Not All Mention of Insurance at Trial is Prohibited.
April 14, 2008
The Court of Appeals published Barkman v. Overstreet, an appeal of a malpractice verdict in favor of the treating physician. While several errors were alleged, the most interesting one involved the mention of insurance by Dr. Overstreet during his testimony. The Appellant Barkman argued these mentions were in violation of evidence rule 411, which prohibits the mention of liability insurance to prove negligence.
The Court of Appeals noted that Overstreet mentioned insurance in his testimony on two occasions. The first was in reference to the 23 hour admission of Barkman. Overstreet noted that “insurance companies” prefer the limited admission to a full blown admission. When questioned about fabricating facts to support the 23 hour admission, Dr. Overstreet responded in part that this was due to the insurance companies restrictions.
The Court of Appeals noted that 411′s prohibition against the mention of insurance requires certain precepts before it is implicated. First, it must be mentioned in the context of liability insurance, and second, it must be used to prove negligence of a party. The Court of Appeals noted that in reviewing the context in which the statements were made it was clear that Overstreet was referring to health insurance and not liability insurance. As such, the trial court did not abuse its discretion in overruling counsel’s motion for a mistrial or in refusing to admonish the jury on its use.
Editor’s note: This rule is often misunderstood and misapplied. Contrary to popular opinion, the rule does not prohibit any mention of insurance at trial. The rule is limited to liability insurance and only then if it is being admitted as evidence of negligence. Even then, rule 411 allows the introduction of liability evidence if used for a different purpose such as agency, ownership, control, or bias or prejudice of a witness. Of course, the mention of “health” insurance could be in violation of the collateral source rule if used to show receipt of payments of damages by a party from other sources.
Court of Appeals Minutes for April 11th.
April 14, 2008
The Court of Appeals has posted its minutes for April 11th. Click here for a list of the published and nonpublished cases. Check back for digests of cases dealing with tort and insurance law.
The Supreme Court recently published Craig and Bishop, Inc. v. Piles, et al., a case resulting in a jury verdict for violations of Kentucky’s Consumer Protection Act (KCPA). Piles and Warner brought suit, alleging violation of the KCPA, common-law fraud, conversion, and breach of contract. Sonny Bishop Cars (Craig & Bishop d/b/a) counterclaimed. The jury found in favor of Piles and Warner on the KCPA violations and fraud, as well as conversion, and awarded them compensatory and punitive damages. The Court of Appeals affirmed, but vacated the portion of the judgment reflecting the common-law fraud and the award of inconvenience damages as duplicative of loss of use damages .
Craig & Bishop argued that Piles and Warner were not purchasers because they never completed the sales agreement, therefore, the KCPA did not apply. The SC disagreed finding that Piles and Warner took a Camaro in exchange, in part, for giving a Nissan as value. This was sufficient. The SC further found that an existing contract was not necessary for recovering for unlawful trade practices.
Craig & Bishop next argued that a finding of violations of the KCPA was not possible as the only promises made were future promises related to financing. This was the basis for the Court of Appeals vacating the common law fraud claim. The SC found this issue was not properly preserved at the trial court, and even if it were, there was sufficient evidence to support a KCPA violation in addition to the guarantees of future financing.
Craig & Bishop finally argued that the award of punitive damages was not warranted and was excessive. The SC found the award of punitive damages appropriate in KCPA cases and in cases of conversion. Since Craig & Bishop did not ask that the jury specify under which finding the punitives were based, the issue was not preserved for review. After review of the total jury verdict, the conduct alleged, and the award of $50,000 in punitive damages, the SC believed the award passed constitutional muster.
The SC also found that the Court of Appeals erred in vacating the inconvenience award as duplicative of the loss of use award. The SC noted that without the inconvenience award, Piles would not recover for the inconvenience caused her by Craig & Bishop, since she was not the owner of the car traded. (She was involved in the financing of the new car, however). The inconvenience award considered the plaintiffs’ loss of work, multiple trips to the dealer, and difficulties finding alternative transportation, aside from the loss of use of the Nissan
The SC reinstated the trial court’s judgment in its entirety.
Editor’s note: This case is an interesting factual read in the trial and appeal of a KCPA claim from start to finish. The court file should be recommended reading for any attorneys involved in these types of claims.
Court of Appeals Minutes for April 4th.
April 8, 2008
The Court of Appeals has published its minutes for April 4th. There was only one published case cited and no published cases dealing with tort and insurance law.
Announcement!
April 4, 2008
Court of Appeals Minutes for March 28th.
April 4, 2008
The Court of Appeals has published its minutes for March 28th. There were no published tort and insurance law cases.
The Court of Appeals published, Speedway Superamerica, LLC v. Erwin, which dealt with contractual indemnity and the extent to which such clauses would be enforced. Erwin entered into a contract with Speedway to perform basic services. He was injured while performing his duties allegedly as a result of Speedway’s negligence. His contract contained language that included a requirement to indemnify Speedway from any “breach of any term of his contract or any act, or omission in the performance of this contract.” Speedway filed a counterclaim seeking indemnity from Erwin on this claim. It was dismissed by the trial court as against public policy.
The court of appeals noted that when a party seeks to use an indemnification provision to defend against its own negligence, the indemnification provision is no different than a pre-injury release, which is disfavored under Kentucky law. The court went on to analyze the bargaining position of the parties and ultimately agreed with prior case law, “that generally in Kentucky agreements to indemnify against the indemnitee’s own negligence are not valid and that . . . when there is a doubt as to the meaning of an indemnity clause the construction should be against the contention that the contract was meant to indemnify against an indemnitee’s own negligence.” While these provisions are not against public policy per se it was doubtful that Erwin intended to indemnify Speedway from its own negligence.
Editors Note: There really is no need to deal with questions of public policy and voiding the contract, when it does not appear that the language relied upon by Speedway is clear enough to warrant its interpretation. Erwin clearly agreed to indemnify Speedway from his own acts of negligence and rightfully so. However, there is nothing in that language to suggest he intended to indemnify Speedway from its own acts of negligence. End of story. No need to delve into issue of public policy or conscionability. However, if the issue is indemnification for a party’s own acts of negligence, remember that provision must be clear and conscionable.
