Colonial Life & Acc. Ins. Co. v. Donaldson, 68819

• Decision Date: 11 September 1984
• Docket Number: No. 68819,68819
• Citation: 322 S.E.2d 510,172 Ga.App. 211
• Parties: COLONIAL LIFE & ACCIDENT INSURANCE COMPANY v. DONALDSON.
• Court: Georgia Court of Appeals

Page 510

322 S.E.2d 510

172 Ga.App. 211

COLONIAL LIFE & ACCIDENT INSURANCE COMPANY v. DONALDSON.

No. 68819.

Court of Appeals of Georgia.

Sept. 11, 1984.

Rehearing Denied Sept. 25, 1984.

Ferdinand Buckley, Schaune C. Griffin, Atlanta, for appellant.

Neal D. McKenney, Jane McKenney Jordan, Macon, for appellee.

BANKE, Presiding Judge.

Plaintiff Donaldson sued Colonial Life & Accident Insurance Company to collect disability benefits allegedly owed him under the terms of an accident insurance policy, as well as to recover a bad-faith penalty and attorney fees pursuant to OCGA § 33-4-6. The jury returned a verdict in his favor for actual damages and attorney fees, and Colonial appeals.

The coverage in question was applicable in the event of loss "resulting directly, independently and exclusively of all other causes from bodily injury effected solely through external and accidental means ..." Donaldson injured his hip and back in March of 1980, when he fell down a flight of stairs while working as a guard at the Georgia Correctional Institute in Macon. He was unable to resume his normal duties after this injury but did return to sedentary work several weeks later. He again ceased work in August of 1980 and has remained totally disabled since then.

Colonial denied the plaintiff's original claim for disability benefits, received in August or September of 1980, because of an erroneous belief that the disability had not commenced within 30 days of the accident, a precondition for payment under the terms of the policy. However, upon further investigation, Colonial accepted the claim and began making payments.

In November of 1981, apparently upon inquiry by Colonial, the plaintiff's physician, Dr. E.H. Brown, notified the company that the plaintiff was being treated with anti-arthritic and anti-inflammatory medication. Colonial subsequently commissioned an independent examination of the plaintiff by another physician. After reviewing a copy of this physician's report, Dr. Brown wrote to Colonial on February 8, 1982, as follows: "I have reviewed the medical evaluation done on Mr. Cecil Donaldson by your independent physician. I would concur in general with his findings, however knowing the history of the case I would have to say that the fall ... did aggravate [Mr. Donaldson's] underlying condition to the point where he is barely able to do self-care activities, much less work. The problem you run into in a situation such as this, with a man who is 60 years old crippled with multiple diseases, is that there is simply no work for him to do." (Emphasis supplied). Colonial ceased making disability payments shortly after receiving this letter. In September of 1982, after the plaintiff had made a formal demand for payment through his attorney, Dr. Brown again wrote the company that the plaintiff was "crippled with multiple diseases."

At trial, Dr. Brown testified that the plaintiff was permanently disabled due to "traumatic arthritis in his hip" and "chronic low back pain, which was not obvious before he suffered this fall." While stating that the plaintiff had suffered from osteoarthritis before the fall, and while acknowledging that this rendered the injury "more painful, more long-lasting and more difficult to treat," Dr. Brown further testified that osteoarthritis is a condition that exists in most people over 35 to some extent, and he indicated that the plaintiff's osteoarthritis had not been a disabling condition prior to the fall. As for his previous statements that the plaintiff was "crippled with multiple diseases," Dr. Brown explained that he had been referring to the fact that the plaintiff was also overweight and suffering from hypertension, and he indicated that because the disability persisted despite the plaintiff's having lost weight and engaged in an exercise program, he no longer considered these other conditions to be factors which contributed to the disability. Held:

1. A judgment against an insurer for a bad-faith penalty and attorney fees is not authorized if the insurer had reasonable and probable cause for defending the claim. See Interstate Life etc. Ins. Co. v. Williamson, 220 Ga. 323, 138 S.E.2d 668 (1964). "Not every defense bars a finding of bad faith. It is a defense which raises a reasonable question of law or a reasonable issue of fact though not accepted by the trial court or jury." Colonial Life & etc. Ins. Co. v. McClain, 243 Ga. 263, 265, 253 S.E.2d 745 (1979).

Although the defendant insurer initially denied the plaintiff's claim based on a misunderstanding that his disability had not commenced within 30 days of the accident, it began making payments upon learning the true facts, and it continued to do so for almost two years, until being informed by the plaintiff's own physician that the fall had aggravated a pre-existing condition and that the plaintiff was "crippled with multiple diseases." Although Dr. Brown may reasonably be said to have repudiated this diagnosis on the witness stand, there is no indication in the transcript that Colonial knew of his change in opinion prior to the initiation of this...