Harner v. USAA Gen. Indem. Co.

590 F.Supp.3d 1217

Paul HARNER, an individual, Plaintiff,

v.USAA GENERAL INDEMNITY COMPANY, a Texas Corporation; Does 1 through 50, Defendant.

Case No.: 3:18-cv-01993-LL-MDD

United States District Court, S.D. California.

Signed March 10, 2022

Justin Ornelas Walker, Lorrie A. Walker, Walker Law, PC, John C. Lemon, Law Office of John C. Lemon, Timothy A. Scott, Gerald B. Singleton, Singleton Schreiber McKenzie & Scott, LLP, San Diego, CA, for Plaintiff.

Brian R. Davis, Jessica J. Ross, Robert S. McLay, DKM Law Group LLP, San Francisco, CA, for Defendant USAA General Indemnity Company.

ORDER:

(1) GRANTING DEFENDANT'S MOTIONS IN LIMINE NOS. 1, 2, 5, AND 6 AND GRANTING-IN-PART MOTION IN LIMINE NOS. 3 AND 4

(2) GRANTING PLAINTIFF'S MOTION IN LIMINE NO. 1 AND GRANTING-IN-PART PLAINTIFF'S MOTION IN LIMINE NOS. 2 AND 3

[ECF Nos. 43, 52, 53, 54, 56, 57]

LINDA LOPEZ, United States District Judge

I. INTRODUCTION

Plaintiff PAUL HARNER ("Plaintiff") brings this bad faith action arising out of a coverage dispute against DEFENDANT USAA GENERAL INDEMNITY COMPANY, a Texas corporation ("Defendant") and Does 1 through 50.¹ ECF No. 1. Before the Court are (1) Defendant's Motions in Limine Nos. 1 through 6, ECF No. 43, and (2) Plaintiff's Motions in Limine Nos. 1 through 3, ECF Nos. 52, 53, 54. After considering the papers submitted, supporting documentation, and applicable law, the Court (1) GRANTS Defendant's motions in limine nos. 1, 2, 5, and 6; (2) GRANTS-IN-PART and DENIES-IN-PART Defendant's motion in limine nos. 3 and 4; (3) GRANTS Plaintiff's Motion in Limine No. 1; and (4) GRANTS-IN-PART and DENIES-IN-PART Plaintiff's Motion in Limine nos. 2 and 3.

II. DISCUSSION

A. Defendant's Motions in Limine

Defendant filed six motions in limine seeking to exclude the following items or types of evidence: (1) Plaintiff's evidence of attorney's fees; (2) Plaintiff's evidence of his traumatic brain injury ; (3) evidence of Plaintiff's military career or other character evidence; (4) evidence and testimony regarding any obligation to pay undisputed sum; (5) evidence of communications or conduct underlying mediation; and (6) Plaintiff's Claim for punitive damages and exclude evidence of Defendant's financial condition. See ECF No. 43. Plaintiff opposed all motions. ECF No. 57. The Court GRANTS Defendant's motions in limine nos. 1, 2, 5, and 6 and GRANTS-IN-PART and DENIES-IN-PART Defendant's motion in limine nos. 3 and 4.

1. Motion in Limine No. 1 to Exclude Plaintiff's Evidence of Attorney's Fees

Defendant seeks to exclude "all evidence of attorney fees incurred by Plaintiff in this action." ECF No. 43:13-14. Defendant argues that even though the California Supreme Court has held that an insured may recover reasonable attorney's fees incurred to recover policy benefits that have not been paid, see Brandt v. Super. Crt. , 37 Cal. 3d 813, 817, 210 Cal.Rptr. 211, 693 P.2d 796 (1985), Plaintiff should not recover his attorneys' fees because Defendant never denied coverage for his claim. ECF No. 43 at 2:6-15. In fact, Defendant points out that on September 30, 2017, it promptly paid Plaintiff the full arbitration award of $249,876.00, and on November 13, 2013, it paid Plaintiff his arbitration costs, totaling $8,008.30. Id. at 3:15-17; ECF No. 27 7:22. Thus, by the time Plaintiff filed suit on February 28, 2018, he had already been paid all benefits due under the Policy, so no attorney efforts were expended in obtaining any policy benefit. Id. at 3:17-24. Defendant also contends that even if Plaintiff had a valid Brandt claim, the Court should exclude any evidence he has of attorney's fees because Plaintiff failed to engage in discovery by objecting to Defendant's interrogatories and document requests seeking proof of Plaintiff's attorney's fees. Id. at 2:23-3:4. Plaintiff responds that the Court should deny Defendant's first motion in limine because it is based on an incorrect understanding of Brandt fees. ECF No. 57 at 3:7. Plaintiff argues that whatever he paid his previous attorney "for having to go through arbitration when [Defendant] unreasonably withheld payment [of policy benefits]," including any increase in fees due to the case failing to resolve at the arbitration, qualify as Brandt fees. Id. at 3:4-17. He points out that Defendant appears to agree that Plaintiff could be entitled to damages incurred to procure his arbitration award but not in this action. Id. at 3:9-21 (citing ECF No. 43 at 4:25-28). He also advises that he has no intention of introducing what he paid his attorneys in this action. Id. at 3:23-28, 4:21-23. Finally, as to the allegations of discovery abuse, Plaintiff admits that he refused to produce "evidence of what his fee arrangement is with his lawyers in this lawsuit ," does not intend to produce such evidence, and agrees it is irrelevant. Id. at 6:16-19. However, he provides the Court with evidence that he did, in fact, comply with discovery requests related to his fee agreements with his attorney in the UIM arbitration. Id. at 6:25-7:17.

Under Brandt , "[f]ees attributable to obtaining any portion of the plaintiff's award which exceeds the amount due under the policy are not recoverable." 37 Cal. 3d at 819, 210 Cal.Rptr. 211, 693 P.2d 796. Any amounts recoverable under the Policy should be litigated by virtue of a motion for attorney's fees and costs filed with the arbitrator if the Policy provided for such fees. See also ECF No. 57 at 4:26-28 (agreeing that whether or not Plaintiff may recover fees incurred in this case would be litigated by virtue of a motion for attorney's fees following his prevailing at trial). The Policy provides that "[e]ach party will pay the expenses it incurs and bear the expenses of the arbitrator equally." ECF No. 14-2 at 32. This suggests that if attorney's qualify as expenses under the Policy, Plaintiff would not be entitled to them. The Policy also does not indicate which arbitration rules, if any, apply or define "expenses" (i.e. , whether expenses include attorney's fees).

The Arbitration took place with Darrell A. Forgey of Judicate West. Id. at 75. Forgey asked for any post-arbitration proceedings to be raised within ten days of his decision, or by October 14, 2017. See id. at 79. To the Court's knowledge, none were raised. Further, Rule 13.B.4 of the Judicate West Arbitration Rules provides: "In appropriate cases, the award will identify the prevailing party or parties, if any, for purposes of ... dealing with any issues of ... attorneys fees," which "will usually be the subjects of supplemental proceedings." See https://www.judicatewest.com/Resources/Arbitration Rules.² Thus, according to the applicable arbitration rules, the issue of attorneys fees arising out of the arbitration should have been raised before Forgey, not this Court. Thus, the Court finds fee evidence pertaining to what Plaintiff paid his attorneys in this case irrelevant for purposes of trial as it does not make a fact of consequence more or less probable, FED. R. EVID. 401, and may prove unduly prejudicial.

As to whether Plaintiff's fee evidence warrants exclusion due to his failure to comply with discovery, FRCP 26(a)(1)(A)(iii) requires all parties to provide each other with "a computation of each category of damages claimed by the disclosing party" along with "the documents or other evidentiary material ... on which each computation is based." Where a party fails to provide this information, that "party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless." FED. R. CIV. P. 37(a)(1). " Rule 37(c)(1) gives teeth to these requirements by forbidding the use at trial of any information required to be disclosed by Rule 26(a) that is not properly disclosed." Yeti by Molly, Ltd. v. Deckers Outdoor Corp. , 259 F.3d 1101, 1106 (9th Cir. 2001). Here, Defendant has provided the Court with discovery requests to Plaintiff, such as Defendant's Special Interrogatory No. 27, which asked, "If YOU contend YOU are entitled to attorney's fees from USAA GIC, IDENTIFY each and every DOCUMENT which supports YOUR contention." See Exhibit 4 to the Declaration of Brian Davis ("Davis Decl."), ECF No. 43-9 at 37; see also Exhibit 4 to Davis Decl., ECF No. 43-10 at 25 (asking Plaintiff to produce every document referenced in his responses to Defendant's special interrogatories). Plaintiff responded with objections only, refusing to provide, identify, or produce documents evidencing his entitlement to attorneys' fees. See Davis Decl., ECF No. 43-9 at 37; see also Exhibit 4 to Davis Decl., ECF No. 43-10 at 25.

In this case, the Court finds Plaintiff's evasive responses to discovery propounded directly addressing this issue willful. Plaintiff's opposition admits that the information was withheld because he did not believe it to be relevant. However, absent a claim of privilege, which is inappropriate given Plaintiff produced the fee agreement pertaining to the UIM arbitration but not any others, withholding information due to a self-determination of what it relevant is inappropriate. Thus, in addition to finding the attorney's fees related to fees incurred in the UIM arbitration irrelevant, the Court also finds such fees warrant exclusion under FRCP 37(a)(1) due to the Court's finding of willfulness. Consequently, Defendant's Motion in Limine No. 1 is GRANTED .

2. Motion in Limine No. 2 to Exclude Plaintiff's Evidence of His Traumatic Brain Injury

Defendant asks the Court to exclude any evidence that Plaintiff sustained a TBI as that claim was already adjudicated in the underlying UIM claim and is subject to res judicata and collateral estoppel. ECF No. 34-1 at 2:2-5. The Statement of Decision and Arbitration Award states, "I am unable to conclude that claimant sustained an actual TBI." Exhibit 6 to Davis Decl., Statement of Decision and Arbitration Award, ECF No. 43-12 at 5:23-24. Plaintiff opposes by arguing that D...