Lewis Insurer May Sue Celtics

[Way Of The Ray <wayray@ix.netcom.com>]

                                [The Boston Globe Online][Boston.com]
                                [Boston Globe Online / Sports]


                                Lewis's insurer may sue Celtics

                                By Benjamin Lipson, Globe Correspondent,
                                07/15/99

                                The issue of insurance fraud could
                                take center stage in the Reggie
                                Lewis saga as The Equitable Life Assurance
                                Society of New York is ''looking into'' a
                                lawsuit as an option to recover at least
                                $5 million from the Celtics, who had
                                purchased a policy on Lewis's life.

                                Sworn depositions both presented and not
                                presented at the trial, exhibits, and
                                testimony alleging cocaine and marijuana
                                use by the late Celtic star would be the
                                cornerstones used by the insurance company
                                to attempt to reclaim the money. When
                                asked if her company was planning any
                                action, Barbara Wilkoc, vice president of
                                public relations for Equitable Life, wrote
                                to the Globe via fax, ''We are looking
                                into the matter and considering our
                                options.''

                                Efforts to reach Celtics chief operating
                                officer Richard G. Pond for comment were
                                unsuccessful last night.

                                When Lewis died on July 27, 1993, The
                                Equitable maintained $17 million of
                                coverage, which was owned by the Celtics.
                                On that date, $5 million of Equitable's
                                coverage was less than two years old. A
                                provision contained in all life insurance
                                policies issued in Massachusetts prevents
                                companies from denying death benefit
                                claims on policies more than two years
                                old, even if a material misrepresentation
                                was made on the policy application. That
                                would make $12 million uncontestable by
                                Equitable and $5 million contestable.

                                Within 30 days of Lewis's death, Equitable
                                paid the Celtics $12 million as a death
                                benefit under the policies on Lewis's life
                                that listed the club as beneficiary. Of
                                the remaining $5 million, The Equitable,
                                in accordance with the terms of that
                                policy, launched an investigation to
                                determine whether any material
                                misrepresentations or false statements
                                were made on the applications. If an
                                investigation uncovered any material
                                misrepresentation or fraud, the claim
                                could be denied.

                                In February 1994, six months after a
                                difficult investigation, The Equitable
                                paid the additional $5 million to the
                                Celtics. In July 1995, shortly after
                                newspaper reports of alleged drug use by
                                Lewis, the insurer started the second
                                investigation of that $5 million policy.
                                According to sources close to the case, on
                                all Equitable applications for the $17
                                million of life insurance coverage, the
                                all-inclusive drug usage question was
                                answered in the negative. On the Equitable
                                insurance applications, there was a
                                question about drug use during the 10
                                years immediately preceding the
                                application, a time frame that included
                                Lewis's college career at Northeastern.

                                In the second investigation, according to
                                correspondence between The Equitable and
                                the Celtics, the team was requested to
                                provide a laundry list of documents that
                                would have included records of drug
                                testing or correspondence with the
                                National Basketball Association concerning
                                drug use.

                                The Celtics informed the Equitable that
                                since their only obligation was to provide
                                information about Lewis's employment, they
                                didn't have to provide personal data. They
                                indicated that that was their final
                                response.

                                At the same time, the insurer was unable
                                to obtain authorization from Donna
                                Harris-Lewis to release Reggie's medical
                                records. This second claims investigation,
                                however, lacked subpoena power, which
                                stymied its efforts.

                                Attorneys representing Dr. Gilbert H.
                                Mudge and two other physicians brought to
                                trial earlier this year by Harris-Lewis,
                                Reggie's widow, for malpractice did not
                                lack that power, however.

                                During the first week of the trial,
                                Celtics team physician Dr. Arnold Scheller
                                testified that he discussed the issue of
                                drug testing with Lewis after Lewis was
                                admitted to New England Baptist and had
                                undergone a battery of tests by Scheller's
                                ''Dream Team'' of physicians. Three hours
                                after that discussion, Lewis checked out
                                of the Baptist against medical advice.

                                Had hospital records provided any insurer
                                during a claims investigation for the $5
                                million policy either contained a record
                                of an order for a drug test or notes of
                                any discussion Scheller had with Lewis
                                about the subject, the insurer would
                                likely have expanded its investigation.

                                This story ran on page C7 of the Boston
                                Globe on 07/15/99.
                                © Copyright 1999 Globe Newspaper Company.