Doe v. Jackson Nat. Life Ins. Co.

• Decision Date: 29 September 1995
• Docket Number: Civil Action No. 3:92-cv-225WS.
• Citation: 944 F.Supp. 488
• Court: U.S. District Court — Southern District of Mississippi
• Parties: Jane DOE, Individually and as Administratrix of the Estate of John Doe, Plaintiff, v. JACKSON NATIONAL LIFE INSURANCE COMPANY, Defendant.

944 F.Supp. 488

Jane DOE, Individually and as Administratrix of the Estate of John Doe, Plaintiff, v. JACKSON NATIONAL LIFE INSURANCE COMPANY, Defendant.

Civil Action No. 3:92-cv-225WS.

United States District Court, S.D. Mississippi, Jackson Division.

September 29, 1995.

John R. Brautigam, Donovan, Leisure, Newton & Irvine, Washington, DC, David R. Jewell, Joan M. Howe, Donovan, Leisure, Newton & Irvine, New York City, Bobby L. Dallas, Scanlon, Sessums, Parker & Dallas, Jackson, MS, for Jane Doe.

Dudley Collier Graham, Jr., Eugene R. Naylor, Shell, Buford, Bufkin, Callicutt & Perry, Jackson, MS, for Jackson Nat. Life Ins. Co.

MEMORANDUM OPINION AND ORDER

WINGATE, District Judge.

Both the plaintiff and defendant herein contend that under the undisputed facts each is entitled to a judgment against the other. Defendant Jackson National Life Insurance (hereinafter "JNL") has submitted alternative motions under Rules 12(b)(6)¹ and 56(b),² Federal Rules of Civil Procedure, respectively, asking this court to dismiss plaintiff's action for failure to state a claim, or for summary judgment. Plaintiff Jane Doe,³ individually and as administratrix of the Estate of John Doe (hereinafter "plaintiff" or "Doe") opposes defendant's motion, while submitting her own motion under Rule 56(a),⁴ Federal Rules of Civil Procedure, asking this court to hold that under the undisputed facts defendant is liable to plaintiff. While the parties champion their respective positions and sharply disagree over the proper outcome of these motions, the parties are in accord over the identity of the key question and factual underpinnings of this litigation. In this diversity-of-citizenship action, our widowed plaintiff, Jane Doe, contends that JNL breached its duty to her, as well as to her deceased husband, John Doe, to inform them or their designated physician of John Doe's HIV-positive condition, when, during JNL's processing of John Doe's application for insurance which included a mandatory medical examination, JNL had discovered that circumstance, but did not reveal this information to the Does. Plaintiff has fired a volley of legal theories at the court which, according to plaintiff, shows that JNL owed a duty to plaintiff under Mississippi law and the factual circumstances peculiar to this case. Unfortunately for plaintiff, this court is persuaded that plaintiff's arguments miss the mark and that summary judgment, while appropriate, must be entered for the defendant. Making an Erie-guess, this court holds that under Mississippi law an insurer has no duty to inform an insurance applicant of the results of a medical examination where the insurer administers the examination only to determine the insurability of the applicant.

PARTIES AND JURISDICTION

Jane Doe is an adult citizen of a State other than Michigan and serves as Administratrix of the Estate of John Doe, her husband, who died in the state of plaintiff's residence.

Defendant JNL is a life insurance company incorporated in Michigan with its headquarters in Lansing, Michigan. JNL is licensed to do business in Mississippi and has designated Cary Bufkin, Esq., of Jackson, Mississippi, as its agent for service of process.

This court has jurisdiction over this dispute pursuant to 28 U.S.C. § 1332,⁵ diversity of citizenship. Since the court's jurisdictional grant is based upon diversity of citizenship, and since the factual backdrop of this dispute occurred in Mississippi, this court applies the substantive law of Mississippi to this dispute. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Boardman v. United Services Auto. Association, 742 F.2d 847, 849 (5th Cir.1984); Mitchell v. Craft, 211 So.2d 509, 516 (Miss. 1968) (Mississippi choice of law rules direct its courts to apply a center of gravity test.).

FACTS

In January, 1988, Mr. Doe had a life insurance policy with defendant which provided coverage of $500,000.00. Desiring additional life insurance, Mr. Doe applied for an increase of $300,000.00. Mrs. Doe simultaneously submitted an application for $250,000.00 of life insurance to replace a policy she held with another insurance company.

As part of its application process, JNL required its applicants to submit to medical examinations at Examination Management Services, Inc., (EMS), a paramedical facility designated by JNL. These examinations, which included blood and urine tests, were vital to JNL's underwriting procedure. JNL reserved the right to refuse coverage if an applicant failed the medical examination. No one disputes that it was JNL's policy at the time to deny life insurance coverage to any individual who tested positive for the Human Immunodeficiency Virus (HIV), also known as the Acquired Immune Deficiency Syndrome (AIDS) virus. So, as part of its medical examination, JNL tested the blood of its applicants to detect any presence of antibodies or antigens to HIV.

On April 19, 1988, EMS, JNL's contract laboratory for blood work, ran a variety of tests on the Does' blood. `Mr. Doe's blood tested positive for HIV. Mrs. Doe's tested negative. Thereafter, on April 21, 1988, the laboratory sent a telecopy of the Does' results to Dr. Lewis L. Stewart, Jr., JNL's medical director. Five days later, Ed Keller, the JNL underwriter in charge of the Does' applications, received a copy of the laboratory results. Keller then rejected Mr. Doe's application.

The notice of rejection mailed to Mr. Doe on April 26, 1988, did not tell him that he had been rejected because of the HIV test. Instead, by mistake, according to JNL, the notice sent to Mr. Doe stated that his application had been rejected "because delivery of the policy was not accepted." But, this oversight was rectified two days later when Oscar Arinder, Mr. Doe's agent, learned that Mr. Doe's application had been rejected for medical reasons. Arinder then communicated this information to Mr. Doe who, in turn, asked Arinder to try to ascertain the specific results of his medical examination. Arinder telephoned JNL's regional office but was unable to obtain the information. Arinder then advised Mr. Doe to submit a written request to JNL for the information. On May 23 and July 5 of 1988, according to the plaintiff, Mr. Doe sent letters to JNL's Michigan office asking JNL to send all information concerning his medical condition to his physician, Dr. Barry L. White.⁶ Mr. Doe's request was not honored.

In May of 1988, Mr. Doe was hospitalized at the Mississippi Baptist Medical Center in Jackson, Mississippi. During his hospital stay, Dr. Eric McVey, a specialist in infectious diseases, visited Mr. Doe and asked him if he had ever exposed himself to any HIV risk factors. Mr. Doe answered in the negative. No blood test was conducted at that time to detect the existence of HIV.

Eighteen months after undergoing the medical examination in connection with his life insurance application, Mr. Doe was hospitalized at Johns-Hopkins Medical Center ("Johns-Hopkins") in Baltimore, Maryland. While there, Mr. Doe was diagnosed as being HIV-positive. Immediately after Mr. Doe tested positive for the HIV virus, Mrs. Doe took an HIV test. Her test, as had the blood test administered by JNL, indicated that she was not HIV-positive. Mrs. Doe has since taken additional tests and all of them have shown that she does not have HIV.

By April of 1991, Mr. Doe's condition had deteriorated and he was again hospitalized at Johns-Hopkins. At that time, Mr. Doe once more wrote to JNL requesting that JNL submit the results of his 1988 medical examination to his physician, Dr. Donald M. Poretz of Annadale, Virginia. Nine days before Mr. Doe succumbed to AIDS, his doctor received a report from JNL. The report revealed that Mr. Doe had tested positive for HIV in 1988.

DISCUSSION

The pivotal issue this court must resolve is whether under Mississippi law JNL had a duty to disclose to the Does the results of Mr. Doe's medical examination required by JNL as part of its insurance application process. Of course, the existence of a defendant's duty to act or not to act is a fundamental element of tort law. Ward v. Hobart Manufacturing Company, 450 F.2d 1176, 1181 (5th Cir.1971). A duty may arise specifically by mandate of statute, generally by operation of law under application of the basic rule of common, or frequently out of a contractual relationship. George B. Gilmore Co. v. Garrett, 582 So.2d 387, 391 (Miss.1991) citing Pinnix v. Toomey, 242 N.C. 358, 362, 87 S.E.2d 893, 897-898 (1955). Whether a defendant is under any duty, the violation of which would subject him to tort liability, is a legal question for the court to determine. Stanley v. Morgan & Lindsey, Inc., 203 So.2d 473 (Miss.1967).

Inasmuch as this court's jurisdiction is grounded in diversity, the often-cited case of Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), commands this court to employ the substantive law of Mississippi to determine the outcome of this dispute. The Mississippi courts, thus far, have not yet spoken definitively to the question of whether an insurer has a duty to disclose to insurance applicants the results of medical examinations which detect that an applicant is suffering from a life-threatening or debilitating disease. Since Mississippi has not directly addressed this issue, this court must make an Erie-guess as to how the Mississippi Supreme Court would rule. See United Parcel Service, Inc. v. Weben Industries, Inc., 794 F.2d 1005, 1008 (5th Cir.1986) ("when making an Erie-guess in the absence of explicit guidance from the state courts, we must attempt to predict state law, not to create or modify it.").

Plaintiff, too, states that the Mississippi Supreme Court has not dealt with the specific issue before the court in this case. Nevertheless, says plaintiff, firmly embedded in Mississippi jurisprudence are accepted causes of action which would accommodate the theory of liability here being urged....