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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. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  2. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  3. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  4. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  5. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

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