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Olsen v. Pacific Indemnity Co.

United States District Court, D. Arizona

April 26, 2019

Clinton Olsen, Plaintiff,
v.
Pacific Indemnity Company, et al., Defendants.

          ORDER

          Honorable John J. Tuchi United States District Judge

         At issue is Plaintiff's Motion for New Trial (Doc. 109), to which Defendant filed a Response in opposition (Doc. 115) and in support of which Plaintiff filed a Reply (Doc. 117). No. party requested a hearing on the Motion and the Court finds oral argument would not assist in its resolution. LRCiv 7.2(f).

         The parties tried Plaintiff's breach of contract claim to a jury over five days in October 2017.[1] At trial, counsel for both parties ably and professionally presented and argued the evidence available to them; the Court notes the fine quality of the advocacy by all counsel. The jury returned a verdict for Defendant. Plaintiff bases his motion for new trial on the premise that the Court should not have allowed certain evidence about his investments in medical marijuana dispensaries because that evidence unfairly prejudiced him in the eyes of the jury. Plaintiff seeks “a new trial that excludes evidence beyond the fact that he had investments in the medical marijuana business and where he is not compelled to answer questions about his investments or explain how he invested in a not-for-profit business.” (Doc. 117 at 4.)[2] For the reasons set forth below, the Court will deny the Motion.

         I. Legal Standard

         Rule 59 provides a district court the discretion to grant a new trial “for any reason for which a new trial has heretofore been granted in an action at law in federal court.” Fed.R.Civ.P. 59(a)(1)(A). “Rule 59 does not specify the grounds on which a motion for a new trial may be granted;” thus courts are “bound by those grounds that have been historically recognized.” Zhang v. Am. Gem Seafoods, Inc., 339 F.3d 1020, 1035 (9th Cir. 2003). The Ninth Circuit has held that “[t]he trial court may grant a new trial only if the verdict is contrary to the clear weight of the evidence, is based upon false or perjurious evidence, or to prevent a miscarriage of justice.” Molski v. M.J. Cable, Inc., 481 F.3d 724, 729 (9th Cir. 2007) (citation omitted). A motion for new trial “may raise questions of law arising out of alleged substantial errors in admission or rejection of evidence” by the trial court. Montgomery Ward & Co., v. Duncan, 311 U.S. 243, 251 (1940). The authority to grant a new trial is “confided almost entirely to the exercise of discretion on the part of the trial court.” Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36 (1980).

         Where a motion for new trial is predicated on an assignment of error in the admission of evidence before the jury, the court should grant the motion only if it finds 1) evidence has been improperly admitted; and 2) the admission of such evidence resulted in prejudice to the party moving for a new trial. See, e.g., United States v. 4.85 Acres of Land, 546 F.3d 613, 617 (9th Cir. 2008). The first element-whether the evidence at issue was improperly admitted-is evaluated by an abuse of discretion standard. Id. A district court in rendering an evidentiary ruling abuses its discretion when

it makes an error of law, when it rests its decision on clearly erroneous findings of fact, or when we are left with the definite and firm conclusion that the district court committed a clear error of judgment.

Id. The second element-a finding of prejudice-requires a finding that “the court's error more probably than not [] tainted the verdict.” Estate of Barabin v. Astenjohnson, Inc., 740 F.3d 457, 464 (9th Cir. 2014) (internal citations and quotations omitted).

         II. Analysis

         A. Prejudice

         The Court starts with the second element and concludes that even if the admission of evidence related to Plaintiff's purported investment in Arizona medical marijuana dispensaries constituted an abuse of discretion, it did not taint the verdict and therefore did not constitute prejudice to Plaintiff. The Ninth Circuit has held that “prejudice is at its apex when the district court erroneously admits evidence that is critical to the proponent's case.” Barabin, 740 F.3d at 465. The evidence Plaintiff charges as wrongly admitted was anything but critical to Defendant's case.

         Plaintiff made a claim against his homeowners' insurance policy to cover a reported burglary and theft of nearly $170, 000 worth of jewelry. When Defendant did not cover the claim, Plaintiff sued for breach of the insurance contract. For Plaintiff to prevail on that claim, the jury had to find that, among other things, the claimed loss actually occurred-in other words, that he owned the jewelry and it was actually stolen.

         Plaintiff told the jury that he had purchased all the jewelry at issue, and when it was stolen, it was in an electronic safe which was locked and hidden under a blanket in his garage and for which only he knew the combination. He also testified that his home was protected by an alarm system monitored by ADT and which was set upon his departure on the evening of he reported a break-in, September 6, 2013. According to Plaintiff's testimony at trial, and his report to Defendant, the burglar breached a dead-bolted French door on Plaintiff's back patio to gain access to the house, proceeded to the garage, uncovered and opened the safe and stole all the jewelry claimed in the loss. Plaintiff reported to police on the night of September 6 that when he returned home, the alarm was sounding and that is when he called in. The jury also had before it the following to compare against Plaintiff's bare testimony:

         The evidence concerning the patio French doors was inconsistent with Plaintiff's testimony that he had engaged the deadbolt before he went out on evening of September 6, 2013. Pictures taken after the burglary show that while there was a crack in the wood near the door latch, about halfway up the door, there was no damage to the deadbolt itself or to any of the wood in the deadbolt area higher up the door. This would be improbable if not impossible if the deadbolt was engaged as Plaintiff testified.

         Examination by the police, the claim investigator, and Defendant's safe expert yielded no evidence that anyone tampered with the safe, and it had no physical or electronic damage. The uncontroverted testimony of the safe expert was that there were only three ways to open the safe without damaging or destroying it: 1) using the owner's unique self-set combination; 2) using the factory key unique to the safe; or 3) resetting the safe to the factory code and using that code.

         As to the first method, Plaintiff testified that only he had the unique owner code and he did not share it. As to the second, Plaintiff told investigators that he did not recall ever receiving such a key and did not have one, although the expert testified that the maker of the safe at issue did provide a unique key along with each safe at delivery. And as to the third, the expert testified, again without contradiction, that the reset feature could be activated by hitting a reset button inside the safe, and then pressing the factory default code; however, if the safe were closed, the only way someone could hit the reset button would be to shove a firm but thin elongated object, such as a coat hanger or “slim jim” lock opener, between the door seams of the safe and inside the safe to depress the reset button, and that would necessarily leave scratches and other tampering damage. No. such damage was found on the safe.

         The jury also heard substantial evidence that Plaintiff had manipulated the alarm to support his version of events. ADT records substantiate that on the night of the reported break-in, it received no signal of any breach of the alarm system from Plaintiff's home, and when Plaintiff called to report the break-in, ADT checked and found no signal was being reported at all from his home. Yet, according to testimony from the ADT technician who was called out to check Plaintiff's alarm the next day, the alarm was enrolled-meaning it had checked in with and was in communication with ADT's monitoring hub-and working properly when he arrived. ADT records introduced at trial also show that shortly before the ADT service technician came to address the issue, Plaintiff's system reestablished contact and enrollment, and then Plaintiff tested the system and called ADT to confirm it was working. Plaintiff never told the tech he had done any of these things.

         The ADT technician testified that, in light of the evidence set forth above, the most likely explanation for the alarm's failure to send a signal to ADT monitoring during the alleged break-in was that someone disabled it by both unplugging it and removing the battery, thus defeating both power fail-safes and interrupting its connection to ADT monitoring; and then reinstalled the battery the next day, which caused a re-enrollment as recorded in ADT logs on that date and time. According to the ADT technician's testimony, when an alarm is disabled by cutting power, both plug and battery, no report is made to ADT monitoring as the power is cut and the connection is lost. When the battery and or plug are reengaged, however, the home alarm unit automatically contacts and reenrolls with the ADT monitoring base and that activity produces records at the monitoring site, as it did here. This testimony and explanation were entirely consistent with the unchallenged ADT record evidence before the jury of what happened on September 6 and 7, 2013.

         The jury also had before it the troubling difference between what the ADT technician testified to, as confirmed by the ADT records-that system was working fine when the technician arrived, having reenrolled earlier that day, with Plaintiff calling to confirm and test it-and what Plaintiff told Defendant's investigator, which was that the system was not working when the technician arrived and the technician had to fix it. Defendant argued to the jury that Plaintiff wanted Defendant's investigator to believe the alarm was not working until an ADT technician fixed it. Indeed, that explanation would be far less suspicious to the investigator evaluating a claim of theft than an unexplained alarm failure followed by an unexplained resumption of regular monitoring service.

         In addition to the inconsistencies in Plaintiff's account of discovering a burglary, Plaintiff was unable to present to the jury any proof that he had purchased the jewelry at issue, that he owned it, or that he even possessed it at the time of the reported break-in. As for proof of income, and therefore the ability to buy the jewelry claimed, Plaintiff could produce no income statements, pay stubs, employment contracts or personnel records from any employer. He testified he had no such records because he was self-employed in all-cash businesses and those businesses kept no records. When questioned about proof of income or assets via income tax records, Plaintiff answered that neither he nor any of his businesses prepared or filed tax returns for any of the relevant years. The jury did see statements from Plaintiff's personal checking account for 2013, wherein Plaintiff's monthly balance ranged between a high of $3400 and a low of $166. Plaintiff also claimed part ...


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