Red Cross Volunteer Falls Short in Claim For Insurance Based on Oral Representations

Posted 8:59 PM by Michael Fox

Following 9/11, volunteers from across the country went to New York to provide assistance, some under the aegis of the American Red Cross. The tenure of one volunteer, Terry Gilmour, tenure was cut short when she contracted Legionnaire's Disease shortly after her arrival. Although a volunteer, Gilmour was entitled under Red Cross policies to a $10,000 insurance policy that was to supplement her own insurance. Unfortunately, her own policy fell short and even the $10,000 in coverage ultimately tendered by the Red Cross was not sufficient either. Based on oral assurances that her needs would be covered, Gilmour sued based on various theories including breach of contract, promissory estoppel and negligent misrepresentation. Misfortune struck again as the district court granted summary judgment against her, which was affirmed by the 11th Circuit today. Gilmour v. American National Red Cross (11th Cir. 9/23/04) [pdf].

Although it is unclear whether an employer would fare quite as well as the charitable Red Cross, the Court dispensed with the various claims in short order:

The contract claim failed for lack of consideration. The claim of negligent misrepresentation failed because speakers who made the statements lacked a pecuniary interest in whether Gilmour’s insurance was supplemented by Red Cross and because Gilmour’s reliance on statements made to her was unreasonable. The promissory estoppel claim failed because Gilmour’s reliance on the written Red Cross manuals and the oral statements was unreasonable as a matter of law and the written statements lacked mutuality.

Good language, if you find yourself the with a case based on oral promises.

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