Case ID: so2d_627/html/0865-01.html
Source: Caselaw Access Project
Author: {"author": "KENNEDY, Justice. HOUSTON, Justice MADDOX, Justice", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MUTUAL ASSURANCE, INC. v. Thomas L. MADDEN, as Administrator of the Estate of Michelle M. Madden, deceased. Dr. Owen B. EVANS v. Thomas L. MADDEN, as Administrator of the Estate of Michelle M. Madden, deceased.
    1911048, 1911049.
    Supreme Court of Alabama.
    April 9, 1993.
    Rehearing Denied Sept. 3, 1993.
    W. Stancil Starnes and Sybil Vogtle Abbott of Starnes & Atchison, Birmingham, and W. Boyd Reeves of Armbrecht, Jackson, De-Mouy, Crowe, Holmes & Reeves, Mobile, for Mutual Assur., Inc.
    John N. Leach, Jr. and Joseph D. Stead-man of Helmsing, Lyons, Sims & Leach, P.C., Mobile, for Dr. Owen B. Evans.
    Andrew T. Citrin, John T. Crowder, Jr. and Michael A. Worel of Cunningham, Bounds, Yance, Crowder and Brown, Mobile, for Thomas L. Madden.
   KENNEDY, Justice.

The defendant, Dr. Owen B. Evans, and his insurer, Mutual Assurance, Inc., appeal from a post-trial order requiring Mutual Assurance to appear “and show cause as to why th[e] court should not consider Dr. Evans’s potential claims ... against Mutual Assurance” on his request for a remittitur of a punitive damages award. Dr. Evans has alleged that this award, in favor of the plaintiff, Thomas L. Madden, as administrator of the estate of Michelle M. Madden, deceased, will devastate him financially. See generally Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986); Green Oil Co. v. Hornsby, 539 So.2d 218 (Ala.1989) (discussing the re-mittitur of punitive damages awards). This award is $9 million in excess of Dr. Evans’s coverage with Mutual Assurance.

The record indicates that Mutual Assurance had rejected Dr. Evans’s pretrial requests that it attempt to negotiate a settlement of Madden’s claims, as well as attempts by Madden to negotiate a settlement.

As indicated, the trial court ordered Mutual Assurance to show cause as to why the court should not consider, in determining the financial impact of the award, a potential “bad-faith” claim Dr. Evans might have against Mutual Assurance.

Mutual Assurance argues that the trial court lacked the authority to order it to “show cause.” We agree; it is clear, beyond the need for lengthy discussion, that the trial court had no authority to order this nonparty to assume a burden of proof on the remittitur question. However, we emphasize that the trial court’s error was not in affording Mutual Assurance an opportunity to protect its interests, but in ordering it to do so.

Although this point is dispositive of these appeals, the parties request that we also address the issue of whether it is proper for the trial court to consider, on the remitti-tur question, Dr. Evans’s potential for recovering from the insurer the amount of the judgment against him that exceeds the amount of his insurance coverage.

The trial court conducted an in camera inspection of Mutual Assurance file materials relating to this ease. The record indicates that the trial court had before it considerable evidence upon which it could reasonably ascribe a present value to Dr. Evans’s potential claims. Certainly, it is within the trial court’s discretion to ascribe a reasonable present value to this interest, and to consider such an asset on the remittitur issue. We have made it clear that in determining the financial impact of a punitive damages award on a defendant, a trial court should determine “the true impact on the defendant.” Killough v. Jahandarfard, 578 So.2d 1041, 1047 (Ala.1991) (emphasis added).

Finally, Madden, who has filed an appel-lee’s brief, has moved for leave to file additional written argument. This motion is denied. Consideration of motions in opposition to Madden’s motion is, therefore, pretermit-ted.

MOTION TO FILE ARGUMENT DENIED; REVERSED AND REMANDED.

HORNSBY, C.J., and SHORES, ADAMS and INGRAM, JJ., concur.

HOUSTON and STEAGALL, JJ., concur in the result.

MADDOX, J., concurs in part and dissents in part.

HOUSTON, Justice

(concurring in the result).

I view the issue as whether, on a defendant’s request for a remittitur of a punitive damages award in a wrongful death case based on an allegation that the award will have a devastating financial impact on the defendant, the trial court can consider the defendant’s potential claim against his insurer to recover an amount in excess of the defendant’s insurance coverage? The answer is no.

Because of the peculiar nature of damages for wrongful death in Alabama, “such damages as the jury may assess,” ranging from nothing to $7,500,000 (largest amount upheld by this Court; see General Motors Corp. v. Johnston, 592 So.2d 1054 (Ala.1992)) may be recoverable. Ala.Code 1975, § 6-5-410. We have established no minimum limit, even where the defendant’s action is intentional; the jury still has the right to award nothing. (Although I personally disagree with this, I have been unable to persuade any other members of the Court that this is not only unjust, but unconstitutional.)

It is doubtful that an insured could ever prove that an insurer’s liability for failure to settle a wrongful death claim amounted to a bad faith failure to settle. See Aetna Casualty & Surety Co. v. Beggs, 525 So.2d 1350, 1352-53 (Ala.1988) (bad faith failure to pay uninsured motorist benefits):

“[I]t is doubtful that an insured could ever prove the amount of an insurer’s liability under uninsured motorist coverage in a wrongful death case with the specificity necessary to recover against an insurer for bad faith in failing to negotiate or pay a wrongful death claim under uninsured motorist coverage.
“This would not be the first time that this Court’s peculiar interpretation of the damages aspect of our wrongful death statute has potentially deprived a claimant of a right it might have had if personal injury, and not death, had resulted. See Carter v. City of Birmingham, 444 So.2d 373 (Ala.1983), cert denied, 467 U.S. 1211, 104 S.Ct. 2401, 81 L.Ed.2d 357 (1984).”

See, also, Barnes v. Oswalt, 579 So.2d 1319, 1324 (Ala.1991) (Houston, J., concurring in the result):

“[I]n making the imposition of those damages [punitive damages only in wrongful death cases] optional with the jury, the majority of this Court consistently denies a remedy for death. This could have led to what, in my opinion, is the ultimate inconsistent verdict in this ease, a verdict that is based upon a jury’s finding that the defendant’s act or omission was the proximate cause of the death of the plaintiff’s decedent, but that awards no damages because the jury, exercising its discretion, elected not to punish the defendant.”

If the trial court considers any more than the face amount of the defendant’s liability policy and the present assets of the defendant in the Hammond hearing, it will deprive the defendant of his constitutional rights. The defendant’s constitutional right to fairness in punishment cannot depend upon what may happen in another court on another day.

MADDOX, Justice

(concurring in part; dissenting in part).

I agree with the majority’s holding that the trial court lacked the authority to order Mutual Assurance to show cause as to why the court should not consider, in determining the financial impact of the $10 million award, a potential bad faith claim Dr. Evans might have against Mutual Assurance. However, although the majority correctly states that the resolution of that issue is dispositive of this appeal, the majority also addresses whether the trial court, in determining whether the verdict was excessive, should consider Dr. Evans’s potential bad faith claim against Mutual Assurance and its conceivable effect upon Dr. Evans’s financial position. The majority holds:

“[I]t is within the trial court’s discretion to ascribe a reasonable present value to [Dr. Evans’s bad faith claim], and to consider such an asset on the remittitur issue. We have made it clear that in determining the financial impact of a punitive damages award on a defendant, a trial court should determine ‘the true impact on the defendant.’ Killough v. Jahandarfard, 578 So.2d 1041, 1047 (Ala.1991).”

627 So.2d at 866 (Ala.1993) (emphasis added by the majority). I disagree.

In my opinion, the trial court cannot determine the value of a potential bad faith claim for purposes of the Hammond-Green Oil Co. hearing without engaging in rank speculation as to the value of such an asset and thereby depriving Dr. Evans of his constitutional right to a post-verdict assessment of the jury’s award of punitive damages.