United States District Court, E.D. North Carolina, Western Division
MICHAEL J. MORGAN, Plaintiff,
RICKY J. SPIVEY, in his individual and official capacities as a Wake County Sheriff's Deputy, Y L. MILLER, in his individual and official capacities as a Wake County Sheriff's Deputy, JOSHUA K. LEGAN, in his individual and official capacities as a Wake County Sheriff's Deputy, and THE OHIO CASUALTY INSURANCE COMPANY, individually, and as subsequent subsidiary of Liberty Mutual Insurance Company, as Surety, Defendants.
W. FLANAGAN UNITED STATES DISTRICT JUDGE.
matter comes before the court on movant National Casualty
Company's (“National Casualty”) motion filed
September 12, 2019, to intervene in this case for the limited
purpose of presenting arguments to the court regarding
admission of its liability insurance policy issued to Wake
County (DE 184). Also before the court is defendants'
motion filed September 12, 2019, for reconsideration of its
motion in limine to exclude evidence of liability insurance
from trial (DE 190). Plaintiff responded in opposition to
both motions. For the reasons that follow, defendants'
motion for reconsideration is allowed, defendants' motion
to exclude evidence of liability insurance is allowed, and
National Casualty's motion to intervene is denied as
of a defendant's financial condition may be admitted for
the purpose of determining an appropriate amount of punitive
damages that will punish and deter defendant. TXO Prod.
Corp. v. All. Res. Corp., 509 U.S. 443, 462 n.28 (1993)
(plurality opinion); Pac. Mut. Life Ins. Co. v.
Haslip, 499 U.S. 1, 22 (1991); City of Newport v.
Fact Concerts, Inc., 453 U.S. 247, 269-70 (1981);
Saunders v. Branch Banking And Tr. Co. Of VA, 526
F.3d 142, 154 (4th Cir. 2008); Stamathis v. Flying J,
Inc., 389 F.3d 429, 442 (4th Cir. 2004). However, the
Supreme Court has also cautioned that, with respect to
punitive damages, “plaintiffs do not enjoy a windfall
because they have the good fortune to have a defendant with a
deep pocket.” Haslip, 499 U.S. at 22; see
also City of Newport, 453 U.S. at 270 (citing
Carlson v. Green, 446 U.S. 14, 21 (1980))
(“The Court previously has found . . . that a damages
remedy recoverable against individuals is more effective as a
deterrent than the threat of damages against a government
law accounts for the concern raised in Haslip. In
§ 1983 cases where plaintiffs seek punitive damages,
federal law places the burden of proof on defendants to come
forward with evidence of their financial condition to plead
inability to pay. See Schaub v. VonWald, 638 F.3d
905, 926 (8th Cir. 2011); Bell v. Clackamas Cty.,
341 F.3d 858, 868 (9th Cir. 2003); Mason v. Oklahoma Tpk.
Auth., 182 F.3d 1212, 1215 (10th Cir. 1999); Mathie
v. Fries, 121 F.3d 808, 816 (2d Cir. 1997); Kemezy
v. Peters, 79 F.3d 33, 34-36 (7th Cir. 1996);
Hutchinson v. Stuckey, 952 F.2d 1418, 1422 n.4 (D.C.
Cir. 1992); Fishman v. Clancy, 763 F.2d 485, 490
(1st Cir. 1985). Defendants may decline to place ability to
pay in issue, and financial condition becomes irrelevant to
the issue of calculating an appropriate amount of punitive
damages. See Schaub, 638 F.3d at 926; Bell,
341 F.3d at 868; Mason, 182 F.3d at 1215;
Kemezy, 79 F.3d at 34-36; Fishman, 763 F.2d
argues that the court's prior order is appropriate based
on the authorities cited therein. However, none of the
controlling authorities cited by the court in its prior order
address the burden of proof for evidence of a defendant's
financial condition in a § 1983 case. See,
e.g., Saunders, 526 F.3d at 145, 154
(considering net worth in evaluating the constitutional
excessiveness of punitive damages for a Fair Credit Reporting
Act claim); Stamathis, 389 F.3d at 435, 442
(applying Virginia law on punitive damages in a diversity
case). If anything, the remaining cases previously cited by
the court involving § 1983 punitive damages claims
militate for, rather than against, reconsideration. See,
e.g., Perrin v. Anderson, 784 F.2d 1040, 1048
(10th Cir. 1986) (finding no abuse of discretion where the
district court allowed a statement from defense
counsel that his client would be individually
responsible for punitive damages, rather than the state of
Oklahoma); Wallace v. Poulos, 861 F.Supp.2d 587, 600
n.11 (D. Md. 2012) (“It might be the case that
Plaintiffs were not entitled to introduce evidence concerning
the Defendants' financial condition until Defendants put
their own financial condition at issue.”).
the court's decision to deny defendants' motion in
limine was appropriate because they had requested the court
instruct the jury that financial condition should be
considered in evaluating punitive damages, and they provided
no representation that they would not offer evidence of their
financial condition. (See Def. Am. Prop. Jury Instr.
(DE 156) at 34).
the court denied defendants' motion in limine on
September 5, 2019, defendants have represented that they will
not offer evidence of their financial condition to argue they
are unable to pay an award of punitive damages. (Def. Mem.
(DE 191) at 6). Defendants have also withdrawn in part their
request for instructions on punitive damages to remove
evidence of defendants' financial resources and ability
to pay from the jury's consideration. (See Def.
Second Am. Prop. Jury Instr. (DE 188) at 24). In light of
these developments, evidence of liability insurance no longer
appears appropriate on the issue of determining an amount of
punitive damages in this case.
on the foregoing, defendants' defendants' motion for
reconsideration (DE 190) is ALLOWED. On reconsideration,
defendants' motion to exclude evidence of liability
insurance from trial (DE 149) is ALLOWED. Movant ...