Case Name: BLUE CROSS OF GEORGIA/ATLANTA, INC. et al. v. GRENWALD; and vice versa
Court: Court of Appeals of Georgia
Jurisdiction: Georgia
Decision Date: 1978-11-28
Citations: 148 Ga. App. 486
Docket Number: 56295, 56456
Parties: BLUE CROSS OF GEORGIA/ATLANTA, INC. et al. v. GRENWALD; and vice versa.
Judges: Bell, C. J., Deen, P. J., Quillian, P. J., Smith, Shulman, Banke and Birdsong, JJ., concur. McMurray, J., dissents.
Reporter: Georgia Appeals Reports
Volume: 148
Pages: 486–494

Head Matter:
56295, 56456.
BLUE CROSS OF GEORGIA/ATLANTA, INC. et al. v. GRENWALD; and vice versa.

Opinion:
Webb, Judge.
Edward S. Grenwald filed a complaint seeking reimbursement for medical bills submitted to and refused by Blue Cross, plus interest, bad faith penalties and attorney fees; and for declaratory judgment that he was covered under his group policies for treatments received by him and his wife from Emory University School of Medicine and its staff physicians. Blue Cross counterclaimed seeking reimbursement of an initial sum paid to Grenwald. The case was tried without a jury and judgment entered denying bad faith damages and attorney fees, but directing Blue Cross to pay all properly submitted claims. The counterclaim was also denied and these appeals ensued. We affirm in both.
1. Grenwald was referred to Dr. Richard P. Michael by the Emory University School of Medicine on June 26, 1973 and was treated by Dr. Michael from then until February 9, 1977. Dr. Michael held a valid institutional license to practice medicine under the supervision of Dr. Bernard Holland of the Emory University School of Medicine from October 12, 1972 through October 12, 1973, and was properly supervised throughout the relevant period by Dr. Holland as required by Code Ann. § 84-927, then in effect. He was at all relevant times a Doctor of Medicine (MD) and a tenured, full professor of medicine at Emory. No person or board or party to this suit has ever contended that Dr. Michael is not an extraordinarily well-qualified and competent doctor.
During the relevant time, institutional licenses were issued for a period of 12 months to "any person.... who is employed by any medical college in the State of Georgia approved by the State Board of Medical Examiners of Georgia, upon request of the superintendent of such State institution or the dean of such medical college. . ." Code Ann. § 84-927. Somehow Emory allowed Dr. Michael's license to lapse for a period from October 13,1973 through August 25, 1975. However, Dr. Michael continued as a full professor and saw patients throughout this period. The institutional license was renewed on August 25,1975 and again on August 25, 1976, and on February 9, 1977 Dr. Michael was issued a full practice medical license pursuant to Code Ann. § 84-907.
Blue Cross insists it was not obligated to pay any claims made during the period during which the license was not renewed because Dr. Michael was not then a "physician" as defined and required by the provisions of its insurance policies. We disagree.
The insurance contract under which Blue Cross denied Grenwald reimbursement for medical treatment by Dr. Michael defines "physician" as: "Any Doctor of Medicine (MD)... licensed by the Composite Board of the State of Georgia or similar board of any other state, legally entitled to practice medicine and perform surgery ." Significantly, the contract draws no distinction between different types of licenses to "practice medicine." Code Ann. § 84-927, although not providing for a full practice license, did and still does allow medical school graduates to "practice medicine" under proper supervision. Code Ann. § 84-901 defines the term "practice of medicine" as used in this Chapter to mean "holding one's self out to the public as being engaged in the diagnosis or treatment of disease, defects or injuries of human beings . with the intention of receiving therefor, either directly or indirectly, any fee, gift or compensation whatsoever..." Dr. Michael was in compliance with all of these provisions.
There is no statutory requirement to register an institutional license in the clerk's office of the superior court of the county of the doctor's residence. The burden of obtaining the license is not upon the doctor, but upon the dean of the medical college in which he is permitted to practice under proper medical supervision. No notice was sent to Dr. Michael or to Emory regarding renewal or recording of the license. Neither during nor after the period that Dr. Michael's license was not renewed did the Board of Medical Examiners institute or take any action against Dr. Michael, or even question the continuing validity of the license, and Dr. Michael's right to act thereunder within the institution. Indeed, in light of the facts shown in this case, it is clear that had the dean requested reissuance at any time during the lapsed period, it would have been an abuse of the board's authority under Code Ann. § 84-927 to have denied renewal. In any event the license was automatically renewed without question each time it was requested.
The trial judge correlated Emory's omission of a formal request for renewal, or the recording thereof, to the doctrine of de facto as opposed to de jure corporations. Such entities, even if technically deficient in licensing, recording or incorporation, if otherwise operating legally and holding themselves out as properly licensed or incorporated are deemed able to transact business and to be held accountable. Brown v. Atlanta R. &c. Co., 113 Ga. 462, 468 (1) (39 SE 71) (1901); Hall v. Kimsey, 48 Ga. App. 605 (3) (173 SE 437) (1934) and cits. The analogy is an apt one. And since no action was taken either against Emory, the dean, the supervising physician or Dr. Michael, and since Dr. Michael subsequently received a full practice license from the board, the doctrine of license by estoppel would likewise be appropriately applicable to the situation. See Brown v. Atlanta R. &c. Co., 113 Ga. 462 (1) , supra.
Blue Cross should not be allowed to escape liability under its contract of insurance by relying on statutes which are inapplicable under law, concededly inapposite to the facts of the case, and irrelevant to the contractual relationship between it and Grenwald. Nor should Grenwald, who has always been current in the payment of his premiums, be penalized through the too-technical construction of a licensing requirement over which neither he nor his doctor had any control. The holder of an institutional license to practice medicine is clearly within the definition of "physician" in the insurance contract drafted by Blue Cross, and if there is any doubt as to contractual definitions or coverage, the law requires construction of the contract in the policyholder's favor. Code Ann. § 56-2419. The trial judge determined that Dr. Michael was at all relevant times duly licensed to practice medicine as contemplated by the policy. This conclusion is amply supported by the law and the evidence and should not be disturbed by this court. Hill v. Cockrell, 141 Ga. App. 39 (232 SE2d 384) (1977).
2. It follows that Blue Cross' counterclaim for reimbursement of claims previously paid was correctly denied.
3. The question of law involved is one of first impression in Georgia and thus bad faith penalties under Code Ann. § 56-1206 were not warranted. Aetna Fire Underwriters Ins. Co. v. Crawley, 132 Ga. App. 181, 183 (2) (207 SE2d 666) (1974); Ga. Farm Bureau Mut. Ins. Co. v. Calhoun, 127 Ga. App. 213, 215 (2) (193 SE2d 35) (1972); Brown v. Seaboard Lumber &c. Co., 221 Ga. 35, 38 (142 SE2d 842) (1965).
Argued September 5, 1978
Decided November 28, 1978
Rehearing denied December 19, 1978 in Case No. 56295
Hey man & Sizemore, William B. Brown, George H. Myshrall, Jr., for appellants.
Haas, Holland, Levison & Gibert, Richard N. Hubert, for appellee.
Judgments affirmed.
Bell, C. J., Deen, P. J., Quillian, P. J., Smith, Shulman, Banke and Birdsong, JJ., concur. McMurray, J., dissents.
Ga. L. 1977, pp. 332, 333, repealed this section as it was originally enacted by Ga. L. 1939, p. 319. Ga. L. 1977, pp. 334, 339, entirely superseded the former section, and was then entirely superseded by the present provision, Ga. L. 1978, p. 273.
Code Ann. § 84-908, requiring the recording of licenses with the clerk of the superior court of the county of the registrant's domicile, has not been applied to institutional licenses. The Secretary of the Board of Medical Examiners testified that notice of the recording requirement was given to holders of full practice licenses, but that no notice was given to holders of institutional licenses. The purpose of this statutory requirement is explained in Murray v. Williams, 121 Ga. 63 (48 SE 686) (1904).