Cross-exam about payments to expert improperly excluded

Where the trial court required plaintiff to show a “direct relationship” between a defense expert and defendant’s insurer before allowing the expert to be cross-examined on his prior financial relationship with the insurer, this was error.

Caselaw provides that the standard is a “substantial relationship.” Further, an “insurer’s payment of a considerable sum of money to an expert for his prior testimony favorable to its insureds can be enough to establish a ‘substantial relationship’ on its own.”

Background

Shoemaker, the appellee, rear-ended plaintiff Graves. After the crash, Graves suffered pain in her hip, back and neck, and emotional trauma. Her medical care and physical therapy cost more than $26,000.

Graves sued Shoemaker. State Farm was Shoemaker’s insurer. State Farm hired Cattano to represent Shoemaker. Cattano hired Andrews, “an orthopedic surgeon who specializes in medicolegal work,” as the defense expert.

Andrews reviewed medical records and wrote a report, in which he concluded Graves suffered only minor injuries from the accident and that much of her reported pain was from pre-existing conditions. He also concluded that most of the treatment Graves received after the accident was not medically or reasonably necessary. Andrews billed Cattano’s office $3,362 for his work. State Farm paid the bill.

In a pretrial deposition, Andrews testified that Cattano or his firm had hired him 30 to 35 times over the last 10 to 12 years, and that he testified on behalf of a plaintiff only once. He also admitted that State Farm paid him more than $793,000 from 2012 to 2018 for testimony he provided for their insureds.

“However, he claimed that he was not aware that Shoemaker was insured by State Farm until her counsel told him during the deposition. He explained that he had been retained by Cattano, not by State Farm directly.”

Shoemaker admitted fault. Damages were the issue at trial. Graves sought to introduce Andrews previous relationships with Cattano, his firm and State Farm, citing Lombard v. Rohrbaugh, 262 Va. 484 (2001), in support. The trial court ruled that Graves could introduce evidence of the number of times Andrews and testified on Cattano’s clients in the past but could nor explore Andres’ prior relationship with State Farm.

“In reaching this decision, the court cited the fact that Cattano, not State Farm, hired Dr. Andrews and was billed for his work. The court also noted Dr. Andrews’ contention that he did not know State Farm would ultimately pay his bill when he wrote his report. Thus, the court found, Dr. Andrews was ‘in a distinctly different position than was the expert in Lombard.’

Andrews was the sole defense witness at trial. The jury awarded Graves $3,000. Graves moved for a new trial based on the exclusion of evidence concerning Andrews’ relationship with State Farm. The court denied the motion. Graves appealed.

Substantial relationship

Graves “argues that the court misinterpreted Lombard as holding that a party must demonstrate a ‘direct relationship’ between an expert and an insurance company before cross-examining the expert on previous payments from the insurance company. We agree. …

“[T]he circuit court erred by requiring a ‘direct relationship’ between Dr. Andrews and State Farm. Lombard made clear that in determining whether there is a ‘substantial relationship’ between an insurer and an expert, the central issue is not ‘artificial labels,’ but the ‘potential for bias because of the witness’s interest in the case.’ …

“While the expert in Lombard was hired directly by the insurer and Dr. Andrews was originally retained by defense counsel, this is a distinction without a difference. It is not necessary that an insurer directly hire an expert to establish a ‘substantial relationship,’ but only one of many factors that a trial court can consider.

“An insurer’s payment of a considerable sum of money to an expert for his prior testimony favorable to its insureds can be enough to establish a ‘substantial relationship’ on its own. This was the case here, where Dr. Andrews received nearly $800,000 over the course of seven years from State Farm, an annualized amount similar to what the expert in Lombard received.

“The receipt of such a substantial amount by an expert is enough to create a potential for bias that outweighs any potential harm from the mention of insurance to a defendant. Furthermore, as we emphasized in Lombard, any potential prejudice to a defendant posed by the mention of insurance can be mitigated by giving a limiting instruction to the jury. …

“Moreover, the issue of Dr. Andrews’ bias was a consideration for the jury. Dr. Andrews alleges that he was not aware that State Farm would benefit from his testimony when he wrote his report. The plausibility of that assertion rested on his credibility, which the jury was entitled to consider given his experience working with insurers and defense attorneys.”

Vacated and remanded for further proceedings.

Graves v. Shoemaker, Record No. 191500 (Mims) Dec. 10, 2020. From the Circuit Court of Albemarle County (Hughes). Fletcher W. Harkrader, III (Mark S. Lindensmith; Marks & Harrison, on briefs), for appellant. John P. Cattano (Christopher L. Smith; Central Virginia Litigation, on brief), for appellee. VLW 020-6-075, 6 pp.