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Williams v. Farmers New World Life Insurance Co.

United States District Court, E.D. Wisconsin

October 7, 2019




         1. Facts and History

          Tajah Williams[1] took out a $150, 000 life insurance policy with Farmers New World Life Insurance Company on October 27, 2016. (ECF No. 53, ¶ 1.) Prior to the issuance of the policy and as part of a paramedical examination, Tajah gave blood and urine samples. (ECF No. 43, ¶ 2; ECF No. 53, ¶ 6.) Farmers contends it uses a “standard panel of tests” on samples and the panel does not include a test for marijuana. (ECF No. 53, ¶¶ 8, 9.) Farmers tests for marijuana only if it has some reason to do so based on information from the application materials, motor vehicle records, or other information from the Medical Information Bureau. (Id., ¶ 10.) Farmers states that it relies on applicants to truthfully answer the questions on the application (id., ¶ 11), one of which is “Have you ever used, or been treated for the use of cocaine, marijuana, heroin, or any other addictive or illegal drug?” (Id., ¶ 13). Tajah's application had a “no” answer to this question. (Id., ¶ 13.)

         Tajah was murdered two months later, on December 26, 2016. (ECF No. 45 at 2, n.1.) On December 30, 2016, Farmers received a claim under the policy. (ECF No. 43, ¶ 6.) Farmers contends that, because Tajah died within two years of the issuance of the policy, the incontestability clause was not yet applicable. (ECF No. 53, ¶ 16.) The incontestability clause states:

We will not contest this policy after it has been in force for two years from the date of issue during the insured's lifetime except for nonpayment of premiums. This provision does not apply to any additional benefits for disability or accidental death.
If this policy is reinstated, we will not contest any statements on the reinstatement application after the policy has been in force for two years from its date of reinstatement during the insured's lifetime.

(ECF No. 28-23 at 4.)

         Broyles Claims Decision Support, Inc. was retained to investigate the claim. (ECF No. 43, ¶ 6; ECF No. 53, ¶ 22.) Farmers alleges that Tajah's medical records from an emergency room visit on July 11, 2016, noted “significant marijuana use (daily).” (ECF No. 53, ¶ 27). Based on this information and per its underwriting guidelines, Farmers contends that, had it known of Tajah's marijuana use, it would not have offered her coverage because she would be considered a “current” and “heavy” user of marijuana. (Id., ¶¶ 28-30, 32-33.) Accordingly, Farmers denied the claim and “[found] the policy null and void for material misrepresentations in the policy application as a result of the insured's failure to disclose her history of daily marijuana use.” (Id., ¶ 37.)

         Joyce Williams, Tajah's mother, filed this lawsuit on December 18, 2017, in Milwaukee County Circuit Court, alleging bad faith and breach of contract on the part of Farmers and seeking payment under the policy. (Joyce M. Williams v. Farmers New World Life Insurance Company, Case Number 2017CV013583; ECF No. 1-1.) Farmers removed the case to this court based on diversity jurisdiction. (ECF No. 1 at 3.)

         Pending before the court are five motions. Both Farmers (ECF No. 28) and Joyce (ECF No. 33) have moved for summary judgment. In support of its opposition to Joyce's motion for summary judgment, Farmers filed what it captioned a Request for Judicial Notice, seeking judicial notice of two facts, discussed below. (ECF No. 42.) Joyce has also moved to exclude testimony of Farmers' non-retained experts (Dr. Ann Lagerlund, Dr. Nadia Huq, Bonnie Ehlinger, R.N., and Susan Talaska-Pikalek, R.N.) (ECF No. 29), to disregard hearsay in the Aurora Sinai Medical Center (Aurora) records (id.), and “To Strike an Unnamed Expert Witness” (ECF No. 48). All parties have consented to the full jurisdiction of a magistrate judge. (ECF Nos. 5, 7.) Briefing on the motions is closed and all are ready for resolution.

         2. Analysis

         2.1 General Hearsay Principles

         Hearsay statements are generally not admissible. Fed.R.Evid. 802. “‘Statement' means a person's oral assertion, written assertion, or nonverbal conduct, if the person intended it as an assertion.” FRE 801(a). Hearsay is defined as “a statement that: the declarant does not make while testifying at the current trial or hearing; and a party offers in evidence to prove the truth of the matter asserted in the statement.” FRE 801(c)(1)-(2).

         But a statement “that is made for-and is reasonably pertinent to-medical diagnosis or treatment; and describes medical history; past or present symptoms or sensations; their inception; or their general cause” is excluded from the rule against hearsay. FRE 803(4). Also excluded is:

         A record of an act, event, condition, opinion, or diagnosis if:

(A) the record was made at or near the time by-or from information transmitted by-someone with knowledge;
(B) the record was kept in the course of a regularly conducted activity of a business, organization, occupation, or calling, whether or not for profit;
(C) making the record was a regular practice of that activity;
(D) all these conditions are shown by the testimony of the custodian or another qualified witness, or by a certification that complies with Rule 902(11) or (12) or with a statute permitting certification; and
(E) the opponent does not show that the source of the information or the method or circumstances of preparation indicate a lack of trustworthiness.

FRE 803(6).

         2.2 Joyce's Motion to Exclude Testimony of Defendant's Non-Retained Experts

          It appears that the primary (if not sole) basis for Farmers' conclusion that Tajah used marijuana daily is an entry in a medical record that allegedly records a statement Tajah gave to medical personnel during a July 2016 visit to the Emergency Department of Aurora Sinai Medical Center. Toward that end, on February 28, 2019, Farmers identified Dr. Ann Lagerlund, Dr. Nadia Huq, Bonnie Ehlinger, R.N., and Susan Talaska-Pikalek, R.N., as non-retained expert witnesses under Federal Rule of Civil Procedure 26(a)(2)(c), which does not require experts to produce reports. (ECF No. 23-1 at 6-10.) According to that disclosure, Dr. Huq was the resident doctor assigned to Tajah during her July 2016 visit, and she was supervised by Dr. Lagerlund. (Id. at 8.) Ehlinger was the initial nurse assigned to Tajah during her visit, and Talaska-Pikalek was the registered nurse assigned to Tajah during her visit. (Id. at 9-10.)

         According to the disclosure by Farmers, all four witnesses are expected to testify that Tajah was admitted “with the chief complaint of abdominal pain and that in response to questions asked during her examination and treatment []advised the emergency room medical personnel, Dr. Huq and Dr. Lagerlund that she used marijuana on a daily basis.” (ECF No. 23-1 at 6-9.) Each of them is also expected to testify that “information regarding a patient's history of drug use, including marijuana use, is requested as part of the examination of patients as such information may and can be relevant to the diagnosis and treatment of a patient.” (Id.)

         In addition, Dr. Huq is expected to testify that “she formulated the diagnosis of dysmenorrhea and prepared a treatment plan with Dr. Lagerlund[.]” (ECF No. 23-1 at 8.) That treatment plan “included advising Tajah M. Williams to cut back on daily cannabis use to allow for symptom ablation.” (Id.) Dr. Lagerlund is expected to testify that she concurred with Dr. Huq's diagnosis and treatment plan. (Id. at 7.)

         Joyce seeks an order excluding the testimony of all four witnesses. Nonetheless, her brief in support of her motion (ECF No. 30) focuses entirely on Dr. Lagerlund. Quoting from Dr. Lagerlund's deposition, Joyce points out that Dr. Lagerlund was unaware she had been named in Farmers' disclosures (id. at 11), does not consider herself a medical expert on marijuana (id. at 12), and, most importantly, has no recollection of having asked Tajah about her marijuana use (id. at 13). In short, Joyce argues, Dr. Lagerlund has no personal knowledge of Tajah's marijuana use. From Joyce's statement that “[w]e do not know what the other non-retained experts might state under oath” (id. at 16), the court surmises that she did not depose Dr. Huq, Nurse Ehlinger, or Nurse Talaska-Pikalek, which is no doubt why her brief focuses exclusively on Dr. Lagerlund.

         In response to the motion, Farmers argues that Dr. Lagerlund is presented as an expert witness on, among other things, her diagnosis of Tajah's cannabis abuse. (ECF No. 38 at 22-23.) It argues that “Dr. Lagerlund does not need to be an expert in marijuana pharmacology to opine on the treatment and diagnosis of her patient.” (Id.)

         It does not appear that any of the four non-retained expert witnesses “diagnosed” Tajah's cannabis use in the sense that any of them determined through the administration of medical tests that Tajah used marijuana. The only evidence that Tajah used marijuana is an entry in a medical record that allegedly records her statement that she did-at least according to Dr. Huq's notes of her discussion with Tajah when she came to the emergency department. Under Rule 803(4) of the Federal Rules of Evidence, a statement made for, and reasonably pertinent to, medical diagnosis or treatment and which “describes medical history; past or present symptoms or sensations; their inception; or their general cause[, ]” are not excluded by the rule against hearsay. Tajah's alleged statement to Dr. Huq about her daily marijuana use was “reasonably pertinent” to the diagnosis about what was causing her nausea and vomiting that led to her coming to the emergency department. As such, it is admissible under FRE 803(4). No. basis exists for precluding Dr. Huq from testifying to what Tajah said to her if she can recall Tajah's statement. If Dr. Huq cannot remember, it is possible that the evidence would be admitted in other ways. It is premature at this stage to rule that any testimony from Dr. Huq about Tajah's alleged marijuana use is inadmissible.

         Dr. Lagerlund and the two nurses learned about Tajah's statement from Dr. Huq. As such, none of them can testify to what Dr. Huq told them if the purpose of offering that testimony is to show that Tajah smoked marijuana. And the court can think of no other purpose for allowing testimony from Dr. Lagerlund and the two nurses as to what Dr. Huq said to them about Tajah's marijuana use.

         Although Dr. Huq's statement to Dr. Lagerlund and the nurses about what Tajah said would be hearsay if offered for the truth of the matter asserted, that does not render the rest of their proposed testimony inadmissible. For example, to the extent they are all familiar with the fact that information regarding a patient's history of drug use, including marijuana use, is requested as part of the examination of patients, that may be proper testimony. See FRE 406 (“Evidence of…an organization's routine practice may be admitted to prove that on a particular occasion the…organization acted in accordance with the…routine practice.”).

         In short, no basis exists for precluding these four witnesses from testifying at all. That is, no basis exists for precluding them from testifying as to relevant facts of which they have personal knowledge, or offering expert testimony in areas in which they have expertise-as long as it was disclosed in the expert disclosures. Thus, Joyce's motion to preclude these witnesses from testifying will be denied.

         2.3 Joyce's Motion to Disregard Hearsay in the Aurora Medical Records

          Tajah's medical records from Aurora on July 11, 2016, contain several references to marijuana use. (ECF 31-1 at 2 (“Cannabis abuse”), 8 (“Social history is significant for frequent marijuana use (daily)), 11 (“Cannabis overuse”), 12 (“should cut back on daily cannabis use as well to allow for sx ablation”), and 19-21 (information regarding marijuana abuse)). Joyce contends that the medical records are hearsay and, thus, not admissible pursuant to either Fed.R.Evid. 803(4) or 803(6). (ECF No. 30 at 22-25.) She notes that “the alleged daily use of marijuana by Tajah Williams was obtained through and by the social history taken from Tajah Williams on July 11, 2016.” (Id. at 23.)

         Farmers contends that, not only are the records admissible under FRE 803(4) and 803(6) (ECF No. 38 at 25-31), they are also admissible under FRE 807 (Id. at 31-34) or are admissible non-hearsay as “[a]n out of court statement…offered to show its effect on the hearer's state of mind” (Id. at 34-35). “The test for determining whether the statements fall within [FRE 803(4)] is ‘whether such statements are of the type reasonably pertinent to a physician in providing treatment.'” Guzman v. Abbott Laboratories, 59 F.Supp. 747, 755 (N.D. Ill. 1999) (quoting Cook v. Hoppin, 783 F.2d 684, 690 (7th Cir. 1986)). “In determining which statements are relevant to diagnosis or treatment, each case must be examined on its own facts, and in making such a judgment much will depend on the treating physician's own analysis.” Cook, 783 F.2d at 790.

         Farmers argues that “Dr. Lagerlund actually testified that Ms. Williams' statement about her daily marijuana use was part of the diagnosis and treatment plan for Ms. Williams[.]” (ECF No. 38 at 28.) Specifically, she gave the following testimony:

Q Now, you also indicated in your note back on -- on 0304 [ECF No. 28-4 at 12] that you agreed with the assessment and plan. That was the assessment and plan of Dr. Huq?
A Yes.
Q And what was the assessment of Dr. Huq that you agreed with?
A That she needed to follow up with OB if the symptoms got worse, that she should continue Zofran, if needed, for her nausea, and continue ibuprofen for her abdominal pain, and that she should cut back on marijuana use.
Q And that's -- according to the note here, it says as well “to allow for SX ablation.” What does that sentence mean?
A To help improve -- possibly improve her symptoms. Because sometimes, if people do use marijuana regularly, they have problems with recurrent vomiting. We call it cyclical vomiting, from marijuana use. So that may help improve ...

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