711 F.3d 1165
10th Cir.2013Background
- Fire destroyed Agriboard’s Texas manufacturing facility in April 2009 amid an insurance claim for lost income under ILM’s policy.
- Agriboard was insured for lost income; ILM had paid $450,000 by May 2009 and $1.8 million thereafter.
- Agriboard sought $2.4 million in unpaid coverage; ILM refused further payment.
- Agriboard’s proofs of loss were prepared by Larson & Company personnel, including Williams and Rump, based on ILM’s formula.
- Prior to trial, ILM moved to exclude the accountants’ testimony as expert under Rule 26(a)(2); the court allowed testimony under Rule 701 as lay opinions.
- Trial proceeded with accountants testifying, followed by other witnesses and contested jury instructions; the jury awarded $2,261,166 for breach of contract; ILM then appealed on grounds including expert testimony, instructions, closing arguments, and sufficiency of the evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the accountants’ testimony was admissible as lay testimony under Rule 701. | Agriboard’s accountants testified from their role in preparing proofs of loss and used ordinary arithmetic. | The testimony was expert and should have been excluded under Rule 702. | Yes, the testimony was proper lay testimony under Rule 701. |
| Whether Instructions 12 and 13 on ambiguity/conflict were proper. | Instructions properly guided interpretation of policy vs. endorsement. | Instructions were confusing and allowed misinterpretation of policy terms. | The court did not abuse its discretion; instructions were appropriate. |
| Whether Agriboard’s closing remarks regarding the Texas endorsement and Mr. McInteer were prejudicial new-trial grounds. | Closing remarks correctly referenced policy terms and witness availability to explain coverage. | Remarks were prejudicial and deviated from evidence. | No reversible prejudice; closing remarks did not warrant a new trial. |
| Whether the verdict was supported by the evidence. | Evidence showed breach and compensable lost income under the policy. | The verdict is speculative and not sufficiently supported by policy terms. | Verdict within range of evidence; not against the weight of the evidence. |
Key Cases Cited
- James River Ins. Co. v. Rapid Funding, LLC, 658 F.3d 1207 (10th Cir. 2011) (review of evidentiary admissibility; Rule 701 analysis)
- M.D. Mark, Inc. v. Kerr-McGee Corp., 565 F.3d 753 (10th Cir. 2009) (abuse-of-discretion standard for new-trial rulings)
- Abuan v. Level 3 Commc’ns, Inc., 353 F.3d 1158 (10th Cir. 2003) (discretion in granting new trials; prejudice standard)
- Woolard v. JLG Indus., Inc., 210 F.3d 1158 (10th Cir. 2000) (standard for disturbing jury damages; weight of evidence)
- Richison v. Ernest Grp., Inc., 634 F.3d 1123 (10th Cir. 2011) (plain-error review for closing arguments; safeguards for burden of proof)
- Lederman v. Frontier Fire Prot., Inc., 685 F.3d 1151 (10th Cir. 2012) (review of jury-instruction objections; de novo legal questions)
- Teen-Ed, Inc. v. Kimball Int’l, Inc., 620 F.2d 399 (3d Cir. 1980) (lay witness accounting testimony; admissibility)