In a case decided October 13th, Grogan v. Nizam , NY Slip Op 07375 (2d Dept. 2009), the Appellate Division, Second Department, issued a decision that underestimates the sophistication of modern jurors, and that continues to legitimize a silly precedent.  The decision is short, and worth reading.

The essential holding is that if the jury finds out that the defendant doctor is insured, that defendant has been prejudiced to the extent that the court has the discretion to declare a mistrial.  The sole mention of the concept of insurance occurred when plaintiff’s counsel asked his OB/GYN expert about his involvement in risk management work.  The expert responded, “I’m a Risk Management Consultant to the Princeton Insurance Company, which is a professional liability carrier, in Obstetrics and Gynecology.”

Plaintiff’s expert did not conclude his statement by standing up, pointing to the defendant OB/GYN, and stating “By the way, see that guy sitting next to the defense lawyer? Sure as the sun will rise tomorrow, he’s insured by a professional liability carrier!”

As Tom Valet, who handled the appeal for the plaintiffs (appellant-respondents), told me, “nobody implied that the defendant had insurance or that a verdict would be covered by insurance.”  In other words, there was no prejudice to the defendant.

Exactly what types of “prejudice” are the courts worried about?  The Grogan Court traveled far back in time, to 1911, to support itself with Simpson v. Foundation Co. , 201 N.Y. 479 (1911), a Court of Appeals case that warned that a jury’s knowledge that a defendant in a negligence case is insured may induce that jury to give a larger-than-reasonable verdict.  On the other hand, the same appellate body (the Second Department) felt, as of 1977, that if jurors knew that an insurance company would be paying the judgment, they may ultimately come to believe that they, Mr. and Mrs. John Q. Public, would be providing the primary funding.  And therefore, such jurors would unreasonably award less.

But times have changed, and the citizens that comprise the jury pool are more sophisticated.  Many, if not most people are aware of the role that insurance companies play in our civil justice system.  To assume that the mere mention of the broad concept of professional liability insurance is enough to warrant a mistrial is unrealistic, and frankly underestimates the intelligence and sophistication of the citizens of New York State.  Moreover, such an inflexible adherence to precedent has resulted in the high cost of having to re-try a complex medical malpractice case, and has delayed justice for the plaintiffs.

What are the lessons here?  As Tom Valet put it: (a) caution your experts to avoid uttering the word “insurance” at trial; and (b) if they mention it anyway, make sure a proper curative instruction is timely given by the trial judge.

But if you end up arguing before an appellate panel after a mistrial has been granted, my recommended argument is as follows: “C’mon people! Get real! Welcome to 2009!”

We’re here to listen.

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