MacKinney v. Allstate Fire and Casualty Insurance Co.

          ORDER ON MOTION IN LIMINE

          NINA Y. WANG UNITED STATES MAGISTRATE JUDGE

         This matter comes before the court on Defendant Allstate Fire and Casualty Insurance Company's (“Defendant” or “Allstate”) Motion in Limine (or “Motion”). [#77, filed August 13, 2018]. The Motion is before the court pursuant to the Order of Reference dated July 27, 2016 [#26], 28 U.S.C. § 636(c), Fed.R.Civ.P. 73, and D.C.COLO.LCivR 72.2. The court has carefully considered the Motion and related briefing, the entire case file, and the applicable case law. For the following reasons, the court GRANTS IN PART and DENIES IN PART the Motion in Limine.

         BACKGROUND

         The events giving rise to this dispute stem from an automobile accident between Plaintiff Julie A. MacKinney (“Plaintiff” or “Ms. MacKinney”) and non-party Melissa Mott (“Ms. Mott”) occurring on or about October 6, 2010. See [#70 at 2]. At the time of the accident Allstate insured Plaintiff's vehicle under three policies that provided uninsured motorists coverage (“UIM”): (1) Policy Number 964294702 (the “Auto Policy”); (2) Policy Number 917977315 (the “KTM Policy”); and (3) 964296870 (the “Motorcycle Policy”) (collectively, “Policies”). See [#39-2; #39- 3; #39-4; #70 at 2]. Ms. Mott also carried liability insurance of $100, 000 at the time of the accident.

         On February 25, 2014, Defendant granted Plaintiff permission to accept Ms. Mott's offer of $100, 000, which she received on March 12, 2014. See [#70 at 2]. On June 16, 2014, Plaintiff, through counsel, demanded the UIM coverage from Allstate. Allstate eventually tendered and paid $150, 000 to Plaintiff on November 18, 2014. Believing Allstate's conduct was unreasonable in handling her UIM claim, this litigation ensued. Plaintiff's Complaint alleged three state law causes of action against Defendant for: (1) breach of contract; (2) common law bad faith breach of an insurance contract (“bad faith”); and (3) violations of Colo. Rev. Stat. § 10-3-1115 Unreasonable Delay and Denial of Insurance Benefits (“statutory bad faith”). See [#1 at 8-10].

         On June 16, 2016, Allstate filed its Partial Motion to Dismiss seeking dismissal of Plaintiff's breach of contract claim, Plaintiff's statutory bad faith claim, and any claim based on Allstate Policy Number 964296872 (the “Umbrella Policy”). See [#8]. The undersigned granted in part and denied in part Defendant's Motion to Dismiss, dismissing Plaintiff's breach of contract claim in its entirety as well as her bad faith and statutory bad faith claims as they related to the Umbrella Policy because that policy did not provide UIM coverage. [#30].^[1] Following the close of discovery, Defendant moved for summary judgment on Plaintiff's remaining bad faith and statutory bad faith claims as to the Policies. [#39]. The court granted in part and denied in part Defendant's Motion for Summary Judgment. In doing so, the court granted summary judgment in favor of Allstate on Plaintiff's bad faith claim, holding that Plaintiff failed to establish a genuine dispute of material fact, or even proffer any admissible evidence, from which a reasonable juror could infer Defendant knowingly and recklessly disregarded the validity of her UIM claim. See [#53 at 7-10]. But the court denied summary judgment as to Plaintiff's statutory bad faith claim, finding a genuine dispute of fact as to the reasonableness of Defendant's conduct in investigating Ms. MacKinney's UIM claim. [Id. at 10-14].

         The Parties then appeared before the court for a Final Pretrial Conference on July 25, 2018 [#69]. A Final Pretrial Order [#70] and Trial Preparation Order [#71] entered that same day, setting this matter for a two-day jury trial commencing on September 24, 2018. [#69; #70; #71]. The Trial Preparation Order set August 13, 2018 as the deadline for filing motions in limine [#71 at 4], the date on which Defendant's filed the instant Motion [#77].

         Relevant here, the Final Pretrial Order dictates that Ms. MacKinney intends to call herself and Ashli Kovach (“Ms. Kovach”), Allstate claim adjuster, as witnesses, and that the only exhibits she seeks to admit are the Policies and written summaries of voicemails from Ms. Kovach to Plaintiff's counsel (one of the several issues identified by Defendant's Motion in Limine). [#70 at 4]. In the instant Motion, Defendant seeks to exclude ten (10) categories of arguments/evidence that Plaintiff may advance at trial. [#77]. Plaintiff concedes several of these points while contesting others. See [#78]. I consider the Parties' arguments in turn.

         STANDARD OF REVIEW

         Motions in limine exist outside of the Federal Rules of Civil Procedure and Federal Rules of Evidence and serve to enable the court “to rule in advance of trial on the relevance of certain forecasted evidence, as to issues that are definitely set for trial, without lengthy argument at, or interruption of, the trial.” United States v. Cline, 188 F.Supp.2d 1287, 1291 (D. Kan. 2002) (quoting Palmieri v. Defaria, 88 F.3d 136, 141 (2d Cir. 1996) (further citations omitted)). Pretrial rulings issued in response to motions in limine can save time during trial as well as cost and effort for the parties as they prepare their cases. However, “a court is almost always better situated during the actual trial to assess the value and utility of evidence.” Koch v. Koch Industries, Inc., 2 F.Supp.2d 1385, 1388 (D. Kan. 1998) (citing Hawthorne Partners v. AT & T Technologies, Inc., 831 F.Supp. 1398, 1400 (N.D. Ill. 1993) (“Unless evidence meets this high standard [of clearly inadmissible], evidentiary rulings should be deferred until trial so that questions of foundation, relevancy and potential prejudice may be resolved in proper context.”)).

         ANALYSIS

         I. Argument That Insurers Profit by Delaying Payment

         Allstate seeks to preclude Plaintiff from making “any statements or arguments about any alleged profitability of delayed payments or of any alleged ‘business model.'” [#77 at 4]. Based on statements made by Plaintiff's counsel at the motion hearing on Defendant's Motion for Summary Judgment, Allstate contends that Plaintiff may wish to make statements in her opening statement, closing statement, or while questioning witnesses, suggesting that Allstate, like all insurers, profits from delaying payments of UIM claims. See [id. at 3]. Defendant argues that these statements are prejudicial and irrelevant. [Id.].

         Plaintiff counters that, despite the prejudicial nature of such statements, they nonetheless speak “directly to the heart of the motive behind delaying or denying benefits.” [#78 at 1]. Ms. MacKinney maintains that the delay of payment on claims easily verifiable by Allstate “bestows the exact benefit upon the Defendant consistent with how they earn their profits.” [Id.]. The court respectfully disagrees.

         Rule 401 of the Federal Rules of Evidence advises that evidence is relevant if “it has any tendency to make a fact more or less probable than it would be without the evidence, ” and “the fact is of consequence in determining the action.” Fed.R.Evid. 401(a)-(b). The court may nonetheless 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.” Id. at 403. And though not raised by either Party, such statements may also speak to Allstate's routine business practice, see Id. at 406. See also Hancock v. Am. Tel. & Tel. Co., Inc., 701 F.3d 1248, 1261 (10th Cir. 2012) (explaining that evidence of an organization's routine practice may be admitted under Rule 406 to prove that it acted in conformity with that practice on this particular occasion, even if it is uncorroborated or there was no eye witness); accord Fritchie v. Alumax, Inc., 931 F.Supp. 662, 676 (D. Neb. 1996) (explicating on why courts admit evidence of routine practices, because “routine business practices are often relied upon by other businesses and because routine business practices are derived from concerted planning activities driven by economic concerns about efficiency which are of necessity more regimented than individual conduct.”).

         At first blush, Ms. MacKinney's statements may speak to a motive in delaying payment of her UIM benefits because Allstate's routine practice is to delay payment of verifiable claims. Cf. Oklahoma v. Montgomery, No. CIV-11-863-C, 2012 WL 12892401, at *4 (W.D. Okla. May 23, 2012) (evidence of wrongdoing by former insurance company's principals “may be relevant to Defendants' assertions that they were overcharged”). But to prove that Allstate's conduct here was a routine practice Ms. MacKinney must offer evidence of numerous, consistent occurrences of the act. See Camfield v. City of Oklahoma City, 248 F.3d 1214, 1232-33 (10th Cir. 2001). As Allstate correctly argues, Ms. MacKinney proffers no such evidence and, thus, the court concludes that she lacks any personal knowledge as to whether this is indeed Allstate's routine practice. See United States v. Oldbear, 568 F. 814, 822 (10th Cir. 2009) (holding that three proposed witnesses lacked personal knowledge of the tribe's routine practice where they could only identify three instances of the alleged routine practice). Nor does the Final Pretrial Order or witness list in this action disclose any expert witness to testify as to Allstate's routine practices. [#70; #83]. Given these findings, the court concludes that the prejudice to Allstate outweighs any probative value such statements may have in demonstrating that Allstate unreasonably delayed payments to Ms. MacKinney. Accordingly, the court GRANTS Allstate's Motion in Limine on this issue.

         II. Argument Regarding the Requirement and/or Condition Precedent of a Signed Release

         Defendant's argument here is twofold. First, Allstate seeks to preclude any argument that it required Plaintiff to sign a Release before paying her UIM benefits and/or any suggestion that a signed Release is a condition precedent to the payment of UIM benefits. See [#77 at 4]. Though conceding that it requested a signed Release, Allstate avers that it paid Plaintiff's UIM benefits without a signed Release and, thus, any argument that Allstate required a Release prior to paying UIM benefits is irrelevant, not probative, and prejudicial. [Id.]. Second, Allstate seeks to preclude Plaintiff from arguing that the Release was a “release of all claims.” [Id.]. Allstate asserts that contract interpretation is for the court in the first instance, and that absent any ambiguity in the contract the jury should not decide the meaning of the terms of a contract. [Id. at 5]. These arguments are repeated in Defendant's Trial Brief. [#87]. The court respectfully disagrees on both points.

         First, it is undisputed that Allstate paid Ms. MacKinney's UIM benefits without her signing the Release. See, e.g., [#77-2 at 4-5]. But it is also undisputed that Allstate tendered several offers to Plaintiff and each time requested that Plaintiff sign a Release. See, e.g., [#43-6 at 22; #43-7 at 7, 9, 11]. And Plaintiff avers that the Policies did not contain a provision requiring her to sign a Release prior to receiving the UIM benefits. Thus, while the court agrees that it would be incorrect and misleading to argue that Allstate required a signed Release prior to paying Ms. MacKinney's UIM benefits, the court does not agree that any mention of Allstate's requests for a signed Release, which occurred prior to the actual payment of her UIM benefits, is irrelevant to whether Allstate unreasonably delayed payment of those UIM benefits or that this in some way unfairly prejudices Defendant. Cf. Wahlert v. Am. Standard Ins. Co. of Wis., 173 F.Supp.3d 1187, 1197-98 (D. Colo. 2016) (“I conclude that a reasonable jury could find that conditioning the payment on Ms. Wahlert's relinquishment of her claim that she was entitled to more under the policy was an unreasonable delay or denial of a benefit.”).

         Second, it is not apparent that Ms. MacKinney seeks the jury to interpret whether the Release was a “release of all claims” as Defendant contends. [#78 at 3]. But, as previously noted, neither Party identifies a witness to testify to the significance of the Release or the interpretation of its terms [#53 at 13 n.6], and it is questionable whether the court would have permitted an expert to testify about the legal scope of a Release. See, e.g., Auto-Owners Ins. Co. v. Csaszar, No. 15-cv-02318-CMA-KMT, 2017 WL 5188338, at *6 (D. Colo. Jan. 26, 2017) (excluding expert testimony regarding contract interpretation when the contractual terms are not complex or technical). Rather, all Parties can testify about actions and communications surrounding the tender of the Release to Ms. MacKinney and the Parties' respective instructions and responses to the tender of such Release, e.g., whether Ms. Kovach communicated or Ms. MacKinney reasonably understood that the signed Release was a prerequisite for payment of benefits. And to the extent that Ms. MacKinney testifies that she understood the Release being of “all claims” to be eligible for the payment of benefits, Allstate may probe into whether such an understanding was ...