Uninsurable: Court of Appeals of Rhode Island Finds No Problem With Judge's Sua Sponte Insurance Instruction

Similar to its federal counterpart, Rhode Island Rule of Evidence 411 provides that

Evidence that a person was or was not insured against liability is not admissible upon the issue whether he acted negligently or otherwise wrongfully. However, such evidence may be allowed when offered for another purpose, such as proof of agency, ownership, or control, bias or prejudice of a witness, or when the court determines that in the interests of justice evidence of insurance or lack of insurance should be permitted.

So, in most cases, neither the plaintiff nor the defendant can present evidence or testimony concerning the absence of presence of liability insurance. But what happens if the judge specifically instructs the jury not to speculate on the absence or presence of such insurance? Let's take a look at the recent opinion of the Supreme Court of Rhode Island in Oden v. Schwartz, 2013 WL 2109929 (R.I. 2013).

In Schwartz, Paul Oden then brought a medical malpractice action against Dr. Carl Schwartz and others in connection with an open-heart surgery procedure. During her closing instructions to the jury, the judge gave the following sua sponte instruction:

"I want to speak about one other thing, and I find it's best to directly speak about this, to discuss it openly. My experience is that jurors are often tempted to speculate about things such as medical insurance or other types of insurance or benefits. Jurors also wonder about the attorneys['] fees, who pays them, how much they will be. Jurors also wonder about what might happen to a physician's insurance premiums. I am specifically instructing you that you must not consider any of these things in deciding the case or determining what amount, if any, you will award for damages. If you were to speculate about insurance[ ] or attorneys['] fees, how much they might be or who will pay them, then you would be speculating about things that are not part of the evidence, things that the law says you must not consider and things about which you could only be guessing. If you were to try to consider, compensate for, or adjust for any of these things, you would be ignoring your duties as jurors. Worse, you could very likely cause a result or outcome that you don't intend. The law and the [c]ourt have rules that govern these matters. They are not matters for jurors."

After the jury later found Dr. Schwartz liable for $375,000 of Oden's damages, Schwartz appealed, claiming inter alia, that the judge's instruction was erroneous under Rule 411. The Supreme Court of Rhode Island disagreed, finding that

We are satisfied that the trial justice's insurance instruction was proper. Although neither party introduced evidence regarding insurance, the trial justice, who had a front-row seat to the trial proceedings, was not oblivious to the fact that the overall concept of liability insurance may have pervaded the minds of the jurors in this case. While Dr. Schwartz characterizes the trial justice's determination that the jurors were aware of insurance coverage as "speculative," we would be hard-pressed to agree. The concept of liability insurance is a wholly familiar concept—from mandatory motor vehicle insurance coverage to the vigorous nationwide debate concerning medical insurance and medical liability, it can hardly be said that jurors are not thinking about liability coverage in one sense or another. Indeed, the Advisory Committee's Note to Rule 411 declares that "[t]he Rhode Island approach tempers the rule excluding evidence of liability insurance with a realistic view of contemporary society that recognizes the ubiquitous presence of insurance."

Here, the trial justice's instruction simply addressed the reality that jurors often wonder about liability coverage, especially in instances where there is typically an insured risk, such as medical malpractice. The trial justice's instruction did nothing more than prohibit the jury from speculating about insurance coverage in its deliberations on the merits of the case—a prohibition that directly squares with the spirit of Rule 411. While the trial justice might more appropriately have refrained from using the phrase "a physician's insurance premiums" in her instruction, we cannot say that the use of this phrase so pervaded the minds of the jurors that they were rendered incapable of arriving at a fair and impartial verdict. Indeed, the instruction expressly told the jurors to completely ignore any assumptions or implications concerning insurance coverage—and it is well settled that "the members of the jury are presumed to follow the trial justice's instructions." 

The court's ruling seems similar to Lakeside v. Oregon, 435 U.S. 333 (1978), in which the Supreme Court found that a trial judge may instruct the jury not to draw an adverse inference from a defendant's failure to testify even when the defendant objects to the giving of such an instruction.

-CM