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Borchardt v. State Farm Fire and Casualty Co.

United States District Court, D. Minnesota

June 26, 2018

TODD BORCHARDT, MICHELE BORCHARDT, DANIELLE SHAVER, and DILLON BORCHARDT, Plaintiffs,
v.
STATE FARM FIRE AND CASUALTY COMPANY, Defendant.

          Charles J. Lloyd and Adam C. Hagedorn, LIVGARD & LLOYD, PLLP, for plaintiffs.

          Tony R. Krall, HANSON LULIC & KRALL, LLC, for defendant.

          ORDER

          Patrick J. Schiltz United States District Judge

         In September 2014, a fire destroyed the home of plaintiffs Todd and Michele Borchardt and their adult children, plaintiffs Danielle Shaver and Dillon Borchardt (collectively, “the Borchardts”). The Borchardts submitted a claim to defendant State Farm Fire and Casualty Company (“State Farm”), their homeowners insurer, for the value of the home and the personal items that were destroyed by the fire. State Farm denied coverage for two reasons: First, State Farm alleged that the Borchardts had either set the fire themselves or arranged for someone else to set it. Second, State Farm alleged that the Borchardts had lied about the cause of the fire and about the items of personal property that were lost in the fire.

         After the Court denied State Farm's motion for partial summary judgment, the case was tried, and the jury returned a mixed verdict. The jury found that State Farm had not proven that the Borchardts set or procured the fire that destroyed their home. ECF No. 152 at 1-2. But the jury also found that State Farm had proven that Todd, Michele, and Danielle[1] had each “willfully and with intent to defraud State Farm conceal[ed] or misrepresent[ed] any material fact or circumstance relating to the fire or to his or her insurance claim.” Id. at 2. In light of the evidence presented by State Farm at trial-and in light of the jury's exoneration of the Borchardts with respect to setting or procuring the fire-it is clear that the intentional misrepresentations found by the jury related to the number and value of items of personal property destroyed by the fire.

         The Borchardts now move for judgment as a matter of law under Fed.R.Civ.P. 50(b), arguing that no reasonable juror could have found that their misrepresentations about their personal property were material.

         I. STANDARD OF REVIEW

         In ruling on the Borchardts' motion, the Court must view the evidence in the light most favorable to the jury's verdict and draw all reasonable inferences in the verdict's favor. Mich. Millers Mut. Ins. Co. v. Asoyia, Inc., 793 F.3d 872, 878 (8th Cir. 2015). In other words, the Court must uphold the jury's verdict “unless no reasonable juror could have reached the same conclusion” as the jury. Id. (citation omitted).

         “There is some uncertainty about whether federal courts should apply state law standards or federal law standards to motions for a judgment notwithstanding the verdict in diversity cases.” Keenan v. Comput. Assocs. Int'l, Inc., 13 F.3d 1266, 1269 n.3 (8th Cir. 1994). But the Court need not resolve that uncertainty because the Minnesota standard for Rule 50.02 motions is substantively identical to the federal standard for Rule 50(b) motions. Id.; cf. Waite v. Am. Family Mut. Ins. Co., 352 N.W.2d 19, 21 (Minn. 1984) (“On appeal from an order for judgment notwithstanding the verdict, the evidence is viewed in the light most favorable to the jurors' findings, and the contrary judgment is affirmed only if reasonable minds could not differ that the jury's conclusion was wrong.”); Cox v. Crown CoCo, Inc., 544 N.W.2d 490, 495 (Minn.Ct.App. 1996) (“In reviewing the denial of JNOV, this court must affirm if the record contains ‘any competent evidence reasonably tending to sustain the verdict.'” (citation omitted)).

         II. ANALYSIS

         The Borchardts make three arguments in support of their Rule 50(b) motion. The Court will address each argument in turn.

         A. Law of the Case

         The Borchardts first point out that, when the Court denied State Farm's motion for partial summary judgment in August 2017, the Court held that an insured's misrepresentations cannot be deemed material unless those misrepresentations impact the insurer's investigation. The Borchardts argue that State Farm introduced no evidence that the Borchardts' misrepresentations about their personal property had any impact on State Farm's investigation. Therefore, the Borchardts contend, under the “law of the case, ” State Farm failed to prove materiality. ECF No. 160 at 5-7.

         The Court disagrees. The law-of-the-case doctrine “applies only to issues decided by final judgments.” Lovett v. Gen. Motors Corp., 975 F.2d 518, 522 (8th Cir. 1992). A district court “has the inherent power to reconsider and modify an interlocutory order any time prior to the entry of judgment, ” K.C. 1986 Ltd. P'ship v. Reade Mfg., 472 F.3d 1009, 1017 (8th Cir. 2007) (citation omitted), so if “a district court is convinced that it incorrectly decided a legal question in an interlocutory ruling, the district court may correct the decision to avoid later reversal, ” Lovett, 975 F.2d at 522.

         The August 2017 order on which the Borchardts rely was an order denying State Farm's motion for partial summary judgment. An order denying a summary-judgment motion is not a final judgment. Therefore, any statements that the Court made in its August 2017 order cannot be considered the “law of the case.” Perhaps more importantly, the Court did not hold in its August 2017 order that the only way that a misrepresentation can be deemed material is if the misrepresentation impacts the insurer's investigation. Instead, the Court held that the particula ...


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