Title: Fincher v. Rhyne
Citation: 145 S.E.2d 316, 266 N.C. 64
Docket Number: 291
State: north-carolina
Issuer: north-carolina Supreme Court
Date: December 15, 1965

145 S.E.2d 316 (1965)
266 N.C. 64
Wallace M. FINCHER
v.
Robert R. RHYNE, Sr.
No. 291.

Supreme Court of North Carolina.
December 15, 1965.
*317 Grier, Parker, Poe &amp; Thompson and James Y. Preston, Charlotte, for plaintiff.
Craighill, Rendleman &amp; Clarkson and Hugh B. Campbell, Jr., Charlotte, for defendant.
MOORE, Justice.
Defendant contends that the court erred in refusing to order a mistrial, upon motion made in apt time, when plaintiff testified with respect to defendant's liability insurance, and in commenting on the testimony and charging the jury with respect thereto.
Plaintiff was testifying, on cross-examination, with respect to the damage to his automobile. The following transpired:
Thereafter, in the charge, the court instructed the jury:
"Ordinarily, in the absence of some special circumstance, it is not permissible under our decisions to introduce evidence of the existence of liability insurance or to make any reference thereto in the presence of the jury in the trial of * * * cases" where the relief sought is damages for injuries caused by negligence. Taylor v. Green, 242 N.C. 156, 87 S.E.2d 11; Jordan v. Maynard, 231 N.C. 101, 56 S.E.2d 26; Duke v. Crippled Children's Comm., 214 N. C. 570, 199 S.E. 918; Luttrell v. Hardin, 193 N.C. 266, 136 S.E. 726; Stanley v. Whiteville Lumber Co., 184 N.C. 302, 114 S.E. 385; Lytton v. Marion Manufacturing Co., 157 N.C. 331, 72 S.E. 1055. This rule is almost universal. 21 Appleman: Insurance Law and Practice, s. 12832; Anno.Informing Jury of Liability Insurance, *319 56 A.L.R. 1418; Anno.Showing as to Liability Insurance, 4 A.L.R.2d 761. Since the enactment of compulsory insurance statutes, it has been held in a few jurisdictions, including California, Georgia and South Carolina, that reference to liability insurance is not error. A.L.R.2d Supplement Service (1960) p. 297. However, our decisions, since the enactment of the Vehicle Financial Responsibility Act of 1957 (G.S. §§ 20-309 to 20-319), have adhered to the general rule above stated. Whitman v. Whitman, 258 N.C. 201, 128 S.E.2d 249 (1962); Greene v. Charlotte Chemical Laboratories, Inc., 254 N.C. 680, 120 S.E.2d 82 (1961); Hoover v. Gregory, 253 N.C. 452, 117 S.E.2d 395, 100 A.L.R.2d 341 (1960). From the opinion in Hoover, Stansbury finds "indications that a departure from the rule will not always be censured as severely in the future as it has in the past." Stansbury: North Carolina Evidence, 2d Ed. s. 88.
The existence of insurance covering defendant's liability in a negligence case is irrelevant to the issues involved. It has no tendency to prove negligence or the quantum of damages. It suggests to the jury that the outcome of the case is immaterial to defendant and the insurer is the real defendant and will have to pay the judgment. It withdraws the real defendant from the case and leads the jury "to regard carelessly the legal rights" of the real defendant. "No circumstance, a court has said, is more surely calculated to cause a jury to render a verdict against a defendant, without regard to the sufficiency (weight) of the evidence, than proof that the person against whom such verdict is sought is amply protected by indemnity insurance." 56 A.L.R. 1422. These reasons for exclusion are as valid under compulsory coverage as under voluntary insurance. But it is argued that it is unrealistic to attempt to conceal from juries a fact of common knowledgethe compulsory requirement that all vehicles be insured. Liability insurance coverage is required by law in this State, and such requirement is, of course, a matter of common knowledge, but there are many valid reasons for excluding evidence of, or reference to, such coverage in addition to those mentioned above. There are instances in which insurance exists but under the particular circumstances there is no coverage. The limits of coverage varythe law requires $5000 coverage for injury to one person; all coverage in excess of this amount is voluntary. The jury might infer from the mention of insurance that there is coverage to the extent of the damages prayed for, or they might guess from some reference made that the coverage is only $5000 and be thereby influenced to award inadequate damages. Furthermore, the Vehicle Financial Responsibility Act of 1957 permits the possibility of time gaps in insurance coverage, that is, short periods in which vehicles are uninsured. Faizan v. Grain Dealers Mutual Insurance Co., 254 N.C. 47, 55, 118 S.E.2d 303. If it is realistic to allow testimony and references to liability insurance, it would be more realistic to permit the introduction of the terms of the policy and all questions of coverage in the particular case. Such injection of irrelevant issues would be insupportable. The courts cannot, of course, control the deliberations of the jury when they have retired to make up their verdicts, and cannot "black out" segments of their thinking related to matters of common knowledge. But the courts can now, just as effectively as before the enactment of compulsory liability insurance laws, control the trial and exclude irrelevant facts and confine the evidence and the matters arising during the course of the trial to the issues involved.
Where testimony is given, or reference is made, indicating directly and as an independent fact that defendant has liability insurance, it is prejudicial, and the court should, upon motion therefor aptly made, withdraw a juror and order a mistrial. Luttrell v. Hardin, supra; Allen v. Garibaldi, 187 N.C. 798, 123 S.E. 66; Stanley v. Whiteville Lumber Co., supra; Lytton v. Marion Manufacturing Co., supra. But there are circumstances in which it is *320 sufficient for the court, in its discretion, because of the incidental nature of the reference, to merely instruct the jury to disregard it. Keller v. Caldwell Furniture Co., 199 N.C. 413, 154 S.E. 674; Lane v. Paschall, 199 N.C. 364, 154 S.E. 626; Fulcher v. Pine Lumber Co., 191 N.C. 408, 132 S.E. 9; Gilland v. Carolina Crushed Stone Co., 189 N.C. 783, 128 S.E. 158; Bryant v. Welch Furniture Co., 186 N.C. 441, 119 S.E. 823; Norris v. Holt-Morgan Mills, 154 N.C. 474, 70 S.E. 912.
Plaintiff was being cross-examined in regard to incidental items of damage to his automobile. He made reference to "defendant's insurance company." Defendant's counsel, in an unobtrusive manner so as not to emphasize the matter, attempted to interrupt. Plaintiff continued to testify until he had made his full statement, as follows: "* * * they estimated and found out the damage themselves, and, in other words, I was told I think by the defense's insurance company my motor mounts were broken." Thus plaintiff got before the jury that defendant had liability insurance, connected the defendant's and insurance company's interests, and disclosed the company's activity in behalf of the defense. When plaintiff finished his statement, counsel for defendant immediately moved for a mistrial. The court overruled the motion and by extended comment undertook to withdraw the statement from jury consideration. The jury was instructed that the reference to insurance was irrelevant and immaterial. The court obtained a pledge from the jury, by show of hands, that they would not consider it. The court twice announced that defendant had moved for a mistrial but the motion had been denied. He declared: * * * everybody knows the law requires all of you to carry liability insurance * * * there is no need of us pretending about that." There was further comment in the course of the charge.
This case brings us to grips with the question whether our present rule has been rendered obsolete by the Financial Responsibility Act or, to state it another way, whether the goal of fair trial will be as well or better served by a relaxation of the rule. The destruction of landmarks for the mere sake of change is hardly progress toward a better administration of justice. All must agree that evidence of the existence of liability insurance at a trial is irrelevant and immaterial to the issues. When insurance is made a positive element of the trial the danger of injustice either to the plaintiff or defendant is real. Despite the Financial Responsibility Act, many vehicles and motorists are uninsured and if there is insurance the amount varies and the contract does not furnish coverage in many situations. To say or assume that all motorists have automobile liability insurance is a generalization subject to many qualifications. It is suggested that the effect of evidence or mention of insurance should be left to the sound discretion of the trial judge, that is, that the judge, in the exercise of discretion, might order a mistrial or withdraw the matter of insurance from consideration of the jury by proper instructions and permit the trial to continuereserving the right to set the verdict aside if it appears that an unfair result has been reached. Notwithstanding the neatness of the suggestion, it would create more problems than it would solve. What instructions would the court give the jury in withdrawing the matter from their consideration? Would an extensive discussion, as in the case at bar, not tend to impress the matter on the minds of the jury? Should there be a discussion of limits of liability? When true, should the judge state that, though insurance had been mentioned, there was in fact no coverage or disputed coverage? Despite its purpose, would not an instruction pledging the jury not to consider insurance introduce a new element in the trial? Would a mere instruction that the matter is immaterial to the issues suffice to offset the potential effect of the evidence? We are of the opinion that it is best to adhere to the present rule that evidence or mention of insurance *321 is not to be permitted. It is simple to understand and administer. Relaxation of this rule will result in relaxation of the care and caution of attorneys and litigants in excluding this matter from the trials. Juries may indeed consider matters of common knowledge in arriving at verdicts, they have always done so, and it is a matter that the presiding judge cannot control. But the possibility that verdicts may be influenced by extraneous matters beyond the control of the judge is the very reason that the judge may in his discretion set verdicts aside to prevent injustices. When such action is necessary, the judge can take it with much better grace when he has not pledged the jury beforehand.
In the instant case the rule required a mistrial.
New trial.
HIGGINS, Justice (dissenting).
In this case the defendant admitted his negligence, leaving only the amount of damages at issue. All pertinent facts are fully set forth in the Court's opinion. If it be conceded the mention of insurance was improper in the first instance, nevertheless, the trial judge took all necessary precautions to instruct and warn the jury against adding anything to the damages on that account. The plaintiff, a witness in his own behalf, said the defendant's insurance company had told him the engine mounts on his automobile were broken. At this juncture the defendant made a motion for a new trial.
Before ruling on the motion for a new trial, Judge Huskins charged the jury at great length that insurance had no bearing on the amount of damages, if any, which resulted from the accident. Upon inquiry, each of the jurors stated affirmatively that insurance would not influence his answer to the issue of damages. Upon receiving this assurance the court denied the motion for a mistrial.
After the return of the verdict, the judge signed a judgment in accordance therewith. We may rest assured Judge Huskins would not have signed the judgment if he felt the jury had disregarded his instructions and violated its pledge. In order to justify a new trial it is necessary to assume the jurors failed to follow the instructions, failed to keep their individual pledges, and gained their first information the defendant had insurance from the plaintiff's inadvertent reference. May we not assume the jurors already had knowledge that the State law required a showing of financial responsibility? I think the verdict and judgment should stand.