Capriulo v. Bankers Life Co.

• Decision Date: 19 March 1986
• Docket Number: 71574,Nos. 71573,s. 71573
• Citation: 344 S.E.2d 430,178 Ga.App. 635
• Parties: CAPRIULO et al. v. BANKERS LIFE COMPANY et al. SYSCO CORPORATION v. CAPRIULO et al.
• Court: Georgia Court of Appeals

Page 430

344 S.E.2d 430

178 Ga.App. 635

CAPRIULO et al. v. BANKERS LIFE COMPANY et al.

SYSCO CORPORATION v. CAPRIULO et al.

Nos. 71573, 71574.

Court of Appeals of Georgia.

March 19, 1986.

Rehearing Denied April 4, 1986.

Certiorari Denied May 7, 1986.

Frank J. Klosik, Jr., H. Edward Marks, Jr., for appellants (case no. 71573).

James A. Gober, Allen I. Hirsch, Ben Kingree III, for appellees.

James A. Gober, Allen I. Hirsch, for appellant (case no. 71574).

Frank J. Klosik, Jr., H. Edward Marks, Jr., for appellees.

POPE, Judge.

Joseph Capriulo was employed as a salesman for Georgia Foods, Inc. in the summer of 1982. As an employee of Georgia Foods, he was covered by group insurance policies issued by The Bankers Life Company (Bankers Life). In late July or early August 1982 Capriulo was contacted by Tom O'Brien about coming to work for Sysco Corporation (Sysco). O'Brien had formerly been with Georgia Foods and had been Capriulo's boss. Because he suffered from Crohn's disease, a chronic disorder, Capriulo was concerned about the insurance coverage afforded by Sysco. While O'Brien had been with Georgia Foods he had been aware that Capriulo suffered from Crohn's disease and had, on occasion, visited him in the hospital during treatment for the disease. Capriulo expressed his concern about the insurance coverage to O'Brien and to another representative of Sysco in a series of meetings in which the subject of Capriulo coming to work for Sysco was discussed. He was told that his insurance at Sysco would pick up where his coverage with Georgia Foods left off. He was told that Sysco had group insurance with Bankers Life also, and that he would be covered on the same basis as he was at Georgia Foods. Specifically, he was told that his insurance at Sysco would cover his treatment for Crohn's disease.

On August 19, 1982 Capriulo joined Sysco. Subsequently, he submitted claims to Bankers Life based upon treatment for Crohn's disease. Bankers Life denied these claims on the basis that its group policy with Sysco excluded coverage for pre-existing conditions for which treatment had been received within 3 months of becoming insured under the Sysco group policy, until either 3 months passed without any treatment for the pre-existing condition, or the person insured had been covered under the Sysco group policy for 12 months, whichever came first. It is undisputed that Capriulo was treated for Crohn's disease almost continuously from 1976. He became totally disabled by the disease in February 1983. Bankers Life denied Capriulo's claim for total disability benefits based upon a provision in the disability policy substantially similar to that described above.

Capriulo and his wife Mary instituted this action in five counts: one against Bankers Life for breach of contract; one against Sysco for breach of contract; a count against Sysco alleging negligence and fraud; a count alleging intentional infliction of emotional distress against both Bankers Life and Sysco; and one count alleging loss of consortium. Both Bankers Life and Sysco moved for summary judgment. Bankers Life's motion was granted in its entirety; Sysco's was granted in all respects but for the allegations concerning negligence and the consortium claim relating to that. In Case No. 71573, the Capriulos appeal the grant of both motions for summary judgment. In Case No. 71574, Sysco appeals the failure of the trial court to give it total summary judgment.

1. In regard to the breach of contract claim against Bankers Life, we note that two policies are at issue, one for disability, the other for medical expenses. As noted above, both policies contain exclusions for pre-existing conditions. Capriulo argues that there remains an issue of fact with regard to coverage due to the following provision found in the medical policy: "NO LOSS OF COVERAGE. Notwithstanding any provision of this Policy to the contrary, there shall be no loss of coverage with respect to medical insurance which is a replacement of such insurance under a prior plan terminated immediately prior to the date of issue of this Policy." The corresponding provision in the disability policy reads: "Notwithstanding any provision of this Policy to the contrary, there shall be no loss of coverage with respect to insurance which is a replacement for insurance, terminated immediately prior to the date of issue of this Policy, under a group plan of the Group Policyholder underwritten by another carrier."

This type of clause is designed to provide continuity of benefits when a group policyholder switches from one carrier to another, or from one policy to another. Clearly, in regard to the policy for disability, Capriulo is not covered. The language of the "no loss of coverage" clause is much better in the disability policy than it is in the medical policy. Nonetheless, the language of the medical policy is not sufficient to create a jury issue. "The whole contract must be looked to in arriving at the construction of any part. [Cits.] Construction of ambiguous contracts is the duty of the court, and no jury question is raised unless after application of the pertinent rules of construction the ambiguity remains. [Cit.] 'It does not follow that merely because there are two possible interpretations which might be employed in construing a contract the matter automatically becomes a question for the jury. If that were true the court would rarely, if ever, construe a contract as [OCGA § 13-2-1] declares its duty to be. The role and function of a court is higher than that of a mere referee.' [Cit.]" Erquitt v. Solomon, 135 Ga.App. 502, 503, 218 S.E.2d 172 (1975).

It is clear from the contract for group medical insurance, read as a whole, that the clause relied upon by Capriulo applies to replacement of one group plan with another by the group policyholder. It cannot be used to prevent the exclusion for pre-existing conditions from operating in regard to Capriulo. Therefore, the trial court did not err in granting Bankers Life summary judgment.

2. Our decision regarding the propriety of the trial court's ruling in regard to Capriulo's claim for fraud against Sysco hinges on the issue of whether a confidential relationship could be shown to have existed between Capriulo and agents for Sysco. For purposes of summary judgment, Sysco concedes that its agents, O'Brien and Sommers, represented to Capriulo while he was considering employment with Sysco that its group major medical policy and its group disability policy would provide coverage to Capriulo in regard to Crohn's disease. Sysco maintains that these representations cannot support an action for fraud because they are representations as to a matter of law, not fact. See Robbins v. Natl. Bank of Ga., 241 Ga. 538(2), 246 S.E.2d 660 (1978). Sysco contends that Capriulo failed to ask for a copy of the group policy to determine firsthand the extent of coverage and thus cannot prove justifiable reliance. Sysco also argues that Capriulo's testimony at deposition where he stated that he felt Sysco's agents did not intentionally deceive him in regard to coverage, but merely spoke mistakenly and in ignorance, demonstrates lack of scienter on the part of Sysco.

All of these issues are necessarily secondary to whether a confidential relationship existed. If a confidential relationship can be shown to have existed, Capriulo may be able to show justifiable reliance even if the representations were to matters of law. See Johnson v. Sherrer, 197 Ga. 392(1), 29 S.E.2d 581 (1944); Drake v. Thyer Mfg. Corp., 105 Ga.App. 20(2), 123 S.E.2d 457 (1961). "Any relationship shall be deemed confidential, whether arising from nature, created by law, or resulting from contracts, where one party is so situated as to exercise a controlling influence over the will, conduct, and interest of another or where, from a similar relationship of mutual confidence, the law requires the utmost good faith, such as the relationship between partners, principal and agent, etc." OCGA § 23-2-58. "The above Code section does not attempt to comprehensively enumerate the cases wherein the relation of mutual confidence is present. The showing of a relationship in fact which justifies the reposing of confidence by one party in another is all the law requires. [OCGA § 23-2-53] expressly goes beyond the strict fiduciary relations of the parties and states that the obligation to communicate may arise from the particular circumstances of the case. The same is true as to [OCGA § 23-2-58]." (Punctuation omitted.) Cochran v. Murrah, 235 Ga. 304, 307, 219 S.E.2d 421 (1975). In Cochran the Supreme Court affirmed the denial of summary judgment to an employer and his insurer where an employee of the employer had been injured and later had signed a release in favor of the employer and the insurer at the request of the employer. The employer represented to the employee that the papers he signed obligated the insurer to pay certain sums. The employee did not read the release even though he admitted that he could read. The court held that it was for jury determination as to whether a confidential relationship existed which would excuse the normal requirement to read the document. There was evidence that the employee had worked for the employer for eight years, lived in a home provided by the employer rent free, and trusted the employer to pay him whatever wages were due him for his work.

Even though the dissent goes on at some length about the fact that Capriulo did not specifically plead a confidential relationship in his complaint for fraud, the dissent eventually recognizes that the issue here on appeal from summary judgment is not the specificity of pleading but whether there exist issues of fact upon which a jury must pass. Relying upon the cases of Bulmer v. Southern Bell Tel., etc., Co., 170 Ga.App. 659, 317 S.E.2d 893 (1984), and Cole v. Cates, 113 Ga.App. 540, 149 S.E.2d 165 (1966), the dissent asserts that...