Opinion ID: 2545849
Heading Depth: 1
Heading Rank: 3

Heading: Substantial Connection Test

Text: This court historically has held that it is improper for a jury to be informed without good reason that a defendant is covered by insurance. See Bolles v. Kinton, 83 Colo. 147, 153, 263 P. 26, 28 (1928). The rationale behind this evidentiary limitation is obvious; in addition to being irrelevant to the issue of negligence, there is a risk that jurors may return a larger verdict if they know that an insurance carrier will be responsible for the damages. See Smith v. District Court, 907 P.2d 611, 612-13 (Colo.1995); see also John W. Strong, McCormick on Evidence 711-12 (5th ed.1999); Joanne R. Galbreath, Annotation, Propriety and Prejudicial Effect of Trial Counsel's Reference or Suggestion in Medical Malpractice Case that Defendant Is Insured, 71 A.L.R.4th 1025, 1029 (1989). The Colorado Rules of Evidence reflect this principle. CRE 411 states: Evidence that a person was or was not insured against liability is not admissible upon the issue whether he acted negligently or otherwise wrongfully. This rule does not require the exclusion of evidence of insurance against liability when offered for another purpose, such as proof of agency, ownership, or control, or bias or prejudice of a witness. As indicated by CRE 411, evidence of insurance coverage may be admissible if it is offered for a distinct purpose, such as to prove agency, ownership, control, or bias of a witness. The trial court nonetheless may exclude evidence relevant to an issue such as bias if it determines that it is too prejudicial. CRE 403 states, Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice.... We have not yet determined when evidence that a defendant and an expert witness share a common insurance carrier is admissible under CRE 403 to prove bias. However, other jurisdictions have addressed this issue and we look to their reasoning for guidance. A majority of jurisdictions addressing this issue have applied a substantial connection analysis in order to balance the probative value and potential prejudice on the facts of each case. The substantial connection analysis looks to whether a witness has a sufficient degree of `connection' with the liability insurance carrier to justify allowing proof of this relationship as a means of attacking the credibility of the witness. Otwell v. Bryant, 497 So.2d 111, 115 (Ala.1986). These courts have rejected a mere commonality of insurance approach, holding that the likelihood of bias is so attenuated that the risk of prejudice substantially outweighs the probative value. [2] For example, the Alabama Supreme Court refused to allow evidence that an expert witness was insured by the same insurance carrier as the defendant when this was the only connection between the witness and the insurance carrier. See id. at 113-14. However, in another case that court allowed evidence that an expert witness was a member of the board of directors and was employed by the same liability insurer as the defendant. See Hinton & Sons v. Strahan, 266 Ala. 307, 96 So.2d 426, 431-32 (1957). The Oklahoma Supreme Court also has applied the substantial connection test to determine the admissibility of insurance coverage of an expert witness. See Mills v. Grotheer, 957 P.2d 540, 543 (Okla.1998). That court stated that a trial court must determine when an expert's connection to a defendant's insurer is probative enough to substantially outweigh the prejudice to defendant resulting from the jury's knowledge that defendant carries liability insurance. Id. The Oklahoma court pointed to a number of examples when a witness's interest would be direct enough to outweigh the prejudicial nature of the evidence, including when a witness is an agent, owner, or employee of the defendant's insurer. See id. A number of other jurisdictions have applied this same substantial connection analysis. See, e.g., Barsema v. Susong, 156 Ariz. 309, 751 P.2d 969, 974 (1988) (holding that the court committed error when it precluded evidence that the witness was the insurer's vice president and a member of the board of directors); Kelley v. Wiggins, 291 Ark. 280, 724 S.W.2d 443, 447 (1987) (finding there was no abuse of discretion in the admission of evidence of common insurance following a determination that the probative value outweighed the danger of prejudice); Golden v. Kishwaukee Community Health Servs. Ctr. Inc., 269 Ill.App.3d 37, 206 Ill.Dec. 314, 645 N.E.2d 319, 325 (1994) (holding that evidence of a common membership in a mutual insurance company was barred, but evidence that one expert witness had performed significant economic services for the insurer was admissible); Strain v. Heinssen, 434 N.W.2d 640, 643 (Iowa 1989) (holding that, absent an agency or employment relationship, payment by an insurance company in exchange for an expert's testimony at trial was not probative enough to outweigh prejudice); Wallace v. Leedhanachoke, 949 S.W.2d 624, 628 (Ky.Ct. App.1996) (holding that absent a more compelling degree of connection between an expert and a defendant's insurer, there was no abuse of discretion in ruling evidence of commonality inadmissible); Davila v. Bodelson, 103 N.M. 243, 704 P.2d 1119, 1126 (Ct.App. 1985) (stating that the trial court has a great deal of discretion in deciding when to admit this type of evidence, which requires, even when it falls within one of the exceptions to Evid. Rule 411, a balancing of the probative value against the prejudicial effect and against other considerations listed in Evid. Rule 403); Cerasuoli v. Brevetti, 166 A.D.2d 403, 560 N.Y.S.2d 468, 469-70 (1990) (holding that the court achieved a fair balance between the right to attack credibility and the prejudicial effect of introducing the fact of defendant's insurance coverage by permitting plaintiffs to show a witness's prior medical review services for law firms). In addition, a division of the Colorado Court of Appeals addressed this issue in a similar case and ruled such evidence admissible for purposes of showing bias. See Evans v. Colorado Permanente Med. Group, P.C., 902 P.2d 867, 874 (Colo.App.1995), aff'd in part and rev'd in part on other grounds, 926 P.2d 1218 (Colo.1996). In Evans, the defendant physician introduced the testimony of an expert witness who held a position on the board of directors of a physicians' insurance company. See id. at 873. The court of appeals held that the expert's position on the board of a physicians' insurance company at the time he testified at trial had some tendency to make it more probable that the expert was biased. Id. at 874. [3] After considering the reasoning of other jurisdictions that have considered this issue, we hold that the substantial connection test strikes an appropriate balance between the probative value of evidence of an expert witness's potential bias and the prejudicial effect such evidence could have on a jury.