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Volume XXVII, No. 24, September 23, 2015
From the Law Offices of Garan Lucow Miller, P.C.
From the Editor: Sarah Nadeau
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INDIANA SUPREME COURT ALLOWS TRIAL COURTS TO EXERCISE DISCRETION IN
DETERMINING WHETHER EVIDENCE OF INSURANCE COVERAGE IS ADMISSIBLE
By Gregory M. Bokota
In State Farm Mutual Automobile Insurance Company v. Earl, 33NE3d 337 (Ind. 2015), State Farm, along with amici the Defense Trial Counsel of Indiana and the Insurance Institute of Indiana, asked the Supreme Court to adopt a bright-line rule: coverage limits are irrelevant to the determination of tortious damages and are therefore inadmissible. The Earls, along with amicus the Indiana Trial Lawyers Association, asked the Court for the opposite bright-line rule: coverage limits are relevant to the underlying contract claim and therefore “must” be admitted. The Court declined either side’s invitation to take such a rigid approach and instead, deemed it more appropriate to rely on the trial courts to exercise their discretion in determining what evidence is probative in the particular case before them.
In Earl, the Earls sued State Farm, their Uninsured Motorist Carrier (“UM”), as a result of a car accident involving an uninsured motorist. Prior to trial, State Farm’s counsel filed a Motion in Limine to bar the introduction of any evidence or testimony of the uninsured motorist policy limits of $250,000 per person. The Trial Court denied the Motion in Limine. State Farm’s counsel then objected every time the Earls’ counsel raised the policy limits. The jury returned a verdict of $175,000 to Earl’s Estate, and $75,000 to the widow on her consortium claim, for a total award of exactly the UM policy limits. State Farm appealed.
The Court of Appeals reversed, and remanded the matter for retrial. Judge Baker, writing for the 2-1 majority, reasoned that the coverage limit was irrelevant, and therefore inadmissible, as neither the existence of the policy nor the amount of the coverage was at issue. Judge Riley dissented, because of two cases, Malott v. State Farm Mutual Automobile Insurance Company, 798 N.E.2d 294 (Ind. App. 2003) and Allstate Insurance Company v. Hammond, 759 N.E.2d 1162 (Ind. App. 2001), in which the Court allowed the evidence of the policy limits in a breach of contract case. Judge Riley also felt that State Farm had failed to demonstrate any prejudice given the substantial evidence of Mr. Earl’s injuries. The Supreme Court granted transfer, vacating the Court of Appeals’ decision.
The Supreme Court noted, that generally speaking, the existence itself of insurance is not logically related to fault. However, liability was not contested in the case so fault was not an issue, and juries should hear that insurance is involved when, as in Earl, an insurance company is a party defendant. The Court cited to Indiana Evidence Rule 401 and reasoned that to determine whether evidence concerns a material fact or a fact of consequence, the Courts must look at the nature of the case and the issues being litigated.
Earl involved a contractual relationship between the Earls and State Farm. While those parties were principally litigating damages relying upon tort principals, the Earls presented an underlying breach of contract claim in their Complaint. Accordingly, the trial court had instructed the jury that there were two questions they had to answer: (1) is the Plaintiff legally entitled to recover from the unidentified motorist; and, (2) if so, what amount are the Plaintiffs entitled to recover from State Farm Mutual Automobile Insurance Company as a result of the accident in question?
Given those two questions, the Supreme Court found they could not determine the trial court erred deciding that the insurance policy, and the coverage limit contained within it, were “relevant background information that would help the jury understand the relationship between the Earls and State Farm and the basis for the lawsuit itself.” The Court balanced the risk of prejudice with the value of the coverage limit as background information.
It should be noted that this was a unanimous Supreme Court decision.
RES JUDICATA BARS IN PRO PER PLAINTIFF’S CLAIMS
By Javon David
In a recent unpublished Court of Appeals decision, Sprague v State Farm, et. al., COA No. 323720 (9/10/15) a unanimous panel ruled that res judicata barred plaintiff’s claim. In Sprague, plaintiff owned and operated an uninsured motor vehicle that was involved in an accident. Defendant, State Farm, insured the driver of the other vehicle and paid PIP benefits to plaintiff on behalf of its insured. State Farm, as subrogee of its insured, then sued plaintiff in district court, seeking reimbursement of the payments made as a result of the accident. The district court entered a judgment in State Farm’s favor against plaintiff. The circuit court denied plaintiff’s effort to appeal the district court judgment as untimely. Thereafter, plaintiff filed a separate action against State Farm and its attorney in the subrogation action.
The trial court in plaintiff’s separate action, Sprague, ruled summary disposition should be granted to all defendants as plaintiff’s claims were barred by the prior actions. Applying the doctrine of res judicata, the court ruled that the issues raised in plaintiff’s separate cause of action were raised in the subrogation case, which resulted in a final judgment on the merits. Where the subrogation case and the separate action involved the same parties or their privies, and the issues in the separate action could have been resolved in the subrogation action, plaintiff’s claims were barred. The Court of Appeals affirmed, finding no dispute the subrogation action was decided on its merits, involved the same parties as the parties in the instant action or privies, and that the prior judgment became final after plaintiff’s direct appeal failed. Where plaintiff’s claims in the separate action and the subrogation case arose out of a single motor vehicle action and its investigation, as well as the payment of insurance benefits because of the accident, the Court of Appeals held plaintiff’s lawsuit against State Farm was barred by res judicata.
REGISTER NOW – LIMITED SPACE STILL AVAILABLE
BASICS OF MICHIGAN AUTOMOBILE NO-FAULT INSURANCE LAW COURSE
Garan Lucow Miller, P.C. is pleased to once again offer this in-depth, educational course in the Fall of 2015. It will be taught each Tuesday evening, beginning September 29, 2015, and running through November 24, 2015, from 6:00 p.m. to 8:00 p.m. In an effort to facilitate our clients in the Detroit Metro area, the course will be held at the Courtyard Marriott, located at 42700 W. 11 Mile Rd., Novi, MI 48375. The cost of the 9 week course is $350.00 per person, with a discount of $50.00 per person for more than 2 registrants from the same company.
Contact Eileen Carty to register: ecarty@garanlucow.com or (800) 875-7600.
Click here for the course curriculum.
REGISTER NOW
RIVALRY SEMINAR
The 2ND Annual Rivalry Seminar will take place on Friday, October 16, 2015, at Weber’s Inn, in Ann Arbor. Please note, this is a complimentary seminar for our clients. Contact Eileen Carty to register: ecarty@garanlucow.com or (800) 875-7600.
Click here for the seminar agenda.
CONGRATULATIONS
SUPER LAWYERS/RISING STARS
Congratulations to the following GLM attorneys, selected for inclusion on the 2015 Super Lawyers/Rising Stars List:
Super Lawyers Rising Stars
Megan Cavanagh Nathan Dodson
Boyd Chapin, Jr. Julie Druzinski
John Gillooly Caryn Ford
Stacey King Rachel Bissett
John McSorley Courtney Krause
Thomas Misuraca
Rosalind Rochkind
Daniel Saylor
John Seyfried
CONGRATULATIONS
TOP LAWYERS IN METRO DETROIT
Congratulations to Rosalind Rochkind, John Gillooly and Daniel Saylor. All three GLM attorneys have been selected as Top Lawyers in Metro Detroit by DBusiness/Hour magazine.