Watkins v. Life Ins. Co. of Georgia
Decision Date | 20 July 1984 |
Citation | 456 So.2d 259 |
Parties | Troy WATKINS, Individually, Troy A. Watkins, Individually, et al. v. LIFE INSURANCE COMPANY OF GEORGIA, a Corporation, Thomas E. Beckham, et al. 83-360. |
Court | Alabama Supreme Court |
Ronald L. Davis of Roberts, Davidson, Wiggins & Davis, Tuscaloosa, for appellants.
Wilbor J. Hust, Jr. of Zeanah, Donald & Hust, Tuscaloosa, for appellees.
The sole question presented is whether Alabama should now recognize that the wrongful cancellation of an insurance contract constitutes a tort for which compensatory and punitive damages are recoverable.
The trial court granted the insurer's motion for summary judgment.
In 1965, Troy Watkins purchased an insurance policy from Life of Georgia. Thereafter, he paid monthly premiums to an agent who came by his home, and he also purchased additional policies on himself and on his two children. In 1981, Watkins had five different policies with Life of Georgia in force on himself, and four other policies in force on his two children. The lawsuit only involves five of these insurance policies, a $1,000 life insurance policy on himself and four policies on the children.
In 1981, Watkins discussed his insurance coverage with Dennis Painter, an agent of New Southland Insurance Company. Painter offered to increase Watkins's own coverage by $12,000 for the same monthly premium. Watkins requested a representative of New Southland Insurance Company to write a letter to Life of Georgia for him, and ask that all the insurance policies he had on himself be cancelled. This letter was dated September 1, 1981. Life of Georgia responded to Watkins's letter by informing him that the policies could not be cancelled until the proper company forms were completed. Watkins called Life of Georgia and asked that Dale Livingston and Thomas Beckham, Life of Georgia representatives, come to his home to discuss the matter. When the agents arrived, Dennis Painter was there with Watkins. The Life of Georgia agents refused to discuss anything while Painter was present, and according to testimony of Watkins, in his deposition, Beckham "got mad" and "raised his voice," then left.
Late in the afternoon, Beckham returned to the Watkins home when Watkins and his wife were alone. The evidence is conflicting regarding what occurred during this meeting.
Watkins testified, by deposition, that Beckham brought the policies with him, and that he told Beckham he wanted to cancel the ones on himself and keep his children's policies in force. Watkins admitted that he signed some papers, because he knew he was entitled to receive cash value on some of the policies. Watkins said that Beckham took with him the policies with the cash surrender value.
Mrs. Watkins testified that when Beckham returned, her husband asked her to get the policies, which she did. The policies were spread out on the coffee table in the living room. She remembered hearing her husband say he was keeping the policies on the children.
Beckham testified that he met at the Watkins home on September 17, 1981, that at this time, Watkins had the policies on the table, and that he told him the ones that he wished to cash out. Beckham testified that Watkins asked him to cash out three policies for cash value, which he did, and that this was all that the plaintiff wanted and he did this for him.
Life of Georgia contends that the effect of the meeting was that one policy was left in effect on Watkins, and the four policies were still in effect on the children.
Watkins claims that he signed forms which cancelled all of his policies, including Policy No. 88541706, a $1,000 life policy, that these forms were taken by the agent for Life of Georgia, but that the request to cancel Policy No. 88541706 was crossed out by someone, and that the forms had been in the possession of Life of Georgia until produced in this litigation.
Afterward, Life of Georgia agents continued to collect monthly premiums of $4.73, which Watkins claimed he thought were being applied to the children's policies. Life of Georgia contends that the $4.73 premium was applied to policy No. 88541706, and that the policies on the children lapsed because of the nonpayment of premiums. Watkins claims that he did not learn that the $4.73 was not being applied to the policies on the children until the fall of 1982, when a new agent of Life of Georgia asked about the children. Watkins contacted the company and was told that the premiums he had paid were applied to his policy and that the policies on the children had lapsed.
The company claims that Watkins continued to pay on his policy "with the knowledge that he was paying it on himself." There is some evidence in Watkins's deposition which supports the company's position. On February 1, 1983, Watkins went to the office of Life of Georgia and paid $11.48 for two months' premium ) . He received a refund check because of his overpayment. He testified in his deposition, as follows:
On the other hand, there is evidence that at the time he made the February 1, 1983, payment he wrote to the state insurance department, as follows:
Watkins filed this suit in April 1983, alleging breach of contract, fraud, bad faith, and wantonness. Watkins alleged in his complaint the following:
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...has been that the remedy for an alleged wrongful cancellation of an insurance policy is in contract, not in tort. Watkins v. Life Ins. Co. of Georgia, 456 So.2d 259 (Ala. 1984). This remedy is recognized in a majority of jurisdictions as being the only remedy available where an insurer canc......
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In re: Defleron v. Gulf Agency
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