Twine v. Liberty Nat. Life Ins. Co.

• Citation: 294 Ala. 43,311 So.2d 299
• Parties: Charles A. TWINE, Jr. v. LIBERTY NATIONAL LIFE INSURANCE CO. SC 1022.
• Decision Date: 10 April 1975
• Court: Supreme Court of Alabama

Page 299

311 So.2d 299

294 Ala. 43

Charles A. TWINE, Jr. v. LIBERTY NATIONAL LIFE INSURANCE CO.

SC 1022.

Supreme Court of Alabama.

April 10, 1975.

J. Richard Carr, Gadsden, for appellant.

Hubert Burns, Gadsden, Ira L. Burleson, Ralph B. Tate, Birmingham, for appellee.

MARRILL, Justice.

This appeal is from a judgment granting defendant's motion for summary judgment. We affirm.

Plaintiff is engaged in the funeral home business in Cherokee County and alleged that he 'has been injured or damaged, directly or indirectly, by an unlawful trust combine or monopoly created and operated by the defendant.' The amended complaint contained four claims. Defendant filed a motion to dismiss under Rule 12(b)(6) ARCP. Prior to a hearing on or response to this motion, defendant amended it with supporting affidavits and other documents and asked that the amended motion be treated as one for summary judgment pursuant to the provisions of Rule 12(b) and 56 ARCP. After oral argument on the motion, the trial court determined that defendant's motion should be granted unless the plaintiff, within ten days from the date of the ruling, filed additional pleadings or counteraffidavits to overcome or refute the matters presented in support of the amended motion.

Plaintiff filed his affidavit. The court overruled the motion to dismiss on May 10, 1974. Defendant filed a motion to set aside the May 10th order. On July 25, 1974, the court, after a hearing, rescinded the May 10the order, and granted defendant's motion for summary judgment.

Plaintiff says that the action was brought under Tit. 7, § 124, Code 1940, which (as stated in brief) 'provides that any person, firm or corporation can bring a suit for damages caused by an unlawful trust, combine, or monopoly.'

Claim One

The alleged unlawful activity consisted of restrictions on trade contained in funeral policies and vault policies. Provisions from each type policy are quoted in the complaint, but there is no material difference except as to purpose, and only the contested paragraph in funeral policies is quoted here:

"AUTHORIZED FUNERAL DIRECTOR--We have authorized various funeral directors throughout Alabama to furnish the funeral benefit provided by this policy, and such benefit is to be furnished only by an authorized funeral director. As used in this policy 'Authorized Funeral Director' means a funeral director authorized by us at the time of your death. 'Retail Value', as used in this policy, refers to the retail prices charged by authorized funeral directors. We will furnish you upon request the names and addresses of all authorized funeral directors."

The contention is that the policies should not be restricted to authorized dealers.

This is required by statute. The Alabama Insurance Code, Acts of Alabama 1971, p. 709, and listed in the 1958 Recompilation as Tit. 28A, §§ 1--759, provides in 17, Burial Insurance Policies, as follows:

' § 393. Certain provisions required.--No policy of burial insurance shall be delivered or issued for delivery in this state unless it contains in substance the provisions set forth in sections 394 through 405, or corresponding provisions which in the opinion of the commissioner are not less favorable in any respect to the policyholder. Any of such provisions or portions thereof not applicable to single premium policies shall to that extent be omitted therefrom.'

And § 398 provides in pertinent part:

'There shall be a provision (in the burial insurance policy) that the insurer has contracted with and appointed an authorized funeral director or monument dealer in this state to furnish the merchandise and services provided by the policy. The policy may also provide that the term 'authorized funeral director' or 'authorized monument dealer' shall mean a funeral director or monument dealer authorized by the insurer at the time of the insured's death.'

The contested paragraph in the policy quoted supra shows that it contains substantially the required provisions. The affidavit of William T. Graves, Vice President of Liberty National, states that policies containing the 'restraint of trade' provisions were approved by the Commissioner of Insurance of Alabama. This was not denied or controverted by plaintiff's affidavit. The affidavit of Charles Healey, President of Brown-Service Funeral Homes Company, Inc., stated that the 'authorized funeral director' required under the policy were those independent funeral directors throughout the State of Alabama with whom Brown-Service, a wholly-owned subsidiary of Liberty National, has contracted to provide the services under such policies. This fact was not denied by plaintiff.

There can be no legal claim for damages to the person or property of any one except as it follows from the breach of a legal duty. Pickett v. Matthews, 238 Ala. 542, 192 So. 261, and whatever damage results from doing that which is lawful does not lay the foundation of an action. Randle v. Payne, 39 Ala.App. 652, 107 So.2d 907, cert. denied 268 Ala. 697, 107 So.2d 913.

In Alabama Power Co. v. Alabama Electric Cooperative, 394 F.2d 672 (5th Cir.), cert. den. 393 U.S. 1000, 89 S.Ct. 488, 21 L.Ed.2d 465, the court stated that 'The Supreme Court has repeatedly held that, 'where a restraint upon trade or monopolization is the result of valid governmental action, as opposed to private action, no violation of the (Sherman) Act can be made out. United States v. Rock Royal Co-op, 307 U.S. 533, 59 S.Ct. 993, 83 L.Ed. 1446, Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315.' Eastern R. Conf. v. Noerr Motors, 1961, 365 U.S. 127, 136, 81 S.Ct. 523, 529, 5 L.Ed.2d 464.' 'These decisions rest upon the fact that under our form of government the question whether a law of that kind should pass, or if passed be enforced, is the responsibility of the appropriate legislative or executive branch of government so long as the law itself does not violate some provision of the Constitution.' Noerr Motors, supra.

Here, defendant did no more than the statute required. There is no merit in Claim One.

Claim Two

The unlawful activity charged in Claim Two was price fixing. Plaintiff charged that the defendant owned Brown-Service, and had contracted with Brown-Service to service its burial insurance policies; that Brown-Service had contracted with plaintiff's competitors in Cherokee and surrounding counties, and a copy of the contract with his competitors was attached as Exhibit A.

Since the only affidavit supporting plaintiff's complaint was his own, we copy the body of the affidavit in which he said:

'1. That he is a resident citizen of Cherokee County, Alabama, the plaintiff of this lawsuit, over the age of twenty-one years, and a member of the black race.

'2. That he is engaged in the funeral home business under the name of Twine's Funeral Home in Cherokee County, Alabama.

'3. That the population of Cherokee County, Alabama, is approximately 15,000 people, including men, women and children. Further, that a great majority of the adult citizens of Cherokee County, both black and white, are covered by a burial policy issued by the defendant.

'4. That he cannot remain in the Funeral Home business unless he has an opportunity to bury people who die and who were covered by a burial policy issued by the defendant at the time of their death.

'5. That unless he will enter into a contract with the Brown Service Funeral Homes Company, Inc., to be a contract mortician, the defendant will not pay him when he buries a person who was covered by one of their policies.

'6. That the said contract is in restraint of trade in that it prohibits him from effectively competing for a majority of the business in which he is engaged.

'7. That if he enters into the contract and becomes a contract mortician, that said contract then fixes the prices of the funeral. Plaintiff would be paid the sum set out in the contract for performing the funeral, rather than the amount that he would normally charge for such a funeral.

'8. That if he became a contract mortician, he would be defrauding the public in that the policy holder would think he was getting a $300.00 funeral when, in fact, he would be getting a $95.00 funeral, which is all the defendant would pay the plaintiff for performing a $300.00 funeral.

'9. That if he entered into said contract, he would be forced out of business, in that he cannot provide a $300.00 funeral for $95.00, or a $600.00 funeral for $150.00, as provided in said contract.

'10. That the defendant, by monopolizing the funeral service business in Cherokee County, and by refusing to pay the face value of the policy and by refusing to pay the plaintiff when he services one of their policies, has injured or damaged the plaintiff directly and indirectly.

'11. That said activity is an unlawful trust, combine or monopoly, and that same was created and operated by the defendant.

'12. That the contract between Liberty National Live Insurance Company and its wholly owned subsidiary, Brown-Service Funeral Homes Company, Inc., and the contract between Brown-Service Funeral Homes Company, Inc., and its authorized funeral directors is in restraint of trade in that it extinguishes all competition and in that it fixes the prices of funerals in Cherokee County, Alabama.

'13. That said contracts are aimed at creating an absolute monopoly for the black funeral home business in Cherokee County, Alabama, to the end that black people who have $300.00 and $600.00 funeral policies with the defendant and expect to be furnished a funeral of that caliber, will be furnished instead a $95.00 funeral or a $150.00 funeral.

'14. That the above facts are true and correct.'

It is an accepted principle of business law that any seller may determine the price at which he will sell his own product or service and any buyer may determine what he is willing to pay for any product or service.

The distinction between a purchaser and seller agreeing upon the price that they will pay...