Consider this scenario: On 5/15/01, Mitchell answered "no" to the question of pre-existing condition on his application health insurance. Mitchell was subsequently diagnosed with HIV in 2002. A handwritten doctor's note regarding the HIV diagnosis was dated incorrectly as 5/14/01 instead of 5/14/02. Fortis Insurance Co. discovered the doctor's note and decided to rescind Mitchell's health insurance policy for material misrepresentation. Mitchell sent all medical records to Fortis to prove he was first diagnosed after he obtained health insurance, but Fortis refused to reinstate Mitchell's health insurance. Mitchell sued Fortis Insurance Co. for bad faith rescission of his health insurance. The jury held in favor of Mitchell and awarded him compensatory damages and $15 million in punitive damages. The court of appeals affirmed the decision. Fortis Ins. Co. appealed to the Supreme Court of South Carolina. The Supreme Court of South Carolinaaffirmed the $150,000 compensatory damages award, and remitted the $15 million punitive damages award to $10 million.

Here is a link to the case:http://caselaw.findlaw.com/sc-supreme-court/1469798.html

1. What are the purposes of punitive damage awards?

2. What should jurors and judges consider in deciding a punitive award amount?

3. (a) As a potential juror or judge, do you think the $15 million in punitive damages was warranted? (b) Why or why not?