The opinion of the court was delivered by: Garnett Thomas Eisele United States District Judge
Presently before the Court is Plaintiff's Petition for Statutory Penalty and Attorney's Fees.
In 1991, Plaintiff, Dr. James Burgess, purchased a disability insurance policy from Continental. At some point Continental assigned the obligations under the Policy to Trustmark, who began collecting the premiums from Dr. Burgess. The Policy, designated TV2308, provided for the payment of $14,000 per month after the 90 day elimination period in disability benefits for Dr. Burgess' lifetime if the disability commences before age 65 "resulting from injury," "to age 65 for disability commencing after age 60 resulting from sickness." Injury is defined as "accidental bodily injury that occurs while Your policy is in force and results directly and independently of all other causes in loss covered by the policy." Sickness is defined as "sickness or disease which is diagnosed or treated while Your policy is in force."
On July 31, 2004, Dr. Burgess was in an accident involving a tractor. He states that he attempted to return to work, but extreme pain prevented him from continuing. An MRI indicated that he had ruptured a disc, which exacerbated spinal stenosis, which Dr. Burgess claims he was unaware of having. Dr. Burgess left his medical practice in September 2004. When steroid injections and physical therapy failed to provide relief, Dr. Burgess underwent a CT. A CT scan report dated December 27, 2004, listing Ron Williams as physician and signed by Dr. Jeffrey Hale, states, "Incomplete fracture," indicating "L-4."
On March 18, 2005, Trustmark sent a letter to Dr. Burgess stating in part: We would like to take this opportunity to outline the status of your claim under policy number TV2308.*fn1
As previously outlined to you, the policy defines Injury as follows:
"Injury means accidental bodily injury that occurs while Your policy is in force and results directly and independently of all other causes in loss covered by the policy."
We recently had your file reviewed by our Medical Consultant, a board-certified Neurologist. The Medical Consultant opined that your medical condition is mainly due to facet disease causing spinal stenosis. In addition, Dr. Williams' September 28, 2004 office note states that you complained of six months of back pain.*fn2 Furthermore, it appears that your alleged injury may have exacerbated the symptomatic facet disease, however, your medical condition does not appear to be solely due to an Injury "directly and independently of all other causes."
Therefore, your claim will be considered under the Sickness provision of the policy. Benefits are payable to the first anniversary date of your policy following your 65th birthday (February 16, 2008) for conditions due to the result of a Sickness.
Plaintiff asked Ms. Karen Burgess, Plaintiff's daughter-in-law, for help in pursuing his claims on his Trustmark disability policy. She states in her affidavit that in March 2005, after receipt of the letter "rejecting Dr. Burgess' injury claim," she informed Dr. Burgess that they would need to collaborate with a law firm in Little Rock. Mr. Coulter of Wilson, Engstrom, Corum and Coulter in Little Rock states in his affidavit that he first became involved in the case in March 2005.
In his affidavit, Mr. Coulter states that Trustmark had access to the December 2004 CT scan well before the March 2005 letter and for the entire time that he had been involved in the matter. Plaintiff Dr. Burgess alleges that he provided every medical release and record Trustmark requested.
On April 20, 2005, Mr. Coulter sent a letter to Trustmark stating, "we anticipate filing suit alleging that Dr. Burgess is entitled to full disability benefits for the rest of his life because he was disabled on an accident on his farm." Additionally, the letter stated that Dr. Burgess was going to negotiate the check sent to him without waiving his claim under the policy for the full payment under the "injury" provision of the policy. The letter also stated that the "check you have tendered is for payments that Trustmark owes regardles of whether the 'sickness' or 'injury' provisions govern the carrier's duties. . . . If you take a different position with regard to this, then you should notify us immediately." On April 28, 2005, Trustmark sent a letter to counsel for Dr. Burgess, including enclosed copies of letters dated December 9, 2005, and March 18, 2005, stating in part,
Our decision was based upon the information we had available to us at the time of the decision. We would be happy to review any other information you wish to submit in regards to Dr. Burgess' claim. Again, please be aware that according to the terms of the policy, Injury is defined as: [restating definition].
The letter agreed with the assessment that the money previously sent to Dr. Burgess is payable regardless of the classification of "sickness" or "injury." The letter also stated that a representative of Trustmark "may have the opportunity to be in your area in the coming months. Please advise us of your availability to set up a mutually convenient time to meet."
On May 20, 2005, Dr. Burgess entered into a Contingent Fee Agreement with Mr. Nate Coulter and Ms. Karen Burgess to represent him with regard to his claims. The agreement provided that Dr. Burgess would "pay the law firms one-third (33 1/3%) of the gross amount collected." In his affidavit, Mr. Coulter states that he met with Trustmark's Field Claim Representative on July 6, 2005. According to Mr. Coulter, they discussed the fluctuations in Dr. Burgess' income, substantial farming losses arising out of the sale of some horses, Dr. Burgess' "history of back problems," a part-time job for the U.S. Air Force at a base, and a penalty on Dr. Burgess' retirement account. Mr. Coulter states that he ...