Opinion ID: 1097684
Heading Depth: 2
Heading Rank: 2

Heading: Bankers Life Had An Arguable Reason For Its Refusal To Pay Crenshaw's Claim

Text: Bankers Life and Casualty Company did not rely merely upon the intuitive implausibility of Lloyd M. Crenshaw's claim when it denied that claim, pre-suit and at trial. Rather, Bankers Life consulted a highly qualified specialist [1] in vascular diseases who  pre-trial and at trial  gave an unequivocal opinion that the sole cause of the amputation of Crenshaw's leg, as distinguished from the pain and soreness in his big toe, was a preexisting arteriosclerotic condition. This was no idle expert opinion. Every shred of medical evidence on the point reflected that the 61-year old Crenshaw had long suffered progressively worsening arteriosclerotic changes in the blood vessels of his right leg. Well prior to January 6, 1979, Crenshaw's years as a chain smoker had played a substantial part in producing the condition, the net effect of which was that the blood flow into Crenshaw's right leg had stopped below the knee. Because of the blood stoppage near the knee, any trauma to the big toe could not have borne a causal connection to the subsequent amputation. Dr. McParland illustrated the point quite simply. The claim that trauma to Crenshaw's big toe caused the blood stoppage below the knee would be similar to dropping a tree in a dry river bed and saying that two miles up the stream there is no water because it's the tree's fault. Dr. McParland was of the opinion that, if the falling alternator had been the culprit, at most only a part of the foot would have had to be amputated. Only the preexisting severe arteriosclerotic conditions could have required the amputation which was in fact performed. Confirming the intuitive view that dropping an alternator on one's big toe should not lead to the amputation of one's leg and broadening our perspective, Dr. McParland made clear that arteriosclerosis frequently leads to amputation sans trauma. Q. Doctor, is it probable, to a medical probability, that one could suffer a severe arteriosclerosis condition and have to undergo limb amputation without the onset of trauma? A. That's the usual. Generally speaking, only trauma of bone-crushing proportions (which Crenshaw's trauma clearly was not) leads to amputation. [2] Substantial evidence in the record supported Dr. McParland's opinion as to the cause of the amputation. The surgeon's report indicated no bleeding when the tourniquet was removed following the surgery. The pathology report of the amputated stump concluded Right foot and lower leg: severe arteriosclerosis of the arteries. Gangrenous necrosis. This strongly supports Dr. McParland's ultimate opinion regarding causation. [3] The proper context for understanding the issues tendered begins with acceptance of the notion that the unanimous opinion of the medical experts was that the arteriosclerotic disease suffered by Crenshaw in his right leg was even on the view most favorable to Crenshaw, an underlying cause of the amputation. The only issue was whether this pre-existing disease was the sole cause of the amputation or whether it combined with accidental trauma to cause the amputation. Of substantial importance and relevance is the testimony of Dr. Christopher T. Westphal, an Air Force general surgeon who performed the surgical amputation. [4] While he was of the opinion that the trauma was a precipitating cause of the amputation, together with the preexisting arteriosclerotic condition, Dr. Westphal conceded the plausibility of Dr. McParland's opinion. Employing terms taken from the majority opinion, Dr. Westphal said that Dr. McParland's thesis was perfectly conceivable (p. 265), a possibility (p. 265), and that one [such as Dr. McParland] could say it was just a coincidence that he [Crenshaw] had trauma, and would have lost his extremity, anyway; ... (p. 266) Dr. Westphal never questioned that Crenshaw had a preexisting arteriosclerosis causing a decrease to the blood flow in his right leg. [5] (p. 266) The third and final medical witness at trial was Dr. Hockaday, a general surgeon practicing in the Pascagoula area without substantial experience or expertise in vascular diseases. Dr. Hockaday was of the opinion that the amputation was caused by the combined operation of trauma and the preexisting arteriosclerosis. [6]
At the risk of stating the obvious, a point needs to be made here: With respect to the basic claim of Lloyd Crenshaw for benefits under the Bankers Life policy, there was a substantial dispute or difference of opinion among the medical experts as to whether Lloyd Crenshaw's dropping the alternator on his big toe bore a sufficient causal connection with the amputation so that policy benefits were payable. The jury resolved that dispute in Crenshaw's favor and, no doubt, because of the credible testimony of Drs. Westphal and Hockaday, the jury's determination in that regard is unassailable. Paymaster Oil Mill Co. v. Mitchell, 319 So.2d 652, 657 (Miss. 1975). The converse is likewise true. If the jury had returned a verdict in favor of Bankers Life on the liability phase of the underlying contract claim, that verdict too would have been beyond attack. Paymaster Oil Mill Co. v. Mitchell, 319 So.2d 652, 657 (Miss. 1975). To put the point another way, when at the conclusion of the evidence at trial Crenshaw requested a peremptory instruction on the liability feature of the underlying contract claim, that request was and necessarily had to be denied. Applying the Paymaster Oil rule, we should surely have reversed had the trial judge granted any such peremptory instruction. We see nothing in the majority opinion which questions this view of the evidence. Indeed, the majority's quite fair and evenhanded description of the expert testimony (pp. 264-268) belies the possibility of any such peremptory instruction having been appropriate. A related notion bears emphasis. Nothing said anywhere in this opinion proceeds upon or may be shown to depend upon acceptance of the proposition that Dr. McParland's opinion regarding the cause of Crenshaw's amputation was correct. Rather, the premises upon which this opinion rests are (a) that Dr. McParland was a qualified medical expert witness, see Hall v. Hilbun, 466 So.2d 856, 873-74 (Miss. 1985); House v. State, 445 So.2d 815, 822 (Miss. 1984), (b) that all necessary predicates to admissibility of his opinion regarding causation of the amputation were laid, (c) that Dr. McParland opined that the sole cause of the amputation of Crenshaw's leg was the arteriosclerotic disease process existing pre-January 6, 1979, and (d) this opinion was of sufficient force that, if the jury had found for Bankers Life on Crenshaw's underlying contract claim (assuming all other proof at trial remained the same), neither the trial judge nor this Court consistent with Paymaster Oil and progeny would have had authority to order entry in Crenshaw's favor of judgment notwithstanding the verdict. Until error be shown in one or more of these premises, it seems to my mind that we should reverse and render so much of the judgment as assesses punitive damages against Bankers Life. A positive statement of my view of the matter having been stated, back to the negative, an exposure of and exposition upon the majority's major errors.
The innuendos in the majority opinion to the contrary notwithstanding, the day of trial was by no means the first time when Bankers Life denied the underlying policy claim by reason of the proposition that the amputation was caused solely by the preexisting arteriosclerotic changes within Crenshaw's right leg. The record reflects that Dr. McParland rendered his first opinion to Bankers Life on June 19, 1979, and that the opinion he gave at that time was precisely the same as he gave at trial. From the outset Bankers Life relied on the opinion of Dr. McParland and denied the claim solely on that basis. The first time Bankers Life communicated its decision to deny the claim to anyone acting on Crenshaw's behalf was the July 11, 1979 letter William Herzau wrote to Crenshaw's employer in Pascagoula. That letter stated in pertinent part that according to the medical information we have, it appears that Mr. Crenshaw's limb loss was because of severe arteriosclerotic changes in his distal blood vessels and subsequent ischemia and necrosis.... [7] This was Bankers Life's first denial of the claim and the reason given was the same as that tendered at trial. On April 8, 1980, Bankers Life wrote to Crenshaw again denying the claim. Again Bankers Life gave as its reason for denying the claim that according to all the medical information we have, it appears your limb loss was due to severe arteriosclerotic changes in the distal blood vessels and subsequent ischemia and necrosis... . In this letter Bankers Life adds This opinion was confirmed in the pathology report. [8] A third pre-suit denial of the claim occurred on June 27, 1980, when Herzau wrote to Crenshaw's attorney and again gave as his reason that the operative report indicates the instructing arteriosclerotic area most likely is in the femoral or popliteal artery area although no mention of the femoral or popliteal pulses is noted. At trial Bankers Life offered this same basis for its denial of Crenshaw's claim. See, for example, Mr. Lemersal at R. 869: Q. Why was Mr. Crenshaw's claim denied? A. Because in the opinion of our medical director, the cause of the loss was a disease process. Mr. Blessing at R. 978: Q. Now, what was the basis that you used in denying the claim? What did you tell Mrs. Doyle to tell Mr. Crenshaw? A. According to the medical findings which our doctor reviewed, the cause of the amputation was strictly due to a disease process and not due to any injury. Mr. Blessing at R. 909: Q. And the denial was based on Dr. McParland's report? A. Yes, it was. Mr. Herzau at R. 925: Q. If the alternator falling on the foot contributed to the injury ... if the alternator was considered to be an injury and contributed to a problem, I would guess it should be paid. This is what I was questioning. This is what I was trying to determine. Dr. McParland at R. 978: Q. Assuming there was trauma, from history, do you attribute any percentage of his loss to a trauma situation? A. Absolutely none. Q. And you conveyed your findings to the claims department at Bankers Life? A. I did. In short, Bankers Life's pre-suit position remained consistent from July 11, 1979 forward. That position expressed in three separate letters to Crenshaw or his representatives was substantially identical to the position taken by Bankers Life at trial. It is disingenuous to suggest that Bankers Life ever relied on any basis for denying the claim other than the view that the sole cause of the amputation was the pre-existing arteriosclerotic condition in Crenshaw's leg.
The majority complains at length that Bankers Life failed to disclose to Dr. McParland all of the medical records in the case and particularly the emergency room report. This is much ado about nothing. The majority opinion never makes quite clear just what it is that Dr. McParland would have learned from the medical records he did not have prior to trial that would have informed his opinion or would have been arguably inconsistent with his opinion. We can only presume that it is the fact of trauma, for it is true that at the outset Dr. McParland was proceeding on the assumption that there was no trauma. In this connection we note a sampling of the medical records regarding the history of Crenshaw's trauma and to begin with the emergency room report of January 9, 1979, states that Crenshaw driving auto and hit pole with foot on brake. (p. 257) On January 9, 1979, a clinical record states that Crenshaw struck on ball right foot with rebounding clutch. (p. 257) Then on January 14, 1979, a report states that Crenshaw injury to his right ankle in an auto accident. (p. 259) Suffice it to say that these reports are not remarkable for their accuracy. Yet the majority says Dr. McParland should have had them. Dr. McParland was cross-examined about this supposedly significant failure on the part of Bankers Life's claims personnel to furnish him all of the medical records. This exchange is revealing. Q. Well, Doctor, the question I'm trying to get at is that you didn't get the full medical records of Lloyd Crenshaw until about two weeks ago; did you? A. All those medical records ... no, I didn't. But all they do is confirm the facts that the man had no blood going down his leg. It's just confirmation. It didn't add anything to the ... to the disease which was present, and the records are not going to change. What he had, he had. What he's got, he's got ... and he's going to have it. Q. And it's not significant to you at all the fact that Lloyd Crenshaw is sixty-one years of age, is an active person, worked up until the time of his amputation and then sometime thereafter as much as forty hours regularly every week, plays golf, goes dancing ... that doesn't mean a thing. A. No. I did the same operation on a professional dancer. It doesn't make much ... you know, until its completely occluded, it doesn't make that much difference. You still have some blood supply. Q. Doctor, would you agree with this? Is it possible to drop something on your foot to aid in occlusion? Is that possible? A. It's possible if you break some bones and if you have a crushing injury. Q. In other words, it would have to be a most crushing injury then. A. Yes, it would. It's always associated with broken bones. And if you don't have a pulse down there, it doesn't make any difference what you drop on it. There's still no pulse, whether you drop it or don't drop it. The surgeon said there was no blood going down there, and you can't change that. [9] We recognize, of course, that there is evidence in the record that may be seen in conflict with that which Dr. McParland relied upon. The majority notes evidence of a pulse below the amputation site. (Majority opinion, p. 276, footnote 9). Coupled with the description given of the trauma experienced by Crenshaw on January 6, 1979, it also furnishes a basis for concluding that Crenshaw's attending physicians and surgeons may have performed an unnecessary amputation. In any event, for present purposes this merely furnished a basis for cross-examination of Dr. McParland and for argument to the jury that respecting Crenshaw's underlying policy claim, Dr. McParland's opinion should not be credited. Such evidence in no way undercuts the power of Dr. McParland's opinion to furnish Bankers Life with an arguable reason for its refusal to pay Crenshaw's claim. The point is this. When Dr. McParland testified at trial, he had reviewed all of the medical records. His opinion remained what he had stated before: that the amputation was caused by the preexisting arteriosclerotic condition in Crenshaw's right foot. There is nothing in the fact of trauma, whether that consists of Crenshaw's dropping an alternator on his big toe or the variations thereof in the records recited above, which is necessarily inconsistent with what Dr. McParland stated. For this reason it is likewise of no great significance that these records were not furnished to Dr. McParland ab initio. While it would obviously be the better practice to furnish the physician who has to give an opinion in such matters all medical reports, one cannot on these facts say that this failure had anything to do with the opinion Dr. McParland originally reached or subsequently delivered by trial. What we have in a nutshell is an arguably sloppy practice which is of no practical or legal consequence here.
Of all of the errors in the majority opinion, the most egregious is that found at pages 274-276. It is here that the majority seeks to discredit Dr. McParland as an expert witness on behalf of Bankers Life. Various tactics are used. That Dr. McParland is a salaried employee of Bankers Life who derives approximately twenty percent of his income from work for Bankers Life is somehow seen as pernicious. [10] The majority goes on to cite the opinion of the other two doctors in the case as well as several medical texts to show that Dr. McParland was wrong. What becomes quickly apparent is that the majority opinion is a combination of a cross-examination of Dr. McParland and jury argument to the effect that the good doctor's opinion should not be credited. That such advocacy is inappropriate requires neither explanation nor citation of authority. I have read pages 274-276 repeatedly searching for a suggestion, first, that Dr. McParland should never have been allowed to testify or, second, that after he testified his testimony should have been excluded or, ultimately, that Dr. McParland's testimony was so incredible that notwithstanding same Crenshaw was entitled to a peremptory instruction in his favor on the underlying contract claim. None of these suggestions are made. Absent such, the majority opinion discredits itself. The majority's opinion treats as somehow significant that McParland was a paid part-time employee of Bankers Life, deriving approximately twenty percent of his income from services rendered to Bankers Life. This was and is a legitimate topic for cross-examination, for it may be said to go to the witness' credibility. How the point is relevant on this appeal, however, escapes me. Suppose Dr. McParland had been situated the same but only ten percent of his income came from Bankers Life? Only five percent of his income? Only one percent of his income? Would we still find such evil in this arrangement? Suppose on the other hand that Dr. McParland were not a salaried employee but rather functioned according to the classical arrangement labeled independent contractor? The majority seems to imply that this would make a difference. But suppose that Dr. McParland's work as an independent contractor in fact resulted in twenty percent or more of his income being derived from services rendered to Bankers Life. It is with our judicial knowledge that many physicians perform medical services for various business, commercial and industrial concerns on an independent contract basis. These physicians frequently are called to testify in a variety of types of proceedings. I have never heard of anyone suggesting that this Court should castigate the credibility of such a witness because of his relationship to the defendant company. And I might add that it is within our knowledge that there are a number of physicians who testify regularly on behalf of injured persons who are plaintiffs in civil actions or claimants in workers' compensation proceedings. This too is and has always been recognized as a legitimate subject for cross-examination. Still I have never heard of a court castigating the credibility of any such plaintiff's physician. What the majority is doing in pages 274-276 is unprecedented in our jurisprudence. The undisguised advocacy there found and the absence of any citation to law or logic supporting such an approach to a party's expert witness should be sufficient to establish the error of the majority's approach.
Remembering that our core question is whether Bankers Life had an arguable reason for refusal to pay Crenshaw's claim, the majority's dispatch of Bankers Life's reliance upon Dr. McParland's opinion is further troublesome. I would have thought it a relatively uncontroversial proposition that, where the outcome determinative question is medical in nature, an insurer's reliance upon a physician's opinion would as a matter of law furnish an arguable reason for denial of a claim. I would have thought this particularly so against the backdrop of our decisions in Blue Cross and Blue Shield of Mississippi, Inc. v. Campbell, 466 So.2d 833 (Miss. 1984) and Consolidated American Life Insurance Co. v. Toche, 410 So.2d 1303 (Miss. 1982). In Blue Cross we held as a matter of law that an insurer had an arguable reason for refusal to pay a hospitalization claim where the insurer relied on the opinion of a registered nurse. In Consolidated American it does not appear that the claims adjuster who rejected the claim relied on an expert medical opinion at all, in the context of which Justice Bowling in dissent chides the company for its failure to consult or seek an opinion of its full time medical director. 410 So.2d at 1307. Here Bankers Life consulted its medical director and relied upon his opinion. This generally ought to be enough. Peel v. American Fidelity Assurance Co., 680 F.2d 374 (5th Cir.1982) is quite important here. On analogous facts and applying Mississippi law, the Court of Appeals concluded that the findings and report of Dr. Attix [a physician retained by the insurer] that Mrs. Peel was not disabled to return to ... [work] constitute an arguable defense as a matter of law. Hence, the trial court correctly refused to submit the issue of punitive damages to the jury. 680 F.2d at 376. [emphasis added] The Peel case is cited prominently in Bankers Life's brief. The rule of law found in Peel  which is the Fifth Circuit's Erie -bound [11] articulation of Mississippi law  strongly supports Bankers Life's position on this appeal. Inexplicably Peel is not mentioned by the majority (although the majority shows great affection for other Fifth Circuit bad faith refusal cases applying Mississippi law). In this state and elsewhere the law is and ought to be that reliance upon the opinion of a qualified expert physician or surgeon should as a matter of law furnish an insurer an arguable reason for refusal to pay a claim. [12] To be sure there must be limits on such a rule, see Younan v. Equifax, Inc., 111 Cal. App.3d 498, 169 Cal. Rptr. 478, 487 (1980); Little v. Stuyvesant Life Insurance Co., 67 Cal. App.3d 451, 136 Cal. Rptr. 653, 659 (1977). Unless the Court holds that the medical expert was not qualified to give the opinion, or that his opinion was inadmissible because fraudulently rendered, the rule should hold. See Georgia Farm Bureau Mutual Insurance Company v. Troupe, 154 Ga. App. 108, 267 S.E.2d 834, 836 (1980); Hermitage Health and Life Insurance Co. v. Baggs, 115 Ga. App. 138, 154 S.E.2d 270, 273 (1967). In the case at bar Bankers Life sought the opinion of a physician highly qualified in the field of vascular diseases and surgery. That opinion was that the sole cause of the amputation of Lloyd Crenshaw's right leg was its pre-existing arteriosclerotic condition. Bankers Life relied on this opinion. With respect, there is no dispassionate basis upon which one might say this was anything other than a bona fide opinion entitled to credit. In my view such a medical opinion as a matter of law furnished Bankers Life an arguable reason for refusal to pay Crenshaw's claim. To do otherwise requires that we set ourselves up as medical experts (which is precisely what the majority ultimately does). The potential for mischief in such an approach is to my mind great and obvious.
An additional red herring needs to be dispatched. The majority claims that the basis for Bankers Life's denial of Crenshaw's claim was its alleged literal reading of a clause in the policy we held in Peerless Insurance Co. v. Myers, 192 So.2d 437 (Miss. 1966) unenforceable literally. This language is in the form of a policy definition of the term injury as meaning bodily injury causing the loss ... directly and independently of all other causes and effected solely through an accidental bodily injury to the insured person. In Peerless we held that, notwithstanding such a clause, recovery may be had where the accidental injury aggravates, renders active, or sets in motion a latent or dormant pre-existing physical condition or disease, which in turn contributes to the disability or death for which recovery is sought... . 192 So.2d at 439. True, Bankers Life quoted the language of the clause in its claim denial letters of July 11, 1979, and April 8, 1980. Those letters coupled with the August 18, 1980 letter to Crenshaw's attorney make clear that Bankers Life is relying ultimately upon the medical opinion of Dr. McParland that the sole cause of the amputation was the preexisting arteriosclerosis. The majority obfuscates this feature of the claim denial letters and insists (at pages 270-271 and elsewhere) that Bankers Life was relying on the Peerless -invalidated definition of injury. I cannot find these facts in any of Bankers Life's claim denial letters or anywhere else in the record. Having misfound the facts, the majority proceeds to find false comfort in the Fifth Circuit's decision in Richards v. Allstate Insurance Company, 693 F.2d 502 (5th Cir.1982). In Richards, Allstate denied a claim on the basis of a policy exclusion which this Court had previously held unenforceable in Lowery v. State Farm Mutual Automobile Insurance Co., 285 So.2d 767 (Miss. 1973). Rashly, the majority says This case is really worse than Allstate (p. 271). With respect, I would suggest that examination of the Richards case and this case and a careful comparison of the two reveals the majority's analogy to be so much wishful thinking. The basis for the superficial similarity between this case and Allstate is that Bankers Life refers in its denial letters to a definition of injury we held unenforceable in Peerless. What the majority overlooks is that the denial of this claim, both pre-trial and at trial, was not based on the unenforceable policy provision but was in fact made on the premise that the sole cause of the amputation was the preexisting arteriosclerotic condition in Crenshaw's right leg. I have been able to find nothing in the record to indicate that Bankers Life accepted the proposition that Crenshaw had sustained a trauma which aggravated the preexisting arteriosclerotic condition and then, ignoring Peerless, denied the claim by the literal invoking of the policy language. Even if it may be said that Bankers Life ignored Peerless in the same sense that Allstate ignored Lowery v. State Farm , we have here a wholly independent basis for the denial of the claim  Dr. McParland's opinion that there was no cause of the amputation other than the preexisting arteriosclerotic changes. In Richards v. Allstate there was no other basis for denial of the claim other than the exclusionary clause invalidated in Lowery v. State Farm .