Opinion ID: 1088707
Heading Depth: 3
Heading Rank: 1

Heading: Did the trial court err when it denied United the use of certain medical records at trial?

Text: ¶ 64. Admission or suppression of evidence is within the discretion of the trial judge and will not be reversed absent an abuse of that discretion. Haggerty v. Foster, 838 So.2d 948, 958 (Miss.2002) (citations omitted). Furthermore, where error involves the admission or exclusion of evidence, this Court `will not reverse unless the error adversely affects a substantial right of a party.' Id. ¶ 65. In a pretrial hearing, the judge stated United was only to gather medical records for whatever the policy allowed them. The policy application requested medical information for the previous three years. The judge further stated, I would say [gather] congestive heart failure records for that three year period. ¶ 66. Subsequently, United issued eleven subpoenas to medical providers. These subpoenas, which sought additional records, were not issued until six years after United denied Natalie's claim. Natalie filed a Motion to Quash these eleven subpoenas. [4] On July 23, 2004, a hearing was held on Natalie's Motion to Quash. The trial judge granted Natalie's Motion to Quash, but allowed United to make a proffer of the records in its possession. ¶ 67. United argues it was denied the use of these relevant medical records at trial. United states the records that were not admitted into evidence would prove that Robert was treated for congestive heart failure. ¶ 68. In its correspondence to Natalie, as well as through the depositions of its representatives, United stated the reason for denial of the claim was that it received medical information indicating undisclosed medical history of congestive heart failure within the three year period prior to application. The medical records in the claims file were from doctors whom Natalie disclosed to United at its request while it was investigating Natalie's claim. United asserts, and Natalie concedes, that it requested and was given authorization by Natalie to obtain the medical records for five years. However, only records from the prior three years were requested from these physicians before Natalie's claim was denied. Whitaker, United's representative, testified the denial of Natalie's claim was based on the following, which was contained in Robert's claim file: the medical records from Dr. Eva Magiros, Dr. Robert Holbert and the Biloxi Medical Center. An employee of United, who had no medical training, reviewed these medical records, none of which included a diagnosis of congestive heart failure. Notwithstanding the absence of a diagnosis, this employee decided Robert had had congestive heart failure within three years prior to his application and forwarded the claim to United's legal department and medical director for review. ¶ 69. As discussed infra, United's medical director, Dr. McCampbell, opined that Robert's medical records indicated congestive heart failure. A thorough review of the record for any substantiation of this conclusion by Dr. McCampbell cannot be found. Dr. McCampbell never contacted Robert's treating physicians, nor did he offer any reason, basis or fact to support his opinion that Robert had been treated for or diagnosed with congestive heart failure during the three-year period preceding application. ¶ 70. An insurance company must present an arguable, good-faith basis for denial of a claim. See State Farm Ins. Co. v. Grimes, 722 So.2d 637 (Miss.1998); Standard Life Ins. Co. v. Veal, 354 So.2d 239 (Miss.1977). The record before us is devoid of any such basis. Every medical document for the three-year period preceding application contradicts the opinion of Dr. McCampbell. Accordingly, there is no proof of a good-faith basis for denial. Insurance companies are not free to employ medical directors who are in a position to recommend arbitrary denials. A medical opinion put forth by a medical director, without substantiation, is insufficient to deny a claim. Insurance companies must comply with the mandate of this Court to demonstrate an arguable basis for denial. ¶ 71. Additionally, Natalie argues that certain records were properly excluded, as the denial of the claim was based on whether Robert had congestive heart failure within the three years prior to the application for insurance. Natalie states these additional, subpoened records were not the medical records which were contained in Robert's claim file and relied upon to deny her claim. ¶ 72. The medical records at issue exceed the three-year time period which is stated on the application. With one exception, [5] the medical records not admitted by the trial court range in date from May 1989 to September 1991, well before the 1996 application. The letter of denial to Natalie clearly stated the denial was based on evidence of congestive heart failure from the medical records United possessed from the preceding three years. While this Court is confronted with multiple issues in this appeal, the issue of the basis for the denial of Natalie's claim is the most pertinent to our ruling. The medical records excluded were not utilized to deny Natalie's claim, nor do they provide evidence Robert suffered from or was treated for congestive heart failure from 1993 to 1996. ¶ 73. Evidence is always subject to the test of relevancy. In this case, the relevant records are the records upon which denial was based. As this Court does not want to favor suppression of discovery, we find the trial court erred in relying upon the policy period solely to determine which records should be excluded. We find the conduct of United should have been considered when determining which records were relevant. The relevancy of medical records was evidenced by United's pre-suit conduct. An insurance company has exclusive control over evaluation, processing and denial of claims. Andrew Jackson Life Ins. Co. v. Williams, 566 So.2d 1172, 1189 (Miss.1990). United requested authorization to obtain records from the preceding five years, but this Court is befuddled by United's complaints about exclusion of the older records, given its decision to obtain only records from the preceding three years. As this is a lawsuit based on the denial of Natalie's claim, and United chose to base its denial only on the preceding three years, then United must be satisfied to use records from these three years to defend its denial. ¶ 74. At trial, United attempted to offer an alternative argument for denial of Natalie's claim. Even though United's employee, Whitaker, testified that question six of the application was the only issue, United attempted to create an additional basis for denial based on application question eight at trial. [6] In the medical records which were excluded, United claimed there was information that Robert had been treated for cancer. A record dated August 13, 1990, from Dr. David Witty stated a carcinoid tumor was found in Robert's small bowel. However, Natalie disputes this was cancer and stated the tumor(s) were polyps which were removed from Robert's colon during a colonoscopy. While the trial judge denied United the use of these records, he reserved the right to reverse this ruling and allowed United to retain an expert to define and explain carcinoid tumor. United failed to do so. Additionally, United never sought medical records regarding cancer prior to its denial of Natalie's claim. ¶ 75. As United did not base its denial of the claim on question eight of the application, nor did United utilize its opportunity to put on proof of carcinoid tumors at trial, the issue of the exclusion of these records is moot. ¶ 76. No proof was put forth to support the denial of Natalie's claim, nor were the excluded records utilized in the decision to deny Natalie's claim. While we find the trial court did not employ the correct reasoning for the exclusion of these records, we find the records were properly excluded from evidence.