The district court
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granted summary judgment in favor of Allstate Property & Casualty Insurance Company (“Allstate”) and dismissed Angelique Tilghmans bad faith claim. We affirm.
I. Background 2
Angelique Tilghman and Brandy Lott were involved in a motor vehicle accident. The accident caused $406.81 in damage to Tilghmans vehicle. Tilghman sued Lott in Arkansas county court. Tilghman ultimately claimed over $30,000 in past medical expenses, at least $46,000 in future medical expenses, and a total loss of earnings capacity between $440,000–$1,000,000. Lotts insurance company denied a duty to defend or indemnify.
After failing to obtain compensation from Lott, Tilghman filed an uninsured motorist claim under her motor vehicle insurance policy with Allstate. The policy provided uninsured motorist bodily injury coverage up to $50,000 per person per accident. Allstate offered $32,000 to settle Tilghmans claim. Allstates evaluation was based, at least in part, on a damage estimator software program which estimated Tilghmans damages at $36,999. Tilghman did not accept Allstates initial offer. Allstate ultimately offered Tilghman $40,000 to settle her claim. Tilghman rejected Allstates offer and added Allstate as a defendant in her lawsuit against Lott. Tilghman sued Allstate for, among other things, breach of the insurance contract and bad faith refusal to pay. Tilghmans bad faith claim was based on her allegations that Allstate employs certain claims practices to intentionally drive down claim values. Allstate removed the case to federal court.
During discovery, Tilghman and Allstate fought over Tilghmans efforts to obtain the following: 1) the unredacted claim file, 2) claims handling and training materials, 3) personnel files of Allstate employees who were involved in Tilghmans claim, and 4) Allstates financial information and structures. Allstate argued these requests were overly broad and violated work product and attorney–client privileges.
Three months before the discovery deadline, Tilghman filed a motion to compel Allstates discovery responses. The district court denied the motion, finding the discovery was overly broad and out of proportion to the needs of the case. Tilghman then served a new set of discovery requests. Allstate objected to these requests claiming they were untimely and overly broad. A day before the discovery deadline, Tilghman filed a motion seeking to continue the case or extend the discovery deadline. The district court denied Tilghmans motion, finding the parties had already received ample time to conduct discovery.
Allstate then moved for summary judgment on Tilghmans bad faith claim.
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Tilghmans response included a request for additional time to conduct discovery. The district court granted Allstates motion and dismissed Tilghmans bad faith claim, holding Tilghman had failed to present sufficient evidence showing Allstate affirmatively engaged in dishonest, malicious, or oppressive misconduct. In doing so, the district court did not entertain Tilghmans request for additional discovery. Tilghman moved for reconsideration of the district courts ruling, which the district court denied.
The summary judgment ruling reduced the case to a single cause of action: Tilghmans contract claim for uninsured motorist benefits. The case proceeded to trial where a jury awarded Tilghman $12,000. After trial, Tilghman made an oral motion for reconsideration of the summary judgment ruling, which the district court again denied.
Tilghman appeals, arguing the district court abused its discretion in refusing to compel Allstates discovery responses which she claims were essential to her bad faith claim. Tilghman also argues the district court erred in denying her additional time for discovery to support her bad faith claim. Tilghman asserts that as a result of these errors, the district court improperly granted summary judgment in favor of Allstate on Tilghmans bad faith claim.
II. Analysis
We review the district courts grant of summary judgment de novo. Lincoln Benefit Life v. Wilson, 907 F.3d 1068, 1074 (8th Cir. 2018). Summary judgment is upheld “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Id. We may reverse summary judgment for erroneous discovery rulings only where the errors amount to “a gross abuse of discretion resulting in fundamental unfairness.” Vallejo v. Amgen, Inc., 903 F.3d 733, 746 (8th Cir. 2018) (quoting McGowan v. Gen. Dynamics Corp., 794 F.2d 361, 363 (8th Cir. 1986)).
Allstate argues this court need not address the merits of the district courts discovery rulings because such rulings, even if erroneous, did not prejudice Tilghman. We agree.
We have held that even if a gross abuse of discretion is found, an appellant must demonstrate prejudice before reversal is justified. See Hofer v. Mack Trucks, Inc., 981 F.2d 377, 381–82 (8th Cir. 1992). Errors not affecting the outcome of a case are not prejudicial. See Vallejo, 903 F.3d at 747 (holding a magistrate judges order limiting the scope of discovery to exclude a deposition did not prejudice the appellants case because the deposition would not have supplied the necessary testimony her claim was missing). Here, the district courts discovery and progression rulings, even if erroneous, did not prejudice Tilghman because her jury award establishes that Allstate acted reasonably in its valuation and negotiation of her insurance claim.
We have previously held that a jurys finding of fact can negate a plaintiffs claim as a matter of law. See Econ. Fire & Cas. Co. v. Tri-State Ins. Co. of Minn., 827 F.2d 373, 375 (8th Cir. 1987) (reasoning that where “the jurys verdict contains findings of fact that negate a necessary element of a legal theory, then there is no prejudice in the courts refusal to put the factual elements of the theory to the jury, for the theory cannot apply in any event”). In this case, the jurys valuation of Tilghmans contract claim negates her bad faith claim.
Under Arkansas law, a plaintiff claiming an insurer acted in bad faith must prove the insurer “engaged in affirmative misconduct that was dishonest, malicious, or oppressive,” Unum Life Ins. Co. of Am. v. Edwards, 362 Ark. 624, 210 S.W.3d 84, 87 (2005), “in an attempt to avoid its liability under an insurance policy.” Aetna Cas. & Sur. Co. v. Broadway Arms Corp., 281 Ark. 128, 664 S.W.2d 463, 465 (1984). An insurers failure to pay a claim cannot constitute malicious conduct where an actual controversy exists regarding the insurers obligation. See Farm Bureau Ins. Co. of Ark. v. Running M Farms, Inc., 366 Ark. 480, 237 S.W.3d 32, 42 (2006); Watkins v. S. Farm Bureau Cas. Ins. Co., 2009 Ark. App. 693, 370 S.W.3d 848, 857 (2009). Interpreting Arkansas law, we have found that a failure to make payment of an insurance claim can be characterized as bad faith “only if there is no genuine issue or controversy between the parties that would justify litigation.” Delta Rice Mill, Inc. v. Gen. Foods Corp., 763 F.2d 1001, 1005 (8th Cir. 1985). In determining whether a genuine controversy exists between the parties, we have considered a jurys verdict and whether it indicates a defendant was “wholly unreasonable, frivolous, or fairly described as dishonest.” Id. at 1004–05. Thus, an insured cannot maintain a bad faith claim for an insurers valuation where the insurer was reasonable in its valuation and justified in refusing to pay more.
Here, an Arkansas jury found Tilghmans injuries were worth $28,000 less than Allstates final settlement offer and $38,000 less than the policy limit. Allstates final settlement offer significantly overvalued Tilghmans claim. The jurys valuation establishes there was a genuine issue regarding the value of Tilghmans claim. As a result, it cannot be said Allstate was unreasonable in its valuation or unjustified in its refusal to pay policy limits. Allstate thus did not act in bad faith as a matter of law.
Tilghman argues the jury verdict is immaterial because a bad faith claim is a separate cause of action from a breach of contract claim. She asserts the jurys verdict does not prove Allstate considered, assessed, and negotiated the claim in good faith. While Tilghman is correct that a bad faith claim is a separate claim from a breach of contract claim, there remains a nexus between the two claims. To constitute bad faith, an insurers affirmative misconduct must be in pursuit of avoiding its obligations under the insurance policy. See Aetna Cas., 664 S.W.2d at 465. Thus, where an insurer discharges, or reasonably attempts to discharge, its contractual obligations, the floor falls out from under the insureds bad faith claim. And a jury verdict on an insureds breach of contract claim can reveal whether the insurer reasonably attempted to discharge its obligations. Cf. Delta, 763 F.2d at 1004–05. Here, Tilghmans jury award establishes Allstates settlement offers were reasonable attempts to discharge its contractual obligations.
Tilghman also argues the jury award is irrelevant because a plaintiff is allowed to recover certain categories of damages in a bad faith case that she could not recover under a breach of contract action. However, the types of compensation that may be available to a successful plaintiff under a bad faith claim do not change the analysis of whether an insurer actually acted in bad faith. And for the above reasons, we find Allstate did not act in bad faith as a matter of law.
In sum, the jury award reveals a fatal flaw in Tilghmans bad faith claim—Allstate was reasonable in its valuation of Tilghmans claim and justified in not paying policy limits. Tilghmans discovery requests would not have cured this defect because they were related to Allstates claim handling processes, not the value of Tilghmans claim. And Tilghman does not dispute the jurys valuation or that Allstates offer exceeded such valuation. Tilghman was thus not prejudiced by any of the district courts discovery or progression rulings.
III. Conclusion
For the reasons set forth herein, we affirm.
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FOOTNOTES
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. The Honorable Brian S. Miller, United States District Judge for the Eastern District of Arkansas.
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. Allstates motion also requested summary judgment on Tilghmans claim for wrongful action in the performance of the insurance policy, which the district court granted in favor of Allstate. Tilghman does not appeal this ruling.
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. We deny Allstates motion to strike Tilghmans reply brief because Allstate was not prejudiced by Tilghmans untimely filing.
GRASZ, Circuit Judge