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DECEMBER 19, 1984


ATTENTION: Claims Department


This letter comes to direct the check for claims of December, 1980, and April and June, 1981, be forwarded to my attorney, Leshe D. King in a check payable to the two of us.


 (Signed) William T. Campbell WILLIAM T. CAMPBELL 587-12-2682

 On August 28 King wrote Mrs. Guenin the following letter:

 This will acknowlege receipt of your letter under date of August 27, 1981, indicating a decision to pay towards the previously-denied charges. While my client is happy Blue Cross is now seeking to honor its contractual obligation, there are two points that must be clarified.

 First the check should be forwarded to my office and made payable to Mr. Campbell and my office jointly. The second and most difficult is the amount of the check. Because Blue Cross breached its obligation, my client has been forced incurr [sic] additional expenses in enforcement of this contract.

 The additional expenses incurred by Mr. Campbell equal to 1/3 of the covered medical expenses. My calculations place this total figure at $13,352.97.

 (Signed) Leshe D. King

 Sally McDavid, General Counsel for Blue Cross responded with the following letter to King, dated September 1, 1981:

 Dear Mr. King:

 Your letter of August 28, 1981, to Mrs. Linda Guenin has been forwarded to me for reply.

 As indicated in an earlier letter from Mrs. Guenin, the company has determined to pay contract benefits for services rendered Mr. Campbell which had been previously denied on the basis that the condition for which services were rendered pre-existed the contract effective October 15, 1980.

 Your calculation of total charges in your July letter, which enclosed the memo from Dr. Yeldell, was not complete. Attached hereto is a full summation of the charges and the payment due toward those charges in accordance with the contract.

 Mr. Campbell's contract calls for an annual $100 deductible, with the balance of covered charges paid at 80 percent, except that hospital room and board charges are paid at 100 percent of the semi-private room rate.

 According to claims we have received, the total charges for services rendered to Mr. Campbell are $13,028.65. Payment due under the contract for those services totals $10,574.92.

 Our original denial of benefits was based on medical records. The March 26, 1981, memo of Dr. Yeldell, included in your July 31, 1981, letter, had not been presented to our company before, and we were not aware of his position that time.

 The full benefits available under Mr. Campbell's contract, as set out above, are enclosed in a check made payable to Mr. Campbell and to you jointly. We do not make payments except for contract benefits.


 S/Sally McDavid

 Blue Cross's check payable to Campbell and to King in the amount of $10,574.92, dated September 2, 1981, was endorsed and cashed. *fn2

 From the proceeds of the check attorney King received $3,524.96, Campbell paid the hospital $3,000.00, a doctor bill of something less than $500.00, and kept the rest of the proceeds. *fn3

 Campbell had no written contract with King. He testified:" I didn't sign any kind of agreement. I hired him as my attorney to try and recover this bill Blue Cross wouldn't pay. "

 Campbell filed suit on October 5, 1981, and on July 27, 1982, filed an amended Declaration.

 When trial commenced on November 19, 1982, Campbell's amended complaint asked punitive damages in the amount of $100,000 and actual damages in the amount of $25,000, all predicated on the wrongful refusal of Blue Cross to pay his claim.

 The witnesses testifying for Campbell were: Campbell, Dr. Yeldell, and Charlene Oltremari Putnam, an insurance clerk with Delta Medical. Blue Cross offered two witnesses in defense, Patsy Cruz and Sally McDavid.

 Cruz is a Registered Nurse employed in the Medical Review Department of Blue Cross. Her department, consisting of five registered nurses and a medical doctor, reviewed claims to determine, among other things, if they were for pre-existing conditions. She testified from the records in this case that Mrs. Dianne Flowers, the registered nurse in the department, first reviewed the claim for the December, 1980, hospitalization. She said that Mrs. Flowers screened the claim and determined that she needed to order the History, Physical and Discharge Summary from the hospital to provide an opinion as to whether or not the condition was preexisting. She said that following receipt of these documents from Delta Medical, Mrs. Flowers was of the opinion that the condition was pre-existing. She said the physician Medical Director reviewed the records and agree with her that the condition was pre-existing and excluded under the policy. As to the December, 1980, hospitalization, Cruz testified:

 The medical records indicated that the pancreatitis was possibly due to alcoholism. The records

 further documented that there had been a problem with drinking alcohol for quite a while. The records also indicated that he may have an ulcer on admission and the records showed that the patient indicated that he had had ulcers in the past. Based on Dr. Yeldell's records from the hospital it appeared that the pancreatitis was due to alcoholism, or related to alcoholism and, there was nothing in the records in the Discharge Summary that disputed this or denied this and all of our medical resources tell us that this is possible and our Medical Director was in agreement.

 As to the corrected diagnosis on a claim form on May 21, 1981, Cruz testified that the Medical Review Department again reviewed the medical records, and they were the same as theretofore submitted, and the denial was maintained.

 As to the April, 1981, hospitalization, Cruz testified that they again ordered the History, Physical Examination and Discharge Summary which revealed that Campbell had again been treated for pancreatitis and active duodenal ulcer, confirmed by x-ray. Based on the exclusion of the contract and the records from the first admission indicating it was pancreatitis, they again denied the claim. The people involved in denying the claim were Mrs. Flowers and Dr. Caldwell, their Medical Director.

 She then testified that in August they received the letter from King, which had the statement in it from Dr. Yeldell indicating there was not a pre-existing condition. Prior to that time, Cruz testified they had not received any correspondence inquiry from anyone. She said that upon receipt of King's letter, she initiated a re-consideration; Nurse Flowers was no longer with the department. Cruz and Mrs. Guenin made a thorough review, and after reviewing the claim, Cruz authorized payment of all the claims. She said that Dr. Caldwell was out at the time because of illness.

 On cross examination Cruz testified that while the medical books did not diagnose" alcoholic pancreatitis, "and the medical diagnosis was" acute pancreatitis, "their statistics told them that alcoholism is one of the causes, in fact, one of the primary causes of acute pancreatitis. She further testified that the medical records in the case diagnosed the condition as acute pancreatitis, and that these records also showed alcoholism for a protracted period.

 The only person connected with Delta Medical who testified

 in this case, as above noted, was Charlene Oltremari Putnam, the insurance clerk. She had been employed about one and one-half years. When the claim was submitted, she testified:" I got back a thing stating they were not going to pay for a pre-existing condition, "and this was all she received. She said that the wrong diagnosis had been put on and she put the right diagnosis on the claim form. She said this claim and the two other claim forms for the other hospitalizations were all the documents that were submitted.

 She testified on cross-examination that requests for follow-up records were not made through her, but through medical records. All she did was file insurance.

 At the conclusion of the trial, the circuit judge granted Campbell five instructions on punitive damages. The jury made no award of punitive damages, however, finding in favor of Blue Cross on this issue.

 The circuit judge also granted an instruction to the jury authorizing an award for actual damages, which reads as follows:


 The Court instructs the jury that should you find from a preponderance of the evidence in this case that the Complainant, William T. Campbell has sustained actual damages as a proximate result of the actions of the Defendant, Blue Cross and Blue Shield of Mississippi, Inc., the Complainant, William T. Campbell, is entitled to a verdict in an amount which will reasonably compensate him for his loss. Such damages are called compensatory or actual damages and are ...

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