Blue Cross Health Services, Inc. v. Sauer, 57011

• Citation: 800 S.W.2d 72
• Decision Date: 30 October 1990
• Docket Number: No. 57011,57011
• Parties: 14 UCC Rep.Serv.2d 799 BLUE CROSS HEALTH SERVICES, INC., f/k/a Blue Cross Hospital Services, Inc., Plaintiff/Appellant, v. William R. SAUER, R.T. Sauer Agency, Ltd., a corporation and Robert Sauer, Defendants/Respondents.
• Court: Court of Appeal of Missouri (US)

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800 S.W.2d 72 14 UCC Rep.Serv.2d 799 BLUE CROSS HEALTH SERVICES, INC., f/k/a Blue Cross Hospital
Services, Inc., Plaintiff/Appellant,
v.
William R. SAUER, R.T. Sauer Agency, Ltd., a corporation and
Robert Sauer, Defendants/Respondents. No. 57011. Missouri Court of Appeals,
Eastern District,
Division Four. Oct. 30, 1990.
Motion for Rehearing and/or Transfer to
Supreme Court Denied Dec. 12, 1990.

Application to Transfer Denied Jan. 9, 1991.

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Martin J. Toft, III, Craig Nicholas Schmid, St. Louis, for plaintiff/appellant.

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Norton Y. Beilenson, Clayton, for defendants/respondents.

CARL R. GAERTNER, Presiding Judge.

Blue Cross Health Services, Inc. (Blue Cross) appeals from the order granting defendants R.T. Sauer Agency, Ltd., and Robert Sauer a new trial. We reverse and remand to the trial court with directions to reinstate the judgment.

William R. Sauer's medical, drug and alcohol problems since childhood left him "physically and mentally incapacitated." On June 6, 1984, William R. Sauer, upon admission to Missouri Baptist Hospital, informed the admission clerk he carried Blue Cross Health Insurance but did not have his Blue Cross card with him. He had been covered by Blue Cross from 1980 until March 1, 1984, when coverage was terminated for non-payment of premiums. His father, Robert T. Sauer, personally paid all of his son's Blue Cross premiums. At the time of admission, William R. Sauer gave his address as P.O. Box 176, Chesterfield, Missouri. This post office box was owned by and is the principal address of the R.T. Sauer Agency. Robert T. Sauer is the president, sole shareholder and director of the R.T. Sauer Agency which operates out of his home.

In 1984, Missouri Baptist Hospital Patient Accounts' Department had an on-line computer with Blue Cross. Although William had provided his middle initial on admission, a hospital employee, who later made a computer search for his Blue Cross certificate number, failed to transmit his middle initial. The computer noted coverage for a William J. Sauer of Milwaukee, Wisconsin. The clerk, apparently assuming a change of address for the subscriber, William J. Sauer, entered the address William R. Sauer had provided.

From July 27, 1984 through February 22, 1985, Blue Cross mistakenly mailed sixty-six checks to William Sauer at P.O. Box 176, Chesterfield, Missouri which were intended to cover medical services for William J. Sauer's child in Milwaukee, Wisconsin. Each check was mailed in a separate envelope which also contained a form entitled "Explanation of Benefits." Thirty-three of the checks, totalling $10,108.36, were endorsed by William R. Sauer's signature or signature stamp; twenty-eight checks, totalling $3,874.72, were endorsed by William R. Sauer and the R.T. Sauer Agency; three checks, totalling $1,267.20, were endorsed only by the R.T. Sauer Agency; and two checks, totalling $6,773.01, were endorsed by William R. Sauer and Robert T. Sauer. Checks endorsed by the R.T. Sauer Agency went into the corporate account. Checks with Robert T. Sauer's personal signature went into his personal account.

In March, 1985, Blue Cross discovered the mistake. A demand letter was sent to William R. Sauer on March 29, 1985. Although receipt of the letter was acknowledged by William R. Sauer on April 2, 1985, no repayment was forthcoming.

Blue Cross filed suit in equity against William R. Sauer and the R.T. Sauer Agency on May 14, 1985, praying that the court impose a constructive trust upon the funds of the defendants for the use and benefit of the plaintiff based on unjust enrichment and mistake. An interlocutory default judgment was entered against defendant William R. Sauer on May 24, 1988. By consent of the parties, Robert T. Sauer was added as a defendant in 1988. Defendants twice moved for a transfer of the case from an equity division to a law division and for a jury trial. Both motions were denied. After a non-jury trial the court ordered that Blue Cross recover $22,023.29 from defendant William R. Sauer of which $6,773.01 should be allocated as a joint and several obligation of defendants William R. Sauer and Robert T. Sauer, and $5,141.92 should be allocated as a joint and several obligation of defendants William R. Sauer and the R.T. Sauer Agency. Costs were to be shared by the defendants.

On July 12, 1989, the court sustained a motion filed by defendants Robert T. Sauer and R.T. Sauer Agency for a new trial and ordered the cause transferred from the equity docket to the civil docket. Later the court amended its order by adding "for the

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reason that defendants were entitled to a trial by jury."

Blue Cross first contends that the trial court erred in failing to specify in its order the grounds for granting a new trial as required by Rule 78.03, and that the defect was not corrected by the subsequent amended order. Rule 78.03 requires the trial court to specify the ground or grounds upon which a new trial is granted. Failure to do so creates a presumption of error and imposes upon the party in whose favor the new trial was granted the burden of supporting such action. Rule 84.05(b). The obvious purpose of these rules is to protect the party appealing from an order granting a new trial from the necessity of showing an absence of merit in each assignment of error set forth in the motion. Rather, it is appropriate to require the beneficiary of the new trial to identify the specific issues which are relied upon to support the order. As a means of carrying out this purpose, Rule 84.05(b) authorizes an appellant to call upon the respondent to prepare and file the original brief on appeal. Blue Cross did not avail itself of this prerogative but proceeded as appellant to file its brief challenging the grant of the new trial for the reasons stated in the amended order. Relying on Hightower v. Hightower, 590 S.W.2d 99, 102 (Mo.App.1979) and Farrell v. DeClue, 365 S.W.2d 68, 72 (Mo.App.1963), Blue Cross argues that the failure to specify grounds for granting a new trial is a judicial, not clerical, error and therefore not correctable...