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Williamson v. Metropolitan Property and Casualty Insurance Co.

United States District Court, D. New Mexico

April 12, 2018

TERESA WILLIAMSON, Plaintiff
v.
METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant.

          MEMORANDUM OPINION AND ORDER

         This matter comes before the Court on the following motions filed by Plaintiff: (1) First Motion in Limine to Exclude Post Hoc Medical Testimony (ECF No. 165); (2) Second Motion in Limine to Exclude Pre-Accident Medical Records (ECF No. 166); (3) Third Motion in Limine to Exclude Evidence of Previous Litigation (ECF No. 167); and (4) Fourth Motion in Limine to Exclude Evidence of Collateral Source Payments (ECF No. 169). The Court, having considered the motions, briefs, evidence, relevant law, and otherwise being fully advised, will deny the first, second, and third motions in limine, and will grant the fourth motion in limine.

         I. First Motion in Limine to Exclude Post Hoc Medical Testimony

         Plaintiff argues that in bad faith cases the reasonableness of Metropolitan's decision to offer Plaintiff only $1, 000 for her claim must be based on the information it had at the time it made its decision, and thus, medical testimony subsequently acquired, particularly in 2016 from Dr. Davis and Dr. Hermes, is irrelevant and inadmissible. Plaintiff asserts that Metropolitan cannot use their testimony to retroactively justify its decision to offer Plaintiff only $1, 000 in settlement of her claim. Dr. Davis is a medical expert for Metropolitan and Dr. Hermes was one of Plaintiff's treating physicians.

         Defendant notes that Plaintiff is correct that in bad faith cases the inquiry into reasonableness is evaluated under the circumstances at the time, but contends that the testimony of Dr. Davis and Dr. Hermes is nevertheless relevant to Plaintiff's breach of contract claim in Count I for failure to provide underinsured motorist (“UIM”) coverage, Metropolitan's affirmative defense of fraud, and damages. The Court finds that the testimony of Dr. Davis and Dr. Hermes may be admissible for purposes other than the reasonableness of Metropolitan's decision, and therefore, will deny Plaintiff's first motion in limine. See, e.g., Aragon v. Allstate Insurance Co., 185 F.Supp.3d 1281, 1287 (D.N.M. 2016) (“To recover UIM benefits, Aragon must prove the elements necessary for any negligence claim: duty, breach of duty, and causation, and also damages that exceed the limits of the tortfeasor's policy.”). The Court will evaluate the admissibility of the testimony in the context of the presentation of evidence. See Indiana Ins. Co. v. General Elec. Co., 326 F.Supp.2d 844, 846 (N.D. Ohio 2004) (“Denial of a motion in limine does not necessarily mean that all evidence contemplated by the motion will be admitted to trial. Denial merely means that without the context of trial, the court is unable to determine whether the evidence in question should be excluded.”).

         II. Second Motion in Limine to Exclude Pre-Accident Medical Records

         Plaintiff argues evidence of her pre-accident medical records is not admissible because she was asymptomatic at the time of the accident. Defendant disputes that she was asymptomatic and asserts that this Court already ruled that the pre-accident medical records are relevant to its affirmative defense of breach of the insurance contract by fraud. Defendant additionally argues that the records are relevant to Plaintiff's case, which is based on the aggravation of a preexisting condition. Defendant contends that Plaintiff's new expert, Dr. Grace, will testify that the April 2012 accident caused an aggravation to Plaintiff's pre-existing condition, and thus, the pre- accident medical records are relevant to establishing that the pre-existing condition existed in the first place. The Court concludes that the pre-accident medical records are generally relevant and may well be admissible as to one or more of the grounds highlighted by Defendant. The Court will therefore deny the second motion in limine, subject to renewal at trial for objections to specific medical records, which the Court will decide in the context of the presentation of evidence.

         III. Third Motion in Limine to Exclude Evidence of Previous Litigation

         Plaintiff seeks to exclude evidence regarding the litigation over the underlying car collision against the tortfeasor. Specifically, Plaintiff seeks to exclude (i) any testimony from Jerry McClellan, the tortfeasor in the car accident, and his defense lawyer Lance Richards; (ii) statements that Plaintiff made to Mr. McClellan's insurance carrier and defense lawyer; (iii) communications between Thomas Mescall, Plaintiff's lawyer, and Mr. Richards regarding settlement negotiations; and (iv) medical records about which Metropolitan questioned Mr. Richards in his deposition. Plaintiff argues the previous litigation is not relevant to Defendant's decision to offer $1, 000 in settlement or to the defense that Ms. Williamson deceived Metropolitan.

         Defendant asserts that the evidence from the underlying litigation is relevant to Plaintiff's UIM claim, as one of the elements is that the tortfeasor, Mr. McClellan, caused Plaintiff's damages and that the damages are in excess of his policy limits. Defendant further argues that evidence of communications between Plaintiff's counsel and Mr. McClellan's defense lawyer is relevant to Metropolitan's affirmative defense of policyholder dishonesty. For example, Defendant contends that Mr. Richards' testimony will show Plaintiff's counsel was in possession of voluminous prior medical records contradicting Mr. Mescall's assertion in his demand letter that Plaintiff was asymptomatic at the time of the accident.

         Plaintiff's arguments pertain to her bad faith claim, but Plaintiff also has a claim in Count I for breach of contract arising from failure to provide underinsured coverage. See Compl. 4, ECF No. 1-2. The Court will deny Plaintiff's third motion in limine because Metropolitan has established the possible relevance of the evidence from the previous litigation as to either Count I and/or to Metropolitan's affirmative defense. The Court, however, will determine any objections to the admissibility of specific evidence arising from the previous litigation in the context of the trial and the presentation of the evidence.

         IV. Fourth Motion in Limine to Exclude Evidence of Collateral Source Payments

         In the Pretrial Order submitted by the parties, Defendant listed as a contested issue of law: “To the extent Plaintiff's medical bills are admitted, whether the proper measure of damages for medical expenses are what has been paid to each provider in full and final satisfaction of the medical expenses.” Proposed Pretrial Order 7. Plaintiff argues that this issue has been conclusively decided by New Mexico courts, which have held that the appropriate measure of medical expenses is the amount billed by medical service providers, not the discounted amounts accepted as payment from the health insurer. Plaintiff thus asserts that Defendant should be prohibited from commenting or offering evidence to establish that the appropriate measure of medical expenses incurred by Plaintiff is the amount actually paid.

         Defendant asserts that there is a split in authority on whether evidence of write-offs should be excluded from trial under the collateral source rule. Defendant argues that medical providers routinely inflate invoices, knowing that insurers will pay reduced amounts, so the best evidence of the “reasonable expense” of medical services is the amount the medical provider agrees to accept from someone as full payment. Defendant therefore requests the Court determine as a matter of law that the reasonable value of medical services is the amount paid and accepted by the healthcare provider, or alternatively, the Court allow all relevant evidence concerning the practices of medical practitioners in submitting inflated invoices with the expectation those invoices will be reduced, including evidence of the write-off amounts.

         The collateral source rule provides that payments made to or benefits conferred on an injured party from a collateral source are not credited against the tortfeasor's liability. Prager v. Campbell County Mem. Hosp., 731 F.3d 1046, 1058-59 (10th Cir. 2013). See also Selgado v. Commercial Warehouse Co., 1974-NMCA-093, ¶ 14, 526 P.2d 430 (stating that New Mexico's collateral source rule is that “[c]ompensation received from a collateral source does not operate to reduce damages recoverable from a wrongdoer”). “A plaintiff may recover medical expenses and lost wages incurred by a defendant's negligence, even though plaintiff may have had such items paid for by insurance or otherwise, ” and such a payment “should not diminish the amount of damages recovered” by a plaintiff in an action based on the defendant's negligence. Bailey v. Jeffries-Eaves, Inc., 1966-NMSC-094, ¶ 45, 414 P.2d 503. The rule ...


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