Title: Hardy v. Blue Cross and Blue Shield

State: alabama

Issuer: Alabama Supreme Court

Document:

585 So. 2d 29 (1991)
Glenda Joyce HARDY
v.
BLUE CROSS AND BLUE SHIELD OF ALABAMA and Alabama State Employees Insurance Board.
1900339.

Supreme Court of Alabama.
August 9, 1991.
*30 Roy S. Moore, Gadsden, for appellant.
Bert S. Nettles and J. Mark Hart of Spain, Gillon, Grooms, Blan & Nettles, Birmingham, for appellees.
HORNSBY, Chief Justice.
Joyce Hardy sued Blue Cross and Blue Shield of Alabama ("Blue Cross"), alleging breach of contract, bad faith, and fraudulent suppression. The trial court entered a summary judgment for Blue Cross on the fraudulent suppression claim and directed a verdict on the bad faith claim. The breach of contract claim was submitted to the jury, and it returned a verdict for Blue Cross. Hardy appeals neither as to the breach of contract claim nor as to the bad faith claim. She appeals only from the summary judgment entered against her on her fraudulent suppression claim. We affirm.
While employed with the Etowah County constable's office, Hardy was enrolled in a major medical benefit plan with Blue Cross, contract number XXX-XX-XXXX. On June 5, 1987, Hardy underwent laser surgery for treatment for a condyloma.[1] On June 22, 1987, Hardy became employed by the Etowah County circuit clerk's office. Upon her employment with the circuit clerk's office, Hardy became enrolled in another plan, under contract number XXX-XX-XXXX, in group 13000; that plan was administered by Blue Cross for the State Employees Insurance Board. On August 21, 1987, Hardy had a recurrence of her condyloma and again underwent laser surgery.
Hardy filed a claim with Blue Cross for the expenses she incurred, but Blue Cross denied her claim. Under the medical plan administered by Blue Cross, preexisting conditions were not covered for the first 270 days of coverage. In this case, the second laser surgery for Hardy's condyloma was performed 60 days after her coverage became effective. Blue Cross denied her claim because Hardy's condyloma was a preexisting condition and the 270-day waiting period had not run.
Hardy argues that the trial court never ruled on the summary judgment motions for either party and that Blue Cross moved for a directed verdict at the beginning of trial. The record does not support this contention. Blue Cross filed a motion for summary judgment on October 4, 1990, and Hardy filed a cross-motion for summary judgment on October 16, 1990. The motions were argued on October 18, 1990, before the commencement of the trial; the trial court struck Hardy's affidavit because she had failed to comply with A.R.Civ.P. 56(e) and it entered a summary judgment in favor of Blue Cross on the fraudulent suppression claim. The following occurred:
"THE COURT: I am going to grant [Blue Cross's] motion to strike [Hardy's] affidavit.
*31 "THE COURT: I am going to deny [Blue Cross's] motion on the contract claim for directed verdict.
"MR. MOORE: Yes sir, I do....
"....
"THE COURT: What says the Plaintiff?
"MR. MOORE: Judge, we consider that [evidence] highly relevant.
Based upon the foregoing, we review the summary judgment under A.R.Civ.P. 56.
Rule 56 sets forth a two-tiered standard for entering summary judgment. The rule requires the trial court to determine (1) that there is no genuine issue of material fact; and (2) that the moving party is entitled to a judgment as a matter of law.
The standard of review applicable to a summary judgment is the same as the standard for granting the motion, that is, we must determine whether there was a genuine issue of material fact and, if not, whether the movant was entitled to a judgment as a matter of law. Our review is further subject to the caveat that this Court must review the record in the light most favorable to the nonmovant and resolve all reasonable doubts against the *32 movant. Wilson v. Brown, 496 So. 2d 756, 758 (Ala.1986); Harrell v. Reynolds Metals Co., 495 So. 2d 1381 (Ala.1986); see also Hanners v. Balfour Guthrie, Inc., 564 So. 2d 412 (Ala.1990).
Because this action was filed after June 11, 1987, Ala.Code 1975, § 12-21-12, mandates that, once the movant makes his prima facie showing, the nonmovant meet his burden by "substantial evidence." Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala.1989). Under the substantial evidence test, the nonmovant must present "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989) (citing Rowden v. Tomlinson, 538 So. 2d 15, 19 (Ala.1988) (Jones, J., concurring)). More simply stated, "[a]n issue is genuine if reasonable persons could disagree." W. Schwarzer, Summary Judgment Under the Federal Rules: Defining Genuine Issues of Material Fact, 99 F.R.D. 465, 481 (1982).
To make out a prima facie case of fraudulent suppression, Hardy must show:
(1) that Blue Cross had a duty to disclose; (2) that Blue Cross suppressed an existing, material fact; (3) that Blue Cross had actual knowledge of the fact and its materiality; (4) that her lack of knowledge induced her to act; and (5) that she suffered actual damage as a proximate result. See, e.g., Cherokee Farms, Inc. v. Firemen's Fund Ins. Co., 526 So. 2d 871 (Ala.1988); Wilson v. Brown, 496 So. 2d 756 (Ala.1986); Harrell v. Dodson, 398 So. 2d 272 (Ala.1981).
This Court has often ruled that mere silence does not constitute fraud and that there is no duty to disclose facts when information is not requested. King v. National Foundation Life Ins. Co., 541 So. 2d 502 (Ala.1989); Wilson, supra; Keeler v. Chastang, 472 So. 2d 1031 (Ala. 1985); Ray v. Montgomery, 399 So. 2d 230 (Ala.1980). A duty to disclose may arise from a confidential relationship between the parties, or from the particular circumstances of the case. Ala.Code 1975, § 6-5-102; King, supra; McCausland v. Tide-Mayflower Moving & Storage, 499 So. 2d 1378 (Ala. 1986); Berkel & Co. Contractors Inc. v. Providence Hosp., 454 So. 2d 496 (Ala.1984); Holdbrooks v. Central Bank, 435 So. 2d 1250 (Ala.1983).
Hardy contends that she made a prima facie showing on her fraudulent suppression claim. Hardy claims that Blue Cross owed her a duty to disclose material facts not known to her and that Blue Cross breached her confidence and trust in Blue Cross. She contends that Blue Cross induced her to enter into a new contract by failing to inform her that if she had a recurrence of her condyloma any expense incurred in treating the recurrence would be excluded under the new contract. Hardy claims that because of Blue Cross's failure to inform her, she failed to purchase a conversion contract under her former insurance agreement and thus suffered injury or loss.
Notwithstanding her claims, Hardy presented no evidence suggesting that Blue Cross had a duty to disclose information. There was no evidence of a confidential relationship, and there were no special circumstances giving rise to a duty. Hardy did not request any information from Blue Cross about her coverage before enrolling in the group 13000 plan. No evidence was presented suggesting that she discussed her old and new coverages with Blue Cross or the possibility that Blue Cross would not pay any medical claims connected with a recurrence of her vaginal warts.
The evidence does show that when Hardy enrolled in the group 13000 plan she was given an employee booklet, which contained the following:
"Waiting Periods
(Emphasis added.)
Based upon the record before this Court, we conclude that Hardy failed to rebut the defendant's prima facie showing by presenting substantial evidence of fraudulent suppression. Consequently, we affirm the summary judgment.
AFFIRMED.
ALMON, ADAMS, STEAGALL and INGRAM, JJ., concur.
[1]  Condyloma is defined as: "Verruca Mollusciformis; a wartlike excrescence at the anus or vulva, or on the glans penis." Stedman's Medical Dictionary 340 (25th ed. 1990).