Cristol, A. Jay

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Civil Procedure -- Discovery -- Insurance

University of Miami School of Law

University of Miami Law SchoolInstitutional RepositoryUniversity of Miami Law Review7-1-1959Civil Procedure -- Discovery -- InsuranceA. Jay CristolFollow this and additional works at: http://repository.law.miami.edu/umlrThis Case Noted is brought to you for free and open access by Institutional Repository. It has been accepted for inclusion in University of Miami LawReview by an authorized administrator of Institutional Repository. For more information, please contact library@law.miami.edu.Recommended CitationA. Jay Cristol, Civil Procedure -- Discovery -- Insurance, 13 U. Miami L. Rev. 489 (1959)Available at: http://repository.law.miami.edu/umlr/vol13/iss4/12CASES NOTEDthat the word "safety" was also included in the Coast Guard regulation.'Liability was imputed for the violation of a statute in a Jones Act case, 0however, this statute contemplated safety of seamen and foreseeability. Themain contention of the majority in the instant case was "the purposeof allocating risks between persons who are more nearly on an equal footingas to financial capacity and ability to avoid the hazards involved." 31 Thisreasoning was prognosticated when the Supreme Court of the United Statesreferred to the Jones Act as welfare legislation.3 2This decision, like many of the decisions under the Jones Act, lightensthe burden for future plaintiff litigants. Because of the vague statutoryconstruction, it seems that the court often enters into the field of legisla-tion. The thin line between statutory interpretation and actual creation ofa new substantive right is indeterminable. If the present trend in govern-ment towards socialization is accepted, no criticism can be made of thealtruistic purposes such decisions pursue. However, certainty in the lawcan never be achieved by obvious stretching of legal terms and theoriesto reach a decision.H. T. MALONEYCIVIL PROCEDU RE-DISCOVERY-INSU RANCEPlaintiff, in a negligence action, sought discovery of the policy limitsof defendant's automobile liability insurance. Held, policy limits are notproper matters of discovery under the Florida Rules of Civil Procedure.Brooks v. Owens, 97 So.2d 693 (Fla. 1957).Since the adoption of the Federal Rules of Civil Procedure1 and similaror identical rules by the several states, the interpretation of the scope ofinformation obtainable by discovery has been in question. The general rule,as laid down in the leading federal case of Hickman v. Taylor,2 is thatdiscovery is not a "matter of unqualified right" but will be granted for"good cause shown" of all "relevant" matters. The purpose of discovery29. 30 Stat. 102 (1951), 33 U.S.C. § 157 (1952), "The Commandant is empoweredto establish rules as to the lights to be carried . . . as he . . . may deem necessary forsafety30.'Fegan v. Lykes Bros. S.S. Co., 198 La. 312, 3 So.2d 632 (1941). Here, a U.S.Department of Commerce regulation was violated and because of the violation, liabilitywas imposed. However, the court in interpreting the statute said that adherence to thestatute was mandatory, that safety of the employee was intended, and that foresecabilitywas present.31. Keman v. American Dredging Co., 355 U.S. 426, 438 (1958). The Court usedthese words in stating that this is the reason magnifications have been made to aidemployees in FELA case. Since the FELA reasoning was being applied the purpose ofthe reasoning was also applicable.32. See cases cited at note 12 supra.1. 335 U.S. 919 (1948); 329 U.S. 837 (1946); 308 U.S. 645 (1938).2. 329 U.S. 495 (1947).3. Balazs v. Anderson, 77 F. Supp. 612 (N.D. Ohio 1948).1959]UNIVERSITY OF MIAMI LAW REVIEWunder the rules was declared "to aid and assist the parties and the courtin the orderly disposition of litigation, but not to supply information forthe personal use of the litigants. 'The relevancy of liability insurance limits has been given diametricallyopposed interpretations in different states.4 The earliest decision denyingdiscovery of liability policy limits, decided prior to the new federal rulesand without reference to state rules on discovery, held policy limits "neithermaterial to the issue nor relevant and competent evidence . . . ." Subse-quent decisions in some state and federal courts held liability policy limitsnot proper subjects of discovery6 though in other jurisdictions discoverywas allowed for "good cause shown" to establish "ownership of a car ' 7 and"control of a stoop."8 Other state and federal courts have held liabilitypolicy limits proper matters of discovery on a basis of relevancy.9 Theopposing decisions in Maddox v. Graurman10 and Jeppesen v. Swanson1made the subject quite popular with legal writers. 12 This precise questionof whether liability policy limits are proper matters of discovery underthe Florida rules had not been decided prior to the instant case. TheFlorida rules. involved are almost identical to the corresponding federal4. Held, not a proper subject of discovery in, federal district courts in Pennsylvaniaand Tennessee. State courts in Florida, Minnesota, Nevada, New Jersey and SouthDakota; Held, a proper subject of discovery in federal district courts in New York andTennessee; State courts in California, Illinois and Kentucky. See cases cited notes 5,6 and 7 infra.5. Coheen v. Goheen, 9 N.J. Misc. 507, 154 Atl. 393 (1931). (The admissibilityas evidence is not in questipn even in jurisdictions which hold liability insurance limitsa proper subject matter of discovery. "It has been judicially determined that theintroduction of such facts and inquiries tends in actual operation to produce a confusionof issues in the mind of the jury and an unfair prejudice against one of the parties,in excess of, and, indeed, in the place of, the legitimate probative effect of suchevidence; in fine, that the true issue before the jury is thereby obscured, rather thanilluminated." Sutton v. Bell, 79 N.J.L. 507, 77 Atl. 42 (1910). See also Annot.,4 A.L.R. 2d 761 (1949). The question of admissibility as evidence is not treatedin this note.6. McClure v. Boeger, 105 F. Supp. 612 (E.D. Pa. 1952); McNelly v. Perry,18 F.R.D. 360 (E.D. Tenn. 1955); Brooks v. Owens, 97 So.2d 693 (Fla. 1957);Jeppesen v. Swanson, 243 Minn. 547, 68 N.W. 2d-649 (1955); Allen v. District Court,69 Nev. 196, 245 P.2d 999 (1952); Bean v. Best, 80 N.W. 2d 565 (S. Dak. 1957).7. Layton v. Cregan and Mallory Co., 263 Mich. 30, 248 N.W. 539 (1933).8. Martyn v. Braun, 270 App. Div. 768, 59 N.Y.S. 2d 588 (1946).9. Orgel v. McCurdy, 8 F.R.D. 585 (S.D.N.Y. 1948); Brackett v. Woodall FoodProducts, Inc., 12 F.R.D. 4 (E.D. Tenn. 1951); Superior Insurance Co. v. SuperiorCourt, 37 Cal. 2d 749, 235 P. 2d 833 (1951); Demarre v. Superior Court, 10 Cal.2d 99, 73 P. 2d 605 (1937); People v. Fisher, 12 II1. 2d 231, 145 N.E. 2d 588 (1957);Maddox v. Crauman, 265 S.W. 2d 939, (Ky. 1954).10. 265 S.W. 2d 939 (Ky. 1954).11. 68 N.W. 2d 649 (Minn. 1955).12. Morse, Discovery of Liability Limits in Suits Where Insurer is not a Party,25 Miss. L.J. 147 (1954); Notes, 9 ARK. L. REv. 412 (1955), 34 'lr.xAs L. REV. 1291955); 9 OKLA. L. REv. 412 (1956), 40 MINN. L. REV. 183 (1956); Young,iscovery by Plaintiff of Defendant's Liability Insurance Coverage, INs. L.J. 503 (1956);Lavorci, Disclosure of Insurance Policy Limits, 6 DEPAUL L. REv. 225 (1957). Seealso Note, 32 NEB. L. REv. 106 (1952).[VOL. XIIICASES NOTEDrules.13 Prior to the adoption of the 1954 Florida Rules of Civil Procedure,14the Supreme Court of Florida held "interrogatories seeking discovery . . .are properly excluded where they seem to elicit testimony wholly irrele-vant. ' 15 A party could not insist as a matter of right that his interrogatoriesbe answered but the matter was within the "sound judicial discretion"of the trial court.' The extent of examination was subject to the samelimitations as a bill of discovery in equity in aid of an action at law,1713.FED.. R. Civ. P. 26(b) FLA. R. Giv. P. 1.21(b)Scope of Examination. Unless otherwise Scope of Examination. Unless otherwiseordered by the court as provided by ordered by the court as provided herein,Rule 30(b) or (d) the deponent may be the deponent may be examined regardingexamined regarding any matter, not privi- any matter, not privileged, which isleged, which is relevant to the subject relevant to the subject matter involved inmatter involved in the pending action, the pending action, whether it relates towhether it relates to the claim or defense the claim or defense of the examiningof the examining party, or to the claim party, or to the claim or defense of anyor defense of any other party, including other party, including the existance,the existance, description, nature, custody, description, nature, custody, condition,condition, and location of any books, and location of any books, documents,documents, or other tangible things and or other tangible things and the identitythe identity and location of persons having and location of persons having knowledgeknowledge of relevant facts. It is not of relevant facts. It is not ground forground for objection that the testimony objection that the testimony will be in-will be inadmissible at the trial if the testi- admissible at the trial if the testimonymony sought appears reasonably calcu- sought appears reasonably calculated tolated to lead to the discovery of admissible lead to the discovery of admissible evi-evidence. (Emphasis supplied]. dence. [Emphasis supplied].FED. R. Civ. P. 34 FLA. R. Civ. P. 1.28Upon motion of any party showing good Upon motion of any party shoving goodcause therefor and upon notice to all other cause therefor and upon notice to all otherparties, and subject to the provisions of parties, and subject to the provisions ofRule 30(b), the court in which an action Rule 1.24(b), the court in which anis pending may (1) order any party to action is pending may (1) order any partyprovide and permit the inspection and to provide and permit the inspection andcopying or photographing, by or on behalf copying or photographing, by or on be-of the moving party of any designated half of the moving party of any designateddocuments, papers, books, accounts, let- documents, papers, books, accounts, let-ters, photographs, objects, or tangible ters, photographs, objects, or tangiblethings, not privileged, which constitute or things, not privileged, which constitute orcontain evidence relating to any of the contain evidence relating to any of thematters within the scope of the examina- matters within the scope of the examina-tion permitted by Rule 26(b) and which tion permitted by Rule 1.21(b) andare in his possession, custody, or control; which are in his possession, custody, oror (2) order any party to permit entry control; or (2) order any party to permitupon designated land or other property entry upon designated land or otherin his possession or control for the pur- property in his possession or control foipose of inspecting, measuring, surveying, the purpose of inspecting measuring, sur-or photographing the property or any veying, or photographing the property ordesignated object or operation thereon any designated object or operation thereonwithin the scope of the examination per- within the scope of the examination per-mitred by Rule 26(b). The order shall mitted by Rule 1.21(b). The order shallspecify the time, place, and manner of specify the time, place, and manner ofmaking the inspection and taking the making the inspection and taking thecopies and photographs and may pre- copies and photographs and may prescribescribe such terms and conditions as are such terms and conditions as are just.just. [Emphasis supplied.] [Emphasis supplied.]14. FA. STATS. Vol. 3 (1957).15. Knight v. Em pire Land Co., 55 Fla. 301, 45 So. 1025 (1908).16. Mutual Beneficial Health and Accident Ass'n v. Bunting, 133 Fla. 646,183 So. 321 (1938).17. Kilgore v. Bird, 150 Fla. 702, 8 So.2d 665 (1942).UNIVERSITY OF MIAMI LAW REVIEWthat is, matters essential to the maintenance or defense of an action.18The sole purpose of discovery was to procure evidence pertinent to theissues.' 9 Subsequent to the adoption of the 1954 rules, the court followedthe language of the rules in holding "any matter, not privileged, whichis relevant to the subject matter involved in the pending action, . . .is a proper subject matter of discovery.20 The test of relevancy was laterdefined as "relevancy to the subject matter of the action rather than theprecise issues framed in the pleadings.'In the instant case the court clearly and concisely explained theconflict of decisions in other jurisdictions. The California cases weredistinguished in that the California Code of Civil Procedure lacks provi-sion for discovery in aid of execution, while such discovery is providedfor by the Florida 22 and Federal 3 Rules. The court reasoned that the basicconcept of our judicial system is to insure citizens of this state entry intothe courts for the purpose of (1) proving liability for an injury and(2) proving damages occasioned thereby. Limits of insurance carried by adefendant in a cause of action are not relevant to either of those basicpurposes. The court recognized that under some circumstances, informationconcerning a policy of insurance may be relevant to the issues of a pendingcause, however, in adopting parts of the Jeppesez24 opinion it concludedthat the arguments presented for allowing discovery of policy limits werecontrary to the intent of the rules.The Florida court has taken a position with the majority of stateswhich hold that discovery of liability policy limits will not be allowed asan unqualified right because such information in itself does not comewithin the scope of relevancy required by the rules. The court indicatedthat a party seeking such information may obtain it by discovery if hecan show good cause why the information is relevant.25The decision of the court in the instant case is a sound interpretationof the intent of the rules. The theory that liability insurance policies inureto the benefit of every person who may be negligently injured by theinsured overlooks the fact thatmany operators of motor vehicles are totallyuninsured. "Every argument that can be made in favor of requiring . . .disclosure could also be made in favor of compelling a defendant in anycivil case, tort or contract, to furnish the plaintiff with full information18. 27 C. J. S., Discovery § 33 (1941).19. Jacobs v. Jacobs, 50 So.2d 169 (Fla. 1951); Fofford v. Wofford, 47 So.2d306 (Fla. 1950).20. Dupree v. Better Way, Inc., 86 So.2d 425 (Fla. 1956).21. Charles Sales Corp. v. Rovenger, 88 So.2d 555 (Fla. 1956).22. FLa. R. Cxv. P. 1.40.23. FED. R. Civ. P. 69 (a).24. See note II supra.25. Brooks v. Owens, 97 So.2d 693 (Fla. 1957) (dictum).[VOL. XlIlCASES NOTEDas to his financial resources, and in the case of an individual as to the fullextent of his private fortune."26The theory that such information would lead to more purposefuldiscussions of settlement thereby coping with today's congested courtdockets and resulting in more effective judicial administration is weak andopen to attack. Its opponents contend that such procedure casts uponour judges the additional burden of being an insurance adjuster, and thatonly a small percentage of such cases actually go to court.27It is admitted that some cases are settled below the actual damagesbecause the plaintiff is unaware of the amount of the defendant's assets.This is true also in cases not involving insurance. It is felt that this problemis for the legislature.28 Todays highways are crowded with incompetentdrivers and unroadworthy automobiles. Financial responsibility need notbe demonstrated until the first accident. When these weaknesses in ourlaws are corrected by proper legislative enactments, there will be no needto bend our very excellent rules of procedure.The dichotomy of decisions is based upon interpretation of the samerules. Both sides draw their conclusions from the same arguments. It isinteresting to note that within a few days of the Florida decision, 29 thesame point was decided conversely by the Supreme Court of Illinois. 0The considerations of "the general welfare" as pointed out in JusticeDrew's dissenting opinion and "effective judicial administration" referredto in People Y. Fisher, 1' the Illinois case, does not justify the straining ofa good rule of procedure. It is strongly contended that the decision ofthe court in the instant case is a sound interpretation of the intent of therules.A. JAY CiusToL26. Annot., 41 A.L.R.2d 968 (1955).27. See the Amici Curiae brief filed by insurance interests in People v. Fisher,12 Ill. 2d 231, 145 N. E. 2d 588 (1957).28. For some interesting aspects of the problem such as compulsory insurance,arbitration, or compensation, see Kuvin, Auto Liability Insurance: What is Its FutureCourse?, Ixs. L. J. 407 (1956).29. Oct. 25, 1957.30. People v. Fisher, 12 Ill. 2d 231, 145 N.E. 2d 588 (1957); Sept. 20, 1957,Modified on Denial of petition of rehearing, Nov. 20, 1957; the court permitted TheAmerican Mutual Insurance Alliances, The Association of Casualty and Surety Companiesand the National Association of Independent Insurers to file a brief as Amici Curiae.The brief was filed on Oct. 15, 1957 but failed to influence the court's ultimatedecision.31. Ibid.1959]

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Civil Procedure -- Discovery -- Insurance

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