Opinion ID: 2001676
Heading Depth: 1
Heading Rank: 5

Heading: fiduciary duty/good faith and fair dealing

Text: Swanson claims SVEEA breached its fiduciary duty or alternatively, its implied duty of good faith and fair dealing. Swanson claims he relied on SVEEA's superior experience, expertise, and knowledge and bargaining power ... for the negotiation and procurement of the best possible health coverages for himself and his family[.] The existence of a fiduciary duty is a question of law for the court to decide. Garrett, 459 N.W.2d at 839 (citations omitted). A fiduciary is one who acts for another, is in a peculiar position of confidence, and the relationship implies a condition of superiority of one of the parties over the other.  Id. at 837 (citation omitted) (emphasis in original). Swanson claims he has no experience in insurance contracts. However, the trial court noted Swanson is an educated farmer-businessman. He served on township boards and dealt with obtaining insurance for himself, his family and for the township in prior years. No evidence indicates Swanson was in a position of reliance on SVEEA in obtaining health coverage. See Id. While an employer [or group policy holder] must respect the rights of the insureds, it does not stand in any particular position of trust or owe a fiduciary duty to them or to the beneficiaries of their [group health plan] certificates. 19 Couch Cyclopedia of Insurance Law, § 82:1 (Rhodes, 2d ed. 1983). SVEEA has shown no genuine issue of material fact exists on the fiduciary relationship claim and Swanson has failed to show otherwise. Swanson claims SVEEA breached its duty of good faith and fair dealing in negotiating and procuring a group health insurance plan for its consumers and employees. Swanson claims SVEEA injur[ed his] right... to receive benefits of a health insurance contract and/or carrier that would have covered liver transplants[.] All insurance contracts contain an implicit contractual duty to act or deal in good faith. Helmbolt v. LeMars Mut. Ins. Co., Inc., 404 N.W.2d 55, 57 (S.D.1987). In Garrett, 459 N.W.2d at 843, we stated the duty of good faith and fair dealing arises from contract and not from tort. [I]f employees contribute in paying the premiums on group insurance carried by the employer, the latter owes them the duty of good faith and due care in attending to the policy, and should make clear to an employee anything required of him to keep the policy in effect, and the time that premiums are due. 44 Am.Jur.2d Insurance, § 1852 (emphasis added). SVEEA informed Swanson of his right to remain with Time or to switch to DAKOTACARE. SVEEA sent information and DAKOTACARE held informational meetings describing its coverage. SVEEA changed its group carrier to DAKOTACARE to attempt to reduce premium costs for its consumers. SVEEA and DAKOTACARE informed Swanson of the coverage under the DAKOTACARE plan, including the exclusion of liver transplants, through direct mailings and member newsletters. Swanson admits that knowledge of the lack of liver transplant coverage would not have affected his choice to remain with DAKOTACARE. He has not shown any evidence that would raise a genuine issue as to SVEEA's failure to act or deal in good faith. An employer procuring a group health insurance plan for its employees is required to use reasonable care to select a solvent insurance carrier. Nidiffer v. Clinchfield R. Co., 600 S.W.2d 242, 246 (Tenn.App.1980) (citation omitted). Swanson claims SVEEA chose a financially unstable company to provide health coverage. He claims this was the reason for the premium increases and for the cherry picking scheme which placed all the sick into one, higher paying class. [1] No evidence indicates SVEEA used less than reasonable care in selecting the group insurer or that the premium increases were not due to DAKOTACARE's loss ratio after it took over the group. We have reviewed the other issues raised by Swanson and consider them to be without merit. [2] We affirm. MILLER, C.J., and AMUNDSON, KONENKAMP, and GILBERTSON, JJ., concur.