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Athridge v. Aetna Casualty and Surety Co.

November 10, 2008

THOMAS P. ATHRIDGE, ET AL., PLAINTIFF,
v.
AETNA CASUALTY AND SURETY COMPANY, DEFENDANT.



The opinion of the court was delivered by: John M. Facciola United States Magistrate Judge

MEMORANDUM OPINION

Before the Court is Plaintiffs' Motion For Judgment as a Matter of Law or Alternatively for a New Trial [#261] ("Motion").

I. Background

Thomas P. ("Tommy") Athridge suffered a serious injury on July 29, 1987, when an automobile driven by Jorge Iglesias ("Jorge") struck Tommy and threw him against the car's windshield. The car was owned by Jorge's uncle and aunt, Francesco and Hilda Rivas, and their restaurant, Churreria Madrid. At the time of the accident, Aetna Casualty and Surety Company ("Aetna") had issued an automobile liability insurance policy (the "Policy") to Jorge's father, Jesus Iglesias.

The Athridges' goal of securing compensation for Tommy engendered three distinct lawsuits. The Athridges brought the first suit to impose liability on Jorge, the underage driver, who was driving the Volkswagen Jetta when he hit Tommy. The late Judge Harold Greene, trying the case without a jury, concluded that Jorge had the last clear chance to avoid the collision, which excused any contributory negligence by Tommy, and awarded Tommy and his father a total of $5,510,010.78 in damages. Athridge v. Iglesias, 950 F. Supp. 1187 (D.D.C. 1996), aff'd, 1997 WL 404854 (D.C. Cir. June 30, 1997).

The second lawsuit was intended to impose liability upon the owners of the car, the Rivases, and their restaurant, Churreria Madrid. Initially, this Court granted summary judgment to the Rivases but the court of appeals reversed. Athridge v. Rivas, 312 F.3d 474, 479 (D.C. Cir. 2002). Upon remand, a jury returned a verdict in favor of the Athridges. The jury concluded that the Rivases had not established by a preponderance of the evidence that "they did not consent to Jorge Iglesias' use of their car on the day of the accident." Athridge v. Iglesias, Civ. Nos. 89-1222 & 92-1868, Verdict Form [#224].*fn1

Judgment was then entered against the Rivases for the $5,510,010.78 that Judge Greene had awarded Tommy and his family.*fn2 The jury's verdict meant that GEICO, the Rivases' insurer, might have to pay Jorge what Judge Greene had awarded Tommy and his father in 1996 but, while an appeal from the judgment based on the jury verdict was pending, a settlement between the Rivases and GEICO was reached. See Gov't Employees Ins. Co. v. Rivas, --- F. Supp. 2d ---, 2008 WL 3918062 at *1 (D.D.C. Aug. 26, 2008).

In this third case, the Athridges initially brought suit against Aetna, Jorge's parent's insurer, for breach of fiduciary duty, bad faith violations, intentional infliction of emotional distress, indemnification, and unfair trade practices. This Court entered summary judgment in favor of Aetna on all counts. See Athridge v. Aetna Cas. & Sur. Co., 163 F. Supp. 2d 38, 48 (D.D.C. 2001); Athridge v. Aetna Cas. & Sur. Co., No. 96-CIV-2708, 2001 WL 214212 at *5-12 (D.D.C. Mar. 2, 2001). On appeal, the D.C. Circuit reversed and remanded only the indemnification claim, finding that there was a genuine issue of material fact as to whether Jorge had a reasonable belief in his entitlement to use the Rivases' car on the day of the accident. Athridge v. Aetna Cas. & Sur. Co., 351 F.3d 1166, 1169-70 (D.C. Cir. 2003). If Jorge did not have a reasonable belief that he could drive the car, then Exclusion 11 of Aetna's policy eliminates coverage of Jorge, and consequently the plaintiffs could not succeed on their indemnification claim.

A jury trial began on February 14, 2007, and one week later a jury found that Aetna had established by a preponderance of the evidence that Jorge did not have a reasonable belief that he was entitled to use the Rivases' car on the date of the accident. Verdict Form [#245]. On September 19, 2007, the clerk entered judgment in favor of Aetna. Judgment [#260].

II. Plaintiffs Are Not Entitled to Judgment as a Matter of Law

Plaintiffs previously moved for summary judgment based on estoppel or preclusion by defense. Plaintiffs' Motion for Partial Summary Judgment [#198]. That motion was denied. Athridge v. Aetna Cas. & Sur. Co., No. 96-CIV-2708, 2006 WL 2844690 at *1 (D.D.C. Sept. 29, 2006).

This defense is based on the following facts summarized in that opinion: A few days prior to the start of the trial before Judge Greene, Irving Starr, who was representing Jorge, ran into a lawyer he knew named Paul Pearson. Pearson had been retained by Aetna to represent Jorge's parents in a related suit brought by the Athridges that was dismissed. See Athridge v. Iglesias, 141 F.3d 357 (D.C. Cir. 1998). When Starr told Pearson of the upcoming trial and his concern that he would be confronting a substantial and well-financed opponent represented by a large and prominent law firm, Pearson volunteered to help Starr on what Starr thought was a pro bono basis. Discovery in this case revealed, however, that Pearson convinced Aetna that paying him was in Aetna's interest. Aetna ultimately paid Pearson for the services he provided Jorge by helping Starr at the trial before Judge Greene. Athridge, 2006 WL 2844690 at *1.

Lest its doing so be deemed a waiver of Aetna's perpetual insistence that it had no responsibility to defend or indemnify Jorge because he did not have a reasonable belief that he was entitled to use the car,*fn3 Pearson had Jorge sign a document*fn4 in which Jorge acknowledged that Pearson's assistance to Jorge at trial was not a waiver of Aetna's position that it denied coverage. Athridge, 2006 WL 2844690 at *2.

The Athridges contended that this document failed to adequately reserve Aetna's rights to disclaim liability on their indemnification claim, and as a result Aetna was estopped from raising a defense to the indemnification claim because it undertook Jorge's defense without an adequate reservation of rights. Id. The Athridges moved for summary judgment on this ground and the motion was denied. Id.

They later renewed that motion, and also sought partial summary judgment on their entitlement to interest under the Supplementary Payments provision of the Aetna policy. Plaintiffs' Renewed Motion for Partial Summary Judgment [#252]. That motion was also denied, and, in the same opinion, Aetna was granted summary judgment on plaintiffs' estoppel by defense claim. Athridge v. Aetna Cas. & Sur. Co., No. 96-CIV-2708, 2007 WL 2493479 (D.D.C. Sept. 5, 2007).

In now seeking judgment as a matter of law, plaintiffs do little more than repeat the unavailing arguments they previously made in support of their motions for summary judgment. Compare Memo at 3-10 with Plaintiffs' Memorandum in Support of Motion for Partial Summary Judgment [#198]; Plaintiffs' Reply Memorandum in Support of Motion for Partial Summary Judgment [#204]; Plaintiffs' Memorandum in Support of Their Renewed Motion for Partial Summary Judgment and in Opposition to Defendant's Renewed Motion for Summary Judgment [#253]; Plaintiffs' Reply in Support of Their Renewed Motion for Partial Summary Judgment [#257]. Indeed, they readily concede that the issues they now present in the Motion were "just recently decided" by the Court, and that they "raise these issues again here to preserve such issues for appeal." Memo at 3-4. Because the plaintiffs raise no new arguments, their motion for judgment as a matter of law will be denied for the reasons stated in the Court's previous opinions.

III. Plaintiffs Are Not Entitled to a New Trial

A court should only grant a motion for new trial pursuant to Rule 59 "where the court is convinced that the jury verdict was a 'seriously erroneous result' and where denial of the motion will result in a 'clear miscarriage of justice.'" Nyman v. FDIC, 967 F. Supp. 1562, 1569 (D.D.C. 1997) (quoting Sedgwick v. Giant Food, Inc., 110 F.R.D. 175, 176 (D.D.C. 1986)). "Generally, a new trial may only be granted when a manifest error of law or fact is presented." Long v. Howard Univ., 512 F. Supp. 2d 1, 6 (D.D.C. 2007) (quoting In re Lorazepam & Clorazepate Antitrust Litig., 467 F. Supp. 2d 74, 87 (D.D.C. 2006)).

Plaintiffs present numerous arguments in support of their motion for a new trial, and those arguments are addressed in turn below.

1. Bifurcation of Trial

The plaintiffs claimed that they were entitled to recover under the Policy pursuant to two "legal theories." Plaintiffs' Memorandum Concerning the "Scope of Trial" [#210] at 1. The first theory was that there was coverage because "Jorge Iglesias at the time of the accident was Jesus Iglesias' son and lived in his father's household." Id. Coverage under that theory was subject to the "reasonable belief" exclusion. The second theory was that there was coverage "because Aetna in fact assumed the defense of Jorge Iglesias at trial, with knowledge of the ground of exclusion on which Aetna now relies, and thereafter conducted that defense in a manner prejudicial to Jorge Iglesias' interests as someone who was both a covered person under the policy and someone who was being represented by an attorney under Aetna's control." Id. at 1-2.

On December 28, 2006, the Court issued a minute order limiting the scope of the trial "to the question of whether Jorge Iglesias had a 'reasonable belief' to drive the automobile at the time of the accident at issue." Plaintiffs argue that "the issue of whether Aetna in fact defended Jorge and whether it adequately reserved its rights" should have been included in the trial because their prior motion for summary judgment on the issue of estoppel by defense had been denied. Memo at 11 (citing Athridge, 2006 WL 2844690). Plaintiffs argue that resolving this issue was "necessarily a prior step in reaching any conclusions about what evidence was admissible even on the issue of reasonable belief," and failure to resolve it before or during trial had the "cascading effect of making it impossible to properly resolve objections to the admissibility of Judge Greene's opinion or merely judicial notice of the facts found in that opinion." Memo at 11-12.

The long history of this case establishes that the evidence must be viewed as falling into two categories: what happened before and during the accident, and what happened thereafter. The evidence of what happened before the accident dealt with whether or nor Jorge could drive a stick shift, and whether he had driven the Jetta or any other car that he was driving on the day of the accident previously. From this evidence the Athridges wanted the finder of fact to find that, despite his denials, Jorge had driven the Jetta before with his family's knowledge, that his family had not prevented him from doing so, and he therefore had a reasonable belief that he could drive the Jetta on the day of the accident. The evidence of his driving on the day of the accident dealt with the ease with which he shifted the gears of the Jetta's manual transmission over a route that required him to shift gears as he accelerated, stopped at stop signs or red lights, or downshifted as he decelerated.

The evidence of what happened after the trial deals with how it came to be that a lawyer named Pearson assisted Jorge's lawyer, Irving Starr, in the first case before the late Judge Harold Greene. In that case, Judge Green concluded that both Jorge and Tommy Athridge (who was severely injured) were negligent, but that Jorge had the last clear chance to avoid the accident. See Athridge, 950 F. Supp. at 1191.

I limited the trial to the issue of Jorge's reasonable belief that he was entitled to drive the car. This meant that the trial focused the evidence on Jorge's abilities to drive the Jetta, and whether, despite his denials, he had driven the Jetta before and was able to drive it well on the day of the accident. As the Athridges would have it, however, the jury that heard that evidence should have also heard the following evidence, that pertained only to how ...


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