Turner v. Milliman

• Decision Date: 12 January 2009
• Docket Number: No. 4478.,4478.
• Citation: 671 S.E.2d 636,381 S.C. 101
• Parties: John and Charlene TURNER, Appellants, v. Douglas A. MILLIMAN, Consumer Benefits of America, NIA Corporation, Mid America Life Insurance Co., World Service Life Insurance Co., Provident American Life and Health Insurance Co., Provident Indemnity Life Insurance Co., and Central Reserve Life Insurance Co., Respondents.
• Court: South Carolina Court of Appeals

671 S.E.2d 636

381 S.C. 101

John and Charlene TURNER, Appellants, v. Douglas A. MILLIMAN, Consumer Benefits of America, NIA Corporation, Mid America Life Insurance Co., World Service Life Insurance Co., Provident American Life and Health Insurance Co., Provident Indemnity Life Insurance Co., and Central Reserve Life Insurance Co., Respondents.

No. 4478.

Court of Appeals of South Carolina.

Heard December 3, 2008.

Decided January 12, 2009.

John W. Carrigg, Jr., of Columbia, for Appellants.

Jonathan Matthew Harvey, of Columbia, Lawrence B. Orr, of Florence, Stephanie G. Flynn and Phillip E. Reeves, of Greenville, for Respondents.

GEATHERS, J.:

In this fraud and negligent misrepresentation action, Appellants John and Charlene Turner (collectively "the Turners") appeal from the trial court's grant of summary judgment in favor of Respondents Douglas Milliman ("Milliman"), Consumer Benefits of America ("CBA"), National Insurance Alliance Corporation, MidAmerica Life Insurance Company ("MidAmerica"), World Service Life Insurance Company, Provident American Life and Health Insurance Company ("Provident American"), Provident Indemnity Life Insurance Company ("Provident Indemnity"), and Central Reserve Life Insurance Company (collectively "Respondents"). On appeal, the Turners argue the trial court erred in finding that their claims were barred by the three-year statute of limitations; in finding that Milliman's representations to the Turners were insufficient to support a claim for fraud or negligent misrepresentation; in holding that Milliman's statements to John Turner ("Turner") were not attributable to MidAmerica or CBA because Milliman was an insurance broker and not an insurance agent; and, in holding that Turner's wife did not have standing to sue Respondents. We affirm as modified.

FACTS

In November 1996, Turner was in need of health insurance coverage. One of Turner's customers recommended Milliman, a local insurance agent,¹ whom Turner subsequently contacted. Turner's health insurance had recently expired after he left his prior employment at an accounting firm. At the time that Turner sought Milliman's services, Turner was employed at the family's radiator service business.

The Turners and Milliman discussed Turner's health insurance options, specifically the option to purchase group health insurance. Milliman represented to Turner that a group policy with CBA would be a good option because the future premiums would not increase dramatically or as dramatically as the premiums with individual insurance plans. Turner also alleged that Milliman stated group health insurance would be beneficial because of the following: (1) Turner was at an age when he could start developing medical problems and this policy would allow him to keep his coverage; (2) companies writing individual insurance policies were going out of business and the prices of those policies were skyrocketing; and (3) the only way people could afford insurance was to purchase group insurance. Turner further stated that Milliman told him CBA acted as a watchdog over the insurance industry for the benefit of its members and would notify its members when better group coverage was available.

Based on these alleged representations, Turner completed an application for group health insurance through CBA. This group insurance coverage was issued by MidAmerica, which was concurrently assumed and reinsured by Provident Indemnity.² Turner's first premium payment in November 1996 was $122.70, which represented his monthly health insurance premium as well as CBA membership dues.³ From the following month until May 1997, $101.70 was drafted from Turner's account for his monthly health insurance premium. In June 1997, Turner's premium increased to $109.70 and did not increase for eleven months. In June 1998, his premium increased to $143.38, and in December 1998, his premium again increased to $194.50. During the following two years, his premiums increased every six months (June 1999, $230.90; December 1999, $271.95; June 2000, $331.81; and December 2000, $456.21). Turner stated he always anticipated the premiums would increase, but by the end of 1999 into 2000, he thought the increases were becoming unreasonable and "just getting completely out of hand."

On April 30, 2001, CBA informed Turner that his monthly premium would increase to $646.19 on June 1, 2001 due to increased research and development healthcare costs. Then, on May 31, 2001, CBA again notified Turner that his premium would increase to $799.61 on July 1, 2001, because of "rising healthcare costs as well as the substantial and continued losses sustained by Provident American...."

In June 2001, as a result of the continued increases in Turner's premiums, Turner submitted a complaint to the South Carolina Department of Insurance. The Department of Insurance wrote Provident American inquiring about its premium rate increases. In response to the Department of Insurance's letter, Provident American told the Department that Turner's insurance contract permitted the company to increase rates with thirty-one days advance written notice and that "it had no alternative but to increase premium rates." Provident American also represented to the Department of Insurance that "[its] members were accustomed to receiving biannual premium rate adjustments," and the May 31, 2001 increase "affect[ed] all current ... certificate holders." Thereafter, the Department of Insurance notified Turner that he was insured under a "group association policy," and as such, those rates were not subject to approval by the Department.

On June 22, 2001, Provident American notified Turner that it would unilaterally terminate the CBA group association policy, but Turner could reinsure under another group policy for the same initial premium with substantially fewer benefits. Turner testified that he attempted to find alternate health care coverage, but due to the onset of diabetes, no insurance company would insure him. Turner paid his premiums until Provident American terminated his policy in September 2001, and he has been without health insurance since this time.

On December 19, 2003, the Turners initiated suit against Respondents for fraud, negligent misrepresentation, and violation of the South Carolina Unfair Trade Practices Act ("SCUTPA").⁴ In essence, the Turners alleged that Milliman, as an agent of Respondents, made several false representations that induced Turner to sign the insurance application and purchase the group policy from CBA. The Turners stated that because of the excessive premium increases, they were unable to maintain the policy, which ultimately caused them to suffer damages. In turn, each Respondent filed a motion for summary judgment based on the statute of limitations, a lack of material evidence to support the Turners' causes of action, and Charlene Turner's (Mrs. Turner) lack of standing as a real party in interest.

The trial court granted Respondents' motions, finding the Turners "should have been on notice of their alleged injury beginning with the premium increases in 1998." Because the Turners did not file suit until December 19, 2003, and because they "should have been on notice of their alleged claims before December 20, 2000," the trial court found their claims were barred by the three-year statute of limitations. The trial court additionally held Milliman's representations to the Turners were matters of opinion or representations as to future events, which were not actionable in fraud or negligent misrepresentation cases. The trial court further held that the Turners' claim for a violation of SCUTPA was unsupported as SCUTPA contains an explicit exemption for insurance-related practices.⁵ Finally, the trial court found Mrs. Turner was not a real party in interest because she was not a co-insured under the group coverage policy.

The Turners filed a Rule 59(e), SCRCP, motion, which the trial court denied. Respondents also filed a Rule 59(e), SCRCP, motion to alter or amend the judgment, asserting additional sustaining grounds for the trial court's grant of summary judgment. The trial court granted Respondents' motion and amended its order to find that Milliman's representations were not attributable to MidAmerica or CBA because he was not an employee or agent of the respective insurers. Further, because MidAmerica had ceded all of its rights and responsibilities to Provident Indemnity, any alleged misrepresentations by Milliman were not attributable to MidAmerica. This appeal follows.

STANDARD OF REVIEW

An appellate court reviews the grant of summary judgment under the same standard applied by the trial court. David v. McLeod Reg'l Med. Ctr., 367 S.C. 242, 247, 626 S.E.2d 1, 3 (2006). The trial court should grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), SCRCP; Russell v. Wachovia Bank, N.A., 353 S.C. 208, 217, 578 S.E.2d 329, 334 (2003). In determining whether any triable issues of fact exist, the evidence and all reasonable inferences must be viewed in the light most favorable to the non-moving party. Law v. S.C. Dep't of Corr., 368 S.C. 424, 434, 629 S.E.2d 642, 648 (2006). "The purpose of summary judgment is to expedite the disposition of cases which do not require the services of a fact finder." George v. Fabri, 345 S.C. 440, 452, 548 S.E.2d 868, 874 (2001). Summary judgment is not appropriate where further inquiry into the facts of the case is desirable to clarify the application of the law. Englert, Inc. v. LeafGuard USA, Inc., 377 S.C. 129, 134, 659 S.E.2d 496, 498 (2008).

ISSUES ON APPEAL

The Turners raise four issues on appeal:

(1) The trial court erred in finding their claims were barred by the statute of limitations because...