Opinion ID: 1863497
Heading Depth: 1
Heading Rank: 3

Heading: The Summary Judgment for Alfa Mutual

Text: The Gonzalezes next argue that the trial court incorrectly entered the summary judgment for Alfa Mutual on all their claims, i.e., breach of contract, bad faith, and fraud. The Gonzalezes claimed that they entered into a health insurance contract with Alfa Mutual and that Alfa Mutual breached that contract by failing to pay the claims relating to Mrs. Gonzalez's maternity care. Before the trial court, Alfa Mutual argued that it was entitled to a summary judgment on the breach of contract claim because, it said, there was no evidence to show that a contract existed between itAlfa Mutual Insurance Companyand the Gonzalezes. Rather, Alfa Mutual contended, the Gonzalezes' contract of health insurance was with Blue Cross and had been issued through the group carrier, Alfa Services, Inc., a corporate entity separate and distinct from Alfa Mutual. The essential elements of a contract are an agreement, consideration, two or more contracting parties, a legal object, and capacity. Shirley v. Lin, 548 So.2d 1329 (Ala. 1989). The Gonzalezes presented no substantial evidence indicating that a contract existed between them and Alfa Mutual. The certificate received by the Gonzalezes shows that their insurance coverage under the Alfa Health Plan was through Alfa Services, not Alfa Mutual: Introduction . . . . This Certificate describes group health benefits available to persons in accordance with the terms of the Contract between Alfa and Blue Cross and Blue Shield of Alabama.... By itself this Certificate is not a contract, although it is part of the Contract. See Section I (`Definitions') paragraph 7 (`Contract') for what makes up the Contract between Alfa and [Blue Cross].... . . . . Section I Definitions . . . . 7. `Contract' means the Group Health Benefits Contract between Alfa Services, Inc. and [Blue Cross]. The Contract is made up of three parts. The first part is your Group's application to [Blue Cross] for the Contract. The second part is this Certificate when we issue it to your Group in response to that application. . . . . 17. `Group' or `Group Agent' means Alfa Services, Inc., with whom [Blue Cross has] the Contract and through which you [the insured] have coverage. (Emphasis added.) The Gonzalezes do not dispute Alfa Mutual's allegation that Alfa Mutual Insurance Company and Alfa Services, Inc., are different corporations. Indeed, the Gonzalezes amended their complaint on May 17, 1996, to change the designation of the Alfa defendant from Alfa Insurance Company to Alfa Services, Inc., implicitly acknowledging that their original complaint designated the incorrect party as a defendant in this action. The Gonzalezes argue, however, that, as a result of certain statements made by opposing counsel during a deposition and in a legal brief, it is undisputed that a contract existed between them and Alfa Mutual. Thus, the Gonzalezes appear to contend that Alfa Mutual has stipulated to the existence of such a contract and should not be permitted now to argue the issue. In support of their position, the Gonzalezes first allege that during the deposition of Martha Melton, a Blue Cross customer service representative, the attorney then representing both Blue Cross and Alfa Mutual, Bert Nettles, agreed to the existence of a contract between the Gonzalezes and Alfa Mutual. The deposition transcript in the record indicates the following exchange between Bert Nettles and Marco Gonzalez, who was acting as his own attorney: Mr. Gonzalez: What I'm trying to get at is for you to confirm for me, Mrs. Melton, whether or not ...maybe we can agree... that the Gonzalezes had effective coverage at the time of the birth of their son, whether they had a contract of insurance with Blue Cross and Blue Shield. Mr. Nettles: She stated and we have admitted in the answers that there is a contract of insurance that existed. . . . . Mr. Gonzalez: We do have an agreement, then, Bert, that the agreementI forgot what the answer saidthat there was a valid contract with Blue Cross and Blue Shield at the time of the baby's birth? Mr. Nettles: Yes, with a waiting period. (C.R. 287.) (Emphasis added.) The Gonzalezes further claim that Nettles also stipulated that the Gonzalezes had family coverage through a group Alfa Mutual Insurance Company Health Plan; they say this stipulation came in the Blue Cross brief filed in the trial court in support of Blue Cross's motion for summary judgment. A stipulation is defined as a `voluntary agreement between opposing counsel concerning [the] disposition of some relevant point so as to obviate [the] need for proof or to narrow [the] range of litigable issues.' Evans v. Alabama Professional Health Consultants, Inc., 474 So.2d 86 (Ala.1985) (quoting Black's Law Dictionary 1269 (5th ed. 1979)). Parties may stipulate the issues in a case[,] with the consequence that such stipulations are binding. Vann Express, Inc. v. Phillips, 539 So.2d 296 (Ala.Civ.App.1988). Agreements between parties or by their attorneys made in open court or at pretrial conferences are binding, whether such agreements are oral or written. Jones v. Gladney, 339 So.2d 1019 (Ala.1976), citing Rule 47, Ala.R.App.P., and, under some circumstances, agreements made during a deposition, a transcript of which appears in the record, may be deemed to have been made in open court and thus may be enforceable, notwithstanding that there was no signed writing. See Ex parte W.Y., 605 So.2d 1175 (Ala.1992); see also McKelvy v. Darnell, 587 So.2d 980 (Ala.1991). Neither of the statements relied on by the Gonzalezes helps them. Even if we assumed that the exchange between Marco Gonzalez and Bert Nettles during the deposition did constitute a stipulation of an issue, Nettles's answers could affirm only that the Gonzalezes had a contract with Blue Cross, not that they had a contract with Alfa Mutual. The witness being deposed was an employee of Blue Cross, and Marco Gonzalez asked whether it was agreed that the Gonzalezes had a valid contract of insurance with Blue Cross. Nettles answered in the affirmative. Neither Nettles nor Mr. Gonzales referred to Alfa Mutual. Later, in his brief filed on March 5, 1996, in support of Blue Cross's motion for summary judgment, Nettles did refer to the fact that the Gonzalezes had insurance coverage through a policy with Alfa Mutual. Section 34-3-21, Ala.Code 1975, provides that An attorney has authority to bind his client, in any action or proceeding, by any agreement in relation to such case, made in writing, or by an entry to be made on the minutes of the court. Once again, even if we assumed that such a statement by counsel in a brief was binding upon the party counsel represents, we would note that the record shows that Nettles did not represent Alfa Mutual when he filed Blue Cross's brief. On October 25, 1995, attorney Connie Ray Stockham filed a notice of appearance as separate counsel for Alfa Mutual. Since that time, Nettles has represented Blue Cross only and has not acted on behalf of Alfa Mutual in any matter connected with this case. Even if Nettles stated in his brief, which was admittedly submitted on behalf of Blue Cross rather than Alfa Mutual, that he agreed that Alfa Mutual had entered into a contract with the Gonzalezes, that statement would not help the Gonzales, because Alfa Mutual was no longer his client when he filed that brief. Therefore, Alfa Mutual is not bound by his statements or agreements. See Shoals Community College v. Colagross, 674 So.2d 1311 (Ala.Civ.App.1995). We find in the record no evidence that Alfa Mutual stipulated that it had entered into a contract with the Gonzalezes. Indeed, the undisputed evidence shows that it did not enter into such a contract. Thus, the trial court correctly entered the summary judgment for Alfa Mutual on the breach of contract claim. We have noted above, in our discussion of the elements of an action for bad faith failure to pay an insurance claim, that the plaintiff in such an action has the burden of proving the existence of an insurance contract between the parties and a breach thereof by the defendant. See Bowen, 417 So.2d at 183. Because we have already determined that the trial court correctly held that evidence showed there was no contract of insurance between the Gonzalezes and Alfa Mutual, we must also conclude that the Gonzalezes failed to present the evidence necessary to defeat the summary judgment motion as to their bad faith claim against Alfa Mutual. The Gonzalezes offered no evidence that there was an insurance contract between the parties and that the insurer had breached that contract. See Bean v. State Farm Fire & Cas. Co., 591 So.2d 17, 22 (Ala.1991). We now consider the summary judgment for Alfa Mutual as it regards the Gonzalezes' fraud claim. Marco Gonzalez alleges that he was told by an agent or employee at the Alfa Service Center in Pelham that the Gonzalez family would have full coverage immediately. He claims that he was defrauded by Alfa Mutual because maternity benefits were not available immediately, but were, rather, subject to the 365-day waiting period. The elements of a fraud claim are: (1) a misrepresentation of a material fact [by the defendant]; (2) made willfully to deceive or recklessly without knowledge; (3) which was justifiably relied upon by the plaintiff under the circumstances; and (4) which caused damage as a proximate consequence. Howard v. Mutual Sav. Life Ins. Co., 650 So.2d 868, 871 (Ala.1994); see § 6-5-101, Ala.Code 1975. The misrepresentations of an insurance agent may be imputed to his or her insurer principal. Washington Nat'l Ins. Co. v. Strickland, 491 So.2d 872, 874 (Ala.1985). We have held that the Gonzalezes presented no substantial evidence that their insurance coverage was issued through Alfa Mutual. There may be evidence indicating that the agent who solicited the Gonzalezes to purchase insurance and who allegedly made the misrepresentation to Marco Gonzalez was acting as an agent on behalf of some principal. However, the Gonzalezes presented no evidence that the agent was, at that time, acting on behalf of Alfa Mutual. Therefore, any misrepresentation on the part of the agent would not be imputable to Alfa Mutual. We conclude that the summary judgment in favor of Alfa Mutual was proper as to the fraud claim.