Allstate Ins. Co. v. Eskridge

• Decision Date: 14 September 2001
• Citation: 823 So.2d 1254
• Parties: ALLSTATE INSURANCE COMPANY v. David W. ESKRIDGE.
• Court: Alabama Supreme Court

823 So.2d 1254

ALLSTATE INSURANCE COMPANY v. David W. ESKRIDGE.

1981754.

Supreme Court of Alabama.

September 14, 2001.

As Modified on Denial of Rehearing December 14, 2001.

J. Russell Campbell and Yvonne Norris Beshany of Balch & Bingham, L.L.P., Birmingham, for appellant.

J. Gusty Yearout and John G. Watts of Yearout, Myers & Traylor, P.C., Birmingham, for appellee.

HARWOOD, Justice.¹

David W. Eskridge sued his employer, Allstate Insurance Company, and Allstate's division manager, Nick Wamboldt, asserting various legal claims arising from Allstate's refusal to allow Eskridge to return to work after he had taken sick leave. The trial court entered a summary judgment for the defendants on all of Eskridge's claims except his breach-of-contract and fraud claims; those claims were tried before a jury in a trial that began on April 19, 1999. Eskridge dismissed his claims against Wamboldt during the trial. On April 22, 1999, the jury returned a verdict in favor of Allstate on Eskridge's claim of breach of contract and in favor of Eskridge on his claim of fraud. The jury awarded Eskridge compensatory damages in the amount of $2.1 million. The trial court entered a judgment on the verdict on April 27, 1999, and Allstate filed postjudgment motions seeking, alternatively, a judgment as a matter of law, a new trial, or a remittitur of the damages. The trial court denied Allstate's postjudgment motions on July 7, 1999.

Allstate appeals, arguing that it was entitled to a judgment as a matter of law because, it says, (1) Eskridge failed to prove the elements of his fraud claim and (2) Eskridge's fraud claim alleged promissory fraud and Eskridge failed to prove promissory fraud. Alternatively, Allstate says that it was entitled to a new trial because (1) the jury's award of damages was not accompanied by a finding of intentional fraud; (2) the jury's award of damages was unsupported by the evidence; and (3) the jury's verdict was the result of prejudice caused by allegedly improperly admitted evidence.

At the time of the trial in this case Eskridge had been employed as an Allstate agent for approximately 16 years. As a result of a head injury early in his life, he suffered from a neurological condition that caused him to experience memory loss and chest pains, among other things. Eskridge testified that although his condition affected his performance as an agent, he had been able to perform his job with assistance from his staff. Possibly because of the stress associated with his work for Allstate, Eskridge's condition deteriorated and his symptoms worsened over time. In December 1996, he scheduled a meeting with Wamboldt, then head of Allstate's Department of Human Resources, to discuss the possibility of taking sick leave. Under Allstate's employment policies, given the length of time he had worked for Allstate, Eskridge was entitled to up to 20 weeks of paid sick leave. Eskridge asked Wamboldt what he needed to do to take sick leave and what he would need to do when he was ready to return to work. Eskridge testified that their conversation was as follows:

"[Wamboldt] told me in order to go on sick leave, I needed to bring him a note from my doctor saying that I needed some time off; and I asked him then, I said, `Well, if I go on sick leave and I am off from work, what do I do to come back to work?' And he said, `David, from sick leave, all you have to do is just come back to work.'"

Wamboldt denied making the second statement Eskridge attributed to him, and he testified that he understood that Eskridge intended to take sick leave for "a couple of weeks" in order to undergo various medical tests. Eskridge testified that he was concerned about his job and that he would not have taken sick leave had he known that he would need a note from a doctor clearing him to return to work. He stated that at the time of the December 1996 conversation with Wamboldt, Dr. Greg Hill, his doctor, had already told him that he would never provide Eskridge with a note that indicated that he could return to work. Eskridge stated that in reliance on Wamboldt's statement that he could "just come back to work," he provided Allstate with a note from Dr. Hill and began taking sick leave on January 1, 1997. Dr. Hill's note recommended that Eskridge take medical leave for three weeks because he suffered from complex medical problems.

On January 13, 1997, Dr. Hill extended Eskridge's sick leave for one month so that he could be evaluated further. On February 20, 1997, Eskridge and Dr. Hill informed Allstate that Eskridge would be unable to return to work. Eskridge and Wamboldt met again in March 1997, and they discussed the possibility of Eskridge's taking an "illness leave of absence." Unlike sick leave, the illness leave of absence would be without pay. They also discussed the possibility that Eskridge might apply to MetLife Insurance Company (hereinafter "MetLife") for long-term disability benefits. Soon after the meeting, Allstate provided Eskridge with the necessary forms, and he applied for the disability benefits. In his application, Eskridge stated that he was unable to perform the duties of his job as a result of his medical condition. In his medical notes, Dr. Hill indicated that Eskridge's condition would only worsen over time.

Eskridge testified that in May 1997, near the end of his allowable 20 weeks of sick leave, one of Allstate's employees in its Department of Human Resources, Greg Hill,² contacted him. Eskridge said that in that conversation Hill told him that his disability claim would ultimately be denied, that his sick leave would soon expire, and that he needed to return to work. Eskridge attempted to return to work, but on his first morning back at work, he received a telephone call from an Allstate manager who told him he had to go home unless he could provide a note from his doctor indicating that he was "well." Eskridge had no doctor's statement to this effect, and he went home. In July 1997, MetLife denied Eskridge's application for disability benefits.

Although Eskridge's 20 weeks of paid sick leave expired in May 1997, he was allowed to remain on paid sick leave until September 1997. During that period, additional discussions took place between Eskridge and various Allstate personnel regarding the need for a doctor's clearance before Eskridge would be allowed to return to work. However, Eskridge never produced a statement from any doctor stating that he was able to return to work. In September 1997, Wamboldt informed Eskridge that he would be placed on unpaid "illness leave of absence" unless he could produce the required doctor's note within a few days. According to Eskridge, Wamboldt also informed him that he would be required to maintain, at his expense, his office and his book of business, but that he would not be paid commissions on renewals on that book of business. Eskridge testified that he would have been able to return to work and meet the requirements of his job at Allstate, even if it became necessary to hire additional staff, at his own expense, to help him. He filed this lawsuit on December 31, 1997.

We first consider Allstate's argument that the trial court erred in denying its motion for a judgment as a matter of law on Eskridge's fraud claim. Our standard for review of a trial court's ruling on a motion for a judgment as a matter of law is settled:

"When reviewing a ruling on a motion for a judgment as a matter of law, this Court uses the same standard the trial court initially used in granting or denying the motion. Palm Harbor Homes, Inc. v. Crawford, 689 So.2d 3 (Ala.1997). Regarding questions of fact, the ultimate question is whether the nonmovant has presented substantial evidence to allow the factual issue to be submitted to the jury for resolution. Carter v. Henderson, 598 So.2d 1350 (Ala.1992). See also § 12-21-12, Ala.Code 1975, and West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989). A motion for a judgment as a matter of law `is properly denied where there exists any conflict in the evidence for consideration by the jury.' Cloverleaf Plaza, Inc. v. Cooper & Co., 565 So.2d 1147, 1149 (Ala.1990). `In reviewing a ruling on a motion for a [judgment as a matter of law], this Court views the evidence in the light most favorable to the nonmovant and entertains such reasonable inferences from that evidence as the jury would have been free to draw.' Daniels v. East Alabama Paving, Inc., 740 So.2d 1033, 1037 (Ala.1999)."

Williams v. BIC Corp., 771 So.2d 441, 446 (Ala.2000). See also Norfolk Southern Ry. v. Bradley, 772 So.2d 1147 (Ala.2000)

; Locklear Dodge City, Inc. v. Kimbrell, 703 So.2d 303 (Ala.1997).

In light of the standard set out in Williams, supra, we examine the record to determine whether Eskridge presented substantial evidence of each element necessary to establish his fraud claim. "The elements of fraud are: (1) a misrepresentation of a material fact, (2) made willfully to deceive, recklessly, without knowledge, or mistakenly, (3) that was reasonably relied on by the plaintiff under the circumstances, and (4) that caused damage as a proximate consequence." Brushwitz v. Ezell, 757 So.2d 423, 429 (Ala.2000). We must view the facts in a light most favorable to Eskridge as the nonmovant, and Eskridge's version as to any fact in conflict is accepted over any conflicting version presented by Allstate. Williams, supra; Wilma Corp. v. Fleming Foods of Alabama, Inc.,

613 So.2d 359 (Ala.1993); and Hanners v. Balfour Guthrie, Inc., 564 So.2d 412 (Ala.1990).

The fraud claim in this case relates solely to a question Eskridge asked Wamboldt during their December 1996 meeting. It is undisputed that Eskridge told Wamboldt that he was experiencing "spells where he would have the exact symptoms of a severe heart attack," associated with periods of memory loss, apparently precipitated by stress associated with his job. Eskridge testified that he said to Wamboldt: ...