Blue Cross-Blue Shield of Alabama v. Fowler

On Rehearing

CATES, Judge.

Appellee in brief to support his application for rehearing states:

“We cannot, of course, close our eyes to the fact that this Court may over-rule our application for a re-hearing. We must therefore give some thought to a fair review of the case by the Supreme Court. It is established law of this state that the Supreme Court will not review the Court of Appeals with reference to findings of fact but will only review the Court of Appeals with reference to matters or conclusions of law.
“In its opinion the Court of Appeals denies there is a jury question concerning certain finds and conclusions of fact. We feel there is evidence contrary to the findings and conclusions of the Court, which was overlooked by a majority of the Court in reaching its conclusions.
“The first statement we refer to is on Page 8 of the Court’s opinion, to-wit:
“ ‘Strictly, the instant arrangement is not group insurance but rather a group of employees who remitted premiums collectively for themselves.’
“If the Court desires to continue this finding of fact, or conclusion, we respect*579fully request the Court to recite in its opinion the testimony found on Page 78 of the Transcript, in which the Vice-President of the appellant made the flat statement that there was a group insurance plan with Bargain Town and its employees.
“Also, Exhibit I on Page 98 of the Transcript shows the existence of a group plan.
“This is in addition, of course, to the statement in the certificate with reference to a group plan, as well as Exhibits 5 and 6 mentioned in the Court’s opinion. There is further no evidence in the Transcript that the emploj^ees remitted the premiums collectively for themselves or that the employees had any control or participated in the collection and remittance ■ of insurance premiums. Such fuding of fact is untenable and should be abandoned by the Court, and certainly there is evidence in the record from which a contrary conclusion could be reached. Surely a jury question is at least created with reference to a group insurance plan.
“With reference to the statement that the employees remitted the premiums collectively for themselves, we believe the Court should set out any evidence which would justify such conclusion or statement, and certainly would have to further conclude that there was no evidence to the contrary. The evidence in the case clearly and definitely shows that the premiums were paid by way of payroll deductions. The payroll deductions were made because of the notification received by employer from Blue-Cross. Blue-Cross made up the invoice which was paid by the employer. It appears from the evidence in the case that Blue-Cross was both responsible for the invoice which omitted appellee’s name and contract and for the payroll deductions which were originated and initiated, under the procedure followed, by Blue-Cross. Also, appellee testified (See Page 32 of Transcript) that she made application to be re-admitted.
“We do not find in the Court’s opinion where the Court specifically states that Bargain Town, USA was the agent of the appellee and her fellow employees. This is clearly implied and the Court in the final analysis gives effect to this theory or implied finding. The evidence all clearly shows such was not the case., (See Transcript Page 92) There is no evidence that we could find in the Transcript that appellee or her fellow employees gave or had any control or direction with reference to collecting or remitting of insurance premiums. We think the Court’s opinion should be clear on this or else should recite evidence to show the opposite, and any contrary evidence should also be cited. At this point in the proceedings, it would only be necessary to show that a jury question had been presented.
“The Court’s opinion quoted certain testimony of Marie Lowery, witness for appellant. From the testimony quoted, it could be inferred that the premium deductions had been returned to the appellee. The record definitely shows that such payment was refused and returned to her employer by the appellee and that the witness had possession of the check. (See Transcript Page 91). This inference should be corrected.
“We are following this brief by an additional motion and we ask that the foregoing also be considered by the Court in support of such motion, and that the matters set out in such motion be considered in support of the application for re-hearing.
“In the event the Court does over-rule our application for re-hearing, we would appreciate the Court modifying and extending its opinion to more clearly present the facts in regard to the matters mentioned above and specifically referred to in the motion which follows this brief.”

*580The appended motion reads:

“If the Court of Appeals fails to grant the foregoing motion and application for re-hearing, in such, event, we move and apply to the Court to include in its opinion certain facts and circumstances in this case, which are not recited or stated in the Court’s opinion, to-wit:
“1. The testimony of Marie Lowery with reference to control over her activities by the appellee found on Page 92 of the Transcript, and consisting of the first five questions and answers of such witness on cross-examination, (showing the dependency of the appellee upon her employer and the appellant with reference to payment and collection of premiums.
“2. The cross-examination of witness, Jack Bruce, Vice-President of appellant, shown on Page 78 of the transcript as follows:
“Q: ‘That was to cover the group insurance plan you had with Bargain Town and its employees?’
“A: ‘Yes, sir.’
“Q: ‘All right, you did have a group insurance plan with Bargain Town and its employees?’
“A: ‘Yes, sir.’
“3. Also, defendant’s Exhibit I found on Page 98 of the Transcript.
“4. The Court should further describe the procedure for collection and remittance of premiums which, under the testimony of the Vice-President of appellant and Marie Lowery, was that the employee would make an application to be included in the group plan and that upon approval of the application by appellant, who then notified Bargain Town of such approval, premiums were then deducted. That Blue-Cross submitted to Bargain Town periodically an invoice setting out and describing the premiums which it deemed to be due. (This procedure reveals definitely that appellee and her fellow employees were entirely dependent upon Bargain Town and Blue-Cross in collection and remittance of premiums and had not control over the situation.)
“5. The testimony of appellee (Mrs. Fowler) that upon her re-employment with Bargain Town she applied to be readmitted to the group and was accepted, and that deductions thereafter were made from her salary, (See Transcript Pages 32 and 33) and also that the record shows appellee and her fellow employees never received any receipt from appellant, and had no way of ascertaining or knowing if their premiums were being received.”

Exhibit 1 (R. 98) is a letter written to Mrs. Fowler shortly after she went to work for Bargain Town in Albertville. It reads:

“January 22, 1963
“Mrs. Frances Fowler
Route 2 Box 10
Albertville, Alabama
“Dear Mrs. Fowler:
“We will be happy to have your Blue Cross-Blue Shield membership transferred to the Alabama Plan, with dues to be paid through the Bargain Town group. Please complete the enclosed application and statement of transfer and return to this office within the next ten days. We will then obtain your status from your former Plan, and your name will be included on your group’s next possible invoice.
"Your dues will be $12.30 per month for a family contract, or $5.25 for an individual female contract.
“A self-addressed envelope is enclosed for your convenience in replying. Also, *581please find enclosed a descriptive folder on the $25 Deductible contract under which you will be covered in our Plan.
“Sincerely yours,
“/s/ Pervy W. Matthews
“Pervy W. Matthews
“Registration Manager”

As to “4.” in the above quoted motion, we believe that the “invoice” system used by Blue Cross originates with a list set up by the remitting agent (here the employer) based on applications of the group. The next month Blue Cross sends the remitting agent the same list.

If new employees have been hired who want Blue Cross, the remitting agent adds their names and adjusts the gross amount of remittance for premiums. Changes by way of deletion or change of marital status are covered by the remitting agent’s notations of adjustment.

Defendant’s Exhibit 8 (R. 52-76) is comprised of Blue Cross’s invoices to the Bargain Town group for the months April through December, 1963.

We think that from the Tillman case, supra, as to a group policy two points of difference appear here.

First, unless otherwise stated, a group policy is between insurer and employer. It is sometimes furnished without premium cost to the employee. In other cases premium costs are shared.

Here a low rate seems to be given by Blue Cross because the bookkeeping, in the minute details, is done by the remitting agent. The major benefit seems to go to the employee.

Second, a group policy ordinarily can be cancelled without notice to the employee unless a claim has accrued. Hill v. Metropolitan Life Ins. Co., 266 Ala. 285, 96 So.2d 185. On the other hand, in a Blue Cross policy of the type in evidence here cancellation must be sent to the employee. The employee is in privity. Notice to the remitting agent is only for convenience in having an agreed address for such notices.

We are aware of no public policy either emanating from our Legislature or in the decisional law that demands that we ignore the express written wording of the Blue Cross policy to the effect that the employer in remitting is the employee’s agent.

Let us imagine that Bargain Town had become bankrupt. Would Blue Cross be a creditor or would the employees claim their wage preferences for the withheld premium amounts? Legislation could require remitting agents to be bonded to remit faithfully: none is cited to us.

Blue Cross wrote the contract, we do not doubt. That, in a case of ambiguity, is resolved under a familiar rule of contract construction.

We do not think the language here brought to bear admits of ambiguity. Nor do we read appellee as. contending so.

We consider that appellee believes that the Tillman case sets up a rule of prohibition against the language used. However, we think that in the absence of a prior enactment regulating what could or could not appear in a Blue Cross policy, the courts cannot ignore the plain words of the contract. MacMahon v. Baumhauer, 234 Ala. 482, 175 So. 299.

The Tillman case we take as a rule of construction where the contract was silent as to the role of the employer. We cannot legislate and a fortiori could not do so ex post facto.

Application overruled.

JOHNSON, J., dissents.