Opinion ID: 1109550
Heading Depth: 1
Heading Rank: 2

Heading: was cossitt entitled to have the issue of bad faith and punitive damages submitted to the jury for their consideration?

Text: This Court has stated that the trial court must determine first, as a matter of law, whether the issue of punitive damages on account of alleged bad faith should be submitted to a jury. Pioneer Life Ins. Co. of Illinois v. Moss, 513 So.2d 927, 929 (Miss. 1987). [3] If an insurance company has a legitimate or arguable reason for denying a claim, then such will utterly preclude the submission of the issue of punitive damages to the jury. Id. at 930 (Emphasis in original). But Pioneer cautioned that the absence of such a reason does not automatically send the issue to the jury. Id. Instead, in the absence of legitimate or arguable reasons, the trial court must find that the insurer committed a willful or malicious wrong, or acted with gross or reckless disregard for the insured's rights. Id. In the procedural context of this case, proceeding de novo, we review the evidentiary matter and ask whether any genuine issue of material fact exists with respect to the allegations of bad faith so as to deny the insurer judgment in its favor as a matter of law. The preceding discussion in Part I demonstrates without doubt that Federated Guaranty had a legitimate and arguable basis in law for denying Cossitt's uninsured motorist claim, regardless of whether we hold that Federated Guaranty is liable or not to pay the amount of uninsured motorist coverage. The existence of such an arguable basis in law utterly preclude[s] the submission of the issue of punitive damages to the jury, and therefore, the lower court was correct in granting to Federated Guaranty judgment as a matter of law on this aspect of Cossitt's bad faith claim. Pioneer Life Ins. Co. of Illinois v. Moss, 513 So.2d 927, 930 (Miss. 1987); State Farm Fire & Cas. Co. v. Simpson, 477 So.2d 242, 252 (Miss. 1985). Alternatively, Cossitt asserts that Federated Guaranty's conduct in refusing to pay at least the $1,000.00 in medical coverage it admitted owing created a sufficient factual issue of bad faith and punitive damages which Cossitt was entitled to have submitted to a jury. Cossitt contends that Federated Guaranty refused to make the medical payments it admitted owing because it wanted to force Cossitt into a position of compromise via forced litigation. In sum, Cossitt appears to be alleging an intentional refusal by Federated Guaranty to pay a legitimate and undisputed claim. The failure of Federated Guaranty to make any medical payments to Cossitt is a result of the following post-accident developments: (1) Jan Cossitt filed a notice of loss which was reported to the office of Federated Guaranty's District Claims Manager on May 2, 1984; (2) The claim was assigned to Ramsey Claim Service in Clinton, Mississippi, on May 4, 1984; (3) Following assignment to Ramsey, Ramsey took a statement from Cossitt on May 24, 1984, per the request of Federated Guaranty's District Claims Manager. This statement revealed that Cossitt's medical expenses would almost assuredly exceed $10,000.00; (4) Following this statement, Ramsey Claim Service wrote the District Claims Manager requesting advice on Cossitt's available coverage; (5) On June 12, 1984, the District Claims Manager advised Ramsey that Cossitt had $1,000.00 in medical coverage under the policy; (6) A declaration sheet for Cossitt covering the period from June to September, 1984, was mailed to Ms. Cossitt; (7) On July 10, 1984, the District Claims Manager advised Ramsey to secure proof of loss from Cossitt and pay her what is owed, assuming she had not settled with the insured; (8) The District Claims Manager received a letter from Cossitt's attorney on July 26, 1984, requesting more information on the medical coverage available to Cossitt under her policy of insurance. This inquiry concerned dispute over three areas of Cossitt's policy, one indicating a $1,000.00 medical limit, one indicating a $5,000.00 medical limit, and one indicating that payment would be made for all expenses incurred within one year; (9) Ramsey again wrote the District Claims Manager in regard to the confusion over the various coverages alluded to by Cossitt's attorney; (10) The District Claims Manager advised Ramsey on August 6, 1984, that Cossitt was entitled to $1,000.00 in medical benefits; (11) The District Claims Manager received a letter from Ramsey on August 9, 1984, advising that Cossitt's attorney had been informed of the availability of $1,000.00 in medical benefits, and that Ramsey was closing its file. The District Claims Manager kept his file open awaiting submission of medical bills from Cossitt; (12) Cossitt's attorney wrote Ramsey Claim Service on April 5, 1985, again requesting clarification of medical coverage; (13) On April 11, 1985, Ramsey wrote to the District Claims Manager concerning the continued confusion over the amount of medical coverage under Cossitt's policy; (14) The District Claims Manager sent a copy of the declaration sheet on Cossitt's policy to Ramsey on April 16, 1985; (15) As of October 1, 1985, Cossitt still had not provided any proof of loss by way of medical bills or reports; (16) The District Claims Manager wrote Ramsey on October 8, 1985, informing Ramsey that Federated Guaranty would pay $1,000.00 in medical benefits upon submission of appropriate proof of loss; (17) The District Claims Manager wrote Cossitt's attorney on either October 12, 1985, or October 18, 1985, to advise him that Federated Guaranty would pay $1,000.00 in medical benefits if Cossitt would furnish proper evidence of proof of loss; (18) Cossitt's attorney wrote the District Claims Manager on October 29, 1985, again disputing the $1,000.00 medical benefit limit; (19) Cossitt sent all medical bills to the District Claims Manager for Federated Guaranty on November 1, 1985; (20) Cossitt's file was transferred to Harold Cain on January 3, 1986; (21) On February 4, 1986, Federated Guaranty filed for declaratory judgment on the issue of uninsured motorist coverage, while the medical benefits remained unpaid; Up to November 1, 1985, when Cossitt supplied proof of loss, there is no genuine issue of material fact as to the allegations of bad faith refusal to make medical payments. Consequently, Federated Guaranty was correctly awarded judgment as a matter of law that it evidenced no acts of bad faith. The policy made submission of proof of loss a condition precedent to payment of medical benefits, and this Court has recognized that, in the absence of waiver, punitive damages are not recoverable for failing to make medical payments where the insured failed to furnish the required medical reports and authorizations. New Hampshire Ins. Co. v. Smith, 357 So.2d 119, 121 (Miss. 1978). Federated Guaranty admits in its brief, however, that the condition precedent to its obligation to pay was satisfied on November 1, 1985, when Cossitt submitted the proper medical bills and reports. Its failure to make payment since renders our inquiry a bit more problematic. Federated Guaranty argues that it has always been willing to pay $1,000.00, but Cossitt has yet to give any indication whether it would accept the payment of $1,000.00 in full or partial satisfaction of Federated Guaranty's obligation. It seems, however, that having admitted owing at least $1,000, it would not devolve upon Cossitt to extend an all or nothing acceptance. Federated Guaranty became duty bound, by its own admission, to pay at least $1,000 on November 1, 1985, when Cossitt submitted proof of loss. At a minimum, Federated Guaranty should have paid the $1,000 it admitted owing into the treasury of the court, and leave to the court the question of whether this payment constitutes full or partial satisfaction of its obligation to Cossitt. On this record, we simply cannot tell whether any genuine issue of material fact exists with regard to Federated Guaranty's alleged bad faith in failing to make at least $1,000 in medical benefit payments to Cossitt. Short of holding that a jury issue has been created, we remand to the trial court for the limited purpose of allowing the additional development of facts surrounding Federated Guaranty's failure to pay medical benefits to Cossitt following November 1, 1985. It may develop on remand that Federated Guaranty is indeed entitled to a summary judgment on this limited issue, or that a jury question is presented. On these questions we express no opinion; we only hold that the evidentiary matter before us is insufficient to justify summary judgment in favor of Federated Guaranty as to its alleged bad faith in refusing to make medical payments to Cossitt following her submission of proof of loss on November 1, 1985. Therefore, the lower court correctly granted summary judgment for Federated Guaranty on the issue of bad faith refusal to pay uninsured motorist benefits, and medical benefits prior to November 1, 1985. However, a further development of the facts is necessary before the question of bad faith refusal to pay medical benefits after November 1, 1985, can be answered.