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Notrica v. State Compensation Insurance Fund3/17/1999
t there was more than "mere negligence" in this case. More to the point, Tricor holds that "evidence of negligent mishandling of such claims to [plaintiff's] detriment, if shown as a pattern, clearly would be strong circumstantial evidence that SCIF indeed engaged in the complained of conduct." (Tricor California, Inc. v. State Compensation Ins. Fund, supra, 30 Cal.App.4th at p. 238.) The trial court properly rejected the other proposed instructions since they misstate the law.
In its Discussion of the compensatory damage award, SCIF mounts several evidentiary arguments which we now address.
SCIF argues that the trial court erred in allowing Notrica expert witness Sam Smith to rely upon a publication titled the Weekly Insider and to read excerpts to the jury. We disagree.
Smith testified that in his opinion representations by SCIF sales personnel to prospective insureds that SCIF adjusters were trained and expected to place a "probable value" on a worker's case were inconsistent with the "maximum probable" guideline set out in SCIF's reserving manual. Smith further testified he had relied upon two documents in forming an opinion as to why SCIF had changed its reserving guideline to "maximum probable."
The first document, Smith testified, was a June 6, 1989 SCIF memorandum to its district offices, which reads in part: "At the recent claims managers' conference, State Fund president Jack Webb gave a clear and straightforward message. With the possibility of Workers' Compensation reform looming, we must face the future in a strong financial condition." SCIF raised no objection.
With respect to the second document, Smith testified he had received the October 3, 1988 issue of the Weekly Insider, a publication of the Independent Insurance Agents and Brokers of California, which referred to SCIF's Webb as follows: "Jack Webb, [SCIF] president, said he is increasing retention because he believes the State Fund will need stronger reserves in the future. `The minimum rate law, the backbone of the successful Workers' Compensation business in California, is at great risk,' said Webb. `Indeed, it may be abolished. I want to have the cash in --'" At this point, SCIF objected on the grounds of hearsay and lack of foundation. The trial court overruled the objections, expressly referring to an earlier, in-chambers ruling that hearsay based upon documents such as SCIF's reserving manual were proper. Smith continued to read to the jury: "`I want to have the cash in the bank to administer the State Fund under an open rating system.'" Smith then stated his opinion that "they revised the reserve standards to maximum probable potential in anticipation of California open rating, so they would have more cash in the bank." Smith explained to the jury that "open rating" meant that the rating market was being opened to more competition, a description with which James Neary, an SCIF vice-president and actuary, agreed. The publication itself was not admitted into evidence.
SCIF asserts that the court erred in permitting Smith to rely upon the Weeky Insider, citing Luque v. McLean (1972) 8 Cal.3d 136, 148. Luque is distinguishable. In Luque, a personal injury case stemming from the use of a defective lawnmower, the trial court was held to have properly refused to admit into evidence articles from Reader's Digest, Today's Health, and Consumer Bulletin "because none of those periodicals constitute the type of professional technical literature `that reasonably may be relied upon by an expert in forming an opinion' (Evid. Code, ยง 801, subd. (b))." (Id. at p. 148, fn. omitted.)
In the instant case, the Weekly Insider, for which SCIF has requested judicial not
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