You Can’t Talk About Insurance in Court!…Or Can You?
January 30, 2015 By Erin H. Cancienne
The Maryland Rules of Evidence generally prohibit any mention of a person having or not having liability insurance for the purpose of proving whether that person acted negligently or wrongfully. But can liability insurance ever be referenced in court?
Maryland Rule of Evidence 5-411 allows evidence of liability insurance to be used for other purposes, such as proof of agency, ownership or control, or bias or prejudice of a witness. Often evidence of liability insurance is admitted when the existence of insurance itself is at issue. For example, if a driver is suing her own insurance company for uninsured motorist benefits, or for first party coverage, such as Personal Injury Protection (PIP). In those cases, a fact finder would need to know that there is an insurance contract to determine the terms of that contract and responsibility of the parties. The amount of coverage may still be inadmissible however.
In Asphalt & Concrete Services, Inc. v. Perry, the Court of Special Appeals considered whether evidence of liability insurance is admissible as evidence regarding negligent hiring. In this case, Morgan Perry was struck by a dump truck and suffered significant injuries. He sued the driver, the owner of the dump truck, and Asphalt & Concrete Services, Inc. (“ACS”). The dump truck was carrying materials on behalf of ACS at the time of the accident, and at the trial, Perry claimed ACS had negligently hired the driver of the dump truck. At the time of the accident, the driver did not have a valid driver’s license and his insurance had been revoked for non-payment.
At trial, Perry moved into evidence the driver’s failure to maintain insurance. The Court admitted the evidence, stating that it was relevant to the claim that ACS negligently hired the driver. The jury returned a verdict in the amount of $529,520 against ACS. ACS appealed.
The Court of Special Appeals addressed the propriety of admitting the insurance information. Acknowledging both the general rule prohibiting evidence related to insurance, and exceptions to that rule, the Court considered whether admission of insurance information was proper. In this case, the lack of insurance was used as evidence of negligent hiring, since insurance was a necessary predicate for operating a dump truck on the road. Even so, admission of this evidence was only proper if it was a proximate cause of the harm.
Proximate cause in the context of this case is basically a determination as to “whether the defendant’s conduct actually produced an injury.” The Court found that the lack of insurance for non-payment was not a proximate cause of the collision with Perry. In other words, that the driver did not have insurance did not cause the accident. Without this causal connection, admission of Johnson’s lack of insurance was prejudicial to ACS. The Court reversed the judgment for Perry and sent the case back to the trial court for a new trial.
Plaintiffs will continue to try new and unique arguments to bring evidence of the existence of insurance coverage, or lack thereof, into evidence. It is important to know when this evidence is strictly prohibited, and when the evidence could be permitted. If you have a question regarding whether evidence of insurance could be admitted in your case, please feel free to contact the attorneys at DeCaro Doran.