Iser v. CSAA Fire and Casualty Insurance Company

United States District Court

for the Northern District of Oklahoma

Case No. 18-CV-504-JDR-CDL

Paul Iser and Donna Iser, individually and as husband and wife,

Plaintiffs,

versus

CSAA Fire and Casualty Insurance Company,

Defendant.

OPINION AND ORDER

Plaintiffs Paul and Donna Iser have filed a motion in limine seeking to

preclude certain categories of evidence at trial. Dkt. 68. CSAA contests the

motion. Dkt. Nos. 77-81. The motions have been fully briefed and are ripe for

review.

The Court begins with the Isers’ first motion, which seeks to prevent

CSAA from using a definition for the term surface water, which is undefined

in the policy, that differs from a normal or customary understanding. Dkt. 68

at 5-6. The Isers ask the court to adopt a definition that does not include lakes.

Id. at 6 (quoting Okla. Water Res. Bd. v. Cent. Okla. Master Conservancy Dist.,

464 P.2d 748, 751 (Okla. 1968)). CSAA argues that the normal and customary

meaning includes lakes. Dkt. 77 at 3.

In the previously filed Order denying CSAA’s motion for summary

judgment, the Court held that the term surface water is not ambiguous simply

because it was undefined in the policy and that the generally accepted mean-

ing of the term in the context of an insurance policy does not include lakes.

No. 18-CV-504

Dkt. 96 at 7-8. Other courts have reached similar conclusions.1 Because the

Court has already made a ruling on the definition of surface water, the Isers’

first motion in limine is DENIED as MOOT.

In their second motion in limine, the Isers seek to exclude any argu-

ment by CSAA that it has complied with its claim handling guidelines or

standards because the guidelines were never produced.2 Dkt. 68 at 7-9. CSAA

maintains that the guidelines and training materials were never produced be-

cause the Iser’s request was overbroad, failing to identify the type of claim

manuals requested. Dkt. 78 at 3. CSAA argues that it should be able to discuss

written training materials and any informal or on-the-job training because the

Isers never requested a meet and confer nor did they file a motion to compel

the requested materials. Id.

“Part of the Court’s goal in ruling on motions in limine is to streamline

trial and limit surprise. The notion that previously undisclosed evidence

1 See, e.g., Corp. Lakes Prop., LLC v. AmGuard Ins. Co., 649 F.Supp.3d 1143, 1148-49

(D. Kan. 2023) (“The phrase ʻsurface water’ is ordinarily understood to mean ʻ[w]ater lying

on the surface of the earth but not forming part of a watercourse or lake.’” (quoting Black’s

Law Dictionary (11th ed. 2019); 11 Couch on Insurance § 153.50 (3d ed. 2022) (“Surface

water is water diffused over the surface of the land. Any water on the earth’s surface, in-

cluding water from rising groundwater, may be surface water unless or until it forms some

more definite body of water.”))); Richards v. State Farm Fire & Cas. Co., 585 F.Supp.3d 1083,

1089 (W.D. Tenn. 2022) (surface water ordinarily means “water lying on the surface of the

earth but not forming part of a watercourse or lake”); Gannon v. Rumbaugh, 772 N.W.2d

258, 263 (Iowa Ct. App. 2009) (surface waters are “distinguished from water of creeks,

streams, rivers, ponds, and lakes having a substantially definite location”); State Farm Fire

& Cas. Co. v. Paulson, 756 P.2d 764, 771-72 (Wyo. 1988) (surface water plainly means “water

on the surface, other than in streams, lakes and ponds”).

2 The Isers ask the Court to compel production of the guidelines and grant leave to

conduct additional limited discovery. Dkt. 68 at 8. This request does not comply with Fed-

eral Rule of Civil Procedure 37(a)(1). Further, discovery in this case closed on September

8, 2020. Dkt. 49. The Court will not grant the Isers’ request because a motion in limine is

not a “proper vehicle to seek relief on such a discovery dispute.” Smithwick v. BNSF Ry.

Co., No. CIV-18-160-G, 2021 WL 1976853, at *2 (W.D. Okla. May 17, 2021); see also Edens

v. The Netherlands Ins. Co., 834 F.3d 1116, 1130-31 (10th Cir. 2018); see also Simpson v. Saks

Fifth Ave., Inc., No. 07-CV-0157-CVE-PJC, 2008 WL 3388739, at *8 n.9 (N.D. Okla. Aug.

8, 2008).

No. 18-CV-504

could be introduced at trial runs afoul of both these goals.” Lancaster v. Good-

man Real Estate, Inc., No. 20-1156 KG/LF, 2023 WL 112321, at *2 (D.N.M.

Jan. 5, 2023). Further, Federal Rule of Civil Procedure 37(c)(1), does not al-

low a party who fails to provide required information “to use that information

…at trial[] unless the failure was substantially justified or is harmless.” See

Perez v. El Tequila, LLC, Case No. 12-CV-588-JED-PJC, 2015 WL 11144033,

at *2 (N.D. Okla. July 20, 2015) (granting a motion in limine to exclude rec-

ords that were not produced during discovery). CSAA fails to argue that the

non-disclosure of the claim handling guidelines was substantially justified or

is harmless, arguing instead that the Isers’ request was overbroad.

Because the written guidelines were never produced, the written claim

handling guidelines cannot be used as evidence by either party at trial. If

CSAA wishes to introduce unwritten claim handling guidelines or secondary

evidence of the written claim handling guidelines at trial, it will bear the bur-

den of establishing admissibility under Federal Rule of Evidence 1002.3

CSAA should seek counsel of the Court if it wishes to introduce evidence of

unwritten internal claim handling procedures or standards that were dis-

cussed during depositions. The Isers’ motion in limine regarding the CSAA’s

claim handling guidelines and standards is GRANTED in part and DE-

NIED in part.

The Isers also seek to prevent CSAA from referencing their wealth,

net worth, or property value during trial. Dkt. 68 at 9-10. They argue that this

evidence is irrelevant and prejudicial. Id. at 10. CSAA responds that it has no

intention of disclosing the nature and extent of the Isers’ wealth unless the

Isers seek damages for financial losses, embarrassment, loss of reputation,

and mental distress related to their bad faith claim. Dkt. 79 at 2.

The Tenth Circuit has generally held that “[r]eference to the wealth

or poverty of either party, or reflection on financial disparity, is clearly

3 The best evidence rule states that “[a]n original writing…is required in order to

prove its content unless” an exception applies.

No. 18-CV-504

improper argument.” Garcia v. Sam Tanksley Trucking, Inc., 708 F.2d 519, 522

(10th Cir. 1983) (collecting cases). But offering evidence of a party’s wealth

to “improperly appeal to a jury’s potential class prejudice” can be easily dis-

tinguished from similar evidence offered to dispute plaintiff’s claim for bad

faith damages. Brown v. State Farm Fire & Cas. Co., 20-CV-0418-CVE-JFJ,

2022 WL 875648, at *9 (N.D. Okla. Mar. 23, 2022); Blankenship v. Rowntree,

219 F.2d 597, 598 (10th Cir. 1955) (recognizing an exception to the general

rule “where position or wealth is necessarily involved in determining dam-

ages sustained”). “[P]laintiffs’ financial condition may be relevant to the ex-

tent of bad faith damages, including: stress, anxiety, and uncertainty.” Brown,

2022 WL 875648, at *9 (providing the example that “the prospect of [the

Insurer] not covering the roof replacement cost may be far more stressful or

anxiety-inducing for a plaintiff who is otherwise unable to afford a roof re-

placement, and is thus helpless in the face of the inevitable premature deteri-

oration and failure of his roof”). Accordingly, The Isers’ motion in limine is

GRANTED in part and DENIED in part. CSAA will be permitted to dis-

cuss the Isers’ financial condition as it relates to their claim for bad faith dam-

ages only.

In their fourth motion in limine, the Isers seek to exclude the testi-

mony of any witnesses that CSAA has not disclosed. Dkt. 68 at 10. They ar-

gue that introduction of undisclosed witnesses would operate as an abuse of

the discovery process and would result in unfair surprise. Id. CSAA states

that both parties have exchanged witness lists and that it “does not currently

intend to exceed the scope of the deposition testimony of any witness in this

case or the information contained in the claim file.” Dkt. 80 at 1. Because both

parties agree that no undisclosed witnesses will testify at trial, the Isers’ mo-

tion in limine is DENIED as MOOT.

The Isers’ fifth and final motion in limine seeks to prevent CSAA from

introducing evidence of their previous lawsuit against another insurance

company, specifically the 2016 case against Farmers Insurance Company,

No. 18-CV-504

Inc., because it is irrelevant and prejudicial. Dkt. 68 at 11. CSAA asserts that

the Isers’ lawsuit against Farmers, which settled in 2018, is especially relevant

to the present case because the Isers also sought damages for embarrassment,

anxiety, frustration, and mental and emotional distress in that lawsuit. Dkt.

81 at 1-2. Thus, CSAA argues, because the timeframe of the two claims and

lawsuits overlap, the Isers essentially have a “pre-existing condition” and

would be required to identify the emotional distress caused by each separate

lawsuit. Id. at 2. In reply, the Isers maintain that Oklahoma law does not re-

quire them to identify what specific distress is attributable to which specific

claim or lawsuit. No. 87 at 5.

To determine whether evidence of other acts—or in this case, previ-

ous litigation—is admissible, the Tenth Circuit applies a four-part test:

(1) the evidence must be offered for a proper purpose;

(2) the evidence must be relevant;

(3) the probative value of the evidence must not be substan-

tially outweighed by its potential for unfair prejudice (Fed.

R. Evid. 403); and

(4) the jury must be given the proper limiting instructions

upon request.

Godfrey v. CSAA Fire & Cas. Ins. Co., No. CIV-19-00329-JD, 2020 WL

1056306, at *2 (W.D. Okla. Mar. 4, 2020) (citing Koch v. Koch Indus., Inc., 203

F.3d 1202, 1227 (10th Cir. 2000)). It is well settled that introduction of the

Farmers litigation to show that the Isers are “litigious” is an improper pur-

pose and would be unduly prejudicial. See, e.g., Hellard v. Mid Century Ins.

Co., No. 19-CV-00043-GKF-CDL, 2021 WL 4993961, at *4 (N.D. Okla. Feb.

19, 2021) (citing Caldwell v. Wal-Mart Stores, Inc., 229 F.3d 1162, at *5 (10th

Cir. 2000) (unpublished table decision)); see also Richardson v. Missouri Pac.

R. Co., 186 F.3d 1273, 1278 (10th Cir. 1999). But because the timeframe of the

two insurance claims and litigation overlap, evidence of the Farmers litigation

may serve a proper purpose in this litigation to distinguish the mental and

No. 18-CV-504

emotional distress attributable to the separate claims and lawsuits. At trial,

CSAA must demonstrate to the Court that the evidence is relevant and not

unduly prejudicial to the Isers. The Court RESERVES RULING on the

Isers’ motion in limine to preclude evidence of their Farmers lawsuit.

For the reasons discussed above, the Court disposes of the Isers’ mo-

tions in limine as follows:

Motion in Limine No. 1 is DENIED as moot;

Motion in Limine No. 2is GRANTED in part and DENIED in part;

Motion in Limine No. 3is GRANTED in part and DENIED in part;

Motion in Limine No. 4 is DENIED as moot;

Motion in Limine No. 5 is RESERVED for trial.

For the motions denied or reserved, the Court’s rulings are preliminary. The

Court reminds the parties of their continued obligation to reassert evidentiary

challenges at trial to preserve such challenges for appeal.

DATED this 4th day of April 2024.

“ 1 A \

JOHN D. RUSSELL

United States District Judge