La Jolla Spa MD, Inc. v. Travelers Property Casualty Co. of America
683 F. App'x 611
| 9th Cir. | 2017Background
- La Jolla Spa MD, Inc. appealed the district court’s denial of its Rule 59(a) motion for a new trial after a jury verdict in favor of Travelers Property Casualty Company of America.
- Central dispute involved whether La Jolla Spa proved it sustained an insurance-covered loss under the parties’ contract/insurance policy.
- Key contested evidence: emails exchanged between the divorce attorneys for Dianne York and Mitchel Goldman, testimony by Goldman about his interpretation of a marital settlement agreement, and York’s own testimony and post‑settlement conduct.
- Travelers argued the marital settlement agreement was ambiguous and that extrinsic evidence (the attorneys’ emails and conduct) supported its interpretation that no covered loss occurred.
- La Jolla Spa argued the contested testimony and evidence prejudiced the jury and warranted a new trial.
- The district court admitted the emails and allowed testimony; denied the new‑trial motion, concluding any evidentiary error was not substantially prejudicial and the verdict was supported by evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of attorneys’ emails as extrinsic evidence to interpret a marital settlement agreement | Emails were inadmissible or irrelevant to contract interpretation | Agreement was ambiguous; emails were relevant to show parties’ meaning | Admitted: agreement reasonably susceptible to defendant’s meaning; emails relevant |
| Goldman’s testimony about his subjective interpretation of the marital settlement agreement | Goldman’s testimony was improper and prejudicial | Testimony was permissible or harmless given other evidence | Even if erroneous, not substantially prejudicial (harmless) |
| Whether evidentiary rulings required a new trial under Rule 59(a) | Erroneous rulings substantially prejudiced La Jolla Spa and warrant new trial | Any errors did not substantially affect outcome; jury verdict supported by evidence | Denial of new trial affirmed; no substantial prejudice found |
| Whether the verdict was against the clear weight of the evidence | Verdict lacked evidentiary support that La Jolla Spa failed to prove covered loss | Record contained evidence supporting jury’s finding that no covered loss was proven | Denial affirmed: sufficient evidence supported the verdict |
Key Cases Cited
- Molski v. M.J. Cable, 481 F.3d 724 (9th Cir.) (standard for reviewing Rule 59(a) denial and sufficiency of evidence review)
- Grand Canyon Skywalk Dev., LLC v. ‘Sa’Nyu Wa Inc., 715 F.3d 1196 (9th Cir.) (abuse‑of‑discretion standard description)
- Brinderson‑Newberg Joint Venture v. Pac. Erectors, Inc., 971 F.2d 272 (9th Cir.) (contract interpretation: written contract reasonably susceptible to proffered meaning is a question of law)
- Winet v. Price, 6 Cal. Rptr. 2d 554 (Ct. App.) (extrinsic evidence admissible if contract language is reasonably susceptible to the interpretation urged)
- Muller v. Auto. Club of S. Cal., 71 Cal. Rptr. 2d 573 (Ct. App.) (interpretation principles regarding words like “includes”)
- Ruvalcaba v. City of Los Angeles, 64 F.3d 1323 (9th Cir.) (new trial warranted only when erroneous evidentiary ruling substantially prejudiced a party)