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SEPTEMBER 11, 1985



Bankers Life and Casualty Company (Bankers Life) is a health and accident insurance corporation with principal offices in Chicago, Illinois. Lloyd M. Crenshaw is a resident of Pascagoula. Bankers Life appeals from a jury verdict and judgment of the Jackson County Circuit Court in favor of Crenshaw of $20,000 actual and $1,600,000 punitive damages, arising out of a claim for accidental loss of a lower right leg, alleged to be covered under a Bankers Life group insurance policy Crenshaw had through his employer, White Stores in Pascagoula, a subsidiary of City Products Corporation.

The main issues of this appeal are whether the question of punitive damages should have been submitted to the jury, and the propriety of the amount awarded.

We find the issue of punitive damages was properly submitted to the jury. A majority of the Court is of the opinion that the judgment of the lower court

 should be affirmed in its entirety.



 On January 18, 1979, Crenshaw's right leg was amputated about six inches below the knee by surgeons at Keesler Air Force Base Hospital. At the time he was 61 years old. Previous to that date Crenshaw had injured his right foot; however, there is some discrepancy in the record as to the precise date of the injury and nature of the trauma. We will give both Crenshaw's version and the history set out in the medical records.

 January 6, 1979, was a Saturday. That evening he was working on his car's alternator when part of it rolled off his work bench and struck the front part of his right foot, just below where his shoelaces would have been had he been wearing shoes. Instead, he only had on socks and house slippers. He replaced the alternator on the car.

 When he removed his house slippers, his foot was red and bruised, but not swollen. The skin was not broken. That night he took some aspirin.

 The next day, Sunday, January 7, Crenshaw noticed that his foot had swollen during the night. He hobbled around the house that day, soaked his foot in warm water, and rested on his couch.

 On Monday afternoon, January 8, Steven Crenshaw, an adult son living with his parents, drove Crenshaw to the Keesler base hospital, where he was seen in the emergency room. He was given medications and told to stay off his foot as much as possible.

 Crenshaw testified he returned to the hospital, but did not state whether it was the next day or two days following. On this trip he said his foot was x-rayed and he was given a blood test. A splint was put on his leg and he was given crutches. On this trip he was told to keep his foot elevated. Crenshaw testified when he elevated his foot that this eased the pain.

 He made another trip to the emergency room when he was again checked, and released home. He returned Friday, January 12, at which time the wrapping was

 removed and he was again sent home.

 The following day Crenshaw's foot was swelled again and had turned dark. On Sunday, January 14, his wife drove him back to the hospital, at which time he was admitted. Different Air Force physicians examined Crenshaw on his previous trips to the hospital.

 During the week he was at home following his second visit to the hospital, Crenshaw stayed in bed, and in the day was not in great pain. At night, however, the pain increased and he could not sleep. When he first elevated his foot it hurt worse, but the pain would eventually ease. He characterized the injury to his foot as a bruise, with the pain so great he could not walk on it. Medication helped to ease the pain.

 Mrs. Crenshaw saw her husband's foot the night of his injury. She said it was red and bruised looking, but the skin was not broken. She testified that the next day it started swelling and getting bluish-red looking.

 Steven Crenshaw said the night his father injured his foot there was swelling, but that a" little black bruise on top of his foot "did not show up until the next day.


 The first medical record of this injury is a January 9, 1979 (Tuesday), emergency room report. That report states:

 61 year old white male complaining of pain in right foot. Patient was driving auto and hit pole with foot on brake yesterday. Unable to stand on foot. Patient soaked foot in hot water last nite.

 Chief complaint: tingling across dorsum (top) toes of right foot, acutely tender at great right toe.

 O: swollen, tender right midfoot, especially base right first metatarsal (great toe). *fn1

 Dorsalis pedis palpable (an artery in the foot, a continuation of the anterior tibial).

 This January 9 report shows the x-ray negative, and

 the urinalysis (for possibility of gout) as normal.

 Crenshaw was diagnosed as having a" ligamentous injury metatarsal right foot ". There is also a notation that the examiner discussed the case with Dr. Morrow, an orthopedist, and after consultation, a splint was applied, and Crenshaw was given analgesics for pain. He was given crutches, told not to bear weight on his foot, and told to return in a week to see an orthopedist. The examining physician was Dr. Thomas E. Scott, a resident.

 There is also a sheet headed" CLINICAL RECORD - CONSULTATION SHEET ", which apparently is a request for consultation with the orthopedist. It is dated January 9. Under the sub-heading" Reason for Request "is the following handwritten notation:" 61 year old white male struck on ball right foot with rebounding clutch. X-rays no fractures or dislocation. Please follow up ligament injury mid-foot. "The provisional diagnosis is:" ligament injury 1st metatarsal-tarsal joint. "This sheet is also signed by Dr. Scott, and the requested orthopedist is Dr. Morrow.

 He was next seen January 11, with this notation:" Patient returned out of pain meds, was given 30 percodans 9 Jan 79. "Dr. Scott, the physician on January 11, was concerned that Crenshaw might be taking too much pain medication. Dr. Scott told Crenshaw to return to the orthopedist as planned.

 The records show Crenshaw was seen on January 12 by Dr. Henry J. O'Neal, an internal medicine intern. Crenshaw presented himself as being out of pain medication. He also complained that he was not obtaining relief from the medication. There were no diagnostic tests run on either the January 11th or 12th visits.

 The records show Crenshaw returned on January 14th and was again seen by Dr. O'Neal. Noted were swelling and red streaks progressing up the lower extremity, the foot swollen, and toes blue. A blister was noted on the back of his foot. The pulses were not palpable. There was a decreased sensation to pinprick of his extremity. There was also a mild enlargement of lymph nodes in the groin. X-rays to determine gangrene showed no gas in the soft tissues of the affected extremity. The red blood cell count was normal. The white blood cells were elevated to 13,300, being above the upper limit normal of 10,000. Dr. O'Neal's impression was a superficial infection with swelling and decreased

 vascular flow.

 Dr. O'Neal noted the need for a surgery consultation, and Crenshaw's condition was recognized as being serious enough for him to be admitted to the hospital.

 Dr. Dan L. Locker, chief resident on vascular surgery, examined Crenshaw, and his report that day recites the following:

 Ext. (external) - RLE (right lower extremity) - pitting edema from knee distal

 Pop (popliteal) doppler - strong

 PT (posterier tibial) - present 2 cm above mallelous - weak monophasic

 DP (dorsalis pedis) - present 2 cm above ankle line - weak monophasic

 Perineal - present - biphasic at ankle line

 Foot is pale - white with mottling Vth toe purple - distal half

 Sensation decreased distal to MT-P (metatarsal - phalingeal) line

 A (diagnosis) - Cynasis 2 degrees (secondary) to swelling over 12 hr. duration confine to distal extremity (beyond ankle line).

 P (recommend) (1) Elevate (2) Anticoagulate with Heparin

 Pt Ed (Patient Education) Pt (patient) informed of options and hi prob (high probability) of loss of part of foot

 Staff - Pt. presented to Dr. Fontenelle who examined patient and agrees with plans.

 Dr. Torma also notified.

 Crenshaw was seen by Dr. Christopher T. Westphal, an Air Force general surgeon on January 17, 1979, who performed a surgical amputation on the following day. He was assisted by Dr. Dale V. Hoekstra, a Board certified orthopedist.

 Dr. Westphal's operation report, dated January 23, in pertinent part states the following:


 Vascular insult, right foot

 * * * *


 Same * * * * *


 The patient was found to have an ischemic right foot with a necrosis of the distal aspect. This was amputated in the manner about to be described. [Emphasis added]


 The patient was administered epidural anethesia. His right lower extremity was prepped and draped in a sterile manner. A tourniquet was applied with 450 mm. of mercury with a total tourniquet time of 14 minutes. A fishmouth apex of the incision approximately 6" below the tibia plateau. The anterior and posterior vessels were identified and ligated. Similarly, the peroneal vessels were identified and ligated with 2-0 silk suture material. The greater and lesser saphenous veins were also identified and ligated. The remainder of hemostasis was assured with electrocautery. At the time of operation, the stump was noted to be extremely ischemic and the muscles somewhat dusky looking with a little free bleeding at the time of operation. The posterior tibial nerve was grasped, cut and allowed to retract. The periosteum of the tibia was incised and elevated. The tibia was divided with a saw. Similarly, the fibula was divided approximately 1 "shorter than the tibia. . . A Penrose drain was inserted

 in the base of the wound with the ends of the drain coming out of the incision bilaterally.


 The January 22 pathology report of the stump, notes:" Vasculature is unremarkable. The skin is mottled up to 5 cm. above the digits. "It concludes as follows:


 Dr. James P. Durning, Resident in Surgery, prepared the Narrative Summary of Crenshaw's problems on February 2, also signed by Dr. Locker. The pertinent portions of this summary read as follows:


 14 January 79


 Lloyd Crenshaw is a 61 year old white male who presented to the emergency room at Keesler Medical Center on 14 Jan 79 with a complaint of pain in his right foot. The patient was one week status post injury to his right ankle in an auto accident. The patient had been previously seen in the emergency room and was told to remain off his leg and keep it elevated. The patient failed to do this at home, and came in complaining of right foot pain. On presentation to the emergency room, the foot was noted to be painful, bluish-white, cool to exam, with absent distal pulses. The patient was admitted, placed on Heparin therapy, and the foot was elevated.


 The review of systems was essentially unremarkable. The patient has no history of pulmonary, cardiac or bowel disease.

 His chief complaint was as noted above. Past medical history was also unremarkable. Past surgical history was remarkable for an appendectomy in 1951 and lysis of adhesions in 1977. Family history was noncontributory. The patient is a heavy tobacco user. He uses occasional alcohol. He was on no medications at the time of admission.


 Clinical findings on admission indicated a well developed, well nourished white male. HEENT were unremarkable. Pulmonary examination revealed good breath sounds bilaterally without any rales or rubs. Cardiac exam was unremarkable. No murmurs were heard. Abdominal exam was also within normal limits with a soft, non-tender abdomen and a long midline surgical scar. Examination of the extremities was remarkable for a blue and cold, paresthetic right foot. There were no auscultable pulses in the foot. Necrosis of the distal toes was also noted.

 * * * * *


 Chest x-ray was unremarkable. X-ray of the right lower extremity did not reveal any gas indicative of gas gangrene.


 The patient was admitted and placed on strict bedrest with elevation of the right leg. He was also placed on Heparin therapy at the time with constant monitoring of PT and PTT. Despite adequate heparinization, the foot failed to resolve. On 18 Jan 79, the patient was transferred to the Surgery A Service and underwent a right below the knee amputation. Amputation was performed under the direction of Dr. Locker and Dr. Hoekstra of the Orthopedic Department. Postoperatively, the patient did well. The stump has

 been healing well.

 * * * * *


 1. Anterior compartment syndrome, right

 2. Ischemia of right leg.

 [Emphasis added]

 On April 9, 1979, Crenshaw filled out a proof of claim on the Bankers Life form, with a medical authorization for the insurance company to obtain all medical information it needed from any physician or hospital. No physician's statement was executed on behalf of Crenshaw because of an Air Force regulation. Bankers Life was notified of this regulation, and also informed that the Air Force would reproduce photocopies of all medical records and send these. The narrative summary, Dr. Westphal's operation report, and the pathology report were sent to Bankers Life when Crenshaw made his claim.

 Bankers Life employed Equifax, Inc., an investigating agency, to investigate the claim. The agency interviewed Steven Frye, manager of the local store and also one of Crenshaw's neighbors, but did not obtain any medical records. Its report dated April 24, 1979, concluded:

 SUMMARY/SUGGESTION: We do suggest that you allow us to diary this case for some six weeks and go back into the area to interview Mr. Crenshaw. He is at the hospital five days per week, comes home on week-ends, and will be there an additional 5-6 weeks.

 Equifax was not requested to perform any further services for Bankers Life following this report.

 William J. Herzau was supervisor of the Special Risks Claim Unit of Bankers Life. In this department William A. Blessing and Robert N. Krol reviewed Crenshaw's claim along with Herzau.

 Dr. Nathaniel P. McParland *fn2 is a physician, specializing in general and vascular surgery, and also a salaried employee of Bankers Life as Medical Director. His responsibility was to make medical judgments on claims,

 a job which constituted one-fifth of his practice.

 Donald Lemersal was one of seven full-time attorneys constituting the legal department.

 These individuals participated in the decision making process of Crenshaw's claim.

 On June 19, 1979, Herzau sent Dr. McParland a memo explaining the final diagnosis, Banker's Life position and requesting an evaluation.

 Dr. McParland replied by memo to Herzau the same date.

  TO: William Herzau

  FROM: N. P. McParland, M.D.

  * * * * *

  Mr. Crenshaw's records have been reviewed. Noted is the absence of the record of the original injury. However, Mr. Crenshaw's loss of limb was not because of an anterior compartment syndrome, but because of severe arteriosclerotic changes in his distal blood vessels and subsequent ischemia and necrosis. The operative report indicates the obstructing arteriosclerotic area most likely is in the femoro popliteal artery area though no mention of the femoral or popliteal pulses is noted.

  Mr. Crenshaw will most likely require further amputative surgery. *fn3

  On July 11, 1979, Herzau wrote Mrs. Marilyn Doyle, Administrator of Employee Benefits of City Products Corporation, Crenshaw's employer:

  We now have the facts needed to service your claim.

  The above captioned policy is an accident only policy defining injury as:

  " Injury wherever used in this policy means bodily injury causing the loss while this policy is in force, directly and independently of all

  other causes and effected solely through an accidental bodily injury to the insured person. "

  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 and not due to an injury as defined above. Therefore, we cannot identify that a covered loss has occurred under the terms and interpretations of the policy. [Emphasis added]

  So, we sincerely regret that no benefits are payable.

  If we have in any way misinterpreted the information furnished us, or if there is additional information we ...

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