Johnson v. State Farm Auto. Ins. Co.

• Decision Date: 25 May 1993
• Docket Number: No. 92-01,92-01
• Citation: 504 N.W.2d 135
• Parties: Judy JOHNSON and Tony Johnson, By His Mother and Next Friend Judy Johnson, Appellants, v. STATE FARM AUTOMOBILE INSURANCE COMPANY, A Corporation, Appellee.
• Court: Iowa Court of Appeals

Page 135

504 N.W.2d 135

Judy JOHNSON and Tony Johnson, By His Mother and Next Friend Judy Johnson, Appellants, v. STATE FARM AUTOMOBILE INSURANCE COMPANY, A Corporation, Appellee.

No. 92-01.

Court of Appeals of Iowa.

May 25, 1993.

Lyle A. Rodenburg, Council Bluffs, for appellants.

Dennis M. Gray of Peters Law Firm, P.C., Council Bluffs, for appellee.

Considered by OXBERGER, C.J., and DONIELSON and SCHLEGEL, JJ.

SCHLEGEL, Judge.

On October 31, 1989, Judy Johnson was driving in Council Bluffs and her son, Tony, was a passenger. They were required to stop behind a school bus on the street. Another motorist, Margaret King, rear-ended the Johnson vehicle. Judy Johnson complained of shoulder and neck pain at the time of the accident. In 1990 she had surgery for a ruptured disc in her back. She has had chiropractic treatment for her back since the time of the accident. Johnson had a considerable medical history prior to the accident in 1989.

King admitted negligence in the accident. Her insurance policy limit was $20,000. In a settlement agreement, King's insurer agreed to pay Johnson $20,000. Johnson's insurer, State Farm Automobile Insurance Company, agreed to the settlement. State Farm paid Johnson $5,000 for medical expenses.

Johnson's insurance policy with State Farm included an underinsured motorist provision. Johnson sued State Farm under this provision, claiming her damages from the accident exceeded the $20,000 she had already received from King's insurer. She also filed a bad faith claim against State Farm. State Farm defended the case on the ground that Johnson's medical problems were not caused by the accident. State Farm admitted it would be liable under the insurance policy if causation and damages were proven.

The case was tried before a jury. On August 27, 1991, by a special interrogatory the jury found the accident with King was not the proximate cause of Johnson's injuries. The court entered judgment for State Farm based on the verdict. The court denied Johnson's motions for judgment notwithstanding the verdict and for new trial.

Additional facts in this case will be addressed as they pertain to the issues raised.

I. Prior to trial, State Farm filed a motion seeking to sever the underinsured claim from the bad faith claim. The district court granted this motion.

Under Iowa Rule of Civil Procedure 186, the question of whether to separate issues for trial is within the trial court's discretion. Handley v. Farm Bureau Mutual Ins. Co., 467 N.W.2d 247, 249 (Iowa 1991). The court there held that a wrongful death action against a tortfeasor should be severed from a bad faith claim against the insurer. Id. at 250. We conclude the district court did not abuse its discretion in severing the underinsured claim from the bad faith claim here.

II. Johnson filed a discovery request seeking the insurer's file, which included the case file from a previous suit she had against State Farm in 1983. State Farm refused this request. Johnson then filed a motion to compel. The district court examined the file in camera, determined it was prepared in anticipation of trial, and ruled it was not subject to discovery.

In Handley, the court found a plaintiff bringing a bad faith claim was entitled to discovery of the insurer's files. 467 N.W.2d at 250. However, Handley did not discuss whether the files were prepared in anticipation of litigation. A routine investigation of an accident by a liability insurer is conducted in anticipation of litigation within the meaning of Iowa Rule of Civil Procedure 122(c). Ashmead v. Harris, 336 N.W.2d 197, 201 (Iowa 1983). A plaintiff then has the burden of showing substantial need and undue hardship. Id. A court has broad discretion in determining whether this showing has been made. Id.

In the present case, Johnson did not make any allegations of substantial need or undue hardship. We conclude the district court did not abuse its discretion in determining State Farm's investigation file was not subject to discovery, at least during the underinsured motorist portion of the suit.

III. Plaintiff did not then see the State Farm file. Apparently, this file contained some medical records of another woman named Judy Johnson, as well as the medical records of the Judy Johnson involved in this case. State Farm did not realize this, and sent the entire medical file to its experts, Dr. Harry Smith, a medical doctor and engineer, and James Wilson, a pharmacist.

The experts developed their opinions based on this partially erroneous information. In fact, Dr. Smith sent State Farm a letter pointing out the inconsistencies between Johnson's statements concerning her medical history and the medical records. The inconsistencies were largely due to the fact that Dr. Smith had the medical records of two different women. Also, Wilson gave the opinion that Johnson abused prescription drugs. However, some of the drugs in question had actually been prescribed to the other woman.

Plaintiff did not discover the problem until August 9, 1991, when in response to a discovery request, State Farm sent her a copy of all materials sent to Dr. Smith. The trial began on August 20, 1991. State Farm agreed to remove the medical records of the other woman from the file.

At the trial, the medical records of Dr. Green, Johnson's chiropractor, were admitted into evidence as Exhibit 15. Johnson objected to the admission of this exhibit. Johnson then learned the medical records of the other woman had somehow gotten into Dr. Green's records. This problem was brought up during closing arguments. The jury had the erroneous records during deliberation. Furthermore, Wilson had created some charts which included the erroneous information, and these too were admitted into evidence.

Johnson filed a motion for a new trial on several grounds. One ground was her claim she was denied a fair trial by the inclusion of the records of another woman throughout the trial. In ruling upon a motion for new trial, broad but not unlimited discretion is vested in the trial court. Kiner v. Reliance Insurance Co., 463 N.W.2d 9, 13 (Iowa 1990).

We determine the district court abused its discretion in not granting Johnson a new trial. Clearly the medical records of another woman were irrelevant and should not have been admitted into evidence. These improper records permeated the whole trial. The improper medical records were not only presented to the jury as an exhibit, but were included in the opinions of State Farm's experts and in the exhibits created by the State Farm experts. In addition, these records were prejudicial to Johnson. State Farm's defense was based on Johnson's medical history. The improper medical records confused the issue of Johnson's actual medical history. We conclude the errors involving the medical records of the other Judy Johnson accumulated until a new trial is necessary in this case.

IV. Johnson contends the district court should not have granted State Farm's motion in limine. The court granted State Farm's motion to exclude evidence of Johnson's settlement with King, that State Farm consented to the settlement, that the suit was being brought under an underinsurance provision, and evidence pertaining to the bad faith claim. In granting the motion, the district court determined the only issues to be tried were causation and damages.

Generally, a ruling sustaining a motion in limine is not a ruling on the evidence; the ruling merely adds a procedural step to the offer of evidence. Johnson v. Interstate Power Co., 481 N.W.2d 310, 317 (Iowa 1992). If the evidence is not offered, there is nothing preserved to review on appeal. Id. Here, Johnson did offer the evidence excluded by the motion in limine.

In Leuchtenmacher v. Farm Bureau Mutual Ins. Co., 461 N.W.2d 291, 294 (Iowa 1990), an estate brought a direct action under an underinsured motorist provision. Evidence of the policy limits in the underinsured motorist policy and the tortfeasor's policy were admitted into evidence. Id. This evidence was not offered to show the tortfeasor acted negligently, but was offered to prove the estate's claim under the insurance contract. Id. The court concluded that any direct claim against an insurer on a...