to which punitive damages are
directed. W e therefore find no legally sufficient evidentiary basis for a
reasonable jury to aw ard punitive damages.
C . E xclusion of Expert W itness
Great American finally contends that the district court improperly excluded
its accident reconstruction expert as being untimely disclosed. Federal Rule of
Civil Procedure 26(a)(2)(C) requires that
disclosures shall be made at the times and in the sequence directed by
the court. In the absence of other directions from the court or
stipulation by the parties, the disclosures shall be made at least 90 days
before the trial date or the date the case is to be ready for trial . . . .
(emphasis added). Here, Great American disclosed its expert more than 90 days
before the trial actually began. Based on this fact, Great American urges that its
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disclosure was timely because the trial date is the actual, as opposed to the
scheduled, date of the trial.
W e find Great American’s disclosure untimely in either case. Rule 26
requires disclosure 90 days prior to the trial date unless otherwise directed by the
court. Because the date of disclosure is initially determined per court order, the
district court’s scheduling orders are dispositive. Here, the court initially
scheduled witness lists to be disclosed by M arch 7, 2003. The court amended this
order twice. The final scheduling order set the date for expert disclosures for
June 6, 2003. Great American filed a final witness list on that date without
including the accident reconstruction expert. Despite ample opportunity to
request an amendment to the scheduling order, 1 9 Great American never did so,
instead opting to file an Amended Witness List on November 12, 2003, five
months past the original deadline.
Because G reat American did not com ply with the court’s scheduling order,
the district court properly excluded Great American’s accident reconstruction
expert as untimely disclosed.
19
Great American filed a joint motion to amend the scheduling order on
July 1, 2003. In its motion, Great American did not request an extension of the
date for witness disclosures. M rs. Sims filed a second motion to amend on
August 15, 2003. Again, Great American did not request an extension.
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V III. C onclusion
Accordingly, we REVERSE the district court’s denial of judgment as a
matter of law on both the bad faith and punitive damages claims. W e otherwise
AFFIR M .
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04-5135 - Sims v. Great American Life Insurance Com pany
H A R T Z , Circuit Judge concurring/dissenting.
I join Judge Tym kovich’s im pressive opinion except in two respects. First,
I would not recognize any restrictions on the validity of Fed. R. Evid. 401 in
diversity cases. Second, I would not hold that it was harm less error to exclude
the seatbelt evidence.
It seem s to m e that my view of the validity of Rule 401 follows inexorably
from the logic of the opinion itself. The opinion convincingly establishes that
Rule 401 is not subject to the Rules of D ecision Act or the Rules Enabling Act.
And Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988), im poses no
lim its on Rule 401 because it is “capable of classification as a procedural rule,”
id. at 32. Indeed, it is a quintessential procedural rule.
This is not to say that Rule 401 can be applied in diversity cases without
reference to state substantive law . Far from it. State law governs the plaintiff’s
cause of action and the defendant’s defenses. The trial court m ust look to that
law when deciding whether evidence m eets Rule 401’s definition of relevant
evidence: “evidence having any tendency to m ake the existence of any fact that is
of consequence to the determ ination of the action m ore probable or less probable
than it would be without the evidence.” If state law renders evidence of no
consequence to resolution of the claim , then the evidence is irrelevant under
Rule 401.
For example, if Oklahoma law says that failure to wear a seatbelt is not
negligence for the purpose of determining a plaintiff’s com parative fault in a tort
case, then evidence of such failure is not relevant under Rule 401 when offered to
prove such comparative fault. Sim ilarly, if, under a state parol-evidence rule, the
contract between two parties does not incorporate oral agreements that contradict
the term s of the written contract, then evidence of the oral agreement is not
relevant under Rule 401. Thus, in a sense, application of Rule 401 in a diversity
case requires examining whether a state rule of evidence is one of procedure or of
substance. If the state rule is one of substance because it determ ines that a fact
(such as seatbelt use) is or is not, in the words of Rule 401, “of consequence to
the determ ination of the action,” then the state rule governs the application of
Rule 401. If, however, the state rule is “substantive” only in som e other sense, it
does not affect application of Rule 401.
The approach that I prefer leads to the same conclusions reached by the
m ajority opinion regarding the admissibility of evidence in this case. Perhaps
application of the m ajority’s form ulation will never differ from what I conceive to
be the proper rule. Future cases w ill tell. I do, how ever, think that a virtue of m y
approach (besides being, in m y view, correct) is that it makes the trial judge’s
task m ore straightforward. Just apply Rule 401 on its own term s, and the ruling
will be correct.
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Turning now to harm less error, the majority and I agree that the district
court erred in excluding the evidence that M r. Sims had a habit of fastening his
seatbelt but had not done so w hen he drove to his death. In what I view as a close
case, this significant evidence could have changed the result. I would therefore
reverse the breach-of-contract judgm ent and rem and for a new trial.
M y chief disagreem ent with the m ajority opinion on this point is not,
however, its conclusion. Reasonable people can differ on whether the failure to
admit the seatbelt evidence was harm less error. M y particular concern is one
aspect of the m ajority’s analysis— the reference to the jury’s verdicts on bad faith
and punitive damages. The majority reasons that this jury m ust not have found
the suicide issue to be a close call because it proceeded to rule against the insurer
on bad faith and punitive damages. Because, as the majority opinion notes, the
general rule is that one looks at the specific jury in assessing whether error is
harm less, the m ajority’s conclusion appears to follow. But I am not persuaded.
To be sure, the jury did find bad faith and award punitive dam ages. On appeal,
however, we set aside both findings for lack of evidence. In other words, the
jury’s fact finding was unreasonable. It seems peculiar to base our harm less-error
ruling on a jury’s unreasonable, irrational finding on another issue. In this
circumstance, I think the proper approach is not to look at this particular jury (or
at least this jury’s findings on bad faith and punitive damages) in assessing
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whether error w as harm less but to consider what a hypothetical rational jury
would do.
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