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Congratulations to Stephanie G. Flynn and Phillip E. Reeves on another victory in the South Carolina Court of Appeals. In an opinion issued by the Court of Appeals on January 12th in the case of Turner v. Milliman, the Court modified and affirmed the decision of the lower court, which had granted summary judgment to all of the defendants as to plaintiffs’ claims for fraud and negligent misrepresentation. In this action, the plaintiffs, John and Charlene Turner, brought suit against an insurance agent and multiple insurance companies relating to the handling of a group health insurance policy that Mr. Turner procured to cover himself. Mrs. Turner already had alternative health coverage.
In seeking health insurance coverage, the Turners had been provided with the name of a local insurance agent, Douglas Milliman. Milliman met with the Turners to discuss their health insurance needs in November 1996. At that time, Milliman represented to the Turners that a group health insurance would be a good option for Mr. Turner for multiple reasons. According to Milliman, (1) Turner was at an age when he could begin developing medical problems and, therefore, he needed to be able to keep his coverage; (2) companies writing individual insurance policies were going out of business and the cost of individual policies was skyrocketing; (3) the only way that people could afford insurance coverage was to purchase group insurance; and (4) future premiums for group health insurance coverage would not increase dramatically. Milliman advised that Mr. Turner could procure group health insurance coverage by joining an association, Consumer Benefits of America (CBA), and by paying nominal association dues. CBA offered group health insurance coverage to its members. Milliman further told the Turners that CBA would monitor and act as a “watchdog” over the insurance industry for the benefit of its members and would notify its members when better group coverage was available.
Based on Milliman’s meeting with the Turners, Mr. Turner completed an application for both CBA and for group health insurance coverage through CBA. Mr. Turner’s initial payment, made in November 1996, was $122.70, representing both association dues and the health insurance premium. As anticipated by Mr. Turner, his monthly premiums periodically increased. Although the increases began slowly at first, they began to escalate in frequency and size during 1999 and 2000. By July 1, 2001, Mr. Turner’s premium was to be $799.61 per month. Before the last premium had even taken effect, Mr. Turner was notified by his health insurance carrier that it was terminating the CBA association group policy, but that Mr. Turner could be reinsured under a replacement policy at the same premium amount.
Although Mr. Turner attempted to find alternative insurance coverage, he was declined for coverage due to the onset of multiple medical problems. Rather than applying for the replacement policy that had been offered to him, Mr. Turner allowed his health insurance coverage to terminate and has been without health insurance coverage since that time. The Turners subsequently brought this action, seeking damages against the defendants on the grounds that, because of excessive premium increases, they could not maintain health insurance coverage for Mr. Turner.
The defendants all filed motions for summary judgment on the grounds that plaintiffs failed to file their action within the three-year statute of limitations, that Milliman’s representations did not support causes of action for fraud or negligent representation, and that Mrs. Turner lacked standing as a real party in interest since she was not an insured under the health insurance policy. The trial court granted the defendants’ motions as to each issue, prompting plaintiffs’ appeal.
In a published opinion, although the Court of Appeals found that the trial court erred in granting the defendants’ motions for summary judgment based on the statute of limitations, the Court affirmed the grant of summary judgment based on the nature of Milliman’s statements to the Turners. The Court held that the statements were nothing more that Milliman’s opinion relating to future events. Under South Carolina law, mere unfulfilled promises or statements as to future events are not actionable. Moreover, there was no evidence to establish that Milliman made the statements to induce the Turners to acquire the policy. Because the Turners’ action for fraud and negligent misrepresentation hinged on Milliman’s representations, and the representations, even if made, were not actionable as a matter of law, summary judgment was proper.
Based on the Court’s ruling on the claims of fraud and negligent misrepresentation, the Court declined to address additional issues in the case, upon which the trial court had also granted summary judgment in favor of the defendants.
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