Unpublished Disposition, 905 F.2d 1540 (9th Cir. 1984)

MEMORANDUM^** 

In this action for breach of contract and breach of the covenant of good faith and fair dealing, Richard Luna ("Luna") appeals the district court's directed verdict for Safeco Insurance Company of America ("Safeco") on the breach of the covenant and punitive damages issues. He also seeks reversal of the jury's verdict for Safeco on the breach of contract issue, alleging prejudicial judicial misconduct. We affirm and sanction appellant with an assessment of double costs for bringing a frivolous appeal.

DIRECTED VERDICT

Luna claimed that on February 27, 1983, he discovered that Indian artifacts allegedly stored in a rented locker at a storage facility had been stolen. Safeco refused to pay this claim, concluding that no theft had in fact occurred.¹  On February 28, 1984, Luna filed this action against Safeco. At the close of evidence, the district court granted Safeco's motion for a directed verdict on the breach of covenant and punitive damages issues.

In reviewing a directed verdict, this court applies the same standard as did the trial court. "A directed verdict is proper when the evidence permits only one reasonable conclusion as to the verdict. It is inappropriate if there is substantial evidence to support a verdict for the non-moving party." Peterson v. Kennedy, 771 F.2d 1244, 1256 (9th Cir. 1985), cert. denied 475 U.S. 1122 (1986) (citations omitted). Tibbs v. Great Am. Ins. Co., 755 F.2d 1370, 1376 (9th Cir. 1985).

Safeco claims that, in order for Luna to bring an action for breach of the implied covenant of good faith and fair dealing and for punitive damages, Luna must establish that he is entitled to recover benefits under his insurance policy. This conclusion does not necessarily follow in general, but does apply in the instant case.

In the instant case, plaintiff does not assert any basis for finding a breach of the covenant other than the insurer's refusal to pay the claim, which refusal he states was unreasonable. In the context of insurance contracts, the duty of good faith and fair dealing provides a remedy in tort where insurers "unreasonably and in bad faith withhold [ ] payment" on claims to their insureds. Gruenberg v. Aetna Ins. Co., 9 Cal. 3d 566, 574, 108 Cal. Rptr. 480, 486, 510 P.2d 1032, 1037 (1973). See Neal v. Farmers Ins. Exch., 21 Cal. 3d 910, 920, 148 Cal. Rptr. 389, 394, 582 P.2d 980, 985 (1978). A jury determined that Luna was not entitled to payment on his claim. It thus follows that Safeco did not "without proper cause" refuse "to compensate its insured for a loss covered by the policy." Gruenberg, 9 Cal. 3d at 574, 108 Cal. Rptr. at 485, 510 P.2d at 1037. Rather, its refusal to compensate was properly grounded in its determination that the insured was not entitled to benefits in this instance. On this basis, and in the absence of any other asserted ground for the alleged breach of the covenant of good faith and fair dealing, we affirm the district court's grant of a directed verdict on this issue. For the same reasons, we also affirm the district court's denial of punitive damages.

JUDICIAL MISCONDUCT

This court reviews the manner in which a judge conducts a trial for abuse of discretion. Hansen v. Commissioner, 820 F.2d 1464, 1467 (9th Cir. 1987). Such abuse exists when a judge expresses an opinion as to an ultimate issue of fact in front of a jury or argues for one of the parties in a suit. Id.; Handgards, Inc. v. Ethicon, Inc., 743 F.2d 1282, 1289 (9th Cir. 1984), cert. denied, 469 U.S. 1190 (1985) (citing Maheu v. Hughes Tool Co., 569 F.2d 459, 471-72 (9th Cir. 1977)). However, when a party does not object to a judge's remarks during trial, as was the case here, we reverse only for plain error. United States v. Sanchez-Lopez, 879 F.2d 541, 551 (9th Cir. 1989). Such error exists when reversal is necessary "in order to prevent a miscarriage of justice." United States v. Egan, 860 F.2d 904, 907 (9th Cir. 1988).

The plaintiff alleges that the judge referred to plaintiff's attorney as "a bad guy" in front of the jury. In response, defendant argues that this remark was made "humorously, facetiously and hypothetically" when the judge was probing a prospective alternate juror's ability to be fair in light of that prospective juror's expressed bias against plaintiff's counsel. After examining the remark in context, we agree with defendant's interpretation. And, even if the remark were misinterpreted, that single remark in context could not have rendered the trial so unfair that failure to reverse on our part would constitute a miscarriage of justice. Reversal based on judicial misconduct ordinarily requires significantly more than a single statement such as that cited in this case. See, e.g., Kern v. Levolor Lorentzen, Inc., 899 F.2d 772, 780 (9th Cir. 1990); Hansen, 820 F.2d at 1467. Indeed, the cases cited by plaintiff do not support his position. In those cited cases where the reviewing court held that the trial judge's conduct necessitated reversal, that conduct was unquestionably more damaging to the fairness of the trial than was the single, relatively benign remark cited here. See, e.g., Crandell v. United States, 703 F.2d 74, 75-78 (4th Cir. 1983); Newman v. A.E. Staley Mfg. Co., 648 F.2d 330, 334-36 (5th Cir. 1981); Williams v. Estelle, 566 F. Supp. 1376, 1378-80 (S.D. Tex. 1983).

Furthermore, there is no merit to plaintiff's assertion that the judge's granting of a directed verdict on the breach of covenant and punitive damages issues placed him in the role of advocate for defendant's position before the jury and thus constituted judicial misconduct.

SANCTION

We are entitled to sanction a party if we determine that that party brought a frivolous appeal. Fed. R. App. P. 38. An appeal is frivolous if the result is obvious or the appellant's argument wholly lacks merit. McCarthy v. Mayo, 827 F.2d 1310, 1318 (9th Cir. 1987); Taylor v. Sentry Life Ins. Co., 729 F.2d 652, 656 (9th Cir. 1984). These conditions are met in this case. Therefore, we assess appellant double costs for bringing this appeal.

AFFIRMED and REMANDED for assessment of sanction.