United Fire and Casualty v. Historic Preservation Trust

United Fire & Casualty Company (United Fire) appeals from the judgment
entered by the district court2 following a jury verdict in favor of the Historic
Preservation Trust (the Trust). We affirm.

I. BACKGROUND

Yuri A. Ives formed the Trust in November 1996 and served as the entity’s sole
trustee. In March of 1997, Ives, on behalf of the trust, purchased a building in Sedalia,
Missouri, with the intention of converting it into a historic hotel. Although renovations
were ongoing, the property opened as the Sedalia Trust Inn (the Inn) and began
operations in June 1997. The following month, United Fire issued the Trust a policy
insuring the Inn and its contents.

Thereafter, the Inn was damaged by two fires. The first occurred on September
4, 1997, when fumes from the lacquer that Ives was applying to a hardwood floor
ignited. After an investigation, the Sedalia Fire Department determined that the fire had
been accidental. In the early morning hours of September 7, 1997, a second fire caused
extensive damage to the Inn. The cause of this fire was determined to be arson.

Ives, acting on behalf of the Trust, submitted to United Fire a claim for the
damage to the building and its contents and a claim for business interruption loss in the
amount of $71,420.48. After conducting an investigation, United Fire denied the claim
on June 15, 1998. On June 16, 1998, United Fire filed the present action in federal
district court, seeking a declaration that its policy did not cover damages to the Inn and
alleging that Ives had intentionally set the fires, that he made material
misrepresentations and concealed material facts, that he failed to protect the property,
and that he failed to cooperate with the insurer as required by the terms of the policy.
The Trust counterclaimed, seeking a judgment that the policy covered the fire damage
to the Inn, as well as business interruption losses. The Trust also alleged breach of
contract, vexatious refusal to pay, and defamation.

The district court granted United Fire’s motion for summary judgment on the
Trust’s defamation claim. The remaining claims were tried in February of 2000. The
jury awarded the Trust $85,407.00 in damages and interest related to the first fire, and
$2,077,630.00, including $650,000 in attorney fees on the vexatious refusal
counterclaim, related to the second fire. On United Fire’s motion, the district court
reduced the jury verdict by $137,539.39. Following the entry of judgment, the district
court denied United Fire’s renewed motion for judgment as a matter of law and for a
new trial.

* * *

United Fire contends that the district court committed reversible error when it
refused to admit the transcript and the videotape into evidence. Citing McIntosh v.
Eagle Fire Co. of New York, 325 F.2d 99, 100 (8th Cir. 1963), it argues that the
evidence was admissible as an admission by a party. It further contends that the
evidence, particularly the videotape, should have been admitted as evidence of Ives’s
“demeanor and attitude” during United Fire’s investigation of his claim.

Although we stated in McIntosh that “[s]worn statements are clearly admissible
as an admission of a party against interest,” id., we did not hold that a district court is
obligated to admit evidence of an examination under oath in its entirety.3 To the
contrary, only “portions of sworn question and answer statements” were offered and
admitted. Id. Here, the district court offered United Fire the opportunity to introduce
appropriate portions of the examination under oath as impeachment and as substantive
evidence, but United Fire declined to do so.

* * *

Click the case caption above for the full text of the
Court's opinion.

Affirmed

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E-mail suggested corrections, comments and/or corrections to:
Kent Morlan

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