SOLL
v.
PROVIDENT LIFE ACCIDENT INSURANCE COMPANY

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United States District Court, E.D. LouisianaJul 3, 2002
Civil Action No. 00-3670, Section "N" (4) (E.D. La. Jul. 3, 2002)

Civil Action No. 00-3670, Section "N" (4)

July 3, 2002


MINUTE ENTRY


Before the Court are Motions in Limine filed on behalf of defendants, Provident Life Accident Insurance Company and UNUM Provident Corporation ("Provident"), to wit: (1) Defendants' Motion in Limine to Exclude or Limit the Testimony of Ben Frank [Rec. Doc. # 79]; (2) Defendants' Motion in Limine to Limit the Testimony of the Plaintiffs Treating Cardiologist Dr. Ben Jacobs [Rec. Doc. # 80]; (3) Defendants' Motion in Limine to Prohibit Evidence or Reference to the Total Disability Policy Premium Payments made to Provident by Dr. Soll [Rec. Doc. # 81]; and (4) Defendants' Motion in Limine to Preclude Testimonial and Documentary Evidence Relative to the Reliance Disability Policy and Reliance Insurance Company's Payment of Dr. Soll's March 2000 "Total Disability" Claim pursuant to its Policy [Rec. Doc. # 82]. Plaintiff filed a formal response memorandum [Rec. Doc. # 84], opposing the aforesaid motions in limine. Regarding Provident's Motion in Limine seeking to Exclude the Expert Testimony of Louis F. Munro, Jr. [Rec. Doc. # 75], counsel for the plaintiff informed the Court that it does not intend to call Mr. Munro to testify at trial. Provident's Motion in Limine to Exclude Expert Testimony by Louis F. Munro, Jr. shall be DISMISSED AS MOOT, the Court having been advised pursuant to the pre-trial conference that the plaintiff does not intend to call Mr. Munro to testify at trial. The Court addresses those motions which remain pending herein below.

I. Testimony of Ben Frank

Provident submits that, in addition to being the independent sales agent who sold Dr. Soll the total disability policy at issue in the case at bar, "Mr. Frank is a co-worker of Louis Munro, plaintiffs purported `bad faith' expert." See Provident's Memorandum in support of Motion in Limine to Exclude and/or Limit the Testimony of Ben Frank, at p. 1 [Rec. Doc. # 79]. Specifically, Provident contends that Mr. Frank's testimony is deficient in a number of respects, to wit: (1) it is not relevant to any issue in this litigation, and thus will not assist the trier of fact; (2) it constitutes opinion testimony beyond the permissible scope of a fact witness; and (3) his testimony involves interpretation of the policy provisions, for which he is not a qualified witness. Thus, Provident submits that the Court should exclude the following specific testimony by Mr. Frank, to wit: (1) any and all testimony regarding his interpretation of the policy, and his interpretation of marketing materials provided by the plaintiff; (2) any and all testimony regarding his representation to Dr. Soll that the policy would provide coverage in the event that Dr. Soll could no longer practice radiology; (3) his opinion as to whether Dr. Soll's occupation was that of a radiologist; and (4) his factual testimony regarding Dr. Soll's attempt to obtain increased coverage with Provident subsequent to his 1988 heart attack, which applications for coverage were denied in 1991 and 1993, due to Dr. Soll's medical history.

For his part, plaintiff submits that Ben Frank is Provident's agent, who sold him the total disability policy at issue. In this vein, plaintiff contends that representations made to him by Mr. Frank are highly relevant and while potentially prejudicial to the defense, such evidence is not unfairly so. Plaintiff highlights the importance of "the reasonable expectations doctrine," in a case such as this involving an insurance policy which is lacking a definition, which might add some degree of clarity to the terms of "total disability" coverage. Citing this Court's prior Order and Reasons, plaintiff notes the law applicable to this case, to wit:

"Ambiguity is also resolved by ascertaining how a reasonable policy purchaser would construe the clause at the time the insurance contract was entered. See Breland v. Shilling, 550 So.2d 609, 610-611 (La. 1989). The court should construe the policy to fulfill the reasonable expectations of the parties in light of the customs and usage of the industry — i.e., in insurance parlance, the reasonable expectations doctrine. See Louisiana Insurance Guaranty Association, 805 So.2d at 764 (citing La. Civ. Code Arts. 2045, 2050, 2053 and 2054; W. Freedman, 2 Richards on the Law of Insurance § 11:2(g)). Nevertheless, if the policy wording clearly and unambiguously expresses the intent of the parties, the insurance contract must be enforced as written. La. Civ. Code Art. 2046; Shroeder v. Board of Supervisors of Louisiana State University, 591 So.2d 342, 345 (La. 1991)."

Order and Reasons dated June 26, 2002, at p. 9 [Rec. Doc. # 66].

This Court also noted that the intention of the parties is a paramount consideration in the construction and interpretation of contracts of insurance under Louisiana law and that the intention of the parties is properly discerned from the plain, ordinary and popular meaning of language set forth in the policy, with consideration being given to the practical and reasonable construction of the instrument as a whole. Id. (citing Kottle v. Provident Life and Accident Insurance Company, 775 So.2d 64, 75 (La.App. 2nd Cir. 2000), cert. denied, 790 So.2d 635 (La. 2001)). The Louisiana Second Circuit's decision Kottle, construing the terms of "total disability" coverage in a Provident policy, noted that its definition of "total disability" is in harmony Louisiana's unwavering jurisprudential view that "the insured who is unable to perform the substantial and material duties of his occupation is entitled to policy benefits." Id. Recognizing that jurisprudential maxim that "the insured's intent for economic protection from loss of employment should not be thwarted," the Kottle court considered letters authored in 1975 and 1980 by Provident confirming and/or admitting the view that "should disability cause a physician, for example, whose practice is limited to nephrology to be unable to perform the duties of a nephrologist, then we would consider him to be unable to perform the duties of his occupation and eligible for monthly benefits." Id. Unlike the case at bar, the particular policy considered by the court in Kottle involved a "recognized specialty" type of coverage (i.e., the occupation covered was defined in terms of the professional's particular specialty). Nevertheless, the court looked beyond the terms of the policy to letters written at the inception of coverage, to determine the parties' intent regarding economic protection from loss of employment.

Notwithstanding the foregoing, regarding Ben Frank's proposed testimony in the nature of expert opinions which were not discussed with the plaintiff at the point of purchase of the policy, the Court is mindful that compliance with Federal Rule of Civil Procedure 26(a)(2)(A) requires disclosure of the identity of any expert witness. To eliminate unfair surprise, the drafters saw fit to require the parties also to disclose the substance of the expert opinion testimony and the basis of such opinion, inter alia. See Fed.R.Civ.P.26(a)(2)(B) (requiring a party to accompany the disclosure of an expert witness with a complete, written report prepared and signed by the witness).

Rule 26(a)(2)(B) specifically provides that:

(2) Disclosure of Expert Testimony.

* * * *

(B) Except as otherwise stipulated or directed by the court, this disclosure [i.e., identity of witness] shall, with respect to a witness who is retained or specially employed to provide expert testimony in the case or whose duties as an employee of the party regularly involve giving expert testimony, be accompanied by a written report prepared and signed by a witness. The report shall contain a complete statement of all opinions to be expressed and the basis and reasons therefore; the data or other information considered by the witness in forming the opinions; any exhibits to be used as a summary of or support for the opinions; the qualifications of the witness, including a list of all publications authored by the witness within the preceding ten years; the compensation to be paid for the study or testimony; and a listing of any other cases in which the witness has testified as an expert at trial or by deposition within the preceding four years.

Id. (emphasis added).

Rule 701 of the Federal Rules of Evidence addresses opinion testimony of the lay witness, and only applies if the witness is not testifying as an expert. It provides that a non-expert witness may testify in the form of opinions or inferences which are (1) rationally based on the perception of the witness and (2) helpful to a clear understanding of the witness' testimony or the determination of a fact issue. See Fed.R.Evid. 701. Pursuant to Rule 701, a lay witness is limited to opinions or inferences (1) based on personal perception; (2) that an ordinary average person would form from those perceptions; and (3) are helpful to the jury.

See Rushing v. Kansas City So. Railway Co., 185 F.3d 496, 512 (5th Cir. 1999) (quoting United States v. Riddle, 103 F.3d 423, 428 (5th Cir. 1997); Doddy v. Oxy USA, Inc., 101 F.3d 448, 460 (5th Cir. 1996) (a person may testify as a lay witness if his opinions or inferences do not require any specialized knowledge and could be reached by an ordinary person); and Lambeth v. Edison Chouest Offshore, L.L.C., 1999 WL 1204843 (E. D. La. 1999)(Vance, J.) (lay witness lacked specialized knowledge required to assess the quality of medical care he received; lay testimony limited to topics within the witness' personal knowledge, which required neither specialized nor scientific knowledge).

This Court has serious reservations regarding Mr. Frank's "opinion" testimony which addresses the ultimate issue (i.e., the meaning of the coverage terms of the policy). This is particularly true in light of the fact that Mr. Frank has represented that he and the plaintiff did not converse on that issue. It is far from clear in this case that Mr. Frank's undisclosed opinion as a lay witness rests, for its validity, on a factual predicate entirely within his own perception and does not require any specialized knowledge. Suffice it to say, it remains to be determined whether or not his opinions and inferences supporting his lay testimony regarding policy interpretation require specialized knowledge and could be reached by any ordinary person. Accordingly and for the reasons discussed above.

The Court DENIES Provident's Motion in Limine Regarding the Testimony of Ben Frank to the extent it seeks to preclude (1) testimony regarding his actual use of marketing materials supplied by Provident to him, including the subject policy specimen in connection with negotiating the subject contract of "total disability" insurance with Dr. Soll; (2) testimony regarding the representations he actually made to Dr. Soll in negotiating the purchase and any renewals of the subject contract providing "total disability" coverage; (3) his understanding based on his first hand actual knowledge as to what occupation the plaintiff was actually engaged in; and (4) testimony detailing the facts regarding Dr. Soll's attempt to obtain increased coverage with Provident subsequent to his 1988 heart attack, and his handling of the such applications, if any, and their ultimate disposition. Such factual testimony is relevant to number of issues in this case, including but not limited to (1) whether the terms "total disability" coverage under the policy at issue apply in this case, (2) whether Dr. Soll's medical condition (coronary disease) degenerated after his 1988 heart attack to the point of "total disability" by March of 2000, and (3) whether or not it was reasonable for Provident's claims specialist to conclude otherwise.

As to testimony by Mr. Frank in the nature of an "expert opinion" going to the ultimate issue of coverage under the policy, the Court DEFERS ruling on Provident's Motion in Limine until the Court has had the opportunity to hear such testimony in limine. At such time, the Court will determine whether any such proffered testimony is admissible pursuant to Federal Rule of Evidence 701. The Court will not otherwise permit "expert testimony" by this lay witness, as no expert report was authored and timely exchanged in accordance with the Federal Rules discussed herein above.

II. Testimony of Plaintiffs Treating Cardiologist Dr. Ben Jacobs

Provident objects to "expert opinion" testimony by the plaintiffs treating cardiologist Dr. Ben Jacobs, arguing that plaintiff failed to exchange any expert report as required by the Federal Rules of Civil Procedure. Provident contends that it was surprised by the fact plaintiff also intends to offer testimonial evidence at trial in the form of Dr. Jacobs' expert opinion expressing disagreement with the opinion of the Provident's expert Dr. Lawrence O'Meallie, whose expert report was timely exchanged in accordance with the applicable rules. Essentially, Provident objects to any opinion testimony being offered by Dr. Jacobs beyond that of his own observation conducted during his treatment of the plaintiff.

In considering whether to exclude evidence as a means of enforcing a pretrial scheduling order, the Court evaluates the explanation for the failure to comply, any prejudice to the opposing party, the possibility of a curing such prejudice, if any, and the importance of the evidence. See Barrett v. Atlantic Richfield Co., 95 F.3d 375, 380 (5th Cir. 1996); and Geiserman v. MacDonald, 893 F.2d 787, 791 (5th Cir. 1990) (observing that the trial court has "broad discretion to preserve the integrity and purpose of the pretrial order").

First, the defendants have had medical records or reports of plaintiffs treating cardiologist Dr. Jacobs for some time. There can be no claim of surprise, and there is no such claim regarding Dr. Jacobs' opinions concerning his care and treatment of the plaintiff

It is noteworthy that, to the extent that the treating physician testifies as to the care and treatment of his patient, the physician is not to be considered a specially retained expert, notwithstanding that the witness may offer opinion testimony under Fed.R.Evid. 702, 703, and 705. However, when the physician's proposed opinion testimony extends beyond the facts made known to him during the course of the care and treatment of the patient and the witness is specially retained to develop specific opinion testimony, he becomes subject to the provisions of Fed.R.Civ.P. 26(a)(2)(B).

Accordingly, Dr. Jacobs shall be permitted to testify as to his current and past care and treatment of the plaintiff without limitation. As to any comments or opinions that Dr. Jacobs may have or have not expressed in his deposition regarding the opinions set forth in the report of the Dr. O'Meallie, Provident's Motion in Limine is GRANTED. The Court believes the foregoing rulings permitting the testimony of Dr. Jacobs regarding his care and treatment, but excluding other expert opinion testimony which was not memorialized in writing and timely exchanged, preserves the purpose and integrity of the pretrial orders issued in this case and comports with the applicable Federal Rules of Civil Procedure.

III. Evidence of the Amount of the Premium Paid

Since approximately 1985, Dr. Soll has paid over $94,000.00 in insurance premiums to Provident for coverage insuring against the his loss of capacity to work in his occupation. Provident seeks to exclude evidence of Dr. Soll's premium payments dating back to 1985. Plaintiff correctly points out that this is a contract case, pursuant to which he claims entitlement to benefits under a policy of "total disability" insurance. In order to be entitled to benefits, plaintiff is entitled to demonstrate that he held up his end of the bargain by timely paying premiums for the coverage plaintiff has continued to renew for over a decade.

Provident suggests that the parties enter a stipulation as to premium payments for the stated reason that a stipulation would be less prejudicial, perhaps presenting Provident in a better light. Since the defendants opted for trial rather than payment of the total disability benefits allegedly owed, plaintiff has chosen to carry his own burden of proof without the stipulation.

Plaintiff candidly admits that he hopes that the facts of this case which he intends to prove, including the evidence of his timely payments of insurance premiums which have exceeded $94,000.00, will cast Provident in a bad light in the eyes of the jury, and that it will find in plaintiffs favor on the "bad faith" issue. See Plaintiffs Responses to Defendant's Motions in Limine at p. 11. Whether or not the plaintiff himself or his employer actually paid the premium in some of the past years is proper grist for cross-examination.

The issue posed by Provident's motion is whether the facts regarding Dr. Soll's payment of the policy's premiums, which consideration/premiums the plaintiff continues to pay, notwithstanding the denial of his "total disability" claim, constitutes evidence which can be categorized as unfairly prejudicial. See Federal Rules of Evidence 403. Considering that the issues in this lawsuit include whether there is coverage under a contract of insurance, as well as whether Provident's denial of the plaintiffs "total disability" claim constitutes a "bad faith" refusal, this Court finds no unfair prejudice. Suffice it to say', evidence of premium payments is part of the res gestae. The fact of the payments and their total value have a probative value that is not outweighed by any potential for unfair prejudice. Relevant evidence is inherently prejudicial. See United States v. Abrego, 141 F.3d 142, 175 (5th Cir. 1998) (noting that because application of Rule 403 operates to exclude relevant evidence, application of the rule must be cautious and sparing, and in any event, Rule 403 only excludes evidence that would be unfairly prejudicial).

Direct proof of a claim does not create the unfair prejudice that Rule 403 intended to avoid. The touchstone for excluding evidence under Rule 403 is not prejudice, but unfair prejudice, which must substantially outweigh the probative value of the evidence. This Court does not view Rule 403 as a tool designed to permit the trial court to "even out" the weight of the evidence. Instead, there is a place in the courtroom where the skill and acumen of professional trial lawyers should be brought to bear. Indeed. the motion practice presaging the subject jury trial admits that the trial lawyers in this case are keenly aware of the points of contest, and quite capable of fairly evening-out the score at trial on the merits and paring down any inaccuracy or exaggeration, such that it more closely comports with the truth.

The Fifth Circuit in United States v. Pace, 10 F.3d 1106 (5th Cir. 1993), cert. denied, 114 S.Ct. 2180 (1994) observed that:

The exclusion of evidence under Rule 403 should occur only sparingly:
"Relevant evidence is inherently prejudicial; but it is only unfair prejudice, substantially outweighing probative value, which permits exclusion of relevant matter under Rule 403. Unless trials are to be conducted on scenarios, on unreal facts tailored and sanitized for the occasion, the application of Rule 403 must be cautious and sparing. Its major function is limited to excluding matter of scant or cumulative probative force, dragged in by the heels for the sake of its prejudicial effect. As to such, Rule 403 is meant to relax the iron rule of relevance. It is not designed to permit the court to even out" the weight of the evidence, to mitigate a crime, or to make a contest where there is little or none.

Id. at 1115-16 (quoting United States V. McRae, 593 F.2d 700, 707 (5th Cir.), cert. denied, 444 U.S. 862, 100 S.Ct. 128, 62 L.Ed.2d 83 (1979)). Accordingly, Provident's Motion in Limine to exclude payment of premiums is DENIED.

IV. Evidence Regarding Reliance Insurance Company's Adjustment of Plaintiffs Claim

While this is not the usual case of a party plaintiff, or party defendant for that matter, seeking to have the Court try another case, involving an incident which occurred at a different point in time and under a different set of circumstances, admission of evidence of the Reliance payment of Dr. Soll's claim would require a trial within a trial. As the Court previously indicated in the pre-trial conference, it is not so inclined to protract this matter, or to do so unfairly.

Plaintiff argues that the jury should be privy to this evidence of another "total disability" claim to demonstrate that Provident's denial of the very same claim at the very same time under the very same circumstances regarding the same insured was arbitrary and capricious. Plaintiff points out that this "other claim" not only involves the same insured, it involves a total disability policy with substantially similar own occupation "total disability" coverage terms, and the determination of coverage was made on the basis of the same medical history in the light of such substantially similar coverage terms.

However, without the appropriate witnesses (i.e., Reliance's claims specialist) testifying as to why Reliance opted to pay the claim against it and forgo litigation and/or trial, the evidence of Reliance's payment harbors a grave potential for jury confusion. There can be no effective cross-examination of the silent Reliance claims file relative to Dr. Soll's claim, nor the sales and marketing employed to entice the plaintiff to procure the Reliance coverage.

Under the circumstances, evidence relating to Reliance's payment of the plaintiffs claim may well be perceived by the jury as the rule in this case. Absent testimony by a Reliance claims representative, and there is not one such witness listed to testify in this case, the Court can only conclude that the evidence is not admissible. Because the great potential for unfair prejudice substantially outweighs any probative value the evidence may have with respect to any issue in the case, the Court GRANTS Provident's Motion in Limine.

Accordingly, and for all the foregoing reasons, the Court enters the following orders, to wit:

IT IS ORDERED that Provident's Motion in Limine regarding the Payment of Dr. Soll's Total Disability Claim by Reliance Insurance Company is GRANTED. [Rec. Doc. # 82].

IT IS FURTHER ORDERED that Provident's Motion in Limine regarding the Testimony of Ben Frank is DENIED IN PART and to the extent that defendant seeks to preclude (1) testimony regarding his actual use of marketing materials supplied by Provident to him, including the subject policy specimen in connection with negotiating the subject contract of "total disability" insurance with Dr. Soll; (2) testimony regarding the representations he actually made to Dr. Soll in negotiating the purchase of the subject contract providing "total disability" coverage; (3) his understanding based on his first hand actual knowledge as to what occupation the plaintiff was actually engaged in; and (4) testimony detailing the facts regarding Dr. Soll's attempt to obtain increased coverage with Provident subsequent to his 1988 heart attack, and his handling of the such applications, if any, and their ultimate disposition. [Rec. Doc. # 79].

IT IS FURTHER ORDERED that to the extent that Provident seeks an order excluding "opinion testimony" of Mr. Frank going to the ultimate issue of coverage under the policy, the Court DEFERS RULING on Provident's Motion in Limine, which will permit the Court the opportunity to hear such testimony in limine, so as to determine whether the evidence is admissible pursuant to Federal Rule of Evidence 701. [Rec. Doc. # 79].

IT IS FURTHER ORDERED that Provident's Motion in Limine to Exclude Dr. Jacobs' expert testimony is GRANTED IN PART, but only to the extent that it seeks to exclude Dr. Jacobs' comments or opinion testimony regarding the report of Dr. O'Meallie. Otherwise, Dr. Jacobs may freely testify regarding his care and treatment of the plaintiff in this case. [Rec. Doc. # 80].

IT IS FURTHER ORDERED that Provident's Motion in Limine to Exclude Evidence of Premium Payments is DENIED. [Rec. Doc. # 81].

IT IS FURTHER ORDERED that Provident's Motion in Limine to Exclude the Testimony of Louis F. Munro, Jr., is DISMISSED AS MOOT. [Rec. Doc. # 75].


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