Sprague v. Equifax Inc.4/16/1985
COURT OF APPEAL OF CALIFORNIA, SECOND APPELLATE DISTRICT, DIVISION FOUR
Civ. No. B004367
1985.CA.40988 ; 213 Cal. Rptr. 69; 166 Cal. App. 3d 1012
April 16, 1985
ELMER SPRAGUE, PLAINTIFF AND APPELLANT,
v.
EQUIFAX, INC., ET AL., DEFENDANTS AND APPELLANTS
Superior Court of Los Angeles County, No. C 218000, Michael Berg, Judge.
G. Dana Hobart and Leonard Sacks for Plaintiff and Appellant.
Cosgrove, Cramer, Rindge & Barnum, J. D. Barnum and L. P. McElhaney for Defendants and Appellants.
Opinion by Arguelles, J., with Kingsley, Acting P. J., and McClosky, J., concurring.
Arguelles
Defendants and appellants, Equifax, Inc. and Equifax Services, Inc. (appellants) have appealed from the judgment on special verdict entered after a two-and-one-half-month jury trial, finding that they engaged in a conspiracy to fraudulently deny insurance benefits to plaintiff and cross-appellant, Elmer Sprague (plaintiff), and awarding plaintiff $100,000 in compensatory damages and $5 million in punitive damages. Plaintiff has cross-appealed from the order granting a new trial as to punitive damages unless plaintiff consents to a reduction of those damages from $5 million to $1 million.
We affirm on both the appeal and cross-appeal.
Facts
The following were original defendants in this action:
Maccabees Mutual Life Insurance Company (Maccabees) was the insurer from which plaintiff obtained a policy of credit disability insurance.
TOP National Credit Union Service Company (TOP) was Maccabees' insurance claims adjuster.
Appellant Equifax, Inc. was a holding company with various subsidiaries, including appellant Equifax Services, Inc. Equifax, Inc. provided accounting, managerial, and legal services, as needed. Equifax Services, Inc. provided
services to insurance companies and claims adjusters, which included investigating insurance claims and insurability of applicants and arranging medical examinations of claimants.
Charles Roath was the employee of appellants who, at TOP's request, scheduled a medical examination of plaintiff and selected the doctor for the examination.
Dr. Ernest Ramey was the physician selected by appellants to conduct a medical examination of plaintiff.
Before trial, plaintiff settled with defendants Maccabees and TOP for $375,000. During jury voir dire, plaintiff settled with Dr. Ramey for $5,000.
The events which led to this lawsuit were as follows:
In May 1975, plaintiff borrowed $21,687 from his credit union, pledging his savings as security for repayment of the loan, and naming the credit union as beneficiary of a credit disability insurance policy issued by Maccabees. Plaintiff, who was born in 1916, was 59 years old when he obtained the disability policy from Maccabees and 66 years old at the time of trial.
When he took out the policy, he was employed as a truck driver by Signal Trucking Service. He had limited formal education, having left high school in his last year to join the "CCC." He worked briefly repairing used cars for sale, then went to work for Signal Trucking Service.
His final assignment was making deliveries of appliances for Sears, which required loading his truck every morning with items to be delivered. On May 31, 1975, as plaintiff and hi
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