SEPTEMBER 2014 BAD FAITH CASES: AFTER JURY VERDICT FOR DISABILITY INSURER IN BAD FAITH CASE, COURT FOUND THAT (1) LIMITED DISCLOSURE OF EVIDENCE ON REGULATORY HISTORY WAS WITHIN THE COURT’S DISCRETION; (2) ALLOWING WIDE LATITUDE ON CROSS OF EXPERT MET DAUBERT; AND (3) JURY HAD SUFFICIENT EVIDENCE, TAKEN IN LIGHT MOST FAVORABLE TO THE VERDICT WINNER, TO RULE AS IT DID (Philadelphia Federal)
The court issued prior opinions on the statute of limitations, expert testimony and the admissibility of evidence. The court found no reason to reconsider the statute of limitations argument, and then addressed plaintiff’s claims of trial errors, chiefly concerning new evidentiary issues.
The insured focused on the court’s precluding evidence, but failed to show prejudice. Moreover, wide latitude was given in permitting plaintiff’s evidence, and the court’s rulings on the evidence were within a trial judge’s discretion. The insured alleged that he was barred from introducing evidence on Market Conduct Examinations and the Regulatory Settlement Agreements and amendments thereto, but this was not the case.
The court had allowed “testimony about these adverse regulatory actions regarding defendant, when they pertained to issues directly affecting the plaintiff, and/or were not already subsumed within [the insurer’s] own standards for reviewing disability claims.” But the court “ruled that admitting evidence as to the origin of these regulatory materials was not relevant to plaintiff’s claim and would have been unduly prejudicial to the defendants….” It did not exclude, however, “reference to these regulatory standards in total….”
Further, the insured “was given significant and wide latitude in introducing both factual testimony and expert testimony supporting his claims, with adequate reference to the regulatory proceedings….”
The court found that the “jury had a full picture of the plaintiff’s claims and the reasons for [the insurer]’s conduct.” There was evidence that both sides causing delays in claims handling; and that the insured received benefits due for a significant period of time. The jury had these facts, and resolved in favor of the defendant; the court observing that the facts are taken in the light most favorable to the verdict winner when moving to set aside the verdict.
Finally, the insured attempted to argue trial error in connection with allowing the defense’s expert testimony. The court observed that “plaintiff was given wide latitude to cross examine [the expert] about his qualifications before he was allowed to testify as an expert,” meeting Daubert’s requirements.
