Kendall Dealership Holdings, LLC v. Warren Distribution, Inc.

WO IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
KENDALL DEALERSHIP HOLDINGS, )
LLC, )
)
Plaintiff, )
vs. )
)
WARREN DISTRIBUTION, INC., )
)
Defendant. )
_______________________________________)
)
WARREN DISTRIBUTION, INC., )
)
Third-Party Plaintiff, )
) No. 3:18-cv -0146-HRH
vs. )
)
ELECTRICAL COMPONENTS )
INTERNATIONAL, INC., and ELECTRICAL )
COMPONENTS CANADA, INC., )
)
Third-Party Defendants. )
_______________________________________)
O R D E R
Motion in Limine to Exclude Insurance Claims Files and Related Testimony
Kendall Dealership Holdings (“Kendall”) moves this court in limine to exclude
evidence of, and testimony regarding, Kendall’s insurance coverage through Federated
Insurance Company and its insurance files.1 Electrical Components International and
1 Docket Nos. 253, 284, and 285.
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Electrical Components Canada (“ECI/ECC”) and Warren Distribution (“Warren”) oppose
this motion.2 Oral argument is not requested and is not deemed necessary.
Background
Kendall contends that approximately 8,000 block heaters which it purchased from
Warren were defective.3 ECC allegedly manufactured the heaters and ECI allegedly sold
these to Warren.4 The only version of engine block heater still at issue is the PU140-00913
heater (“913 heater”).5
Kendall is insured through Federated Insurance Company.6 According to Kendall,
Federated received five subrogation claims from third-party insurers who had paid their
clients’ claims, following block heater induced fires.7 Federated claims adjuster Brian
Murphy handled Kendall’s claims.8 Kendall states that Murphy hired Sean Shideh (now
also a Kendall expert witness in this case) to investigate the cause of the fires.9 In August
2020, ECI/ECC subpoenaed copies of Murphy’s claim files from Federated.10 According
2Docket Nos. 265 and 266.
3Docket No. 247, SEALED ORDER.
4Id.
5Id.
6Docket No. 253, Exhibit 1, Docket No. 271, SEALED Exhibit D.
7Docket No. 253.
8Docket No. 253, Exhibit 1.
9Docket No. 253.
10Docket No. 131, SEALED Exhibit V.
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to Warren, these files consist of approximately 1,500 pages of records.11 Warren states that
these “insurance files” consist of Shideh’s reports, materials Shideh reviewed, invoices, fire
reports, photos, documents regarding block heater installation, correspondence between
Shideh and Murphy, correspondence with Kendall, and documents relating to Kendall’s
involvement in certain subrogation claims.12
Kendall now contends that there exist five categories of insurance information and
claim-related documents that should be excluded.13 These include statements or inferences
that Kendall is insured; documents related to the five subrogation claims that Federated
handled, including those submitted to inter-company arbitration, inter-arbitration company
arbitration determinations, and third-party demands for reimbursement; adjuster reports,
investigation analysis, opinions, communications, emails, phone log entries, letters and
“etc.” related to block heater fire investigations and claim determinations; all communica-
tion between the insurance adjuster and Kendall employees; and “all other inadmissible
claim-related materials.”14 Kendall does not seek exclusion of the reports Shideh generated
during his insurance investigation.15
Kendall seeks exclusion of these general categories of documents in the insurance
claims files on the grounds that certain of these documents are inadmissible hearsay, that
certain statements constitute improper expert opinion under Federal Rule of Evidence
11Docket No. 266.
12Id.
13Docket Nos. 253 and 285.
14Id.
15Docket No. 253.
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(“Evidence Rule”) 702, and that certain evidence is irrelevant and unduly prejudicial.16
Kendall does not identify a single document or statement that it seeks to exclude.17 Yet
Kendall contends that its vague identification of the various categories of documents it
seeks to exclude is sufficiently detailed, such that this court can rule on its substantive
objections. Finally, Kendall claims that evidence of its liability insurance is subject to
exclusion under Federal Rules of Evidence 403 and 411.18
In their opposition briefs, Warren and ECI/ECC argue that Kendall’s motion is
premature and that it insufficiently identifies which evidence Kendall seeks to exclude.19
Additionally, ECI/ECC contends that much of the evidence that Kendall seeks to exclude is
both relevant and admissible.20
Discussion
First, this court addresses Kendall’s contention that the documents contained within
the insurance claims files should be excluded. Federal Rule of Civil Procedure (“Civil
Rule”) 26(a)(3) sets forth the pretrial disclosures that a party must provide to other parties
at least thirty days before trial. Among various things, these disclosures require parties to
identify “each document or other exhibit, including summaries of other evidence –
separately identifying those items the party expects to offer and those it may offer if the
need arises.” Civil Rule 26(a)(3)(A)(iii).
16Docket Nos. 253, 284, and 285.
17Id.
18Docket No. 284.
19Docket Nos. 265 and 266.
20Docket No. 265.
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As the advisory committee note to the 1993 amendment of this rule states, the court
may issue a pretrial scheduling order that establishes a different time for such disclosures.
This court’s second amended scheduling and planning order, issued on August 21, 2019,
provides that “[t]he disclosures required by Rule 26(a)(3), to the extent not covered by this
order, will be addressed by the court in an Order for Pretrial Proceedings and Final Pretrial
Conference, which the court will issue concurrent with setting this case for trial.”21
Under Civil Rule 26(a)(3)(A)(iii) and this court’s current scheduling order,
Kendall’s motion is premature. This is so because ECI/ECC and Warren have not yet had
to identify which exhibits they may offer at trial. That this request is premature is further
evidenced by the fact that Kendall fails to identify a single document that it seeks to
exclude – indeed, because none have yet been proffered. Yet Kendall asks this court to
make substantive rulings about currently non-existent evidence in a vacuum. Kendall fails
to carry its burden of pleading. See United States v. Cline, 188 F. Supp. 2d 1287, 1292
(D. Kan. 2002) (citing National Union v. L.E. Myers Co. Group, 937 F. Supp. 276, 287
(S.D.N.Y. 1996)) (“As a procedural matter, the movant should identify the particular
evidence at issue and articulate with specificity the arguments supporting the position that
the particular evidence is inadmissible on any relevant ground. A court is well within its
discretion to deny a motion in limine that fails to identify the evidence with particularity or
to present arguments with specificity.”), aff’d, 349 F.3d 1276 (10th Cir. 2003).
Because Kendall’s motion to exclude insurance claims files documents is premature,
and because Kendall has not provided the court with sufficient information with which to
rule on its request, this court denies Kendall’s motion without prejudice. Kendall is
21Docket No. 55.
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permitted to again bring this motion at the time set forth in the scheduling order referenced
above, once Kendall has identified exactly which evidence it seeks to exclude.
This court next addresses Kendall’s contention that this court should preclude any
reference that Kendall is insured or that Federated is its insurer. Generally, evidence of
insurance coverage is inadmissible because parties are entitled to have the issues decided
on the merits. Humbert v. O'Malley, Civil No. WDQ-11-0440, 2015 WL 1569182, at *3
(D. Md. Apr. 6, 2015) (citing Sands v. Kawasaki Motors Corp. U.S.A., 513 F. App’x 847,
854 (11th Cir. 2013); Halladay v. Verschoor, 381 F.2d 100, 112 (8th Cir. 1967); Braun v.
Lorillard, Inc., No. 94C976, 1996 WL 14027, at *1 (N.D. Ill. Jan.11, 1996)).
Thus, under Evidence Rule 411, evidence that a party was or was not insured is
inadmissible to prove that the party acted negligently or wrongfully. However, Evidence
Rule 411 permits the court to admit such evidence for another purpose, such as to show that
a witness is biased or prejudiced, or to prove agency, ownership, or control. Notwith-
standing these exceptions, this court may still exclude evidence if it is irrelevant under
Evidence Rule 401, or if its probative value is substantially outweighed by the danger of
“unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or
needlessly presenting cumulative evidence” under Evidence Rule 403.
Here, any general reference to the fact that Kendall is insured or that Federated is its
insurer, offered alone and without any case-specific purpose, would not be relevant to a
determination of the ultimate issues in this case. Moreover, the probative value of such
evidence would be outweighed by any of the issues listed in Evidence Rule 403. But
Kendall’s request is too broad: it asks this court to exclude all references to Kendall’s
insurance status, even though such evidence may be admissible in certain contexts for any
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of the permissible purposes listed in Evidence Rule 411. For example, Shideh was initially
employed by Federated to investigate certain of the claims that eventually gave rise to this
lawsuit. References to the fact that he was employed by Federated may be relevant to show
bias, which is a permissible purpose for offering such evidence under Evidence Rule 411.
And while Kendall generally claims that references to its insurance status would
prove irrelevant and prejudicial, it fails to explain how or why, in the context of the issues
presented in this case – including Kendall’s claims and the defendants’ asserted defenses –
such references would be irrelevant or prejudicial. Additionally, as noted above, Kendall
fails to identify any specific evidence that Kendall believes contains improper references to
its insurance status.
Thus, to the extent that Kendall is asking this court to exclude references to its insur-
ance status when offered for a purpose prohibited by Evidence Rule 411, that motion is
granted. To the extent that Kendall is asking this court to preclude references to its insur-
ance status when offered for a permissible purpose under Evidence Rule 411, the motion is
denied without prejudice because Kendall has failed to sufficiently explain how or why any
such reference may be irrelevant or prejudicial in the context of the issues presented in this
case.
This court grants Kendall’s request to exclude references to Kendall’s insurance
status, but with a caveat. That is, this court excludes such evidence, if and until the propo-
nent of such evidence first applies to this court for permission to admit any such evidence,
explains why such evidence is admissible, and this court then finds that it is admissible for
the proffered purpose.
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Conclusion
For the reasons set forth above, this court grants Kendall’s motion to exclude
references to its insurance status when such references are offered for a purpose that runs
afoul of Evidence Rule 411’s prohibitions. This court grants the remainder of Kendall’s
motion to exclude reference to its insurance status without prejudice, but only then with the
limitation described above. This court denies the remainder of Kendall’s motion without
prejudice.
DATED at Anchorage, Alaska, this 16th day of September, 2021.
/s/ H. Russel Holland
United States District Judge
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