What? That Doctor Has Insurance? Ct. of Appeals Weighs In
In my last post, I discussed the Appellate Division, Second Dept.’s approach to the mere mention of the concept of professional liability insurance during a trial. Unfortunately, the result was a mistrial.
As if on cue, the New York State Court of Appeals addressed the issue anew about a week after the Grogan decision. In Salm v. Moses, NY Slip Op 07479 (2009), decided October 22, 2009, defendant moved at trial to preclude plaintiff from questioning defendant’s expert dental witness about his relationship to defendant’s professional liability insuror. Both individuals were insured by, and shareholders of, the same insurance company.
Plaintiff objected, but the trial court granted defendant’s motion, so that such cross examination of defendant’s expert could not take place. The trial court based its decision on the prejudicial effect that knowledge of defendant’s insurance coverage would have on the jury.
The Court of Appeals affirmed the Appellate Division, First Department’s Order affirming the trial court’s decision, finding that the trial court was well within its discretion based on the perceived ”risk of confusion or prejudice.” And it restated some general principles in getting there. Evidence that a defendant carries liability insurance is generally inadmissible for two reasons: (a) if a jury knows that an insurance company is footing the bill, that will encourage an adverse verdict; and (b) evidence of insurance coverage injects a collateral issue that has no bearing on whether the defendant was negligent.
Is the Court of Appeals also underestimating the sophistication of modern jurors with this decision? Isn’t it time that the Court acknowledge that the State’s citizens, unless they’ve been hiding out in caves, are aware of the role insurance companies play in commerce and in lawsuits? Justice Pigott, in the concurring opinion regognizes that “[i]t is common knowledge that most defendants carry insurance. Indeed, most prospective jurors are cognizant of the significant role in litigation that liability insurance plays…”
As for the missed opportunity to show the relationship of defendant’s expert toward defendant, Justice Pigott believes, as I do, that the jury should have been presented with such evidence, through cross examination. And so, you might be confused, as I was at first, to see that Justice Pigott was concurring, instead of dissenting. But on closer examination, it becomes clear that Jusitce Pigott went along with the majority on procedural grounds. Plaintiff’s counsel had had the opportunity at trial to voir dire defendant’s expert concerning potential bias, but failed to request it. Apparently, Justice Pigott viewed this as a failure to preserve the issue for appellate review.
But look at the big picture here. The Court of Appeals is relying on ancient, outdated principles, and ensuring their continued survival. And it has done so here at the expense of plaintiff’s right of cross examination. Clearly, the trial court was overly cautious, let alone blind to the realities of the modern world, when it prevented plaintiff’s cross examination–an exercise that surely would have shown an overly comfortable relationship between defandant and the expert hired to defend him. Might the exposure of this arrangement changed the outcome at the trial level, from defense verdict to plaintiff’s verdict? We’ll never know, because the Court of Appeals has allowed the lower courts to continue living in the past.
Speaking of Medical Malpractice Insurance is Hazardous to Your Trial’s Health
In a case decided October 13th, Grogan v. Nizam, NY Slip Op 07375 (2d Dept. 2009), the Appellate Division, Second Department, issued a decision that underestimates the sophistication of modern jurors, and that continues to legitimize a silly precedent. The decision is short, and worth reading.
The essential holding is that if the jury finds out that the defendant doctor is insured, that defendant has been prejudiced to the extent that the court has the discretion to declare a mistrial. The sole mention of the concept of insurance occurred when plaintiff’s counsel asked his OB/GYN expert about his involvement in risk management work. The expert responded, “I’m a Risk Management Consultant to the Princeton Insurance Company, which is a professional liability carrier, in Obstetrics and Gynecology.”
Plaintiff’s expert did not conclude his statement by standing up, pointing to the defendant OB/GYN, and stating “By the way, see that guy sitting next to the defense lawyer? Sure as the sun will rise tomorrow, he’s insured by a professional liability carrier!”
As Tom Valet, who handled the appeal for the plaintiffs (appellant-respondents), told me, “nobody implied that the defendant had insurance or that a verdict would be covered by insurance.” In other words, there was no prejudice to the defendant.
Exactly what types of “prejudice” are the courts worried about? The Grogan Court traveled far back in time, to 1911, to support itself with Simpson v. Foundation Co., 201 N.Y. 479 (1911), a Court of Appeals case that warned that a jury’s knowledge that a defendant in a negligence case is insured may induce that jury to give a larger-than-reasonable verdict. On the other hand, the same appellate body (the Second Department) felt, as of 1977, that if jurors knew that an insurance company would be paying the judgment, they may ultimately come to believe that they, Mr. and Mrs. John Q. Public, would be providing the primary funding. And therefore, such jurors would unreasonably award less.
But times have changed, and the citizens that comprise the jury pool are more sophisticated. Many, if not most people are aware of the role that insurance companies play in our civil justice system. To assume that the mere mention of the broad concept of professional liability insurance is enough to warrant a mistrial is unrealistic, and frankly underestimates the intelligence and sophistication of the citizens of New York State. Moreover, such an inflexible adherence to precedent has resulted in the high cost of having to re-try a complex medical malpractice case, and has delayed justice for the plaintiffs.
What are the lessons here? As Tom Valet put it: (a) caution your experts to avoid uttering the word “insurance” at trial; and (b) if they mention it anyway, make sure a proper curative instruction is timely given by the trial judge.
But if you end up arguing before an appellate panel after a mistrial has been granted, my recommended argument is as follows: “C’mon people! Get real! Welcome to 2009!”
First Dept. Allows Room for Unpleasant Surprise
The Appellate Division, First Dept., has issued a decision saying that it’s OK to change experts during the trial, as long as your CPLR 3101(d) exchange put your opponent on fair notice of the substance of the expert’s testimony, and the substituted expert conforms to what was promised when he testifies. In S & W Home Improvement Co. v. La Casita II H.D.F.C., NY Slip Op 07332 (1st Dept. 2009), the Court also relied on the inclusion within the expert exchange of notification that another representative from the same company as the named expert might be called.
This was a mechanic’s lien case, but what the First Dept. did here would obviously apply to any case involving expert disclosure pursuant to CPLR 3101(d). Therefore, medical malpractice and personal injury cases could arguably be affected by this decision, and I think it is a dangerous one. It is nice that the new expert stayed within the boundaries of the noticed subject matter. It is also nice that the expert exchange at issue happened to mention that someone else might be called at trial (as many such documents note). But if you are the lawyer on the receiving end of this last-minute switch, you’ve been placed at a disadvantage. You do not have time to research the new witness by obtaining prior transcripts or educating yourself about his history as an expert witness. You are thus deprived of the opportunity to develop key impeachment material that may affect the outcome of the case. You are, in a word, prejudiced. And trials are surprising enough when you are prepared to the gills.