Ingram v. Liberty National Life Ins.

• Decision Date: 01 October 1999
• Citation: 774 So.2d 563
• Parties: (Ala. 2000) Ex parte Charles E. Ingram (Re: Charles E. Ingram v. Liberty National Life Insurance Company et al.) 1982167
• Court: Alabama Supreme Court

774 So.2d 563 (Ala. 2000)

Ex parte Charles E. Ingram

(Re: Charles E. Ingram v. Liberty National Life Insurance Company et al.)

1982167

SUPREME COURT OF ALABAMA OCTOBER TERM, 1999-2000

06/16/2000

PETITION FOR WRIT OF MANDAMUS

(Chambers Circuit Court, CV-96-62)

COOK, Justice.

Charles E. Ingram, the plaintiff in an action pending in the Chambers Circuit Court, seeks a writ of mandamus directing the trial court to vacate its partial summary judgment in favor of the defendant Liberty National Life Insurance Company and to remove the limitation it had placed on Ingram's right to discovery. We grant the petition in part and dismiss it in part.

Liberty National, an Alabama corporation headquartered in Birmingham, formerly marketed a life-insurance policy known as the "LifePlus" policy. Liberty National's agents represented to potential purchasers of the LifePlus policy that if the purchaser paid the policy's monthly premiums for 10 years, then the policy's face value would be "paid up" at the end of the 10-year period. This representation was false.

Lane Mitcham and 30 other purchasers of the LifePlus policy sued Liberty National in Chambers County, alleging a pattern and practice of misrepresentation and suppression in the sale of the policy. Mitcham v. Liberty National Life Ins. Co., CV-95-290. Mitcham and the other plaintiffs negotiated a settlement with Liberty National, and Liberty National moved for a determination that the punitive-damages award provided by the settlement agreement was sufficient to adequately punish Liberty National for its alleged misconduct. After conducting an evidentiary hearing, Judge Howard F. Bryan entered an "order and final judgment" in Mitcham on December 29, 1995; that "order and final judgment" stated, in pertinent part:

"Plaintiffs contend that the misconduct of [Liberty National] revolves around alleged misrepresentations and suppression concerning [life insurance policies]. Specific allegations deal with assurances that the policies would be paid up in a defined period, generally 10 years. The misconduct is alleged to constitute fraud both by affirmative misrepresentations and by intentional suppression.

"It is further contended by plaintiffs and claimants that [Liberty National] taught and encouraged its agents to ... promote sales of such policies and was aware that its agents were conducting themselves in this manner and did not take appropriate action to prevent them from so doing and that defendant authorized, ratified, and confirmed such wrongful conduct of its agents.

"[Liberty National] specifically denies the allegations against it. ...

"For purposes of this motion, the court assumes that Plaintiffs could prove all of their allegations and [that Liberty National] could prove ... its contentions. It is further noted that Liberty National does not admit any liability, but rather entered into settlements in an effort to buy its peace and to avoid further expense.

"....

"This court has been guided in its considerations by the factors outlined in Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala. 1989); Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala. 1986); and the factors set forth in Ala. Code 1975, § 6-11-23.

"The court also deems it to be significant that in these cases, unlike many other cases involving the award of punitive damages, Plaintiffs actually received something of value for the monies expended by them -- i.e., insurance which would pay benefits in the event of their deaths.

"This court has also reviewed evidence relating to the financial status of Liberty National. This court is aware of the assets of [Liberty National] and of the alleged wrongdoing in numerous other cases resolved by either an award of punitive damages or settlements both in this judicial circuit and in other judicial circuits throughout the state of Alabama. ...

"In view of these factors and others, the court is of the opinion that Liberty National should not be subjected to punitive damages in excess of the amount that would adequately punish it and accomplish fully society's interest in deterrence. ...

"This court is firmly convinced that payment of the amounts which Liberty National has agreedto pay, as well as its other costs incurred, is sufficient to punish it for alleged intent, scheme, andpattern and practice of wrongful conduct ... and to deter it and others from any similarmisconduct in the future.

"The court accordingly finds that the cumulative amount which Liberty National has paid or agreed to pay is adequate, when coupled with expenses incurred, to fully punish and deter Liberty National with respect to any and all of its complained of conduct and misrepresentations which have occurred to date, including Liberty National's employing, training, and supervising any of its agents with respect to the sale of life insurance such as that described hereinabove (whether through direct responsibility, respondeat superior liability, or otherwise). The courtfurther concludes that the imposition of additional punitive damages against Liberty National forsuch alleged misconduct, scheme, and pattern and practice in excess of the amount already paidin the settlements ..., whether in this case or any other proceeding, would constitute duplicative, multiple, and unjust punishment."

Mitcham v. Liberty Nat'l Life Ins. Co., CV-95-290, Chambers Circuit Court (emphasis added).¹

Charles Ingram, the petitioner here, purchased a Liberty National LifePlus policy, and he, too, learned that his policy would not be "paid up" at the end of 10 years. Ingram sued Liberty National in the Chambers Circuit Court on March 29, 1996, for compensatory and punitive damages, alleging fraud, deceit, and fraudulent suppression. Ingram filed his lawsuit approximately three months after Judge Bryan's "order and final judgment" in Mitcham had been filed in the same court.

Liberty National moved for a partial summary judgment on Ingram's punitive-damages claim. Liberty National, relying on the final judgment in Mitcham, argued that any punitive-damages award against it in Ingram's action would be excessive as a matter of law and would violate its constitutional right to due process. Ingram opposed the motion, arguing that his rights had not been adjudicated by the judgment in Mitcham.

After conducting a hearing, Judge Bryan granted Liberty National's motion, entering a partial summary judgment holding that Liberty National had been adequately punished for its misconduct regarding the LifePlus insurance policy and noting that Liberty National was no longer selling the LifePlus policy:

"Consequently, the court is of the opinion that [Ingram] should not be allowed to offer proof toward the end of recovering punitive damages in connection with the sale and marketing of the policies in question. However, the court is also of the opinion that [Ingram] should be allowed to introduce testimony in support of any punitive damages which arise from the defendant's conduct solely toward him. That is to say, conduct which was directed toward [Ingram].

"Is...