Light v. Provident Life and Accident Insurance Company

Full title: JEFFREY R. LIGHT, Plaintiff and Appellant, v. PROVIDENT LIFE AND ACCIDENT…

Court: Court of Appeals of California, Second Appellate District, Division Five.

Date published: Nov 19, 2003

No. B158361 (Cal. Ct. App. Nov. 19, 2003)

Opinion

B158361. B161832.

11-19-2003

JEFFREY R. LIGHT, Plaintiff and Appellant, v. PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, Defendant and Respondent.

Robert A. Kahn and Bruce M. Lorman for Plaintiff and Appellant. Galton & Helm, Melissa M. Cowan and Keiko J. Kojima for Defendant and Respondent.

Turner

I. Introduction

Plaintiff, Jeffrey R. Light, M.D., appeals from a judgment entered following a jury trial on his contract breach action against defendant, Provident Life & Accident Insurance Company. The jury found that plaintiff was not totally disabled from his occupation as a pathologist under a policy issued by defendant. Plaintiff has also appealed from an order summarily adjudicating a cause of action for breach of the implied covenant of good faith and fair dealing. Finally, plaintiff has appealed from the denial of costs after the trial court ruled in his favor on a cross-complaint filed by defendant. We affirm the judgment in all respects.

II. Procedural History

A. Plaintiffs Complaint and Defendants Cross-Complaint

Plaintiff filed this action on July 13, 1998, naming defendant and an insurance broker, J. Michael Roney, as defendants. Mr. Roney was subsequently dismissed from the action with prejudice. The complaint contained causes of action for: implied covenant breach; contract breach; negligence; fraud; and conspiracy. The complaint alleged that, prior to February 1, 1988: defendant issued a number of insurance policies, including a disability insurance policy to protect plaintiff against disability in his specialized occupation, a pathologist; defendant issued to plaintiff a second policy, a Total and Residual Disability Income Policy, with a Regular Occupation Amendment; in September 1991, plaintiff was injured in an accident; plaintiff suffered serious and permanent personal injuries, rendering him "totally disabled" within the definition of the disability policy; plaintiff submitted a claim for benefits under the policy; defendant paid total disability benefits for over six years; and defendant discontinued paying the benefits. The complaint alleged that defendant, among other things, unreasonably: failed to pay total disability benefits knowing that plaintiff was entitled to payments under the policy; delayed payments in bad faith; withheld total disability benefits; misrepresented pertinent policy provisions; and unreasonably insisted that plaintiffs claim for total disability benefits under the policy was one for residual or partial disability.

Defendant cross-complained against plaintiff for declaratory relief and restitution. Defendant alleged that: in December 1987, it issued a business buyout expense disability policy (Policy No. 6-BUY-815261) to Empire Pathology Medical Group ("Empire") of which plaintiff and Dr. Paul Boynton were partners; the policy provided for the payment of insurance proceeds to the extent that plaintiffs financial interests in Empire are purchased by the group as a result of his total disability; the policy provided for the payment of up to a $1 million directly to Empire to reimburse the group for the purchase of plaintiffs financial ownership interest in that entity; in 1995, plaintiff on behalf of Empire submitted a claim for benefits under the buyout policy; and the claim asserted that his interests in Empire were being purchased by it as a result of plaintiffs alleged total disability. In support of his claim, plaintiff represented: his financial interests were being purchased by Empire; he would no longer have a financial interest in Empire; insurance benefits would reimburse Empire for funds previously paid to him in connection with the buyout of his financial interest; and implicitly that Dr. Boynton would be the remaining owner of Empire. According to the cross-complaint, defendant paid Empire an initial down payment of $500,000 in 1995 followed by monthly $8,333 installments.

The cross-complaint alleged that: defendant had recently discovered that plaintiffs interest in Empire was not actually bought out; the purported purchase was actually a sham transaction designed to encourage defendant to pay benefits under the buyout policy; in fact, Empire was dissolved in 1994 with each partner taking a 50 percent interest; plaintiff was given the right to continue using the name Empire in his business; Empire did not really buy out plaintiffs ownership; the cancelled checks shown to defendant were money paid by plaintiff to himself; plaintiff and Dr. Boynton devised the scheme to jointly share in the buyout insurance benefits as profit; plaintiff continued to control Empire; and plaintiff had personal use of all insurance proceeds paid to Empire under the buyout policy.

B. Procedural Events

As will be noted, on May 9, 2000, the trial court granted summary adjudication on all of plaintiffs causes of action except his contract breach claim. Plaintiff asserts on appeal summary adjudication should not have been granted on its implied covenant breach cause of action. Also, the trial court granted summary adjudication as to the first cause of action for declaratory relief in defendants cross-complaint. The trial court concluded: the buyout policy required that the partner who is bought out no longer operated the business; plaintiff was no longer a partner in Empire; rather, plaintiff owned and operated Empire; and plaintiff was not so disabled that he could not continue to operate Empire. Plaintiff has raised no issue on appeal concerning the order granting summary adjudication in favor of defendant which declared that it owed no further benefits under the buyout policy.

By the time the case was to be tried, there were only two remaining issues. The first issue involved plaintiffs contract breach claim because all of the other causes of action in the complaint had been summarily adjudicated against plaintiff. Plaintiff has raised issues on appeal concerning the jury verdict against him on the contract breach claim. The second issue involved the second cause of action in defendants cross-complaint for reimbursement of benefits paid to plaintiff. Trial on the second cause of action for reimbursement in defendants cross-complaint was severed and tried separately. No issue has been raised on appeal concerning the reimbursement claim findings.

The matter proceeded to a jury trial on the contract breach claim in plaintiffs complaint in May 2001. The jury deadlocked eight to four in favor of defendant, prompting the trial court to grant a mistrial. A retrial began on October 24, 2001. As will be noted in greater detail later, on October 24, 2001, the jury returned an 11-to-1 defense verdict limited solely to the issue of whether plaintiff had been disabled since March 19, 1998. On February 5, 2002, the trial court ruled on the second cause of action in defendants cross-complaint. The trial court ruled defendant was not entitled to restitution. On March 18, 2002, judgment was entered on plaintiffs complaint and defendants cross-complaint. This timely appeal followed.

III. Summary Adjudication

A. The Standard of Review

Plaintiff contends summary adjudication was erroneously entered on plaintiffs implied covenant claim in favor of defendant. In Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851 the Supreme Court described a partys burdens on summary judgment or adjudication motions as follows: "[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a courts action in his favor bears the burden of persuasion thereon. [Citation.] There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. . . . [¶] [T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact. . . . A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.]" (Fns. omitted; see Kids Universe v. In2Labs (2002) 95 Cal.App.4th 870, 878.) We review the trial courts decision to grant the summary adjudication motion de novo. (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 65, 67-68; Sharon P. v. Arman, Ltd. (1999) 21 Cal.4th 1181, 1188, disapproved on another point in Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 853, fn. 19.) The trial courts stated reasons for granting summary adjudication are not binding on us because we review its ruling not its rationale. (Szadolci v. Hollywood Park Operating Co. (1993) 14 Cal.App.4th 16, 19; Barnett v. Delta Lines, Inc. (1982) 137 Cal.App.3d 674, 682.)

B. Evidence And Rulings Concerning Plaintiffs Implied Covenant Breach Cause of Action And Punitive Damage Claim

1. Defendants evidence in support of summary adjudication of plaintiffs implied covenant cause of action and punitive damage claim

Defendant moved for summary judgment on plaintiffs complaint. At issue on appeal is the trial courts order granting summary adjudication on his implied covenant cause of action and punitive damage claim. In support of its summary adjudication motion of plaintiffs implied covenant cause of action and punitive damage claim, defendant presented the following evidence. Effective January 1, 1988, defendant issued disability income insurance policy No. 06-335-820703. The policy provides for a $17,500 monthly benefit if the insured is totally disabled due to injuries or sickness. Total disability was defined as follows: "1. [Y]ou are not able to perform the substantial and material duties of your occupation; and [¶] 2. you are receiving care by a Physician which is appropriate for the condition causing the disability." The policy defined occupation as: "[Y]our occupation means the occupation (or occupations, if more than one) in which you are regularly engaged at the time you become disabled. If your occupation is limited to a recognized specialty within the scope of your degree or license, we will deem your specialty to be your occupation." The disability policy also contains a residual disability provision which means due to an injury or sickness: "1. [Y]ou are not able to do one or more of your substantial and material daily business duties or you are not able to do you usual daily business duties for as much time as it would normally take you to do them; [¶] 2. you have a Loss of Monthly Income in your occupation of at least 20%; and [¶] 3. you are receiving care by a Physician which is appropriate for the condition causing disability."

Also, defendant issued Business Buyout Expense Disability Policy No. 6-BUY-815261, effective "December 1987" to Empire, the partnership then operated by plaintiff and Empire. The policy provided for a $1 million benefit if one of the partners became totally disabled for 18 consecutive months and was "bought out of Empire." The policy provided for an initial $ 500,000 reimbursement to Empire for funds paid to the bought out partner with additional monthly installments of $8,333.

On December 11, 1990, plaintiff submitted a claim for residual benefits under the disability policy based on injuries to his right arm and shoulder which he suffered after a September 14, 1990, automobile accident. In the claim form, plaintiff indicated that he was able to work and was 50 percent disabled due to lack of use of his right arm and shoulder. Plaintiff described his pre-claim duties as follows: "[P]erform frozen sections; bone marrow aspiration [and] biopsy; fine needle biopsy; gross tissues; read microscopic biopsies and cytologies; attend meetings, [and] administrative responsibilities."

In 1994, plaintiff claimed he was totally disabled from his occupation. On November 2, 1994, plaintiff, through an attorney, Robert A. Kahn, submitted a claim under the buyout policy. On April 24, 1995, plaintiff submitted a copy of a canceled check written to him by Empire for $500,000. The cover letter, signed by Mr. Kahn, stated in part: "Enclosed please find a copy of the cancelled check in the sum of $500,000 issued by Empire to [plaintiff] to purchase [plaintiff]s partnership interest as result of his disability. [¶] Please immediately issue a check to the new loss payee, Robert Hull, in the sum of $500,000 as reimbursement to Empire for this expense, pursuant to the above policy." Empires partnership agreement specified what was to occur in the event the partner became disabled. The disabled partner was to receive $500,000 payable upon the receipt of the disability insurers check. Further, under the terms of the partnership agreement the disabled partner was to receive payments of $8,333 per month over a 60-month period. On May 23, 1995, defendant paid the buyout policy by sending Empire a check for $500,000. Defendant also paid the initial sum due under the monthly installments of $8,333 under the buyout policy.

Since 1995, plaintiff has continued to represent that Empire bought him out. A settlement agreement was entered into between plaintiff and Dr. Boynton. Empire ostensibly purchased plaintiffs partnership interests. But plaintiff simultaneously purchased back the name Empire Pathology Medical Group. Plaintiff also purchased back Empires Garden Grove practice. Empires Garden Grove practice was what plaintiff had been operating all along, including all assets and receivables. The settlement agreement provided that all legal fees and restitution damages would be split between plaintiff and Dr. Boynton if defendant disallowed the buyout claim. Plaintiff has paid Dr. Boynton portions of the buyout benefits received from defendant.

Defendant continued to pay disability benefits to plaintiff. Defendant sought and gathered information regarding plaintiffs claim, including medical and financial records. In October 1996, defendant requested that plaintiff respond to a questionnaire which addressed a comparison of his pre-disability and post-disability duties, obligations, hours worked, physical limitations, business and financial interests, and income. After four months, plaintiff, through Mr. Kahn, responded to the defendants questionnaire. But plaintiff refused to provide details concerning his ownership interests and current financial data.

In July and August 1996, defendant had a surveillance performed on plaintiffs activities. Reports from the surveillance indicated that plaintiff was going to work at Empire and using his right extremities. In May 1997, defendant had surveillance performed on plaintiff which showed him going to Empire, spending time aboard his boat, and using his right extremities.

On September 24, 1997, defendant had plaintiff attend an independent medical examination performed by Dr. Seth Weingarten, a neurologist. Such an examination was permitted by the terms of the disability policy. Dr. Weingartens initial report to defendant requested additional medical records due to the absence of atrophy in plaintiffs right hand. Dr. Weingarten believed there would normally have been atrophy given the disuse of the right hand as represented by plaintiff. Defendant obtained and provided the additional medical records requested by Dr. Weingarten. Dr. Weingarten provided supplemental reports dated October 15 and 31, 1997, and February 19, 1998. Dr. Weingarten subsequently concluded there was a discrepancy between plaintiffs claimed injuries and what was shown on the surveillance tapes. Dr. Weingarten recommended that plaintiff be evaluated by Dr. Eugene Harris, an orthopedic specialist.

Defendant scheduled an examination for plaintiff with Dr. Harris. Plaintiff initially refused to be examined. On February 26, 1998, Dr. Harris examined plaintiff. Dr. Harris reported: plaintiffs own assessment of his right upper extremity dysfunction was "somewhat hyperbolic"; plaintiff had good functional range of his shoulder, wrist, and hand; plaintiff could perform the standard activities of daily living; and the surveillance tape revealed that plaintiff had better control of his right upper extremity than his presentation during the examination.

In his final report dated March 18, 1998, Dr. Weingarten concluded that plaintiff was capable of returning to work as a pathologist as of the first time defendant conducted surveillance of plaintiff in 1996. On April 7, 1998, defendant sent a letter to plaintiff advising him that based on its investigations and the independent medical examination evaluations, he had been found capable of performing the substantial and material duties of his occupation and he was no longer eligible for benefits under the disability policy.

2. Plaintiffs evidence in opposition to the summary adjudication motion

With the exception of his implied covenant claim, plaintiff did not dispute the facts asserted by defendant regarding the other tort causes of action. Plaintiff relied on the following evidence: he was injured in a "head-on" automobile collision on September 14, 1990; he was a pathologist at the time of the accident; in December 1990, defendant began paying him disability benefits pursuant to the disability policy; between October 5, 1990, and February 1991, he underwent three shoulder operations ; in trying to repair his shoulder, plaintiff suffered nerve damage which caused continuous pain in his right shoulder, arm, and hand; and he was diagnosed with multiple nerve damage conditions, reflex sympathetic dystrophy, and thoracic outlet syndrome.

Plaintiff underwent a fourth surgery to try to eliminate the pain syndrome. The procedure consisted of amputating the first right rib from his chest and removing the entire "sympathetic chain" of nerves in his right hand and arm. Because the surgery is so drastic, it is only performed in the most severe nerve damage, pain syndrome cases. The surgery, although successful for about an 18-month period, did not completely alleviate the pain syndrome. Plaintiffs condition returned and he also developed Horners Syndrome of the right eye, which interfered with his vision. Plaintiff was also required to take prescription medication, including narcotics. Dr. Phillip OCarroll was plaintiffs treating physician. Dr. OCarroll certified that plaintiff was totally disabled from practicing pathology. From December 1990 through October 1995, a number of plaintiffs treating physicians provided various certifications to defendant. The certifications ranged from total disability to partial disability. In the latter part of May 1994, Dr. OCarroll indicated that due to increased pain, plaintiff needed to be on total disability.

Plaintiff was evaluated in 1993 by Paula Cannon, a vocational consultant, to obtain a detailed job description of his occupation as a pathologist. On May 30, 1993, Ms. Cannon reported that she met with plaintiff who described his duties as a pathologist to her. This included: performing autopsies; rapid frozen section; gross dissections of organs and specimens; bone marrow aspirations, fine needle biopsies; and microscopic diagnosis. Ms. Cannon was given a sampling of Empires records from July 1990 through April 1993. She stated in her report: "Based upon the records I reviewed, it appeared that Empire Pathology performs more gross, microscopic diagnoses work than any other procedures. This procedure involves receiving a gross specimen, the office staff logs in the information and gives it to a histologist. The histologist places the specimen in a processor in the laboratory and puts it on a slide then the physicians look at it under a microscope and render a diagnosis. The physician then does a report. According to the reports, [plaintiff] performed more gross, microscopic diagnosis work than any other procedures and did more of these prior to his injury. There are no records during his partial disability phase, therefore, I cannot comment on this time period. He was off of claim from July 15, 1991 through October 1, 1991. The records indicate he did mostly gross, microscopic diagnosis during this period. He did 16 in July, 19 in August, and 52 in September. He did one froze section in July and six in September. After he was on total disability he did no procedures in October of 1992, 11 gross microscopic diagnoses in March of 1993, and nothing in April of 1993. It appears that after he was on total disability his productivity decreased significantly. [& para;] Since I received a sample of procedures done during the time frame of July 1990 through April 1993 and did not review all work performed it is difficult to verify exactly what job duties [plaintiff] did before his injury and during the partial disability period. [Plaintiff] stated that as a pathologist he may do autopsies, frozen sections, gross dissections, and review slides under a microscope. The records I reviewed did not include any autopsies, only a few frozen sections and mostly gross specimens and microscopic work. All records would need to be reviewed to determine the exact number of procedures done by [plaintiff] and his staff members. [¶] [Plaintiff] is a 47-year-old pathologist who sustained a right shoulder injury when he was involved in a head on car accident on September 14, 1990. I met with [plaintiff] at his home in Newport Beach on March 10, 1993, for an interview. [Plaintiff] greeted me at the door wearing an arm sling on his right arm. He took control of our meeting explaining how he was injured, what treatments he had been receiving, and gave me his current medical status. He explained his job duties as a pathologist and what duties he is unable to perform. [Plaintiff] referred to machinery I was unfamiliar with and suggested that I meet with him at his office to see the equipment. [Plaintiff] met with me at his office on March 31, 1993, in Riverside and took me to a hospital to explain some of his procedures. He showed me a cryostat machine and how a frozen section is processed in this machine. In addition, [plaintiff] showed me the microscopes that he uses to diagnose a patients problem. [Plaintiff] said the microscopes weigh 50 pounds. During our meeting, [plaintiff] appeared to be in severe pain and had his right arm in a sling. I noticed dark circles under his eyes. . . . [¶] The job duties of a pathologist require the use of both arms. [Plaintiff] is essentially using one arm. In addition, he needs fine finger dexterity skills with both hands. [Plaintiff] would need both hands to do an autopsy as it requires the use of saws, tools and the ability to turn and move bodies. [Plaintiff] would need both hands to operate a cryostat machine as it has two cranks that are used while slicing a specimen. [Plaintiff] would need to repetitively use his right hand and arm in order to turn the crank. He would use his left hand to move the specimen up and down. This procedure cannot be done one handed. . . . [Plaintiff] needs both hands to review slides under a microscope as his right hand turns the lens and adjusts the power and the left hand flips the slides back and forth. [Plaintiff] needs both hands and good sensation in his hands to perform a fine needle biopsy and bone marrow aspirations. [Plaintiff] reported that he has to drive to different out-patient centers and carry a 50-pound microscope with him. He stated that he cannot carry the microscope any more and has trouble driving due to the treatments and medications he is taking. [Plaintiff] reported that at the present time he is spending one to two days in the office at Garden Grove to oversee the quality of service and to maintain a relationship with his customers. [& para;] Based upon the information I received from [plaintiffs] office manager, the records reviewed and my meeting with [plaintiff] it appears that he is unable to perform the job duties of a pathologist. [¶] I recommend that [plaintiff] be re-evaluated in six months to see if the treatments he is currently receiving is helping his medical condition. In order to determine what job duties [plaintiff] and his staff performed prior to his disability and during the partial disability period, I suggest a review of all records during these time periods as the sampling I received is not enough to formulate an opinion."

Plaintiff also claimed that defendants decision to terminate his disability payments was motivated by a $423 million loss on its "own occupation" disability line of business in 1993. Plaintiffs theory was that defendant began to place the interests of its shareholders over those of its insureds. In support of this theory, plaintiff presented evidence defendant developed 10 individual disability claims performance objectives. The purpose of the performance objectives was to increase the number of claim terminations. Defendant instituted the changes by setting them forth in a 10-point "Claims Improvement Initiatives" memorandum. The initiatives included: increased investigative tools such as surveillance; increased use of independent medical examinations; the development of a network of independent medical examination physicians; the use of physicians who would challenge the impairment rather than giving a fair and objective evaluation; and the targeting of certain types of claims. Plaintiff claimed that California and physician claims were specifically targeted. In order to implement employees to save money, defendant created awards such as the "Hungry Vulture Award" by terminating more claims.

Defendants employees also held Tuesday and Thursday afternoon "Roundtable Discussions." Plaintiff presented evidence that the purpose of the meetings was to terminate on-going disability claims. Dr. William E. Feist was employed at defendant from July 1982 until February 1996, first as Assistant and then as Associate Medical Director. Dr. Feists position required him to review life insurance applications and review claims. Dr. Feist declared that: beginning in 1995, defendant changed the manner in which disability claims were handled due to the losses from the "own occupation" disability policies; the attitude of the claims department was anti-insured; the vast majority of the files brought to the "round table meetings" were where the insured had been receiving benefits for a substantial period of time and where the reserves (the amount that defendant was obligated to set aside out of its assets as a potential expense) were relatively high; and defendant wanted to terminate claims to reduce the amount of reserves.

Plaintiff further argued that his benefits became the target of the claim improvement initiatives. In support of this theory, he presented the following facts. In November 1995, Sally Moore began handling plaintiffs claim. Ms. Moore initially authorized the continued benefit payments after reviewing a number of claim file materials. Ms. Moore testified that she ordered that plaintiff be watched to "validate the claim." Ms. Moores direction to an investigator was: "Please set up surveillance for four days from residence to employer address. If activity is high, continue with surveillance Friday and Saturday." Ms. Moore testified at her deposition, "I wanted to kind of get a better understanding [of] how many days per week he was going to work, to the Empire Pathology, how long he was there, . . . activity, to find out what he was doing." Ms. Moore never spoke to plaintiff about questions she had about his claimed disability. In October 1996, Claims Manager William Parker instructed field investigator Ed Ruiz to meet with plaintiff. The purpose of Mr. Ruizs interview was to determine what plaintiffs occupational duties were prior to the accident.

More surveillance was suggested by Dr. Fred OConnell, one of defendants in-house physicians. In a note to Dr. OConnell, Ms. Moore noted, "This is the insured you viewed the surveillance tape with me [and] recommended more surveillance to try to get him using fine motor skills." Dr. OConnell recommended plaintiff be seen by a neurologist. Plaintiffs case was discussed at least twice at roundtable discussions. Ms. Moore included the amount of plaintiffs benefits in letters she wrote to Dr. Weingarten and Dr. Harris. Ms. Moore received a "spot bonus" a month after plaintiffs benefits were terminated. Ms. Moore was never told she received the spot bonus because plaintiffs benefits were terminated. The prior claims adjuster, Pam Haegerl, did not include the benefit amount in the letter to the independent medical examiners.

Plaintiff believed Dr. Weingartens opinion was deficient in the following ways: Dr. Weingarten was himself receiving disability benefits; Dr. Weingarten only performed a 45-minute examination; Dr. Weingarten disagreed with the diagnoses of plaintiffs treating physicians; Dr. Weingartens analysis was contradictory in that it suggested plaintiff never had reflex sympathetic dystrophy or thoracic outlet syndrome but there was a pain syndrome as a result of the post-accident surgeries; Dr. Weingarten did not discuss plaintiffs condition with any treating physician; Dr. Weingarten admitted that plaintiff is taking methadone; methadone use precluded plaintiff from direct patient contact; and Dr. Weingarten determined plaintiff was able to return to work. In addition, plaintiff claimed Dr. Weingartens report was inadequate because it did not: analyze the duties of a pathologist; address what plaintiffs duties were before the 1990 accident; discuss how and why plaintiffs use of methadone did not in and of itself render him unable to practice pathology; evaluate the effects of plaintiffs condition of Horners Syndrome; and address Ms. Cannons vocational evaluation. Based on these deficiencies, plaintiff argued that Dr. Weingartens opinion could not be relied on in good faith by defendant.

Plaintiff also argued that defendant did not act in good faith because it failed to give due weight to Dr. Harriss report. Dr. Harris came to no conclusion as to whether plaintiff was disabled. Dr. Harris was unable to assess plaintiffs fine motor skills. At his deposition, Dr. Harris stated, "I dont think he could do all of the things he was doing before." Dr. Harris testified that it was be unwise for plaintiff to perform bone marrow aspirations, fine needle biopsies, and fine needle aspirations. Dr. Harris did not contact plaintiffs treating physicians. Finally, Dr. Harris believed that the use of methadone pain medication was a negative factor in terms of plaintiffs ability to practice pathology.

3. Defendants reply to the opposition

In reply, defendant submitted the following facts and arguments. Ms. Cannon: based her conclusions on a 1993 evaluation; was not a physician; based her conclusions upon plaintiffs representations of his limitations and previous job duties, which were disputed by Dr. Nguyen a former Empire employee; performed no physical examination of plaintiff; and did not have the surveillance videotape to confirm the truth of plaintiffs claim he was disabled. The surveillance videotape showed plaintiff moving about normally in contradiction to his claim he was completely disabled. Defendant admitted it was trying to capture plaintiffs ability to perform fine motor skills on film, which it did by showing he used keys and held objects.

Defendant further asserted: Dr. Weingartens and Dr. Harriss belief that plaintiff could not now perform autopsies or have patient contact given methadone use did not render its decision to terminate benefits unreasonable; this was because plaintiff was not performing the same job duties at the time of his automobile accident; disclosing the amount of plaintiffs claim to Dr. Weingarten and Dr. Harris was proper because it was relevant in terms of a financial motive to exaggerate; there was nothing improper in allowing Dr. Weingarten to conduct the examination because he was receiving disability benefits; Ms. Moores bonus was unrelated to plaintiffs case; and the bonus was based on her purchasing an orthopedic chair to assist one of defendants insureds to return to work.

Defendant also submitted deposition testimony from its former employee, Dr. Feist. Dr. Feist testified he: had nothing to do with the termination of plaintiffs claim in 1998; was never involved with plaintiffs claim; did not know whether plaintiffs claim was legitimate; and did not know of any legitimate claims that were ever improperly denied as a result of the roundtable meetings. Dr. Feist admitted that he slept through some of the roundtable meetings. Dr. Feist believed that if an attending physician believes a patient is disabled, a disability insurer should provide benefits. Further, Dr. Feist believed that if an insurer concludes an insured is disabled, that issue should never be revisited by the insurance company.

4. The rulings

On May 9, 2000, the trial court ruled on defendants summary adjudication motion aimed at the complaint. The trial court noted that plaintiff did not oppose summary adjudication of the negligence (third and fourth causes of action), fraud (fifth cause of action) and conspiracy (sixth) causes of action. Accordingly, the trial court ruled summary adjudication was appropriate on these claims.

With respect to the implied covenant claim, the trial court ruled defendant was entitled to summary adjudication. Further, the trial court concluded plaintiff was not entitled to punitive damages. The trial court ruled: "Every contract has an implied duty of good faith and fair dealing. [Citation.] The breach of this implied covenant in insurance contracts is known as `insurance bad faith and is a valid cause of action. [Citation.] The denial of insurance benefits alone does not constitute a breach of the implied covenant of good faith and fair dealing; the denial must be unreasonable. [Citation.] The insurer must search for evidence which supports its insureds claim. [Citation.] The insurer must give at least as much consideration to the insureds interest as it does to its own. [Citation.] [¶] If the insurer has proper cause for withholding benefits, its doing so is not a breach of the implied covenant even if it turns out that benefits were in fact owed. `The mistaken withholding of policy benefits, if reasonable or if based on a legitimate dispute as to the insurers liability under California law, does not expose the insurer to bad faith liability. [Citation.] It is not unreasonable for the insurer to resolve good faith doubts about the claim against the claimant. [Citation.] [& para;] The crux of [plaintiffs] theory is that [defendant] engaged in a scheme to deny him of his disability benefits in order to increase [its] profits and/or reduce losses it allegedly sustained in the [1990s]. There is no evidence to support [plaintiffs] contention that [defendants] efforts to improve operations included the denial of legitimate claims. [Plaintiffs] broad allegations regarding [defendants] `claim initiatives do not create a genuine issue of fact as to the reasonableness of [its] decision to terminate [plaintiffs] claim. [¶] A genuine issue existed regarding [defendants] liability at the time it terminated [plaintiffs] claim. Nothing precluded [defendant] from investigating a claim it had been paying for a number of years, including by requesting further medical examinations by engaging in surveillance of [plaintiff]. There is undisputed evidence from independent doctors that [plaintiff] was not totally disabled at the time [defendant] stopped paying him benefits. At a minimum, this evidence creates a genuine issue regarding whether [plaintiff] was disabled. As set forth above, [defendant] is not liable for bad faith by resolving this question against [plaintiff]. And, there is no evidence that [defendant] did not consider the contrary evidence from [plaintiff] regarding his claimed disability. [& para;] The resolution of the bad faith claim in favor of [defendant] resolves the issue of punitive damages as well. There is no cause of action to support the request for punitive damages." When another judge was assigned to the cause, plaintiff sought relief from summary adjudication. The motion for relief was denied.

C. Implied Covenant

The California Supreme Court has concluded that every contract imposes on each party an implied duty of good faith and fair dealing. (Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 400; Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 818.) Our colleague, Associate Justice H. Walter Croskey, synthesized the applicable rule of law in insurance coverage litigation as follows: "[I]n the context of an insurance contract, . . . the insurers responsibility to act fairly and in good faith with respect to the handling of the insureds claim `"is not the requirement mandated by the terms of the policy itself—to defend, settle, or pay. It is the obligation . . . under which the insurer must act fairly and in good faith in discharging its contractual responsibilities." [Citation.] [Citations.] [¶] `Thus, allegations which assert such a claim must show that the conduct of the defendant, whether or not it also constitutes a breach of a consensual contract term, demonstrates a failure or refusal to discharge contractual responsibilities, prompted not by an honest mistake, bad judgment or negligence but rather by a conscious and deliberate act, which unfairly frustrates the agreed common purposes and disappoints the reasonable expectations of the other party thereby depriving that party of the benefits of the agreement. Just what conduct will meet these criteria must be determined on a case by case basis and will depend on the contractual purposes and reasonably justified expectations of the parties. [Citations.]" (Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co. (2001) 90 Cal.App.4th 335, 346; citing Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 573-574; State Farm Fire & Casualty Co. v. Superior Court (1996) 45 Cal.App.4th 1093, 1105; Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395; and California Shoppers, Inc. v. Royal Globe Ins. Co. (1985) 175 Cal.App.3d 1, 54.)

The mere fact that an insurance company has wrongfully denied a claim does not in and of itself constitute a violation of the implied covenant. The Court of Appeal has held, "The mistaken withholding of policy benefits, if reasonable or if based on a legitimate dispute as to the insurers liability under California law, does not expose the insurer to bad faith liability." (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1280-1281; accord, Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co., supra, 90 Cal.App.4th at p. 346.) An insurer is not liable if there is a legitimate or genuine dispute as to whether the insured is entitled to benefits. (Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co., supra, 90 Cal.App.4th at p. 347; Opsal v. United Services Auto Assn. (1991) 2 Cal.App.4th 1197, 1205-1206.) Such a denial of benefits does not make the insurer liable for an implied covenant breach; but might render the insurer liable for contract breach. (Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co., supra, 90 Cal.App.4th at p. 347; Fraley v. Allstate Ins. Co. (2000) 81 Cal.App.4th 1282, 1292.) In order to establish a tortious violation of the implied covenant, the insured is required to prove that the insurer acted unreasonably or without proper cause. (Gourley v. State Farm Mut. Auto Ins. Co. (1991) 53 Cal.3d 121, 127; Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co., supra, 90 Cal.App.4th at pp. 346-347.) An insurer is entitled to give consideration to its interests including shareholders and other policyholders during the evaluation; but the insurer must give as much consideration of the interests of the insured as its does to its own. (Egan v. Mutual of Omaha Ins. Co. , supra, 24 Cal.3d at pp. 818-819; Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co., supra, 90 Cal.App.4th at p. 347.)

An implied covenant claim can be resolved by summary judgment or adjudication if the insurer can prove that there was a genuine dispute as to whether the insured was entitled to benefits. (Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co., supra, 90 Cal.App.4th at pp. 339-340; Fraley v. Allstate Ins. Co., supra, 81 Cal.App.4th at p. 1292.) Nevertheless, it has been held that summary adjudication in this context must be determined on a case-by-case basis. (Guebara v. Allstate Ins. Co. (9th Cir. 2001) 237 F.3d 987, 994; accord, Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co., supra, 90 Cal.App.4th at p. 348.) Thus, the implied covenant issue should be resolved by a jury where: (1) the insurer is guilty of misrepresentation concerning its investigation; (2) the insurers employees lie during discovery or to the insured; (3) the insurer dishonestly selects biased experts; (4) the insurers experts are unreasonable; and (5) the insurer does not conduct a thorough investigation. (Guebara v. Allstate Ins. Co. , supra, 237 F.3d at p. 996; accord, Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co., supra, 90 Cal.App.4th at pp. 348-349 & fn. 8 [citing Guebara and indicating the list is not exhaustive].)

D. Summary Adjudication Was Properly Granted

The relevant issue is whether as of April 7, 1998, a genuine dispute existed concerning whether plaintiff was totally disabled from performing his occupation as a pathologist. Application of the genuine dispute doctrine principles set forth above to the specific facts of this case shows that, when the evidence is considered in a light most favorable to plaintiff, summary adjudication was correctly entered on plaintiffs implied covenant claim. This is because a genuine dispute regarding defendants contractual obligations existed when the benefits were terminated. Defendant initially paid benefits beginning in December 1990. From 1990 to 1994, plaintiff submitted a number of claim forms which ranged from partial to total disability. The claims were paid based on plaintiffs medical records, Ms. Cannons evaluation, and the statements of his treating physicians. From May 1994, all claim forms submitted to defendant indicated that plaintiff was totally disabled. Defendant paid the claims until April 1998.

In 1995, defendant began to closely scrutinize plaintiffs case. Plaintiff argues the scrutiny was a result of the amount of his benefits and its policy to terminate legitimate claims in order to get around its ill-fated "owner occupation" policies. These policies were aggressively marketed in the 1980s and resulted in a $423 million loss to defendant in 1993. Defendant admitted and the evidence established that a decision was made to make a number of changes in its business practices concerning disability payments. The changes consisted in part of the challenged "claim improvement initiative" procedure which included surveillance of claimants and the round table evaluations.

Surveillance of plaintiffs daily activities showed him driving a car with a stick shift, going to work, screwing an antenna onto a car, and picking up keys. Defendant then made a decision to have plaintiff submit to an independent medical examination conducted by Dr. Weingarten. A second examination was conducted by Dr. Harris. Both physicians concluded that plaintiff was exaggerating his condition.

Moreover, there was evidence concerning the buyout policy. It is undisputed that from 1990 until 1994, plaintiff submitted claim forms which stated that he was partially or totally disabled depending upon a number of factors including surgeries, pain levels, and his use of medication. During some portions of this time, plaintiff performed some pathology duties. In 1994, plaintiff and Dr. Boynton became involved in an alleged dispute about their partnership. The partnership, Empire, was insured with a $1 million buyout policy. The buyout policy was only effective based on a total disability claim. After the parties became involved in a dispute over terminating the partnership, plaintiff submitted a claim that he was totally disabled. Sometime after that dispute was settled, plaintiff continued to operate Empire which was receiving $8,333 in monthly payments from defendant. The trial court found that the buyout of plaintiffs interest was a sham transaction given that plaintiff continued to operate Empire.

Under these circumstances, a genuine dispute existed as to whether plaintiff was totally disabled as he claimed or was exaggerating his condition. Defendant acted reasonably in assessing plaintiffs claims under the circumstances of this case including the use of surveillance techniques, which it had the authority to do. In addition, defendant relied on the opinions of two physicians who examined plaintiff and concluded that he was exaggerating his symptoms. The surveillance tapes and two medical physician opinions demonstrated that plaintiff was not totally disabled. The trial court correctly concluded that the implied covenant claim could be decided in defendants favor as a matter of law even if the decision to deny benefits might ultimately have been held to be incorrect.

Plaintiff nevertheless argues that under standards set forth in Amadeo v. Principal Mutual Life Insurance Co. (9th Cir. 2002) 290 F.3d 1152, 1162-1163, and Hubka v. Paul Revere Life Insurance Co. (S.D. Cal. 2002) 215 F.Supp.2d 1089, 1092-1094, the trial court should not have applied the "genuine dispute" doctrine. This, plaintiff argues, is because: (1) the opinions of the physicians examining him at defendants request were not truly "independent"; (2) the insurer can create a genuine dispute by hiring medical examiners who will conclude that the insured is not disabled; and (3) there is a possibility that a jury would disbelieve the physicians employed by defendant. Both Amadeo and Hubka were decided on the facts presented in those cases, which are distinguishable from the case at bench. Amadeo v. Principal Mutual Life Insurance Co., supra, 290 F.3d at pages 1162-1163, involved an unreasonable and arbitrary interpretation of a policy term; an issue not present here. In Hubka v. Paul Revere Life Insurance Co., supra, 215 F.Supp.2d at pages 1092-1094, a physician performing an independent medical examination recommended an additional evaluation. The insurer did not follow through on the independent medical examiners recommendation. In Hubka, the only conclusion that insured was not totally disabled was made by insurers in-house doctor. As noted above, the determination of whether the genuine dispute doctrine should be applied must be decided on a case-by-case basis. (Guebara v. Allstate Ins. Co., supra, 237 F.3d at p. 994; Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co., supra, 90 Cal.App.4th at p. 348.) Summary adjudication was properly entered on plaintiffs implied covenant cause of action.

Also, because summary adjudication was properly granted on the implied covenant cause of action, the punitive damage claim was properly dismissed. The order granting summary adjudication left only a potential non-tortious contract remedy where punitive damages are unavailable. (Civ. Code, § 3294, subd. (c)(1); Tomaselli v. Transamerica Ins. Co., supra, 25 Cal.App.4th at p. 1286.) Accordingly, the trial court properly dismissed the punitive damage claims.

IV. The RETrial

A. Overview

Various issues were bifurcated for purposes of trial. The jury was presented with two questions. The first question was, "Do you find [plaintiff] to have been totally disabled under this policy at any time since March 18, 1998." The jury, by an 11-to-1 margin, answered the first question, "No." It was therefore unnecessary for the jury to respond to the second question which inquired what dates plaintiff was disabled. Finally, given the answer to the first question, it was unnecessary for the jury to respond to the third inquiry, "Is [plaintiff] currently totally disabled under his policy?"

During the trial, the parties presented conflicting evidence regarding whether plaintiffs injuries to his right shoulder and arm rendered him totally disabled to be a pathologist. Plaintiffs evidence can be summarized as follows: plaintiff remained totally disabled from his occupation as a pathologist; he had four operations since the accident; he remained under the care of physicians for a condition considered to be permanent; plaintiff was being treated for reflex sympathetic dystrophy, thoracic outlet syndrome, and complex regional pain; and plaintiff was taking methadone in addition to other medications to control pain caused by the injuries to his right shoulder and arm. By contrast, defendant presented evidence that: plaintiff was exaggerating his physical condition; he had financial motivations to claim a total disability; he had pre-disability occupational duties consisting of administrative and managerial functions; and plaintiff could still perform administrative and microscopic duties that he had performed prior to his disability.

B. Discussion

1. The alleged errors regarding "substantial and material" duties

Plaintiff argues there was error in connection with the admission of evidence and jury instructions on total disability benefits. Plaintiff argues the trial court erroneously: denied his in limine motion to exclude evidence of duties and activities he performed that were unrelated to the special skills required to practice pathology; refused jury instructions concerning which duties may be properly considered in determining the "substantial and material" duties of a pathologist; and responded to the jurys question regarding consideration of additional activities by plaintiff.

a. admission of evidence

Plaintiff argues the trial court should have granted his in limine motion to exclude evidence of duties and activities he performed that were unrelated to the special skills required to practice pathology. We review a ruling admitting or excluding evidence, including those made in limine, for abuse of discretion. (People v. Williams (1997) 16 Cal.4th 153, 196; People v. Alvarez 1996) 14 Cal.4th 155, 201.) A trial court has broad discretion in ruling on the admissibility of evidence. (Evid. Code § 352; People v. Williams, supra, 16 Cal.4th at p. 196; People v. Karis (1988) 46 Cal.3d 612, 637; Tudor Ranches, Inc. v. State Comp. Ins. Fund (1998) 65 Cal.App.4th 1422, 1431.) An abuse of discretion is established only where there is a clear showing the ruling exceeded the bounds of reason under all the circumstances. (Walker v. Superior Court (1991) 53 Cal.3d 257, 272; People ex. rel Lockyer v. Sun Pacific Farming Co. (2000) 77 Cal.App.4th 619, 639-640.) As will be noted, the trial court acted within the allowable scope of its discretion.

Plaintiff argues the trial court erred in denying the in limine motion to exclude evidence that he had performed administrative duties as a co-director or laboratory owner prior to his accident. Plaintiff argues the evidence should have been limited to "the special skills and duties necessary to perform medical procedures that only pathologists are trained to perform," including fine needle biopsies, frozen sections, bone marrow aspirations, microscopic diagnosis, autopsies, and related medical procedures.

Plaintiff has the burden of proving that he is totally disabled within the meaning of the policy. (Royal Globe Ins. Co. v. Whitaker (1986) 181 Cal.App.3d 532, 537; American Home Assurance. Co. v. Essy (1960) 179 Cal.App.2d 19, 23.) The policy in this case defines the term "total disability" as: "1. [Y]ou are not able to perform the substantial and material duties of your occupation; and [¶] 2. [Y]ou are receiving care by a Physician which is appropriate for the condition causing the disability." The policy defines occupation as: "[Y]our occupation means the occupation (or occupations, if more than one) in which you are regularly engaged at the time you become disabled. If your occupation is limited to a recognized specialty within the scope of your degree or license, we will deem your specialty to be your occupation."

The policy definition is consistent with the standard set forth by the Supreme Court in Erreca v. Western States Life Ins. Co. (1942) 19 Cal.2d 388, 396, which explained: "According to overwhelming authority, the term `total disability" does not signify an absolute state of helplessness but means such a disability as renders the insured unable to perform the substantial and material acts necessary to the prosecution of a business or occupation in the usual or customary way. Recovery is not precluded under a total disability provision because the insured is able to perform sporadic tasks, or give attention to simple or inconsequential details incident to the conduct of business [citations]. Conversely, the insured is not totally disabled if he is physically and mentally capable of performing a substantial portion of the work connected with his employment. He is not entitled to benefits because he is rendered unable to transact one or more of the duties incidental to his business [citations]." (Accord, Bareno v. Employers Life Ins. Co. (1972) 7 Cal.3d 875, 886-887; Austero v. National Cas. Co. (1978) 84 Cal.App.3d 1, 19-20, overruled on different grounds in Egan v. Mutual of Omaha Ins. Co., supra, 24 Cal.3d at p. 824, fn. 7.)

No abuse of discretion occurred. As this case aptly demonstrates, the determination of what professional activities any insured is regularly engaged in at the time of the injury may be a fact-based issue. This case involves a pathologist who was also an entrepreneur. It is conceivable that the administrative portions of plaintiffs duties as a pathologist were so peripheral to the material and substantial duties of his occupation that he was totally disabled by the accident and his subsequent surgeries. By contrast, it is also conceivable that plaintiffs administrative and managerial responsibilities had become the material and substantial duties of his occupation so that the inability to perform the hands-on work did not render him totally disabled. In this case, it was disputed whether and to what extent plaintiffs pre-accident duties as a pathologist consisted of administrative and managerial duties rather than hands-on pathology work. That percentage and the issue of how plaintiff spent the bulk of his time either in hands-on work as a pathologist or as a medical director and laboratory owner were disputed. There was no clear indication from the record that plaintiff spent the majority of his time performing only the specific duties such as autopsies, rapid frozen section, gross dissections of organs and specimens, bone marrow aspirations, fine needle biopsies, and microscopic diagnosis. The evidence was unclear as to whether immediately preceding the accident plaintiff was predominantly or equally engaged in operating and managing the enterprise or was actually doing hands-on pathology work the majority of the time. Given the conflicting evidence about what his pre-occupational duties consisted of plus the conflicting evidence of whether plaintiff was exaggerating his injuries, no abuse of discretion occurred.

Even if it was error to admit the evidence, it was not prejudicial error. (Cal. Const. art. VI, § 13; People v. Earp (1999) 20 Cal.4th 826, 880.) Article VI, section 13 of the California Constitution provides: "No judgment shall be set aside, or new trial granted, in any cause, on the ground of . . . the improper admission . . . of evidence, . . . or for any error as to any matter of procedure, unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice." A "miscarriage of justice" means it is reasonably probable that the jury would have reached a result more favorable to the appealing party in the absence of error. (People v. Earp, supra, 20 Cal.4th at p. 880; People v. Wharton (1991) 53 Cal.3d 522, 571, fn. 10; People v. Watson (1956) 46 Cal.2d 818, 836; People v. Steele (2000) 83 Cal.App.4th 212, 224-225.) After examining the entire cause, we cannot conclude that there has been a miscarriage of justice requiring the verdict to be set aside on the grounds set forth. (Cal. Const. art. VI, § 13; Evid. Code, § 353; People v. Breverman (1998) 19 Cal.4th 142, 174.)

b. the jury instruction

Plaintiff argues the trial court erred in refusing to give two proposed special instructions. The first proposed instruction No. 3.1 concerned the term "occupation" and provided: "The disability insurance policy issued by [defendant] provides that if [plaintiff] is not able to perform the substantial and material duties of pathology, he is entitled to disability benefits even if [he] engages in another occupation or earns income from another occupation or from another source." The trial court also refused proposed special instruction No. 4 which provided: "Administrative duties and other non pathology duties should not be considered to be part of the substantial and material duties of an occupation if they are something that are incidental to the primary duties of the occupation. [¶] With a physician, the substantial and material duties of his occupation are the special duties associated with the practice of his particular specialty in medicine, not the administrative duties that are incidental to it."

The jurors were instructed: "Plaintiff seeks a determination as to whether he is totally disabled as that term is applied to the insurance policy in this case. Plaintiff has the burden of proving by a preponderance of the evidence all of the facts necessary to establish the essential elements of [his] claim. . . . [& para;] The term `total disability as applied to the insurance policy in this case means a disability that prevents the insured from engaging with reasonable continuity in the substantial and material acts necessary to pursue his usual occupation in the usual or customary way. [¶] If the insured is physically and mentally capable of performing a substantial portion of his usual occupation in the usual or customary way, he is not totally disabled. Total disability does not mean an absolute state of helplessness, nor the ability of the insured to perform sporadic tasks or simple details incident to the conduct of his particular occupation. Plaintiffs usual occupation is that of a pathologist."

During deliberations, the jury requested clarification regarding the meaning of disability as it referred to plaintiffs usual occupation. A jury note asked: "Clarification on the following—The language regarding `disability determination refers to [plaintiffs] `usual occupation. We realize that pathologists do technical things such as microscopic examinations, frozen section, etc—But—it has been shown in court that [plaintiff] also engaged in Administrative, marketing, management, and client-relations work. May we consider these additional activities as being part of his `usual occupation?" Judge Flier replied: "In response to your question: You may consider those work related acts that [plaintiff] engaged in prior to his accident. [¶] Then you must determine which of those acts were substantial and material. Then please reread jury instruction #310. (pg. 21.)"

Plaintiff argues the jury should have been instructed to consider only those responsibilities that were necessarily involved in the practice of pathology in determining the duties of his "occupation" and not what he was "actually" doing at the time of the accident. We disagree. The trial courts instructions plus the response to the jurys question were consistent with the California Supreme Court standard in Erreca v. Western States Life Ins. Co., supra, 19 Cal.2d at page 396. In addition, as we have concluded, the issue of whether the administrative duties were substantial and material to plaintiffs occupational duties as a pathologist was properly submitted to the jury. Plaintiffs proposed instructions would have taken from the jury the factual determination of which duties were "substantial and material" for purposes of determining whether he was totally disabled from his occupation. As noted above, the evidence was conflicting about the actual work and the percentage of time plaintiff engaged in hands-on work in his occupation as a pathologist rather than engaging in substantial and material duties as an administrator of the business. The jury was correctly instructed.

2. Hireability issues

a. plaintiffs two contentions

Plaintiff argues that the trial court erroneously excluded opinion testimony concerning hireability because there was evidence that plaintiff was required to take methadone. Plaintiff also claims the trial court erroneously refused his proposed special instruction No. 5 which stated, "In determining whether Dr. Light is totally disabled from practicing pathology you must consider the likelihood that anyone would employ Dr. Light given the evidence you have during this trial."

b. admissibility of evidence

In ruling on the in limine motion, the trial court relied upon the testimony from the first trial which resulted in a mistrial declaration on May 16, 2001. Here, plaintiff wanted to present evidence that due to taking methadone he: could not be credentialed; would not be given staff privileges at a medical facility; would not have patients referred to him; and would be practicing below the standard of care to perform pathology. However, the trial court concluded that the witnesses from which plaintiff sought to elicit the evidence were not sufficiently qualified to testify on methadone and its effects and, therefore, could not render such an opinion. We review a decision to exclude evidence because witnesses are not sufficiently qualified to offer opinion testimony on a particular subject for an abuse of discretion. (People v. Catlin (2001) 26 Cal.4th 81, 131; People v. Davenport (1995) 11 Cal.4th 1171, 1207.)

Based on the record provided by plaintiff, he has failed to demonstrate an abuse of discretion occurred. Plaintiff relies upon Moore v. American United Life Ins. Co. (1984) 150 Cal.App.3d 610, 617-630. Moore held that the trial court "did not err" in permitting evidence to be presented that an insured under a total disability policy would be unable to "find[] and hold[]" a job. (Id. at pp. 630-631.) Moore did not hold that in every case an aggrieved policyholder can present evidence concerning the ability to find and hold a job; rather, it concluded the trial judge reasonably could have allowed that evidence to be presented to the jury. Moreover, Moore involved a total disability policy. (Id. at p. 617.) The present policy provided for benefits when plaintiff was unable to perform the occupation he was regularly engaged in at the time he became disabled. Whether he could be employed elsewhere was not directly at issue. Rather, the issue was whether plaintiff could be employed in his occupation; which depending on the evidence that was credited was as a pathologist or an entrepreneur operating Empire.

The incomplete evidence provided by plaintiff from the initial trial which resulted in a hung jury was as follows. Prior to the accident, plaintiff admitted he was operating Empire. Plaintiff testified he "usually" went to Empires offices "a couple of days" apparently a week. Plaintiff testified, "I simply go in for business purposes, to review accounts, discuss things with my office manager, my lab director, and then I usually go home." When asked to define the percentage of time spent prior to the accident spent on "outpatient" activities, plaintiff testified he did not know how to answer the question. When testifying at the initial trial, plaintiff held himself out as a co-director of Empire. Plaintiffs business card indicated he was Empires co-director. In the past, plaintiff had advertised over the Internet he was Empires medical director. Prior to the accident, plaintiff was contractually obligated to devote his full professional time to managing Empire. At the time of the initial trial, plaintiffs responsibilities included: encouraging hospitals to use Empire for their pathology needs; problem solving; assisting the business over the telephone; attending meetings; do computer work; deal with financial issues; and arrange the financial aspects of equipment acquisition. A claim form provided to defendant described plaintiffs post-accident duties as follows: "All his duties, which he does on a part-time basis, consist of administrative, marketing, and public relations. [Plaintiff] handles calls and meeting with clients, vendors, attends Smith Klein meetings, personnel meetings, deals with financial issues, and equipment acquisition."

Prior to the accident, Julie Isaacs, plaintiffs office manger, testified he was her "boss." Prior to the accident she described her "boss" as being both plaintiff and Dr. Boynton. Ms. Isaacs described plaintiff as the "owner/CEO" of Empire.

Dr. Christopher OCarroll testified for plaintiff. By the time of the initial trial, Dr. OCarroll was not plaintiffs primary treating physician. Dr. OCarroll only saw plaintiff relatively infrequently; about once a year. Dr. OCarroll described the examinations during the relatively infrequent meetings as follows, "[I]ts more of an eyeballing." At one point, plaintiff was switched from morphine for pain treatment to methadone. Dr. OCarroll prescribed methadone for plaintiff. According to Dr. OCarroll, the effect of methadone would depend on the dose and how long the drug has been ingested by the patient. The effect of methadone was "very relative." A patient taking methadone could suffer from a "lack of judgment." Dr. OCarroll did not believe plaintiff should be practicing medicine while taking high dosages of drugs. However, Dr. OCarroll could not accurately describe how long plaintiff could practice pathology during a typical day because of the drug use.

Dr. Stephen A. Geller believed plaintiff could not practice pathology. Dr. Geller as asked, "Would you hire [plaintiff] as a pathologist?" After responding in the negative, Dr. Geller testified: "Because—one, because of his Methadone dependence. I dont think the hospital would allow him to be hired, but I certainly would not." But Dr. Geller denied he was an expert on methadone. Dr. Geller also admitted he did not know the specific side effects of methadone. Dr. Geller did not know of any literature or rules of the American Medical Association which indicated a methadone patient could not practice pathology.

Dr. Garry Brodey testified that plaintiff was dependent on methadone. In terms of plaintiff being employed by a hospital, Dr. Brodey testified, "Any hospital Ive been associated [with] would probably not grant him privileges as long as he is dependent on Methadone." But Dr. Brodey admitted he was unfamiliar with: methadone doses; methadone "in detail"; and the "common and uncommon side effects" of methadone.

Doctor Seth Weingarten testified at his deposition: "[M]y preference would be that the person not be on Methadone. I would really have to ask the pathologist whether he felt that being on a pain-relieving medication with hurt a persons ability to read a slide. I wouldnt think it would, but I would really have to defer to a pathologist." Defense counsel attempted to focus on the sentence concerning Dr. Weingartens preference concerning a pathologist conducting examinations while under the influence of methadone. Dr. Weingarten argued that taking that sentence out of context misconstrued his opinion. Defense counsel asked whether it was Dr. Weingartens opinion that it was against the law and constituted medical malpractice for a physician to practice pathology while using methadone. Dr. Weingarten responded: "Im really not familiar with the law on that. So Im going to have to defer. And I may have said that during the deposition, but Im really not clear." Later, Dr. Weingarten changed his testimony and indicated that it would be "against the law" and malpractice for a pathologist to perform "a fine needle biopsy" or a "bone marrow aspiration" while under the influence of methadone. Dr. Weingarten was uncertain as to whether a pathologist could perform a "frozen section" while taking methadone. When asked whether it was his preference that a pathologist did not do a frozen section while on methadone, Dr. Weingarten responded: "Not necessarily. I dont agree with that. What I said in my deposition was that I wouldnt have any personal objection to it, but I would have to ask pathologists how they felt. I think a person on methadone could definitely read slides." In fact, Dr. Weingarten used a pathologist who was highly regarded who used narcotics.

Based on the foregoing, the trial court did not abuse its discretion in concluding that no evidence should be presented on the "hireability" issue. The pertinent issue in this case involved whether plaintiff was disabled under the terms of the policy. Unlike Moore, this is not a total disability case where the issue of whether an insured can obtain any employment is directly relevant in a contract breach action. (Moore v. American United Life Ins. Co., supra, 150 Cal.App.3d at pp. 617-630.) Further, Dr. OCarroll no longer regularly saw plaintiff; only once a year and then only briefly. Moreover, Dr. Geller testified he had limited knowledge of the effects of methadone. Also, Dr. Brodey testified he was unfamiliar with methadone, its dosages, and its side effects. Dr. Weingarten indicated he would have to defer to others in terms of whether it would be unlawful or malpractice for a pathologist to be a methadone user. Under these circumstances, reversal is not a legally viable option. (People v. Burgener (2003) 29 Cal.4th 833, 871; People v. Quartermain (1997) 16 Cal.4th 600, 625; People v. Ramos (1997) 15 Cal.4th 1133, 1175; People v. Davenport, supra, 11 Cal.4th at p. 1207.)

c. instructional error contention

Plaintiff argues that the trial court should have given the "hireability" instruction appearing at page 29, ante. Plaintiff argues the controlling authority is Moore v. American United Life Ins. Co., supra, 150 Cal.App.3d at pages 632-635. Moore does not control the disposition of this case. Moore considered the issue of total disability as defined as an employee being prevented "`from engaging in any occupation or employment for compensation, profit, or gain." (Id. at p. 617.) In this case, the definition of total disability is contained in an "own occupation" policy and is defined as: "1. [Y]ou are not able to perform the substantial and material duties of your occupation; and [¶] 2. [Y]ou are receiving care by a Physician which is appropriate for the condition causing the disability." The policy defined occupation as: "[Y]our occupation means the occupation (or occupations, if more than one) in which you are regularly engaged at the time you become disabled. If your occupation is limited to a recognized specialty within the scope of your degree or license, we will deem your specialty to be your occupation." Thus, the disability policy in this case refers to whether plaintiff was able to perform the substantial and material duties of his occupation. This definition is different from whether plaintiff was employable in any line of work which was the policy at issue in Moore. The issue of whether an employee under the policy in Moore was hireable versus whether plaintiff was able to perform the substantial and material duties is materially distinguishable on that basis.

Further, the definitional instruction actually given on the disability issue is set forth in its entirety at pages 27-28, ante. The instruction defined plaintiffs burden of proof in the terms of the policy language. This is a contract breach case. No error occurred because the trial court used the contract language which defines the type and state of disability that gives rise to a right to benefits. Further, the proffered instruction (see p. 26, ante) was argumentative. The proffered instruction required the jury to consider only plaintiffs performance of the tasks of and employment possibilities as a pathologist. The proposed instruction did not require the jury to consider whether plaintiff was still acting as an entrepreneur in operating Empire. There was conflicting evidence on the question of whether plaintiff could still act as a pathologist but also act as the operator of Empire. Thus the proffered instruction directed the jurors attention to only one issue and was thus argumentative. (People v. Brown (2003) 31 Cal.4th 518, 564; People v. Yeoman (2003) 31 Cal.4th 93, 152.)

In this case, plaintiff continued to work as the medical director and laboratory owner of a pathology business in much the same manner that it was operating prior to the accident. Prior to and after filing his claim under the disability policy, plaintiff operated the Empire venture. The policy language here is different from Moore. No error occurred.

d. prejudice

Even if the evidence was erroneously excluded, reversal of the judgment would only be proper only if plaintiff met his burden of showing a miscarriage of justice. (Cal. Const., art. VI, § 13; § 354; People v. Earp, supra, 20 Cal.4th at p. 880; County of Los Angeles v. Nobel Ins. Co. (2000) 84 Cal.App.4th 939, 944-945.) Plaintiff has not met his burden of showing a miscarriage of justice in this case. For similar reasons, we disagree with plaintiff that the trial courts refusal to instruct the jury on his hireability resulted in prejudicial error. The jury instructions given by the trial court directed the jurors to the definition of disability in the policy which makes no reference to whether plaintiff could be hired by another entity. (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 570-571, 574; People v. Watson, supra, 46 Cal.2d at p. 836.)

3. Plaintiffs medical license

Plaintiff argues the trial court abused its discretion in instructing the jury that the revocation of his medical license due to his disability was irrelevant and in limiting the introduction of evidence on the subject. Plaintiff argues he should have been allowed to present evidence to further develop his theory that he was unable to obtain a license to practice medicine because he takes pain medication. According to plaintiff, this rendered him disabled to practice medicine pursuant to Business and Professions Code section 2441: "Any licensee who demonstrates to the satisfaction of the board that he or she is unable to practice medicine due a disability may request a waiver of the license renewal fee. The granting of a waiver shall be at the discretion of the board and may be terminated at any time. Waivers shall be based on the inability of a licensee to practice medicine. A licensee whose renewal has been waived pursuant to this section shall not engage in the practice of medicine unless and until the licensee pays the current renewal fee and establishes to the satisfaction of the board, on a form prescribed by the and signed under penalty of perjury, that the licensees disability either no longer exists or does not affect his or her ability to practice medicine safely."

We review relevance questions for an abuse of discretion. (People v. Smith (2003) 30 Cal.4th 581, 612; People v. Rowland (1992) 4 Cal.4th 238, 264.) The trial court did not abuse its discretion in concluding that the licensing issue was irrelevant as to whether plaintiff was totally disabled under the circumstances of this case. The issue of plaintiffs license arose when he testified on direct examination that he was on "disability status" with the California Medical Board. When cross-examined, he testified that the board had placed him "in an inactive category, which does not allow me to practice medicine." Plaintiff explained: "[M]y office manager was talking to the state about license issues for two of our pathologists, and she asked, because it costs—its very expensive for us to keep an active pathologist. She asked if there was any kind of category that would be acceptable without losing ones license and they said `Theres an inactive category and you can apply for it."

Thus, plaintiff was placed on inactive status at his officer managers request due to the cost of maintaining the license. There was no evidence the California Medical Board had revoked or suspended plaintiffs license to practice pathology based upon his narcotics use or his disability. Rather, plaintiff requested that he be placed on inactive status in order to save money. Accordingly, the trial court acted within its discretion to limit the evidence on this issue and in instructing the jury because plaintiff had chosen to place himself on this status.

In addition, the trial court properly rejected plaintiffs proposed special instruction No. 8 which provides: "If a physician uses prescription drugs or controlled substances that could impair his ability to practice medicine safely, the physician is totally disabled from performing the substantial and material duties of his occupation. Methadone is a controlled substance. Neurontine is a prescription drug. Elavil is a prescription drug. Diovan is a prescription drug. Clondine is a prescription drug." The trial court properly rejected this instruction for a number of reasons. The proposed instruction is overly broad in that it makes no reference to the amount of drugs being taken, the duration of the impairment, or the physiology of the person taking narcotics. It also attempts to usurp the jurys function in determining whether plaintiffs drug use rendered him totally disabled because he was in fact unable to perform the substantial and material duties of his occupation.

4. The order excluding the testimony of Dr. Arnold Purisch

Plaintiff argues that the trial court erred in excluding the testimony of Dr. Arnold Purisch. Plaintiff contends the September 28, 2001, ex parte order which purportedly barred Dr. Purisch from testifying was prejudicial error. We review the courts choice of a discovery sanction for abuse of discretion. (Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1244; Kuhns v. State of California (1992) 8 Cal.App.4th 982, 988; Laguna Auto Body v. Farmers Ins. Exchange (1991) 231 Cal.App.3d 481, 491, disapproved on another point in Garcia v. McCutchen (1997) 16 Cal.4th 469, 478, fn. 4.)

On July 25, 2001, pursuant to Code of Civil Procedure section 2034, subdivision (a)¹, defendant served a demand to exchange expert witness lists. The specified date for exchange of expert witness information was August 14, 2001. On August 13, 2001, defendant served its expert witness designation pursuant to section 2034, subdivision (f).² On August 13, 2001, plaintiff served a written objection to defendants expert witness designation. On August 17, 2001, defense counsel responded to plaintiffs August 13, 2001, objection. In the August 17, 2001, letter, defense counsel extended the time to respond to the July 25, 2001, expert witness exchange until August 24, 2001. On August 24, 2001, plaintiff served his further expert witness designation. The August 24, 2001, further expert witness designation listed nine witnesses in addition to plaintiff. Attached to the designation was the expert witness declaration. As to each of the nine nonparty experts, the declaration described their anticipated testimony as follows, "Said expert is expected to testify as to the nature and extent of Plaintiffs injuries and how such injuries prevent Plaintiff from performing the substantial and material duties of his occupation."

1 Code of Civil Procedure section 2034, subdivision (a) states: "After the setting of the initial trial date for the action, any party may obtain discovery by demanding that all parties simultaneously exchange information concerning each others expert trial witnesses to the following extent: [& para;] (1) Any party may demand a mutual and simultaneous exchange by all parties of a list containing the name and address of any natural person, including one who is a party, whose oral or deposition testimony in the form of an expert opinion any party expects to offer in evidence at the trial. [¶] (2) If any expert designated by a party under paragraph (1) is a party or an employee of a party, or has been retained by a party for the purpose of forming and expressing an opinion in anticipation of the litigation or in preparation for the trial of the action, the designation of that witness shall include or be accompanied by an expert witness declaration under paragraph (2) of subdivision (f). [¶] (3) Any party may also include a demand for the mutual and simultaneous production for inspection and copying of all discoverable reports and writings, if any, made by any expert described in paragraph (2) in the course of preparing that experts opinion." Unless other wise indicated, all future statutory references are to the Code of Civil Procedure.

2 Section 2034, subdivision (f) states: "All parties who have appeared in the action shall exchange information concerning expert witnesses in writing on or before the date of exchange specified in the demand. The exchange of information may occur at a meeting of the attorneys for the parties involved or by a mailing on or before the date of exchange. [¶] (1) The exchange of expert witness information shall include either of the following: [¶] (A) A list setting forth the name and address of any person whose expert opinion that party expects to offer in evidence at the trial. [¶] (B) A statement that the party does not presently intend to offer the testimony of any expert witness. [¶] (2) If any witness on the list is an expert as described in paragraph (2) of subdivision (a), the exchange shall also include or be accompanied by an expert witness declaration signed only by the attorney for the party designating the expert, or by that party if that party has no attorney. This declaration shall be under penalty of perjury and shall contain: [¶] (A) A brief narrative statement of the qualifications of each expert. [¶] (B) A brief narrative statement of the general substance of the testimony that the expert is expected to give. [¶] (C) A representation that the expert has agreed to testify at the trial. [¶] (D) A representation that the expert will be sufficiently familiar with the pending action to submit to a meaningful oral deposition concerning the specific testimony, including any opinion and its basis, that the expert is expected to give at trial. [¶] (E) A statement of the experts hourly and daily fee for providing deposition testimony and for consulting with the retaining attorney."

On September 14, 2001, after Dr. Valdezs deposition, defendants attorney, Nicole Y. Pomerantz, wrote plaintiffs counsel, Mr. Kahn. In her September 14, 2001, letter, Ms. Pomerantz wrote: "[A]t Dr. Valdez[s] deposition today, I got the impression that you planned to have your experts testify about [plaintiffs] limitations from a psychiatric or psychological standpoint and that you might have had [plaintiff] undergo testing to support your position. This is not what any of your experts were identified to testify about, and, as you know, you have not provided us with any additional records in response to our request for production, which you indicated you if any existed." The parties exchanged communications in which they acknowledged that all of the designated witnesses would actually not be testifying.

On September 17, 2001, Ms. Pomerantz was advised by Mr. Kahn that Dr. Purisch had conducted neuropsychological testing of plaintiff. Also on September 17, 2001, prior to the deposition of Dr. Purisch, Ms. Pomerantz wrote Mr. Kahn: "As I have previously indicated, depending on the testing Dr. Purisch performed, [defendant] may need to request additional neuropsychological testing on [plaintiff]. You have indicated that you will not allow any such testing or examination. Because [plaintiffs] expert disclosures were untimely, we may request the court to preclude any of them from testifying, unless, at the very least, we are given the right to examine [plaintiff] as necessary to refute such expert testimony." Based on this state of affairs, the trial court barred Dr. Purisch from testifying unless plaintiff submitted to psychological testing. Plaintiff never filed a section 2034, subdivision (k) motion to augment his August 24, 2001, expert witness list and declaration.

Without abusing its discretion, the trial court could have reasonably found that the expert witness declaration was inadequate concerning the anticipated testimony of Dr. Purisch. The purpose of the expert witness declaration was described by the California Supreme Court as follows: "[T]he very purpose of the expert witness discovery statute is to give fair notice of what an expert will say at trial. This allows the parties to assess whether to take the experts deposition, to fully explore the relevant subject area at any such deposition, and to select an expert who can respond with a competing opinion on that subject area. `The opportunity to depose an expert during trial, particularly if the testimony relates to a central issue, often provides a wholly inadequate opportunity to understand the experts opinion and to prepare to meet it. [Citations.] (Kennedy & Martin, Cal. Expert Witness Guide [Cont.Ed.Bar 1998] § 10.18, at p. 267.) `[T]he need for pretrial discovery is greater with respect to expert witnesses than it is for ordinary fact witnesses [because] . . . the . . . other parties must prepare to cope with witnesses possessed of specialized knowledge in some scientific or technical field. They must gear up to cross-examine them effectively, and they must marshal the evidence to rebut their opinions. (1 Hogan & Weber, Cal. Civil Discovery (1997) Expert Witness Disclosure, § 10.1, p. 525.) `Late disclosure of experts . . . frustrates the very purposes of the discovery statutes, and should be permitted, with appropriate safeguards and limits, only when absolutely necessary to avoid a miscarriage of justice. (Kennedy & Martin, Cal. Expert Witness Guide, supra, § 10.18, at p. 268.)" (Bonds v. Roy (1999) 20 Cal.4th 140, 146-147; see Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2003) ¶ 8:1669, p. 8J-14 (rev.#1, 2002) ["To be meaningful, enough facts and opinions should be disclosed to enable the opposing party to determine whether to depose the expert, and to prepare for cross-examination and rebuttal at trial." (Original italics)].)

Without abusing its discretion, the trial court reasonably could have concluded that the omission from the expert witness declaration that Dr. Purisch had conducted neuropsychological testing warranted the conditional exclusion order. On August 24, 2001, plaintiff served his further expert witness designation. The August 24, 2001, expert witness designation identified nine separate witnesses and described their testimony using the exact same language—"Said expert is expected to testify as to the nature and extent of Plaintiffs injuries and how such injuries prevent Plaintiff from performing the substantial and material duties of his occupation." The description of Dr. Purischs anticipated testimony made no reference to neuropsychological testing of plaintiff. More to the point, the expert witness declaration never indicated that Dr. Purischs testimony would involve the results of neuropsychological testing of plaintiff. It was not until September 17, 2001, that defense counsel learned plaintiff had been tested by Dr. Purisch. Under the terms of section 2034, subdivision (j), the trial court had discretion to exclude Dr. Purischs testimony. (§ 2034, subd. (j)³; Bonds v. Roy, supra, 20 Cal.4th at p. 143.)

3 Section 2034, subdivision (j) states: "(j) Except as provided in subdivisions (k), (l), and (m), on objection of any party who has made a complete and timely compliance with subdivision (f), the trial court shall exclude from evidence the expert opinion of any witness that is offered by any party who has unreasonably failed to do any of the following: [¶] (1) List that witness as an expert under subdivision (f). [¶] (2) Submit an expert witness declaration. [¶] (3) Produce reports and writings of expert witnesses under subdivision (g). [¶] (4) Make that expert available for a deposition under subdivision (i)."

Two further points are in order. To begin with, the trial court could condition its exclusion order on defendant voluntarily agreeing to undergo psychological testing. The exclusion order was entered on September 28, 2001—five days before the scheduled retrial date. It would have been very difficult to secure an order for psychological testing prior to the retrial. Plaintiff could have agreed to undergo the psychological testing even at that date under the express terms of section 2021.⁴ Section 2034, subdivision (j) explicitly states that the exclusion remedy is unavailable unless the litigant has "unreasonably failed" to comply a disclosure duty. The trial court could have concluded that if plaintiff agreed to undergo testing, then failure to comply with section 2034, subdivision (f)(2) was no longer unreasonable. Finally, no error occurred because the exclusion issue was raised ex parte. It could have been presented for the first time during trial just before Dr. Purisch testified.

4 Section 2021 provides, "Unless the court orders otherwise, the parties may by written stipulation (a) provide that depositions may be taken before any person, at any time or place, on any notice, and in any manner, and when so taken may be used like other depositions, and (b) modify the procedures provided by this article for other methods of discovery."

5. Evidence of the buyout

Plaintiff contends that the trial court committed prejudicial error in denying an in limine motion to exclude evidence of the buyout policy on relevance and undue prejudice grounds. Plaintiff asserts that because trial on the cross-complaint had been bifurcated, no evidence on the buyout should have been admitted. We disagree.

We review this contention for an abuse of discretion. (Evid. Code, § 352; People v. Williams, supra, 16 Cal.4th at p. 196; Walker v. Superior Court, supra, 53 Cal.3d at p. 272; People ex rel. Lockyer v. Sun Pacific Farming Co., supra, 77 Cal.App.4th at p. 639.) If relevant, evidence of insurance coverage is admissible. (Blake v. E. Thompson Petroleum Repair Co. (1985) 170 Cal.App.3d 823, 831 [`"It has always been the rule that the existence of insurance may properly be referred to in a case if the evidence is otherwise admissible"]; see 1 Witkin, Cal. Evidence (4th ed. 2000) Circumstantial Evidence, § 134, p. 484 ["The fact of insurance or the terms of a policy may be relevant on an issue other than the quality of the insureds conduct, and therefore may be introduced under the doctrine of limited admissibility . . . "].)

The buyout evidence was relevant to establish a motivation by plaintiff to exaggerate his condition to claim a total disability. Plaintiff was injured in 1990 and underwent a number of surgeries. After he was injured, he filed several different claim forms in which he claimed that he was either partially or totally disabled. Eventually plaintiff became involved in a dispute with Dr. Boynton. Plaintiff then submitted claims to defendant indicating he was totally disabled. The trial court read a stipulation which stated: plaintiff and Dr. Boynton began negotiations through their attorneys in an effort to resolve the dispute around November 1993; a settlement agreement was signed in October 1994; and the settlement agreement was effective as of May 18, 1994. In May 1994, plaintiff began to see a physician about increased pain. Plaintiff submitted a claim form for total disability to defendant on May 26, 1994. During the arbitration of the partnership dispute, both partners made a claim under the buyout policy. The buyout policy was only applicable if plaintiff was totally disabled. Thus, the challenged evidence was relevant to the issue of whether the timing of the total disability claim was based on the potential benefits available under the buyout policy.

We also disagree with plaintiff that admission of the evidence was unduly prejudicial. The evidence did tend to support defendants theory that plaintiff might have had a financial motive to seek total disability benefits. However, the fact that evidence is prejudicial does not mean that it must be excluded pursuant to Evidence Code section 352. (People v. Kipp (2001) 26 Cal.4th 1100, 1121; People v. Bolin (1998) 18 Cal.4th 297, 320.) No abuse of discretion occurred.

6. The residual disability evidence

The trial court granted defendants in limine motion to exclude evidence of plaintiffs residual disability. Defendant argued in the trial court that plaintiff was residually disabled. The residual benefits under the policy were calculated by a formula. Plaintiffs income exceeded the limit to qualify for residual benefits. The trial court ruled that defense counsel could argue that plaintiff was residually rather than totally disabled. We disagree with plaintiffs argument that the trial court erred in its in limine rulings concerning evidence of whether he was residually disabled.

First, prior to May 1994, plaintiff made claims for residual benefits under the policy. He then made a total disability claim. The trial court acted within its discretion to allow defendant to show what the residual benefits were given that plaintiff made both types of claims under the policy at issue in this case.

Second, the fact that plaintiff was not allowed to claim he could not receive residual benefits does not require the judgment be reversed. It is undisputed that plaintiffs income would have barred a claim for residual benefits. As the trial court pointed out, plaintiff requested that evidence concerning his finances and economic status be excluded. However, in order to argue that he did not qualify for residual benefits would have been inconsistent with his request to exclude evidence of his financial status. The trial court did not exceed the bounds of reason in resolving the residual disability issue against plaintiff.

7. Attorney and expert witness misconduct

a. overview of pertinent legal principles

Plaintiff argues that defense counsel and one of defendants witnesses, Dr. Weingarten, engaged in a pattern of misconduct that was sufficiently prejudicial to constitute reversible error. The Court of Appeal has synthesized California misconduct law in the following manner: "`"`The right of counsel to discuss the merits of a case, both as to the law and facts, is very wide, and he has the right to state fully his views as to what the evidence could afford shows, and as to the conclusions to be fairly drawn therefrom. The adverse party cannot complain if the reasoning be faulty and the deductions illogical, as such matters are ultimately for the consideration of the jury." (People v. Beivelman (1968) 70 Cal.2d 60, 76-77 [], overruled on other grounds in People v. Green [(1980)] 27 Cal.3d 1, 33, quoting People v. Eggers (1947) 30 Cal.2d 676, 693 [], and People v. Sieber (1927) 201 Cal. 341, 355-356 [], disapproved on other grounds in People v. Marsh (1962) 58 Cal.2d 732, 746 [].) `Counsel may vigorously argue his case and is not limited to "Chesterfieldian politeness." (People v. Bandhauer (1967) 66 Cal.2d 524, 529 [], cert. den. in Bandhauer v. California (1967) 389 U.S. 878 [], quoting Ballard v. United States (9th Cir. 1945) 152 F.2d 941, 943, revd. on other grounds (1946) 329 U.S. 187 [].) `An attorney is permitted to argue all reasonable inferences from the evidence, . . . (Brokopp v. Ford Motor Co. [ (1977)] 71 Cal.App.3d 841, 860-861.) `Only the most persuasive reasons justify handcuffing attorneys in the exercise of their advocacy within the bounds of propriety. (Beagle v. Vasold (1966) 65 Cal.2d 166, 181-182 [].)" (Grimshaw v. Ford Motor Co. (1981) 119 Cal.App.3d 757, 799.) Further, it is presumed that any misconduct is cured by appropriate corrective admonitions by the trial court. (Horn v. Atchison, T & S. F. Ry. Co. (1964) 61 Cal.2d 602, 610; Tobler v. Chapman (1973) 31 Cal.App.3d 568, 576-577.)

Also, except on one occasion, none of alleged acts of misconduct were assigned as such in the trial court. Further, no request for a curative admonition was ever sought by plaintiffs counsel in the trial court. Hence, we agree with defendant that none of plaintiffs misconduct contentions have been preserved for appeal. This constitutes waiver of the opportunity to raise the misconduct issue on appeal except on the one occasion the misconduct assignment was actually asserted. (Whitfield v. Roth (1974) 10 Cal.3d 874, 891-892 [`"Generally a claim of misconduct is entitled to no consideration on appeal unless the record shows a timely and proper objection and a request that the jury be admonished. . . . In the absence of a timely objection the offended party is deemed to have waived the claim of error through his participation in the atmosphere which produced the claim of prejudice"]; Horn v. Atchison T. & S. F. Ry. Co., supra, 61 Cal.2d at p. 610 [same].)

b. references to Ms. Cannons report

Plaintiff argues that defense counsel made improper references to Ms. Cannons May 1995 report during the trial and in argument to the jury. At the outset, it is appropriate to identify the circumstances under which both parties referred to Ms. Cannons report. During his opening statement, Mr. Kahn referred to Ms. Cannons report. According to Mr. Kahn: "[Defendant] hired a woman by the name of Paula Cannon, a vocational specialist. Her job is to determine what are the duties of your occupation because thats the issue when you have a disability claim. [& para;] The evidence will show that she went out to [plaintiffs] facilities. He showed her how things were done, or he had people show her the equipment that he used in the procedures they did. She did a complete assessment and did a very long report for [defendant] and explained why he was disabled. And [defendant] accepted that report and paid his claim. That was done in 1993. [¶] In her report, [plaintiffs] duties are doing frozen sections and fine needle biopsies and bone marrow aspirations, broad dissections, and all the other things that I told to about." When subject to direct examination by Mr. Kahn, plaintiff was shown the report. Plaintiff was asked if he saw the date of the report and whether it was entitled, "Cannon Vocational Services?" Plaintiff testified on direct examination: he met with Ms. Cannon before his fourth surgery; he cooperated with Ms. Cannon; and he explained the various tasks performed by a pathologist to Ms. Cannon. While subject to direct examination, plaintiff read from or related limited portions of Ms. Cannons report including: a sentence indicating plaintiff was a pathologist who performed several job duties; an analysis of plaintiffs job duties; and the fact the report makes no reference to being a medical director as an important duty on plaintiffs part. Further, plaintiff testified he made his records available to Ms. Cannon and he cooperated with her. Moreover, plaintiff denied telling Ms. Cannon that being a medical director or performing administrative work was an important duty in his occupation. All of this occurred on direct examination while plaintiff was being questioned by Ms. Kahn.

Plaintiff argues the following constituted misconduct: asking two questions where a hearsay objection was sustained concerning Ms. Cannons report; asking questions about the percentage of plaintiffs time that was spent prior to the accident performing "microscopic diagnosis" ; asking the same question of Ms. Issacs, plaintiffs office manager; stating during closing argument that the jurors knew what Ms. Cannons report stated; and indicating during closing argument that the jurors had not seen Ms. Cannons report because plaintiff had never reviewed it. In terms of this latter point, plaintiff argues that defense counsel improperly stated during closing argument that "they" blocked the jurors view of Ms. Cannons report. Specifically, defense counsel argued, "I submit to you that they must have figured that, although they could try and argue that [plaintiff] had never seen the Cannon report, and they could block it from evidence that way . . . ."

As to all of the contentions except the alleged "block[ing]" of the jurors access to Ms. Cannons report, the misconduct allegations have no merit. It was not misconduct for defense counsel to ask questions concerning a report which plaintiff testified to on direct examination. Further, some of the alleged misconduct in this regard was never objected to in the trial court. Other than the reference to "block[ing] allegation, no misconduct occurred in connection with Ms. Cannons report.

As to "block[ing]" contention, we agree that there was no evidence to support the contention that any inappropriate conduct was engaged in by plaintiff to prevent the jury from reading Ms. Cannons report. No doubt, defense counsel was correct that plaintiffs attorney, Mr. Kahn, had prevented the jury from finding out about certain contents of Ms. Cannons report because of hearsay objections. But there was no evidence of any inappropriate conduct on the part of Mr. Kahn or plaintiff in terms of preventing the jury from reviewing Ms. Cannons report. However, any prejudice from this one sentence unsubstantiated allegation that plaintiff prevented the jury from reading Ms. Cannons report in the midst of a lengthy trial was obviated by the trial courts prompt admonition to the jury to disregard defense counsels argument. The trial court allowed the attorneys to approach the bench where Mr. Kahn interposed a vague objection—he did not assign defense counsels "blocking" argument as misconduct. The trial court then advised the jury: "I want to indicate that last comment was stricken. There is no evidence that anything has been intentionally blocked or concealed. Theres been no such evidence." It is presumed that the jury followed the trial courts admonition. (People v. Burgener, supra, 29 Cal.4th at p. 870; People v. Arias (1996) 13 Cal.4th 92, 148.) Plaintiffs arguments that the references to Ms. Cannons report require reversal are without merit.

c. attacks on opposing counsel

Plaintiff argues that defense counsel made personal attacks against Mr. Kahn during closing argument. No objection was interposed to the alleged misconduct and this issue is therefore waived. (Whitfield v. Roth, supra, 10 Cal.3d at pp. 891-892; Barajas v. USA Petroleum Corp. (1986) 184 Cal.App.3d 974, 986.)

d. wealth, activities, and travel by plaintiff

Plaintiff contends that the defense counsel improperly made inquiries in the areas of wealth, recreational activities, and travel. Prior to trial, the trial court granted plaintiffs in limine motions concerning: plaintiffs wealth ; evidentiary matters developed from an improperly served subpoena duces tecum ; and where plaintiff traveled. The in limine order concerning the travel location issue was somewhat unclear as to its scope. The trial court ruled: "Now, thats something that you would have to approach, so do not mention—you could say that—you can use generic expressions such as he engaged in activities that would seem to be inconsistent, as opposed to saying he did A, B, C, and D without first approaching." Defense counsel responded: "As I get close to those questions, Ill approach and well deal with it." The trial court responded, "Im talking about [the] opening statement." In other words, the trial court appeared to limit its ruling to references to wealth, financial information, and travel to defense counsels opening statement.

Later, while being cross-examined, plaintiff was questioned about: an interrogatory that inquired about travel outside California ; fishing out of state ; and fishing in Alaska. Plaintiffs wife was asked where she and her husband had gone on their boat. Objections to each of these questions were sustained. Hence, the jury never had any evidence before it that plaintiff had in fact traveled outside of California. The in limine ruling arguably can be construed to mean that the aforementioned questions set forth in this paragraph violated the trial courts order concerning asking about travel destinations without first approaching the bench and presumably securing permission to inquire in these areas. On the other hand, the oral in limine order indicates it was limited to defense counsels opening statement. However, the trial court, after sustaining plaintiffs counsels objections, instructed the jury, "Ill strike everything about locations and you are to disregard it as if it had not been said." It is presumed the jurors followed the trial courts orders in this regard. (People v. Burgener, supra, 29 Cal.4th at p. 870; People v. Arias, supra, 13 Cal.4th at p. 148.)

Other than the references to ultimate destinations, no other questions were even arguably inappropriate. The trial courts in limine order permitted inquiries concerning recreational activities. Further, on direct examination, plaintiffs wife testified that he could no longer play tennis as he once had. She testified plaintiff could not play golf after the accident. The trial court could reasonably conclude that plaintiffs ability to travel and engage in various recreational activities was pertinent to the extent of his alleged disability. More to the point though, asking questions in areas which the trial court indicated were proper was not misconduct. No prejudicial misconduct occurred.

e. the buyout, arbitration, and settlement agreement

The parties disputed whether the buyout was relevant. Defendants theory was that the buyout and the total disability claim were not coincidences but were evidence that plaintiff switched his claim to total disability in 1994 when the partnership was dissolved. The parties stipulated that the trial court would read the following to the jury: "The settlement agreement between Dr. Light and Dr. Boynton that is dated May 18, 1994, that was referred to at trial, was actually signed in October of 1994, but was to be effective as of May 18, 1994. . . . The negotiations between Dr. Lights attorneys and Dr. Boyntons attorneys, . . . commenced about November of 1993."

During argument, defense counsel stated: "[O]n the very day that their agreement was made effective, May 18, 1994, [plaintiff] called Dr. OCarroll and said that his condition, pain condition, had suddenly worsened. Now they tried to argue the timing here is mere coincidence. I submit to you thats nonsense. [Plaintiff] and Dr. Boynton reached some kind of deal by May 18." The trial court sustained plaintiffs counsels objection to the argument and instructed the jury to disregard it. First, no analysis has been presented as to why this argument to the jury was misconduct or prejudicial. An argument made on appeal without a factual analysis and legal authority on each point made may be deemed waived. (People ex rel. Dept. of Alcoholic Beverage Control v. Miller Brewing Co. (2002) 104 Cal.App.4th 1189, 1200; In re Marriage of Nichols (1994) 27 Cal.App.4th 661, 672-673, fn. 3; Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 979; Metzenbaum v. Metzenbaum (1950) 96 Cal.App.2d 197, 200.) Second, defense counsels comment appears to have been within the parameters of the stipulation; i.e., the trial court probably acted outside the scope of its allowable discretion in directing the jury to disregard the argument. Third, the jurors are presumed to have followed the trial courts admonition. (People v. Burgener, supra, 29 Cal.4th at p. 870; People v. Arias, supra, 13 Cal.4th at p. 148.)

f. suggesting evidence that will call for hearsay

Plaintiff challenges the manner in which questions by defense counsel were posed. For example, defense counsel asked witnesses "would you agree with me" pose questions that would lead to hearsay. Because no argument is made on appeal as to why the questions amount to attorney misconduct rather than simply amounting to an arguably objectionable style of questioning witnesses, the contention is deemed waived. (People ex rel. Dept. of Alcoholic Beverage Control v. Miller Brewing Co., supra, 104 Cal.App.4th at p. 1200; Metzenbaum v. Metzenbaum, supra, 96 Cal.App.2d at p. 200.) In any event, the record shows that the trial court raised the issue and instructed defense counsel not to phrase the questions in such a manner. No prejudicial misconduct has been shown.

g. existence of equipment and people to assist a disabled pathologist

Plaintiff argues defense counsel violated an in limine ruling excluding evidence of the existence of equipment and people who could assist a disabled pathologist to practice pathology. Prior to trial, the trial court granted plaintiffs in limine motion which sought exclusion of, "Any reference to the existence of equipment that can assist a disabled pathologist to perform pathology." (Original italics.) Also, the trial court granted an in limine motion which sought to exclude the following: "(1) The existence of pathologists that practice `without any hands; [¶] (2) The opinion that if a right handed pathologists right hand becomes disabled, he can practice pathology with his left hand; [¶] (3) The effects of managed care on career opportunities in pathology[; ] [¶] (4) The existence of equipment or people that can assist a disabled pathologist to perform pathology." The latter motion was specifically directed at preventing a defense witness, Dr. Barry F. Silverman, a pathologist, from testifying concerning the existence of other ways plaintiff could continue to practice pathology. However, as to this latter motion, the trial courts ruling was unclear. The following occurred: "[Defense counsel]: [C]ould I just ask [for] clarification, so I know. The clarification is what I gather youre saying is . . . that we look at what [plaintiff] had around at the time he became injured. And I can talk about that, but I cant talk about changes, new microscopes that he didnt have or additional assistants that he didnt use? [& para;] THE COURT: Thats correct or hiring more people to help him do some things. [¶] . . . [W]hatever he did at the time that he was injured or applied for total disability can be used. If he used two assistants and he would need four, he could just talk about the two. If he used a certain kind of microscope, thats what he can talk about, not new hires." Plaintiffs counsel then asked, "What if the microscope existed, but he didnt use it?" The trial court responded, "I just said, `What he used." Thereupon, the following transpired: "[Defense counsel]: But what if there are two microscopes sitting on the desk, he could use either one. He had them both. [¶] THE COURT: If he had them? [¶] [Defense counsel]: That counts, if he had them? [¶] THE COURT: If he had them, thats fine."

Later, plaintiff called Dr. Stephen Geller, a anatomical and clinical pathologist, to offer opinion testimony. On direct examination, Dr. Geller testified that two hands were necessary to perform microscopic diagnosis. When cross-examined, Dr. Geller admitted: a standard microscope can be adjusted with either hand; a microscope could be placed on a higher or lower table; and adjustments for ergonomics could be made. Defendant called Dr. Silberman, a pathologist, to testify. Dr. Silberman was asked the following questions: "Do you think it would take much training for a right-handed person to try to learn to focus with the left hand?"; "Is that within the custom and practice to rest his arms if he needs to?"; and "Does a pathologist need two hands in order to perform microscopic diagnosis?" Plaintiffs counsels relevancy objections to each of these questions was sustained.

Plaintiff argues the foregoing questions to which relevancy objections were sustained violated the in limine motion order. (Plaintiffs counsel never objected on the basis of the in limine motion order.) Defendant argues that Dr. Gellers questions "opened the door" so as to allow defense counsel to ask the four questions. Reversal is unwarranted. To begin with, the "clarification" by the trial court prevented inquiries concerning technology changes or use of additional staff which would allow a disabled pathologist to engage in the practice of pathology. None of the questions focused on new technologies or staffing changes; just on established workplace realities for all pathologists. One question, "Do you think it would take much training for a right-handed person to try to learn to focus with the left hand?" can arguably be read to violate the second aspect of the in limine ruling, "The opinion that if a right handed pathologists right hand becomes disabled, he can practice pathology with his left hand . . . ." But of course the trial courts "clarification" would allow for questioning in this area so long as it did not involve new technology or staffing changes. On balance, we conclude no misconduct occurred given the trial courts clarification. None of plaintiffs other contentions in this regard have any merit. Finally, there has been an insufficient showing of the requisite prejudice to permit reversal because: the objections were sustained; none of the challenged evidence was before the jury; and Dr. Gellers unobjected to testimony made it clear that either hand could be used to adjust a microscope and other modifications could be made to accommodate a disabled pathologist. (Cal. Const., art VI, § 13; People v. Watson, supra, 46 Cal.2d at p. 836.)

h. information about Empires income and size

Plaintiff argues defense counsel committed misconduct by asking two questions in violation of an in limine order excluding evidence of Empires size. The in limine motion at issue sought an order prohibiting defense counsel from making inquiries with reference to and introducing evidence of: "The income of Empire Pathology (the laboratory [plaintiff] owns) or the number of people it [employs], referring to Empire as `the largest pathology laboratory in Southern California, or otherwise referring to or suggesting the size or income generated by Empire." The trial court granted the in limine motion. Two questions were asked which plaintiff contends were misconduct. The first question was, "Is it true that in the seven to eight months before your car accident, Empire hired 15 new people to assist in the outpatient lab prior to the accident?" The relevancy objection was sustained to this question. We agree that the question violated the in limine order but no prejudice resulted. The second question asked much later in the trial was whether people were hired when the lab was opened. The relevancy objection was overruled. By this time, the trial court had obviously changed its opinion concerning the relevancy of this area of questioning. Plaintiff does not argue the trial courts obvious change of mind was error. It was not misconduct to seek the admission of admissible evidence.

i. argumentative questioning of witness

Plaintiff testified about the percentage of time he spent performing his pathology duties prior to the accident. When cross-examined, plaintiff was asked: if he practiced the number prior to trial so that the total would be 100 percent; whether he rehearsed the figures; and whether he had an explanation as to why the numbers added up to 100 percent. The trial court overruled his objections to these questions. The questions were appropriate cross-examination and were designed to test plaintiffs credibility. (Evid. Code, § 780; People v. Humiston (1993) 20 Cal.App.4th 460, 479.)

Plaintiff also argues he was inappropriately cross-examined about: whether he tried to lead Ms. Cannon to believe that his pathology duties were more physical then they actually were; whether he stood by the representations he made to Ms. Cannon; why he took the title "medical director" off his business card; and whether he advertised his position with Empire as "medical director." To the extent the questions could be considered inappropriate, the trial court sustained objections to the questions, so no prejudice occurred.

j. the purported misconduct by Dr. Weingarten

Plaintiff contends that Dr. Weingarten engaged in misconduct. Dr. Weingarten accused Mr. Kahn of asking "misleading questions" and being "ridiculous." Plaintiff reasons as follows: Dr. Weingarten was a designated defense expert witness; Dr. Weingarten engaged in misconduct by characterizing Mr. Kahns inquiries as "ridiculous" and "misleading"; and Dr. Weingartens misconduct was therefore attributable to defendant. Dr. Weingarten was under oath and if his opinion testimony was subject to misleading cross-examination and mischaracterization, it was not misconduct to so testify. This contention has no merit. (People v. Navarette (2003) 30 Cal.4th 458, 508.)

C. Order Denying Motion for Costs

Plaintiff appeals from an order denying his motion for costs as the prevailing party on a cross-complaint brought against him by defendant pursuant to section 1032. Defendants April 20, 1999, cross-complaint contained two causes of action. The first cause of action was for declaratory relief. The second cause of action was for restitution of benefits paid under defendants buyout policy. The trial court did not err in refusing to award costs to plaintiff after judgment was entered in his favor on the cross-complaint seeking restitution.

Prior to trial, the parties each filed summary judgment or adjudication motions which litigated issues concerning defendants cross-complaint. On May 9, 2000, the trial court granted summary adjudication in favor of defendant on the declaratory relief cause of action. In granting summary adjudication on the declaratory relief cause of action, the trial court reasoned that Empire did not buy out Dr. Lights interest as contemplated by the policy. The court ruled: "The parties agree that the question raised by this Motion, whether there was a total buyout as contemplated by the Buyout Policy, is a question of law for the Court to adjudicate by way of summary adjudication. . . . [¶] [Plaintiff] contends that he totally was disabled and thereafter was bought out of Empire. He argues that he is entitled to use the monies paid to him under the Buyout Policy however he sees fit, including to repurchase Empires `assets, because the Buyout Policy does not expressly restrict how the insured may spend the monies paid under the Buyout Policy. Provident argues that no [buyout], as contemplated by the Buyout Policy, ever occurred and that [Drs.] Boynton and Light essentially `scammed the monies from Provident by claiming there was a buyout, giving the monies to [Dr.] Light, who then used those monies to purchase `assets of Empire. [¶] The only reasonable interpretation of what constitutes a [buyout] or purchase under the Buyout Policy is that the owner . . . would cease to have any ownership interest in the business. That did not occur here. Although [Dr.] Light may no longer be a [partner] in Empire, he continues to own and operate the same portion of Empires business he did before he claimed total disability. While the Buyout Policy does not expressly limit what [Dr.] Light may do with the monies paid to him under the Buyout Policy, [Dr.] Lights interpretation of the Buyout Policy contradicts the spirit and intention of the Buyout Policy. The purpose of a disability buyout policy is to pay disability benefits to an insured who is disabled and can no longer operate his business. It does not make sense to allow [Dr.] Light to receive these benefits under the guise of being disabled, yet allow him to retain the business he claimed he could no longer operate because of said disability. [¶] [Dr.] Light is not permitted to recoup the $1 million from Provident and maintain control and operate the business he purportedly was bought out of." Plaintiff does not challenge the May 9, 2000, ruling as it relates to defendants declaratory relief claims concerning the purported buyout.

After summary adjudication was entered on the declaratory relief claim, there remained the question of defendants right to restitution for benefits paid under the buyout policy. As noted previously, trial on the remaining restitution cause of action in defendants cross-complaint was severed from the contract breach claim in the complaint. On February 5, 2002, the trial court ruled that defendant was not entitled to restitution under the buyout policy as alleged in defendants cross-complaint because: defendant was guilty of laches; plaintiff had materially changed his position in reliance on defendants initial conclusion concerning his disability; and plaintiff was not unjustly enriched. The trial court also found that plaintiff did not act tortiously or with any wrongful intent and that he had reasonably relied in good faith on the advice of counsel. On March 18, 2002, a judgment was entered on plaintiffs complaint and defendants cross-complaint.

After the trial on the defendants cross-complaint, each party filed cost memoranda. Plaintiff served a memorandum of costs in which he sought $39,837 for costs incurred in defending against defendants cross-complaint. On April 18, 2002, Defendant filed a motion to strike those costs. Plaintiff also filed a motion to tax defendants costs in defense of the complaint. The trial court reduced in part defendants request for costs incurred for successfully defending against the complaint. As to the cross-complaint, the trial court granted defendants motion to strike plaintiffs cost memorandum. The trial court found that plaintiff was not a prevailing party and therefore not entitled to costs on the cross-complaint. Plaintiff filed a timely notice of appeal from the order denying costs.

Plaintiff argues that the trial court erred in denying his cost request because he was the prevailing party on defendants "permissive" cross-complaint. We review a prevailing party determination in a cost dispute for an abuse of discretion. (Heppler v. J.M. Peters Co. (1999) 73 Cal.App.4th 1265, 1298; Lubetzky v. Friedman (1991) 228 Cal.App.3d 35, 39.) Section 1032 provides in part: "(b) Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding." The term prevailing party is defined in section 1032, subdivision (a)(4) as follows: "`Prevailing party includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. When any party recovers other than monetary relief and in situations other than as specified, the `prevailing party shall be as determined by the court, and under those circumstances, the court, in its discretion may allow costs or not and, if allowed may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034." Section 1032, subdivision (a) further provides: "(1) `Complaint includes a cross-complaint. [¶] (2) `Defendant includes a cross-defendant or a person against whom a complaint is filed. [¶] (3) `Plaintiff includes a cross-complainant or a party who files a complaint in intervention."

Under section 1032, subdivision (a)(4), the trial court could correctly find defendant was not the prevailing party. This is because neither plaintiff nor defendant obtained any affirmative relief on the complaint or the cross-complaint. (Building Maintenance Service Co. v. AIL Systems, Inc. (1997) 55 Cal.App.4th 1014, 1015-1026; McLarand, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn. (1991) 231 Cal.App.3d 1450, 1454.) Plaintiff nevertheless claims that the trial court erred because defendants cross-complaint was "permissive" rather than compulsory. We disagree. The express language of section 1032, subdivision (a)(4) provides that defendant is the prevailing party when neither party secures any relief. There is no additional requirement a defendant under these circumstances have proceeded by way of a compulsory cross-complaint.

V. disposition

The judgment is affirmed in all respects. The order denying plaintiff, Jeffrey R. Light, his costs is affirmed. Each party is to bear their own costs on appeal.

We concur: ARMSTRONG, J. and MOSK, J.