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Flaunting Insurance Coverage: Missouri Court Reaffirms, Explains Rule Against Referencing a Party’s Liability Insurance (And the Rare Exception)

January 23, 2020

When representing an insured, trial attorneys must be attentive and recognize the circumstances under which opposing counsel may or may not present evidence that their client carries liability insurance. More importantly, attorneys must understand the actions that must be taken to preserve the record and protect the client. The Eastern District Court of Appeals recently granted a new trial based on a finding that the plaintiff made repeated, improper references to the defendant’s liability insurer in front of the jury. Collier v. Steinbach, — S.W.3d –, 2019 WL 7159756 (Mo. App. E.D. Dec. 24, 2019). In so holding, the Court reaffirmed the general rule in personal injury cases that presenting evidence of liability insurance is considered reversible error while also explaining the rare exception to this rule.

In Collier, Plaintiff filed a personal injury action against Defendant, alleging negligence arising out of a motor vehicle accident. Throughout trial, Plaintiff repeatedly made references to Defendant’s liability insurer, AAA. Plaintiff referenced AAA in the opening statement and called an employee of AAA to testify as well as an investigator retained by AAA who surveilled Plaintiff following the accident. Defense counsel objected to each witness. In closing argument, Plaintiff referred to defense counsel as part of the “corporate team” and one of AAA’s “corporate cronies” who initiated the surveillance. Again, defense counsel objected to these two references and requested a mistrial, which the trial court denied. Ultimately, the jury returned a verdict in favor of Plaintiff for $1.5 million. The jury assessed twenty percent fault to Plaintiff and eighty percent fault to Defendant, reducing Plaintiff’s recovery to $1.2 million. The trial court denied Defendant’s motion for new trial.

On appeal, Defendant argued she was entitled to a new trial because the court below erroneously permitted Plaintiff to make repeated and prejudicial references to Defendant’s liability insurer. Defendant also argued the trial court abused its discretion in allowing Plaintiff to call the AAA employee and independent investigator as witnesses. By contrast, Plaintiff maintained that such evidence was relevant and admissible because AAA hired the investigator to surveil her, which she reasonably believed Defendant would later introduce at trial.

At the outset, the Eastern District reiterated Missouri’s long-standing rule that it is generally considered reversible error in personal injury actions to demonstrate, either directly or indirectly, that a party carries liability insurance. With that said, on rare occasions, such evidence may be proper if it is relevant and material to an issue in the case. However, as the Court went on to explain, even in those rare instances, the plaintiff is not free to “flaunt insurance coverage in the jury’s face,” and the trial court “must exercise the greatest caution and restraint[.]”

Turning to the case at bar, the Eastern District found that Plaintiff was operating under the assumption that Defendant would later introduce evidence of the investigation. As such, Plaintiff presented evidence of AAA in an effort to proactively mitigate harmful evidence from the surveillance of her post-accident behavior. The Court concluded that evidence of the investigation was not relevant or admissible unless it was introduced by Defendant. Further, the Court held that Plaintiff’s premature and tactical use of AAA’s involvement “constituted an effective weaponization of a narrow exception to the general rule prohibiting its admission.” The Eastern District granted Defendant a new trial, finding that the trial court abused its discretion and committed unequivocal, reversible error.

In an effort to distinguish its case from one in which evidence of liability insurance was properly introduced, the Eastern District cited to Pope v. Pope, 179 S.W.3d 442 (Mo. App. W.D. 2005). In Pope, Plaintiff, a sexual abuse victim, asserted a negligence claim against Defendant on the theory that he was liable for the negligence of his business partner, a licensed psychiatrist who treated the victim’s abuser, for failure to warn of suspected child abuse. In order to establish that a partnership existed, Plaintiff presented evidence of the renewal endorsement page of the “Psychologists Professional Liability Policy,” which provided insurance coverage to Defendant and his business partner, and expressly stated that the entity covered under the policy was a partnership. This exhibit was offered and admitted without objection.

During closing argument, Plaintiff’s counsel referred to the exhibit as “their [Defendant and his business partner’s] representation that they make to—on their psychologist’s professional policy.” Defense counsel objected and requested a mistrial on the basis that Plaintiff deliberately injected the issue of insurance into the case. The court denied the request for a mistrial. During deliberations, the jury requested all the exhibits, including the endorsement page. Defense counsel objected on the same basis and was again overruled. The court published the endorsement page to the jury with a few redactions. The jury returned a verdict in favor of Plaintiff for $5 million.

On appeal, the Western District found that the exhibit was admissible as it was relevant and material to establish Plaintiff’s cause of action against Defendant—that is, to establish the factual and legal basis to support a finding of vicarious liability arising from the negligence of Defendant’s alleged partner. However, while the evidence of insurance coverage was properly admissible in this limited circumstance, the trial court was required to give an instruction limiting the evidence to its legitimate purpose. In this case, the exhibit was only admissible for the limited purpose of proving the existence of a partnership. That the trial court permitted the exhibit to be published to the jury without an appropriate limiting instruction was an abuse of discretion.

Both Collier and Pope are reminders of the importance of making a record before the court when insurance is injected into the case. In those rare circumstances when a reference to liability insurance is permissible, limiting instructions are required in order to protect the interests of the parties.

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