Opinion
Civ. No. 01-cv2686 (WGB).
July 13, 2006
MEMORANDUM AND ORDER
This matter concerns the parties' outstanding disagreements regarding the admissibility of certain contested trial documents. The Court having carefully considered the submissions of the parties issues the following decision pursuant to the Federal Rules of Evidence:
I) DEFENDANT'S CONTESTED TRIAL EXHIBITS
1) Joint Exhibit 35:
Article entitled, "Hershey Is the Primary Site in the Country to Test Heart Valves," dated November 7, 2000
Penn State News.
Defendant seeks to admit Joint Ex. 35 for what it claims is the limited purpose of establishing that: a)this article was in their files and was considered by Mr. Philo; and b)Plaintiff failed to consider the information therein when evaluating the Pfizer heart valves claims, in violation of its duty to General Accident to conduct a businesslike claims investigation.
Plaintiff seeks to exclude Joint Ex. 35 as hearsay which is irrelevant to any issues in the case. Plaintiff contends the article quotes Dr. Gilchrist, however Defendant failed to question Dr. Gilchrist at trial about his quoted statements.
The Court finds Joint Ex. 35 is admissible because it is relevant and is not being offered for the truth of its contents but rather to show that both parties had notice of its contents. It therefore has independent legal significance and is not hearsay.
The motion to exclude Joint Ex. 35 is OVERRULED;
2) Joint Exhibit 47:
Letter dated May 9, 1995, from C. Guerry Collins, Esq., Lord Bissell Brook ("LBB"), to Gene Sturdyvin, California Insurance Guarantee Association ("CIGA"). LBB acted as CIGA's legal counsel in connection with Pfizer's coverage claims of various insolvent insurers.
Defendant seeks to introduce Joint Ex. 47 as relevant to its claim that Plaintiff failed to conduct a businesslike investigation of Pfizer's coverage claims. Defendant contends that if Plaintiff's claims handler, John Reive, had obtained this document prior to January 2000, he would have been put on inquiry notice that he should investigate certain matters further, including theories pertaining to the Dairyland action.
Plaintiff argues that Joint Ex. 47 is hearsay and is irrelevant, as there is no evidence at trial that it was received, considered, or reviewed by Mr. Reive, or made available to him, nor was it present in the Transit Casualty files he reviewed.
The Court finds that Joint Ex. 47 is irrelevant and is hearsay. It is not being offered by Defendant to show that Mr. Reive had actual notice of this document, but rather to prove that he would have acted differently if he had knowledge of its contents.
The motion to exclude Joint Ex. 47 is GRANTED;
3) Joint Exhibit 48:
Letter dated May 10, 1995 from LBB's Collins to Lawrence Mulryan, Executive Director of CIGA.
Defendant seeks to admit the above document for the same purpose as Joint Ex. 47.
Plaintiff raises the same objections of irrelevancy and hearsay.
The Court finds Exhibit 48 is inadmissible for the same reasons that are set forth above for excluding Exhibit 47.
The motion to exclude Joint Ex. 47 is GRANTED;
4) Defendant's Exhibit 2:
Copy of the California appellate court decision in Khan v. Shiley Inc., 217 Cal. App. 3d 848 (4th Dist. 1990).
Defendant seeks to admit this document and claims it is relevant because Mr. Philo relied on this decision in connection with his review of Plaintiff's reinsurance claim and cited Khan in his January 12, 2001 letter to Mr. Reive.
Plaintiff contends that Def.'s Ex. 2 is irrelevant because it does not address trigger of coverage or any other insurance issues and no insurance companies were a party to this case.
The Court finds this exhibit is admissible because the standard of relevancy under Fed.R.Evid. 401 is very broad.
The motion to exclude Def.'s Ex. 2 is OVERRULED;
5) Defendants' Exhibit 22:
(This does not appear in Plaintiff's list of Exhibits it objects to)
General Accident's chart entitled "The Integrity Estate's Incentive to Pay Claims."
Defendant seeks to admit Ex. 22 because they claim it illustrates the divergence in interests between an insolvent insurer and its reinsurer, and it reflects Plaintiff's motivation for failing to conduct the businesslike investigation that would have been undertaken by a solvent insurer.
Plaintiff does not address the introduction of Ex. 22, although Defendant asserts that Plaintiff has asserted a relevance objection.
The Court finds this exhibit is admissible because the standard of relevancy under Fed.R.Evid. 401 is very broad. Plaintiff does not allege that under Fed.R.Evid. 403 the probative value of the evidence is substantially outweighed by danger of confusion of the issues, or needless presentation of cumulative evidence.
The motion to exclude Def.'s Ex. 22 is OVERRULED;
6) Defendant's Exhibit 24:
Contains the definitions of "personal injury" and "occurrence" from the underlying 1982 and 1983 Transit Casualty umbrella policies followed by Integrity's excess policies.
Defendant seeks to admit Ex. 24 and claim a number of witnesses used this chart in their testimony. Defendant disputes that this exhibit is prejudicial as a result of certain highlighted language.
Plaintiff argues Ex. 24 should be excluded because its policies are in evidence, these excerpts are duplicative, and the highlighted portions of the policy are potentially misleading.
The Court finds that Ex. 24 is admissible because the standard of relevancy under Fed.R.Evid. 401 is very broad. Plaintiff does not allege that under Fed.R.Evid. 403 the probative value of the evidence is substantially outweighed by danger of confusion of the issues, or needless presentation of cumulative evidence.
The motion to exclude Def.'s Ex. 24 is OVERRULED;
7) Defendant's Exhibit 26:
A graph which sorts Bjork-Shiley heart values by date of fracture.
Defendant states that the source of the graph in Ex. 26 is the loss runs provided by Pfizer to Plaintiff in April 1999. See Joint Ex. 13. Defendant seeks to introduce Ex. 26 because they assert that it shows that most of the fractures, as reflected by Pfizer's loss runs, occurred after the expiration of the 1982 and 1983 Integrity excess policies reinsured by General Accident.
Plaintiff argues that Ex. 26 should be excluded because no foundation was provided for the document's accuracy.
The Court finds that it is unnecessary to lay a separate foundation for Ex. 26 to be admissible because it is not being submitted as conditional evidence under Fed.R.Evid. 104(b). Also, Defendant claims the source of the document's information is already contained in Ex. 13. The accuracy of the document is an issue of weight and credibility under Fed.R.Evid. 104(e) to be determined by the fact finder.
The motion to exclude Def.'s Ex. 26 is OVERRULED;
8) Defendant's Exhibit 34:
January 25, 2000 letter from LBB's Collins to James J. Ciccone, Esq. (attorney for Pfizer in the Dairyland litigation), Troop Steuber Pasich Reddick Tobey, LLP.
Defendant does not seek to introduce Ex. 34 for its truth, but to rebut Plaintiff's contention that CIGA settled the heart valve claims with Pfizer in 1995 on the basis of date of implant trigger.
Plaintiff argues that Ex. 34 should be excluded because it is hearsay and it is irrelevant because there is no evidence that it was received, considered, or reviewed by Reive or made available to him. Also, Plaintiff argues that there is no evidence it was present in the Transit Casaulty files reviewed by Reive.
The Court finds that Ex. 34 is admissible under Fed.R.Evid. 803(3) because it is being offered to show the declarant's then existing state of mind as it relates to CIGA's basis for settling claims. It is also relevant because the standard of relevancy under Fed.R.Evid. 401 is very broad.
The motion to exclude Ex. 34 is OVERRULED.
9) Plaintiff's Exhibit 13:
Letter dated December 27, 2001 from LBB's Collins to Martin D. Katz, Esq., Akin Gump Strauss Hauer Feld, LL_, counsel to Pfizer.
Defendant seeks to admit Ex. 13 for the same purpose as is offered for admission of Ex. 34.
Plaintiff does not raise an objection to admission of Ex. 13.
The Court finds Ex. 13 is admissible for the same reasons as were stated concerning Ex. 34
Therefore any objection to exclude Ex. 13 is OVERRULED. II) PLAINTIFF'S CONTESTED TRIAL EXHIBITS
1) Joint Exhibit 42:
Letter dated January 16, 2001 from C. Guerry Collins, attorney for CIGA, to Richard Kafaf of Integrity.
Plaintiff seeks to admit Ex. 42 not for its truth, but for the limited purposes of establishing that: 1) CIGA asserted a 2.5 million claim against the Integrity Estate as a result of CIGA's settlement with Pfizer; and 2) Reive was aware of it when he reconsidered his allowance of Pfizer's claim. Plaintiff asserts Joint Ex. 42 is relevant to the reasonableness of Reive's allowance of the Pfizer claim, and to Plaintiff's argument that Integrity is legally bound by the settlement by CIGA.
Defendant argues that Ex. 42 should be excluded on grounds of relevance because the Pfizer/CIGA settlement agreement was not information considered by Mr. Reive or anyone else on Plaintiff's behalf in connection with the January 2000 allowance of Pfizer's claims.
The Court finds that Ex. 42 is admissible under the broad standard of relevancy set forth in Fed.R.Evid. 401.
The motion to exclude Ex. 42 is therefore OVERRULED;
2) Joint Exhibit 43:
Memorandum dated January 22, 2001 from Reive to the file concerning his telephone conversation with Collins of the same date.
Plaintiff seeks to admit Ex. 43 under Fed.R.Evid. 803(6) as a hearsay exception for a business record of the Integrity Estate maintained in the ordinary course of its business, and as a present sense impression under Fed.R.Evid. 803(1). Plaintiff states that the document is relevant to show the reasonableness of Reive's allowance of the claim in 2001, when he reduced the allowance to Pfizer.
Defendant argues Ex. 43 reflects post-allowance communications between Mr. Reive and Mr. Collins, and is therefore not relevant for the reasons stated above with respect to Joint Ex. 42.
The Court finds that Ex. 43 qualifies as a hearsay exception under Fed.R.Evid. 803(6) as a business record of regularly conducted activity, and under 803(1) as a present sense impression. The document is relevant under the broad standard of relevancy under Fed.R.Evid. 401.
The motion to exclude Ex. 43 is OVERRULED;
3) Joint Exhibit 44: Letter dated January 21, 2001 from Reive to Collins.
Plaintiff seeks to admit Ex. 44 under Fed.R.Evid. 803(6) as a hearsay exception for a business record of the Integrity Estate maintained in the ordinary course of its business. Plaintiff states that the document is relevant to show the reasonableness of Reive's allowance of the claim in 2001, when he reduced the allowance to Pfizer.
Defendant argues Ex. 44 reflects post-allowance communications between Mr. Reive and Mr. Collins, and is therefore not relevant for the reasons stated above with respect to Joint Ex. 42.
The motion to exclude Ex. 44 is OVERRULED;
4) Joint Exhibit 45, Also Known As Joint Exhibit 49:
Ex. 45/49 is a letter dated March 5, 2001 from Mr. Collins to Mr. Reive. The letter was originally designated as Ex. 45 and was missing page 2 and an attachment on page one.
Plaintiff refers to the now complete letter dated March 5, 2001 (with page 2 and the missing attachments included), as Joint Ex. 49.
Plaintiff does not seek to admit Ex. 45/49 for the truth of its contents but rather to establish that when CIGA asserted its claim against the Integrity Estate, it contended that a date of implant trigger should be used. Plaintiff asserts that Ex. 45/49 is relevant to the reasonableness of Reive's allowance of the claim in 2001, when he reduced the allowance to Pfizer.
Defendant refers to this exhibit as Ex. 45 and argues that it should be excluded because the version originally included in the exhibit book was incomplete because page 2 was missing. Defendant recently obtained the missing page 2 from Mr. Collins.
Defendant argues that one of the six attachments which was listed on page one of the letter has never been produced by Plaintiff to Defendant at any point in this litigation. The alleged missing attachment is "Pfizer's mediation brief presented to the insurers during court ordered mediation in 1995."
Defendant maintains a completeness objection to the admissibility of Joint Ex. 45/49. Defendant further objects to the admissibility of Ex. 45/49 because it post-dates the January 2000 allowance of Pfizer's coverage claims. Defendant also argues that Ex. 45/49 constitutes inadmissible hearsay because even though page 2 was received, there is no evidence that Mr. Reive considered or relied on page 2 at any time.
The Court finds that there is no basis for Defendant's first objection to Joint Ex. 49 based on incompleteness, because the missing page 2 and attachments have been included. The Court also finds that Joint Ex. 49 is admissible as a hearsay exception under Fed.R.Evid. 803(3) which is offered to show the then existing state of mind of the declarant, Mr. Collins, who wrote on behalf of CIGA. The Court finds this document is relevant under Fed.R.Evid. 401 since Plaintiff asserts it relates to the to the reasonableness of Mr. Reive's allowance of the reduced claim to Pfizer in 2001, not in January 2000 as Defendant maintains.
The motion to exclude Joint Exhibit 45 or 49 is OVERRULED;
5) Plaintiff's Exhibit 20 and Joint Exhibit 63:
Plaintiff's Exhibit 20 is a list of "Dear Doctor" letters, and Joint Exhibit 63 is an index of those letters.
Plaintiff maintains that the documents were sent to doctors who prescribed BSCC heart valves, warning them of problems with the valves. Plaintiff contends the letters were sent prior to the expiration of Integrity's 1983-84 policy. Plaintiff seeks to admit Ex. 20 and Ex. 63 to establish the prospect that valve recipients may have sustained anxiety during the period of Integrity's policies. Plaintiff asserts that Exhibits 20 and 63 are relevant to the Court's consideration of the reasonableness of the allowance made by Integrity for anxiety claims.
Defendant objects to Exhibits 20 and 63 on relevance grounds. Defendant contends the evidence shows that Plaintiff never obtained, reviewed or considered these "Dear Doctor" letters in connection with the allowance of Pfizer coverage claims, and therefore they do not establish the reasonableness of its coverage decisions. Defendant also argues there is no evidence that any heart valve claimant suffered anxiety from reading or becoming aware of these letters.
The Court finds these letters are admissible under the broad standard of relevancy under Fed.R.Evid. 401. The motion to exclude Joint Exhibit 20 or 63 is OVERRULED;
6), 7) Plaintiff's Exhibits 24-29
These six exhibits are news articles concerning manufacturing defects in heart valves: Exhibits 24-26 are three articles published in the New York Times dated August 10, 1984, August 11, 1984, and September 20, 1984; Exhibits 27-29 are three articles published in the Washington Post dated August 10, 1984, August 11, 1984, and September 20, 1984.
Plaintiff seeks to admit Exhibits 24-29 as relevant to the Court's consideration of the reasonableness of the allowance made by Integrity for anxiety claims. Plaintiff contends they establish the prospect that valve recipients may have sustained anxiety during the period of Integrity's policies.
Defendant argues Exhibits 24-29 are inadmissible on relevance grounds because: 1)no one connected with Plaintiff was aware of these news articles in connection with allowance of Pfizer's coverage claims; 2)there is no proof in this record that any heart valve claimant suffered anxiety as a result of reading or becoming aware of these articles.
The Court finds Exhibits 24-29 are admissible under the broad standard of relevancy under Fed.R.Evid. 401. The Court also finds that whether any one connected to Plaintiff was actually aware of these articles or any heart valve claimant suffered anxiety from these articles is an issue of weight and credibility to be determined by the fact finder under Fed.R.Evid. 104(e).
The motion to exclude Plaintiff's Exhibits 24-29 is OVERRULED;
8) Plaintiff's Exhibit 47:
Ex. 47 is a chart of the Integrity Estate's recalculation of D-22 relating to the Estate' alleged incentive to pay claims as alleged by Defendant.
Plaintiff seeks to introduce Ex. 47 to rebut the assertion that the Estate had a monetary incentive to pay the claim regardless of its merit.
Defendant objects to the introduction of Ex. 47 as misleading and prejudicial because: 1) it claims it lacks a proper factual foundation because it is based upon a future, proposed distribution rate; and 2) the calculations in he chart are inaccurate and misleading.
The Court does not find Exhibit 47 should be excluded because Defendant does not allege that under Fed.R.Evid. 403 its probative value is substantially outweighed by the danger of unfair prejudice or confusion of the issues. Therefore it is admissible under broad standard of relevancy under Fed.R.Evid. 401.
The motion to exclude Ex. 47 is OVERRULED;
9) Plaintiff's Exhibit 44:
A copy of the case entitled Armstrong World Indus., Inc. v. Aetna Cas. Sur. Co., 52 Cal. Rptr. 2d 690 (App.Div. 1996).
Plaintiff seeks to admit Ex. 44 and claims it is relevant because the decision came down four days after the decision inDairyland, and substantially undermines the significance of theDairyland trial court decision.
Defendant asserts that Ex. 44 does not constitute evidence. Defendant also argues it is not relevant to the disputed issue concerning the reasonableness of Plaintiff's coverage decision since Mr. Reive did not consider or rely on the Armstrong decision in deciding to allow Pfizer's coverage claims, and the decision is not found in Plaintiff's claim file.
The Court finds Exhibit 44 is admissible under the broad standard of relevancy under Fed.R.Evid. 401.
The motion to exclude Exhibit 44 is OVERRULED;
10) Plaintiff's Exhibits 10, 11, and 12:
These are three cases: Ex. 10 is a copy of the decision by the Minnesota Supreme Court in In re Silicone Implant Ins. Coverage Litig., 667 N.W.2d 405 (Minn. 2003).
Ex. 11 is a copy of the decision in Maryland Cas, Co. v. W.R. Grace and Co., 23 F.3d 617 (2d Cir. 1994).
Ex. 12 is a copy of the decision in Eljer Mfg. v. Liberty Mut., 972 F.2d 805 (7th Cir. 1992).
Plaintiff seeks to introduce Ex. 10 as relevant because it establishes that in the closely analogous context of breast implants, courts have adopted an implant trigger.
Plaintiff seeks to introduce Ex. 11 and Ex. 12 as relevant cases because Reive testified that he relied on these cases in allowing the claim and they are relevant to the reasonableness of Reive's conduct.
Defendant does not raise any objection to the introduction of Exhibits 10-12.
The Court therefore finds that Exhibits 10, 11, and 12 are admissible.
The motion to introduce Exhibits 10, 11, and 12 is GRANTED;
11) Plaintiff's Exhibits 45 and 46:
Defendant seeks to exclude Plaintiff's Exhibits 45 and 46; however Plaintiff does not list these as trial exhibits.
The motion to exclude Exhibits 45 and 46 is OVERRULED.