Opinion ID: 2651525
Heading Depth: 3
Heading Rank: 3

Heading: July 20-October 4, 2006 (~11 weeks)

Text: State Farm argues its active investigation of James’s claim provides an arguable or legitimate basis for its payment delay. Because State Farm was not 11 Case: 11-60458 Document: 00512514313 Page: 12 Date Filed: 01/28/2014 No. 11-60458 actively investigating James’s claim during this time period, we hold that there is a question of fact as to whether James can satisfy her burden of demonstrating by a preponderance of the evidence that State Farm did not have an arguable reason for this eleven-week period of delay. During this time period, James continued to receive medical treatment for her injuries, about which she continued to apprise State Farm. On July 25, 2006, James reported to Powell that her doctors attributed her medical problems to the motor vehicle accident. On July 30, 2006, State Farm received a bill from Staggs, which indicated that James was being treated for a thoracic compression fracture. Although Powell’s July 20 review of James’s medical records recognized that James’s symptoms might be due to a pre-existing injury that would not be eligible for coverage under James’s UM motor vehicle coverage, State Farm did not act on this concern until October 5, 2006. On that date, Powell sent James a letter asking her to call to discuss the claim and, in the subsequent phone call, she apprised James of her questions about whether the injuries were caused by a pre-existing injury. The record does not show that Powell received any additional information bolstering her concern about a potential pre-existing injury during this time. Between July 20, 2006 and October 5, 2006, Powell spoke to James at least twice, but Powell admitted in her deposition that she did not discuss her pre-existing condition concerns “in detail.” Nor does the record provide any evidence that Powell raised these concerns with James prior to October 5, 2006. Because State Farm was not conducting any investigation during this time period, we conclude that it was not acting in accordance with its duty under Mississippi law “to perform a prompt and adequate investigation.” Broussard, 523 F.3d at 627 (citation omitted). State Farm has provided no explanation for its failure to inquire further into its concerns during this nearly three-month 12 Case: 11-60458 Document: 00512514313 Page: 13 Date Filed: 01/28/2014 No. 11-60458 period. Critically, State Farm does not point to any evidence in the record that Powell received any additional information during this time before she contacted James on October 5, 2006 to obtain prior medical records. It thus follows that Powell could have sought this information in July. Accordingly, we hold that James has satisfied her burden of raising a fact issue regarding whether State Farm had an arguable or legitimate reason for this eleven-week delay between July 20 and October 4, 2006.