Opinion ID: 1875795
Heading Depth: 4
Heading Rank: 1

Heading: employers mutual acted in reliance upon advice from counsel.

Text: In reliance upon the advice of local counsel Tompkins' claim in excess of $20,000.00 was denied. It is contended the soundness of this advice is not the issue, but rather the insurer's reliance upon the legal opinion of an experienced insurance attorney when the offer was made. We are urged to hold the insurer had the right to this defense, and although conceding an erroneous interpretation of the policy, that such mistake did not justify punitive damages. Lincoln National Life Ins. Co. v. Crews, 341 So.2d 1321, 1322 (Miss. 1977), does hold, The mere fact that Lincoln rejected the claims under the provisions of its policy and defended this suit and lost does not justify the imposition of punitive damages. Gulf Guaranty Life Ins. Co. v. Kelley, 389 So.2d 920 (Miss. 1980), and Aetna Cas. & Sur. Co. v. Steele, 373 So.2d 797 (Miss. 1979), are cited as supporting authority. From this it is contended the legal opinion constituted a legitimate or arguable reason for the insurer to limit its offer to $20,000.00 and consequently the trial court erred in submitting the issue of punitive damages to the jury. This contention overlooks, however, the time interval from the first denial of the claim on September 3, 1981, based upon the exclusion and the offer of $20,000.00 shortly after February 1, 1982. Unquestionably during this interval Employers Mutual was not relying on the advice of counsel but upon the void clause in the policy as stated by Wilson to the Tompkins. It is true that subsequent to the attorney's opinion an offer of $20,000.00 was tendered to Tompkins but this also must be reviewed in context with the policy exclusion in the Lowery decision and other cases mentioned in assignment (b) below.