Ford Punished for Failure to Disclose Insurance Coverage

Based on information about Ford’s insurers that came to light more than a year later, however, the Conleys filed a motion for new trial in July 2011. The trial court granted the motion. The Court of Appeals judges divided evenly on whether a new trial was appropriate. The Supreme Court has now found that it was.

The Conleys sent Ford a typical interrogatory requesting insurance information and received a response stating that Ford had “sufficient resources to cover any reasonable judgment.” Based upon this response there was no qualification for the jury in the Conley case as to any insurance providers.

In June of 2011, about nineteen months after the judgment in the Conley case, another trial involving Ford began in Cobb County before the same judge that presided over the Conley matter and with at least two of the same lawyers representing Ford. During discovery in that case the Plaintiff sent Ford two requests for insurance information much as the Conleys had done. Ford responded in much the same way. However, the Plaintiffs proposed in their pretrial order that the jury be qualified for relationships with two specific insurance carriers which the Plaintiff believed insured Ford. Ford objected and a hearing was held over the issue of insurance coverage at which point it came out that Ford did, in fact, have numerous excess coverage policies that might cover a judgment. The judge declared a mistrial and prohibited Ford’s out of state lawyers from participating in the case. As a sanction, the trial court decided to instruct the jury that it was established that Ford “failed to adequately warn consumers of the danger of a seatbelt during rollovers.” That case settled. The Conleys, based upon this information, then filed their motion for new trial.

Ford’s in-house counsel testified that Ford routinely answered discovery requests for insurance information by saying that Ford had sufficient resources to cover any reasonable judgment and that opposing parties generally found that response sufficient. The Georgia Supreme Court found that that answer might be sufficient to satisfy the main purpose of the statute requiring identification of insurance coverage because Plaintiffs like the Conleys were notified that Ford will be able to pay an adverse judgment or settlement. In Georgia, however, information about a civil defendant’s insurers is required for a second and perhaps and even more important purpose: qualifying the jury. It is the long standing rule in Georgia that to insure the right of trial by an impartial jury a party to a civil case is entitled to have the jury qualified by the Court as to any insurance carrier with a financial interest in the case.

The lesson from this case is that any corporation with a large deductible or self-insured retention should still identify in discovery all available excess policies. This practice may seem burdensome but Plaintiffs’ lawyers are certainly on the lookout for situations where all insurance policies have not been identified and may use that fact as the basis for sanctions or to overcome an adverse verdict. It is simply not worth taking the chance.

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About the Author

Michael Rust graduated from Emory University in 1980 and Emory University School of Law in 1983 where he was Notes and Comments editor of the Emory Law Journal (Law Review). Since that time, he has maintained an active trial practice in the state of Georgia both in State and Federal Courts. Mr. Rust teaches litigation as part of Emory University School of Law’s annual Trial Practice Program. He has received AV rating from Martindale Hubble, the highest rating afforded to lawyers by their peers.