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Shelter Mutual Insurance Company v. Barton9/7/2001
standard the trial court used initially in granting or denying the motion. Employees' Benefit Assoc. v. Grissett, 732 So. 2d 968, 974 (Ala. 1998). "In reviewing a ruling on a motion for a JML, this Court views the evidence in the light most favorable to the non-movant and entertains such reasonable inferences as the jury would have been free to draw. Regarding a question of law, however, this Court indulges no presumption of correctness as to the trial court's ruling." Id. at 975 (citation omitted).
Although Shelter's briefs raise 20 issues on appeal, we note that this appeal presents 3 primary issues: (1) whether the trial court erred in submitting Barton's bad-faith claim to the jury; (2) whether the trial court erred in submitting to the jury Barton's claim for damages based on mental anguish arising out of her breach-of-contract claim; and (3) whether the trial court erred in denying Shelter's motion for a new trial on the ground that the award of $250,000 for mental anguish was against the great weight of the evidence.
I. Bad-Faith and Breach-of-Contract Claims
We first recognized the tort of intentional bad faith in insurance actions in Chavers v. National Sec. Fire & Cas. Co., 405 So. 2d 1 (Ala. 1981). " n actionable tort arises for an insurer's intentional refusal to settle a direct claim where there is either '(1) no lawful basis for the refusal coupled with actual knowledge of that fact or (2) intentional failure to determine whether or not there was any lawful basis for such refusal.'" Chavers, 405 So. 2d at 7, quoting Vincent v. Blue Cross-Blue Shield of Alabama, Inc., 373 So. 2d 1054, 1067 (Enbry, J., dissenting).
The plaintiff asserting a bad-faith claim bears a heavy burden. LeFevre v. Westberry, 590 So. 2d 154, 159 (Ala. 1991). To establish a prima facie case of bad-faith refusal to pay an insurance claim, a "plaintiff must show that the insurer's decision not to pay was without any ground for dispute"; in other words, the plaintiff must demonstrate that the insurer had no legal or factual defense to the claim. LeFevre, 590 So. 2d at 159. "' he insured must eliminate any arguable reason propounded by the insurer for refusing to pay the claim.'" LeFevre, 590 So. 2d at 159 (quoting Burns v. Motor Ins. Corp., 530 So. 2d 824, 827 (Ala. Civ. App. 1987)). " finding of bad faith based upon rejection of an insurer's legal argument should be reserved for extreme cases. The right of an insurer to deny a claim on any arguable legal issue is to be as zealously guarded as is its right to decline benefits on any debatable issue of fact, the test of reasonableness being the same." Safeco Ins. Co. of America v. Sims, 435 So. 2d 1219, 1226 (Ala. 1983) (Jones, J., concurring specially).
Our cases have distinguished between a "normal" bad-faith claim and an "abnormal" bad-faith claim. In a "normal" bad-faith claim, the factual dispute centers around the reasonable, but conflicting, inferences that may be drawn from the evidence. Safeco Ins. Co. of America v. Sims, 435 So. 2d at 1225 (Jones, J., concurring specially). For a "normal" bad-faith claim to be submitted to the jury, the underlying contract claim must be so strong that the plaintiff would be entitled to a preverdict judgment as a matter of law. National Savings Life Ins. Co. v. Dutton, 419 So. 2d 1357, 1362 (Ala. 1982). If a fact issue exists, making a judgment as a matter of law on the contract claim inappropriate, then the bad-faith claim fails and should not be submitted to the jury. Id., 419 So. 2d at 1362.
Because the factual dispute here centered around whether the uninsured motorist, Vaden, or the insured motorist, Walters, was negligent, Barton's claim was a "normal" bad-fa
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