Court Opinion

ID: 50221
Source: CourtListenerOpinion
Date Created: 2010-04-26 00:48:01+00
Date Added: 2024-06-11T09:39:16.088553
License: Public Domain

United States Court of Appeals
                                                               Fifth Circuit
                                                            F I L E D
                    UNITED STATES COURT OF APPEALS
                                                              May 9, 2007
                        FOR THE FIFTH CIRCUIT
                                                        Charles R. Fulbruge III
                                                                Clerk

                             No. 06-60884
                           Summary Calendar

     KAFAREN FAIRLEY,

                                        Plaintiff-Appellant,

                                  v.

     DENISE CROWELL, DALE HARRIS AND CONTINENTAL CASUAL COMPANY,

                                        Defendants-Appellees.

         Appeal from the United States District Court for the
                   Southern District of Mississippi

Before DAVIS, BARKSDALE, and BENAVIDES, Circuit Judges.

PER CURIAM:*

     Kafaren Fairley challenges the district court’s grant of

summary judgment in favor of Denise Crowell, Dale Harris, and

Continental Casualty Company (“Continental”).   Fairley argues that

Crowell, Harris, and Continental acted in bad faith in handling her

workers compensation claim.    We AFFIRM.

     Fairley was working as an assembly line worker in Hattiesburg,

     *
       Pursuant to 5th Cir. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5th Cir. R. 47.5.4.
Mississippi, when she suffered a compensable injury, ultimately

diagnosed as bilateral carpal tunnel syndrome.               She reported her

condition to her employer, Manpower, Inc., (“Manpower”) which

subsequently reported the injury to Continental.

     An adjuster for Continental contacted Fairley on December 2,

1999, and she began receiving temporary total disability (“TTD”)

benefits as of December 10, 1999, continuing until February 21,

2000, when she briefly returned to work at the American Red Cross.

She left Red Cross in May, 2000, and began receiving TTD again as

of June 5, 2000, for the period beginning May 26, 2000.

     Continental sent Fairley to a doctor for an evaluation in May,

2000,   and   Fairley   began   seeing     that   doctor    as   her   treating

physician.     He performed two surgeries on Fairley in May and June

of 2000 to treat the carpal tunnel syndrome, and prepared a

document on August 28, 2000, indicating that she could return to

work.   Manpower immediately found suitable employment for Fairley.

Crowell, the adjuster handling Fairley’s claim at that time,

discontinued Fairley’s TTD benefits as of September 5, 2000.

     Shortly    after   Continental       discontinued     her   TTD   benefits,

Fairley contacted Crowell to express displeasure at that decision,

as well as the doctor’s release to return to work.               At that time,

Fairley allegedly stated that if there was in fact a release from

the doctor, she would “shoot him.”          Fairley subsequently expressed

dissatisfaction with the doctor, and allegedly told Continental

that he was never her choice of treating physician.

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     On November 9, 2000, Fairley filed her Petition to Controvert

with the Mississippi Workers Compensation Committee and sought

approval for a new treating physician.            In October, 2001, the

Administrative Judge (“AJ”) ordered Continental to pay for an

evaluation by a second doctor.           The second doctor completed the

evaluation in February, 2002, and concluded that Fairley could not

work.   He recommended further testing to determine the full extent

of the injuries.

     In July, 2003, the AJ issued her order, awarding Fairley

permanent   partial   disability    (“PPD”)    benefits   and   payment   of

reasonable and necessary future medical treatment. Following entry

of the order, Fairley’s attorney faxed his interpretation of the

order to Harris, who had replaced Crowell as the adjuster.           After

crediting   Continental   for      payments    previously   made,   Harris

calculated the final amount due to Fairley to be $22,035.93 and

sent the check to Continental’s counsel, who forwarded the check on

to Fairley’s counsel on November 19, 2003.

     Continental had no further contact with Fairley until her

counsel faxed a letter to Continental in January, 2004, complaining

about the calculations and the credits Continental had taken.

Fairley subsequently filed this suit for bad faith in Mississippi

state court against the defendants.            The case was removed to

federal court.   On July 21, 2004, the AJ issued an order clarifying

the previous order, stating that Continental had the right to take

credit for all prior payments, thus ratifying Harris’ calculation.

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Fairley did not appeal the AJ’s second order.        The district court

granted Crowell’s, Harris’, and Continental’s motions for summary

judgment.

     We review a grant of summary judgment de novo, using the same

criteria employed by the district court.         Hanks v. Transcon. Gas

Pipe Line Corp., 953 F.2d 996, 997 (5th Cir. 1992).            Summary

judgment is appropriate when “there is no genuine issue as to any

material fact and . . . the moving party is entitled to a judgment

as a matter of law.”    FED. R. CIV. P. 56(c).    A court’s role at the

summary judgment stage is not to weigh the evidence or determine

the truth of the matter, but rather to determine only whether a

genuine issue exists for trial.        Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 249 (1986).     Because Mississippi law controls the

disposition of the claims in this case, we apply the law in the

same manner as a Mississippi court.      DiPascal v. New York Life Ins.

Co., 749 F.2d 255, 260 (5th Cir. 1985).

     Fairley seeks punitive damages, arguing that the defendants

acted in bad faith.     “Punitive damages are not recoverable for a

breach of contract unless such breach is attended by intentional

wrong, insult, abuse, or such gross negligence as to consist of an

independent tort.”     Progressive Cas. Ins. Co. v. Keys, 317 So.2d

396, 398 (Miss. 1975).     Additionally, punitive damages cannot be

recovered “if an insurance company has a legitimate or an arguable

reason for failing to pay a claim.”          Standard Life Ins. Co. v.

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Veal, 354 So.2d 239, 248 (Miss. 1977).                   Both elements — an

intentional wrong, insult, abuse, or gross negligence and the

absence of a legitimate or arguable reason for denial — must be

satisfied.   See Life & Cas. Ins. Co. of Tenn. v. Bristow, 529 So.2d

620 (Miss. 1988).

     Continental       paid       Fairley     benefits    immediately       upon

notification of her injury and continued to do so until she was

released   to   work   by   her    treating    doctor.     It   is   true   that

Continental continued to deny reinstatement of benefits, even after

the second doctor found Fairley could not work, until the AJ issued

her order. The fact that Continental ultimately proved to be wrong

in its assessment, however, does not create ground for punitive

damages. The plaintiff must offer proof of an intentional wrong,

insult, abuse, or gross negligence as to consist of an independent

tort, and has failed to do so.         Instead, she has merely shown that

her disability status was contested.

     In order for Crowell or Harris to be liable to Fairley, she

must show that they personally acted grossly negligent, with

malice, or with reckless disregard for her rights.                     Bass v.

California Life Ins. Co., 581 So.2d 1087, 1090 (Miss. 1991).

     It is undisputed that Crowell was in constant contact with the

nurse care manager for Continental while handling Fairley’s claim

so that she knew her medical status.                When she received the

doctor’s release for Fairley to work in September, 2000, Crowell

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continued benefits until she was advised that suitable employment

had been arranged and offered to Fairley by Manpower. When Fairley

refused the employment offer, her claim was disputed and there was

no further obligation for Crowell to continue payments.   There is

no evidence that Crowell acted grossly negligent, and she is not

liable.

     Harris’ involvement with Fairley’s case was even more limited

than Crowell.   He properly calculated what was owed to Fairley

after the AJ’s order, and sent the checks to Continental’s counsel

to forward to Fairley.    The AJ’s second order, in July, 2004,

showed his calculations to be correct.   There is no evidence of

negligence, and there can be no liability on Harris’ part.

     For the foregoing reasons, we AFFIRM the district court.

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