493 So.2d 1374 (Ala. 1986), 84-1046, Hammond v. City of Gadsden

Docket Nº84-1046, 84-1133.
Citation493 So.2d 1374
Opinion JudgeSHORES, Justice.
Party NameKathryn E. HAMMOND v. CITY OF GADSDEN, et al. CITY OF GADSDEN, et al. v. Kathryn E. HAMMOND.
AttorneyWilliam D. Russell, Jr., of Dortch, Wright & Russell, Gadsden, for appellant/cross-appellee. Roger W. Kirby, City Atty., Gadsden, for appellees/cross-appellants.
Case DateJuly 11, 1986
CourtSupreme Court of Alabama

Page 1374

493 So.2d 1374 (Ala. 1986)

Kathryn E. HAMMOND

v.

CITY OF GADSDEN, et al.

CITY OF GADSDEN, et al.

v.

Kathryn E. HAMMOND.

84-1046, 84-1133.

Supreme Court of Alabama.

July 11, 1986

William D. Russell, Jr., of Dortch, Wright & Russell, Gadsden, for appellant/cross-appellee.

Roger W. Kirby, City Atty., Gadsden, for appellees/cross-appellants.

SHORES, Justice.

This case involves an appeal and cross-appeal from the trial court's order granting the City of Gadsden a new trial, conditioned upon the plaintiff's refusal to accept a remittitur of damages.

Prior to 1980, employees of the City of Gadsden were insured for hospitalization, major medical, short-term disability, and life insurance coverage through General American Life Insurance Company. The plan provided conversion privileges for employees to continue participation in the program after retirement. The plan also provided conversion privileges for the retiree's spouse upon the death of the retiree, if the surviving spouse was covered by the plan at the time of the death.

In June 1980, the city changed to a self-funded employee benefit plan administered by Marketing Management Administrator Associates and a local agency, Red Leach & Son Insurance. The plan did include

Page 1375

conversion privileges for retirees "on an individual basis," but dropped the privilege for the surviving spouse. The plan booklet stated: "There are no other conversion privileges under the Plan." (Emphasis in original.) The plan remained in effect until September 1, 1983, when Blue Cross-Blue Shield became the administrator. The Blue Cross-Blue Shield plan reinstated conversion privileges for surviving spouses.

Kathryn Hammond's husband, J. Curtis Hammond, worked for the city water works and sewer board until he retired in 1973. Both he and his wife were covered by the city insurance plan. Around June 1980, Mr. Hammond received a letter from the Gadsden City Commission, discussing the transfer to the self-funded plan. Addressed to all retirees, the letter stated:

"There are no changes in your existing benefits--

"There is complete continuity between the old and new plans--....

"From your viewpoint, it's just as though there hadn't been a change...." (Emphasis in original.)

Mr. Hammond continued to pay monthly premiums for coverage until his death on September 18, 1981. When Mrs. Hammond and her son, Richmond, went to the Leach Agency to collect life insurance benefits, Mrs. Hammond learned for the first time that she would be covered under the plan for one year from the date of her husband's death and would not have to pay any premiums during that one-year period. However, she also learned that, upon the expiration of the one-year period, she would be dropped from the plan.

On December 3, 1981, the Hammonds met with Gadsden Mayor Steve Means, a friend of her son, to discuss the possibility of Mrs. Hammond's continuing under the city's group coverage beyond the one-year period. Mrs. Hammond was concerned that she might not be able to get any insurance coverage because of her past medical history. Mayor Means testified:

"I expressed some concern about Mrs. Hammond's situation and I was very anxious to try to help her out if I possibly could. I could understand the dilemma of someone who was just a couple of years away from being eligible for Medicare, that due to their age and this particular gap between that age and being eligible for Medicare that it would be very difficult to get other insurance.... I indicated to Mrs. Hammond that I would look into it to see if there was anything that might possibly be done to help her out."

On January 4, 1982, Mayor Means wrote a letter to Richmond Hammond, stating:

"I'm still working on this and have just today spoken with our insurance carrier. I don't have any idea whether or not I'll be able to work anything out, but I did want you to know I was trying my best. I will keep you informed as things develop."

According to Richmond Hammond, he and his mother had several more discussions with the mayor during the year.

In October 1982, Mayor Means sent a note to the Hammonds thanking them for their get-well card to him. His note included a postscript: "I think about you often. Did you ever work anything out on your insurance matter?"

Mrs. Hammond testified that Mayor Means also told her son to inquire about separate insurance with the Leach Agency. On November 1, 1982, Mrs. Hammond paid $82.77 for an insurance policy but was informed in April 1983 that the insurance company had rejected her application. Leach refunded the premium payment, with a letter stating that the agency would continue its attempts to find hospitalization coverage for Mrs. Hammond. A copy of the letter was sent to Mayor Means.

Mrs. Hammond met again with the mayor in April or May 1983, and once more on November 1, 1983. Jan Veal, director of loss control for the city, attended the latter meeting "to talk about her situation and to see if I knew of anyone with my insurance contacts that could find her some sort of coverage." Veal made a number of calls and told Mrs. Hammond of several possibilities

Page 1376

with local agents. Veal encouraged Mrs. Hammond to contact these agents directly.

Sometime around early 1984, Mrs. Hammond called Veal again, stating that she still had not found coverage and that she was upset with Veal's efforts. Veal explained that "we had done all we could do."

Mrs. Hammond filed this action against the city and the water works and sewer board on May 14, 1984, alleging fraud, breach of contract, and negligence. She alleged that the city commission's letter contained misrepresentations by stating that the change in insurers in June 1980 resulted in no changes in the insurance program. In addition to a general denial, the city and the board raised the affirmative defense of statute of limitations. The trial court granted the defendants' motion for directed verdict on the contract and negligence courts, but the fraud and statute-of-limitations issues were submitted to the jury. The jury returned a verdict of $12,000 for Mrs. Hammond. In response to the city's motion for judgment notwithstanding the verdict (JNOV) or, alternatively, for a new trial, the trial court ordered a new trial unless Mrs. Hammond filed a remittitur of that portion of the verdict in excess of $2,000. Both sides appealed to this Court.

The parties raise several issues, which will be discussed in turn. However, a review of the appropriate standards of appellate review is useful here. A motion for directed verdict or JNOV is tested against the scintilla rule, which requires that a question go to the jury "if the evidence or any reasonable inference arising therefrom, furnishes a mere gleam, glimmer, spark, the least particle, the smallest trace, or a scintilla in support of the theory of the complaint." Alabama Power Co. v. Taylor, 293 Ala. 484, 306 So.2d 236 (1975). In reviewing a trial court's ruling on these motions, the appellate court, guided by the standard of the scintilla rule, determines whether there was sufficient evidence below to produce a conflict warranting jury consideration. Baker v. Chastain, 389 So.2d 932 (Ala.1980). Like the trial court, the appellate court must view all the evidence in a light most favorable to the non-moving party. Ritch v. Waldrop, 428 So.2d 1 (Ala.1982).

In reviewing a trial court's ruling on a new trial motion, based on the weight and preponderance of the evidence, the standard of review guiding the appellate court is whether the trial court abused its discretion in disposing of the motion. Pepsi-Cola Bottling Co. v. Colonial Sugars, a Division of Borden, Inc., 423 So.2d 190 (Ala.1982). The trial court's decision will not be overturned on appeal unless the evidence "plainly and palpably" shows that the trial court erred in ruling on the motion for new trial. Herrington v. Central Soya Co., 420 So.2d 1 (Ala.1982). The appellate court must view the tendencies of the evidence most favorably to the non-moving party and must indulge such inferences as the jury was free to draw. Cooper v. Peturis, 384 So.2d 1087 (Ala.1980).

In their motions for JNOV or new trial, the city and the board contended that Hammond's claim was barred by the statute of limitations for fraud. An action for fraud must be "commenced within one year." Code...

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  • 108 So.3d 1022 (Ala.Civ.App. 2012), 2110178, Engineered Cooling Services, Inc. v. Star Service, Inc. of Mobile
    • United States
    • Alabama Alabama Court of Civil Appeals
    • 8 Junio 2012
    ...should have stated its reasons for determining that the punitive-damages award was not excessive, see, e.g., Hammond v. City of Gadsden, 493 So.2d 1374, 1379 (Ala.1986), we remand the cause with instructions for the trial court to enter an order stating its reasons for determining that the ......
  • 12 So.3d 32 (Ala. 2008), 1060615, Southeast Environmental Infrastructures, L.L.C. v. Rivers
    • United States
    • Alabama Supreme Court of Alabama
    • 27 Junio 2008
    ...and punitive-damages awards and requested a hearing in accordance with the decisions of this Court in Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986), and Green Oil Co. v. Hornsby, 539 So.2d 218 (Ala.1989). The trial court scheduled those motions to be heard on December 1, 2006. The d......
  • 519 So.2d 912 (Ala. 1987), 86-555, Kabel v. Brady
    • United States
    • Alabama Supreme Court of Alabama
    • 18 Diciembre 1987
    ...corruption, or other improper motive. Mobile Dodge, Inc. v. Alford, 487 So.2d 866 (Ala.1986). In accord with Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986), the trial court properly stated and applied the factors to be considered in ruling on the defendant's post-judgment motions. Le......
  • 524 So.2d 586 (Ala. 1987), 83-110, Sharp Electronics Corp. v. Shaw
    • United States
    • Alabama Supreme Court of Alabama
    • 30 Octubre 1987
    ...or findings of fact, we remand this cause for reconsideration of the issue of excessiveness, pursuant to Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986). See, also, Harmon v. Motors Insurance Corp., 493 So.2d 1370 (Ala.1986); Alabama Farm Bureau Mutual Casualty Insurance Co. v. Griffi......
  • Request a trial to view additional results
342 cases
  • 108 So.3d 1022 (Ala.Civ.App. 2012), 2110178, Engineered Cooling Services, Inc. v. Star Service, Inc. of Mobile
    • United States
    • Alabama Alabama Court of Civil Appeals
    • 8 Junio 2012
    ...should have stated its reasons for determining that the punitive-damages award was not excessive, see, e.g., Hammond v. City of Gadsden, 493 So.2d 1374, 1379 (Ala.1986), we remand the cause with instructions for the trial court to enter an order stating its reasons for determining that the ......
  • 12 So.3d 32 (Ala. 2008), 1060615, Southeast Environmental Infrastructures, L.L.C. v. Rivers
    • United States
    • Alabama Supreme Court of Alabama
    • 27 Junio 2008
    ...and punitive-damages awards and requested a hearing in accordance with the decisions of this Court in Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986), and Green Oil Co. v. Hornsby, 539 So.2d 218 (Ala.1989). The trial court scheduled those motions to be heard on December 1, 2006. The d......
  • 519 So.2d 912 (Ala. 1987), 86-555, Kabel v. Brady
    • United States
    • Alabama Supreme Court of Alabama
    • 18 Diciembre 1987
    ...corruption, or other improper motive. Mobile Dodge, Inc. v. Alford, 487 So.2d 866 (Ala.1986). In accord with Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986), the trial court properly stated and applied the factors to be considered in ruling on the defendant's post-judgment motions. Le......
  • 524 So.2d 586 (Ala. 1987), 83-110, Sharp Electronics Corp. v. Shaw
    • United States
    • Alabama Supreme Court of Alabama
    • 30 Octubre 1987
    ...or findings of fact, we remand this cause for reconsideration of the issue of excessiveness, pursuant to Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986). See, also, Harmon v. Motors Insurance Corp., 493 So.2d 1370 (Ala.1986); Alabama Farm Bureau Mutual Casualty Insurance Co. v. Griffi......
  • Request a trial to view additional results
3 books & journal articles
  • Beyond State Farm: due process constraints on noneconomic compensatory damages.
    • United States
    • Harvard Journal of Law & Public Policy Vol. 27 Nbr. 1, September 2003
    • 22 Septiembre 2003
    ...be reasonable." (citation omitted)). (202.) Haslip, 499 U.S. at 20 (footnote omitted). (203.) Id. (quoting Hammond v. Gadsden, 493 So. 2d 1374, 1379 (Ala. 1986)). (204.) Id. (205.) Id. at 20-21. (206.) Id. at 21. This statement may have been unduly optimistic because, as discussed belo......
  • Post-Judgment Review of Punitive Damages, 0716 ALBJ, 77 The Alabama Lawyer 250 (2016)
    • United States
    • Alabama Bar Lawyer Nbr. 77-4, July 2016
    • 1 Julio 2016
    ...the plaintiff gave the defendant to remedy the wrong. See Green Oil, 539 So. 2d at 223-24; Hammond v. City of Gadsden, 493 So. 2d 1374, 1379 (Ala. 1986); Ala. Code § 6-11-23(b). These factors are not exclusive; a court may also consider “other relevant factors.” Kil......
  • Vol. 6, No. 3, Pg. 18. Trial Trifurcation/Quadrification Unbridled Punitive Verdicts In Federal Court.
    • United States
    • South Carolina Bar Journal Nbr. 1994, January 1994
    • 1 Enero 1994
    ...at 17, 111 S.Ct. 1045. The Haslip court then enunciated (not mandated) what are now known as the Hammond v. City of Gadsden, 493 So.2d 1374, 1379 (Ala. 1986), factors. They are: Whether there is a reasonable relationship between the punitive damages award and the harm l......