Opinion ID: 1126627
Heading Depth: 2
Heading Rank: 2

Heading: Negligent Investigation

Text: Mrs. Lewis next contends that Equity National's failure to properly investigate her claim warranted submission of the issue of punitive damages to a jury. Equity National's representative, Sandra D'Orzio admitted that the decision to rescind Mrs. Lewis' policy and refuse her claim was based solely on the information provided in Dr. King's statement. Dr. King treated Mrs. Lewis only for injuries sustained in the March 1990 accident and not for any prior injuries or conditions. He indicated on his statement merely that she had been treated for a coronary occlusion in 1983. Ms. D'Orzio stated that no further investigation was undertaken to verify the alleged condition or to obtain Mrs. Lewis' medical records. Moreover, no inquiries were made to Farmer or Mrs. Lewis' physicians prior to the denial of the claim. Nothing was done beyond obtaining the claim form and submitting it to the underwriting department. In Bankers Life & Casualty Company v. Crenshaw, 483 So.2d 254 (Miss. 1985), we established that the denial of a claim without proper investigation may give rise to punitive damages. Id. at 276. We recognized that an insurance company has a duty to the insured to make a reasonably prompt investigation of all relevant facts. Id. See also, Life and Casualty Insurance Co. of Tennessee v. Bristow, 529 So.2d 620, 623-624 (Miss. 1988). Proper investigation, the Crenshaw Court held, means obtaining all available medical information relevant to [the policyholder's] claim. Id. at 272. In Eichenseer v. Reserve Life Insurance Co., 682 F. Supp. 1355, 1366 (N.D.Miss. 1988), the court found that under Mississippi law, before denying a claim, the insurer, at a minimum, must determine whether the policy provision at issue has been voided by a state or federal court, interview its agents and employees to determine if they have knowledge relevant to the claim, and make a reasonable effort to secure all medical records relevant to the claim. Id. at 1366. In the case sub judice, Equity National did not even undertake minimal inquiry into Mrs. Lewis' claim. Ron Farmer, the agent, was not questioned about the claim until after the lawsuit was filed in January 1991. Equity National admits that it neither made an investigation nor requested any medical information regarding Mrs. Lewis' claim or policy application. This evidence suggests that there exist questions of fact regarding the adequacy of Equity National's investigation of Mrs. Lewis' claim which should have been considered by a jury.