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Court of Appeals overturns jury verdict against Home-Owners Insurance Company

Abir and Abdul Chouman obtained a jury verdict against Home-Owners Insurance Company, a subsidiary of Auto Owners Insurance Company, arising out of their no fault policy providing uninsured/underinsured motorist coverage. Abir Chouman was hurt when she was rear-ended by another motorist with minimal insurance coverage.  Home-Owners appealed after the verdict, arguing that the Court should not have admitted evidence suggesting that it initially paid PIP benefits to Chouman before denying the benefits.  It also objected to testimony that it had consented to Chouman's settlement with the at-fault driver. Lastly, it disagreed with the judge's ruling that Chouman had suffered a "serious impairment of bodily function."

On appeal, the Court held that it was relevant to the case that Chouman discontinued treatment when coverage was denied, but irrelevant who had been paying PIP medical coverage up to that time (even though the plaintiffs claimed that HomeOwners' payment of the expenses constituted an "admission" of reasonableness and necessity).  Therefore the Court of Appeals demanded that the case be re-tried with no evidence offered to prove that it was HomeOwners that initially paid, but then rejected coverage.

The Court determined that it was also error to admit into evidence Home Owners' consent to the payment of the at-fault's underlying coverage limits.  The Court held that the predudice resulting from this admission outweighed the probative value of the evidence.

The Court also over-turned the trial judge's conclusion that Ms Chouman had suffered a serious impairment of bodily function.  The judge had relied upon the testimony of Chouman's orthopaedic surgeon confirming the diagnosis of a herniated disc and pinched nerve and deeming her to be disabled from operating her daycare business.  The appellate court relied upon an "independent" medical examination by Dr. Annette DeSantis, employed by the insurer, to conclude that reasonable jurors might reject the treating doctor's diagnosis of disability and impairment.

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