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Insurer not allowed to substitute party name

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An insurance company isn't allowed to substitute another party's name in a suit filed by a driver for her underinsured motorist benefits because there's no authority for substitution of a non-party before a jury in a contract case, the Indiana Court of Appeals decided today. Doing so would create a "legal fiction" before the jury.

In Marijeanne Brown-Day v. Allstate Insurance Co., No. 49A02-0903-CV-277, the Court of Appeals accepted Marijeanne Brown-Day's interlocutory appeal to review pretrial orders that granted Allstate Insurance's motion for party substitution and a motion in limine that collectively prohibited any explicit reference to Allstate.

Brown-Day was injured in an accident caused by Michelle Lobdell; Lobdell admitted fault and Brown-Day settled with Lobdell's insurer. Brown-Day then pursued a claim against her insurer, Allstate, for underinsured motorist benefits of $100,000. Lobdell was dismissed as a defendant from the suit with prejudice. The complaint was set for a jury trial.

Two years later, Allstate moved to substitute Lobdell as the sole defendant for trial to protect it from unfair prejudice should the jury know that underinsured motorist coverage was applicable to damages. The trial court granted that motion and another that prohibited Brown-Day from referring to the underinsured motorist claim, the Allstate policy, or the limits of the UIM coverage. It also excluded evidence of past dealings and payments Allstate made to its examiner/expert witness.

Allstate believed based on Indiana Evidence Rule 411 and Wineinger v. Ellis, 855 N.E.2d 614 (Ind. Ct. App. 2006), it could substitute another party to lessen prejudice in insurance cases.

"Evidence Rule 411 simply is not a mechanism providing for an outright substitution of parties so that the identity of a party as an insurer may be shielded. It does not contemplate the creation of a fiction to avoid possible prejudicial effects from a reference to insurance or an insurer," wrote Judge L. Mark Bailey.

Even if the appellate court assumed the prejudice could have been lessened if Lobdell remained a defendant, Allstate allowed her dismissal with prejudice instead of advancing payment and asserting a subrogation interest pursuant to Indiana Code Section 27-7-5-6.

And Allstate's reliance on Wineinger is misplaced because unlike that case, there is no other named defendant and that case was substantively a tort claim.

"Allstate wants the benefit of its bargain with Brown-Day, that is, the contractual limitation on Brown-Day's recovery. Neither Evidence Rule 411 nor Wineinger provides authority for substitution of a non-party in place of a party so as to create a legal fiction before the jury in a contract case," he wrote.

The Court of Appeals also found the trial court erred in not allowing Brown-Day to inquire about the payments Allstate made to its examiner/expert witness based on Evidence Rule 616. The source of witness income goes to the heart of bias or prejudice, and excluding evidence relevant to the jury's credibility assessment would operate as an invasion on the province of the jury, wrote Judge Bailey.

The case is remanded for further proceedings.

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  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

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