Buckman v. People Exp., Inc.

• Decision Date: 01 September 1987
• Docket Number: No. 13071,13071
• Citation: 205 Conn. 166,530 A.2d 596
• Court: Connecticut Supreme Court
• Parties: Ralph W.P. BUCKMAN v. PEOPLE EXPRESS, INC.

Page 596

530 A.2d 596

205 Conn. 166

Ralph W.P. BUCKMAN v. PEOPLE EXPRESS, INC.

No. 13071.

Supreme Court of Connecticut.

Argued June 9, 1987.

Decided Sept. 1, 1987.

Samuel B. Feldman, East Hartford, with whom, on brief, was Gregory T. D'Auria, Law Student, for appellant (defendant).

John F. McKenna, Hartford, for appellee (plaintiff).

Before ARTHUR H. HEALEY, CALLAHAN, GLASS, FRANCIS X. HENNESSY and STOUGHTON, JJ.

ARTHUR H. HEALEY, Justice.

This is an appeal from a jury verdict for the plaintiff, Ralph W.P. Buckman, in the amount of $51,595.94. On appeal, the defendant, People Express, Inc., claims that the trial court erred in (1) instructing the jury as to bad faith, (2) improperly allowing a recovery for emotional distress, and (3) refusing to grant its motion for remittitur.

The jury could reasonably have found the following background facts. On December 14, 1984, the plaintiff was terminated from his employment with the defendant. On the day after his termination, the plaintiff, citing various medical problems, ¹ wrote a letter to the defendant, a self-insurer, advising it that he wished to continue his health insurance coverage and requesting that the defendant send him an insurance conversion form. Subsequent to this written request, the plaintiff, on a number of occasions, made or attempted to make several oral requests to the defendant for a conversion form. The defendant did not comply with the plaintiff's requests. The plaintiff then contacted an attorney who in turn sent a letter to the defendant fully explaining the situation and requesting an insurance conversion form. This letter was not answered by the defendant.

From December 15, 1984, until early March, 1985, the plaintiff was under the impression that he had no medical coverage. As a result, he became withdrawn, very depressed, unable to eat or sleep, upset and teary, and felt inadequate and irresponsible as a husband and father. ² Citing, inter alia, this emotional distress, the plaintiff filed suit against the defendant. In the first count, the plaintiff sought a recovery based on the "defendant's failure to enable [him] to continue coverage" pursuant to General Statutes § 38-262d. ³ In the second count, the plaintiff sought a recovery based on the defendant's failure "to act in good faith with regard to the interests of the plaintiff in continued group coverage ..." Based on these two counts, the plaintiff sought "[d]amages; [p]unitive or exemplary damages; [a]ttorneys' fees and costs; [i]nterest; and [s]uch equitable relief as the court deems proper." The jury awarded the plaintiff $51,595.94 in damages. ⁴

After the trial court denied the defendant's motions to set aside the verdict and for remittitur, the defendant, on October 9, 1986, filed an appeal in the Appellate Court. On December 19, 1986, this court transferred the appeal to itself. Practice Book § 4023. On June 3, 1987, this court granted the plaintiff's motion for expedited hearing. Practice Book § 4187.

I

The defendant's first claim is that the trial court erred in instructing the jury as to the bad faith alleged in the second count of the plaintiff's complaint. In support of this claim, the defendant argues that such instructions were inappropriate because General Statutes " § 38-262d(a) provides the plaintiff with the sole remedy," namely, that "the employer shall be liable for benefits to the same extent as the insurer or hospital or medical service corporation would have been liable if coverage had not been terminated." The defendant maintains that the employee is "made whole" by the statute and that "[n]owhere in the statute's legislative history does there occur a hint that the legislature meant to provide a recovery for 'bad faith.' " ⁵

General Statutes § 38-262d provides that whenever an employee who is a member of a group hospital or medical insurance plan becomes ineligible for continued participation in such plan for any reason, the medical benefits under such plan shall be made available by the employer to the employee for an extension period of thirty-nine weeks or until the discontinued employee becomes eligible for benefits under another group medical insurance plan. The statute further provides that the employer must inform the employee in writing of his right to continue his medical insurance coverage within ten days after the employee becomes ineligible to participate in the group plan. If the employee elects to continue participation in the group plan, he must notify the employer within thirty days after he becomes ineligible to participate in the group plan. To continue coverage, the employee is responsible for payment of the premium to the employer, policyholder or insurance carrier during the extension period. If, after timely receipt of the premium, the employer fails to make payment to the insurer, the employer is liable for benefits to the same extent as the insurer would have been liable if coverage had not been terminated.

The premise of the defendant's argument that the trial court erred in instructing the jury relative to a claim of bad faith is the assumption that, under the facts of this case, the only cause of action available to the plaintiff is a cause of action based on the violation of the statute. This assumption, however, is erroneous because this court recognizes an independent cause of action in tort arising from an insurer's common law duty of good faith. This cause of action is separate and distinct from the plaintiff's statutory claims. See Magnan v. Anaconda Industries, Inc., 193 Conn. 558, 566, 479 A.2d 781 (1984); Burgess v. Vanguard Ins. Co., 192 Conn. 124, 127, 470 A.2d 244 (1984); Bibeault v. Hanover Ins. Co., 417 A.2d 313 (R.I.1980). An "implied covenant of good faith and fair dealing has been applied by this court in a variety of contractual relationships, including ... insurance contracts; Hoyt v. Factory Mutual Liberty Ins. Co., 120 Conn. 156, 159, 179 A. 842 (1935); Bartlett v. Travelers Ins. Co., 117 Conn. 147, 155, 167 A. 180 (1933); cf. Grand Sheet Metal Products Co. v. Protection Mutual Ins. Co., 34 Conn. Sup. 46, 375 A.2d 428 (1977)...." Magnan v. Anaconda Industries, Inc., supra; see also 2 Restatement (Second), Contracts § 205 (1979); 43 Am. Jur.2d, Insurance §§ 141, 142; 3 G. Couch, Insurance 2d (Rhodes Rev.1984) § 25.32. Given the fact that, in this case, the defendant was both the insurer and employer of the plaintiff, it had a common law duty to act with good faith and fair dealing toward the plaintiff.

The trial court instructed the jury that the defendant, "as a self-insurer, had the duty and obligation under the law to deal fairly and in good faith with its insured...." The court instructed the jury that "[g]ood faith and fair dealing mean an attitude or state of mind denoting honesty of purpose, freedom from intention to defraud and generally speaking means faithful to one's duty or obligation ... an honest intention not to take an unconscientious [sic] advantage of another...." The court also instructed the jury that "[b]ad faith is defined as the opposite of good faith, generally implying a design to mislead or to deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation not prompted by an honest mistake as to one's rights or duties...." The court further instructed the jury that "bad faith is not simply bad judgment or negligence, but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity ... it contemplates a state of mind affirmatively operating with furtive design or ill will." ⁶

Based upon the general verdict rendered by the jury, ⁷ we must presume that the jury found that the defendant acted in bad faith in failing to provide the statutorily mandated notice. From the general verdict, we must also presume that the jury found that this failure on behalf of the defendant resulted in the plaintiff's inability to elect to continue in the group plan which in turn, we must presume, caused the plaintiff's damages. The fact that § 38-262d provides a statutory remedy to the plaintiff does not eliminate the plaintiff's independent cause of action based on the defendant's breach of its common law duty of good faith. As this court has recently noted, " ' "[n]o statute is to be construed as altering the common law, farther than its words import [and that a statute] is not to be construed as making any innovation upon the common law which it does not fairly express." Shaw v. Railroad Co., 101 U.S. (11 Otto) 557, 565, 25 L.Ed. 892 [1879].' Dennis v. Shaw, 137 Conn. 450, 452, 78 A.2d 691 (1951); Stolberg v. Caldwell, 175 Conn. 586, 607, 402 A.2d 763 (1978); 2A J. Sutherland, Statutory Construction (Sands 4th Ed.) § 50.05." State v. Sanchez, 204 Conn. 472, 479, 528 A.2d 373 (1987). The trial court did not err in instructing the jury as to the bad faith alleged in the second count of the plaintiff's complaint.

II

The defendant's second claim of error is that the trial court erred in allowing the plaintiff to recover for his mental and emotional distress. The defendant argues that the plaintiff cannot recover for any claimed mental and emotional distress because the plaintiff did not plead or prove that the defendant knew or should have known " 'that its conduct involved an unreasonable risk of causing emotional distress and that that distress, if it were caused, might result in illness or bodily harm.' [ Montinieri v. Southern New England Telephone Co., 175 Conn. 337, 345, 398 A.2d 1180 (1978) ]." (Emphasis in original.) Morris v. Hartford Courant Co., 200 Conn. 676, 683, 513 A.2d 66 (1986); see also 2 Restatement (Second), Torts § 313 (1965). Although we agree with the principle of law advocated by the defendant, under the facts of this case, we are unpersuaded by the defendant's argument.

In our view, the plaintiff's allegations that "[t]he defendant's failure to enable the plaintiff to continue coverage...