Case ID: so2d_690/html/0091-02.html
Source: Caselaw Access Project
Author: {"author": "I tSULLIVAN, Judge. hSAUNDERS, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Marilyn GUILLOT, Plaintiff-Appellee, v. BLUE CROSS OF LOUISIANA, Defendant-Appellant.
    No. 96-594.
    Court of Appeal of Louisiana, Third Circuit.
    Jan. 29, 1997.
    Rehearing Denied April 8, 1997.
    
      Keith Wayne Manuel, Marksville, for Marilyn Guillot.
    Paul Joseph Hebert, Lafayette, for Blue Cross/Blue Shield of Oregon.
    Before SAUNDERS, WOODARD, DECUIR, SULLIVAN and GREMILLION, JJ.
   I tSULLIVAN, Judge.

Marilyn Guillot filed suit for health insurance benefits against her two successive insurers, Blue Cross of Oregon and Blue Cross of Louisiana. The trial court absolved the first insurer, Blue Cross of Oregon, finding that its policy was no longer in force when Mrs. Guillot incurred substantial medical bills approximately ten months after returning to Louisiana. However, the court rendered judgment against Blue Cross of Louisiana by reforming its health conversion policy to conform with the mandated benefits of La.R.S. 22:230.2.

Blue Cross of Louisiana appeals, contending that Mrs. Guillot has no remedy under La.R.S. 22:230.2 because her conversion policy was issued before that statute’s effective date. Mrs. Guillot has neither answered the appeal nor appealed the dismissal |2of her claims against Blue Cross of Oregon. For the following reasons, we reverse the judgment of the trial court.

Facts

In 1987, Mrs. Guillot and her husband, Gordy, natives of Louisiana, moved to Oregon, where they became insured by HMO Oregon (HMOO) through Mr. Guillot’s employment. When Mr. Guillot retired in 1989, he obtained a HMO group conversion policy. This conversion policy, as well as the initial HMOO contract, required that the insured’s permanent residence be within a certain geographic area.

In the fall of 1991, the Guillots decided to return to Louisiana. Aware of the policy’s territorial restrictions and his wife’s many debilitating, pre-existing health problems, Mr. Guillot consulted HMOO about his options for maintaining coverage in Louisiana. He first spoke with Linda Rask, the group marketing liaison who had earlier assisted him with his group conversion policy. Ms. Rask informed him that his conversion benefits would terminate if he left the service area, but she referred him to Kim Wirtz, who marketed individual policies for Blue Cross of Oregon, HMOO’s parent company. Ms. Rask denied that she ever told Mr. Guillot his benefits under either the conversion plan or any individual plan that he may obtain from Ms. Wirtz would equal his original HMOO group benefits.

. Ms. Wirtz explained that Mr. Guillot would have to obtain special permission to transfer his group conversion plan to a traditional Blue Cross individual plan. Once this was obtained, he would be eligible for an inter-plan transfer to Blue Cross of Louisiana. However, Ms. Wirtz testified that she had no knowledge of the level of benefits that Blue Cross of Louisiana would provide, nor did she have any application forms for a Louisiana policy. The individual Blue Cross of Oregon policy would cover the Guillots for one payment period (three months) after they moved to Louisiana, but jgthey would have to enroll in the Louisiana plan (at whatever benefits Louisiana offered) to continue coverage beyond that date.

The Guillots elected to convert their Oregon group policy to an Oregon individual policy at the level of benefits known as “Conversion J.” The individual “Conversion J” policy, effective December 1, 1991 through February 29,1992, placed the Guillots in line for a transfer to Blue Cross of Louisiana. On April 28, 1992, Mrs. Guillot submitted an application for the Louisiana policy, which was issued effective March 1,1992 to prevent any lapse in coverage. The Louisiana policy, however, provided far less benefits than the Oregon “Conversion J” policy: for a quarterly premium of $700.83, the Louisiana policy offered coverage of only $10,000.00 per calendar year, with a lifetime maximum of $20,-000.00. At the time of the Guillots’ application, this policy was the only option Blue Cross of Louisiana offered to out-of-state transferees.

Mr. Guillot testified that he first learned of the limited coverage of the Louisiana policy after his wife had been hospitalized in Alexandria for quadruple by-pass surgery in late August and early September of 1992. He testified that he had no contact with Blue Cross of Louisiana, but he insisted that Blue Cross of Oregon employees represented that all of his benefits would be transferred to Louisiana. He points to a letter from Ms. Wirtz, in which she states that the “Conversion J” policy will cover him “while we transfer your benefits to the Blue Cross and Blue Shield Plan that is headquartered in Louisiana, where you now reside.”

Mr. Guillot’s testimony was disputed by employees of Blue Cross of Oregon and Blue Cross of Louisiana. Ms. Wirtz testified that she explained to Mr. Guillot that any conversion plan would have a dramatic difference in coverage and that he should consult an insurance professional in Louisiana to look for other benefits because the conversion policy would not be adequate for his wife’s needs. She stated that she had 14no knowledge of policies in Louisiana and that she never quotes any information about out-of-state policies. She explained that in her letter she equated “transfer your benefits” as a statement of eligibility of coverage, with no reference to benefit levels.

Marie Smith, of Blue Cross of Louisiana, testified that the application that Mrs. Guillot submitted on April 28, 1992, was perforated from a brochure that explained the limitations of the Louisiana policy. She also stated that a package containing the Guillots’ subscriber cards (which they received) should' have contained a booklet explaining the Louisiana policy benefits.

In her suit, Mrs. Guillot prayed that the Blue Cross of Louisiana policy be reformed to provide benefits equal to either the HMOO policy or the “Conversion J” policy or, alternatively, that the Guillots’ coverage with Blue Cross of Oregon be reinstated. At trial, plaintiff argued the applicability of La. R.S. 22:230.2, which sets forth minimum conversion requirements in certain situations. That statute became effective August 21, 1992, after Mrs. Guillot was issued her Louisiana policy but before she incurred most of her medical expenses.

Opinion

La.R.S. 22:230.2, the basis of the trial court’s assessment of liability to Blue Cross of Louisiana, provides in part:

A. (1) A group policy or group certificate delivered or issued for delivery in this state by: (a) an insurer; (b) a nonprofit mutual association which is engaged exclusively in the furnishing of hospital services and medical or surgical benefits; (e) a health maintenance organization; (d) a self-insured plan that provides, on an expense-incurred basis, hospital, surgical, or major medical e:spense insurance; or (e) any combination thereof, shall provide that an employee or member whose insurance under the group policy has been terminated for any reason and who has been continuously insured under the group policy and under any group policy providing similar benefits that the terminated group policy replaced, for at least three months immediately prior to termination, shall be entitled to have issued to him by the insurer a policy or certificate of health and accident insurance, hereafter referred to in this Section as a “converted policy”.

_k- • ■ ■

C. The converted policy shall be issued without evidence of insurability.
D. (1) The premium for the converted policy shall be determined in accordance with premium rates applicable to the age, class of risk, and type and amount of insurance coverage provided in the converted policy of the person to be covered. However, the premium for the converted policy may not exceed the premium charged by the Louisiana Health Insurance Association at the time of conversion, adjusted for differences between benefit levels for the converted policy and the policy offered by the Louisiana Health Insurance Association.
(2) The actual or expected experience under converted policies may be combined with the experience under group policies for the purposes of the determination of premium and loss experience by the insurer and the establishment of adequate premium rate levels for group coverage.
(3) For purposes of this Section, a conversion policy shall not be denied because a person is or may be eligible for benefits pursuant to R.S. 22:240. In the event that the Louisiana Health Insurance Association does not issue policies, or has not done so by the effective date of this Section, benefit and premium levels for conversion policies under this Section shall be based upon those proposed by the Louisiana Health Insurance Association, if any, or determined in accordance with the mechanisms established by R.S. 22:240.
E. The effective date of the converted policy shall be the day following the termination of insurance under the group policy.
F. The converted policy shall provide insurance coverage for the employee or member and the dependents of the employee or member who were covered by the group policy for at least three months prior to the date of termination of insurance. At the option of the insurer, a separate converted policy may be issued to cover any dependent.
I. An insurer under this Section shall not be required to issue a converted policy that provides benefits in excess of those provided under the preceding group policy.
J. In determining whether any pre-ex-isting condition precludes coverage for a specific benefit in the converted policy, credit shall be given for the time the person was covered under the group policy.
K. (1) Subject to any provision and condition of this Section, the employee or member shall be entitled to obtain a converted policy providing major medical coverage under a plan providing substantially ^similar benefits to those offered in R.S. 22:240(A) through (E). If the benefit levels required in R.S. 22:240(A) through (E) exceed the benefit levels provided under the prior group insurance policy, the converted policy may offer benefits which are substantially similar to those provided under the prior group policy.
L. An insurer may, at its option, also offer alternative plans for group health and accident conversion in addition to the converted policy required by this Section.
M. The conversion privilege provided in this Section shall also be available to any of the following:
(2) To the spouse of the employee or member upon termination of coverage of the spouse, if the employee or member remains insured under the group policy, by reason of ceasing to be a qualified family member under the group policy, with respect to the spouse and the children whose coverages under the group policy terminate at the same time.
N. If the benefit levels required in this Section exceed the benefit levels provided under the prior group policy, the converted policy may offer benefits which are substantially similar to those provided under the prior group policy.
O. Any insurer of health and accident insurance may elect to provide group health and accident insurance coverage instead of issuing an individual converted policy.
P. A notification of the right to a converted policy shall be included in each certificate of coverage for health and accident insurance.

We first note that this statute applies only to a “group policy” that is “delivered or issued for delivery in this state." The statute then requires such a policy to provide that certain terminated employees or members shall be entitled to have issued to them a “converted policy” with certain minimum benefits. Blue Cross of Louisiana, however, never issued the Guillots a group policy. That coverage was provided by HMOO, through its initial HMO contract and later its HMO conversion policy. These policies were territorially restricted to certain counties within the state of Oregon (a |7fact acknowledged by the Guillots); therefore, they cannot be considered as “delivered or issued for delivery in this state.” Thus, regardless of the statute’s effective date, its mandatory conversion provisions are not triggered by the issuance of either of these policies.

However, Blue Cross of Oregon did issue the Guillots its “Conversion J” policy with knowledge that the Guillots would be living in Louisiana during the term of this policy. Although this policy was an “individual” policy in that it was issued through Blue Cross of Oregon’s non-group marketing division, it was apparently issued in compliance with Oregon’s group conversion benefits statute (in effect at the time). It was also issued as a “bridge” for coverage in Louisiana, in accordance with “interplan transfers” that are accepted by Blue Cross of Louisiana. We, therefore, find that a discussion of whether La.R.S. 22:230.2 can be applied to the Louisiana policy is necessary.

La.Civ.Code art. 6 provides:
In the absence of contrary legislative expression, substantive laws apply prospectively only. Procedural and interpretative laws apply both prospectively and retroactively, unless there is a legislative expression to the contrary.

In Segura v. Frank, 93-1271 (La.1/14/94), 630 So.2d 714, cert. denied, 511 U.S. 1142, 114 S.Ct. 2165, 128 L.Ed.2d 887 (1994), the supreme court asked the following questions in applying Article 6: (a) will application of a law or amendment have a retroactive effect; and (b) if so, is the retroactive application permissible, depending upon the classification of the law or amendment as procedural, interpretative, or substantive?

Blue Cross of Louisiana contends that application of the this statute would retroactively impair contractual obligations the parties incurred prior to the statute’s enactment. Mrs. Guillot, however, argues that her cause of action did not accrue until |8the insurer denied coverage under the conversion policy, after the statute’s effective date; therefore, there is no retroactive application in the instant case.

We agree with Blue Cross of Louisiana that application of the statute to its policy would have a retroactive effect. As the supreme court stated in Block v. Reliance Ins. Co., 433 So.2d 1040, 1044 (La. 1983) and quoted with approval in Segura, 630 So.2d at 722-23:

Where the statute in question was not in effect at the time of contracting, it cannot be retroactively applied to alter the obligations of that contract, even though the act giving rise to the obligation occurs after the effective date of the statute.

(Emphasis in Segura, 630 So.2d at 722-23.)

The eases cited by Mrs. Guillot are not controlling. Prejean v. Dixie Lloyds Ins. Co., 94-2979 (La.9/15/95), 660 So.2d 836, stands only for the proposition that LIGA’s obligations are governed by the law in effect on the date of an insurer’s insolvency. Cole v. Celotex Corp., 599 So.2d 1058 (La.1992) and Trahan v. Liberty Mutual Ins. Co., 314 So.2d 350 (La.1975) involve delictual actions, not contractual disputes.

In the absence of legislative intent regarding retroactive or prospective application of La.R.S. 22:230.2, the next inquiry is whether the enactment is substantive, procedural, or interpretative. As explained in Segura, 630 So.2d at 723:

Substantive laws establish new rules, rights, and duties or change existing ones. St. Paul Fire & Marine Ins. Co. v. Smith, 609 So.2d 809, 817 (La.1992); Ardoin v. Hartford Acc. & Indem. Co., 360 So.2d 1331, 1339 (La.1978). Procedural laws prescribe a method for enforcing a substantive right and relate to the form of the proceeding or the operation of the laws. Graham v. Sequoya Corp., 478 So.2d 1223, 1226 (La.1985); Terrebonne v. South Lafourche Tidal Control Levee Dist, 445 So.2d 1221, 1224 (La.1984). Interpretive laws merely establish the meaning the interpreted statute had from the time of its enactment. St. Paul Fire & Marine, 609 So.2d at 817; Ardoin, 360 So.2d at 1339.

We also agree with Blue Cross of Louisiana that this statute represents a substantive change in the law. La.R.S. 22:230.2 appears to be the first legislative expression regarding the rights of group policy holders to have issued a conversion ^policy upon termination of group coverage. The law creates a new right in favor of certain group insureds in Louisiana as well as a corresponding new duty required of group insurers. Unlike the statute considered in Manuel v. Louisiana Sheriff’s Risk Management Fund, 95-0406 (La.11/27/95), 664 So.2d 81, La.R.S. 22:230.2 specifically addresses the subject and terms of a contract. We, therefore, hold that the statute cannot be applied to alter the terms of conversion policies issued before its effective date.

Because Mrs. Guillot has not appealed the dismissal of Blue Cross of Oregon, we are precluded from addressing that carrier’s liability, either under the Oregon mandate statute, the Louisiana statute, or any theory of negligent misrepresentation and/or agency.

Decree

For the above reasons, the judgment of the trial court is reversed. Costs of this appeal are assessed to plaintiff/appellee, Marilyn Guillot.

REVERSED.

SAUNDERS, J. concurs in part, dissents in part, and assigns reasons.

hSAUNDERS, Judge,

concurring in part and dissenting in part.

I agree with the conclusions of the majority that the trial judge erred in applying La.R.S. 22:230.2 retroactively. Clearly, the statute was enacted subsequent to the effective date of the Louisiana Blue Cross policy. Nevertheless, in the interest of justice, I feel that a remand is warranted so that the trial court could consider whether the Oregon insurer acted as an agent for the Louisiana carrier or is otherwise culpable for its actions.

|2The problem with the Louisiana policy, and the basis of the present dispute, is that the Louisiana policy the Guillots eventually obtained had a limit of de minimis value in comparison to the Oregon plan which left plaintiff and her husband underinsured. As it turned out, the Blue Cross of Louisiana policy for which they paid premiums of $700.00 every three months only provided coverage of $10,000.00 per illness and $20,000 per lifetime, far less than the $500,000.00 policy they had in Oregon and the coverage they thought they had purchased in Louisiana.

These numbers are shocking and one cannot review these without recognizing that a great injustice has taken place. Can anyone believe that the plaintiffs went to such trouble to obtain only $10,000.00 of medical insurance? Without a doubt they wanted and negotiated for the $500,000.00 policy which they had in effect in Oregon. Can anyone believe that they agreed to pay $2,800.00 for only $10,000.00 of insurance? Such a proposition is indefensible. Clearly they bargained for $500,000.00 of insurance and thought they were paying for $500,000.00 of insurance. Something is wrong in the State of Oregon and, yes, something is wrong in the State of Louisiana. What is wrong in the State of Oregon is that a giant of the insurance industry has skillfully relieved itself of liability for catastrophic medical bills which, had the plaintiffs not moved to Louisiana, it would unquestionably have had to pay. What is wrong in the State of Louisiana is that Blue Cross of Oregon is not before this court and unless an agency or alter ego theory of liability can be established, the courts of this state will have to countenance this most unconscionable travesty!

13As is correctly pointed out by the majority, the plaintiffs had no direct contact with Blue Cross of Louisiana, with whom this policy was being negotiated and, accordingly, the only way plaintiffs claim for medical expenses might remain viable would require Blue Cross of Louisiana to be proven responsible for plaintiffs losses, even if indirectly, 1.e., through a theory of agency or alter ego representation of Blue Cross of Oregon. The trial judge did not consider these issues, notwithstanding the evidence tending to suggest this possibility, due to his erroneous conclusion that La.R.S. 22:230.2 must be read into the Guillots’ policy. In my view, these issues remain viable and I would remand this case in order to have the trial court review the evidence and rule on these issues.

According to plaintiffs husband, he and his wife, Marilyn Guillot, had hoped to return home in 1991 to their native Louisiana to complete their retirement. At the time of the contemplated move, the Guillots were insured by Health Maintenance Organization of Oregon, Mr. Guillot’s group insurer through his former employer. Before moving, Mr. Guillot, a retired truck driver, contacted the HMO, a Blue Cross of Oregon subsidiary, to confirm that their Blue Cross insurance would continue in force following their move to Louisiana. Mr. Guillot was determined to prevent the couple’s medical insurance from lapsing, knowing that his spouse’s history of serious medical ailments, very expensive medical procedures (two angioplasties among others), and equally poor prognosis meant that obtaining a new insurance policy in Louisiana would be impossible.

According to Mr. Guillot’s version of events, he first discussed these concerns with Ms. Linda Rask, a Health Maintenance Organization of Oregon (HMOO) who _j4indicated that in order for the couple to maintain their coverage, he and his wife would have to first transfer their Oregon HMO coverage to a traditional policy with Blue Cross of Oregon, the HMO’s parent, then transfer that coverage to Blue Cross of Louisiana. Thereafter, Blue Cross of Oregon’s representative, Ms. Kim Wirtz, contacted Mr. Guillot and likewise assured him that the couple would lose little or no coverage in the move.

Mr. Guillot contends that he never discussed the couple’s coverage needs directly with Blue Cross of Louisiana personnel, but rather that Oregon personnel took care of the couple’s every need. This account could well be true, given Blue Cross of Louisiana’s lack of documentation to contradict Mr. Guil-lot’s version of events and the Louisiana carrier’s apparent reception of the couple’s transfer via “wires” from Oregon Blue Cross. These are the words Mr. Guillot used to describe his conversations with Ms. Wirtz, which occurred sometime between his September 1991 conversation with Ms. Rask and the Guillot’s October 1991 move to Louisiana:

A. She told me. She says, Mr. Guillot, you go ahead and make your move and, she said, you will be covered by us. I said, fine. And she says, I’ll discuss it with you, you know, from time to time, which she did. She called me two or three times to talk to me. I went ahead and I made the move, and she told me, she said, I’m going to give you a letter stating that you are covered, all your benefits will be transferred in, you know, into Louisiana, if we transfer you.

While Blue Cross of Oregon concedes that Ms. Wirtz and Mr. Guillot had conversed several times during the period in question and that he had ample reason to be concerned that his wife’s coverage not be permitted to lapse, it steadfastly maintains that Ms. Wirtz had never informed Mr. Guillot that the couple would retain coverage more or less equivalent to that offered them in Oregon. Quoting Ms. Wirtz’s testimony on the subject:

IsA. My primary roles was to obtain the special approval needed to move him from HMOO conversion to Blue Cross [of Oregon] and Blue Shield’s conversion at his choice of level benefits.
Q. So you would have never given him what benefits were available in Louisiana?
A. -That’s absolutely true.
Q. From Conversion J.
A. I would have made no comparison because I have no knowledge to their benefits.

Ms. Wirtz also ruled out anyone else’s intervention in Oregon:

Q. How would Mr. Guillot have obtained that particular application he forwarded to Louisiana?
A. I have no knowledge of that.
Q. Is it possible that somebody else from Oregon would have forwarded Mr. Guillot the conversion application that we see here?
A. No. We have no other [state’s] forms on file in our company.

In view of the foregoing, it is conceivable (though by no means certain) that Blue Cross of Louisiana could be held accountable for the actions of its Oregon counterpart. While Ms. Wirtz’s testimony suggests that she had told Mr. Guillot that his insurance would be different, it also suggests that Blue Cross knew of the importance the Guillots placed on their continued coverage in Louisiana and the likely difficulty of obtaining coverage here. Specifically, Ms. Wirtz testified as follows:

Q. During that conversation, or any conversation, did you and Mr. Guillot discuss that the benefits under the [Oregon Blue Cross] conversion plan were limited?
A. Every conversation we had, we went over that. The first conversation, I indicated to him that it was going to be a dramatic difference from his HMO conversion which was a co-payment situation rather than a scheduled benefit, and that the first thing he should do when he gets ... got to Louisiana was to contact an |6insurance professional here to look for other benefits because the conversion would not be adequate. First and foremost, it didn’t offer any outpatient benefits.
Q. Did he ever indicate to you that ... what his concern was about obtaining insurance for his wife?
A. Absolutely. She had a pre-existing condition that he felt if they applied for regular benefits on the open market that they wouldn’t be able to qualify for them.
Q. From your experience in the underwriting field, is that statement correct?
A. Absolutely, in Oregon.

Additionally:

Q. Based on your knowledge of Mr. Guil-lot ... Mrs. Guillot’s condition, there was no way she would have been able to obtain coverage because both the pre-existing condition and riders would have excluded coverage for illness.
A. That would be true in Oregon. The assumption is that that would be true elsewhere.
Q. Okay. From your knowledge of the insurance industry, other insurance companies contain limitations on coverage such as preexisting conditions?

A. Yes, they do.

The record suggests the possibility that the finder of fact might conclude that the Blue Cross of Oregon personnel acted as agents for the Louisiana insurer.

An agent is defined as one who acts for or in the place of another by authority from the latter. La.C.C. art. 2985 et seq.; Craft v. Trahan, 351 So.2d 277 (La.App. 3rd Cir.1977), writ denied 353 So.2d 1336 (La. 1978). An actual agency relationship may be either express or implied. For some acts an agent’s authority must be express. This is true for the agent to buy, sell, contract a loan, acknowledge a debt, draw or endorse promissory notes, and generally where the acts to be done are not merely those of administration or such as facilitate such acts. La.C.C. art. 2997; Hugh O’Connor, Inc. v. J. Robert Autenreith, Inc., 343 So.2d 1090 (La.App. 4th Cir. 1977), writ denied 345 So.2d 59 (La.1977).

Pesson v. Kleckley, 526 So.2d 1220, 1225 (La.App. 3 Cir.1988). See also, Tedesco v. Gentry Development, Inc., 540 So.2d 960 (La. 1989)(sale of immovable property). Support for such a conclusion could be drawn from the history of dealings between the Blue Cross insurers, or from the transactions at issue in this case between the Oregon and Louisiana Blue Cross companies.

While the concepts of express and implied authority apply mainly to questions of liability arising between a principal and its agent and situations where a third party claims no detrimental reliance on the acts of either party, Broadway v. All-Star Insurance Corporation, 285 So.2d 536 (La.1973), Blue Cross of Louisiana conceivably could be held liable to plaintiffs by virtue of its having vested Blue Cross of Oregon with apparent authority.

Apparent authority is a doctrine by which an agent is empowered to bind his principal in a transaction with a third person when the principal has made a manifestation to the third person, or to the community of which the third person is a member, that the agent is authorized to engage in the particular transaction, although the principal has not actually delegated this authority to the agent. Restatement (Second) of Agency Sec. 8 (1958); W. Seavey, Law of Agency Sec. 8(D) (1968); F. Mechem, Law of Agency Sec. 84 (4th ed.1952); Comment, Agency Power in Louisiana, 40 Tul.L.Rev. 110 (1965) [hereinafter cited as Comment, Agency Power]. In an actual authority situation the principal makes the manifestation first to the agent; in an apparent authority situation the principal makes this manifestation to a third person. However, the third person has the same rights in relation to the principal under either actual or apparent authority. Further, apparent authority operates only when it is reasonable for the third person to believe the agent is authorized and the third person actually believes this. Restatement, supra Sec. 8, comments a and c.
There is no express codal or statutory authority for the doctrine of apparent authority in Louisiana. This doctrine of unprivileged agency power, however, is an important part of the modern law of agency. A. Yiannopoulos, Civil Law in the Modern World 88 (1965).
Louisiana courts have utilized the doctrine of apparent authority to protect third persons by treating a principal who has manifested an |8agent’s authority to third persons as if the principal had actually granted the authority to the agent. See Restatement, supra Sec. 8, comment d; Comment, Agency Power, supra; Conant, The Objective Theory of Agency: Apparent Authority and the Estoppel of Apparent Ownership, 47 Neb.L.Rev. 678 (1968).

Tedesco, 540 So.2d at 963.

There would appear to be some uncertainty in some instances as to whether a party seeking to rely on the doctrine of apparent authority must establish that the reliance induced a change of position. See Tedesco, 540 So.2d at 964:

The Louisiana decisions have sometimes used language of estoppel, but have not distinguished between the concepts of apparent authority and agency by estoppel. The Restatement, however, makes a clear distinction. According to the Restatement, apparent authority is based on the objective theory of contracts that a party ought to be bound by what he says and manifests rather than by what he intends, so that a third person who contracts with an agent need only prove reliance on the appearance of authority manifested by the principal. Because an enforceable contract results from the agreement with the agent after the principal’s conduct has manifested his consent, the third person need not prove any change of position induced by the reliance. On the other hand, agency by estop-pel is based on tort principles of preventing loss by an innocent person. The third person not only must show reliance on the conduct of the principal, but also must show such a change of position on his part that it would be unjust to allow the principal to deny the agency. Restatement, supra Sec. 8, comment d.
íi» V *1* ^

Nevertheless, in this case there is no question that plaintiffs premium payments to Blue Cross of Louisiana and the insurer’s failure to pay benefits constitutes such a change in position. “Change of position includes payment of money, expenditure of labor, suffering of loss, or subjection to legal liability in reliance on the belief of agency.” Id., at 965. Consequently, “[i]n the present ease, it is not necessary for this court to consider adopting a distinction between the doctrines of apparent authority and agency by estoppel.” Id.

Accordingly, in the case at bar, it is conceivable that the Louisiana carrier could be bound by the actions of its “sister company” although plaintiffs had little ifjgany direct contact with Blue Cross of Louisiana, depending on whether Oregon Blue Cross’s actions or inactions “gave the erroneous impression that third parties dealing with [Blue Cross of Oregon] were dealing with [Blue Cross of Louisiana, the principal],” Independent Fire Ins. v. Able Moving, 94-1982 (La.2/20/95), at p. 6, 650 So.2d 750, 752, or whether Blue Cross of Louisiana had vested its Oregon sister with contractual (ie., express) or implied authority to act in its behalf.

While the constitutional authority of appellate courts and the need for judicial economy encourage our reaching the merits wherever justified, Gonzales v. Xerox Corporation, 320 So.2d 163 (La.1975), that discretion must be employed prudently.

Where a finding of fact is interdicted because of some legal error implicit in the fact finding process or when a mistake of law forecloses any finding of fact, and where the record is otherwise complete, the appellate court should, if it can, render judgment on the record.
This is not to say, and Gonzales should not be read to require, that the appellate court must find its own facts in every such case. There are cases where the weight of the evidence is so nearly equal that a firsthand view of witnesses is essential to a fair resolution of the issues. The appellate court must itself decide whether the record is such that the court can fairly find a preponderance of the evidence from the cold record. Where a view of the witnesses is essential to a fair resolution of conflicting evidence, the case should be remanded for a new trial.

Ragas v. Argonaut Southwest Ins. Co., 388 So.2d 707, 708 (La.1980)(emphasis added).

Iioln my view, this is such a case. Inasmuch as the Oregon carriers already have been dismissed from these proceedings with prejudice, in accordance with Ragas, I would remand in order that the trial court could determine whether the agency theory is applicable in this case with respect to Blue Cross of Louisiana. 
      
      . There is no question but that the Guillots were forced to terminate their health insurance coverage with the Oregon HMO since the HMO's coverage did not extend beyond a several county area, let alone beyond Oregon state's boundaries. Nonetheless, according to the Guillots, at least two Oregon representatives, Linda Rask of the Oregon HMO, and Kim Wirtz of Blue Cross of Oregon, advised that if the Guillots transfer their policy from the Oregon HMO to Blue Cross of Oregon, this would not result in reduced coverage.
     
      
      . Plaintiff herself was unable to testify at trial as a consequence of severely disabling brain lacerations and multitudinous medical complications arising from an automobile accident in which she was involved in 1987.
     
      
      . The record contains evidence of one direct communication between the two insurers, a “faxed wire” between them dated May 5, 1992 concerning the Guillots' insurance.
     
      
      . By way of example only, wholly apart from the agency theory, plaintiff could conceivably demonstrate that Blue Cross of Louisiana is liable for the actions of its Oregon counterpart under an alter ego theory. See, e. g., Green v. Champion Ins. Co., 577 So.2d 249, 257-258 (La.App. 1 Cir.), writ denied, 580 So.2d 668 (La.1991). As with the agency question, the record before us does not contain adequate evidence to confirm whether the two Blue Cross companies share more than their names, but the question must arise by virtue of Louisiana Blue Cross's willingness to accept responsibility for "new" insurance applicants so clearly demonstrating a high risk of exposure.