Andrew Jackson Life Ins. Co. v. Williams, 07-CA-58758
| Citation | 566 So.2d 1172 |
| Decision Date | 25 July 1990 |
| Docket Number | No. 07-CA-58758,07-CA-58758 |
| Parties | ANDREW JACKSON LIFE INSURANCE COMPANY v. Willie L. WILLIAMS. |
| Court | United States State Supreme Court of Mississippi |
Christy D. Jones, Stevenson Ray, Butler Snow O'Mara Stevens & Cannada, Jackson, for appellant.
Michael B. McMahan, McMahan & McMahan, Hattiesburg, for appellee.
Before DAN M. LEE, P.J., and PRATHER and BLASS, JJ.
I. INTRODUCTION
[Once again, this Court is] called upon to redress grievances which [might have been] avoided by proper state regulation of insurance company practices. 1
The primary issue addressed in the case sub judice is whether the insurer, Andrew Jackson Life Insurance Company, should be held accountable for its agents' allegedly "unauthorized" misrepresentations of insurance policy provisions and conditions. In the Hinds County Circuit Court, a jury answered the question in the affirmative and returned a verdict against the company in the amount of $28,000 in compensatory damages and $200,000 in punitive damages. The verdict is affirmed.
In Section I of this opinion, the events which preceded the filing of this appeal are delineated--followed (in Section II) by an analysis of the issues presented. This analysis leads to the ultimate conclusion in Section III--that the jury's verdict was proper.
Finally, no issues pertaining to the constitutionality of the punitive-damages award were raised at trial nor presented on appeal. 2 Accordingly, this Court's scope of review is limited.
In the fall of 1984, Al Page and David Smith, agents for Andrew Jackson Life Insurance Company ("Andrew Jackson"), met with numerous company officials at Universal Manufacturing Company ("Universal") in Mendenhall, Mississippi. The meetings with the officials were scheduled for the purpose of securing permission to offer interested Universal employees a "unique," "local" product contrived by Andrew Jackson. The agents explained that purchasers of the product would receive allegedly "better" coverage than that provided by American Income Insurance Company ("American Income"), which issued the policies then-held by many employees (including the appellee, Willie Williams).
More specifically, the agents explained that what they were offering was not an ordinary life insurance policy; rather, it was a "supplemental retirement program with a death benefit" and an "immediate cash benefit plan" containing a $1,000 "check" 3 which, in the event of an insured's death, could be cashed immediately to pay for such burdensome expenses as funeral arrangements. Of critical significance, the agents assured that employees who decide to enroll in Andrew Jackson's retirement program: (1) could allow their current policies to lapse, and (2) would be covered (insured) "immediately" and unconditionally upon completing an application and "upon signing ... the[ir] payroll deduction card." In essence, the agents guaranteed all-important "risk aversion" 4 and "peace of mind." 5 This was critical to those who were currently insured and were concerned about being without risk aversion and peace of mind once they allowed their policies to lapse. 6
Based on the information the agents provided, permission to offer their retirement program was granted. With their "foot in Universal's door," the aggressive agents incurred no difficulty in persuading Universal employees to "lend an ear." As employees passed through clock alley, 7 their attention was captured by an array of alluring wares displayed on the table. These wares included televisions, radios, money, and teddy bears, and were provided as door prizes (i.e., "gimmicks")--which anyone willing to stop and listen to the agents' offers could win. Basically, the offers included the same information conveyed during meetings with company officials.
Willie Williams, a forklift operator at Universal, was one of the many who were persuaded to sign his payroll-deduction card and to drop his American Income policy through guarantees of immediate "enrollment" in Andrew Jackson's "retirement program." Notably, the application was filled out by an agent as Willie and his wife, Jerlean responded to questions. Upon completing the transaction, the agents told Willie that he could "pick [his] policy up within two to three at the plant." But several weeks passed, and Willie had not received his policy as promised. On February 11, 1985, Jerlean died of a heart attack. Willie again inquired if his policy had arrived--"because [he] needed the $1,000" check from the immediate cash benefit plan "to pay for funeral arrangements." And once again, the reply was: "[I]t [will] probably be in this week[; j]ust check back [later]."
The policy never arrived; instead, Andrew Jackson executives attempted to induce Willie to settle for $1,000 and to sign a release which would have relinquished his rights to receive the full amount of benefits due him under his policy. Willie refused to settle, to which one company executive admonished: "[I]f you don't take this, you might ... get nothing." But Willie, adamant in his refusal to settle, rationalized: "I'm in a bind, but, my God"--"compared to the [death benefits I contracted for] this thousand dollars is nothing [and] I just as soon to do without it." Restated, Willie felt that Andrew Jackson was trying to take advantage of him and use his financial dire straits to compel him to settle. And in light of his heavy financial burdens, accepting the $1,000-settlement offer would hardly make a difference; therefore, he'd rather than "leave it" than "take it." It was simply a matter of principle.
On May 3, 1985, Andrew Jackson mailed Willie a letter officially denying his claim for the death benefits. Andrew Jackson provided the following logic for its denial: (1) Willie applied for a policy which expressly declares it "will not take effect until it has been delivered" and ... until the first premium has been paid ... while the ... Insureds are alive ... and ... prior to any change in health as shown in the application"; (2) The underwriting process was ongoing when Jerlean died, therefore, a contract had not been formed and an actual policy delivered; (3) The underwriting process nonetheless continued, and was eventually completed; and (4) Based on the information adduced during the underwriting process, Jerlean was determined to be "uninsurable" because she had a heart condition which was undisclosed. Andrew Jackson concluded its letter by noting: "Since we are unable to accept your application, we are returning [seven premiums in] the amount of $76.44 which ha[ve] been paid" by your employer through payroll deductions.
Willie attempted to avert litigation. He informed Andrew Jackson that, prior to Jerlean's death, its agents unequivocally formed a contract with him-- notwithstanding Jerlean's disclosure to the agents that she had a heart condition. In essence, Willie contended that Andrew Jackson was accountable for any misrepresentations which they may have made to him regarding policy conditions or to it their principal regarding Jerlean's health. Willie's attempt was to no avail.
On August 26, 1986, Willie filed a complaint at the Hinds County Circuit Court, and contended that he contracted with authorized agents of Andrew Jackson for immediate enrollment in the "retirement program" and, that the insurer breached its "contractual obligations" by denying his claim--and for "no logical, arguable reason." Willie also contended the breach was "prompted by willful and conscience [sic] wrong or by actual malice and fraud or by conduct so grossly negligent and inexcusable" that he is entitled to compensatory damages in the amount of $27,705, and to punitive damages "in the sum of $250,000" (punitive), in addition to costs and interest.
Andrew Jackson countered that conditions of insurability were not met in Willie's case, that it formed no contract with Willie, that its agents are limited to mere solicitation of applications, and that none of its agents is authorized to waive existent conditions or to form binding contracts on its behalf. Therefore, Andrew Jackson concluded that it cannot be held responsible for "any and all wrongful acts" of its agents.
During the course of the trial, Andrew Jackson twice moved for a directed verdict; the motions were denied. After three days of lengthy testimony, the jury returned a verdict in favor of Willie for $28,000 in compensatory damages and $200,000 in punitive damages. Andrew Jackson subsequently and unsuccessfully moved for j.n.o.v. and, alternatively, for a new trial. The motion was denied. Andrew Jackson appealed.
II. ANALYSIS
Eight issues were presented for resolution and are addressed, without specific reference, in the following sections.
The propriety of the jury's award of $28,000 is determinable upon resolution of whether an actual contract was formed between Andrew Jackson's agents and Willie, and whether Andrew Jackson should be bound by the formed contract. Before addressing these issues, discussion of the standard applicable to this Court's review of the jury's finding is in order.
Formation of an insurance contract must be proved by clear and convincing evidence. Mississippi Farm Bureau Mut. Ins. Co. v. Todd, 492 So.2d 919, 928-29 (Miss.1986). And whether a contract was formed is an issue for the fact-finder to resolve. Id. at 929; McPherson v. McLendon, 221 So.2d 75, 79 (Miss.1969). In the case sub judice, the jury resolved the issue against Andrew Jackson, and awarded Willie the amount of the contract (i.e., policy). Regarding this and other issues (discussed in subsequent subsections of this opinion), Andrew Jackson requested a j.n.o.v. and, alternatively, a new trial.
Whe[n] a motion for j.n.o.v. has been made, the trial [judge] must consider all evidence in the light most favorable to the non-movant, who must also be given the benefit of all...
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