Appellate Division holds that insurer's withholding of evidence does not shift burden of proof in PIP case

Excel Physical Therapy sued Commerce Insurance for reimbursement of costs of treatment of Hayes. Hayes claimed she was injured when riding as a passenger in a car insured by Commerce. Commerce denied the claim, asserting that Hayes was not in the car when the accident occurred. (That type of insurance fraud is called a "jump in.")

During discovery Excel had requested Commerce's claims logs. In response, Commerce provided a claim note that was extensively redacted.

At trial Excel argued that Commerce's improper discovery response shifted to Commerce the burden of proving the affirmative defense that Hayes was not in the insured vehicle when the accident occurred. The trial judge agreed and directed a verdict to Excel.

In Excel Physical Therapy, Inc. v. Commerce Ins. Co., 2011 WL 1167214 (Mass. App. Div.) the Appellate Division overturned the trial judge's decision. It noted, "It is elementary that a claimant under a policy of insurance has the initial burden of proving that he or she is covered under the policy. . . . Commerce was not required to prove its alleged defense to Excel's PIP claim before Excel proved the claim." It was Excel's burden to prove that Hayes was entitled to PIP benefits because she occupied a vehicle insured by Commerce.

The court held that the proper remedy for withholding evidence based on privilege during discovery is the exclusion at trial of the withheld evidence, not a shifting of burdens.