Travelers Indem. Co. of Illinois v. Griner

• Decision Date: 20 April 2001
• Citation: 809 So.2d 808
• Court: Alabama Supreme Court
• Parties: The TRAVELERS INDEMNITY COMPANY OF ILLINOIS and Crawford & Company v. Sidney O. GRINER.

809 So.2d 808

The TRAVELERS INDEMNITY COMPANY OF ILLINOIS and Crawford & Company v. Sidney O. GRINER.

1925.

Supreme Court of Alabama.

April 20, 2001.

Rehearing Denied July 13, 2001.

Keith J. Pflaum and W. Perry Webb of Porterfield, Harper & Mills, P.A., Birmingham; and Michael Leo Hall of Burr & Forman, L.L.P., Birmingham, for appellants.

Stephen D. Heninger of Heninger, Burge, Vargo & Davis, L.L.P., Birmingham, for appellee.

STUART, Justice.

Sidney O. Griner was a truck driver employed by Charles G. Lawson Trucking, Inc. ("Lawson"). The Travelers Indemnity Company of Illinois ("Travelers") and Crawford & Company ("Crawford") administered the workers' compensation claims for Lawson. In August 1996, Griner sued Lawson, Travelers, and Crawford, alleging fraud, outrageous conduct, and contempt of court on the part of Travelers and Crawford related to the medical treatment he had received for an injury he had incurred on the job. A jury awarded him $300,000 in compensatory damages and $200,000 in punitive damages.

Griner injured his back in May 1990, while unloading wooden pallets. The indemnity or compensation portion of Griner's workers' compensation claim was settled by an agreement under which Griner received a $60,000 lump sum and periodic payments of $399 per month for 10 years. With regard to responsibility for payments for future medical care, the settlement stated:

"[Travelers and Crawford] shall pay the reasonably necessary future medical expenses proximately resulting from [Griner's] alleged accident."

(Griner's exhibit 2.)

Griner's injury was substantial, and it required extensive medical treatment, including spinal-fusion surgery. Griner testified that before September 14, 1993, the date of his spinal-fusion surgery, he had had no significant problems getting his medical expenses paid by Travelers and Crawford. However, after undergoing the spinal-fusion surgery, he said, Travelers and Crawford, despite the requirements of the policy and the court order, delayed payment for reasonable and necessary medical devices and treatment and often refused to pay for them.

In his lawsuit, Griner specifically claimed that the defendants had failed to authorize certain reasonably necessary medically related expenditures, including expenditures necessary to purchase a hospital bed, to purchase a whirlpool tub, and to pay for psychotherapy. The court entered summary judgment for Lawson.

Travelers and Crawford removed the lawsuit to the United States District Court for the Middle District of Alabama; that court remanded to the state court. Meanwhile, Griner and his wife had filed a Chapter 13 bankruptcy petition. Travelers and Crawford then filed a petition in the bankruptcy court to stay the state-court action and to substitute the bankruptcy trustee for Griner in the state-court action. According to Travelers and Crawford, Griner, by reason of his filing the bankruptcy petition, lacked standing to pursue his damages claim. They also contended that the doctrine of judicial estoppel should bar Griner from pursuing his claims. The bankruptcy court ruled that Griner was the proper party, refused to enjoin the trial of this case, and held that the doctrine of judicial estoppel did not apply. In re Griner, 240 B.R. 432 (Bankr. S.D.Ala.1999).

At the close of the evidence in the state court, the court entered a judgment as a matter of law for Travelers and Crawford on the fraud claim, reserved the contempt issue for resolution at a later time, and submitted to the jury the claim for damages based upon the alleged outrageous conduct of Travelers and Crawford. Travelers and Crawford raised the same issues they had raised before the bankruptcy court, by way of a motion for a directed verdict. The trial court held that because the bankruptcy judge had ruled on these issues, the doctrine of res judicata foreclosed additional judicial review, and it denied the motion for a directed verdict.

The jury returned a verdict in favor of Griner, assessing $300,000 in compensatory damages and $200,000 in punitive damages. The court entered a judgment on the verdict on March 5, 1999. Travelers and Crawford moved for a judgment as a matter of law or, in the alternative, a remittitur or a new trial. The trial court never ruled on these motions; consequently, they were denied by operation of law. See Rule 59.1, Ala.R.Civ.P. Travelers and Crawford appealed.

On August 11, 2000, this Court remanded the cause for the trial court to resolve the contempt claim. The trial court did so, and in its return to remand it submitted an order holding Travelers and Crawford in contempt of court. The trial court ordered Travelers and Crawford to provide and pay for the electric hospital bed and the whirlpool tub within 60 days of the order.

I.

Travelers and Crawford contend that the trial court erred in denying their motion for a judgment as a matter of law because, they say, Griner failed to present sufficient evidence of the tort of intentional infliction of emotional distress—the tort of outrage—to submit the case to the jury.

In American Road Service Co. v. Inmon, 394 So.2d 361 (Ala.1980), this Court recognized this particular tort, stating:

"[W]illful wrongs, or those made so recklessly as to equate willfulness, authorize recovery in damages for the mental suffering caused thereby, and we now recognize that one who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress and for bodily harm resulting from the distress. The emotional distress ... must be so severe that no reasonable person could be expected to endure it. Any recovery must be reasonable and justified under the circumstances, liability ensuing only when the conduct is extreme. Comment, Restatement [(Second) of Torts, § 46 (1965)], at 78. By extreme we refer to conduct so outrageous in character and so extreme in degree as to go beyond all possible bounds of decency, and to be regarded as atrocious and utterly intolerable in a civilized society. Comment (d), Restatement, supra at 72."

394 So.2d at 365. In Garvin v. Shewbart, 442 So.2d 80 (Ala.1983), this Court held that the exclusivity provisions of the Workers' Compensation Act, §§ 25-5-11, -52, and -53, Ala.Code 1975, do not bar claims based on the tort of outrage. In Continental Casualty Insurance Co. v. McDonald, 567 So.2d 1208 (Ala.1990), the Court stated that there is a threshold beyond which an insurance company's recalcitrance must go before it crosses into actionable outrageous conduct.

Griner's evidence established, and Travelers and Crawford did not disagree, that Travelers had the legal obligation to pay for and provide all reasonable and necessary medical services, including prescribed treatments, medication, devices, therapy, and equipment. Additionally, the policy's only condition required that such services be prescribed by an authorized physician. Travelers and Crawford admitted that an insurance carrier cannot arbitrarily refuse to provide any reasonable and necessary things ordered by authorized treating physicians.

An examination of the evidence in this case indicates that the trial court properly refused to direct a verdict on the tort-of-outrage claim. The evidence showed that an authorized physician had ordered a hospital bed, a whirlpool tub, and psychiatric treatment for Griner. Travelers and Crawford did not pay for these items, although they had no information indicating that they were not reasonable and necessary. Because after the back surgery Griner suffered pain that prevented him from sleeping in a regular bed and therefore had to sleep in a recliner, an authorized physician ordered a hospital bed to help Griner sleep. The whirlpool tub was authorized by a physician because Griner suffered from significant pain and swelling in his legs and feet, problems that the water therapy would help alleviate. Dr. Gerald Sweeney, one of Griner's physicians, wrote a letter to Travelers and Crawford explaining that he had prescribed a whirlpool tub because it "would allow [Griner] to reduce his medication load and significantly improve his overall health as well as relieve his lower back pain." The evidence indicated that three authorized physicians had ordered the whirlpool tub, but that it was never provided. Dr. Sweeney further testified that Griner suffered the usual depression that accompanies chronic pain. He testified that Travelers and Crawford's refusal to provide the prescribed whirlpool tub and hospital bed made Griner's depression worse. The following testimony from Dr. Sweeney was admitted at trial:

"Q. Doctor, do you have an opinion as to whether the failure to provide medications —prescription medications, hot tubs, electric hospital bed, referrals to Dr. Das, Dr. Singh, do you have an opinion as to whether that would have exacerbated or made worse Sid Griner's depressive condition?

"A. I know that—I know that it did. I know that it did. I saw the change in Sid. At one stage there were so many objections by the insurance company, that you would almost get the feeling that they were being punitive to this individual, for whatever reason."

(Dr. Sweeney's deposition at pp. 59-60.)

The claims adjuster, Angela McDonald, admitted at trial that prescriptions for a hospital bed, a whirlpool tub, and psychiatric treatment had been submitted. She conceded that these items should have been provided under the terms of the policy, but that so far as she knew they were not. McDonald qualified her testimony by stating that although the hospital bed, the whirlpool tub, and the psychiatric treatment had not been authorized by Travelers and Crawford, they also had not been denied. The evidence clearly established that these items, which had been authorized by physicians, were not provided for a period of approximately five years.

Consequently, Griner remained depressed and in pain for an extended...