Of course, for policyholders’ counsel trying bad faith cases, an insurer’s jingle or slogan provides a foundation upon which trial themes can readily be constructed. Unfortunately, the premise of most such arguments to the jury is that the operative promises made to a policyholder consisted, in whole or in part, not of the text of the insurance contract, but of a slogan that may have, at best, led a policyholder to consider the option of contracting with that insurer.
Notwithstanding all this, given that an insurer is the source of its advertising and marketing, what legal basis does it have for precluding a policyholder’s use at trial of a slogan it has repeatedly broadcast to the public?
Insurers have raised at least four interrelated and often overlapping legal grounds for excluding such evidence and argument: (1) the fact that the slogan upon which the policyholder would like to rely is mere “puffing” and does not constitute a material representation upon which a contracting party may reasonably rely, (2) the parol evidence rule, (3) broader lack of relevance, and (4) the fact that such evidence and argument are generally more prejudicial than probative.
“Puffing” or “Puffery”
As the Tenth Circuit Court of Appeals explained, “mass advertising expressed in vague terms . . . is not relied on by rational adults.” Indeed, vague mass advertising statements cannot reasonably be relied on by a contracting party, even in the context of a claim of fraudulent inducement. In the commercial context, such statements are commonly labeled “puffing” or “puffery.”
A plethora of decisions from jurisdictions across the country have concluded that insurer marketing slogans are simply puffing or puffery and cannot reasonably be relied on by a policyholder. The key question to ask when analyzing whether a statement is mere puffing or puffery is whether it is sufficiently specific to be subject to measurement and therefore testable. In principle, can the statement be proven true or false?
Courts have applied this logic not merely in deciding pretrial motions but also in making evidentiary rulings at trial. For example, in Hatch v. State Farm Fire & Casualty Co., the Supreme Court of Wyoming affirmed rulings excluding expert testimony that purported to address whether State Farm had been “a good neighbor” in its dealings with the plaintiff. As that court explained: “[The expert’s] opinion, as to whether the advertising established a standard and on how a ‘good neighbor’ would act, required no specialized knowledge, nor could it have assisted the jury in understanding the evidence or determining any of the facts in issue.”
Parol Evidence Rule
The parol evidence rule “bars consideration of extrinsic evidence of prior or contemporaneous negotiations or agreements at variance with the written agreement.” “[T]he parol evidence rule . . . does not merely serve an evidentiary purpose; it determines the enforceable and incontrovertible terms of an integrated written agreement.” The parol evidence rule applies to every kind of contract, including an insurance contract.
Ordinarily, the text contained in an insurance policy represents the entirety of the insurance contract. This is especially true in the case of personal lines policies. Thus, to the extent a policyholder seeks to introduce evidence of an insurer’s advertising or marketing to show that a policyholder somehow detrimentally relied on the same, such precontractual communications are superseded by the terms of the insurance contract and rendered inadmissible by the parol evidence rule.
Lack of Relevance
“No evidence is admissible except relevant evidence.” “The test of relevance is whether the evidence tends ‘“logically, naturally, and by reasonable inference” to establish material facts.’” The proponent of the proffered materials has the burden of producing evidence of the preliminary facts upon which the relevance of the proffered evidence rests.
In the context of breach of contract and bad faith lawsuits, courts have held that insurer slogans are irrelevant and hence inadmissible. For example, in Revocable Trust Agreement of Randall S. Ellis & Teri L. Ellis v. State Farm Fire & Casualty Co., in addressing a motion in limine to exclude testimony regarding or referencing any of State Farm’s advertising, the court concluded:
State Farm’s advertising, slogans, and mottos have no relevance as to plaintiffs’ breach of contract claim; i.e., State Farm’s advertising, slogans, or mottos have no tendency to make a fact of consequence more or less probable with respect to whether plaintiffs’ roof damage entitles them to the full replacement cost value of a total roof replacement under the policy.
In most breach of contract and bad faith cases, the policyholders’ complaint is not that they were fraudulently induced to purchase the insurance, but rather that the insurer is not performing in accordance with the terms of the insurance contract, thereby depriving the policyholders of benefits due under that contract. Thus, even if marketing slogans or other advertising could be said to have induced the purchase of the insurance, they have no bearing on the issue at hand in breach of contract or bad faith cases—whether an insurer is fulfilling its contractual obligations (in breach of contract cases) and the reasonableness of an insurer in performing its obligations under the insurance contract (in bad faith cases).
Even the rare cases that decline to grant an insurer relief on this basis hardly embrace the relevance of such slogans. For example, in Nelson v. State Farm Fire & Casualty Co., a federal district court declined to grant State Farm’s motion to strike “all allegations in [the plaintiff’s] Complaint which refer to State Farm’s slogan and advertisements” as “impertinent” under Federal Rule of Civil Procedure 12(f). The insurer argued both lack of relevance and application of the parol evidence rule. Noting that a motion to strike was subject to the trial court’s discretion, the court concluded:
While the Court acknowledges State Farm’s concern respecting the ultimate scope of this litigation, the Court does not find at this time that the allegations at issue are irrelevant to the degree that this Court should grant State Farm’s requested relief that every reference to State Farm’s advertisement and slogan be stricken from [the plaintiff’s] Complaint. On that basis alone, and without addressing the viability of [the plaintiff’s] claims which rely on these allegations at this juncture, the Court will deny State Farm’s request to strike averments regarding State Farm’s advertisements and slogan.
On a related issue, insurer advertising and marketing are immaterial to a policyholder’s case against an insurer if they have not been raised by the pleadings. For example, even with respect to the purchase of the insurance, if there are no allegations that the policyholder was exposed to an insurer’s advertising or marketing and relied on the same in purchasing the insurance, evidence of such advertising and marketing is simply immaterial.
More Prejudicial Than Probative
Courts, in their discretion, ordinarily “may exclude evidence if its probative value is substantially outweighed by the probability that its admission will (a) necessitate undue consumption of time or (b) create substantial danger of undue prejudice, of confusing the issues, or of misleading the jury.”
Focusing on a marketing slogan distracts the fact finder from the terms of the insurance contract and sheds no light on an insurer’s performance under that contract. Unless a policyholder is contending that they saw and relied on the advertising or marketing at issue in deciding to purchase the insurance contract, any value of evidence relating to an insurer’s advertising or marketing is substantially outweighed by the risk of unfair prejudice to an insurer, the probable confusion of the triable issues before the jury, the misleading of the jury, and undue consumption of time.
Other decisions that seem, at first glance, to take a contrary position are, upon closer examination, readily distinguishable and, indeed, appear to assume the propriety of excluding such slogans from evidence. For example, in State Farm Insurance Cos. v. Ashley, in appealing a judgment for the limits of an uninsured motorist policy, State Farm argued that “the remark about State Farm’s corporate slogan made by [the plaintiff’s] counsel during closing arguments [‘here’s how fair your good neighbor is’] was intended to prejudice the jury.” The Kentucky Court of Appeals responded to this argument as follows:
Although remarks and arguments appealing to passion and prejudice are improper, the isolated sarcastic comment made here did not rise to the level of a serious breach of the rules. Although no admonition was given, State Farm’s objection was sustained and [the plaintiff’s] counsel abandoned that line of commentary when warned by the trial court and did not return to it. While we do not find that the trial court committed error, even if it had, any error would have been harmless.
Potential Counterarguments
While courts across the country have generally excluded evidence of insurer marketing and advertising slogans in breach of contract and bad faith cases for the reasons stated above, at least five potential counterarguments in favor of admitting insurer slogans at trial warrant consideration.
Reasonable expectations of the policyholder. To the extent a material ambiguity is present in an insurance contract and the rules of interpretation in the jurisdiction require consideration of the reasonable expectations of the insured, certain advertising and marketing materials may arguably shed light on those expectations and thus on the meaning of certain policy language. For this argument to apply, an ambiguity must exist in the insurance contract and the marketing materials in question must be specific enough to actually shed light on the meaning of the ambiguous language. This will rarely be the case, and this argument should never apply to a mere slogan.
Identity of the insurer. One could argue that evidence of such advertising and marketing materials must be considered to provide the jury with evidence concerning who the defendant insurer is. In advancing this contention, one could argue that such evidence is akin to evidence concerning a natural person’s familial status (e.g., whether they are married or have children). However, such evidence concerning a natural person, when admitted, involves material facts. An insurer’s slogan provides no such information and, hence, is devoid of similar probative value.
Veracity. A policyholder’s lawyer may argue that allowing the fact finder to compare an insurer’s slogan to its conduct may shed light on the truthfulness of that insurer. However, because slogans are mere puffery, they do not amount to material statements of fact that may be compared in any meaningful way to an insurer’s conduct to establish duplicity.
Res gestae. One could also argue that such slogans are part of the res gestae and that an insurer, by utilizing them, has implicitly consented to having them considered as part of the whole context in which the parties interacted. Of course, an insurer, by utilizing mere slogans in its marketing, rather than representations of fact, has avoided making those statements a meaningful part of the factual context.
Futility. It may be argued that, given that the slogans have been used in mass marketing, to the extent they could create prejudice, they are already well-known to the trier of fact, and thus that attempts to exclude them from the trier of fact’s consciousness are necessarily futile, if not counterproductive. However, this argument proves too much and, if accepted, would eliminate most efforts to exclude prejudicial evidence. Further, in any given case, it will always be a question of fact whether the premise of the argument is accurate.
Conclusion
Relying on multiple legal grounds, in the context of breach of contract and bad faith lawsuits, nearly all courts that have considered this issue have recognized the impropriety of utilizing insurer marketing slogans to influence the trier of fact. This recognition acknowledges the potential inflammatory consequences of utilizing such slogans with juries and the paramount status of the text of the insurance contract.
