Court Opinion

ID: 9701551
Source: CourtListenerOpinion
Date Created: 2023-08-25 22:24:25.347594+00
Date Added: 2024-06-11T15:02:31.049530
License: Public Domain

Douglas, J.,
dissenting: I do not differ with the majority’s analyses of the intentional infliction of emotional distress, fraud, and breach of contract counts. I do, however, disagree with the majority’s decision to dismiss the counts alleging that the defendant negligently inflicted emotional distress and refused in bad faith to pay or settle the Jarvis’ claim.
John Jarvis, who is seventy-two years old, suffers confusion, agitation, combativeness, hallucinations, and paranoid delusions due to an organic brain disease. He was hospitalized in the fall of 1979 and required constant supervision and nursing care. Registered nurses cared for Mr. Jarvis during the day and evening, and certified aides tended to his needs at night. The defendant provided coverage for all this special nursing care, including the services performed by certified aides. Mr. Jarvis was released from the hospital in October 1979, on the condition that twenty-four-hour nursing care continue and that a male nurse attend Mr. Jarvis during the daytime. Neither the hospital nor the leading commercial home nursing service providers in Manchester could locate a male registered nurse (RN) or licensed practical aide (LPN). Plough, Inc., which was authorized to approve and disapprove claims on behalf of the defendant, permitted the plaintiffs to employ a certified male aide. In November, the defendant reimbursed Mrs. Jarvis for the first five days of home-nursing care provided by a certified male aide, RNs, and LPNs. On January 2, 1980, however, the defendant notified Mrs. Jarvis that it would not reimburse her for services provided by certified medical attendants, although she was reimbursed for services provided by RNs. Payment soon stopped altogether because the plaintiffs’ policy only covered “[pjrivate duty professional nursing services by a registered graduate nurse. . . .” Two months later, the defendant agreed to reimburse the plaintiffs for one shift per day since the preceding January.
In refusing to reimburse the plaintiffs for the services of a licensed certified aide, the defendant callously ignored the fact that an RN or LPN was simply unavailable and that a male attendant was essential to both Mr. and Mrs. Jarvis’ wellbeing. When the defendant cut back its medical coverage, Mrs. Jarvis was forced to *656exhaust the plaintiffs’ resources. She spent all their savings, borrowed $12,000 from her relatives, sold the family car, and sold stock at a loss. She eventually had to place her husband in a nursing home. Mrs. Jarvis says that the defendant’s refusal to pay for home-nursing services which had been certified as medically necessary resulted in a horrifying emotional experience. Because of her age and her own ill health, Mrs. Jarvis was physically and emotionally unprepared for the burden of keeping her husband alive without the full-time services of nursing personnel. As she watched her husband deteriorate, Mrs. Jarvis suffered nervousness, anxiety, fatigue and trauma. It was a painful experience, with lasting effects.
The majority disposes of the plaintiffs’ negligent infliction of emotional distress claims by distinguishing the circumstances of this case from those present in Corso v. Merrill, 119 N.H. 647, 406 A.2d 300 (1979), in which we allowed parental bystanders to recover mental distress damages. Nothing in Corso indicates that this court intended to confine negligent infliction of emotional distress recovery to the limited facts of that case. To the contrary, negligently inflicted emotional distress has been compensable in this State in other contexts since 1902. See Chiuchiolo v. New England &c. Tailors, 84 N.H. 329, 150 A. 540 (1930); see Walker v. Railroad, 71 N.H. 271, 271, 51 A. 918, 918 (1902); see also Young v. Abalene, 122 N.H. 287, 290, 444 A.2d 514, 517 (1982) (Douglas, J., dissenting). I see no reason to deny recovery when a plaintiff suffers genuine, serious mental anguish. See W. Prosser, Handbook of the Law of Torts § 54, at 330 (4th ed. 1971).
I am particularly troubled by the majority’s decision because of the procedural posture of this case: it is before us on the defendant’s motion to dismiss. By dismissing the plaintiffs’ negligent infliction claim, the court holds that the plaintiffs are not entitled to recover on any state of the facts findable under the pleadings. The facts do not warrant such a conclusion.
The plaintiffs should be given an opportunity to prove their negligent infliction of emotional distress claim. The defendant can be held liable for negligence only if he owes the plaintiff a duty to conform its conduct to a particular standard of care. Young v. Abalene, 122 N.H. 287, 289, 444 A.2d 514, 517 (1982) (Douglas, J., dissenting); Libbey v. Hampton Water Works Co., 118 N.H. 500, 502, 389 A.2d 434, 435 (1978); Cote v. Litawa, 96 N.H. 174, 176-77, 71 A.2d 792, 794-95 (1950). The issue in this negligent infliction claim, therefore, is whether the defendant owed the Jarvis’ a duty. Unlike the majority, I cannot say as a matter of law that no duty was owed. Even if the defendant did not breach its insurance contract, an issue *657which is not before this court, the mere manner in which the defendant terminated benefits for Mr. Jarvis’ certified aide and eliminated all but one shift of nursing services could constitute actionable negligence and prevent dismissal of the plaintiffs’ negligent infliction of emotional distress claim. See Muniz v. United Hospitals, 153 N.J. Super. 79, 79, 379 A.2d 57, 57 (App. Div. 1977). It is wrong for this court to hold as a matter of law that the defendant had no duty to the Jarvis’ and that they could recover under no circumstances.
I also disagree with the majority’s decision to adhere to Lawton v. Great Southwest Fire Ins. Co., 118 N.H. 607, 614, 392 A.2d 576, 581 (1978) and not recognize a cause of action in tort for wrongful or bad-faith refusal claims. In Lawton, this court held that an insurer’s bad-faith refusal to pay a first-party claim did not constitute a tort. Id., 392 A.2d at 581; see Tafro, Insurers’ Bad Faith Refusal to Pay First Party Insurance Claims: New Hampshire’s Remedy Under Lawton v. Great Southwest Fire Insurance Company, 20 N.H.B.J. 187, 192 (1979). Lawton dealt with fire insurance on commercial property; this case concerns insurance for medically necessary health care.
Because I believe that an insurer’s responsibilities are greater in the area of health insurance, I would distinguish Lawton and recognize the separate tort of bad-faith refusal to pay a first-party claim when an insurer wrongfully delays paying, or completely refuses to pay, a first-party health insurance claim.
The court in Lawton refused to hold the insurer liable in tort partly because in the first-party claim situation, the insurer does not have a “special relationship” with the insured which would warrant imposition of an “independent legal duty to deal fairly with the insured.” Id. at 613-14, 392 A.2d at 580-81. In the health insurance context, a “special relationship” does exist.
When an insured purchases health insurance, he seeks peace of mind and security in the event of sickness. As the California Supreme Court noted in the context of disability insurance, the insured
“seeks protection against calamity. As insurers are well aware, the major motivation for obtaining disability insurance is to provide funds during periods when the ordinary source of the insured’s income — his earnings— has stopped. The purchase of such insurance provides peace of mind and security in the event the insured is unable to work.”
Egan v. Mutual of Omaha Ins. Co., 169 Cal. Rptr. 691, 695, 620 P.2d *658141, 145 (1979); see Tafro, id., at 195 (1979); Note, Damages for Mental Suffering Caused by Insurers: Recent Developments in the Law of Tort and Contract, 48 Notre Dame Lawyer 1301, 1309 (1973) (insured is contracting for “financial and emotional security in the event of loss.”) Because health insurers hold themselves out as fiduciaries, see Seamen’s Direct Buying Serv. v. Standard Oil, 181 Cal. Rptr. 126, 135 (1982), they have a special responsibility to deal fairly and in good faith with their insureds, who are insuring themselves to protect against mental distress. See id.
What, then, do these special responsibilities of good faith and fair dealing entail? They “encompass qualities of decency and humanity inherent in the responsibilities of a fiduciary.” Id. (citation omitted). They require an insurer to examine all circumstances which might support the insured’s claim, and only deny payment after a thorough investigation of foundation for its denial. See Egan v. Mutual of Omaha Ins. Co., 169 Cal. Rptr. at 696, 620 P.2d at 145-46. While the precise limits of this tort cannot yet be defined, liability might be found not only when an insurer breaches its express contract obligations but also when it fails to conduct a thorough investigation of the factors which support the insured’s claim or of the reasons for its denial.
Because it cannot be concluded as a matter of law that the Jarvis’ could never prevail on the facts they have pleaded, I dissent to the dismissal of their claim relating to the defendant’s failure to deal fairly with them.