San Antonio Court of Appeals upholds big win for UIM claimant although trial court allowed insurance and undesignated expert testimony in at trial.

August 19th, 2022 By Erin Holmes

In a case with some disturbing implications for insurance carriers, the San Antonio Court of Appeals recently affirmed a $1,000,000 judgment against a UIM carrier in The Cincinnati Insurance Company v. Villanueva, No. 04-20-00389-CV, filed March 2, 2022. The Court rejected Cincinnati’s arguments that (1) the trial court erred by allowing Villanueva to call the claims adjuster to testify at trial; (2) the trial court erred by permitting Villanueva’s experts to testify and striking Cincinnati’s experts; (3) the evidence is legally and factually insufficient to support the award of future medical expenses; and (4) the trial court erred by failing to transfer venue to Bexar County.

Villanueva was involved in an auto accident, and sued the owner and driver of the other vehicle, as well as his UIM carrier, Cincinnati. The extra-contractual claims against Cincinnati were severed and abated, but Villanueva and Cincinnati proceeded to trial on his contractual claims for UIM benefits under his policy. The jury awarded Villanueva $1.4 million in damages, which included $1,250,000 for future medical expenses. The trial court entered a judgment for the $1,000,000 limits of the policy, plus pre-judgment and post-judgment interest and court costs, and Cincinnati appealed.

Of note, the Court of Appeals ruled that there was no abuse of discretion when the trial court allowed testimony from two of Villanueva’s experts on future medical expenses that was substantially different from the opinions expressed in their reports. In response to discovery, Villanueva disclosed that the experts were “expected to testify regarding the services provided to [Villanueva], the reasonableness and necessity of the charges incurred, [Villanueva]’s medical conditions, prognosis, diagnosis and the injuries [Villanueva] sustained due to the incident which has been made the basis of this lawsuit,” and produced reports summarizing their opinions. Cincinnati complained that the experts’ testimony at trial was a material deviation, offering higher amounts and using different information and methodology than they used to form the opinions expressed in the reports that were produced. Cincinnati argued that since Villanueva failed to timely supplement his responses to discovery to disclose the changes in the experts’ opinions as required by the rules, this testimony should have been excluded.

The Court disagreed, noting that there are some circumstances where supplementation is not required, as an expert may “refine calculations or perfect a report” through the time of trial, and may change an opinion without supplementation if the opinion is an “expansion on an already disclosed subject.” Even though the foundation, methodology and conclusions the experts expressed at trial differed from what was stated in their reports, the Court ruled that these previously undisclosed opinions were merely an “expansion” on the timely disclosed subject matter of their testimony because they related to Villanueva’s prognosis and treatment. This sets an alarming precedent, as it suggests that an expert may testify to something totally different than the opinions timely disclosed to the other party as long as the testimony is related to the same subject matter.

Accordingly, the Court rejected Cincinnati’s contentions that the evidence was legally and factually insufficient to support the jury’s award of damages for future medical expenses, noting that even if the expert testimony complained of should have been excluded, expert testimony is not required to support an award of future medical expenses in Texas. The Court found that not only was the challenged testimony properly admitted, there was sufficient evidence in the record to support the verdict even without it.

Ironically, and with very little substantive discussion, the Court found that even if the trial court erred by refusing to allow any of Cincinnati’s designated experts to testify, Cincinnati failed to show that this error – not being allowed to present any expert testimony to refute the opinions of Villanueva’s experts — was harmful. Cincinnati identified four experts in response to discovery and filed a motion to compel Villanueva to submit to a Rule 204.1 examination, which the trial court granted. However, Villanueva moved for rehearing and to strike all four of Cincinnati’s experts, arguing that Cincinnati failed to give a sufficient description of the experts’ mental impressions. The trial court granted the motion, ordering that the experts were excluded from testifying because Cincinnati failed to properly designate them.

Finally, in its first issue on appeal, addressed last in the Court’s opinion, Cincinnati argued that the trial court erred by allowing Villanueva to call Cincinnati’s corporate representative to testify at trial, and by denying Cincinnati’s objections to specific statements the adjuster made at trial in response to questions regarding Cincinnati’s coverage, settlement negotiations with the tortfeasor, the policy limits of the tortfeasor’s insurance, and how Cincinnati handled the claim, including the following:

Q. Would it surprise you to know, based upon what we reviewed, that the reason we didn’t sue Mr. Lee is because his insurance company did the right thing and paid this claim to the limits of their insurance?

Cincinnati objected to the question and the trial court overruled the objection, stating that it would allow the question. Villanueva then proceeded to inquire about the settlement with the tortfeasor as follows:

Q. And in this case your review of the file and your investigation reflect that a release was signed for the limits of the Progressive policy that was applicable to this accident, correct?
A. Correct. I believe they had a $30,007 limit that they paid.

The Court noted:

The mention of UIM coverage limits before a jury is not always reversible error. Univ. of Tex. at Austin v. Hinton, 822 S.W.2d 197, 201 (Tex. App.—Austin 1991, no writ). To demonstrate reversible error, the party appealing must show (1) that the reference to insurance probably caused the rendition of an improper judgment in the case; and (2) that the probability that the mention of insurance caused harm exceeds the probability that the verdict was grounded on proper proceedings and evidence. Id. The record must show harm to the complaining party. See Canyon Vista Prop. Owners Ass’n, Inc. v. Laubach, No. 03-11-00404-CV, 2014 WL 411646, at *8 (Tex. App.—Austin Jan. 31, 2014, no pet.) (mem. op.). “A reviewing court must evaluate the whole case from voir dire to closing argument, considering the ‘state of the evidence, the strength and weakness of the case, and the verdict.’” Reliance Steel & Aluminum Co. v. Sevcik, 267 S.W.3d 867, 871 (Tex. 2008) (citing Standard Fire Ins. Co. v. Reese, 584 S.W.2d 835, 841 (Tex. 1979)).

Assuming without deciding whether there was error, the Court held that such error was harmless, rejecting Cincinnati’s argument that evidence of the tortfeasor’s policy limit already being paid out along with testimony suggesting that Cincinnati breached its contractual obligations affected the jury’s verdict by “inciting anger at Cincinnati among the jurors.” The Court noted that the testimony complained of lasted only a few minutes, Lowry was one of eight witnesses that testified over the course of the 4-day trial, and that his testimony was not highlighted during Villanueva’s closing arguments, which argued for an award based on the testimony of his experts. Since it found that Villanueva’s experts’ testimony was properly admitted and that the evidence was legally and factually sufficient to support the jury’s award, the Court concluded that Cincinnati failed to show “that the probability that the mention of insurance caused harm exceeds the probability that the verdict was grounded on proper proceedings and evidence.”

Erin Holmes