Friday, September 25, 2009
Like A Good Witness: Supreme Court Of South Carolina Applies "Substantial Connection" Test To Evidence Of Insurance Offered To Prove Bias
Evidence that a person was or was not insured against liability is not admissible upon the issue whether the person acted negligently or otherwise wrongfully. This rule does not require the exclusion of evidence of insurance against liability when offered for another purpose, such as proof of agency, ownership, or control, or bias or prejudice of a witness.
That's not to say, though, that evidence of liability insurance is automatically admissible to prove bias as it must still pass the Rule 403 balancing test. And the recent opinion of the Supreme Court of South Carolina in Todd v. Joyner, 2009 WL 2988904 (S.C. 2009), reveals the test that South Carolina courts use to make that determination.
In Joyner, A car driven by Barbara Joyner collided with a car in which Frances Todd was a passenger, and Todd sustained injuries and sued for damages. State Farm, Joyner's insurer, defended her at trial, during which she admitted negligence and the trial court directed a verdict on liability; consequently, the sole issue before the jury was the amount of damages owed to Todd. In disputing Todd's claimed damages, Joyner presented Dr. Richard J. Friedman as an expert in orthopedic surgery. Dr. Friedman testified that Todd suffered no permanent impairment from the auto accident and that any treatment she received more than roughly four months after the accident was not reasonable and necessary or proximately caused by the accident.
At trial, Todd sought to introduce evidence that Joyner was insured by State Farm to prove bias by Dr. Friedman, whom was paid between $50,000 and $60,000 by the insurance company for work on eighteen different claim numbers during calendar years 2003-2005. The trial court, however, deemed this evidence inadmissible, and the jury only awarded Todd $37,191.11, the amount of medical bills presented at trial.
Todd subsequently appealed, and her appeal eventually reached the South Carolina Supremes, who noted that in Yoho v. Thompson, 548 S.E.2d 584, it had decided to follow the analysis of "[a] majority of jurisdictions" and apply the "substantial connection" test to determine whether evidence of liability insurance passes the Rule 403 balancing test when offered to prove bias. In other words, when there is a substantial connection between an expert witness and an insurance company, evidence of liability insurance passes the Rule 403 balancing test. In Yoho, the court found such a "substantial connection" because he maintained an employment relationship with Nationwide Insurance, consulted for Nationwide in other cases, gave lectures to Nationwide's agents and adjusters, devoted 10-20% of his practice to reviewing records for insurance companies, including Nationwide, and had his yearly salary based in part on his insurance consulting work.
Conversely, the court found that Dr. Friedman did not have a "substantial connection" with State Farm because
Todd showed...that Dr. Friedman earned approximately $50,000 from State Farm during calendar years 2003-2005 based on work on eighteen claims, but presented no evidence as to Dr. Friedman's total earnings during that period. Moreover, unlike Yoho, the evidence appear[ed] to show that Dr. Friedman was paid an expert fee rather than having an employment relationship with State Farm. In short, the evidence presented by Todd d[id] not show as strong a connection between the expert and the insurance company as in Yoho and [the court could not] conclude that the Court of Appeals erred in affirming the trial court.