Progressive Classic Insurance Company v. Daniel R. Riley, and Michael L. Riley

• Court: Court of Appeals of Iowa
• Decided: November 12, 2015
• Docket: 14-0740
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 14-0740 Filed November 12, 2015

PROGRESSIVE CLASSIC INSURANCE COMPANY, Plaintiff-Appellee,

vs.

DANIEL R. RILEY, Defendant, and MICHAEL L. RILEY, Defendant-Appellant. ________________________________________________________________

Appeal from the Iowa District Court for Webster County, Thomas Bice,

Judge.

The defendant appeals the finding the plaintiff had no obligation to defend

or indemnify him for damages resulting from a motor vehicle accident.

AFFIRMED.

Ernest M. Kersten, Fort Dodge, for appellant.

Steven T. Durick and Joseph M. Barron of Peddicord, Wharton, Spencer,

Hook, Barron & Wegman, L.L.P., West Des Moines, for appellee.

Considered by Vogel, P.J., Tabor, J., and Goodhue, S.J.*

*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2015). 2

GOODHUE, Senior Judge.

Michael L. Riley (Michael) appeals from the trial court’s decision that

Progressive Classic Insurance Company (Progressive) had no obligation to

defend or indemnify Michael for damages resulting from a motor vehicle

accident.

I. Factual Background

Michael had an automobile collision on December 8, 2011, with a vehicle

operated by his half-brother, Daniel R. Riley. Michael had an auto insurance

policy with Progressive that included liability coverage. Daniel filed suit against

Michael, and Progressive answered but did so with a “reservation of rights.”

Progressive filed a declaratory judgment action to determine whether it had a

duty to defend. Progressive contends it had no duty to defend based on an

expected or intended injury exclusion contained in Michael’s policy. The

exclusion clause in the policy stated that Progressive’s duty to defend does not

apply to:

Bodily injury or property damage either expected or caused intentionally by or at the direction of any insured.

Based on the record made at trial, the trial court found that Michael was driving in

such a manner that he intended to cause damage to Daniel or his vehicle, and

therefore, Progressive had no duty to defend.

As trial began in April 2014, Progressive offered its exhibits into the

record, and Michael objected. The only exhibit that is material to this appeal was

Exhibit 1, Michael’s commercial auto insurance policy with Progressive, including

the cited exclusion. Michael’s counsel objected to its admission, asserting that 3

on September 20, 2013, he had propounded discovery requests, including a

request for production of all documents Progressive intended to offer into

evidence. Progressive answered the request by stating, “Unknown at this time.”

At one point Michael’s counsel contended that he made five separate requests

for discovery and “finally got it January 7.” At another time he asserted he did

not see the policy until the Friday before the trial. In his brief he states the exhibit

was not received until six days before trial. We will assume for purposes of this

ruling that counsel did not receive a copy of the policy until six days before trial

as asserted in Michael’s brief.

The trial court overruled the objection and admitted the policy into the

record. Michael contends the policy should not have been admitted based on

Progressive’s failure to respond to the request for production. In addition,

Michael contends Progressive failed to comply with a scheduling order entered

July 29, requiring each party to provide an exhibit list to the other party seven

days prior to trial. The record reflects Michael did not provide a copy of his

exhibit list to Progressive until the date of trial, but Progressive made no

objection.

Counsel asserted Michael did not have a copy of his policy with

Progressive and his counsel had never seen it until it was produced. In

overruling the objection, the trial court noted the policy had been issued to

Michael and the scheduling order provided that all motions should be filed at

least sixty days before trial, but Michael never filed any motion to compel the

discovery request. 4

II. Error Preservation

For error to be present ordinarily the issue must be raised and ruled on by

the trial court. Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002). Error was

preserved.

III. Scope of Review

The admission of an untimely disclosed exhibit is reviewed for abuse of

discretion. Fry v. Blauvelt, 818 N.W.2d 123, 128 (Iowa 2012).

IV. Discussion

Whether by tacit agreement or benign neglect, neither party complied with

the scheduling order. Progressive did not provide an exhibit list until six days

prior to trial, and Michael did not provide an exhibit list until the day of trial.

Pretrial orders are intended to give the district court a tool to effectively manage

the administration of justice and may be enforced by sanctions. A review of

appellate decisions reveals that our courts are reluctant to use noncompliance

with a scheduling order as a sword to alter the outcome of a case except in

extreme situations. See, e.g., Klein v. Chicago Scent and Pac. R. Co., 596

N.W.2d 58, 61 (Iowa 1999). Instead, a reviewing court is required to scrutinize

the exercise of the trial court’s discretion and to confine the sanctions imposed to

reasonable limits. Fox v. Stanley J. How & Assocs., Inc., 309 N.W.2d 520, 522

(Iowa Ct. App. 1981). At least Progressive’s untimely disclosure could be

considered substantial compliance, although one day late. The existence of the

exclusion clause cannot have been a surprise to Michael, as it was clearly set out

in Progressive’s petition. We cannot say the trial court abused its discretion in 5

admitting the policy as an exhibit even though not provided seven days prior to

trial.

The purpose of discovery is in part an effort to narrow the issues,

ascertain the facts relative to those issues, and eliminate the need to conduct a

trial in the dark or blindly. Barks v. White, 365 N.W.2d 640, 643 (Iowa Ct. App.

1985). The fact that it was Michael’s own policy that was being requested does

not absolve Progressive from complying, but the lack of surprise and Michael’s

access to the information are factors to be considered in imposing sanctions.

See id. at 644. Furthermore, if Michael was really left in the dark by

Progressive’s failure to provide the requested document, he could have filed a

motion to compel and had the right to do so under the scheduling order until sixty

days prior to trial. However, he failed to do so. Exclusion of evidence is an

extreme sanction and is justified only when admission would result in prejudice.

Klein, 596 N.W.2d at 61. Michael alleges he was prejudiced because the

exclusion was critical to the court’s decision, but the real question is whether

Progressive’s failure to provide the document impacted Michael’s ability to

prepare, resulting in prejudicial surprise. When the contents of the document

sought to be excluded are known to the objecting party, it is indeed difficult to find

discernible prejudice of the kind to justify inadmissibility. See State v. Froning

328 N.W.2d 333, 338 (Iowa 1982). Michael does not contend there was

prejudicial surprise in the admission of the exclusion clause, and there is no way

under the record that he could reasonably make such a contention. 6

We cannot say that the trial court abused its discretion in admitting the

exhibit because of Progressive’s failure to provide the requested documentation.

Accordingly, we affirm.