Gallimore v. Daniels Construction Co.

78 N.C. App. 747 | N.C. Ct. App. | 1986

ARNOLD, Judge.

Defendants contend that the Commission erred in allowing plaintiff to testify concerning his conversations with persons in the Duke University Compensation Office. Defendants assert such testimony was hearsay, material and prejudicial. Specifically defendants cite the following:

Q. (Mr. Lawing, attorney for plaintiff) Go ahead tell us about that.

A. (Plaintiff) Okay. They had me up — the bed there April 29 to be in, but they couldn’t admit me on account of the— there was no authorization of insurance to pay for the bill and . . .

Mr. Bauman (attorney for defendants): Objection as to that portion of his testimony.

The COURT: That is Duke Compensation office telling you this?

A. Yeah.

The COURT: Let me just — that was their compensation office telling you without an authorization of the carrier, they would not admit you?

A. Yeah, I’m sorry.

The COURT: Overruled . . .

Assuming arguendo that this testimony was hearsay and should have been excluded per Rule 802 of the North Carolina Rules of Evidence, defendants failed to object to the following testimony by plaintiff:

Q. (Mr. Lawing) And, were you admitted [to the hospital] on April 29 of 1983?

A. (Plaintiff) No.

Q. Why not?

A. No funds to pay the bill and no insurance.

It is the well-established rule that the admission of evidence without objection waives prior or subsequent objection to the admission of evidence of a similar character. State v. Campbell, 296 N.C. 394, 250 S.E. 2d 228 (1979); Moore v. Reynolds, 63 N.C. App. 160, 303 S.E. 2d 839 (1983). Defendants in this instance waived the benefit of their objection.

The testimony of defendants’ own witness Gregory Victor Haaker, the Senior Insurance Adjuster for defendant U. S. Fidelity & Guaranty Insurance Co., also renders harmless any alleged prejudicial effect of the admission of the testimony in question. The witness Haaker testified that he received a letter on 16 May 1983 from Dr. Gianturco stating that plaintiff urgently needed to be hospitalized. The witness also testified that the insurance company took no action after receiving the letter because the company knew it would not have to pay for the hospitalization if such hospitalization occurred after 31 May 1983 — the last date for which the insurance company was obligated under the compromise agreement for the costs of defendants’ medical treatment. Implicit in this testimony is the insurance company’s understanding that the hospital would not admit the patient without company authorization.

Defendants also contend that the Commission erred in ordering them to pay plaintiffs medical expenses incurred beyond the 31 May 1983 “cutoff date” of the approved compromise agreement because defendants have fully complied with the terms of the agreement by paying every medical bill submitted to them which was incurred prior to 31 May 1983. Defendants further argue there is no evidence of fraud, misrepresentation, undue influence or mutual mistake necessary to set aside the terms of the agreement.

However, the issue in this case is neither the validity of the agreement nor whether all bills incurred prior to 31 May 1983 have been paid, but rather the conduct of defendants in view of the intent of the compromise agreement. Every contract or agreement implies good faith and fair dealing between the parties to it, and a duty of cooperation on the part of both parties. 17 Am. Jur. 2d, Contracts § 256; Restatement, Contracts 2d § 205. In determining whether or not defendants have breached this duty of good faith and fair dealing, we are bound by the findings of fact of the Industrial Commission. G.S. 97-86. The facts as found and adopted by the Commission reveal the following: The insurance company agreed to pay all necessary medical expenses, incurred by the plaintiff through 31 May 1983, while plaintiff waived any and all rights to reopen a claim for further compensation. Plaintiff urgently needed medical attention relating to his industrial injury but was denied admission to the hospital until the insurance company authorized the hospitalization or until funds were advanced. Plaintiffs doctor wrote the insurance company that “Mr. Galli-more urgently needs readmission to Duke Hospital for treatment. . . .” The letter was dated 12 May 1983 and was received by Gregory Victor Haaker, the person handling plaintiffs claim on behalf of the insurance company, on 16 May 1983. In spite of receiving this correspondence, defendants took no action and did not authorize the urgently needed hospitalization. Mr. Haaker stated at trial the reason why no action was taken:

Q. (Mr. Lawing) And, the reason you didn’t [authorize the hospitalization] was because you knew you wouldn’t have to pay it, if you could delay it until after May 31, didn’t you?

A. That’s my recollection.

We find defendants have breached their duty of good faith and fair dealing by acting to delay the treatment until after 31 May 1983. Therefore defendants may not now claim that plaintiff cannot recover the expenses incurred after that date.

We do not however find that defendants should be responsible for all the costs of the medical treatment. Defendants were not notified of the need to grant the authorization until 16 May 1983. Plaintiffs hospitalization lasted 17 days. Even if defendants had acted promptly and in good faith, the medical treatment would have carried past the 31 May 1983 “cutoff date.” We therefore remand this case to determine how soon after notification the insurance company could have reasonably granted the authorization and to determine what portion of the costs would have then occurred prior to 31 May 1983, for which defendant is liable.

Modified and remanded.

Judges Wells and Parker concur.