Opinion ID: 1126627
Heading Depth: 2
Heading Rank: 5

Heading: Applicability of Guy v. Commonwealth Life Insurance Co.

Text: In making his determination that Equity National was entitled to summary judgment on the issue of punitive damages, the circuit court noted that both parties relied largely upon their divergent interpretations of McGee and Guy v. Commonwealth Life Insurance Co., 894 F.2d 1407 (5th Cir.1990). Equity National asserts that based on Guy, the circuit court properly granted partial summary judgment. Mrs. Lewis, however, contends that Guy is distinguishable. As Mrs. Lewis contends, the Fifth Circuit's opinion in Guy may indeed contradict the holdings of this Court in McGee, Miller, Crenshaw, and McCann. An agent of Commonwealth approached Mrs. Guy about purchasing a medical insurance policy. He asked only about her address, date of birth and Social Security number. Without further questioning, he completed the policy application and submitted it to the insurer. Guy, 894 F.2d at 1409. Seven months later, Mrs. Guy was hospitalized for removal of her gall bladder. Id. Commonwealth investigated the claim and learned that she had suffered from gall bladder problems prior to obtaining the policy. The insurer denied coverage based on the pre-existing condition and later rescinded the policy on other grounds after determining that she had been treated for gall bladder problems more than two years prior to issuance of the policy. Id. at 1409. The United States District Court for the Northern District of Mississippi upheld a punitive damages award in the amount of $141,000.00 in Guy v. Commonwealth Life Insurance Co., 698 F. Supp. 1305, 1315 (N.D.Miss. 1988). The Fifth Circuit, however, in a decision which flies in the face of Mississippi bad faith jurisprudence, reversed the lower court on the issue of punitive damages, finding that [a]lthough the claims handling process used by Commonwealth fell short of perfection, it served its essential goal of affording adequate investigation of Guy's claim and did not rise to the level of reckless or grossly negligent conduct. Guy, 894 F.2d at 1414. It is difficult to reconcile the Fifth Circuit's decision in Guy with Mississippi case law. Moreover, it is factually distinguishable from the case sub judice. Mrs. Guy gave no information to the agent, whereas Mrs. Lewis informed Farmer about her diabetes as well as her heart condition. Further, unlike Mrs. Guy, Mrs. Lewis' claim was for injuries not remotely related to any pre-existing condition. Finally, as distinguished from Guy, Equity National made no effort to obtain Mrs. Lewis' medical records, to consult with her physicians, or to even seek the opinion of its own in-house doctors or nurses. Therefore, the Fifth Circuit's opinion in Guy is of no benefit to Equity National. A jury determined that Mrs. Lewis was entitled to actual damages of $200.00, the amount payable under the Equity National policy for one day of intensive care treatment. Even if Equity National had an arguable reason for denying the claim, as it contends, it was not entitled, as a matter of law, to partial summary judgment on the issue of punitive damages. Moreover, there remain questions of material fact which can be determined only by a jury. Because the circuit court's decision was contrary to Mississippi law, we reverse and remand for proceedings consistent with this opinion. REVERSED AND REMANDED FOR PROCEEDINGS CONSISTENT WITH THIS OPINION. PRATHER, P.J., and SULLIVAN, PITTMAN, BANKS, JAMES L. ROBERTS, Jr., and SMITH, JJ., concur. HAWKINS, C.J., concurs in result only. DAN M. LEE, P.J., not participating.