Court upholds admission of receipt of PIP wage loss and insurance disability payments to support claim injured woman was malingering

Anne Schenck suffered a fractured back when her car was struck on I-696 by a car driven by a woman operating at a high rate of speed. The at-fault woman had only $25,000.00 in coverage, but Schenck had purchased from her own No Fault insurer Underinsured Motorist (UIM) Coverage that would increase her potential recovery to $100,000.00.  State Farm argued that Schenck was malingering and refused to pay its policy limits to Schenck:  at a trial over UIM benefits, it asked the Judge to allow it to introduce evidence of Schenk's wage loss payments to show that she was "malingering" and not hurt as badly as sche claimed.

The judge allowed the jury to hear this testimony and ordered State Farm to pay only $10,000.00 in damages, rather than the $75,000.00 it had insured.  Schenck appealed, pointing out that her statutory and contractual entitlement to insurance benefits was irrelevant to State's Farm's obligation and historically this information is deemed inadmissible.

The Appeals Court acknowledged that this information might improperly suggest to the jury that Schenck had already been fully compensated for her injury, but nevertheless held that the judge's decision was not "inconsistent with substantial justice" because it suggested she lacked incentive to return to work and instead chose to undertake a "multitude of vacations" after the accident.