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LOYAL AMERICAN LIFE INS. v. MATTIACE5/24/1996
erwriting manual of a reinsurance company, one referred to in the record simply as "Cologne." However, the "Cologne" page did not support Loyal American's position that it would have charged Joseph a higher premium. The "Cologne" page actually indicated that for a person age 26 or over, such as Joseph, a DUI conviction within a year of the policy application would not have caused a rate increase but, rather, would have caused the policy to be issued at the standard rate.
In May 1991, Sue Mattiace sued Loyal American, alleging breach of contract and the tort of bad faith. The complaint was later amended to add a third count alleging fraud, misrepresentation, and deceit. Loyal American moved for a summary judgment, which the trial court denied. Before trial, each party filed a motion in limine to exclude certain evidence. The trial court denied Loyal American's motion in limine, but granted Sue Mattiace's motion in limine.
The case went to trial in May 1995. After resting her case, Sue Mattiace voluntarily dismissed the fraud, misrepresentation, and deceit claims. Loyal American moved for a directed verdict, which the court denied. The jury returned a verdict in favor of Sue Mattiace, awarding her $32,200 on her breach of contract claim, plus $25,000 compensatory damages for emotional distress and $75,000 punitive damages on her bad faith claim. Loyal American then moved for a judgment notwithstanding the verdict or, in the alternative, a new trial or a remittitur. The trial court denied that motion. Loyal American appealed.
II. Issues
Although Loyal American appears to argue several issues on appeal, the issues may be summarized as follows: (1) whether the trial court erred in ruling on either party's motion in limine, (2) whether the trial court erred in denying Loyal American's motions for a directed verdict and a J.N.O.V. on the breach of contract and bad faith claims, and (3) whether recognition of the bad faith cause of action violates Loyal American's right to a trial by jury under the Alabama Constitution of 1901 or its right to equal protection of the laws guaranteed by the Alabama and United States Constitutions.
III. Motions in Limine
A. The "Cologne" Page
Loyal American argues that the trial court erred by denying its motion in limine to exclude the "Cologne" underwriting manual page from evidence. As noted previously, the "Cologne" page was mailed by Loyal American to Sue Mattiace's lawyer as an attachment to the "Lyles letter" explaining why it had rescinded Joseph's life insurance policy. Citing Nationwide Mut. Ins. Co. v. Clay, 525 So.2d 1339 (Ala. 1987), cert. denied, 488 U.S. 1040, 109 S.Ct. 863, 102 L.Ed.2d 988 (1989), and other cases, Loyal American notes that under Alabama law, the issue whether an insurance company acted in bad faith in handling a claim must be judged solely by the information that was before the insurer when it denied the claim and that any information obtained after the denial is not relevant to the bad faith claim.
Loyal American contends that the "Cologne" page was not before it when it decided to rescind Joseph's policy. It says that its underwriting department uses a "Hudson" reinsurance manual to determine the effect of DUI convictions on life insurance applications and that its attachment of the "Cologne" page to the "Lyles letter" was simply a harmless mistake. Loyal American argues that the "Cologne" page should not have been admitted into evidence because, it says, the page was irrelevant and immaterial because, it says, (1) it did not rely on that page in denying the claim, (2) that page was not applicable, and (3) that page did not become an issue until after the clai
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