United States District Court, W.D. Oklahoma
TIMOTHY D. DeGIUSTI CHIEF UNITED STATES DISTRICT JUDGE
the Court is Plaintiff's Motion in Limine [Doc. No. 82].
Defendant has responded in opposition [Doc. No. 89], and
Plaintiff has filed a reply [Doc. No. 92]. The matter is
fully briefed and at issue.
breach of contract and bad faith claims arise out of an
insurance policy issued by Defendant to Plaintiff. Plaintiff
alleges that its real and personal property was damaged or
destroyed by a tornado on May 16, 2017. The factual and
procedural background of the case appears in the Order of
October 24, 2019 [Doc. No. 97], denying summary judgment, and
will not be repeated here.
seeks to exclude Defendant from asserting a “fraud
defense” at trial that was not asserted at the time of
the denial of the claim. Plaintiff also seeks to exclude
Defendant from presenting a comparative bad faith argument,
and moves to strike witnesses who were not listed on
Defendant's Final Witness List [Doc. No. 39], but were
added by Defendant to the Final Pretrial Report [Doc. No.
83]. Finally, Plaintiff seeks to exclude from trial evidence
of its prior claims with Defendant. Upon consideration of the
issues raised by the motion, the Court makes the following
Defendant's fraud defense or new denials for the
stage of the proceedings, Defendant has answered the
Complaint and asserted its affirmative defenses [Doc. No. 5].
Defendant moved the Court for summary judgment, detailing the
evidence that it contended supported its denial of
Plaintiff's claim [Doc. No. 38]. The Court denied
Defendant's Motion for Summary Judgment [Doc. No. 97].
Now, Defendant asserts for the first time a claim of fraud in
Plaintiff's presentation of the claim, specifically in
connection with the debris removal after the tornado.
the tornado, volunteers from the Elk City community,
including country club members, assisted with the clean-up.
Brad Gilbert, President of the Elk City Golf and Country
Club, was one of the volunteers who assisted. According to
Mr. Gilbert's deposition testimony, the golf club had an
impending tournament and “needed to get 120 trees off
the fairways and the greens, so [they] could proceed with
business.” [Doc. No. 82-2 at 2]. Mr. Gilbert advised
that Ronald Murchek, Defendant's adjustor, and Darrin
Patrick, the insurance agent who sold the policy to
Plaintiff, advised him and the members who assisted with
debris removal to submit invoices to Defendant for their
Gilbert (BVG Construction) submitted an invoice on June 2,
2017, for tree and debris removal in the amount of $7,
200.00. [Doc. No. 82-2 at 3]. He wrote a “personal
note” at the bottom of the invoice that indicated the
invoice was paid on June 5, 2017. [Doc. No. 82-2 at 3-4]. Mr.
Gilbert testified in his deposition that the invoice was
never paid, and that he “just wrote it off [on] my
books as if the club gets money, they'll pay, and if not
- I do a lot of pro bono stuff.” [Doc. No. 82-2 at 3].
Murchek testified in his deposition that it was his decision
to advance $100, 000.00 to Plaintiff because Plaintiff had a
large fundraiser at the end of the month and needed to remove
debris. [Doc. No. 82-3 at 2]. After looking at the check, Mr.
Murchek acknowledged that the check for $100, 000.00
indicated it was an advance payment on the building loss.
Id. at 3. There is no evidence of record, to date,
that Defendant has made any payment toward debris
also asserts that Plaintiff misrepresented the contents of
the clubhouse in submitting its claim to Defendant. Alex
Alvarez, the golf course manager, testified in his deposition
that he prepared, with input from club members, an itemized
list of the club contents that were damaged or lost because
of the tornado. [Doc. No. 89-2 at 1]. The list totaled $400,
000.00, which is the coverage for the clubhouse contents
under the policy. Mr. Alvarez also testified that the
contents that were able to be salvaged were being stored in a
train container in the club parking lot. Id. at 1-2.
Mr. Alvarez testified that he “tried to be as thorough
as possible, ” and that the itemized list included
asterisks where the item was physically damaged or was not
operable. Id. at 3.
Gilbert's testimony supports the testimony of Mr.
Alvarez. Mr. Gilbert advised that serial numbers were not
provided for the items on the contents list because the items
blew away in the tornado. [Doc. No. 89-1 at 12].
asserts that the fraud defense has been properly raised, and
that it was not aware of Plaintiff's alleged
misrepresentations until depositions in late March 2019.
Defendant included the defense in the Final Pretrial Report
[Doc. No. 83], filed on May 14, 2019. Further, Defendant
asserts that the fraud defense was contemplated in its
Answer, which provided that the affirmative defense of
“Conditions precedent and subsequent to an entitlement
to certain benefits under the subject insurance contract are
not satisfied, by way of which claim is barred.” [Doc.
No. 5 at 3].
who alleges fraud “must state with particularity the
circumstances surrounding fraud ….” Fed.R.Civ.P.
9(b). “Rule 9(b) applies to all claims of fraud
…, including affirmative defenses.”
Boardwalk Apartments, L.C. v. State Auto Prop. and Cas.
Ins. Co., 2012 WL 3024712, at *1 (D. Kan. July 24,
2012). Further, Rule 8(c) specifically addresses affirmative
defenses and imposes the additional requirement that a party
“affirmatively state any avoidance or affirmative
defense, including fraud.” Fed.R.Civ.P. 8(c)(1).
“The policy behind Rule 8(c) is to put plaintiff on
notice well in advance of trial that defendant
intends to present” an affirmative defense of fraud.
Hardin v. Manitowoc-Forsythe Corp., 691 F.2d 449,
458 (10th Cir. 1982) (emphasis added).
Court disagrees with Defendant's assertion that its fraud
defense was contemplated in its Answer, as described above.
It was not pled with particularity in the Answer, and
Defendant has not sought leave to amend its Answer. Assertion
of the fraud defense at this late stage in the litigation
would be unfairly prejudicial to Plaintiff, particularly
given the fact that Defendant has known since March 2019 of
Plaintiff's alleged misrepresentations, but has never
sought leave to amend its Answer, the Court has denied
Defendant's motion for summary judgment, and ...