MKB Constructors v. American Zurich Insurance Co., 711 F. App'x 834

Background

MKB Constructors contracted with Lower Yukon School District to build a gravel pad; substantial gravel was barged in from Alaska.
MKB held a Zurich builder’s risk policy covering earth movement, including soil settlement.
MKB claimed excess soil settlement forced it to bring in more gravel and incur additional costs beyond the contract; a jury awarded MKB compensatory contract damages, compensatory IFCA damages, and enhanced IFCA damages.
Zurich moved for judgment as a matter of law and for a new trial arguing insufficient evidence connected settlement to the extra costs and challenging other awards and procedures; the district court denied relief and the denial was appealed.
The Ninth Circuit reviewed sufficiency of the evidence de novo, evaluated incidental cost awards, defendant’s proposed special verdict form, the excessiveness and notice of IFCA enhanced damages, the propriety of appellate review of summary judgment after trial, and whether enhanced damages must be court-determined rather than jury-determined.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Sufficiency of evidence that unforeseen soil settlement caused extra gravel costs	Evidence and expert estimates showed more gravel was required than contractually expected due to settlement	Evidence was insufficient; jury verdict unsupported	Jury had sufficient evidence; JML denied (de novo review)
Recovery of incidental expenses (maintenance, depreciation, winter equipment costs, increased barging, survey, markup/overhead, arbitration costs)	These costs were caused by settlement or are covered overhead and thus compensable; arbitration costs resulted from insurer’s refusal to pay	Such items were not caused by settlement or covered; objection raised post-Rule 50(a)	Jury reasonably could find these were covered/caused by settlement; no plain error
Special verdict form refusal	(Plaintiff did not propose) MKB argued standard verdict sufficient	Zurich argued court should adopt its detailed 11‑page special verdict form to clarify findings	District court did not abuse discretion rejecting complex form; general verdict acceptable
Excessiveness and constitutional challenge to IFCA enhanced (treble) damages	Enhanced damages were authorized by statute and less than actual damages; not grossly excessive	Treble/enhanced damages violate due process as grossly excessive	Rejected: statute provides notice; award not so excessive to violate Gore/State Farm standards
Right to jury decide enhanced damages under IFCA	MKB: enhanced damages are legal damages; jury determination appropriate	Zurich: statute provides court assessment; judge should determine enhanced damages	Seventh Amendment requires jury determination of enhanced damages; Loether controlling
Review of district court’s denial of summary judgment on appeal after trial	MKB: merits resolved by jury verdict and record at trial	Zurich: seeks appellate review of denial of summary judgment	Court cannot review denial of summary judgment once case presented to jury absent purely legal question; insufficient-evidence issue reviewed under JML standard

Key Cases Cited

Castro v. County of Los Angeles, 833 F.3d 1060 (9th Cir. 2016) (standard for de novo review of JML)
Pavao v. Pagay, 307 F.3d 915 (9th Cir. 2002) (Rule 50/JML review standard framed)
EEOC v. Go Daddy Software, Inc., 581 F.3d 951 (9th Cir. 2009) (plain‑error review where Rule 50(a) motion not raised)
Floyd v. Laws, 929 F.2d 1390 (9th Cir. 1991) (district court discretion on special vs. general verdicts)
BMW of N. Am. v. Gore, 517 U.S. 559 (1996) (standards for excessive punitive damages review)
State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003) (limits on punitive damages under Due Process)
Ortiz v. Jordan, 562 U.S. 180 (2011) (limits appellate review of summary‑judgment denials after trial)
Curtis v. Loether, 415 U.S. 189 (1974) (Seventh Amendment right to jury for legal damages including punitive damages)