Pfeifer v. Phoenix Insurance Co.

MATRICCIANI, J. Appellant/cross-appellee Deborah L. Pfeifer (“Ms.Pfeifer”) appeals the sufficiency of a jury verdict in the Circuit Court for Baltimore County for $100,000 in damages against appellee/cross-appellant Phoenix Insurance Company (“Phoenix”) ⁶⁷⁸ for breach of contract regarding an underinsured motorist claim. Ms. Pfeifer presents one issue for our consideration, which we have rephrased as such: I. Whether the circuit court abused its discretion by permitting Phoenix to present the de bene esse deposition of its expert as evidence after Ms. Pfeifer had been deprived of the opportunity to cross-examine the expert as a result of his failure to comply with a properly issued subpoena duces tecum. Phoenix’s cross-appeal asserts that Ms. Pfeifer’s claim is barred by the statute of limitations. We affirm the circuit court’s ruling for the reasons explained below.

FACTS On February 12, 2003, Ms. Pfeifer was involved in an automobile accident in Baltimore City, Maryland. At the time of the accident, Ms. Pfeifer was operating a vehicle owned by her employer, International Union of Operating Engineers Local 37. Ms. Pfeifer’s employer had a contract for automobile liability insurance with Phoenix, which contained a provision for uninsured/underinsured motorist coverage pursuant to Md.Code (1996, 2006 Repl.Vol.), § 19-509 of the Insurance Article (“IA”) 1 On February 27, 2003, Ms. Pfeifer’s attorney sent a letter in which he notified Phoenix of ongoing settlement negotiations, asserting that, “even if there is a liability policy, there may be insufficient limits of coverage to pay all of the damages to our client considering the injuries sustained.” In October 2004, the tortfeasor’s insurance company offered its policy limits of ⁶⁷⁹ $100,000. Ms. Pfeifer informed Phoenix of that offer and requested permission to accept the settlement on October 13, 2004.

With Phoenix’s written permission, Ms. Pfeifer accepted the offer of the tortfeasor’s insurance company and released all claims against the tortfeasor. On July 10, 2006, Ms. Pfeifer filed suit against Phoenix for breach of contract arising from Phoenix’s failure to pay under-insured motorist benefits. During the discovery phase, Ms. Pfeifer consented to an evaluation by Mark Rosenthal, M.D., a medical expert witness hired by Phoenix. On May 15, 2008, Phoenix noted the de bene esse deposition of Dr. Rosenthal, which was scheduled for July 23, 2008.

Ms. Pfeifer then noted a discovery deposition and issued a subpoena duces tecum requiring Dr. Rosenthal to produce various documents, including documents reflecting how much income he earned from the review of records, testimony at deposition or trial, forensic evidence, independent medical examinations, examinations conducted on any person who was not a patient and research in connection with any forensic assignment. Ms. Pfeifer also requested documents relating to the potential of bias, including agreements with any insurance carrier relating to forensic activities or medical examinations on persons who are not patients and bills for work performed on behalf of appellee and appellee’s counsel. Ms. Pfeifer notified Dr. Rosenthal that he would not need to appear for his deposition on July 2, 2008, if all of the documents requested in the subpoena were provided prior to that date. On June 8, 2008, Ms. Pfeifer received a response from Dr. Rosenthal in which he provided his curriculum vitae and information regarding his examination of Ms. Pfeifer.

Ms. Pfeifer wrote a letter confirming receipt of the above documents and requesting the other documents. Dr. Rosenthal’s office responded with a letter stating “no further documentation is kept with regard to the list of additional documentation you seek.” On July 1, 2008, Phoenix filed a motion for protective order seeking relief from the subpoena. ⁶⁸⁰ After Dr. Rosenthal did not appear at the deposition on July 2, Ms. Pfeifer filed an answer to the motion for protective order, as well as a motion to compel discovery and a motion to defer the de bene esse deposition. The court did not rule on these motions prior to trial. On July 23, 2008, the de bene esse deposition of Dr. Rosenthal was taken.

On July 25, 2008, Ms. Pfeifer filed a motion to exclude Dr. Rosenthal from testifying at trial by videotape deposition or trial appearance. On July 28, 2008, trial commenced and the court ruled on the motion to exclude, finding: Dr. Rosenthal may testify in this case, provided that in advance of his testimony the information requested is produced, that is Numbers 10 and 12 of the notice to take deposition duces tecum and with respect to his tax return information. Although it was requested for 10 years, a five-year period is appropriate, whatever income he received with respect to 1 through 6 of the subpoena duces tecum. In response to the court’s ruling, Phoenix produced two letters from Dr. Rosenthal’s office, stating that they could not locate a record of payments from Phoenix to Dr. Rosenthal.

Phoenix also produced a chart showing payments received by Dr. Rosenthal for various services, including legal services and work-related examinations, between 2004 and 2008. At the circuit court’s instruction, Dr. Rosenthal’s discovery deposition took place on July 29, 2008. The next day Phoenix presented the de bene esse deposition of Dr. Rosenthal to the jury and Ms. Pfeifer was permitted to read a portion of Dr. Rosenthal’s discovery deposition to the jury and to introduce the chart produced by Dr. Rosenthal. Ms. Pfeifer attempted to introduce the entire discovery deposition into evidence but the trial court denied this request.

The trial ended on July 31, 2008, and the jury returned a verdict in favor of Ms. Pfeifer in the amount of $100,000. The verdict was reduced to zero upon motion by Phoenix pursuant ⁶⁸¹ to IA § 19-509(g) 2 , due to the $100,000 which had already been received from the tortfeasor. Ms. Pfeifer filed a motion for a new trial or for additur on August 11, 2008, and the court denied this motion on September 9, 2008. Ms. Pfeifer timely appealed.

DISCUSSION I. Ms. Pfeifer contends that the circuit court abused its discretion by allowing Phoenix to present the de bene esse deposition of Dr. Rosenthal after Ms. Pfeifer had been deprived of the opportunity to cross-examine Dr. Rosenthal with the documents she had requested beforehand. Ms. Pfeifer argues that Dr. Rosenthal failed to comply with a properly issued subpoena duces tecum. Ms. Pfeifer argues that she complied with the Maryland Rules of Procedure in seeking information from Dr. Rosenthal. According to Ms. Pfeifer, the circuit court abused its discretion by failing to provide any meaningful remedy for Phoenix’s discovery violations.

We review the circuit court’s determination of discovery sanctions under an abuse of discretion standard. Rodriguez v. Clarke, 400 Md. 39, 57 , 926 A.2d 736 (2007). The scope of cross-examination of expert witnesses is largely within the control and discretion of the trial judge, but wide discretion must be allowed in permitting cross-examination as to bias or interest. Wrobleski v. de Lara, 353 Md. 509, 525 , 727 A.2d 930 (1999).

The normal and appropriate function of cross-examination regarding the compensation an expert witness earns is to expose bias. Id. ⁶⁸² Both parties cite to Wrobleski to support their arguments. In Wrobleski the Court of Appeals considered whether the trial court erred in allowing defense counsel to question one of the plaintiffs medical expert witnesses as to how much money the witness had earned in a single year from testifying as an expert Id. at 512 , 727 A.2d 930 . The plaintiff asserted that allowance of this question was error and attributed the unfavorable jury verdict to the question.

Id. at 515 , 727 A.2d 930 . Similarly, in the instant case Ms. Pfeifer argues that had she been able to cross-examine Phoenix’s medical expert more fully regarding his bias, the jury would have reached a more favorable verdict. In Wrobleski the Court examined the wide latitude granted to a cross-examiner in exploring a witness’s bias: Exposure of potential bias based on self-interest is often attempted through cross-examination directed at how much the witness is being paid for his or her services in the case at bar, the frequency with which the witness testifies in similar kinds of cases, whether the witness customarily appears for a particular type of party ..., whether the witness is frequently employed by a particular party or attorney and, if so, how much income the witness derives from that employment, and ... the amount or the percentage of the witness’s total income that is derived from lawyer referrals or testimony in lawsuits. Some forms of inquiry seek to uncover a specific and enduring relationship between the witness and the party or attorney, from which a direct bias may be inferred.

Others are directed at exposing the more subtle problem of the professional “hired gun,” who earns a significant portion of his or her livelihood from testifying and, rather than having a tie to a specific party or attorney, may have a general economic interest in producing favorable results for the employer of the moment. “That an expert in a particular field may be in effect a ‘professional witness’ in lawsuits, rather than being more or less exclusively a practitioner whose employment in a law ⁶⁸³ suit as a witness is merely incidental to his or her profession, is a matter which is likely to bear on the credibility of that expert, since a significant portion of the expert’s livelihood may thus depend on his or her desirability as a favorable and convincing witness, thus possibly leading to a temptation for the witness to color findings and testimony to suit the needs of the proponent party, rather than to evaluate and present the subject matter of the testimony with complete impartiality.” Id. at 517-18 , 727 A.2d 930 (citation omitted). The Court also noted that effective cross-examination of expert witnesses had become more difficult because of the increased latitude given to experts by the modern rules of evidence. Id. at 520 , 727 A.2d 930 . The Court held: [W]e believe that it is generally appropriate for a party to inquire whether a witness offered as an expert in a particular field earns a significant portion or amount of income from applying that expertise in a forensic setting and is thus in the nature of a “professional witness.” ... [T|he party may inquire both into the amount of income earned in the recent past from services as an expert witness and into the approximate portion of the witness’s total income derived from such services.

Id. at 526 , 727 A.2d 930 . The Court ended its analysis with a caveat, warning: “[ W|e do not intend by our decision today to authorize the harassment of expert witnesses through a wholesale rummaging of their personal and financial records under the guise of seeking impeachment evidence.” Id. at 527 , 727 A.2d 930 . In Behler v. Hanlon, 199 F.R.D. 553 (D.Md.2001), the United States District Court for the District of Maryland considered, citing Wrobleski , what an expert witness is required to produce in response to a request for information from the opposing side. In Behler , the plaintiff requested tax returns, and documents relating to income earned during the last five years by [the expert witness] from defense attorneys and insurance companies, in connection with per ⁶⁸⁴ forming [independent medical evaluations] and testifying as an expert witness in deposition or at trial ... [P]laintiff sought documents relating to the amount of time [the witness] has spent doing such activities, as well as a list of those cases where he has been retained for such services, and attorneys and insurers on whose behalf he has provided forensic services.

Id. at 555 . The Court ordered the expert to reveal the following information prior to his deposition: (1) the percentage of his gross income earned for each of the preceding five years attributable to performing expert witness services on behalf of insurance companies, and/or attorneys defending personal injury cases; (2) a list of cases in which he has performed such services during the last five years ... (3) the name of each insurance company for which [the expert witness] has provided services as an expert witness in personal injury cases, for the preceding ten years. Id. at 562 .

Here, the court ordered Phoenix to reveal the following: income received for the previous five years from forensic activities, medical examinations and testimony as an expert witness; a history of all bills for forensic or medical activities on behalf of Phoenix Insurance Company for the past five years; and all records, reports, or documents that were supplied to Dr. Rosenthal in preparation for the case. Unlike Behler , the court did not order Dr. Rosenthal to produce documents relating to forensic work done for other insurance carriers. The other major difference between the instant case and Behler is the timing of the court’s order. In Behler , the court ordered that the information be provided prior to the trial while here the court ordered that the information be provided prior to a second deposition that took place during the trial and as a prerequisite to the admission of Phoenix’s videotaped de bene esse deposition of Dr. Rosenthal.

We recently addressed a similarly recalcitrant party’s failure to comply with a lower court’s scheduling order in Living ⁶⁸⁵ stone v. Greater Washington Anesthesiology & Pain Consultants, P. C., 187 Md.App. 346 , 978 A.2d 852 (2009). In Livingstone we were asked to determine the propriety of a sanction for violation of a scheduling order. While stressing the discretionary nature of a decision regarding discovery or scheduling violations, we held: [W]e will reverse a decision that is committed to the sound discretion of a trial judge if we are unable to discern from the record that there was an analysis of the relevant facts and circumstances that resulted in the exercise of discretion. Thus, the record must reflect that the judge exercised discretion and did not simply apply some predetermined position.

The discretion is broad but not boundless. If the judge has discretion, he must use it and the record must show that he used it. Id. at 389 , 978 A.2d 852 (emphasis in original) (internal quotations and citations omitted). The record here clearly shows that the circuit court used discretion in fashioning a remedy to ensure that Ms. Pfeifer could introduce evidence pertaining to Dr. Rosenthal’s potential bias.

Although the timing was not perfect, Ms. Pfeifer was given the opportunity to take Dr. Rosenthal’s deposition and explore his bias prior to the introduction of the videotaped deposition. Ms. Pfeifer used information gleaned from the court-ordered deposition during her case-in-chief and in closing argument in order to east a negative light on Dr. Rosenthal’s testimony. Moreover, the record reflects that the circuit judge offered to make Dr. Rosenthal available as a live witness after the court-ordered documents were produced to appellant, but her counsel did not respond to the offer. The cases that Ms. Pfeifer cites as evidence that Dr. Rosenthal’s testimony should have been excluded are inapposite to the instant case.

In Rodriguez v. Clarke, 400 Md. 39 , 926 A.2d 736 (2007), the Court of Appeals ruled that the trial court did not abuse its discretion when it excluded plaintiffs experts from testifying where the plaintiffs had repeatedly failed to provide discovery regarding their experts’ opinions. There ⁶⁸⁶ are two significant differences between this case and Rodriguez . First, the Court was reviewing the trial court’s exclusion of the expert rather than a failure to exclude. This means that the Court owed deference to the trial court’s discretionary decision, as we do in this case, even though it resulted in summary judgment for the defendant in Rodriguez .

The second, and perhaps more significant difference, is that in Rodriguez the plaintiffs’ evasive tactics were clearly designed to hide the substance of their experts’ opinion. Similarly, we held in Bartholomee v. Casey, 103 Md.App. 34 , 651 A.2d 908 (1994), that the trial court’s failure to exclude evidence which was not revealed until the eve of trial was an abuse of discretion. Here, Dr. Rosenthal provided the basis for his opinion more than a month before commencement of the trial, meaning Ms. Pfeifer had sufficient time to cross-examine him regarding this opinion during the videotaped deposition. A sanction excluding a key witness “should be reserved for egregious violations of the court’s order, and should be supported by evidence of willful or contemptuous or otherwise opprobrious behavior on the part of the party or counsel.” Maddox v. Stone, 174 Md.App. 489, 507 , 921 A.2d 912 (2007).

Because the record shows that the circuit court exercised its discretion by fashioning a remedy for Ms. Pfeifer short of exclusion, we hold that it was not an abuse of discretion for the circuit court to allow the videotaped deposition to be played at trial.

II

Phoenix cross appeals and claims that Ms. Pfeifer’s underinsured motorist claim is barred by the statute of limitations. Phoenix argues that the only issue in dispute is the amount of damages which Ms. Pfeifer was legally entitled to recover as a result of a motor vehicle accident which occurred more than three years prior to the filing of suit. Phoenix argues that Maryland appellate courts have drawn a clear ⁶⁸⁷ distinction between the contractual and tort aspects of an underinsured motorist claim. Ms. Pfeifer contends that her suit is not barred by the statute of limitations.

Ms. Pfeifer argues that a claim for underinsured motorist benefits is a contract action and that a breach of contract cannot occur until the insurance company has some obligation to pay benefits. Ms. Pfeifer argues that the obligation to pay benefits can not possibly arise until the exhaustion of the underinsured motorist’s policy and that as long as the action is filed within three years after exhaustion the statute of limitations defense is not applicable. Maryland Courts and Judicial Proceedings Code § 5 - 101 states: “A civil action at law shall be filed within three years from the date it accrues[.]” We have previously held that “The legislative policies] underlying statutes of limitation include the encouragement of promptness in instituting actions, the