Opinion ID: 1359312
Heading Depth: 2
Heading Rank: 3

Heading: Failure to Disclose to the Jury the Insurer's Interests Also Constitutes Substantial Error.

Text: A basis for finding substantial error, however, goes beyond the representation issue since Allstate's interests and role in the litigation were not divulged to the jury. Allstate's covert participation undermines the foundation for the acceptance of intra-family tort liability in this state. This court first recognized this cause of action in Hebel v. Hebel, 435 P.2d 8 (Alaska 1967). In Hebel the court addressed the argument that family harmony would be destroyed by permitting one family member to bring an action against another for damages. The court, as did Justice Dimond in Drickersen, 604 P.2d at 1089 (Dimond, J., concurring), concluded that because most families carry insurance that will pay the damage award, the concern over the degradation of the familial relationship was not a determinative complication that barred the cause of action. Hebel, 435 P.2d at 12 ([A]lthough the existence of liability insurance does not create liability its presence is of considerable significance... .). As this court notes, Op. at 204, the Hebel court observed, Since the insurer is the real defendant, it has been said that there is a danger of fraud and collusion between the parent and child. One may not, of course, deny the hazard, but such a danger, being present in all liability insurance cases, furnishes the reason not for denial of a cause of action, but for added caution on the part of court and jury in examining and assessing the facts. Id. (quoting Badigian v. Badigian, 9 N.Y.2d 472, 215 N.Y.S.2d 35, 42, 174 N.E.2d 718, 723 (1961) (Fuld, J., dissenting)) (emphasis added). The jury in this case, in spite of this need for added caution, was left to speculate on the existence or non-existence of liability insurance. As a result, it may have been concerned that the Robertsons did not carry liability insurance and that a damage award could potentially disrupt the family unit. See Drickersen, 604 P.2d at 1085. Furthermore, it seems indisputable that the jury did not know of, much less understand, the active role of a second attorney who also was representing Allstate: he was concealed from view. Instead, the jury was left with the image of an attorney who impeached the credibility of his own clients. If the jury had been informed of the conflicting interests at stake, their verdict probably would have been different. This too provides a basis for finding substantial error.