Opinion ID: 1359312
Heading Depth: 1
Heading Rank: 2

Heading: Disclosure of Allstate's interest

Text: In Severson v. Estate of Severson, 627 P.2d 649 (Alaska 1981), this court held that direct actions against liability insurers are not permitted in Alaska. The Estate does not argue that Severson should be overruled. Instead, it contends that once Allstate voluntarily intervened in the case, it was required to disclose its presence to the jury. This argument relies in part on Justice Dimond's concurring opinion in Drickersen v. Drickersen, 604 P.2d 1082 (Alaska 1979). Drickersen involved an intra-family lawsuit arising from an automobile accident in which the defendant-mother's insurance company was the real party in interest. In holding that good faith questioning of prospective jurors regarding insurance connections was permissible, a majority of this court chose not to address whether the presence or absence of liability insurance should have been made known to the jury. Id. at 1085. In his concurring opinion, Justice Dimond argued that the insurer's role as the real party in interest should have been disclosed. He stated that, because jurors on the whole are aware of the widespread existence of laws requiring automobile liability insurance, they would assume that a child's lawsuit against her mother involved insurance. He concluded: In a suit against the mother brought by a child, the insurance company is a real party in interest. I submit that this fact should be honestly faced and that the presence or absence of liability insurance should be divulged to the jury in cases such as this one. It is time to remove from the law the fiction that a child suing her mother for vast sums of money really intends to burden her mother with a resulting judgment, and to collect on the judgment from whatever assets the mother might have. Id. at 1089. Justice Dimond's point is well taken, and we now adopt it as the rule in intra-family lawsuits such as the one at issue here. That is, regardless of whether Allstate had intervened in this action, we believe its interest should have been disclosed to the jury. Without explaining the basic alignment of the parties, and the Robertsons' role as purely nominal defendants, there was a risk of confusing the jurors and unfairly prejudicing them against the plaintiff. In reaching this result, we do not overrule Severson or alter the basic proposition that the existence of insurance is irrelevant to the issue of negligent or wrongful conduct. See Alaska R.Evid. 411. We simply conclude that, in cases such as this, the jury should be provided with some context in order to fully and fairly evaluate the case and the testimony before it. Here, the fact of insurance could have been admitted consistent with Evidence Rule 411 because that information would tend to show the potential bias or prejudice of the Robertsons as witnesses. Despite this conclusion of law, Allstate correctly points out that, to prevail on appeal, the Estate bears the burden of showing prejudicial error. Loof v. Sanders, 686 P.2d 1205, 1209 (Alaska 1984). To do so, the Estate must demonstrate that the failure to disclose Allstate's interest had a substantial influence on the outcome of the case. Id. To assess the effect of this error, this court must put itself in the position of the jury to determine whether the omission probably affected the verdict. Id. (citing Love v. State, 457 P.2d 622, 631 n. 15 (Alaska 1969)). In our view, the Estate has not carried its burden of showing prejudice. Although it raises a speculative possibility of prejudice, the Estate has not convinced us that the failure to disclose Allstate's interest probably affected the verdict. In reviewing the record, we specifically recognize the trial court's substantial efforts to preserve the integrity of the trial, and we see no evidence of jury confusion or undue prejudice against either the Estate or the Robertsons. The record indicates that, over the course of the trial, the jury heard abundant evidence to support the conclusion that Sidney, Jr. intentionally attempted to move the car, and that the Robertsons were not the legal cause of their son's injuries. The Estate's arguments do not convince us that the evidence would have been interpreted substantially differently if Allstate's presence had been disclosed. For this reason, we conclude that the error was harmless, and the jury's verdict should be affirmed. [12]
In sum, we affirm the trial court's decision regarding adversity and subject matter jurisdiction. However, we note that, had the Estate recovered any damages in this case, the Robertsons could not receive any benefit from that award through intestate succession or otherwise, due to the public policy preventing negligent parties from benefitting from their negligent acts. We acknowledge the validity of the Estate's argument regarding disclosure of an insurer's interest in intra-family tort actions such as the present one. For this reason, we believe that in this limited context the jury should be informed of an insurer's interest in order to prevent any undue confusion or prejudice against the parties. Despite this conclusion, we do not believe that disclosure of Allstate's interest in this action would have affected the jury's verdict. Therefore, the failure to inform the jury of Allstate's presence was harmless error. The verdict is AFFIRMED.