Unpublished Disposition, 899 F.2d 1224 (9th Cir. 1984)

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US Court of Appeals for the Ninth Circuit - 899 F.2d 1224 (9th Cir. 1984)

Nos. 88-4365, 88-4370.

United States Court of Appeals, Ninth Circuit.

Before JAMES R. BROWNING, BEEZER and RYMER, Circuit Judges


Appellants Gerald Kingen and Barry Luboviski appeal from the district court's judgment on a jury verdict awarding compensatory and punitive damages to plaintiff-appellee John J. Beaupre on causes of action for fraud and bad faith. A state court judgment in Beaupre's favor had been stayed pending appeal on condition that Kingen post security. An irrevocable letter of credit, delivered to Beaupre's counsel, stated that it was to expire on a date that came and went before the appeal was resolved. An extension was obtained but never passed on to Beaupre by Luboviski, who represented Kingen in that proceeding.

Kingen and Luboviski contend that the district court erred in instructing the jury and limiting the testimony of their expert legal witness. They also argue that the jury's verdict is not supported by substantial evidence. We affirm.

* Kingen and Luboviski contend that the district court erred in permitting the jury to consider liability for breach of a duty of good faith. The jury returned a special verdict finding appellants liable both for a breach of this duty and for fraudulent misrepresentation. Because we conclude that the jury's verdict may stand on the basis of the fraudulent misrepresentation theory alone, we need not reach this issue. See Benigni v. City of Hemet, 879 F.2d 473, 478 (9th Cir. 1989); McGrath v. Zenith Radio Corp., 651 F.2d 458, 471-72 (7th Cir.), cert. denied, 454 U.S. 835 (1981); Farmer v. International Harvester Co., 97 Idaho 742, 553 P.2d 1306, 1310 (1976).


The reviewing court must determine "whether, considering the charge as a whole, the court's instructions fairly and adequately covered the issues presented, correctly stated the law, and were not misleading." Thorsted v. Kelly, 858 F.2d 571, 573 (9th Cir. 1988); see also Carvalho v. Raybestos-Manhattan, Inc., 794 F.2d 454, 455 (9th Cir. 1986); Los Angeles Memorial Coliseum Comm'n v. National Football League, 726 F.2d 1381, 1398 (9th Cir.), cert. denied, 469 U.S. 990 (1984). If the issues are fairly presented, the district court has broad discretion regarding the wording of instructions. Carvalho, 794 F.2d at 455.

Appellants first contend that the court erred in rejecting their proposed instruction that statements of opinion or belief cannot support a fraudulent misrepresentation claim. The court's Instruction No. 8 stated that the defendants' alleged misrepresentation must have been "of past or existing fact." This instruction is sufficient to "allow a jury to determine intelligently the questions presented," and is therefore not grounds for reversal. Ragsdell v. Southern Pac. Transp. Co., 688 F.2d 1281, 1282-83 (9th Cir. 1982).

Appellants next argue that Instruction No. 10A was erroneous because it advised the jury that a plaintiff has no duty to investigate a defendant's representations and because it failed to consider the legal consequences when a plaintiff does in fact investigate. See, e.g., Snow's Auto Supply, Inc. v. Dormaier, 108 Idaho 73, 696 P.2d 924, 929 (App.1985). The instruction was proper in light of evidence that Luboviski not only delivered the letter of credit to Beaupre's counsel, but represented that it was the equivalent of cash that would implicitly be available once the appeal was concluded. See Conder v. A.L. Williams & Assocs., Inc., 739 P.2d 634, 638 (Utah Ct.App.1987) ("Reliance also has been found reasonable even where a plaintiff executes a written agreement in reliance upon verbal promises that the contrary written provision is not operative, or where a plaintiff is induced to refrain from reading the contract.") (citing Berkeley Bank for Coops v. Meibos, 607 P.2d 798 (Utah 1980)).

Third, appellants maintain that Instruction No. 13 is erroneous because it diverges from the language of Idaho Appellate Rule 13, which provides that a bond on appeal must state that the sums due by reason of the outcome of the appeal will be paid within 30 days of the remittitur, by stating that any security must remain in effect for that period. An instruction need not be given in the exact words of a statute. See Carvalho, 794 F.2d at 455. The letter of credit which appellants posted as security does not fall within the explicit terms of Rule 13. Idaho courts have found, however, that an irrevocable letter of credit is "substantially equivalent to ... a supersedeas bond" for purposes of Rule 13. Whittle v. Seehusen, 113 Idaho 852, 748 P.2d 1382, 1388 (App.1987). It was therefore not error to treat a letter of credit as subject to the requirements of Rule 13 governing a supersedeas bond, to ensure that the plaintiff remain secured throughout the pendency of the appeal. Cf. Martinson v. Martinson, 90 Idaho 490, 414 P.2d 204, 205 (1966).

Appellants' fourth claim is that the court erred in rejecting their proposed instructions explaining the adversarial nature of the legal system and regarding the professional duty of care owed to plaintiff by his own attorney. Defendants are entitled to have instructions on their theory of the case given only if the theory is legally and factually supported. See Los Angeles Memorial Coliseum Comm'n, 726 F.2d at 1398; Higgins v. Martin Marietta Corp., 752 F.2d 492, 496 (10th Cir. 1985). There was no competent evidence supporting this theory.


The district judge limited the scope of testimony by appellants' expert legal witness. "The trial court is vested with broad discretion concerning the admissibility or exclusion of expert testimony and the court's action is to be sustained unless shown to be manifestly erroneous." Reno-West Coast Distrib. Co. v. Mead Corp., 613 F.2d 722, 726 (9th Cir.), cert. denied, 444 U.S. 927 (1979). Although Fed.R.Evid. 702 allows expert testimony when it will assist the jury to evaluate facts, expert testimony regarding questions of law need not be received. See Fed.R.Evid. 704 advisory committee's note; Specht v. Jensen, 853 F.2d 805, 808 (10th Cir. 1988) (en banc) (collecting cases), cert. denied, 109 S. Ct. 792 (1989); VII Wigmore, Evidence Sec. 1952, at 103 (Chadbourn rev.1978) (expert testimony regarding question of law is excluded, as such testimony usurps judge's function); 32 C.J.S. Evidence Sec. 453, at 91-92 (1964) ("As a general rule, a witness will not be permitted to state a conclusion, or opinion, of law; the testimony of witnesses in general is confined to matters of fact, as distinguished from matters of law...."). In this case, the trial court excluded proffered testimony to the effect that "the arguments [Luboviski and Donovan] made at the hearing ... were reasonable and appropriate," and the actions of plaintiff's attorney were "unreasonable and negligent." See Opening Brief of Appellant Luboviski at 31-33. Such testimony is aimed at "direct [ing] the jury's understanding of the legal standards upon which their verdict must be based," and it was therefore within the court's discretion to exclude it. See Specht, 853 F.2d at 809-10.


Kingen and Luboviski contend that the jury's verdict on fraudulent misrepresentation is not supported by substantial evidence. "Substantial evidence is such relevant evidence as reasonable minds might accept as adequate to support a conclusion even if it is possible to draw two inconsistent conclusions from the evidence." Landes Constr. Co. v. Royal Bank of Canada, 833 F.2d 1365, 1371 (9th Cir. 1987). In reviewing the verdict, we may not weigh the evidence or assess witness credibility, id., but must indulge every intendment in favor of the validity of the judgment, see State Farm Mut. Auto. Ins. Co. v. White, 563 F.2d 971, 977 (9th Cir. 1977); McGrath, 651 F.2d at 472.

The district court correctly instructed the jury that each of the nine elements of fraudulent misrepresentation under Idaho law must be found for the plaintiff to prevail. See Faw v. Greenwood, 101 Idaho 387, 613 P.2d 1338, 1340 (1980). Appellants argue, however, that four of these elements were not supported by substantial evidence. First, they claim that Luboviski did not make any false representations of fact during the April 18, 1984 hearing, relying upon Luboviski's testimony that he merely stated that the letter of credit was "like a bond."1  Second, appellants contend that Beaupre failed to introduce evidence that his reliance on their representations was justifiable. Finally, Kingen and Luboviski argue that substantial evidence is lacking to support the conclusion that Luboviski was aware of the falsity of the representations or that he intended to deceive Beaupre.

Substantial evidence supports the jury's verdict. There was evidence that Luboviski represented to the court and to Beaupre's counsel during the telephonic hearing that a letter of credit was the equivalent of a cash deposit or supersedeas bond for purposes of Idaho Appellate Rule 13. Idaho District Judge Meehl so testified, recalling that Luboviski suggested "that [the letter of credit] was legally sufficient and equivalent to a Rule 13 requirement." Reporter's Transcript, vol. II, at 36. Implicitly this was a representation that the security would remain in place until after the Idaho Supreme Court ruled and a remittitur was entered. The letter of credit stated on its face that a draft of the letter must be accompanied by an order to pay "representing the final resolution of the appeal process of case # 11866" and noted that it was "to facilitate the appeal of both" Kingen and his codefendant. Judge Meehl understood that the letter of credit would still be available as a recourse after the appeal was completed, or that the defendants were going to provide security for the payment of the judgment until conclusion of the appeal; his Order Granting Stay of Execution Pending Appeal provided " [t]hat the letters of credit ... shall constitute a cash deposit which complies with Rule 13, Idaho Appellate Rules."

Evidence of Luboviski's subsequent conduct in handling the amendment to the letter of credit further supports the jury's verdict. Recognizing that the letter of credit would expire before completion of the appeal process, Luboviski obtained a letter of amendment extending the letter of credit. Luboviski then purposefully withheld the letter of amendment from Beaupre and from the court, despite instructions from the drafter that the amendment was to be delivered to the beneficiary. After receiving Beaupre's affirmative demand for payment, Luboviski returned the letter to the bank for cancellation. From this the jury could reasonably infer the requisite knowledge of the falsity of the representations and intent to deceive Beaupre.



This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3


In Whittle v. Seehusen, 113 Idaho 852, 748 P.2d 1382, 1388 (App.1987), an Idaho court ruled that "posting [a] letter of irrevocable credit [is] substantially equivalent to posting a supersedeas bond" under Idaho Appellate Rule 13