A recent decision by the Georgia Court of Appeals and several cases coming from Cobb County, Georgia reinforce the necessity of identifying available insurance coverage in response to a properly phrased Interrogatory in discovery, even when the claim may seem relatively minor and the defendant has a high deductible or self-insured retention. Ford Motor Company has unfortunately found out graphically what can go wrong when this is not done.
On February 7, 2013, a panel of the Georgia Court of Appeals decided Reese v. Ford Motor Company, and upheld a decision by a trial judge in Cobb County granting a new trial to the plaintiffs in a case in which a jury had found in favor of Ford. The basis for the Judge’s ruling was that Ford had not properly identified insurance carriers so that the jury could be qualified as to their relationship with the carriers. Reese involved a product liability wrongful death claim against Ford. The case had originally gone to trial in Cobb County and the Plaintiffs had received a $3M verdict which was appealed by Ford and overturned by the Court of Appeals because of an improper jury instruction. When the case went back for a second trial, the jury returned a defense verdict in favor of Ford. The Judge, however, granted a new trial for the plaintiffs because in another case pending in Cobb County, the trial court had sanctioned Ford for failing to disclose that it had excess liability insurance coverage and the identity of the insurer. In Reese, Ford had likewise failed to disclose excess liability coverage.
Ford’s Interrogatory response in Reese indicated that it was responsible for paying any “reasonable judgment” and identified no insurance coverage. However, in the other case, which was settled after severe sanctions were levied against Ford and its attorneys, it came out that Ford was self-insured for damages up to $2M with excess insurance coverage above that. The trial judge in Reese found that Ford should have divulged its excess coverage and the identity of the insurance carrier so that the jury could be qualified as to the carrier.
Interestingly, last week a different panel of the Court of Appeals heard oral argument in another Cobb County Ford case in which Ford had won a defense verdict in 2009 but, in 2011, the judge granted a new trial to the plaintiffs because of Ford’s “willful concealment of insurance coverage.” Ford’s counsel sought to distinguish the Reese case at oral argument.
The moral of this story is that regardless of the size of the deductible or self-insured retention, a corporate defendant should identify available excess insurance coverage in response to a proper Interrogatory. The jurors are allowed to be qualified as to their relationship with these insurance carriers. Beyond that, the fact of insurance coverage should not be mentioned to the jury.
Please call me if you would like a copy of the Reese opinion or have any questions.