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Ray v. Draeger

Supreme Court of Alaska

July 17, 2015

KIMBER RAY, Petitioner,

Page 807

Petition for Hearing from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, John Suddock, Judge, on appeal from the District Court of the State of Alaska, Anchorage, David Wallace, Judge. Superior Court No. 3AN-12-11421 CI, District Court No. 3AN-11-08969 CI.

Michael J. Hanson and Barry Kell, Call & Hanson, P.C., Anchorage, for Petitioner.

Jeff Barber, Barber & Banker, LLC, Anchorage, for Respondent.

Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and Bolger, Justices.


Page 808

FABE, Chief Justice.


In a personal injury trial resulting from a car accident, the plaintiff sought to cross-examine the defendant's medical expert about his substantial connection to the insurance industry in an effort to prove bias. But in response to defense counsel's motion in limine, the district court ruled that the plaintiff could not refer to the fact that the defendant was insured or that her insurance company and others had hired the expert witness numerous times. The trial court did permit the plaintiff to cross-examine the expert witness about his financial interest in continuing to work for " defendants" and " defense attorneys."

On appeal from the district court judgment, the superior court concluded that the district court had abused its discretion by excluding evidence of the expert's connections to the insurance industry, reasoning that the expert witness and the company which hired him had extensive dealings with the defendant's insurance company and the insurance industry more broadly and that this information was relevant to the question of bias. We agree with the superior court that the district court erred in ruling that relevant evidence of the expert witness's substantial connection to the insurance industry should be excluded. But the district court's error was harmless because at trial the plaintiff was able to elicit testimony about the witness's connection to the insurance industry. We therefore vacate the superior court's remand order and reinstate the district court's judgment.


A. Facts

In July 2009 Kimber Ray rear-ended an automobile in which Megan Draeger was a passenger. There was no serious physical damage to either car, and at trial the accident was described as a low speed, low impact collision.

Draeger did not complain of any injuries at the accident scene. But soon afterward, she experienced pain in her neck and shoulders, and she made an appointment to see a chiropractor six days after the accident. Draeger had a total of 24 chiropractic treatments between July and November 2009 at a total cost of $5,160. Nine months later, in August 2010, Draeger sought treatment from a physical therapist for neck pain and headaches. The physical therapist treated Draeger over nine sessions between August and September 2010.

B. Proceedings

Draeger filed suit against Ray in the district court in July 2011. Ray admitted liability for the accident, so the trial focused on the extent of Draeger's injuries and other damages related to the accident. Ray's insurer, Government Employees Insurance Company (GEICO), paid for her defense.

Page 809

Ray filed a motion in limine based on Alaska Evidence Rule 411[1] seeking to preclude reference at trial to the fact that Ray was covered by liability insurance with respect to Draeger's claims. Draeger partially opposed the motion, arguing that she wished to cross-examine Dr. John Ballard, an orthopedic surgeon hired by Ray's counsel to give expert testimony at trial, regarding potential bias. In particular, Draeger sought to examine Dr. Ballard about the fact that a substantial portion of his work as a medical expert is derived from referrals from insurance companies and that he had been hired many times by GEICO in particular.

District Court Judge David Wallace granted Ray's motion. Judge Wallace concluded that under the required Alaska Evidence Rule 403 balancing,[2] the " minimal relevance" of the insurance evidence being offered to show bias, which is allowed under Rule 411, was outweighed by " the prejudicial nature and confusion of issues" that would more likely result if Draeger impeached Dr. Ballard by referencing GEICO or the fact that Ray was insured. The order stated that " witnesses and parties shall be instructed that no reference should be made to the fact that defendant has liability insurance" or to " the fact that persons investigating this matter may have been employed by defendant's liability insurance." However, the order noted that " this ruling does not preclude plaintiffs counsel's ability to cross examine any witness on the issue of bias that relates to the nature of their work for defendants and/or the fact [that] there may be . . . financial reasons for the continuation of wanting to work for defendants."

Dr. Ballard frequently performs independent medical evaluations and medical record reviews for insurance companies. GEICO retained Dr. Ballard to evaluate medical records or conduct independent medical examinations 20 to 30 times in 2011 alone, though Dr. Ballard stated in a deposition that less than 5% of his work in Alaska comes from GEICO. Dr. Ballard does about 50 to 60 record reviews and 200 to 300 independent medical evaluations per year; 40% of those evaluations are for claims of injury arising out of automobile collisions. He also co-founded a medical evaluation company called The Independent Medical Evaluators (T.I.M.E.), which provides medical evaluations. More than 98% of T.I.M.E.'s clients are insurance companies or defense attorneys. Although Dr. Ballard was no longer a co-owner of the company when he conducted the evaluation for this case, Ray's counsel hired and paid him through T.I.M.E for this case. Dr. Ballard made over $100,000 per year from insurance defense referrals and between $300,000 to $350,000 per year from his insurance-related medical exam work. His total ...

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