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Lexington Insurance Co. v. Scott Homes Multifamily Inc.

United States District Court, D. Arizona

March 31, 2016

Lexington Insurance Company, Plaintiff,
v.
Scott Homes Multifamily Incorporated, et al., Defendants.

ORDER

JAMES A. TEIBORG SENIOR UNITED STATES DISTRICT JUDGE.

Pending before the Court is Plaintiff Lexington Insurance Company (“Lexington”)’s Renewed Motion for Judment [sic] as a Matter of Law, Motion for a New Trial, Motion to Alter or Amend the Judgment, and/or Motion for Relief from the Judgment. (Doc. 499). Defendant/Counterclaimant Silverbell 290 Limited Partnership and Defendant Scott Homes Multifamily, Inc. (“Silverbell”) filed a response, (Doc. 512), and Lexington replied, (Doc. 513). The Court held a jury trial in this matter, and the jury returned a verdict in favor of Silverbell. (Doc. 463). The Court entered Judgment in favor of Silverbell in the amount of $3, 410, 000.01 in addition to pre- and post-judgment interest. (Doc. 486). The Court now rules on Lexington’s motions.

I. Renewed Motion for Judgment as a Matter of Law

A. Legal Standard

Federal Rule of Civil Procedure (“Rule”) 50 permits a court to grant judgment as a matter of law (“JMOL”) on an issue if “the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.” Fed.R.Civ.P. 50(a)(1). JMOL is “proper when the evidence permits only one reasonable conclusion and the conclusion is contrary to that reached by the jury.” Lakeside-Scott v. Multnomah Cnty., 556 F.3d 797, 802 (9th Cir. 2009) (quoting Ostad v. Or. Health Sci. Univ., 327 F.3d 876, 881 (9th Cir. 2003)). The Court must uphold the jury’s verdict “if it is supported by substantial evidence, which is evidence adequate to support the jury’s conclusion, even if it is also possible to draw a contrary conclusion.” Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir. 2002). “In making this determination, the court must not weigh the evidence, but should simply ask whether the [moving party] has presented sufficient evidence to support the jury’s conclusion.” Harper v. City of Los Angeles, 533 F.3d 1010, 1021 (9th Cir. 2008). The Court must “view the evidence in the light most favorable to the party in whose favor the jury returned a verdict and draw all reasonable inferences in [its] favor.” Lakeside-Scott, 556 F.3d at 802.

B. Analysis

In support of its Renewed Motion for Judgment as a Matter of Law, Lexington contends that Silverbell did not prove (1) more than $1, 000, 000 of “property damage” as defined by the underlying Evanston Policy, (2) that any “property damage” actually occurred during the policy period, and (3) that Scott Homes complied with the Evanston Policy’s independent contractors conditional exclusion. (Doc. 499 at 2-8).

1. Amount of “Property Damage”

Lexington first argues that Silverbell did not provide sufficient evidence to show that “property damage” exceeded $1 million. (Id. at 2-3). In this regard, Silverbell’s expert opined that Silverbell suffered over $7 million in property and resultant damages to tangible property in addition to loss-of-use damages of over $1 million. See (9/2/15 Tr. at 26-44). Silverbell also introduced into evidence volumes of photographs depicting property damage. See e.g., (Tr. Exs. 1029-30). On the other hand, Lexington’s expert testified that Scott Homes suffered less than $1 million in covered property damages. See (9/9/15 Tr. at 1684, 1174-75). While Lexington’s view could be construed as one possible interpretation of the evidence, the Court finds that the jury’s interpretation is a reasonable one. Even assuming the Court considered Lexington’s view of the evidence to be more reasonable, it is not for the Court to “substitute [its] view of the evidence for that of the jury.” Polar Bear Prods., Inc. v. Timex Corp., 384 F.3d 700, 708 (9th Cir. 2004).

2. Time Period of “Property Damage”

Lexington next contends that Silverbell presented no evidence showing that the millions of dollars in “property damages” occurred during the Lexington Policy period. (Doc. 499 at 3-6). “Property damage” was defined by the Evanston Policy as:

a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the “occurrence” that caused it.

(Doc. 270-2 at 53). The Court previously held that in order to recover, Silverbell needed to show that “Scott Homes suffered damages exceeding $1 million for property damages caused by construction defects.” (Doc. 323 at 23). The Court finds that the jury’s verdict in this regard was “supported by ...


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