South Carolina Court Awards $10 Million to an Cut by Fortis Insurance

The South Carolina Supreme Court this week upheld a multimillion verdict against an insurer the justices said revoked a man’s health policy after he tested positive for HIV based solely on a nurse writing down the wrong year for the test.

The court in this conservative, often pro-business state called Fortis Insurance Co.’s actions “highly reprehensible,” but did reduce punitive damages awarded to Jerome Mitchell Jr. from $15 million to $10 million.

Mitchell first found out he might have HIV when he tried to donate blood in April 2002. The Red Cross let him know his sample tested positive, and a trip to his personal physician confirmed the diagnosis.

Fortis said it revoked Mitchell’s policy because he didn’t reveal his diagnosis when he applied for insurance in May 2001 as the then 17-year-old from Florence prepared to head to college and could no longer be covered under his mother’s policy. The company cited a note made by a nurse on Mitchell’s chart that incorrectly gave the wrong year for the test confirming the HIV diagnosis, placing it one day before Mitchell’s application for insurance, according to court records.

The committee that decides whether to revoke policies heard Mitchell’s case and 45 others in a two-hour session. Court records showed the members were given a report from an underwriter that included the note: “Technically, we do not have the results of the HIV test. This is the only entry in the medical records regarding HIV status. Is it sufficient?”

Mitchell would later hire a lawyer who sent the company the original test results with the correct date. But a second committee also upheld revoking the insurance and Mitchell didn’t have coverage for 20 months before Fortis changed its mind, according to trial testimony.

The company’s “conduct involved repeated acts of deliberate indifference for more than two years,” the justices wrote in their decision.

A phone listing for Mitchell could not be found, and his attorneys didn’t return a phone call seeking comment. A spokesman for Fortis, which now does business as Assurant Health, said the company doesn’t comment on pending lawsuits.

Fortis had appealed the case, saying the trial judge allowed improper evidence, the jury ruled on passion instead of the law and the $15 million in punitive damages was too much. The justices only budged on the damages, saying awarding Mitchell nearly 14 times the approximately $1.1 million it will cost to treat him during his life was excessive.

The justices also ruled the trial judge was correct to allow jurors to consider the value of the care Mitchell got at the free clinic when it considered how much money to give him.