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Court Finds That Insurance Companies Should Be Identified In UIM Trial

Posted on Oct 17, 2013

On October 15, 2013, in the case of Stepanovich v. McGraw and State Farm Ins. Co., a three-judge panel of the Superior Court concluded that Pennsylvania Rule of Evidence 411 does not prohibit the identification of uninsured or underinsured motorist insurance carriers as defendants at trial.  Writing for the majority, Judge Paula Ott recognized that Pa.R.E. 411 does not act as a bar to prohibit the disclosure of the presence of an underinsured (or uninsured, as the case may be) insurance carrier to a jury.  Rather, the majority noted that Rule 411 prohibits only the introduction of liability insurance into evidence, which is governed by different sections of the Motor Vehicle Financial Responsibly Law.  Specifically, the Court stated that:

“. . . the trial court’s resolution also recognizes by necessity that Pa.R.E. 411 does not apply to the instant situation regarding State Farm’s participation in the trial.  Rather, Pa.R.E. 411 prohibits the introduction of liability insurance into evidence; liability insurance is required coverage providing indemnity to the alleged tortfeasor for injuries caused to others.  See 75 Pa.C.S. §§ 1702, 1711-1725, Subchapter B, Motor Vehicle Liability First Party Benefits.  Underinsured Motorist benefits are optional benefits purchased by a motorist for personal protection, but which do not provide indemnity to the tortfeasor.  See 75 Pa.C.S. §§ 1702, 1731-1738, Subchapter C, Uninsured and Underinsured Motorist Coverage.  Therefore, a course of action identifying State Farm as a party would not necessarily run afoul of either Rule 411 or the [trial court’s] 6/28/11 order.”

President Judge Emeritus, Kate Ford Elliot, while dissenting with respect to the majority’s other finding that reversed the trial court’s order granting plaintiff a new trial, joined in the recognition of the inapplicability of Pa.R.E. 411 to the identification of an insurance company as a defendant to a jury.

Prior to this decision, trial courts across the Commonwealth grappled with the issue of whether combined negligence and uninsured/underinsured actions were effectively prohibited by Pa.R.E. 411, because of the eventuality of having to identify an “insurance company” as a defendant at trial. Following Stepanovich, the rationale and reasoning of those trial court holdings that previously prohibited the joinder of negligence and uninsured/underinsured actions based upon application of Rule 411, will have to be reevaluated. The Superior Court’s decision on this issue also effectively validated the prior rulings of the Courts of Common Pleas of Lackawanna, Beaver, Pike, Montour and Centre Counties, all of which had previously held that Rule 411 does not act as a bar to identifying an underinsured or uninsured insurance carrier defendant to a jury in a joint trial.  By way of example, Judge Terrance R. Nealon, of the Court of Common Pleas of Lackawanna County, articulated the reasoning for such a determination:

“Pennsylvania Rule of Evidence 411 provides that ‘[e]vidence that a person was or was not insured against liability is not admissible upon the issue whether a person acted negligently or otherwise wrongfully.’ . . . Notwithstanding that general ban, the Supreme Court of Pennsylvania has consistently held that where evidence of insurance is relevant to the issues in the case it will not be barred merely because it might be prejudicial . . . The appellate courts in this state have never said that the mention of insurance, per se, like dynamite with a live fuse, will blow up the case . . . As a result, Rule 411 also states that it ‘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.’ ” Bingham v. Poswistilo, 24 Pa. D.&.C.5th 17 (C.P. Lackawanna, 4/8/2011) (internal citations and quotations omitted; emphasis in original).

With that foundation, and after recognizing that “it is difficult to conceive how 21st century jurors are unaware of the existence of insurance in motor vehicle litigation,” Judge Nealon concluded that Rule 411 does not prohibit the mentioning of insurance at joint trials of negligence and underinsured motorist claims.  Now, with the Superior Court’s similar analysis in Stepanovich, trial courts across the Commonwealth have received the imprimatur of the Superior Court, and should freely permit insurance company defendants to be identified to jurors in consolidated negligence and uninsured/underinsured trials, without fear of violating Pa.R.E. 411.

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