United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT

           ___________

           No. 00-2879
           ___________

United Fire and Casualty Company,    *
                                     *
             Appellant,              *
                                     *
      v.                             *
                                     *
Historic Preservation Trust, doing   *
business as Sedalia Trust Inn,       *
                                     *
             Appellee.               *
           ___________
                                         Appeals from the United States
           No. 00-2990                   District Court for the
           ___________                   Western District of Missouri.

United Fire and Casualty Company,    *
                                     *
             Appellee,               *
                                     *
      v.                             *
                                     *
Historic Preservation Trust, doing   *
business as Sedalia Trust Inn;       *
Yuri A. Ives, Trustee,               *
                                     *
             Appellants.             *
                                     ___________

                              Submitted: May 18, 2001

                                   Filed: September 12, 2001
                                    ___________

Before WOLLMAN, Chief Judge, BEAM, Circuit Judge, and BARNES,1
      District Judge.
                             ___________

WOLLMAN, Chief Judge.

      United Fire & Casualty Company (United Fire) appeals from the judgment
entered by the district court2 following a jury verdict in favor of the Historic
Preservation Trust (the Trust). We affirm.

                                 I. BACKGROUND

       Yuri A. Ives formed the Trust in November 1996 and served as the entity’s sole
trustee. In March of 1997, Ives, on behalf of the trust, purchased a building in Sedalia,
Missouri, with the intention of converting it into a historic hotel. Although renovations
were ongoing, the property opened as the Sedalia Trust Inn (the Inn) and began
operations in June 1997. The following month, United Fire issued the Trust a policy
insuring the Inn and its contents.




      1
        The Honorable Harry F. Barnes, United States District Judge for the Western
District of Arkansas, sitting by designation.
      2
      The Honorable Nanette K. Laughrey, United States District Judge for the
Western District of Missouri.

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       Thereafter, the Inn was damaged by two fires. The first occurred on September
4, 1997, when fumes from the lacquer that Ives was applying to a hardwood floor
ignited. After an investigation, the Sedalia Fire Department determined that the fire had
been accidental. In the early morning hours of September 7, 1997, a second fire caused
extensive damage to the Inn. The cause of this fire was determined to be arson.

       Ives, acting on behalf of the Trust, submitted to United Fire a claim for the
damage to the building and its contents and a claim for business interruption loss in the
amount of $71,420.48. After conducting an investigation, United Fire denied the claim
on June 15, 1998. On June 16, 1998, United Fire filed the present action in federal
district court, seeking a declaration that its policy did not cover damages to the Inn and
alleging that Ives had intentionally set the fires, that he made material
misrepresentations and concealed material facts, that he failed to protect the property,
and that he failed to cooperate with the insurer as required by the terms of the policy.
The Trust counterclaimed, seeking a judgment that the policy covered the fire damage
to the Inn, as well as business interruption losses. The Trust also alleged breach of
contract, vexatious refusal to pay, and defamation.

       The district court granted United Fire’s motion for summary judgment on the
Trust’s defamation claim. The remaining claims were tried in February of 2000. The
jury awarded the Trust $85,407.00 in damages and interest related to the first fire, and
$2,077,630.00, including $650,000 in attorney fees on the vexatious refusal
counterclaim, related to the second fire. On United Fire’s motion, the district court
reduced the jury verdict by $137,539.39. Following the entry of judgment, the district
court denied United Fire’s renewed motion for judgment as a matter of law and for a
new trial.




                                           -3-
                                  II. DISCUSSION

                               A. Standard of Review

       We review the district court’s evidentiary rulings for a clear and prejudicial
abuse of discretion. Loehr v. Walton, 

, 836 (8th Cir. 2001); Qualley v.
Clo-Tex Intern., Inc., 

, 1127 (8th Cir. 2000). We review the district
court’s denial of a motion for judgment as a matter of law de novo, applying the same
standard as did the district court. Fletcher v. Price Chopper Foods of Trumann, Inc.,

, 875 (8th Cir. 2000). In doing so, we analyze the evidence in the light
most favorable to the prevailing party, we do not engage in a weighing or evaluation
of the evidence, and we do not consider questions of credibility. 

the
district court’s instructions to the jury for abuse of discretion. Grain Land Coop. v. Kar
Kim Farms, Inc., 

, 995 (8th Cir. 1999). Although our task is to determine
whether the instructions fairly and adequately submitted the issues to the jury, 

the district court “broad discretion in choosing the form and language of the jury
instructions.” Fed. Enter., Inc. v. Greyhound Leasing & Fin. Group, 

, 820
(8th Cir. 1986).


                                 B. Claims of Error

                       1. Transcript and Videotape Evidence

        Pursuant to the terms of the insurance policy and at United Fire’s request, Ives
submitted to an extensive examination under oath over the course of five days in
January and March of 1998. The entire examination was transcribed and, over Ives’s
initial objection, the final three days of the examination were videotaped.

      On the second day of trial, United Fire attempted to offer both the transcript and
the videotape, in their entirety, into evidence as admissions by a party opponent.


                                           -4-
Observing that “both exhibits were quite lengthy,” and that live trial testimony was
preferable to recorded testimony, the district court ruled that the transcript and the
videotape were not admissible. The court informed counsel that it would allow the
introduction of portions of Ives’s prior testimony under oath for impeachment purposes
and that the testimony would be considered to be substantive evidence.

      United Fire contends that the district court committed reversible error when it
refused to admit the transcript and the videotape into evidence. Citing McIntosh v.
Eagle Fire Co. of New York, 

, 100 (8th Cir. 1963), it argues that the
evidence was admissible as an admission by a party. It further contends that the
evidence, particularly the videotape, should have been admitted as evidence of Ives’s
“demeanor and attitude” during United Fire’s investigation of his claim.

       Although we stated in McIntosh that “[s]worn statements are clearly admissible
as an admission of a party against interest,” 

not hold that a district court is
obligated to admit evidence of an examination under oath in its entirety.3 To the
contrary, only “portions of sworn question and answer statements” were offered and
admitted. 

district court offered United Fire the opportunity to introduce
appropriate portions of the examination under oath as impeachment and as substantive
evidence, but United Fire declined to do so.

       The district court also expressed concerns about “time and repetition” and about
certain potentially inflammatory and unfairly prejudicial statements that were made
during the course of the examination. The transcript of the examination was more than
six hundred pages in length, and the videotape covered more than two days of
testimony. District courts have broad discretion to place reasonable limits on the


      3
        Counsel for United Fire appears to have conceded as much at a pre-trial
conference, stating that “I don’t have any authority that says that it’s reversible error
not to admit the [transcript of the examination] itself.”

                                           -5-
presentation of evidence to prevent undue delay, waste of time, or needless
presentation of cumulative evidence. First Nat’l Bank and Trust Co. v. Hollingsworth,

, 1304 (8th Cir. 1991). Likewise, district courts have broad authority
under Federal Rule of Evidence 403 to exclude probative but unfairly prejudicial
evidence. Cummings v. Malone, 

, 823 (8th Cir. 1993).

        We note that United Fire first clearly articulated its intent to offer the videotapes
as evidence of Ives’s demeanor in its post-verdict motion for a new trial. Although
counsel for United Fire made limited references to Ives’s demeanor during a pre-trial
conference, in our view those comments were insufficient to alert the district court that
the videotapes were being offered primarily as demeanor evidence. Furthermore, on
appeal United Fire concedes that it made no offer of proof during trial that the evidence
was intended to establish demeanor or attitude. We thus agree with the district court’s
conclusion that because “United Fire did not give the Court the opportunity to consider
this [issue] during trial, a new trial is not warranted.” See also Badami v. Flood, 

, 998 (8th Cir. 2000); Fed. R. Evid. 103(a) (“[e]rror may not be predicated
upon a ruling which . . . excludes evidence unless . . . the substance of the evidence
was made known to the court by offer or was apparent from the context within which
questions were asked”).

       Accordingly, we conclude that the district court did not abuse its discretion by
refusing to admit the transcript and the videotapes in their entirety.

                                   2. Polygraph Issue

      United Fire next argues that the district court committed reversible error by
excluding evidence that Ives had refused to take a lie detector test, as requested by the
Missouri state fire marshal. United Fire argues that because it was aware of Ives’s
refusal to take the polygraph test when it denied the Trust’s insurance claim, evidence
of that refusal is relevant to the reasonableness of its actions and therefore admissible

                                            -6-
on the issue of vexatious refusal to pay. It cites our holding in Underwood v. Colonial
Penn Ins. Co., 

, 589-91 (8th Cir. 1989), in which we upheld the
admissibility of evidence of refusal to take a polygraph for purposes of impeachment
and as proof of motive. Further, United Fire contends that because under Missouri law
evidence that is generally inadmissible may be admitted to demonstrate reasonableness
when vexatious refusal to pay is at issue, see Goodman v. State Farm Ins. Co., 

, 424 (Mo. Ct. App. 1986), Scott v. Mo. Ins. Co., 

, 665
(Mo. 1950) (en banc) (hearsay admissible where relevant on the issue of
reasonableness of an insurer’s actions), Ives’s refusal to submit to a polygraph
examination is admissible here. In short, United Fire contends that the Trust “opened
the door” to the admission of the polygraph evidence by filing the vexatious refusal
counterclaim.

       Evidence that an insured refused to take a lie detector test is generally
inadmissible because it has little probative value and may be highly prejudicial to an
insured. Aetna Ins. Co. v. Barnett Bros., Inc., 

, 34 (8th Cir. 1961).
Accordingly, we cannot say that the district court abused its discretion by concluding
that the probative value of Ives’s refusal to take the exam was “substantially
outweighed” by the danger of unfair prejudice. We reach the same conclusion even
assuming, arguendo, that Missouri law applies a lower evidentiary standard on
vexatious refusal to pay claims.

       Our holding in Underwood is distinguishable. There, we affirmed the district
court’s admission of polygraph evidence for purposes of impeachment and to establish
motive under Federal Rule of Evidence 404(b). 

. Here,
on the contrary, United Fire sought to introduce Ives’s refusal to submit to the
examination as substantive evidence. Moreover, the holding in Underwood was
explicitly limited “to the narrow factual pattern” presented in that case. 

                                          -7-
      We therefore conclude that the district court did not abuse its discretion by
excluding evidence that Ives refused to submit to a polygraph examination.

                                 3. Vexatious Refusal

      The jury awarded $650,000 in attorney fees on the Trust’s vexatious refusal to
pay counterclaim. United Fire contends that because there was insufficient evidence
to support the jury’s verdict, the district court erred in denying its motion for judgment
as a matter of law on that claim.

     Missouri law provides that an insured may recover penalties and attorney fees
when an insurer denies a claim without reasonable cause or excuse.

      In any action against any insurance company to recover the amount of any
      loss under a policy of . . . fire . . . insurance, if it appears from the
      evidence that such company has refused to pay such loss without
      reasonable cause or excuse, the court or jury may, in addition to the
      amount thereof and interest, allow the plaintiff damages not to exceed
      twenty percent of the first fifteen hundred dollars of the loss, and ten
      percent of the amount of the loss in excess of fifteen hundred dollars and
      a reasonable attorney’s fee; and the court shall enter judgment for the
      aggregate sum found in the verdict.

Mo. Rev. Stat. § 375.420 (2000). Missouri law further provides that “[t]o support the
imposition of the penalty under the statute, [the insured] must show that the insurer’s
refusal to pay the loss was willful and without reasonable cause, as the facts would
appear to a reasonable and prudent person.” DeWitt v. Am. Family Mut. Ins. Co., 

, 710 (Mo. 1984) (en banc). Where there is an open question of law or
fact, an insurer is ordinarily entitled to insist on a judicial resolution without being
penalized for vexatiousness. Oliver v. Cameron Mut. Ins. Co., 

, 870
(Mo. Ct. App. 1993). “The existence of either a factual or legal litigable issue,


                                           -8-
however, does not preclude a vexatious penalty where there is evidence that the
insurer’s attitude was vexatious and recalcitrant.” 

.

      We agree with the district court’s conclusion that the Trust presented sufficient
evidence that United Fire’s attitude throughout the investigation of its claim was
vexatious and recalcitrant. In its post-judgment memorandum and order, the district
court pointed out that United Fire’s claims supervisor admitted that she had no
evidence linking Ives to the fire and that she knew that the state fire marshal and the
Sedalia Fire Department had found no evidence that Ives had set the fires, and that
United Fire had failed to investigate all means of entry into the building.

                                4. Lost Business Income

        The district court instructed the jury that if it concluded that United Fire’s policy
covered the damage to the Inn, it should also award damages for any lost business
income that the Trust suffered. United Fire argues that there was insufficient evidence
to support a finding of lost business income and that the district court should therefore
have granted its motion for judgment as a matter of law on the issue. Specifically,
United Fires argues that the Trust’s business interruption counterclaim was too
speculative because the Inn had been in operation for only some three months before
the fires; because Ives had never before prepared a business interruption claim and did
not consult with a financial expert before doing so; and because Ives admitted that he
did not know if the lost income figure that he had calculated was correct. United Fire
also points to the testimony of its financial expert that the Trust suffered no business
interruption loss whatsoever.

      As a general matter, anticipated profits of a commercial business are too remote
and speculative to warrant recovery under Missouri law. Coonis v. Rogers, 

, 713-14 (Mo. 1968). Anticipated profits may be recovered, however,
when estimates of lost profits “are made reasonably certain by proof of actual facts,

                                            -9-
with present data for a rational estimate of their amount.” 

to recover lost
profits, a party must produce proof of business income and expenses during a period
of time prior to the interruption of business. Indep. Bus. Forms, Inc. v. A-M Graphics,
Inc., 

, 703 (8th Cir. 1997). With proper proof, even a new business can
recover for lost anticipated profits. 

district court observed, the standard for obtaining lost business profits is
based on the general Missouri rule for establishing damages. Under Missouri law,
although the existence of damages must be demonstrated with some certainty, the
specific amount of damages need not be proven with similar precision. Gasser v. John
Knox Village, 

, 731 (Mo. Ct. App. 1988). “A party attempting to
prove damages need only place before the jury the relevant facts tending to show the
extent of damages, enabling the jury to make an intelligent estimate of [damages] as
circumstances of the case admit.” C.L. Maddox, Inc. v. Benham Group, Inc., 

, 601 (8th Cir. 1996) (quotation marks and citation omitted). Furthermore, in
certain circumstances, where “the evidence weighed in common experience
demonstrates that a substantial pecuniary loss has occurred,” but damages defy exact
proof, “it is reasonable to require a lesser degree of certainty as to the extent of the
loss, leaving a greater degree of discretion to the court or jury.” 

(citation omitted).

      Here, the Trust’s claim for lost business profits was based primarily on Ives’s
estimate that the Inn would have earned $71,420.48. Given the particular
circumstances of this case, this evidence was sufficient to submit the issue to the jury.
As the district court noted, Ives fully explained to the jury how he had calculated the
Inn’s lost profits. The jury was also presented with testimony by United Fire’s expert
witness, who indicated that the Trust was due no compensation for lost business
income. Both Ives and the expert were extensively cross-examined about their
assumptions and calculations. This evidence was sufficient to enable the jury to make
an intelligent estimate of business interruption damages without resorting to mere

                                           -10-
speculation. The court did not err, therefore, in denying United Fire’s motion for
judgment as a matter of law on the lost business profits claim.

                  5. Jury Instruction on Material Exaggeration

       The district court’s refused to give United Fire’s proposed jury instructions on
the issue of material exaggeration. Citing Vitale v. Aetna Cas. & Sur. Co., 

, 1247 (8th Cir. 1987), United Fire argues that an insured’s exaggeration of the
amount of business interruption loss can constitute a material breach that voids a policy
and that there was evidence that Ives had materially exaggerated his business income
losses.

       We disagree. The district court properly determined that the evidence was
insufficient to submit the issue of misrepresentation to the jury because, under Missouri
law, misrepresentation requires an intent to deceive. Gould v. MFA Mut. Ins. Co., 

, 669 (Mo. Ct. App. 1960). As the district court noted, there was no
evidence from which a reasonable jury could infer that Ives was intending to deceive
United Fire when he submitted his estimate of business loss. To the contrary, Ives
admitted that he had never before calculated lost business profits, and the record
suggests that he was entirely open about the assumptions and calculations that he made.
Likewise, because United Fire’s proposed instructions did not include the element of
intent to deceive, the district court did not err in rejecting them.

                               6. Jury Instruction 23

       United Fire contends that the district court erred in instructing the jury on the
issue of the Trust’s alleged misrepresentation. Jury instruction 23 stated:




                                          -11-
      Your verdict must be for United Fire & Casualty Company on Historic
      Preservation Trust’s claim for insurance benefits and interest as a result
      of the fire of September 7, 1997, if you believe:
      First, that Yuri Ives represented [at least one of several assertions]; and
      Second, that any one or more of the representations in paragraph First
      were false; and
      Third, Yuri Ives knew that it was false or did not know whether it was
      true or false; and
      Fourth, the representation was material; and
      Fifth, Yuri Ives intended to deceive United Fire and Casualty Company.

United Fire argues that the language of the instruction should have closely tracked the
terms of the policy, which provided, in relevant part:

      This Coverage Part is void in any case of fraud by you as it relates to this
      Coverage Part at any time. It is also void if you or any other insured, at
      any time, intentionally conceal or misrepresent a material fact concerning:
             1. This Coverage Part;
             2. This Covered Property;
             3. Your interest in the Covered Property; or
             4. A claim under this Coverage Part.

       In short, United Fire argues that there is a material distinction between the
“intent to deceive” language employed by the court and the “intentionally . . .
misrepresent[ed]” language in the policy.

       Like the district court, we are not persuaded by United Fire’s attempt to
distinguish “intent to deceive” from “intentionally . . . misrepresent[ed].” As the
district court noted, to “intentionally misrepresent” a fact is to make a false statement
with the intent to deceive the hearer. One cannot “intentionally misrepresent” by
mistake, because such a statement would necessarily be unintentional. Moreover,
Missouri courts have consistently included the element of intent to deceive in their jury
instructions on misrepresentation. See, e.g. Hodge v. Continental Western Ins. Co.,


                                          -12-


, 134 (Mo. Ct. App. 1986); 

. Accordingly,
we find no error in the challenged instruction.

                               7. Jury Instruction 25

       In support of its refusal to approve the Trust’s insurance claim, United Fire
alleged that Ives had failed to protect the Inn, as required by the terms of the policy, by
failing to immediately reactivate the sprinkler system after the September 4 fire.
Instruction 25 told the jury that

      . . . Historic Preservation Trust had a duty under the insurance policy to
      take reasonable steps to protect the property from further damage after the
      fire of September 4, 1997, and the fire of September 7, 1997 . . .
      [t]herefore, if you find that United Fire & Casualty Company has shown
      by the preponderance of the evidence that Historic Preservation Trust
      failed to make reasonable steps to protect the property from further
      damage after the fires, you may not award damages for losses that could
      have been avoided . . . .”

       United Fire contends that the Trust’s failure to take reasonable steps to protect
the Inn constituted a material breach of the policy. Accordingly, it argues, the district
court should have instructed that failure to protect the property was an absolute bar to
recovery under the policy rather than merely as a bar to recovery of avoidable losses.

       Again, we disagree with United Fire’s arguments. The relevant policy provision
required that, in the event of loss or damage to the Inn, the Trust “[t]ake all reasonable
steps to protect the Covered Property from further damage and keep a record of . . .
expenses necessary to protect the Covered Property.” The policy goes on to say that
“we [United Fire] will not pay for any subsequent loss or damage resulting from a
cause of loss that is not a Covered Cause of Loss.” This latter phrase suggests,
contrary to United Fire’s contentions, that failure to protect a covered property does not


                                           -13-
bar recovery for any covered losses. Rather, as the district court concluded, the
purpose of this provision is simply to limit the insurer’s liability for damage that could
be prevented by the insured. In other words, the provision bars recovery only of
damages that are incurred “subsequent to” an unreasonable failure on the part of the
insured to protect the covered property. Accordingly, the district court did not err in
giving Instruction 25.

                                 III. CONCLUSION

       The judgment is affirmed. The Trust’s motion to strike United Fire’s opening
brief is denied.

      A true copy.

             Attest:

                 CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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