United States District Court, D. Arizona
ORDER
HONORABLE JAMES A. SOTO, UNITED STATES DISTRICT JUDGE
Pending
before the Court are numerous motions in limine filed by both
parties, and Defendants' motion to bifurcate trial The
motions are discussed below.[1]
BACKGROUND
This
case involves an insurance dispute that arises from an
automobile accident in Tucson, Arizona. On November 12, 2014,
Javier Lopez was driving his 2004 Econoline Van
(“Van”). The Van was involved in an accident with
a motorcycle driven by Patrick Yager. Yager suffered various
physical injuries in the accident. It is disputed as to who
was at fault in the accident. Yager argued that Lopez made an
unsafe lane change and collided with Yager. Defendants argued
that Yager had been in three other accidents, had been
required to go to driving school twice for speeding, that he
has driven his motorcycles at speeds of 190 miles an hour,
that Yager lacks any memory of the accident, and that
witnesses to the accident indicated that Yager caused the
accident.
After
the accident, Yager filed a lawsuit in Pima County Superior
Court against Lopez alleging that he was at fault in the
accident; in addition, Alonso Pastor was also named in the
lawsuit (“State Lawsuit”). Pastor was named in
the State Lawsuit as he was the named insured under a
commercial auto liability policy with Wilshire Insurance
Company (“Wilshire”); the Van that Lopez owned
was added as a covered auto under Pastor's previously
existing policy with Wilshire, but Lopez was not listed as a
named insured under that policy (the
“Policy”).[2] There was no evidence reflecting that
Wilshire was aware of Lopez's existence prior to the
accident in question; Wilshire was only informed of
Lopez's existence after the accident had already
occurred. Likewise, Girard (i.e., the insurance agency that
actually procured the liability insurance policy on behalf of
Pastor) also argued that it was never aware of Lopez's
existence prior to the accident in question, and that it was
only informed of Lopez's existence after the accident had
already occurred;[3] this issue was disputed by Yager who
introduced evidence that Girard may have been aware of
Lopez's existence prior to the accident and therefore
failed to properly procure liability insurance for him from
Wilshire.
Lopez
tendered his defense to Wilshire pursuant to the Policy
issued to Pastor. In March of 2015, Wilshire retained counsel
to defend Lopez in the State Lawsuit. However, by August of
2015, Wilshire sent Lopez a reservation of rights letter
informing him that while Wilshire would continue to provide
counsel to Lopez in the State Lawsuit, it was doing so under
a reservation of rights because although Lopez's V an was
li st e d as a covered auto under Pastor's Policy, Lopez
was not an insured under the Policy (i.e., one has to be both
an “insured” driving a “covered auto”
for liability coverage to apply).
Yager's
claims in the State Lawsuit against Pastor were dismissed at
summary judgment, and that dismissal was affirmed on appeal.
The State Lawsuit against Lopez ended when Lopez entered into
a Morris agreement with Yager whereby Lopez assigned
all of his rights against Wilshire and Girard to Yager;
pursuant to the Morris agreement, the parties
stipulated to a judgment of $1.5 million, and Yager agreed
not to seek recovery of the judgment, or any other form of
damages, against Lopez. Thereafter, Wilshire filed the
instant declaratory judgment action against Yager and Lopez
in this Court seeking a declaration that Wilshire owed no
duty to indemnify. In response, Yager asserted claims for
breach of contract and bad faith against Wilshire, and claims
against Girard stemming from its failure to properly procure
insurance coverage for Lopez. This Court dismissed all of the
claims against Wilshire at summary judgment, but Yager's
claims against Girard remain as this Court denied summary
judgment as to Girard.
ADMISSIBILITY
STANDARDS
As
pertinent to the motions in limine, Fed.R.Evid. 402 provides:
"Relevant evidence is admissible unless any of the
following provides otherwise: • the United States
Constitution; • a federal statute; • these rules;
or • other rules prescribed by the Supreme Court.
Irrelevant evidence is not admissible." Fed.R.Evid. 401
defines relevant evidence as follows: "Evidence is
relevant if: (a) it has any tendency to make a fact more or
less probable than it would be without the evidence; and (b)
the fact is of consequence in determining the action."
Fed.R.Evid. 403 provides that: “The court may exclude
relevant evidence if its probative value is substantially
outweighed by a danger of one or more of the following:
unfair prejudice, confusing the issues, misleading the jury,
undue delay, wasting time, or needlessly presenting
cumulative evidence.” As to experts, Fed.R.Evid. 702
states that “[a]witness who is qualified as an expert
by knowledge, skill, experience, training, or education may
testify in the form of an opinion or otherwise if: (a) the
expert's scientific, technical, or other specialized
knowledge will help the trier of fact to understand the
evidence or to determine a fact in issue; (b) the testimony
is based on sufficient facts or data; (c) the testimony is
the product of reliable principles and methods; and (d) the
expert has reliably applied the principles and methods to the
facts of the case.”
DISCUSSION:
MOTIONS IN LIMINE
Docs.
261, 256, 258: Expert Carmine Cornelio, Fault, Reasonableness
of the Settlement Agreement
Girard
seeks to exclude the testimony of expert Carmine Cornelio.
See Doc. 261. Cornelio's proposed testimony at
trial pertains to his expert opinion that the Morris
agreement stipulating to a $1.5 million judgment against
defendants was reasonable. Girard, however, argues that
Cornelio's testimony is unreliable and subject to
exclusion because he did not have an adequate basis to form
his opinion. For example, Girard argues that Yager only
provided Cornelio with “cherry-picked”
information to support the $1.5 million judgment, but failed
to provide Cornelio with: the pleadings and discovery from
the underlying lawsuit, Yager's actual medical records
and bills, statements from eye witnesses, deposition
testimony of Javier Lopez, and evidence of Yager's second
surgery and lost wage claims. In addition, Girard argues that
at his deposition, Cornelio admitted that the information he
was provided was limited, that the information withheld would
benefit the defense position, and that he not comfortable
with parts of his opinion in light of the withheld
information. Nonetheless, to support his opinion, Cornelio
specifically reviewed: Yager's medical records from the
hospital, the rehabilitation hospital and his treating
orthopedic doctor; Yager's policy limit demand and
attachments including a summary of the medical billing;
evaluations of the case from Lopez's attorney to the
insurance company; notes from the adjuster regarding value of
the case; the offer of judgment and judgment; Yager's
responses to summary judgment; the police report regarding
the accident; photos taken by the police at the scene of the
accident and photos of Yager's injuries; the letter from
Lopez's attorney to the insurance company transmitting
the offer of judgment and indicating that this is a liability
case with damages that could exceed the policy limits;
portions of Yager's deposition; and other related
documents from Lopez's attorney's file. Based on this
information, Cornelio's expert report opined that the
value of the case was between one and two million dollars,
and he reaffirmed that this was still his valuation of the
case at his deposition (even after Defendants' presented
him with additional information). The Court finds that there
is a sufficient basis to support Cornelio's expert
opinion, and Girard's motion to exclude his expert
testimony (Doc. 261) is denied.[4]
Yager
seeks to prevent Girard from impeaching Cornelio with prior
public and private censures he received while he was a judge
with the Pima County Superior Court. See Doc. 256.
Yager argues that such impeachment is irrelevant, unduly
prejudicial, and improper character impeachment. Girard
argues, however, that if Cornelio testifies as to his prior
history as a judge, then Girard should be allowed to impeach
him with the censures in question. Girard argues that Yager
undoubtedly chose Cornelio as his expert to use the prestige
of the office to impact the jury inasmuch as the jurors may
give undue weight to his opinion because they may believe
that judges are fair, unbiased, and experts in the law. As
such, Girard argues that it should be able to question him as
he has been censured for being biased during mediations, and
that of the 32 available votes evaluating whether he meets
the standards for being a judge, 27 of his peers voted that
he “does not meet the standards” of judges, and
he only received 4 votes for “meeting standards”
of judges. The Court agrees with Girard's position.
Cornelio's expertise can be established without him
testifying as to being a judge in the past; rather, he can
establish his expertise through testimony reflecting that he
practiced as an attorney for many years (including personal
injury litigation), and that he has also conducted hundreds
of settlement conferences. However, if Yager has Cornelio
testify as to his history of being a judge, Girard will be
allowed to cross-examine him as to the discipline and censure
he received related to being a judge.
Cornelio's
expert opinion is also implicated in Yager's motion to
preclude any reference to his comparative fault in the
accident with Lopez. See Doc. 258. Yager primarily
argues that there is no evidence of comparative fault, that
Lopez is precluded from denying that he caused the accident
pursuant to A.R.S. § 13-807 because he pled guilty to
making an unsafe lane change in relation to the accident,
[5] and
that liability can not be disputed after Lopez's
acceptance of fault in the Morris agreement. While
§ 13-807 states that a “defendant who is convicted
in a criminal proceeding is precluded from subsequently
denying in any civil proceeding brought by the victim . . .
the essential allegations of the criminal offense of which he
was adjudged guilty, ” the Arizona Court of Appeals has
held that § 13-807 does not necessarily bar a defendant
in a civil action from raising affirmative defenses such as
contributory negligence and comparative fault as these
generally are not recognized as defenses to criminal conduct
which deny required allegations of the criminal offense.
See Williams v. Baugh, 214 Ariz. 471, 474 (Ct. App.
2007). As to Yager's fault, Girard seeks to question the
reasonableness of the Morris agreement and
Cornelio's expert opinion that the Morris
agreement in question stipulating to a $1.5 million judgment
is reasonable. For example, during his deposition, when
Cornelio was confronted with information reflecting that
Yager may have been comparatively at fault in the accident,
[6]
Cornelio conceded that Yager provided him only limited
information, that Yager did not provide him with information
as to his comparative fault, that the information Yager
provided favored Yager's position, the previously
undisclosed information presented at the deposition could
favor Defendants' position, and that he was uncomfortable
with some of his expert opinions in light of the new
information. See Doc. 268, Ex. B-Cornelio's
Deposition: (p. 135, line 1-6: “Q: Are you still
comfortable with the statement, in your opinion, that your
opinion is based upon the presumption that this was a case in
which [Yager] has little or no comparative fault? [Cornelio:]
. . . no.”); p. 55, line 24 to p. 56, line 3: “Q:
As you are sitting here today, having seen some new
information [today at the deposition], are you still
comfortable with your opinion that a $1.5 million stipulated
judgment was reasonable . . . [Cornelio:] I don't
know.”). Furthermore, in light of these issues, the
fact that Lopez may have admitted fault in the
Morris agreement, does not bar Girard from attacking
the reasonableness of the Morris agreement in this
case. See, e.g., United Services
Automobile Association v. Morris, 154 Ariz. 113, 120
(1987) (“We recognize . . . that an insured being
defended under a reservation might settle for an inflated
amount or capitulate to a frivolous case merely to escape
exposure or further annoyance . . . the [stipulated]
‘judgment' does not purport to be an adjudication
on the merits; it only reflects the settlement agreement. It
is also evident that, in arriving at the settlement terms,
the [insureds] would have been quite willing to agree to
anything as long as plaintiff promised them full immunity . .
. [N]either the fact nor amount of liability to the claimant
is binding . . . unless . . . [the claimant] can show that
the settlement was reasonable and prudent . . . The test as
to whether the settlement was reasonable and prudent is what
a reasonably prudent person in the insureds' position
would have settled for on the merits of the claimant's
case . . . This involves evaluating the facts bearing on the
liability and damage aspects of claimant's case, as well
as the risks of going to trial.”); Himes v. Safeway
Insurance Company, 205 Ariz. 31, 39-40 (Ct. App. 2003)
(“[W]hat is the standard to determine the extent to
which a stipulated settlement is reasonable? . . . [T]he
primary instruction is that a reasonable settlement should
reflect what would have occurred if there had been an
arm's-length negotiation between interested parties . . .
This standard applies in every case in which the settlement
represented by a . . . Morris agreement is subject
to a review for reasonableness, whether the amount or
judgment is stipulated to or whether the parties leave the
amount open . . . [I]t is the absolute duty of the finder of
fact to evaluate the evidence presented and determine what
settlement amount the [claimant] has proved reasonable by a
preponderance of the evidence . . . Not only does a
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