Defendant-Appellant Indiana Lumbermens Mutual Insurance Company (ILM) is appealing a district court ruling that denied its motion for judgment as a matter of law or for a new trial after a jury awarded $2,261,166 to Plaintiff-Appellee Ryan Development Company, L.C. (Agriboard) for breach of an insurance contract. The case originated from a fire in April 2009 that destroyed Agriboard's manufacturing facility in Texas, where it produced building panels from compressed straw. At the time of the fire, Agriboard held an insurance policy with ILM, which had initially paid $450,000 and later $1.8 million following Agriboard's lawsuit. Agriboard subsequently sought an additional $2.4 million for unpaid coverages, leading to the current appeal.
Agriboard, initially a struggling start-up, received investment from Ron Ryan in 1998 and underwent significant operational improvements under his leadership, including the acquisition of necessary certifications and enhanced production processes. Following the fire, Agriboard engaged its accounting firm, Larson Company, to assist in calculating claims. Certified public accountants from the firm prepared proofs of loss, with one accountant calculating lost income based on historical data, estimating total earnings exposure at $2.4 million. The appellate court affirmed the district court's decision.
The lost income policy limit was set at $2.2 million, with ILM having paid only $400,000, leaving Agriboard seeking $1.8 million. Mr. Rump documented Agriboard's physical losses, reviewed financial records, and submitted proofs of loss, but ILM refused full payment, prompting Agriboard to file a lawsuit. Prior to trial, ILM sought to exclude the testimony of Agriboard's accountants, arguing they were not designated as expert witnesses under Rule 26. The trial court ruled that their testimony was not expert in nature but rather factual, allowing them to testify. ILM moved for judgment as a matter of law, claiming insufficient evidence, but the court denied this motion, reaffirming the admissibility of the accountants' testimony.
ILM presented its own witnesses, including a forensic accountant and a claims specialist. The trial court found sufficient evidence to support jury instructions that ILM argued were confusing. Agriboard's counsel referenced a Texas endorsement in the insurance policy, suggesting that claims like lost income were considered liquidated demands for full policy limits without further action required from Agriboard. ILM did not object to this assertion during closing arguments. During rebuttal, Agriboard suggested ILM's failure to call its corporate counsel was due to potentially damaging testimony, leading to an objection from ILM, which the court sustained. Ultimately, the jury awarded Agriboard $2,261,166 for breach of contract.
ILM renewed its motion for judgment as a matter of law or, alternatively, for a new trial, citing four grounds: prejudicial remarks during closing arguments by Agriboard, confusing jury instructions, inadmissible expert testimony, and a verdict not supported by evidence. The trial court denied the motion, and ILM subsequently appealed, focusing solely on the request for a new trial. The appellate court reviews the trial court's decision for abuse of discretion, reversing only for clear error or exceeding permissible choices.
ILM contends that a new trial is justified due to the admission of Agriboard's accountants' expert testimony, which they argue was inadmissible as the court had previously ruled that such testimony was not allowed. The trial court admitted the testimony under Rule 701 of the Federal Rules of Evidence, which permits non-expert witnesses to give opinions not requiring specialized knowledge. The court determined that the accountants provided lay testimony based on their involvement in Agriboard’s financial documentation, using simple arithmetic and personal experience rather than expert analysis. The appellate court found the trial court’s conclusion reasonable and supported by the record, affirming that the accountants' testimony fell within the bounds of Rule 701 as lay testimony, distinguishing it from cases involving true expert opinion.
ILM challenges jury Instructions 12 and 13 regarding insurance contract ambiguity, arguing that they were inappropriate and confusing since Agriboard did not present testimony on the policy's ambiguity. The review of jury instructions is conducted for abuse of discretion, while legal objections are assessed de novo. The trial court found the instructions appropriate, citing testimony from ILM’s claims specialist, Mr. Thompson, about policy provisions and time requirements, which justified guidance on interpreting policy conflicts. The record supports the trial court's conclusion that the instructions did not mislead the jury regarding their duty and interpretation, affirming that no abuse of discretion occurred.
ILM also argues for a new trial due to improper closing remarks by Agriboard’s counsel, specifically referencing the Texas endorsement and failing to call Mr. McInteer as a witness. Although ILM objected to the mention of Mr. McInteer, the trial court sustained the objection. The decision for a new trial based on attorney misconduct lies with the district court's discretion and requires proof of prejudice. ILM contends that references to the Texas endorsement were prejudicial since Agriboard had not discussed it during the trial. However, the trial court ruled that the comments did not warrant reversal, as jurors were instructed that closing arguments are not evidence. Additionally, even if there was an error, it was deemed brief and unlikely to affect the jury’s substantial rights. The court similarly found that remarks regarding Mr. McInteer did not shift the burden of proof to ILM, reaffirming that Agriboard had the burden of proof as instructed. The trial court's conclusions are supported by the record.
The trial judge instructed the jury to disregard a statement made by counsel following an objection, and it is presumed that the jury complied. The timely objection and its sustenance diminish claims of prejudice, indicating no abuse of discretion by the trial court. ILM contended that the jury's verdict lacked evidentiary support, particularly regarding awards for lost profits and valuable papers. The appellate review process is deferential; a jury verdict stands unless it is overwhelmingly against the evidence's weight. The jury's decision will not be disturbed unless it appears influenced by improper motives. ILM's arguments are speculative due to the general nature of the jury's verdict, which does not reveal the specific basis for the awarded damages. Therefore, claims regarding excessive restoration periods or damages for unreturned valuable papers cannot be substantiated. The jury's award of $2,261,166, requested by Agriboard at $2.4 million, is not deemed excessive. Sufficient evidence supported the jury's determination of ILM's breach of contract, and the trial court's discretion was upheld. The ruling is affirmed.
