Farley v. Allstate Insurance

CHASANOW, Judge. The primary issue raised in this appeal is whether, in a breach of contract action against an automobile insurer for nonpayment of underinsured motorist benefits, the contract itself is admissible into evidence, including its coverage amounts. Appellants (William J. Farley, Jr., and Ana Farley) argue that the trial court erred by prohibiting introduction of their insurance contract into evidence, resulting in an inadequate damage award. Appellee (Allstate Insurance Company) maintains that unless the amount of underinsured motorist coverage itself is in controversy, it is more prejudicial than probative to disclose this information to the jury.

Appellants also ask us to resolve whether the trial judge was in error (1) in failing to give Appellants’ requested jury instructions numbers six, seven, and ten; and (2) by permitting the Appellee in closing argument to question the reasonableness and necessity of the Appellant’s medical bills, treatment, and lost wages. Appellants argue that the trial court’s ³⁹ failure to give the requested jury instructions, along with permitting certain portions of Appellee’s closing argument, was prejudicial to Appellants, resulting in an insufficient verdict. For the reasons stated in this opinion, we hold that the trial court did nor err in refusing to admit the automobile insurance contract into evidence, as its admission would be more prejudicial than probative. Unless the amount itself is in controversy, the admission of the contract into evidence, in order to get before the jury the available amount of underinsured motorist coverage, would likely result in a distorted jury verdict.

As to the remaining issues, we hold that the trial court did not err by failing to give the jury the Appellants’ requested instructions, nor was it error for the trial judge to permit Appellee in closing argument to question Appellant’s medical bills, treatment, and lost wages. We find that the trial judge’s instructions to the jury adequately covered the applicable law. Furthermore, we agree with the trial judge’s finding that Appellee’s statements casting doubt upon the reasonableness and necessity of the Appellant’s medical bills, treatment, and lost wages were properly characterized as argument and not evidence; as such, the statements were not improper or prejudicial. I. BACKGROUND On November 21, 1993, William Joseph Farley, Jr., in the course and scope of his employment, was driving a United States Postal Service truck northbound on Park Heights Avenue in Baltimore, Maryland.

Mr. Farley was hit by Lamont Gregory, who was driving a van southbound on Park Heights Avenue and attempting to pass a bus by moving to the left lane. Gregory’s vehicle straddled the double yellow line, which caused the side view mirrors of his van and Mr. Farley’s truck to strike each other. At the time of the collision, Gregory had a $25,000 automobile liability insurance policy with State Farm Mutual Insurance Company (State ⁴⁰ Farm), and Mr. Farley had an automobile insurance policy with Allstate Insurance Company (Allstate), which included a provision for underinsured motorist benefits. Mr. Farley did not request an ambulance at the scene of the accident.

After the collision, Mr. Farley was referred to Dr. Marcel Reischer by his attorney. Mr. Farley obtained medical treatment from Dr. Reischer from November 21, 1993, until August 11, 1994, for which his bills totaled $12,087.02. Mr. Farley also claims that he lost wages of $7,973.07 due to his missing two weeks of work right after the accident and then being on a light duty job for the next two months, which consisted of approximately 28 hours of work per week. On February 27, 1995, Mr. Farley and his wife, Ana, filed suit against Gregory and Allstate in the Circuit Court for Baltimore City, alleging negligence against Gregory and breach of contract against Allstate for not paying out the underinsured motorist benefits available under their policy.

Specifically, the Farleys sought compensation for medical bills, lost wages, pain and suffering, and loss of consortium. On December 4, 1996, Allstate filed a motion for summary judgment, contending that Gregory was negligent as a matter of law. The motion was granted at the hearing. Subsequently, Gregory offered to settle the case with the Farleys for $25,-000, which was the full amount of Gregory’s insurance policy with State Farm. 1 A release was signed on June 9, 1997, and Gregory was then dropped from the lawsuit.

The Farleys alleged that their damages were much greater than $25,000; 2 therefore, on January 26-27, 1998, there was a ⁴¹ jury trial with Judge Thomas J.S. Waxter presiding. The trial concerned only the breach of contract action against Allstate; specifically, the issue of nonpayment of underinsured motorist benefits. At trial, Dr. Reischer testified about Mr. Farley’s injuries in general and also as to whether Mr. Farley was left with any permanent injury to his left hip as a result of the accident and what, if any, type of future medical treatment he would require. Dr. Reischer also testified that Mr. Farley had experienced both prior and subsequent motor vehicle accidents, occurring in 1986 and 1996, respectively.

At the conclusion of the trial, the jury rendered a verdict in favor of the Farleys for $31,087.02, with interest and costs against Allstate. The verdict was broken down as follows: 1. Past medical expenses $12,087.02 2. Past lost wages 4,000.00 3.

Noneconomic damages 10,000.00 4. Damages to marital relationship 5,000.00 TOTAL: $31,087.02 The Farleys believed they did not receive sufficient damages so on February 5, 1998, they filed a motion for a new trial, which was denied by the court on March 13, 1998. On April 8, 1998, the Farleys appealed to the Court of Special Appeals. This Court granted certiorari on its own motion.

II

DISCUSSION AND ANALYSIS A. The Insurance Contract The primary issue we must decide is whether in a breach of contract action against an automobile insurer for nonpayment of underinsured motorist benefits, the contract itself is admissible into evidence. Specifically, in the instant ease, we are examining whether the amount of underinsured motorist benefits available under the Farleys’ insurance contract with Allstate should have been permitted into evidence at trial. ⁴² Prior to the start of the trial testimony, Judge Waxter instructed counsel not to divulge to the jury the terms of the insurance contract, including its policy limits, nor the amount of the settlement with Gregory. The trial judge also instructed counsel not to inform the jurors that the case involved underinsured motorist coverage. The Farleys maintain that by not allowing the contract into evidence, the trial judge prevented the jurors from seeing the “whole picture,” thus causing them to decide the case in a “vacuum” and prejudicing the verdict.

We disagree for the following reasons. We begin our analysis of this issue by noting that “[f]or an item of evidence to be admissible, it must be both relevant and material. Evidence is material if it tends to establish a proposition that has legal significance to the litigation. Evidence is relevant if it is sufficiently probative of a proposition that, if established, would have legal significance to the litigation.” Paige v. Manuzak, 57 Md.App. 621, 632 , 471 A.2d 758, 763 (1984).

The admissibility of evidence, including rulings on its relevance, is left to the sound discretion of the trial court, and absent a showing of abuse of that discretion, its rulings will not be disturbed on appeal. White v. State, 324 Md. 626, 636-37 , 598 A.2d 187, 192 (1991). The trial court also determines whether the probative value of the evidence outweighs any unfair prejudice. Sowell v. State, 122 Md.App. 222, 228 , 712 A.2d 96, 98 (1998).

If evidence is more prejudicial than probative, it should not be admissible at trial. In Maryland, the general rule is that evidence of a defendant’s insurance is inadmissible to show fault or lack thereof. Jones v. Federal Paper Bd. Co., 252 Md. 475, 494 , 250 A.2d 653, 664 (1969).

In cases where the insurance carrier is a party to the litigation, obviously the existence of insurance cannot be kept from the jury. In such cases, however, as we will discuss infra, the amount of uninsured/underinsured motorist coverage should not be disclosed unless the amount itself is in controversy. ⁴³ Maryland Rule 2-402, “Scope of discovery,” provides in pertinent part: “(b) Insurance agreements. A party may obtain discovery of the existence and contents of any insurance agreement under which any person carrying on an insurance business might be liable to satisfy part or all of a judgment that might be entered in the action or to indemnify or reimburse for payments made to satisfy the judgment. Information concerning the insurance agreement is not by reason of disclosure admissible in evidence at trial.” (Emphasis added).

The rationale for this rule of inadmissibility as to the contents of an insurance contract at trial is that the amount of an insured’s coverage is not relevant to the jury’s consideration of damages. To allow coverage amounts into evidence would be more prejudicial than probative. Indeed, if the jury were provided with a definitive amount of available policy limits the likely result would be a distorted jury verdict. This Court has already spoken on the main issue raised in this appeal; therefore, we need look no further than Allstate Insurance Co. v. Miller, 315 Md. 182 , 553 A.2d 1268 (1989), to resolve the controversy.

We held in Miller that the amount of uninsured/underinsured motorist coverage should not be disclosed to the jury unless the amount itself is in controversy. In Miller , which involved a factual scenario similar to the instant case, Mary Miller was a passenger in her employer’s vehicle when she was injured in a two-car collision. Her employer had a policy with Allstate that covered any passenger injured by an uninsured motorist. Like the Farleys, Miller alleged negligence against the uninsured driver of the other car, Gregory Sowell, and also brought a breach of contract action against Allstate as to the uninsured motorist provision of her employer’s policy.

Sowell’s case went into default; thus, the trial only dealt with the issue of damages. At the close of trial, as in the present case, we found that “[t]he circuit court’s instructions directed the jury to only consider the issue of the plaintiffs damages. The jury was ⁴⁴ directed to consider the elements of damage that typically are involved in a tort case. What was before the jury was the damages, if any, arising from the tort action of Miller v. Sowell, Sowell’s liability having been determined by the order of default.” Miller, 315 Md. at 184-85 , 553 A.2d at 1269 .

The jury in Miller returned a verdict in excess of the uninsured benefit limits. In a post judgment motion, Allstate argued that a jury verdict against an insurer that exceeds its uninsured third party policy limits should be reduced by the trial judge to the amount of the contractual coverage. In response, Miller contended that Allstate had the burden of establishing and proving the limits of its liability to the jury, and that since the insurer elected not to enter the policy limits into evidence at trial, it could not offer this evidence for the first time in a post-trial motion. We stated: “[Miller’s] argument might be persuasive had this ease gone to the jury on the contract claim against Allstate.

But, as we have seen, what actually went to the jury was the question of damages arising from the tort claim of Miller against Sowell. We are dealing with what was functionally presented to the jury as a tort case. ” (Emphasis added). Miller, 315 Md. at 190 , 553 A.2d at 1271 . In finding that the trial court should have reduced the amount of judgment against Allstate in keeping with the contractual limitations of the policy, we held: “[T]he amount of uninsured motorist coverage should not be disclosed unless the amount is in controversy. * * * [WJhat the jury was directed to consider, and all the jury was directed to consider, was the issue of damages in a tort case.

In this posture of the case, and under these circumstances, rather than require a party to establish uninsured motorist policy limits as an affirmative defense or as a limitation of exposure, the better rule is to allow the jury to make its decision on the issue of damages without being ⁴⁵ informed of the amount of coverage available. Therefore, the admission of uninsured motorist coverage amounts should not be a tactical decision left to the parties’ discretion. The fact of the limit of uninsured motorist coverage is irrelevant to the issue of the amount oftoH damages.” (Emphasis added and footnote omitted). Miller, 315 Md. at 191-92 , 553 A.2d at 1272-73 .

In this opinion, we reaffirm our holding in Miller that the amount of policy limits is in no way probative of the issue of damages, absent a controversy in the amount of coverage itself. In this case, as in Miller , the amount of underinsured motorist coverage is not in controversy. Nowhere in the Farleys’ actions against either Gregory or Allstate do they dispute the policy limits; they only seek compensation for medical bills, lost wages, pain and suffering, and loss of consortium. Whether the underinsured motorist coverage was $25,000 or $1 million is not probative on the amount of the Farleys’ alleged pain and suffering and loss of consortium, nor to their claim for medical bills and lost wages.

Thus, we affirm the trial judge’s ruling that the Farleys’ policy with Allstate was inadmissible, as it was not relevant to the issue of the Farleys’ damages. Even if Judge Waxter had found the insurance policy to be material and relevant, he would not have abused his discretion in determining that its prejudicial effect in this case outweighed its probative value, thus making it inadmissible at trial. Like Miller , this case is “functionally ... a tort case,” the purpose of which is to establish the damages that Allstate is required to pay under the underinsured motorist portion of the Farleys’ policy. As stated earlier, Gregory’s tort liability of $25,000 was established prior to trial but the Farleys believed their damages were much greater than this.

Consequently, they sought compensation under the underinsured motorist provision of their Allstate insurance policy for tort— not contract—damages. Therefore, this action is not, as the Farleys suggest, a contract action in the sense that any provisions of the insurance policy were at issue or that cover ⁴⁶ age was being denied based upon language in the insurance contract. The jury was not required to interpret any provisions of the contract in accordance with any principles of contract law: its sole responsibility was to listen to the evidence and determine what amount, if any, Allstate should be obligated to pay based on the testimony of the Farleys and their doctors. The Farleys emphasize that they brought a contract, not a tort, action against Allstate, but clearly no other cause of action could be brought by an insured against his or her insurance carrier in this context.

Thus, Judge Waxter properly instructed the jury to consider the issue of damages in a tort case. The verdict sheet reflects the tort—not contract— flavor of the case when it directs the jurors to decide the amounts, if any, to be given for “noneconomic damages” and “damages to marital relationship.” B. The Jury Instructions The next issue we must resolve is whether the trial judge erred in refusing to give the Farleys’ requested jury instructions six, seven, and ten. Before we turn to the specific instructions at issue, we state some general principles regarding the standard of review for jury instructions. We have held that the standard of review for jury instructions is that so long as the law is fairly covered by the jury instructions, reviewing courts should not disturb them.

Jacobson v. Julian, 246 Md. 549, 561 , 229 A.2d 108, 116 (1967). Accordingly, Md. Rule 2-520, “Instructions to the jury,” states in pertinent part: “(c) How given. The court may instruct the jury, orally or in writing or both, by granting requested instructions, by giving instructions on its own, or by combining any of these methods. The court need not grant a requested instruction if the matter is fairly covered by instructions actually given.” (Emphasis added).

See also Myers v. Alessi, 80 Md.App. 124, 132 , 560 A.2d 59, 62 (1989)(“It is firmly established that under Md. ⁴⁷ Rule 2-520(c) a trial judge is not obliged to give a requested instruction if the matter is fairly covered in the instructions actually given.”) Thus, simply because a requested instruction is an accurate statement of the law and supported by the evidence does not mean the trial judge is required to give it to the jury. So long as the trial judge has covered the applicable law in another instruction, or combination of instructions, Md. Rule 2-520(c) makes clear that he or she does not have to give it to the jurors. In reviewing the propriety of a trial court’s denial of a requested jury instruction, we must examine “whether the requested instruction was a correct exposition of the law, whether that law was applicable in light of the evidence before the jury, and finally whether the substance of the requested instruction was fairly covered by the instruction actually given.” Wegad v. Howard Street Jewelers, 326 Md. 409, 414 , 605 A.2d 123, 126 (1992). Moreover, the standard for reversible error places the burden on the complaining party to show both prejudice and error.

Harris v. Harris, 310 Md. 310, 319 , 529 A.2d 356, 360 (1987). In applying these general principles to this case, we find that the Farleys have not demonstrated that any prejudice and error resulted from the trial judge not giving their requested jury instructions, in that the instructions he gave to the jury adequately covered the applicable law. The Farleys allege that prejudice and error are demonstrated by their insufficient damage award. We disagree.

As we will discuss in Part II.C.1-3., infra, the jury’s verdict was not improperly influenced by Judge Waxter’s decision not to give the Farleys’ requested instructions. We now turn to an examination of the jury instructions at issue in this appeal. 1. Instruction # 6 The Farleys argue that the trial court erred in failing to give their requested jury instruction number six, which provided: ⁴⁸ “The Court instructs the jury that if they find for the Plaintiff, they may award damages for those results which are the natural, proximate and direct effect of the injury. It is not necessary that the particular results were either foreseen or contemplated by the wrongdoer.” At trial, the Farleys’ counsel excepted to the judge’s decision to not give the jury their requested prayer, stating: “I think it’s always a wise instruction to give because it allows the jury ... not [to] speculate on what was expected or whether the Defendant could or expected this to happen.” In their brief to this Court, the Farleys assert that because the jury was not instructed that Gregory was liable for all damages, foreseen and unforeseen, it was able to ignore the extent of the Farleys’ damages, resulting in a “verdict that did not adequately and fairly compensate the Appellants.” Other than making this general statement in their brief, the Farleys have not indicated how the trial judge’s failure to give this instruction resulted in an inadequate verdict.

We concur with the trial court that the instructions given were adequate, and note that there was no evidence in this case that Mr. Farley’s injuries were unforeseen or not contemplated. His injuries arose out of a typical automobile accident, and Judge Waxter properly instructed the jury on how to assess damages in a personal injury case, to include non-economic damages and causation, stating in pertinent part: “Now, in an action for damages for personal injuries, you shall consider the following: * * * (2) The effect such injuries have had on the overall physical and mental health and well being of the Plaintiffs; the physical pain and mental anguish suffered in the past and with reasonable probability, may be expected to be experienced in the future---- * * * Your verdict must be itemized [to include] * * * (3) the non-economic damages, including any pain, suffering, inconvenience, physical impairment or other non-pecuniary damage. * * * You may find from the evidence that Mr. William Farley, Jr.[,] will sustain a permanent injury from the injuries proximately and directly sustained in this accident and you may consider any effects ⁴⁹ upon him during his lifetime that he may have, that will fairly and justly compensate him for any such permanent injuries that you find were proximately and directly caused by this accident.” Using a special verdict sheet, the jury found that Mr. Farley had sustained injuries and damages proximately caused by the collision and awarded what it determined to be the appropriate damages. See Part I.,