Kathryn Cox v. Continental Casualty Company
703 F. App'x 491
| 9th Cir. | 2017

Background

  • Continental Casualty Company defended insured Dr. Henri Duyzend in claims by former patients (the Plaintiffs). Dispute arose over production of coverage-related documents and later Continental asserted fraud-based defenses.
  • During discovery Continental represented coverage-related files were immaterial because coverage was not at issue and resisted producing certain documents.
  • The Plaintiffs sued asserting Consumer Protection Act (CPA), negligence, and bad-faith claims among others; jury returned a verdict for the Plaintiffs on some claims.
  • District Court applied judicial estoppel to bar Continental from asserting fraud defenses based on its earlier discovery representation, denied Continental’s JMOL motion, instructed the jury on various claims, and awarded attorneys’ fees to the Plaintiffs.
  • District Court dismissed Plaintiffs’ Insurance Fair Conduct Act (IFCA) claim and reduced the jury’s award; Ninth Circuit found the reduction improper because the court relied on a clearly erroneous factual premise.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Judicial estoppel for discovery representation Continental should be barred from asserting fraud defenses because it told court coverage documents were irrelevant Continental contended it accepted coverage and could later assert fraud; production sufficed Affirmed: estoppel proper—Continental previously represented coverage irrelevant and withheld documents; reliance and inequity satisfied
JMOL on causation for CPA/negligence Missteps in handling claims were sufficient to show cause-in-fact and proximate cause Argued plaintiffs failed to prove causation and legal causation was lacking Affirmed denial of JMOL: evidence sufficient for jury; legal-causation argument waived and in any event not dispositive
Jury instructions (comparative fault; bad-faith) Plaintiffs argued instructions given were correct and errors, if any, harmless Continental sought comparative-fault instruction and challenged bad-faith instruction Affirmed: Continental’s comparative-fault instruction misstated law and lacked evidentiary support; any bad-faith instruction error was harmless
Attorneys’ fees and IFCA dismissal; reduction of verdict Plaintiffs sought full fees and IFCA claim relief; objected to verdict reduction Continental challenged fee award and District Court reduced jury award citing offset Mixed: Fees and multiplier affirmed; IFCA dismissal affirmed (not first-party claim); reduction of verdict vacated and jury award reinstated

Key Cases Cited

  • United States v. Ibrahim, 522 F.3d 1003 (9th Cir. 2008) (judicial-estoppel framework)
  • New Hampshire v. Maine, 532 U.S. 742 (U.S. 2001) (elements and purpose of judicial estoppel)
  • Wagner v. Prof’l Eng’rs in Cal. Gov’t, 354 F.3d 1036 (9th Cir. 2004) (abuse-of-discretion review; estoppel when party plays fast and loose)
  • Ki Sin Kim v. Allstate Ins. Co., 223 P.3d 1180 (Wash. Ct. App. 2009) (effect of material misrepresentation on coverage)
  • Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873 (9th Cir. 2009) (limits on motions for reconsideration introducing new evidence)
  • Experience Hendrix L.L.C. v. Hendrixlicensing.com Ltd., 762 F.3d 829 (9th Cir. 2014) (standard for viewing evidence on JMOL)
  • Crawford v. Lungren, 96 F.3d 380 (9th Cir. 1996) (preservation of arguments for appeal)
  • Welch v. Southland Corp., 952 P.2d 162 (Wash. 1998) (intentional acts cannot be considered for comparative fault)
  • Ursich v. da Rosa, 328 F.2d 794 (9th Cir. 1964) (court not required to reframe legally incorrect proposed instruction)
  • Gantt v. City of L.A., 717 F.3d 702 (9th Cir. 2013) (harmless-error review for jury instructions)
  • Escriba v. Foster Poultry Farms, Inc., 743 F.3d 1236 (9th Cir. 2014) (presumption that jury follows instructions)
  • Mayer v. Sto Indus., Inc., 132 P.3d 115 (Wash. 2006) (fee recovery and segregation of non-fee work)
  • Chuong Van Pham v. City of Seattle, Seattle City Light, 151 P.3d 976 (Wash. 2007) (factors supporting multiplier awards)
  • Swanson v. Solomon, 314 P.2d 655 (Wash. 1957) (elements of fraud: materiality and reliance)
  • Christen v. Lee, 780 P.2d 1307 (Wash. 1989) (duty and proximate-cause principles)
  • Geer v. Tonnon, 155 P.3d 163 (Wash. Ct. App. 2007) (expert testimony required for standard-of-care proof)
  • United States v. ASARCO, Inc., 430 F.3d 972 (9th Cir. 2005) (district court abuses discretion when relying on clearly erroneous facts)
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