Stead v. Blue Cross-Blue Shield of Alabama

• Citation: 346 So.2d 1140
• Decision Date: 10 June 1977
• Docket Number: CROSS-BLUE
• Parties: Eston H. STEAD, Jr. v. BLUESHIELD OF ALABAMA. SC 1891.
• Court: Supreme Court of Alabama

Page 1140

346 So.2d 1140

Eston H. STEAD, Jr. v. BLUE CROSS-BLUE SHIELD OF ALABAMA.

SC 1891.

Supreme Court of Alabama.

June 10, 1977.

John H. Lavette, Birmingham, for appellant.

Reid B. Barnes and J. Gusty Yearout, Birmingham, for appellee.

EMBRY, Justice.

Appellant, Eston H. Stead, Jr., states eleven issues that he contends are presented for review by this court. However, we perceive there is only one issue controlling a decision in this case: Whether or not, under the facts, upon breach of a hospital and medical benefits insurance contract, damages, compensatory and punitive, may be recovered that include those for mental anguish, personal injury, loss of earnings, pain and suffering and impairment of earning capacity.

We hold that such damages may not be recovered in this case and affirm the order of the trial court granting a new trial.

For a history of the facts and proceedings in this case to 6 March 1975, see In re Eston H. Stead, Jr. v. Blue Cross-Blue Shield of Alabama, 294 Ala. 3, 310 So.2d 469 (1975). Thereafter, in September 1975, Stead filed an amendment to his original complaint in which he alleged that Blue Cross wilfully, wrongfully and in bad faith rejected and refused to pay his claim for benefits due him under his policy on account of incurred hospital and surgical expenses. He further claimed damages for the loss of insurance coverage, personal injury, loss of wages, impairment of earning capacity, inability to go about his usual pursuits and duties, physical pain and mental anguish, permanent injuries, inconvenience, humiliation, worry and distress of mind, expenditure of monies in the effort to heal and cure his injuries and future medical expense; all as a result of the refusal of Blue Cross to pay his claim.

In February 1976 he filed another amendment alleging that damages as claimed in the September 1975 amendment were:

the natural and proximate consequence of breach of contract and reasonably supposed to have been within the contemplation of the parties at the time the insurance contract was made;

that Blue Cross knowingly made false representations to him that his health insurance policy was in full force and effect shortly after it was underwritten with no intention to perform according to such representations and with intent that Stead would rely upon them and;

further that he, Stead, relied on the representations and purchased his health policy, that further false representations were made to Stead by Blue Cross, after denial of his initial claim, to the effect that his policy would remain in full force, future claims would be paid and there was no intent to perform according to the representations but rather they were made to induce Stead to continue to pay premiums;

and all the acts, omissions and representations made to Stead by Blue Cross were perpetrated by the latter, wilfully, fraudulently, intentionally, in bad faith, and by extreme outrageous conduct.

A further amendment was filed in February 1976 raising the demand for damages in the original complaint (for simple breach of contract) to $10,000. Defendant Blue Cross filed a motion to dismiss Stead's amendments to his complaint, which was granted. The effect of this was to leave the original complaint before the court with a demand for damages in the sum of $10,000.

Among the grounds of the motion to dismiss was that to allow the amendments would work to the prejudice and harm of Blue Cross.

The case was tried to a jury and a verdict in behalf of Stead returned in the amount of $5,000. Blue Cross filed its motion for judgment n. o. v. or, in the alternative, for a new trial. Stead filed a motion renewing his earlier motions to allow the amendments to his complaint; this was overruled. Judgment for Stead was entered in the amount of $5,000.

Among the grounds of the motion for judgment n. o. v. or for new trial were: The verdict was excessive and was arrived at by considering illegal evidence. The trial court then entered the following order:

"The Court being of the opinion that the verdict of the jury awarding the damages in this case is excessive by Three Thousand Nine Hundred and Seventeen Dollars ($3,917.00), it is, therefore,

Considered, Ordered and Adjudged that the motion for the new trial on the ground that the damages awarded are excessive be and the same is hereby granted, unless within 10 days from this date the plaintiff shall file an instrument remitting all damages in excess of One Thousand and Eighty Three Dollars ($1,083.00) and agreeing to a reduction of the judgment to One Thousand and Eighty Three Dollars ($1,083.00)."

Stead, electing not to file a remittitur, allowed the trial court's order for a new trial to become absolute and thus appealable. Ex parte Smith, 228 Ala. 232, 153 So. 152 (1934); McCormick v. Alabama Power Co., 293 Ala. 481, 306 So.2d 233 (1975).

In order to reach a conclusion about the single issue we deem controlling we must deal with: (1) Whether Stead was entitled to amend his complaint and attempt to recover damages under the theories expressed therein. (2) Whether the order of the trial court granting the motion for new trial, on the ground that the verdict of the jury was excessive, was plainly and palpably erroneous.

I

The trial court assigned no reasons for disallowing the proferred amendments. We note, however, the record contains no showing that the delays by Stead in advancing new theories as bases for recovery were: excusable, would not unduly delay trial on issues possibly raised by the amendments, or would not unduly prejudice Blue Cross. In this regard the case is even less favorable to Stead than it was as addressed by Justice Faulkner in In re Stead, supra. We cannot say, then, that the trial court abused its discretion in not allowing the amendments. Holding this, as we do, we need not determine if Stead could have maintained an action in tort where he could have recovered damages of the kind he sought to recover in this action for breach of an insurance contract....