Thomas v. Safeway Ins. Co. of Ala., Inc.

• Decision Date: 04 August 2017
• Docket Number: 2160613
• Citation: 244 So.3d 965
• Parties: Quinzetia THOMAS v. SAFEWAY INSURANCE COMPANY OF ALABAMA, INC.
• Court: Alabama Court of Civil Appeals

244 So.3d 965

Quinzetia THOMAS

v.SAFEWAY INSURANCE COMPANY OF ALABAMA, INC.

2160613

Court of Civil Appeals of Alabama.

August 4, 2017

Mark Erdberg of Jaffe & Erdberg, P.C., Birmingham, for appellant.

J. Mark Hart and Brett W. Aaron of Hand Arendall LLC, Birmingham, for appellee.

THOMPSON, Presiding Judge.

Quinzetia Thomas appeals from a summary judgment entered by the Jefferson Circuit Court ("the trial court") in favor of Safeway Insurance Company of Alabama, Inc. ("Safeway"). Thomas had filed a civil action against Safeway alleging claims of breach of contract and bad faith.

The material facts in this case are not in dispute. The evidentiary submissions in favor of and in opposition to Safeway's motion for a summary judgment indicate the following. Thomas was in an automobile accident on November 11, 2013, when a vehicle driven by Erica Square struck Thomas's vehicle.¹ Thomas was injured in the accident and required medical treatment. At the time of the accident, Thomas had an automobile insurance policy ("the policy") with Safeway that included "medical payments" ("med pay") benefits of up to $2,000. Pursuant to the policy, Safeway would pay Thomas up to $2,000 for "reasonable expenses incurred for necessary medical and funeral expenses" to treat injuries sustained in an automobile accident and

"which is in excess of any medical and/or funeral expenses actually paid or which would be payable to or on behalf of [Thomas] under any provision of any:

"a. automobile or premises insurance affording benefits for medical expenses;

"b. individual, blanket or group accident, disability or hospitalization insurance; or

"c. medical or surgical insurance or reimbursement plans."

In his affidavit, Richard Mizell, the claims manager for Safeway, testified that Thomas notified Safeway of the accident on November 12, 2013, and that on November 19, 2013, Safeway faxed a "proof of loss and medical authorization" form ("the proof-of-loss/medical-authorization form") to Thomas through her attorney. A letter accompanying the proof-of-loss/medical-authorization form asked that Thomas return the form, signed and notarized, along with copies of any medical bills and prescriptions and proof of related expenses. In his affidavit, Mizell explained the importance of obtaining Thomas's signature on the proof-of-loss/medical-authorization form. Saying the signed form was "vital" to Safeway, Mizell said:

"The proof of loss form contained the medical authorization and trust agreement for [Thomas] to sign. Without it, Safeway could not obtain medical bills to confirm whether Safeway was excess to other insurers, including medical insurance providers. Further [Thomas's] policy required her to sign the proof of loss/medical authorization to preserve Safeway's subrogation and reimbursement rights."

A second proof-of-loss/medical-authorization form was faxed to Thomas on December 9, 2013. Mizell said that on February 13, 2014, and again on May 16, 2014, Safeway contacted Thomas to ask her whether she intended to file a claim under her med-pay coverage. On May 23, 2014, Thomas informed Safeway that she would be making such a claim but that she did not have all of her documentation yet.

On August 27, 2014, Lindsay Hardaway, a claims adjuster for Safeway, sent Thomas a letter with yet another proof-of-loss/medical-authorization form. In the letter, Hardaway informed Thomas that Safeway still had not received a completed proof-of-loss/medical-authorization form. She asked that Thomas "sign and mail this form back to this office along with any related medical bills for us to consider that were not covered by any group, health, or other coverage." The letter also said that Safeway could not consider any payment until the proof-of-loss/medical-authorization form was completed and returned.

On September 30, 2014, Thomas informed Safeway that she would be sending documentation to support the med-pay claim. Mizell said that, at that time, Safeway again told Thomas that she needed to sign the proof-of-loss/medical-authorization form. Mark Erdberg, Thomas's attorney, stated in his affidavit that, on March 11, 2015, he contacted Hardaway and told her he "was not comfortable with some of the language in the [proof-of-loss/medical-authorization form] that they require[d] to be signed." Specifically, Erdberg was not comfortable with language in the sworn-statement portion of the form. That statement provides:

"To the extent of the payment made or advanced under this policy, the insured hereby assigns, transfers and sets over to the insurance company all rights, claims or interests that he/she has against any person, firm or corporation liable for the medical or funeral services for which payment is made or advanced. He/she also hereby authorizes the insurance company to sue any such third party in his/her name. It is further understood that the said company, their duly authorized agent or attorney in that behalf, shall have the authority to endorse releases and drafts, and receipt for all monies in any manner, occurring to any benefit, from or out of the said subrogation.

"The Insured or Covered Person hereby warrants that no release has been given or will be given or settlement or compromise made or agreed upon with any third party or insurer who may be liable to the insured with respect to the claim being made herein.

"That the Insured or Covered Person warrants that said loss or damage did not originate by any act, design or procurement on my part nor in consequence with any fraud or evil practice done or suffered by me and that the above stated informat[io]n is true and correct in all regards and is material to any rights under the policy.

"MEDICAL

"By this Sworn Proof of Loss the undersigned hereby authorizes and gives permission to Safeway Insurance Company to obtain any and all medical information concerning the undersigned and hereby request any and all doctors, hospitals, and medical providers to furnish said Company any and all medical information requested by said Company.

"It is expressly understood and agreed that the furnishing of this blank or the preparation of proof by a representative of the above insurance company is not a waiver of any of its rights."

Erdberg asked Hardaway whether there was anything in Thomas's policy that required the proof-of-loss/medical-authorization form to be signed. He said that Hardaway told him she would look into the matter. On April 7, 2015, after another telephone conversation between Hardaway and Erdberg, Hardaway faxed a portion of the policy to Erdberg. In his affidavit, Erdberg said that he still disagreed that the policy required Thomas to sign the proof-of-loss/medical-authorization form. We note that neither Thomas nor Erdberg indicated in the record the specific language in the policy that was under discussion at that time. Erdberg said in his affidavit that Hardaway told him not to worry about signing the proof-of-loss/medical-authorization form but to complete it and return it to her. After the conversation, Thomas faxed a copy of the proof-of-loss/medical-authorization form to Safeway; however, only one page of the form was completed and it was not signed.

On July 6, 2015, Erdberg said, Thomas still had not received a payment from Safeway for her med-pay claim. He spoke to Hardaway again, and, he said, she pointed out to him that the med-pay coverage was secondary to health insurance. Erdberg advised that the amount Safeway owed Thomas was $530.52, and, he said, he faxed the records supporting the med-pay claim to Hardaway again. Although Erdberg's affidavit indicates that the records were attached as an exhibit, the record on appeal contains only a fax cover letter referring to "the attached," but there are no records attached.

On August 18, 2015, Erdberg said, he spoke to Safeway employee Bart Copeland, who asked that Thomas's records be forwarded to him. Copeland sent Erdberg an e-mail stating that Safeway did not have the signed second page of the proof-of-loss/medical-authorization form. He asked Erdberg to forward that page to him so that Safeway could conclude its investigation of the claim. A copy of a blank signature page was attached to the e-mail. Erdberg responded, saying that he was not comfortable with the language in the form, and asked Copeland if the policy explicitly required an insured to sign the proof-of-loss/medical-authorization form. Copeland sent Erdberg a portion of the policy and referred Erdberg to language stating:

"As soon as possible the Covered Person [, i.e., Thomas,] making a claim under this coverage shall give us written proof of intent to present a claim under this Part, and to provide us a proof of loss, including full details of the injuries and treatment, other medical, hospital, workman's compensation insurance available, and any other information we may need to determine the amounts payable. The Covered Person shall submit to reasonable questioning concerning any claim made under this policy.

"The Covered Person shall submit to physical examination by doctors chosen by us at the time we select and as often as we may reasonably require. The Covered Person shall also give us an authorization which would allow us to obtain medical reports and copies of the records.

"....

"TRUST AGREEMENT

"When we pay medical expenses, the Covered Person or legal representative must agree in writing to repay us out of any damages recovered from anyone responsible for causing the bodily injury. The Covered Person must also agree in writing to hold in trust and preserve for us any rights to recover against anyone."

(Bold typeface in original.) Thomas did not provide Safeway with a signed proof-of-loss/medical-authorization form.

On November 12, 2015, Erdberg said, a settlement was reached with Square. On December 9, 2015, Thomas signed the settlement agreement releasing Square from liability. Mizell stated in his affidavit that Safeway was not notified that Thomas planned to settle with Square until after...