A Jury Should Never see Defendant’s Available Liability Insurance

Jury Verdict Equal to Available Insurance Improperly Provided to Jury is Indication of Misconduct

Jurors, willing to give damages for injuries received, should never be allowed to know the insurance available to the defendant since they might consider the available limits in setting damages. In Unit Drilling Company v. Michael Gilmore, Number 13-17-00594-CV, Court of Appeals Thirteenth District of Texas Corpus Christi-Edinburg (October 10, 2019) the jury inadvertently received a copy of the defendant’s available insurance and entered a judgment almost identical to the available limits.

After the trial four jurors told the defendant, Unit Drilling Company (Unit) that they considered the limits when deciding on the amount of damages. Unit appealed a judgment rendered in favor of Michael Gilmore and argued that the trial court erred in denying its motion for new trial based on jury misconduct.

BACKGROUND

Gilmore, a certified technician for Accurate Valve Services (Accurate), was called out to one of Unit’s oilfield sites to repair a seal on a blowout preventer.  On this particular day, Gilmore was “boomed out”—i.e., lifted up by the forklift arms while standing on a pallet—by Unit employee and certified forklift operator Rolando Luna.

As Luna backed up the forklift, he did not check the area for potential hazards, and there was no spotter in place as required by Unit’s safety procedures. The forklift backed over a cable that was stretched across the ground. The cable, which became wrapped in the forklift’s tire, connected to a nearby pulley. The cable broke, sending the pulley flying toward Gilmore. The pulley struck Gilmore’s right hand, causing injury.

Gilmore underwent surgery the following day for a crush injury to the fourth metacarpal bone on his right hand. Three years after his injury, Gilmore was diagnosed with complex regional pain syndrome. Gilmore then underwent a trial implantation for a spinal cord stimulator in December 2015.

The nearly two-week trial concluded with a jury awarding Gilmore $1,025,000 in actual damages and $8,000,000 in exemplary damages. The trial court applied a statutory cap, reducing Gilmore’s judgment against Unit to $943,750 in actual damages and $1,885,000 in exemplary damages, plus pre-judgment interest.

After the jury’s verdict had been received Unit spoke with the jury. Unit was informed that the jury received an unredacted insurance certificate in the jury room. The insurance certificate reflected that Unit had $9,000,000 in insurance coverage. Unit moved for a mistrial and a new trial, arguing there was unauthorized conduct and outside influence causing substantial harm.

Prior to the hearing, the trial court sua sponte quashed the subpoenas. Unit requested to proceed with an evidentiary hearing, which was denied. The trial court denied Unit’s motion for mistrial and motion for new trial.

ANALYSIS

Unit argued that the trial court erred in denying its motion for mistrial because the jury improperly considered an insurance certificate. Misconduct of the jury is a legal phrase meaning an unlawful or unauthorized act done by the jury or any of its members in connection with the trial. It does not necessarily imply an evil or corrupt motive on the part of the jury or the prevailing party.

To obtain a new trial based on jury misconduct, the moving party must show that:

  1. misconduct occurred,
  2. it was material, and
  3. the party probably suffered injury as a result.

Unit complains that the jury received evidence of its liability insurance. During trial, Gilmore offered an exhibit which contained a statement that Unit had $9,000,000 in liability insurance, prompting a bench conference. Although the court agreed that it should be redacted to avoid revealing the limits it was not redacted when it went to the jury for deliberations.

The court of appeal concluded that the jury received a piece of information that was not admitted into evidence, nor intended for their consideration, specifically that Unit had $9,000,000 in liability insurance coverage. Neither party intended for the jury to receive this information. Neither party expected or intended that the jury view the information. Both parties knew that the jury should not have seen the Certificate. The court of appeal concluded that the inadvertent admission of the insurance information was misconduct.

Four jurors filed affidavits and swore that: “[T]he jury considered the $9 million in insurance when reaching a decision to award $8 million in punitive damages.”

Therefore the jury admitted that there was a discussion of the insurance coverage and that it was used to determine the amount of damages. Accordingly, the court of appeal concluded that misconduct was material and probably caused Unit to suffer injury.

The trial court abused its discretion in denying Unit’s motion for new trial.

ZALMA OPINION

The innocent mistake made by providing a certificate of insurance for the jury to review obviously effected the verdict since – before the statutory caps were deleted – was a few dollars over the $9 million in coverage. Although most states do not allow insurance for punitive damages, Texas does, so the insurer and Unit were both damaged by the error. A new trial is the only appropriate remedy and may cause the parties – after a two week trial convinced the jury that exemplary damages were appropriate – to consider a compromise settlement.


© 2019 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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