Case Name: BANKERS LIFE AND CASUALTY COMPANY v. Lloyd M. CRENSHAW
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1985-09-11
Citations: 483 So. 2d 254
Docket Number: No. 54123
Parties: BANKERS LIFE AND CASUALTY COMPANY v. Lloyd M. CRENSHAW.
Judges: PATTERSON, C.J., ROY NOBLE LEE, P.J., and DAN M. LEE, SULLIVAN and ANDERSON, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 483
Pages: 254–301

Head Matter:
BANKERS LIFE AND CASUALTY COMPANY v. Lloyd M. CRENSHAW.
No. 54123.
Supreme Court of Mississippi.
Sept. 11, 1985.
Rehearing Denied Feb. 26, 1986.
Hawkins, J., dissented as to Part II and filed opinion.
Robertson, J., dissented and filed opinion in which Walker, P.J., and Prather, J., joined.
George F. Woodliff, Charles G. Copeland, Heidelberg, Woodliff & Franks, Jackson, John M. Kinard, Michael J. McElhaney, Me-gehee, Brown, Williams & Mestayer, Pasca-goula, for appellant.
Ernest R. Schroeder, Vincent J. Castigli-ola, Jr., John A. Banahan, Bryan, Nelson, Allen, Schroeder & Backstrom, Pascagoula, for appellee.

Opinion:
Bankers Life and Casualty Company (Bankers Life) is a health and accident insurance corporation with principal offices in Chicago, Illinois. Lloyd M. Crenshaw is a resident of Pascagoula. Bankers Life appeals from a jury verdict and judgment of the Jackson County Circuit Court in favor of Crenshaw of $20,000 actual and $1,600,000 punitive damages, arising out of a claim for accidental loss of a lower right leg, alleged to be covered under a Bankers Life group insurance policy Crenshaw had through his employer, White Stores in Pas-cagoula, a subsidiary of City Products Corporation.
The main issues of this appeal are whether the question of punitive damages should have been submitted to the jury, and the propriety of the amount awarded.
We find the issue of punitive damages was properly submitted to the jury. A majority of the Court is of the opinion that the judgment of the lower court should be affirmed in its entirety.
HAWKINS, Justice,
for the Court, Part I:
FACTS
On January 18, 1979, Crenshaw's right leg was amputated about six inches below the knee by surgeons at Keesler Air Force Base Hospital. At the time he was 61 years old. Previous to that date Crenshaw had injured his right foot; however, there is some discrepancy in the record as to the precise date of the injury and nature of the trauma. We will give both Crenshaw's version and the history set out in the medical records.
January 6, 1979, was a Saturday. That evening he was working on his car's alternator when part of it rolled off his work bench and struck the front part of his right foot, just below where his shoelaces would have been had he been wearing shoes. Instead, he only had on socks and house slippers. He replaced the alternator on the ear.
When he removed his house slippers, his foot was red and bruised, but not swollen. The skin was not broken. That night he took some aspirin.
The next day, Sunday, January 7, Cren-shaw noticed that his foot had swollen during the night. He hobbled around the house that day, soaked his foot in warm water, and rested on his couch.
On Monday afternoon, January 8, Steven Crenshaw, an adult son living with his parents, drove Crenshaw to the Keesler base hospital, where he was seen in the emergency room. He was given medications and told to stay off his foot as much as possible.
Crenshaw testified he returned to the hospital, but did not state whether it was the next day or two days following. On this trip he said his foot was x-rayed and he was given a blood test. A splint was put on his leg and he was given crutches. On this trip he was told to keep his foot elevat ed. Crenshaw testified when he elevated his foot that this eased the pain.
He made another trip to the emergency room when he was again checked, and released home. He returned Friday, January 12, at which time the wrapping was removed and he was again sent home.
The following day Crenshaw's foot was swelled again and had turned dark. On Sunday, January 14, his wife drove him back to the hospital, at which time he was admitted. Different Air Force physicians examined Crenshaw on his previous trips to the hospital.
During the week he was at home following his second visit to the hospital, Cren-shaw stayed in bed, and in the day was not in great pain. At night, however, the pain increased and he could not sleep. When he first elevated his foot it hurt worse, but the pain would eventually ease. He characterized the injury to his foot as a bruise, with the pain so great he could not walk on it. Medication helped to ease the pain.
Mrs. Crenshaw saw her husband's foot the night of his injury. She said it was red and bruised looking, but the skin was not broken. She testified that the next day it started swelling and getting bluish-red looking.
Steven Crenshaw said the night his father injured his foot there was swelling, but that a "little black bruise on top of his foot" did not show up until the next day.
HOSPITAL RECORDS
The first medical record of this injury is a January 9, 1979 (Tuesday), emergency room report. That report states:
61 year old white male complaining of pain in right foot. Patient was driving auto and hit pole with foot on brake yesterday. Unable to stand on foot. Patient soaked foot in hot water last nite. Chief complaint: tingling across dorsum (top) toes of right foot, acutely tender at great right toe.
0: swollen, tender right midfoot, especially base right first metatarsal (great toe).
Dorsalis pedis palpable (an artery in the foot, a continuation of the anterior tibial).
This January 9 report shows the x-ray negative, and the urinalysis (for possibility of gout) as normal.
Crenshaw was diagnosed as having a "ligamentous injury metatarsal right foot". There is also a notation that the examiner discussed the case with Dr. Morrow, an orthopedist, and after consultation, a splint was applied, and Crenshaw was given analgesics for pain. He was given crutches, told not to bear weight on his foot, and told to return in a week to see an orthopedist. The examining physician was Dr. Thomas E. Scott, a resident.
There is also a sheet headed "CLINICAL RECORD — CONSULTATION SHEET", which apparently is a request for consultation with the orthopedist. It is dated January 9. Under the sub-heading "Reason for Request" is the following handwritten notation: "61 year old white male struck on ball right foot with rebounding clutch. X-rays no fractures or dislocation. Please follow up ligament injury mid-foot." The provisional diagnosis is: "ligament injury 1st metatarsal-tarsal joint." This sheet is also signed by Dr. Scott, and the requested orthopedist is Dr. Morrow.
He was next seen January 11, with this notation: "Patient returned out of pain meds, was given 30 percodans 9Jan79." Dr. Scott, the physician on January 11, was concerned that Crenshaw might be taking too much pain medication. Dr. Scott told Crenshaw to return to the orthopedist as planned.
The records show Crenshaw was seen on January 12 by Dr. Henry J. O'Neal, an internal medicine intern. Crenshaw presented himself as being out of pain medication. He also complained that he was not obtaining relief from the medication. There were no diagnostic tests run on either the January 11th or 12th visits.
The records show Crenshaw returned on January 14th and was again seen by Dr. O'Neal. Noted were swelling and red streaks progressing up the lower extremity, the foot swollen, and toes blue. A blister was noted on the back of his foot. The pulses were not palpable. There was a decreased sensation to pinprick of his extremity. There was also a mild enlargement of lymph nodes in the groin. X-rays to determine gangrene showed no gas in the soft tissues of the affected extremity. The red blood cell count was normal. The white blood cells were elevated to 13,300, being above the upper limit normal of 10,-000. Dr. O'Neal's impression was a superficial infection with swelling and decreased vascular flow.
Dr. O'Neal noted the need for a surgery consultation, and Crenshaw's condition was recognized as being serious enough for him to be admitted to the hospital.
Dr. Dan L. Locker, chief resident on vascular surgery, examined Crenshaw, and his report that day recites the following:
Ext. (external) — RLE (right lower extremity) — pitting edema from knee distal
Pop (popliteal) doppler — strong
PT (posterier tibial) — present 2 cm above mallelous — weak monophasic
DP (dorsalis pedis) — present 2 cm above ankle line — weak monophasic
Perineal — present—biphasic at ankle line
Foot is pale — white with mottling Vth toe purple — distal half
Sensation decreased distal to MT-P (metatarsal — phalingeal) line
A (diagnosis) — Cynasis 2° (secondary) to swelling over 12 hr. duration confine to distal extremity (beyond ankle line).
P (recommend) (1) Elevate
(2) Anticoagulate with Heparin
Pt Ed (Patient Education) Pt (patient) informed of options and hi prob (high probability) of loss of part of foot
Staff — Pt. presented to Dr. Fontenelle who examined patient and agrees with plans.
Dr. Torma also notified.
Crenshaw was seen by Dr. Christopher T. Westphal, an Air Force general surgeon on January 17, 1979, who performed a surgical amputation on the following day. He was assisted by Dr. Dale V. Hoekstra, a Board certified orthopedist.
Dr. Westphal's operation report, dated January 23, in pertinent part states the following:
PREOPERATIVE DIAGNOSIS
Vascular insult, right foot
$ * # * >H #
OPERATIVE DIANOSES
Same
* # # # # *
FINDINGS:
The patient was found to have an ischemic right foot with a necrosis of the distal aspect. This was amputated in the manner about to be described. [Emphasis added]
PROCEDURE:
The patient was administered epidural anethesia. His right lower extremity was prepped and draped in a sterile manner. A tourniquet was applied with 450 mm. of mercury with a total tourniquet time of 14 minutes. A fish-mouth apex of the incision approximately 6" below the tibia plateau. The anterior and posterior vessels were identified and ligated. Similarly, the peroneal vessels were identified and ligated with 2-0 silk suture material. The greater and lesser saphenous veins were also identified and ligated. The remainder of hemostasis was assured with electrocautery. At the time of operation, the stump was noted to be extremely ischemic and the muscles somewhat dusky looking with a little free bleeding at the time of operation. The posterior tibial nerve was grasped, cut and allowed to retract. The perios-teum of the tibia was incised and elevated. The tibia was divided with a saw. Similarly, the fíbula was divided approximately 1" shorter than the tibia . A Penrose drain was inserted in the base of the wound with the ends of the drain coming out of the incision bilaterally.
S/DALE V. HOEKSTRA, MAJ, USAF MC
The January 22 pathology report of the stump, notes: "Vasculature is unremarkable. The skin is mottled up to 5 cm. above the digits." It concludes as follows:
(A) RIGHT FOOT AND LOWER LEG: SEVERE ARTERIOSCLEROSIS OF THE ARTERIES. GANGRENOUS NECROSIS
Dr. James P. Durning, Resident in Surgery, prepared the Narrative Summary of Crenshaw's problems on February 2, also signed by Dr. Locker. The pertinent portions of this summary read as follows:
DATE:
14 January 79
HISTORY OF PRESENT ILLNESS:
Lloyd Crenshaw is a 61 year old white male who presented to the emergency room at Keesler Medical Center on lj Jan 79 with a complaint of pain in his right foot. The patient was one week status post injury to his right ankle in an auto accident. The patient had been previously seen in the emergency room and was told to remain off his leg and keep it elevated. The patient failed to do this at home, and came in complaining of right foot pain. On presentation to the emergency room, the foot was noted to be painful, bluish-white, cool to exam, with absent distal pulses. The patient was admitted, placed on Heparin therapy, and the foot was elevated.
PAST HISTORY:
The review of systems was essentially unremarkable. The patient has no history of pulmonary, cardiac or bowel disease. His chief complaint was as noted above. Past medical history was also unremarkable. Past surgical history was remarkable for an appendectomy in 1951 and lysis of adhe-sions in 1977. Family history was noncontributory. The patient is a heavy tobacco user. He uses occasional alcohol. He was on no medications at the time of admission.
CLINICAL FINDINGS ON ADMISSION:
Clinical findings on admission indicated a well developed, well nourished white male. HEENT were unremarkable. Pulmonary examination revealed good breath sounds bilaterally without any rales or rubs. Cardiac exam was unremarkable. No murmurs were heard. Abdominal exam was also within normal limits with a soft, nontender abdomen and a long midline surgical scar. Examination of the extremities was remarkable for a blue and cold, paresthetic right foot. There were no auscultable pulses in the foot. Necrosis of the distal toes was also noted.

X-RAY STUDIES:
Chest x-ray was unremarkable. X-ray of the right lower extremity did not reveal any gas indicative of gas gangrene.
PROGRESS IN HOSPITAL:
The patient was admitted and placed on strict bedrest with elevation of the right leg. He was also placed on Heparin therapy at the time with constant monitoring of PT and PTT. Despite adequate heparinization, the foot failed to resolve. On 18 Jan 79, the patient was transferred to the Surgery A Service and underwent a right below the knee amputation. Amputation was performed under the direction of Dr. Locker and Dr. Hoeks-tra of the Orthopedic Department. Postoperatively, the patient did well. The stump has been healing well.

FINAL DIAGNOSIS:
1. Anterior compartment syndrome, right leg.
2. Ischemia of right leg. [Emphasis added]
On April 9, 1979, Crenshaw filled out a proof of claim on the Bankers Life form, with a medical authorization for the insurance company to obtain all medical information it needed from any physician or hospital. No physician's statement was executed on behalf of Crenshaw because of an Air Force regulation. Bankers Life was notified of this regulation, and also informed that the Air Force would reproduce photocopies of all medical records and send these. The narrative summary, Dr. West-phal's operation report, and the pathology report were sent to Bankers Life when Crenshaw made his claim.
Bankers Life employed Equifax, Inc., an investigating agency, to investigate the claim. The agency interviewed Steven Frye, manager of the local store and also one of Crenshaw's neighbors, but did not obtain any medical records. Its report dated April 24, 1979, concluded:
SUMMARY/SUGGESTION: We do suggest that you allow us to diary this case for some six weeks and go back into the area to interview Mr. Crenshaw. He is at the hospital five days per week, comes home on week-ends, and will be there an additional 5-6 weeks.
Equifax was not requested to perform any further services for Bankers Life following this report.
William J. Herzau was supervisor of the Special Risks Claim Unit of Bankers Life. In this department William A. Blessing and Robert N. Krol reviewed Crenshaw's claim along with Herzau.
Dr. Nathaniel P. McParland is a physician, specializing in general and vascular surgery, and also a salaried employee of Bankers Life as Medical Director. His responsibility was to make medical judgments on claims, a job which constituted one-fifth of his practice.
Donald Lemersal was one of seven full-time attorneys constituting the legal department.
These individuals participated in the decision making process of Crenshaw's claim.
On June 19, 1979, Herzau sent Dr. McParland a memo explaining the final diagnosis, Banker's Life position and requesting an evaluation.
Dr. McParland replied by. memo to Her-zau the same date.
TO: William Herzau
FROM: N.P. McParland, M.D.
>fc ⅜ jje * jfc
Mr. Crenshaw's records have been reviewed. Noted is the absence of the record of the original injury. However, Mr. Crenshaw's loss of limb was not because of an anterior compartment syndrome, but because of severe arterioscle-rotic changes in his distal blood vessels and subsequent ischemia and necrosis. The operative report indicates the obstructing arteriosclerotic area most likely is in the femoro popliteal artery area though no mention of the femoral or popliteal pulses is noted.
Mr. Crenshaw will most likely require further amputative surgery.
On July 11, 1979, Herzau wrote Mrs. Marilyn Doyle, Administrator of Employee Benefits of City Products Corporation, Crenshaw's employer:
We now have the facts needed to service your claim.
The above captioned policy is an accident only policy defining injury as:
"Injury wherever used in this policy means bodily injury causing the loss while this policy is in force, directly and independently of all other causes and effected solely through an accidental bodily injury to the insured person."
According to the medical information we have, it appears that Mr. Crenshaw's limb loss was because of severe arterio-sclerotic changes in his distal blood vessels and subsequent ischemia and necrosis and not due to an injury as defined above. Therefore, we cannot identify that a covered loss has occurred under the terms and interpretations of the policy. [Emphasis added]
So, we sincerely regret that no benefits are payable.
If we have in any way misinterpreted the information furnished us, or if there is additional information we should have, please let me know.
On July 10, 1979, the case reserve was reduced from $20,000 to $3,000.
On September 25, 1979, Herzau's denial was communicated to Crenshaw in a letter from Leon Mueller of White Stores, a subsidiary of City Products Corporation.
Thereafter, Crenshaw obtained the following statement dated October 5, 1979, from the Air Force:
1. Mr. Lloyd Crenshaw was hospitalized in late January 1979 where he underwent a below-the-knee amputation of the right leg. From a thorough review of his records dating back to 1972,1 am unable ' to find any evidence of symptomatic ath-erosclerotic disease in his right lower extremity prior to the injury which ultimately caused him to undergo a right below-the-knee amputation. When seen in the Emergency Room initially for this injury, a dorsalis pedis pulse was palpable and documentation of this is substantiated in the records. This documentation was noted on 9 Jan 1979. Following the initial injury he developed a gangrenous right foot. He was admitted and a trial of heparinization and elevation in order to save the lower extemity was undertaken. This was not successful and as a result a below-the-knee amputation was performed. The specimen was submitted to pathology for diagnosis. At that time it was apparent to the pathologist that he had severe atherosclerosis of the arteries of the lower extremity. 2. I would feel that the atherosclerosis is an underlying condition and not the immediate cause of the gangrenous necrosis. The precipating event must be considered to be the trauma which intially brought him to the Emergency Room on 9 January.
This statement is signed by Dr. Dale V. Hoekstra, the orthopedist attending the surgery; Dr. Robert L. Morrow, chairman of the Department of Orthopedic Surgery; and Dr. Thomas T. Coolidge,' Director of Hospital Services.
In answer to a letter from Mrs. Doyle stating Crenshaw wished to appeal his claim, Herzau replied on December 4, 1979, repeating Bankers Life's position as previously set out, stating in pertinent part:
In order to reconsider this claim, we would need additional medical information showing that Mr. Crenshaw's loss was due to an accidental bodily injury directly and independently of all other causes. [Emphasis added]
An interoffice memo from Blessing to McParland dated March 27, 1980, notes the receipt of the correspondence from the three doctors dated October 5, 1979, and attaches it to the memo:
Mr. Crenshaw underwent a right below knee amputation on January 18, 1979 after reportedly sustaining an injury to the leg on January 6, 1979.
This claim was previously denied on the basis that the amputation was caused by vascular conditions rather than an injury. Mr. Crenshaw has advised that he would like to appeal this decision. He has furnished us with the attached medical report from the Department of the Air Force.
I see nothing in the report which would change our decision on this case. However, we would appreciate it if you would review the file once again paying particular attention to this new information. [Emphasis added]
Do you still feel that Mr. Crenshaw's limb loss was due to his vascular problem rather than his January 6, 1979 injury? Also, do you feel there is any additional information which would be helpful in making a determination? If so, what?
Dr. McParland's memo to Blessing dated April 2, 1980, states:
The records again have been reviewed. Again noted is the admitting examination of this heavy smoker with a cold, pale, paresthetic, right foot with absent distal pulses. An anterior compartment syndrome would affect only the anterior tibial artery and dorsal pedal pulse. The posterior tibial artery is the major artery to the foot and this too was occluded producing the physical findings and the resultant amputation of the lower extremity. This was confirmed in the pathology report and, therefore I feel no further information is necessary to sustain our previous diagnosis. [Emphasis added]
If I can be of further help, please call.
On April 8, 1980, Herzau wrote Cren-shaw, stating:
Our medical director has once again reviewed your file.
this policy is an accident only policy defining injury as:
"Injury wherever used in this policy means bodily injury causing the loss while this policy is in force, directly and independently of all other causes and effected solely though an accidental bodily injury to the insured person."
According to all the medical information we have, it appears your limb loss was due to severe arteriosclerotic changes in the distal blood vessels and subsequent ischemia and necrosis and not due to any injury as defined above. This opinion was confirmed in the pathology report. Therefore, we cannot identify that a covered loss has occurred under the terms and interpretations of the policy. [Emphasis added]
Crenshaw then employed an attorney, who wrote Herzau on May 15, 1980, demanding payment, and stating that Cren-shaw's trauma was a precipitating event to his trouble, as revealed by the medical records.
Herzau wrote Lemersal a memo on May 16, 1980, asking him to review the file, stating Crenshaw's lawyer had furnished no new information, and only an "opinion" that Crenshaw's condition came within the terms of the policy.
Lemersal replied to Herzau by memo dated June 19, 1980:
I do not feel there is a legal question presented here at this time. Until we know more about the condition and how (and whether) the alleged accident contributed to cause the loss we cannot very well apply the Mississippi law regarding proximate cause.
If an injury caused the loss we should have some further substantiation of this. I suggest that in writing to Attorney Schroeder you explain in some detail what our file contains and point out to him that we must have some substantiation that an injury caused this loss "directly and independently of all other causes."
Perhaps we should try to get more information on etiology, previous treatment, etc. The report from the VA hospital indicates there may not have been treatment before January 14, 1979.
If there is further substantiation that the loss is the result of the combination of disease and accident Mississippi law holds that where "injury aggravates, renders active, or set in motion a latent or dormant pre-existing physical condition or disease ." there may be recovery under this type policy. Peerless Insurance Company v. Myers, 192 So.2d 437 (1966, Miss.Sup.Ct). However, we do not know what effect the alleged injury had on this condition, or whether the arteriosclerotic changes were dormant. [Emphasis added]
On July 15 Crenshaw's attorney responded with a strong letter, again requesting payment, explaining the position of Cren-shaw that the trauma contributed to the problem causing the amputation. He quoted from the three physicians letter of October 5, 1979:
I would feel that the atherosclerosis is an underlying condition and not the immediate cause of the gangrenous necrosis. The precipitating event must be considered to be the trauma which initially brought him (Crenshaw) to the Emergency Room on 9 January.
This letter again stated if the company wished to dispose of this case without litigation, to please forward payment.
A memo from Blessing to Herzau on July 23 states:
Dr. McParland feels this limb loss is due to pre-existing vascular problem. However, it appears there is some evidence his physical condition deteriorated rapidly after this event. Per Don Lemer-sal, Mississippi law holds that where "injury aggravates, renders active, or set in motion a latent or dormant pre-existing physical condition or disease ." there may be recovery under this type policy. In view of attorney Schroeder's letter of 5-15-80,1 suggest we consider the possibility of a compromise. [Emphasis added]
On June 27 Herzau wrote Crenshaw's attorney, again denying coverage on the ground that there was no evidence that Crenshaw's alleged "injury caused this loss 'directly and independently of all other causes.' " Herzau also explained that it was the view of Bankers Life's medical director that:
The operative report indicates the obstructing arteriosclerotic area most likely is in the femoro popliteal artery area although no mention of the femoral or popliteal pulses is noted. [Emphasis added]
Blessing wrote a memo to Lemersal on July 28:
This 63 year old auto parts manager is claiming limb loss due to a January 6, 1979 injury to his right foot. A car part fell on his foot reportedly resulting in a below knee amputation on January 18, 1979.
Dr. McParland has reviewed this file twice and feels that this limb loss is due to a pre-existing vascular condition. However, there is some evidence that his physical condition deteriorated after this trauma.
You previously advised us that Mississippi Law holds that where "injury aggravates, renders active, or sets in motion a latent or dormant pre-existing physical condition or disease ." there maybe recovery under this type policy.
Please see Attorney Schroeder's letter of July 15, 1980. This letter contains no additional factual information regarding Mr. Crenshaw's medical problems. Rather, it contains Mr. Schroeder's interpretation of the previously submitted medical information. Since Mississippi is a penalty state, I request that you review this file and respond to Attorney Schroeder's letter.
If you prefer, please advise what type of response we should give and I will write Attorney Schroeder.
Lemersal in turn contacted Dr. McPar-land, who wrote the following memo to Lemersal dated August 7:
The records have been reviewed again. Noted is the absence of an emergency room report on the alleged injury which has been described on the discharge summary as a jarring injury to the right leg. On the narrative summary the patient gave a history of injury to his right ankle in an auto accident for which he was seen and advised in an emergency room. Mr. Crenshaw states he dropped an armature onto his right foot.
His physical findings were that of complete arterial occlusion to foot and lower leg with necrosis of the distal tips of the toes.
This severe occlusive arterial disease in this heavy smoker necessitated an amputation six inches below the knee, and the pathology report indicated severe arteriosclerosis indicative of relatively long standing disease.
A diagnosis of anterior compartment syndrome and ischemia of the leg was the final diagnosis.
If Mr. Crenshaw had an anterior compartment syndrome, which he did not, malpractice is in evidence because the treatment is division of the fascia enclosing the musculature not leg amputation. If Mr. Crenshaw in reality did to his leg, foot or ankle depending upon which report is read, he either had no evidence of any injury, and therefore was sent home from the emergency room, or if there was injury again malpractice is in evidence because of lack of treatment in a severely diseased foot from atherosclerosis and the absence of any pulses. The treatment of choice being immediate hospitalization and heparin therapy.
Because of the absence of an emergency room report, I must conclude there was either no trauma or the trauma was insignificant.
Mr. Crenshaw suffered from severe occlusive arteriosclerosis of all arteries at least as high up as six inches below his knee, resulting in ischemia and gan-greene [sic] of his foot.

In conclusion, Mr. Crenshaw has a very common disease for which various therapies are instituted in virtually every hospital in the country. No trauma is necessary to produce the end results suffered by Mr. Crenshaw and from the reports presented, I feel the alleged trauma has not been documented, and even if all three areas were traumatized at one time, there would be no cause and effect situation.
If Mr. Crenshaw had any significant trauma or an anterior compartment syndrome malpractice was performed. [Emphasis added]
Lemersal wrote to Blessing on August 8: Please see the memo from Dr. McPar-land dated August 7.
I do not feel a legal question is involved. The question is whether the amputation was caused by an accident, as required by the policy. I do not believe there is anything I can add to my memo dated June 19, 1980. [Emphasis added] Incidentally, I am not aware Mississippi is a "penalty state."
Herzau wrote Crenshaw's attorney on August 18, 1980, summarizing Dr. McPar-land's evaluation, including the absence of an Emergency Room report, and concluding:
In conclusion, Mr. Crenshaw has a very common disease for which various therapies are instituted. No trauma is necessary to produce the end results suffered by Mr. Crenshaw. Even if all three areas of the leg were traumatized at once, there would be no cause and effect situation.
So, we sincerely regret that the policy does not permit payment of benefits.
Crenshaw instituted suit November 10, 1980, for $20,000 actual damages and $400,000 punitive. The declaration was later amended to claim $1,635,000 in punitive damages.
At trial in December, 1981, three physicians testified: Dr. Perry J. Hockaday and Dr. Westphal, who testified for Crenshaw; and Dr. McParland, who testified for Bankers Life. Neither Dr. Hockaday nor Dr. McParland had treated or examined Cren-shaw.
DR. HOCKADAY
Dr. Hockaday is a general surgeon who had been practicing 15 years in Pascagoula. Prior to this he was a surgeon in the Air Force. In answer to a hypothetical question, he testified that the amputation was a result of injury. The precipitating cause in his opinion was trauma, probably combined with arteriosclerosis of a severe nature. He testified that one of the common causes of people who have loss of limbs with arteriosclerosis was accidental trauma. The trauma did not have to be severe. He explained that the patient would have an inability to heal the wound by virtue of poor blood flow to the extremities. Further, a person with poor blood flow such as Crenshaw was more susceptible to severe complications from minor injuries because any swelling would result in a further decreased blood flow to an area already experiencing poor circulation.
In making a determination of whether there was an arterial occlusion independent of any trauma or whether trauma played some part in the problem, Dr. Hockaday testified the entire medical record needed to be examined, not just portions of it as seen by Dr. McParland. Of utmost importance to Dr. Hockaday was the emergency room report, which documented an injury of some type to Crenshaw, distinguishing him from someone who simply came in off the street with a need to have his leg amputated.
Dr. Hockaday testified (Record, P. 670): We're dealing with swelling, and swelling is the culprit. We're talking about a long-standing disease that has evolved over 61 years and a gradual diminished flow . a flow that has not diminished to the point of creating a problem by itself solely, but with that little bit that tips it over — and that is the swelling of the foot and the shutdown of the circulation in the toes. . And that's where usually gangrene of this nature starts, in the toes, rather than a diffuse problem.
He was of the opinion that the dark, dusky muscle and tissue observed by the pathologist could have been caused by the tourniquet used during surgery.
He stated that a person with arteriosclerosis who sustains an injury presents a very hard problem to the doctor, who hopes the patient will have enough circulation to heal the wound. Yet, there is no way to make the swelling go away, and it is a matter of waiting and hoping.
He stated that people who have amputations solely from vascular problems will usually have a history of leg pains, and severe pain in walking. Their troubles are progressive, not spontaneous.
DR. WESTPHAL
Dr. Westphal gave a deposition by video tape which was introduced at trial. He testified he first saw Crenshaw on January 17, the day before surgery. He reviewed the medical records, and in his opinion Crenshaw already had a decreased flow of blood because of arteriosclerosis, but that situation was compounded by trauma.
He testified that the swelling caused a further decrease in blood flow to the foot, that the blood flow would not take care of waste, and the injury would not heal. He stated that the flow of blood may have caused a thrombosis, or clot to develop locally in the arteries at the very end of the foot, and that as a result of the low flow state, impoverished by swelling, that tissue died and gangrene developed.
Dr. Westphal acknowledged it was perfectly conceivable that Crenshaw could have presented himself in the emergency room one day with a cold foot and no pulses on basis of an obstruction either from an embolism, or the blood flow to the foot was so slow due to gradual blockage that the artery had clotted. He testified this was seen relatively frequently; in fact, in most cases this was how physicians saw people with peripheral artery disease. He also acknowledged this possibility in Cren-shaw's case.
The distinction to Dr. Westphal in Cren-shaw's case was that Crenshaw did have trauma to his right extremity, and he was of the opinion this aggravated a pre-exist-ing condition which led to loss of the extremity.
He acknowledged one could say it was just a coincidence that he had trauma, and would have lost his extremity, anyway; however, he expressed his opinion as follows:
I can simply state that having been there a few days down the line and having reviewed those records, I believe it was a situation where trauma came, compounding atherosclerosis, and led to loss of the foot.
He was of the opinion that most likely there would have been some previous symptoms, such as pain in walking, if atherosclerosis alone had caused the amputation.
Dr. Westphal also was of the opinion that while the documents seen by Dr. McParland would give a general idea as to what was wrong with the patient and what happened to him, they were not sufficiently accurate to make many judgments concerning the patient. The physician needed to go specifically to the entire medical record, not simply the summary. The pathology report was insufficient, in his opinion, and also inaccurate as to the location of the amputation. There was also a discrepancy in the pathologist's finding upon a visual inspection of the blood vessels as normal, while the microscopic diagnosis revealed severe atherosclerosis of arteries and gangrenous necrosis. Dr. Westphal apparently felt some clinical observation should have supported the microscopic diagnosis.
Significant to Dr. Westphal was a review of Crenshaw's hospital records since 1972 which disclosed no evidence of symptomatic athersclerotic disease prior to 1979. This would have indicated a definite predisposing cause to eventual amputation. It was not uncommon for a patient with hardening of the arteries to develop symptoms on exercise, and as the disease progressed, less exercise would cause pain. Also, he would have pain just from the disease if an artery were blocked. Crenshaw was a fairly active man, employed full time, with hobbies such as golfing, fishing, and outdoor recreation.
Dr. Westphal explained that thrombosis was a blood clot. In an embolism a piece of tissue has broken off, floated downstream and blocked a vessel. This would give a patient ischemia. A thrombosis meant the blood flow to the vessel had slowed sufficiently that it clotted, and the clot acted as an obstruction rather than a piece of tissue broken off.
He stated an actual clot could begin at any point, and that physicians are concerned with propagation of the clot, whereby blood adjacent to the clot also clots and extends, making a long line of clot.
Dr. Westphal noted Dr. Locker's examination and initial Doppler evaluation on January 14 showed pulse at the popliteal level was very strong. He was of the opinion there was no femoral artery occlusion or popliteal artery occlusion when Dr. Locker examined Crenshaw on January 14. He also observed that Dr. Locker noted farther downstream the pulses were considerably weaker.
Dr. Westphal stated there were four symptoms of vascular insufficiency and occlusion of vessels: pain; paralyzed muscles; parathesia (tingling); pallor paleness to extremity.
He was of the opinion that on January 9 Crenshaw exhibited none of these symptoms. Yet on January 11 he was complaining of pain, and as time went on he developed parathesia. On the 14th his toes were blue, and upon being admitted to the hospital he evidenced parathesia, a paleness, pallor and a decrease in the pulses, as well as some degree of decreased muscle function.
Upon being asked why the arteries in both sides of his leg would be involved when there was an injury to his foot, Dr. Westphal replied this was the key to the whole situation, and why in his opinion Crenshaw lost his leg.
First, Crenshaw had a pre-existing atherosclerosis causing some decrease to the blood flow in his lower extremity. Then, he had an accident in which his foot was injured. Swelling developed which caused a further decrease in blood flow, and the whole foot swelled. All three arteries were affected. This swelling caused a decrease in blood flow locally to the foot. The blood flow could not take care of the waste product, and the injury could not heal. It might even have caused a thrombosis, or a clot to develop locally in those arteries at their very ends, and thus as a result of the low flow state and swelling, tissue died, and he developed gangrene. This led to amputation. (R. 715)
He said it was very hard to tell how long direct trauma will take to give trouble. In a healthy individual it would take a complete blockage, by having a portion of the artery ripped away. In such a case a patient could develop problems immediately. In a low blood flow situation, however, it could take a while for a clot to develop and the patient have symptoms. The situation was variable.
DR. McPARLAND
Dr. McParland was the medical expert offered by Banker's Life. He testified his first opinion was given following examination of the pathology report, surgeon's report and some — but not all — of the medical reports. He did not have the benefit of any emergency room report or the admitting examinations on January 14, 1979.
Based on the surgeon's report of no blood supply distally to six inches below the knee, no evidence of trauma or injury to any part of the leg or foot, and the pathology report that Crenshaw had arteriosclerosis obliterans (hardening of arteries, narrowing and occlusion of the arterial bore), accelerated by his smoking two packs of cigarettes a day, Dr. McParland was of the opinion this disease alone caused the amputation.
As to trauma playing any part, he testified that the "blood stopped below the knee, according to the surgeon's report," and the trauma was to the foot. Therefore, according to Dr. McParland, any claim that an injury to the foot caused blood stoppage up below the knee was similar "to dropping a tree in a dry river bed and saying that two miles up the stream there's no water because it's the tree's fault."
He explained how the femoral artery in the groin and thigh becomes the popliteal artery, which in turn divides into three parts just below the knee: the peroneal, the posterior tibial and the anterior tibial, which extend and branch off into other arteries in the foot. The major trouble in arterial disease was where the arteries divided at the adductor magnus tendon and took a sharp turn.
An artery is very tough, he explained, like a garden hose, and that if the posterior tibial artery was damaged the anterior tibial artery took over.
He claimed the original records he examined showed no evidence of trauma: no redness, no bruising, no bleeding, as well as no swelling. The only diagnosis made initially by the treating physician was strain of the fourth metarsal ligament, which to Dr. McParland was insignificant.
Dr. McParland testified a review of Cren-shaw's history, including that before the accident, confirmed his original opinion that the disease alone caused Crenshaw's problem and trauma had nothing to do with it.
An October 18, 1975, emergency room report showing a visit from Crenshaw to the hospital indicated pain in left calf with the cause undetermined. Further, Cren-shaw had been hospitalized in 1978 for an abdominal obstruction, at which time an arterial pulse taken in his left leg showed only one-half normal, and there was no palpable pulse in the posterior tibial artery in his left leg.
Dr. McParland was of the opinion that if Crenshaw had been properly diagnosed originally on January 9, 1979, with proper treatment the leg might have been saved, or at least amputation of only part of the foot would have been required.
Of main significance to Dr. McParland was the fact the surgeon's report indicated no bleeding when the tourniquet was removed. He said the tourniquet was only on for 13 minutes. In practice, after sur gery the tourniquet is removed and the surgeon looks for bleeding blood vessels, and they must be sewed shut to avoid massive hemorrhaging. They are not tied off with a catgut. He said the flow was like a garden hose, and the report should indicate the "pulsatile blood flow" from the different arteries. The main reason for noting blood flow was so the next surgeon would know the exact condition of the blood vessel. It must be noted that Dr. McParland has never used tourniquets in his surgery practice.
In this particular case, according to the report of Dr. Westphal (as explained by Dr. McParland), Dr. Westphal took the tourniquet off and his search revealed no bleeders, and he reported no, or virtually no, bleeding, which meant Crenshaw's vascular blood supply stopped above there. Cren-shaw's popliteal artery was not pulsating, and therefore not bleeding.
Dr. McParland testified Crenshaw was seen by at least ten doctors and not one of them reported any evidence of injury such as a bruise, broken skin, scratch or redness. Dr. McParland testified that his diagnosis was supported by the fact that physicians using the Doppler ultrasound technique could only find one artery with measurable blood flow.
He testified the physicians determined where to amputate from the Doppler ultrasound showing that except for the peroneal artery there were only monophasic sounds.
On cross-examination Dr. McParland testified that a person with a severe case of arteriosclerosis affecting his lower extremities who dropped something on his foot was in no greater danger of developing problems from such injury than a healthy individual. This diseased condition made no difference.
He also testified a patient could cause an occluded artery by crossing his legs. Then he testified he did' not believe a swelling of the foot would contribute to an occlusion. Rather, it was his view the occlusion in the upper part of the leg caused the edema.
Dr. McParland was of the opinion Cren-shaw suffered no traumatic injury to his arteries. While acknowledging that trauma could cause a problem, he was of the opinion trauma played no part in Cren-shaw's problem:
Because if he had significant trauma to occlude the artery or to rupture or to lacerate it, then it would be one cause. But without any damage, with no evidence whatsoever of trauma — no redness, no swelling, no bruising, no discoloration, no fractured veins — a progressive disease going up his leg, I don't see . I couldn't correlate trauma to the foot with no blood supply below the knee. [R.985]
He reached the conclusion there was no swelling, bruising or redness because none of the reports mentioned it.
He was of the opinion Crenshaw's occlusion occurred in the popliteal artery, somewhere above where it divided into three arteries.
LAW
Was there a jury issue on punitive damages?
There are two significant cases which serve as guidelines on this question.
In Standard Life Insurance Co. of Indiana v. Veal, 354 So.2d 239 (Miss.1978), involving the wrongful refusal by an insurance carrier to pay a claim due under a credit life insurance policy, we repeated familiar criteria justifying award of punitive damages.
Punitive damages are in addition to actual damages, and are in the nature of punishment for the wrongdoing of the defendant, and to set an example so as to deter others from similar behavior. Snowden v. Osborne, 269 So.2d 858 (Miss.1972), and cases cited.
The basis in awarding such damages is to reward a plaintiff for public service in bringing the wrongdoer to account. Fowler Butane Gas Co. v. Varner, 244 Miss. 130, 141 So.2d 226 (1962), and cases cited.
Punitive damages may be recovered for a willful and intentional wrong, or for such gross negligence and reckless negligence as is equivalent to such a wrong. Seals v. St. Regis Paper Co., 236 So.2d 388 (Miss.1970).
In Veal we then stated:
This case demonstrates the necessity of awarding punitive damages when an insurance company refuses to pay a legitimate claim, and bases its refusal to hon- or the claim on a reason clearly contrary to the express provisions of its own policy. If an insurance company could not be subjected to punitive damages it could intentionally and unreasonably refuse payment of a legitimate claim with veritable impunity. To permit an insurer to deny a legitimate claim, and thus force a claimant to litigate with no fear that claimant's maximum recovery could exceed the policy limits plus interest, would enable the insurer to pressure an insured to a point of desperation enabling the insurer to force an inadequate settlement or avoid payment entirely. We are of the opinion the refusal to pay the legitimate claim in this case was an intentional wrong and constituted an independent tort as contemplated in Progressive Casualty Insurance Co. v. Keys [317 So.2d 396 (Miss.1975) ], supra.
Of course, if an insurance company had a legitimate reason or an arguable reason for failing to pay a claim, punitive damages will not lie, but in this case the defendant had no reason to contest the claim filed with it. We therefore hold that punitive damages were allowable.
354 So.2d at 248.
Richards v. Allstate Insurance Co., 693 F.2d 502 (5th Cir.1982), involved a policy exclusion which this Court in Lowery v. State Farm Mutual Automobile Insurance Co., 285 So.2d 767 (Miss.1973), had previously held violated public policy and was unenforceable. In spite of our decision in Lowery, Allstate Insurance Company kept the exclusion in its standard policies sold in Mississippi. Allstate did, however, inform its executive personnel to hon- or claims which would otherwise, under the exclusion, be denied. The lower echelon personnel (apparently not getting the message) denied the claim, based upon the exclusion. The Court of Appeals held retention of the invalid exclusion, failure to provide adequate procedures to prevent erroneous denials on this claim, plus denial of plaintiffs claim justified submitting the issue of punitive damages to the jury under Mississippi Supreme Court decisions.
In Reserve Life Insurance Co. v. McGee, 444 So.2d 803 (Miss.1983), and the recent case of Blue Cross & Blue Shield of Mississippi, Inc. v. Campbell, 466 So.2d 833 (1985), we held that the trial judge should first determine from all the facts of the ease whether the issue of punitive damages should be submitted to the jury. In Blue Cross we stated, "... it is the function and responsibility of the trial court to determine whether the insurance carrier had a reasonably arguable basis, either in fact or in law, to deny the claim." We also stated in Blue Cross that any plaintiff asking for punitive damages had a heavy burden.
Did Bankers Life breach the contract in such a way as to amount to an intentional wrong, or in doing so was it so grossly negligent that the breach constituted an independent tort? D.L. Fair Lumber Co. v. Weems, 196 Miss. 201, 16 So.2d 770 (1944).
Was there an "intentional and unreasonable refusal" to pay a legitimate claim? Was there a legitimate or an arguable reason for failing to pay Crenshaw's claim? Standard Life Insurance Co. v. Veal, supra. Or, was there a "reasonably arguable basis, either in fact or in law, to deny the claim"? Blue Cross, supra.
These criteria in turn require an evaluation of the conduct of Bankers Life in handling this claim, as well as the reason it gave for denying the claim prior to actual trial, and the reason given during the trial.
PRE-TRIAL
Bankers Life's handling of this claim pri- or to trial is a striking example of how an insurance claim should not be handled.
Crenshaw submitted his claim under the policy. The attending physician's form could not be filled in and completed by his attending physicians because of Air Force regulations. He did, however, sign authorization for Bankers Life to examine every medical record in existence pertaining to himself, and to interview any treating physician.
Bankers Life's own investigative procedures set forth what should have been done in such a case. Indeed, the special claim inquiry form transmitted to Equifax Service requests quite specific information:
Investigation is not confined to points checked below. Cover fully, but in addition, use good judgment in following all leads.

Interview attending physician PERSONALLY and:
Use confirmation of interview, Form 1425.
Obtain photocopy of his records (if not available, explain).
Emphasize following point(s) when personally interviewing physician:
Question thoroughly regarding policy provisions checked above.
Past health history .
Determine if injury is sole cause, independent of all other causes.
Exact cite of amputation [this handwritten in]
Obtain hospital record.
Photocopy entire record.
Exclude: nurses notes-temp charts.
EKG reports.
Interview insured and obtain:
Signed statement on confirmation of interview.
Signed medical authorizations.
Description of circumstances surrounding accident.
Description of injuries.
Name and address of doctors and hospitals where confined.
The company did none of this. Only minimial information was procured from Equifax Service, following which no further information was requested by Bankers Life. There was no interview of Crenshaw, no interview of any of his doctors, and no request for medical records. Instead, relying on the three medical entries Crenshaw sent with his claim, his claim was denied. There is no dispute that these medical documents did not tell the complete story of Crenshaw's problems. It is also clear to this Court that what Crenshaw did send was sufficient to either justify payment of his claim, or at least require Bankers Life to make a full and thorough investigation, interview Crenshaw and his family, look at all of his medical records, and interview his doctors before his claim was denied.
Instead Bankers Life denied his claim, and gave as a reason therefor an exclusion under the policy which its executive personnel knew was invalid under Mississippi law.
In Peerless Insurance Co. v. Myers, 192 So.2d 437 (Miss.1966), a case actually read and cited by counsel for Bankers Life in his memo, we stated, P. 439:
In cases involving insurance policies which allow recovery for "loss resulting directly and independently of all other causes from accidental bodily injury," recovery may be had where the accidental injury aggravates, renders active, or sets in motion a latent or dormant pre-exist-ing physical condition or disease, which in turn contributes to the disability or death for which recovery is sought, and where the accidental injury is a proximate cause of the resulting loss. [Citations omitted]
This well-established principle has been restated by this court and reaffirmed in the cases of Zurich Insurance Co. v. Ruscoe, 203 So.2d 305 (Miss.1967); Lincoln American Insurance Co. v. Ruscoe, 210 So.2d 769 (Miss.1968).
In its group insurance policy covering Crenshaw, Bankers Life had the following provision:
Injury wherever used in this policy means bodily injury causing the loss while this policy is in force, directly and independently of all other causes and effected solely through an accidental bodily injury to the insured person.
Despite the consistent holdings of this court that such a policy provision would not have prevented Crenshaw from recovery had the trauma to his foot played any part in the loss of his limb, Bankers Life at all times prior to trial denied coverage under the above policy exclusion. The denial of coverage for this reason appears in all correspondence to Crenshaw or his representatives, and after suit was filed in the answer to the interrogatories.
In our cases we have spoken of "bad faith". This exclusion was particularly deceptive in this case. Common sense tells us there are many accidents which in and of themselves might cause no particular problems, but coupled with the physical condition of the victim can cause serious injury or disease. How many Bankers Life insureds have there been who sustained some minor injury, and because of some underlying physical condition suffered serious problems, yet who accepted at face value the clear language of the policy? It would not be at all beyond the bound of reason for such injured insured to have read the initial rejection, examined his policy, and concluded that he was not covered. Such insured in all likelihood would not have known about our court decisions. Bankers Life, on the other hand, did know about them.
Bankers Life played the odds in this case and lost.
This case is really worse than Allstate. In Allstate the company personnel at least were notified not to deny coverage under an invalid policy exclusion. In this case Bankers Life took the consistent and deliberate choice to deny coverage for an invalid reason.
In their dealing with Crenshaw, Bankers Life personnel knew they were under a duty not to give an invalid reason for denying his claim. This duty was violated.
The Fifth Circuit Court of Appeals in two cases has interpreted our holding in Veal to mean that if the carrier offers no justifiable reason or arguable basis under Mississippi law for denying a valid claim, the issue of punitive damages must be submitted to the jury. Black v. Fidelity & Guaranty Ins. Underwriters, 582 F.2d 984, 990-991 (5th Cir.1978); Vogel v. American Warranty Home Service Corp., 695 F.2d 877 (5th Cir.1983).
We think this is a sound interpretation of Veal. Surely, if a justifiable reason or an arguable basis for denying a claim exists, the insurance company is under a duty to assert it; however, without that foundation the requisite intent or gross negligence necessary for the recovery of punitive damages may reasonably be inferred.
The reason given by Bankers Life for denying this claim up until actual trial was that Crenshaw had not shown that the amputation resulted from an injury "directly and independently of all other causes", and effected "solely through an accidental injury." Such a claim constitutes no arguable defense under Mississippi law. Bankers Life subjected itself to punitive damages by consistently asserting this reason for denying Crenshaw's claim.
FAILURE OF DUTY
Aside from what Bankers Life consistently wrote Crenshaw and his representatives for a period of approximately two years, however, is the manifestly strange conduct of the executive personnel of Bankers Life, including its legal and medical departments.
Dr. McParland noted the absence of an emergency room report in all of his written memos, yet Bankers Life made no attempt to get a copy. The failure of Bankers Life to follow its own investigative procedures is blatant. By reviewing the complete medical records and interviewing the attending physicians and Crenshaw, Bankers Life could have answered any of the questions Dr. McParland raised prior to and at trial.
House counsel for Bankers Life testified he deemed the refusal to be purely a medical reason, not "legal". This is specious. He knew that reputable doctors were of the opinion that trauma did play a part in the eventual amputation, he was certainly aware of our decision in Peerless, and he should have known of authority from several jurisdictions would have affirmed an award to Crenshaw under the policy. See: U.S. Casualty Co. v. Thrush, 21 Ohio App. 129, Ohio L.Abs 714, 152 N.E. 796 (1926) (stubbed toe coupled with arteriosclerosis: amputation); Fidelity Reserve Ins. Co. v. English, 226 Ark. 210, 288 S.W.2d 951 (1956) (roofing tack foot wound coupled with arteriosclerosis: amputation); Bumpus v. Eastern Greyhound Bus Corp., 291 N.Y.S.2d 540 (1968) (irritation of wet feet plus arteriosclerosis: amputation), in which appellate courts in three jurisdictions faced with similar questions affirmed awards of trial courts. Also, see Couch on Insurance, 2d ed., Vol. 10, § 41:86, P. 146.
The executive personnel of Bankers Life, a nationwide health and accident insurance company which has been in business a number of years, unquestionably knew their duty under the law to properly investigate any claim. Proper investigation in this case meant the obtaining of all available medical information relevant to Crenshaw's claim. See generally authorities cited in Couch on Insurance 2d ed., Vol. 15A, § 58.10, P. 277.
This was not a claim by a third party under a liability insurance policy, but a claim from a customer policy-holder of many years. Crenshaw was entitled to an honest, not disingenuous response to his claim.
With these basic premises in insurance law, the following questions' are pertinent:
1. Why was Dr. McParland never asked to make his determination based on the applicable legal standards?
This record shows Dr. McParland never knew prior to trial what the legal criterion was in order for the claim to be due under the policy.
Dr. McParland should have been told: "Doctor, if trauma had anything to do with the loss of Crenshaw's leg, even though disease may have played a major part, under Mississippi law this is an accidental loss under the policy. Also, Doctor, we are under a duty to obtain all relevant medical information in order for you to make a determination based on all the facts. Therefore, do not make any medical evaluation until you are satisfied as a physician that you have all the information required to render a valid medical opinion."
Had Dr. McParland been told Bankers Life's responsibility under the law, it is inconceivable he would not have required the company to interview Crenshaw and his family and ascertain precisely how the accident occurred, what discoloration and swelling followed and where the pain was felt. Acting reasonably, Dr. McParland would have examined all medical records available to ferret out the relevant information. He noted discrepancies in the medical records furnished him, and an error as to the final diagnosis, which indicated a need to examine all records. Furthermore, his memos mentioned the missing Emergency Room report, this showing that he had some questions about the history of the accident. After examining all of the records, any further information needed was readily available by interviewing the attending physicians.
Furthermore, even without knowledge of the applicable legal standard, Dr. McPar-land should have recognized that under any standard of prudent medical practice it is foolhardy to attempt to make a diagnosis on incomplete medical records. Dr. McPar-land's in-house memos clearly indicate that he knew review of Crenshaw's emergency room record was essential to a trustworthy diagnosis; however, he never required Bankers Life to obtain a copy of it before rendering his opinion. The inter-office memos indicate the executive personnel en gaged in a distinct, yet subtle nudging of McParland in the direction of an opinion favorable to it. They "used" their doctor and he quite willingly accommodated them in the affair. Dr. McParland ignored the gaps in information needed in order to make an accurate evaluation, picked the facts favorable to Bankers Life, and gave a medical opinion.
2. Why wasn't Crenshaw told the reason Bankers Life was denying the claim?
As we have noted Bankers Life was under a duty to investigate Crenshaw's claim, and if the company's doctor was of the opinion trauma had nothing to do with amputation, to tell this to Crenshaw.
Bankers Life did neither. Its personnel did not make a proper investigation, and on incomplete information told Crenshaw his claim was denied. The reason they gave was not what their doctor had said, namely: trauma had nothing to do with the limb loss. Instead, they told Crenshaw he had to demonstrate that the accident, solely and independently of all other causes, caused the limb loss, a manifest impossibility in his case. Then, they told him if he had any further information to submit it, assuming no responsibility of checking the facts further themselves.
This conduct evidences a lack of confidence in their own doctor's opinion. For, not until trial began did Bankers Life ever attempt to claim that the actual reason for denying coverage was that the accident had nothing to do with the amputation.
TRIAL DEFENSE
Was Bankers Life entitled to rely on Dr. McParland's opinion?
Bankers Life argues that Dr. McParland was a qualified and reputable doctor. Why should punitive damages be assessed when he testified disease alone caused the limb loss? Since there was a jury question on whether the accident had any causal relation to the amputation, based upon Dr. McParland's testimony, how can punitive damages be assessed?
This ignores the conduct of Bankers Life prior to trial and the reason it gave Cren-shaw and his attorney for denying the claim. Lemersal, the house counsel, even advised Herzau to inform Crenshaw's lawyer Bankers Life must have proof that an injury caused the loss "directly and independently of all other causes."
Crenshaw could argue with some cogency Bankers Life should have been estopped to assert this variant defense for the first time at trial.
Furthermore, the issue is not the defense which Bankers Life at trial finally settled upon to defend the suit, but the reason it gave Crenshaw for denying the claim. See: Aetna Life & Casualty Co., Inc. v. Lavoie, 470 So.2d 1060 (Ala.1985)
Moreover, it is not simply whether a jury question on liability is presented that is determinative, but whether Bankers Life knew the facts it asserted to make the jury issue were valid. Dr. McParland was not an independent physician in this case, but an employee and agent of Bankers Life. What he knew, or should have known, was imputed to Bankers Life.
An insurance company faced with two separate and distinct medical theories, each of which is supported by reputable physicians, and one of which would exclude liability, probably should not have punitive damages assessed if it asserted in court the theory favorable to its position. This would be true even though a jury rejected the company's position in the trial on actual damages.
It was not disinterested witnesses' particular version of the facts, or one medical theory arrived at by independent evaluation, which Bankers Life chose to rely on in this case. Instead, it was an opinion of its own employee on incomplete facts.
This leaves us with the inquiry as to whether Dr. McParland was a witness or an advocate in his medical opinion. The jury was entitled to examine the bona fides of Dr. McParland's testimony, just as they were entitled to scrutinize the other manifestly strange behavior of Bankers Life we have set out.
In any field of human endeavor judgments based on incomplete information are perilous. It is clear from this record that Dr. McParland both before and during trial freely expressed his opinion when he either did not have all the facts, or having them before him, chose to ignore those facts which either should or conceivably could have altered his opinion.
Three reasons were stressed by Dr. McParland for his assertion trauma had nothing to do with Crenshaw's limb loss bear scrutiny.
1. No Sign of Trauma. Dr. McParland said the medical records showed no sign of redness, swelling, bruising, or breaking of skin. He said of the "ten" doctors who saw Crenshaw from his initial trip to the emergency room through his hospitalization, none noted any trauma. "He did not even break a vein, much less damage an artery."
While the medical records vary on the initial accident causing the foot injury, Crenshaw informed Bankers Life from his first claim thenceforward that the cause of his foot injury was dropping a part of an automobile alternator on his foot. Bankers Life never challenged the accuracy of Cren-shaw's version of the initial injury.
That dropping a metal object on an unprotected foot would not cause some swelling and some bruising of that extremity defies common experience. Dr. McParland was never instructed to, and never bothered to obtain a history from Crenshaw or his family, or to discuss the clinical observation of Crenshaw's foot with the emergency room doctors. He never considered the possibility that even if there had been no notation of swelling it might have resulted from a failure to record, rather than the fact there was no swelling or bruising.
Yet, even the medical records dispute Dr. McParland.
When Crenshaw was seen by the resident, Dr. Scott, on January 9, 1979, he noted a "swollen, tender right midfoot."
On January 14 Drs. O'Neal and Locker noted swelling from the foot upward.
2. A severely arteriosclerotic patient who suffers minor trauma to his foot is in no more danger of serious complications than a perfectly normal person.
This particular view, of course, is totally at odds with the medical opinions expressed by both Drs. Hockaday and Westphal. It is also inconsistent with Dr. McParland's own assertion on the witness stand that an occlusion can occur from as simple an act as crossing your legs.
Dr. McParland gave no medical authority for this conclusion, and some rather basic medical authorities state otherwise. Textbook of Medicine, by Cecil, Vol. I (16th ed. 1982), Chapter 36.1 "Peripheral Vascular Disease Due to Organic Arterial Obstruction," p. 318, states:
Patients should protect limbs from cold or trauma; careful attention to keep the skin scrupulously clean, dry and soft is important. Even minor infection such as the dermatophytoses may produce problems. Toe nail trimming should be done regularly and with care.
See, also: Harrison's Principles of Internal Medicine (9th ed.), Chapter 253, "Vascular Diseases of the Extremities"; Robbins and Cotran, Pathologic Basis of Disease (2nd ed.), pp. 608-613. Indeed, in the August, 1979, issue of The Journal of Trauma, there is an article entitled, "Complete Disruption of Axillary Artery Caused by Severe Atherosclerosis and Trivial Nonpenetrating Trauma." [Emphasis added]
Atherosclerosis by its very nature is a narrowing and hardening of blood vessel walls, as well as gradual clogging of the blood stream with fatty deposits. A view that a patient with a severe case of atherosclerosis is no more likely to have severe complications from minor trauma and swelling than a perfectly normal person defies common sense.
3. The occlusion was above the knee.
According to Dr. McParland, even giving Crenshaw the benefit of the doubt that problems could have been caused by his injury, the occlusion which stopped the blood flow was not in the foot, but in the popliteal artery before it branched off into the anterior and posterior and the peroneal arteries, the three main arteries supplying the lower leg and foot. Dr. McParland's opinion was the occlusion was in the popli-teal artery or higher in the femoral artery.
Why did he reach this conclusion? Two reasons: (1) the site of the amputation, and (2) the report of surgery, which showed no bleeding when the tourniquet was removed; hence there was a blockage of the artery above the amputation.
This conclusion is curious in view of the medical records and the testimony of Dr. Westphal, the attending surgeon.
As Dr. McParland noted, Crenshaw was seen by a number of physicians. The medical records reveal a chain of events beginning with a man reporting to the Emergency Room complaining of an injury to his foot, observations of progressive worsening of that injury and complications therefrom, efforts to abate or cure the problem, with the final progression up the lower leg to the critical stage of gangrene and necessity of amputation. None of the records suggested Crenshaw's problem originated with, or was solely a clot beginning above the amputation site. Rather, they relate directly to a problem beginning with a foot injury which rather rapidly deteriorated over a period of a few days.
As to the amputation site, Dr. Parland's first contention, Dr. Westphal testified this site was chosen-for function and the fact the gangrenous condition had progressed far enough up the foot to indicate six inches below the knee was the safest place. There is nothing in the medical records or Dr. Westphal's testimony suggesting that prior to surgery the decision to amputate below the knee was based upon a medical diagnosis or suspicion there was an occlusion at the kneeline or above.
Dr. Westphal testified no firm conclusion could be made about the blood vessels following the amputation because a tourniquet had cut off the blood flow for a significant period of time prior to surgery. Dr. McParland in his surgery never used tourniquets. Also to be remembered is this tourniquet was applied to a seriously ather-osclerotic patient.
Demolishing Dr. McParland's contention that there was no blood flow below the amputation site, there is first the January 14 finding by Dr. Locker, the chief resident in vascular surgery, of a popliteal pulse which grew weaker downstream. Dr. Westphal testified the popliteal pulse found by Dr. Locker was "strong," according to the record. Second, and most conclusive, was Dr. Westphal's testimony, uncontra-dicted in the record, that on the day prior to surgery he obtained a blood pressure, albeit greatly weakened. Although discounted by Dr. McParland as "worthless," Dr. Westphal also testified a fluorescin dye injection on the day prior to surgery showed a line of demarcation of blood flow from the back of the foot to the back of the ankle.
Dr. McParland ignored Dr. West-phal's personal finding of a pulse on the day prior to surgery.
This Court takes no pleasure in any insurance company having to pay punitive damages. We affirm such an award with extreme reluctance. Yet an insurance company has a duty to the insured to make a reasonably prompt investigation of all relevant facts. It has a further duty, after an adequate investigation and a realistic evaluation of the claim, to tell the insured, its customer, the plain truth. And, if the insurance company cannot give its insured a valid reason for denying the claim, it has a final duty to promptly honor it.
Conduct such as exemplified by Bankers Life in this case is harmful to the insured public. The company violated standards of conduct enunciated by this Court. It grossly violated its own in-house procedure for investigating a claim. Its executive personnel had to realize that a full and complete investigation posed a very strong likelihood of dissipating any contention that Crenshaw's trauma had absolutely nothing to do with the loss of limb. Yet they simply denied the claim for an invalid reason, especially deceptive in this ease, because on the surface and to the uninitiated it appeared valid. Why did they not fully investigate so that their doctor would have all the facts? Was it because they thought the full facts would be favorable to them, or unfavorable? We must conclude the latter. They clearly recognized they were skirting a bad faith cause of action, but still played the odds.
Conduct of an insurance company not authorized by law which carries with it a potentiality of great harm to the insurance public is an outrage, and should be condemned. Punitive damages in such a case is an appropriate, and perhaps the only remedy. In this kind of case, it is the medicine most likely to cure the malady.
VOIR DIRE, TESTING QUALIFICATIONS OF EXPERT
In the voir dire inquiry of Dr. McParland's qualifications, he was asked if he knew Marlene Tobin, and replied, "Yes." Then, he was asked if he knew Lillian or John J. Hamparian, to which he responded he did not recall the name, but might know them. Then he was asked if they had not sued him. He replied he did not know about Hamparian, but there was a suit just instituted, "... she didn't sue me; she sued ten doctors . and I was not the doctor attending her at the time that that suit was instituted." (Vol VII, pp. 955-956)
He was asked what the suit was about, how it was he was sued, and he replied Dr. Donald D. Dwyer was the attending physician. When asked her problem, he replied she was a 40-year-old woman who developed cancer and had a lot of other problems. All the above testimony was elicited without objection.
Dr. McParland was then asked, "What about Marlene Tobin?" An objection to this question was sustained. Counsel then asked the doctor if he had been sued by anybody else, to which he responded, "Once." There was then an objection, which was overruled, and Dr. McParland replied that he had been one of the doctors sued in an anesthetic death that had occurred a number of years before, he could not recall when.
Bankers Life argues the above was improper voir dire but counsel has failed to favor us with any case in point.
Most of this testimony was elicited without objection, following which there was an objection to a question, which was sustained, but no motion for a mistrial. We are therefore confined to the question of whether reversible error was committed in the doctor's answer to the final question.
Dr. McParland was offered as an expert on the human anatomy. If there was anything about his past conduct which reflected upon his knowledge, clearly it was admissible. See: Wood v. American Life Ins. and Trust Co., 7 How. 609 (Miss.1843), p. 631; "... when particular credit is concerned, particular inquiries are proper." The question is whether such past conduct was relevant to the inquiry.
In this case the questioning never proceeded to the point where it is clear, one way or another, that the one suit affected his knowledge in the capacity in which he was testifying.
In hindsight we can observe it would have been preferable for the inquiry concerning the litigation in which Dr. McPar-land found himself a party defendant to have been conducted in chambers in order to ascertain whether such suit in any way bore upon his professional qualification to express an opinion. No such request was made, however.
In inquiries of this nature, trial courts are given broad discretion, and there must be a showing of an abuse to warrant a reversal. See: 3A Wigmore, Evidence (Chadbourn Rev.1970), Section 991, pp. 922-926; Jones The Law of Evidence (6th Ed.), Vol. 2, § 14:30, p. 668. We cannot find an abuse of discretion on the part of the trial court, and even if there were, it was not reversible error. In these litigious times the mere fact some person has been sued hardly affects either his reputation or credibility.
AFFIRMED.
PATTERSON, C.J., ROY NOBLE LEE, P.J., and DAN M. LEE, SULLIVAN and ANDERSON, JJ., concur.
WALKER, P.J., and ROBERTSON and PRATHER, JJ., dissent.
SULLIVAN, Justice,
for the Court, Part II:
Bankers Life argues that the amount of damages awarded — $1,600,000—is grossly excessive and should be substantially reduced. The point is brought before us by Bankers Life's assignment that the trial judge erred when he denied Bankers Life's post-trial motion for a remittitur of punitive damages or, alternatively, a new trial on the amount of punitive damages.
This issue must be adjudged under the same process of adjudication as is applicable on any other assignment of error. This involves the familiar three-step process of identifying and articulating the applicable rules of law, resolution of all questions of evidentiary fact, and application of the law to the facts. See Boardman v. United Services Automobile Association, 470 So.2d 1024, 1029 (Miss.1985)
With regard to punitive damages, our rules are necessarily general. Once it is established that punitive damages in some amount should be allowed, the quantum thereof is determined by reference to certain general factors which include:
(1) Such amount as is necessary for the punishment of the wrongdoing of the defendant and deterring defendant from similar conduct in the future, Standard Life Co. of Indiana v. Veal, 354 So.2d 239, 249 (Miss.1977);
(2) Such amount as is reasonably necessary to make an example of the defendant so that others may be deterred from the commission of similar offenses. Reserve Life Insurance Co. v. McGee, 444 So.2d 803, 808 (Miss.1983); T.C.L., Inc. v. LaCoste, 431 So.2d 918, 923 (Miss.1983); Tideway Oil Programs, Inc. v. Serio, 431 So.2d 454, 460 (Miss.1983); Snowden v. Osborne, 269 So.2d 858, 860 (Miss.1972); and
(3) The pecuniary ability or financial worth of the defendant, Collins v. Black, 380 So.2d 241, 244 (Miss.1980); Allen v. Ritter, 235 So.2d 253, 256 (Miss.1970); Standard Life Insurance Co. of Indiana v. Veal, 354 So.2d 239, 249 (Miss.1978); Jones v. Carter, 192 Miss. 603, 610, 7 So.2d 519 (1942).
Punitive damages are an important component of the remedial side of our law whose purpose is the protection of the customer. On these facts our law would seem to authorize a quantum of punitive damages to be that amount reasonably necessary to punish dfefendant and to provide a substantial deterrent to it and others similarly situated from the commission of similar offenses, all consistent with the pecuniary ability and financial worth of the defendant. In this context, we note that Bankers Life reported to the Commission of Insurance in its 1980 report total assets in excess of $1,300,000,000, and net assets of approximately $294,000,000.
Our case law is to the effect that the determination of the amount of punitive damages is a matter committed solely to the authority and discretion of the jury. See e.g., Commodore Corp. v. Bailey, 393 So.2d 467, 471 (Miss.1981); Collins v. Black, 380 So.2d 241, 244 (Miss.1980); Sandifer Oil Co. v. Dew, 220 Miss. 609, 71 So.2d 752 (1954); Teche Lines, Inc. v. Pope, 175 Miss. 393, 166 So. 539 (1936). These same cases, frequently in the same sentence as has been used to commit sole discretion to determine the amount of punitive damages to the jury, use language expressing a view to the effect that the jury's verdict may be interfered with if it is found "arbitrary or unreasonable" or "against the overwhelming weight of the evidence". Commodore Corp. v. Bailey, 393 So.2d at 472. Other cases recognize that a jury's finding on amount of punitive damages may be disturbed "for exceptional causes". Collins v. Black, 380 So.2d at 244; Snowden v. Osborne, 269 So.2d 858, 861 (Miss.1972); Woodall v. Ross, 317 So.2d 892, 896 (Miss.1975).
Our general rule is that a damage award is so excessive that it should be altered or amended when it evinces passion, bias and prejudice on the part of the jury so as to shock the conscience. Jesco, Inc. v. Shannon, 451 So.2d 694, 705 (Miss.1984); Entex, Inc. v. McGuire, 414 So.2d 437, 444 (Miss.1982); James Reeves Contractor, Inc. v. Chain, 343 So.2d 1229, 1232 (Miss.1977). This shock must be experienced by the judicial conscience, not the actual conscience of the members of this Court. Schoppe v. Applied Chemicals Division, 418 So.2d 833 (Miss.1982), (contrast amount of verdict with amount of actual damage). We are not authorized to disturb a jury verdict regarding amount of damages because it "seems too high" or "seems too low". Toyota Motor Co., Ltd. v. Sanford, 375 So.2d 1036, 1037 (Miss.1979).
Where this test is met, the trial judge is authorized generally to enter a remittitur or an additur as may be appropriate under the facts and circumstances of the particular case. [Miss.Code Ann. § 11-1-55 (Supp.1984) ]. This authority to enter a remittitur or an additur exists where the nature of the damage award at issue is punitive or exemplary. See Standard Life Insurance Co. of Indiana v. Veal, 354 So.2d 239, 249 (Miss.1977) (rule impliedly recognized). We hold that motions challenging the quantum of punitive damages and seeking either a remittitur or an addi-tur are subject to the same rules as motions challenging the amount of damage awards generally. This means that on appeal we are reviewing a matter which is by its very nature committed to the sound discretion of the trial judge. See Jesco, Inc. v. Whitehead, 451 So.2d 706, 714-716 (Miss.1984) (Robertson, J., concurring). What in essence we are dealing with is a motion for a remittitur or in the alternative for a new trial on the issues of damages only. Where the trial judge acts upon these matters, we reverse only if the trial judge abuses or exceeds his discretion. Dorris v. Carr, 330 So.2d 872, 874 (Miss.1976).
While no hard and fast rule may be laid down with regard to the maximum amount of punitive damages which may be awarded in a given case, it is difficult to imagine that, consistent with the rules of law recited above, the judicial conscience could be shocked by a punitive damages assessment which is less than 1% of the financial net worth of the defendant. The record reflects that the net worth of Bankers Life in the year immediately preceding the trial was $294,000,000. The amount of punitive damages assessed by the jury was $1,600,000 or 0.54421% of the net worth of the company. However high that amount may "seem", it may not, consistent with our rules of law in the area, be said to shock the judicial conscience.
AFFIRMED.
PATTERSON, C.J., ROY NOBLE LEE, P.J., and DAN M. LEE and ANDERSON, JJ., concur.
WALKER, P.J., and HAWKINS, ROBERTSON and PRATHER, JJ., dissent.
. For the convenience of the reader, we have at times, in parenthesis, explained medical terms. We have also written out abbreviations except when the abbreviations, as they appear in the medical records can be clearly understood by the non-medical reader.
. The trial record spells the doctor's surname as "McParlin" while the Bankers Life records and briefs spell it "McParland". We will use the latter spelling.
. In this initial correspondence there was an obvious breakdown of information and communication. The question and answer of paragraph 3 of Crenshaw's proof of claim states:
"3. Describe fully how and where the accident occurred. (Answer) Removed alternator from wife car, and carried it to work bench. Removed armature from housing and was checking brg. on armature when housing rolled off bench and hit right foot."
Furthermore, on both the operation report signed by Drs. Westphal and Dale V. Hoekstra, orthopedic surgeon, and the pathologist's report the pre and operative diagnosis was "vascular insult, right foot." These reports were examined by Dr. McParland. The medical term "insult" means trauma. We will return to this perplexing failure to make further inquiry.
. Dr. McParland was correct in his conclusion that "anterior compartment syndrome" was not the correct diagnosis of Crenshaw's problem.
. The holdings in this case were reiterated in the recent case of Reserve Life Insurance Co. v. McGee, 444 So.2d 803 (Miss.1983).
. Dr. McParland was quick to assert that at least ten doctors had seen Crenshaw, and none of them noted any trauma to his foot. Although this assertion is not supported by the record, the Court also notes that not one of these attending physicians reached the diagnosis Dr. McParland asserted. In fact, it is clear from the medical records and Dr. Westphal's testimony that Cren-shaw's physicians were confronted with an injury to a foot that rapidly deteriorated up the leg, resulting in amputation. There is nothing in the medical records or Dr. Westphal's testimony to indicate that any of them considered the original problem to be an occlusion beginning around the knee.
These physicians were "on the scene," they examined Crenshaw, and Dr. McParland did not. Instead of interviewing these attending physicians, Bankers Life and Dr. McParland were content to deny the claim upon incomplete facts. In other words, they quit when they were ahead.
. Lemersal defended himself by testifying this was the policy language. When reminded this was contrary to Mississippi law, Lemersal replied Mississippi law had little, if any, bearing on whether the claim was "payable or deniable." (R. 612)
. Dr. McParland illustrated his medical opinion mentioning a log in a stream. Simple physics and hydraulics (if not the most rudimentary observation) also instruct us that, given the same pressure, a tube with its inner lining encrusted and with trash in it is more likely to stop up than it would if clear and clean.
. Well, not quite. The circuit judge, apparently detecting the omission by Dr. McParland of this observation made by Dr. Westphal in reaching his opinion, questioned Dr. McParland in chambers out of the presence of the jury. There the circuit judge noted Dr. Westphal had found blood pressure the day prior to surgery. Dr. McParland's first response was this finding was not in the medical records. The court then asked Dr. McParland was he saying Dr. West-phal found no pulse. Dr. McParland replied he was not saying Dr. Westphal found no flow, but if Crenshaw had had the kind of flow Dr. West-phal found, then he would not have required surgery. (R. 1029-1032)
This brings us full circle. Dr. McParland never saw Crenshaw. Dr. Westphal did. Unless Dr. Westphal was either mistaken or committed perjury, he detected a pulse. This was a fact Dr. Westphal personally observed (and not McPar-land's prerogative to deny), which sent up in smoke Dr. McParland's opinion there was no blood flow below the amputation site.
Did Dr. McParland then concede, in the face of an eyewitness account of blood flow, that he himself might be mistaken in his opinion that there was no flow below the site? No, he said, "If there had been that kind of flow, he would not require surgery."
Having repeatedly testified the blood flow ceased above the site of amputation, and this being his sole basis for concluding a problem above this area brought about the necessity of an amputation, when brought face-to-face with a testified fact to the contrary, did he abandon his opinion that he was possibly mistaken?
No, rather than having been mistaken in his opinion, he said if that had been true, there would have been no need for surgery. We can thus understand the circuit judge's intrigue with Dr. McParland's testimony.