Kulak v. Nationwide Mutual Insurance Company, 40 N.Y.2d 140 (1976)

Expert testimony regarding the handling of a personal injury claim is inadmissible in a bad faith action against an insurer if the testimony relates to matters within the common knowledge and experience of jurors.

Summary

Kulak sued Nationwide, alleging bad faith in failing to settle a personal injury claim within policy limits. At trial, Kulak presented expert testimony from attorneys regarding the handling of the underlying negligence case. The Court of Appeals held that such expert testimony was inadmissible because the issues involved were within the ken of the typical juror. The Court reasoned that expert opinions on topics jurors can understand may improperly influence their decision-making process. The case emphasizes the need for expert testimony to address specialized knowledge, not to offer opinions on matters of common understanding.

Facts

Kulak was involved in a car accident with Nationwide’s insured. Subsequently, a personal injury lawsuit was filed against Nationwide’s insured. Kulak offered to settle within the policy limits, but Nationwide refused. The case proceeded to trial, where the verdict exceeded the policy limits. Kulak, as assignee of the insured, then sued Nationwide, alleging bad faith in their handling of the claim and refusal to settle. At the bad faith trial, Kulak presented expert testimony from attorneys opining on Nationwide’s handling of the underlying personal injury case.

Procedural History

The trial court admitted the expert testimony, and the jury found in favor of Kulak. Nationwide appealed. The Appellate Division affirmed the trial court’s decision. Nationwide then appealed to the New York Court of Appeals.

Issue(s)

Whether expert testimony regarding the proper handling of a personal injury claim is admissible in a bad faith action against an insurer.

Holding

No, because the matters testified to by the experts were within the common knowledge and experience of jurors.

Court’s Reasoning

The Court of Appeals reversed, holding that the expert testimony was improperly admitted. The Court reasoned that expert testimony is only appropriate when it concerns matters requiring specialized knowledge beyond the ken of the typical juror. The Court stated, “The guiding principle is that expert opinion is proper when it would help to clarify an issue calling for professional or technical knowledge, possessed by the expert and beyond the ken of the typical juror.” The court found that the issues in this case, such as the reasonableness of settlement offers and the assessment of liability, were within the common knowledge of jurors and did not require expert assistance. Allowing expert testimony on such matters would “usurp the role of the jury” and permit the expert to “state all the inferences and conclusions from the facts” which is the province of the jury. The court noted that while expert testimony is admissible when it relies on professional or scientific knowledge or skill not within the range of ordinary training or intelligence, the expert testimony offered here didn’t meet that criteria. The dissent argued that the handling of insurance claims involves complexities not readily understood by laypersons and that expert testimony could assist the jury in understanding these complexities. The dissent also noted that insurance companies routinely consider these matters when evaluating their risks.