surgeon considered disabled due to loss of fingers despite continuing to practice general medicine
How later courts described this case
- surgeon considered disabled due to loss of fingers despite continuing to practice general medicine
Written by the judges who cited it.
The opinion
STATON, Judge,
concurring in part and dissenting in part.
I concur with the majority opinion except that part which deals with the award of punitive damages. The authority cited by the majority does not support its position that the insurance company does not have to make any reasonable investigation before suspending payments under a valid claim. 1
Continental Casualty Company had already recognized the valid claim of Dr. Charles A. Novy and was making regular payments under the provisions of the policy. To suspend or withhold further payments thereafter without a reasonable investigation amounted to oppressive conduct and unilateral conduct in bad faith. Dr. Novy testified that he was transferring his former patients to other doctors so that they could receive proper medical attention. This activity on his part amounted to a winding down and transfer of his practice rather than a continuation of the practice of medicine. Travelers Ins. Co. v. Sanders (1933), 47 Ga.App. 327 , 170 S.E. 387 ; Harasymezuk v. Massachusetts Acci. Co. (1926), 127 Misc. 344 , 216 N.Y.S. 97 (also see: Murphy v. Travelers Ins. Co. (1942), 141 Neb. 41 , 2 N.W.2d 576 ).
When Continental Casualty Company acknowledged Dr. Novy’s disability as a valid claim under the policy and commenced making payments to him, a presumption is created. The presumption is that the disability continues until there is proof of its discontinuance. The burden of this proof is upon Continental Casualty Company and not Dr. Novy, the insured. In Aetna Life Insurance Company, Inc., v. Fruchter (1973), 283 So.2d 36 , the Supreme Court held:
“That once the insurer has acknowledged such disability by proceeding to make disability payments under the policy, then in a suit upon a discontinuance thereof and demand for resumption of premium payments, the burden is cast upon the insurer to prove that the disability no longer continues.” (Emphasis original.)
*1360 283 So.2d at 37 . Continental Casualty had the burden of proof to establish by a preponderance of the evidence that Dr. Novy’s disability had discontinued. Upon the pretext that one of its adjusters observed Dr. Novy in his office with patients and without further investigation, Continental Casualty Company hastily concluded that its obligation to make payments under the policy had ended. This constituted oppressive conduct on the part of Continental Casualty Company; without a reasonable investigation and without meeting the burden of proof that the disability had discontinued, bad faith is presumed. 2 Punitive damages should have been awarded.
Since failure to make a reasonable investigation of the circumstances before suspending payments on a valid claim is per se oppressive and bad faith conduct on the part of Continental Casualty Company, I would reverse the judgment of the trial court as to the award of punitive damages.
. The majority cites Craft v. Economy Fire and Casualty Co. (7th Cir. 1978), 572 F.2d 565 and Nationwide Mutual Ins. Co. v. Neville (1982), Ind.App., 434 N.E.2d 585 . Both of these authorities are concerned with the validity of the initial claim rather than the validity of withholding further payments upon an initially valid claim.
. Also see: Prudential Ins. Co. of America v. Dismore (1935), 261 Ky. 741 , 88 S.W.2d 924 ; Couch on Insurance 2d (1966) § 53:84.