caseMitchell v. Fortis Insurance Company

• What kind of contract is this and who is the breaching party?
• What kinds of damages are normally awarded for breach of contract?
• Are punitive damagesnormallyawarded in a case of this type?Why did the court award punitive damages in this case?Do you agree with this decision?
• Did the insurance company behave ethically in this situation?In your opinion, What should they have done differently?

CASE 16.5 STATE COURT CASE Bad Faith Tort Mitchell v. Fortis Insurance Company 686 S.E.2d 176, 2009 S.C. Lexis 451 (2009) Supreme Court of South Carolina "First, any court reviewing a punitive damages Dr. Michael Chandler, whose tests confirmed that award should consider the degree of reprehensibil- Mitchell was HIV positive. On that day, one of ity of the defendant's conduct." Dr. Chandler's assistants noted on Mitchell's chart -Toal, Chief Justice "Gave blood in March-got letter yesterday stating blood tested for HIV." The handwritten note was Facts erroneously dated May 14, 2001, rather than May 14, On May 15, 2001, Jerome Mitchell Jr., who was 2002. Dr. Chandler referred Mitchell to Dr. Kevin 17 years old, submitted an application for health Shea, an infectious disease specialist, for treatment. insurance to Fortis Insurance Company. The ap- Fortis soon received claims for Mitchell's treat- plication required Mitchell to complete a medical ment. Fortis launched an investigation to determine questionnaire, which included the question "Been whether Mitchell had failed to disclose a preexist- diagnosed as having or been treated for any immune ing condition on his insurance policy application. deficiency disorder by a member of the medical pro- With Mitchell's permission, Fortis obtained Mitchell's fession?" Mitchell answered "no" to this question. medical and billing files from Dr. Chandler and Fortis issued Mitchell a health insurance policy. Dr. Shea and Mitchell's blood test results. A Fortis In April 2002, Mitchell attempted to donate blood investigator reviewed the files and discovered the to the Red Cross. On May 13, 2002, the Red Cross erroneously dated note in Dr. Chandler's files. Based notified Mitchell that his blood had screened posi- on this note, Fortis's rescission committee voted to tive for HIV. On the next day, Mitchell contacted rescind Mitchell's health insurance policy. Fortis (case continues)