Court Opinion

ID: 32816
Source: CourtListenerOpinion
Date Created: 2010-04-25 18:57:58+00
Date Added: 2024-06-11T12:29:20.704327
License: Public Domain

United States Court of Appeals
                                                                  Fifth Circuit
                                                               F I L E D
                 UNITED STATES COURT OF APPEALS                October 21, 2003
                      For the Fifth Circuit
                                                           Charles R. Fulbruge III
                                                                   Clerk

                             No. 02-60907

                           LESTER WHITEHEAD

                                                  Plaintiff-Appellant,

                                VERSUS

                ZURICH AMERICAN INSURANCE COMPANY

                                                   Defendant-Appellee.

          Appeal from the United States District Court
       For the Northern District of Mississippi, Aberdeen

Before BARKSDALE, DeMOSS and BENAVIDES, Circuit Judges.

DeMoss, Circuit Judge:

     Plaintiff-Appellant, Lester Whitehead (“Whitehead”), appeals

the dismissal of his intentional tort claims against Defendant-

Appellee, his employer’s workers’ compensation insurance carrier,

Zurich American Insurance Company (“Zurich”).       The district court

dismissed Whitehead’s claim as premature because he had failed to

exhaust his administrative remedies.          The district court also

denied Whitehead’s motion to amend his complaint and add his

employer as a defendant.
                                 BACKGROUND

     Whitehead is an employee of F.E. Moran, Inc. Fire Protection

(“Moran”).   Moran is not a party to this action.         Zurich is Moran’s

workers’ compensation insurance carrier.          Zurich is the Defendant-

Appellee in this case.

     Whitehead injured his leg on the job on July 12, 2000.            He was

taken to an emergency room that day by another Moran employee.            He

returned to work the next day but was sent home because he was

unable to work.         On September 5, 2000, Whitehead underwent a

surgical procedure on his leg.          Whitehead initially alleged that

his work-related injury had caused the recurrence of his non-

Hodgkins lymphoma, which had been in remission.           He later withdrew

this allegation.

     Although    it     is   clear    that   Whitehead   filed   a   workers’

compensation    claim    with   the   Mississippi   Workers’     Compensation

Commission (“Commission”), it is unclear when he did so.               Zurich

did not learn of Whitehead’s injury until October 16, 2000.            In any

event, Whitehead filed a petition to controvert his workers’

compensation case on March 16, 2001.         Zurich filed an answer to the

petition on April 9, 2001, contesting the nature, degree, and

extent of Whitehead’s disability and the causal connection between

the injury and his medical expenses.            On August 3, 2001, Zurich

paid for the emergency room treatment Whitehead received in July

2000.   On October 17, 2001, Zurich paid Whitehead $1582.15 for

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temporary total disability benefits covering the period between

September 5, 2000, the day of Whitehead’s leg surgery, and October

9, 2000.

       On June 7, 2001, Whitehead sued Zurich in state court alleging

both negligent and bad faith failure to investigate his workers’

compensation claim and to compensate him for his medical expenses

and lost wages.         He sought compensatory and punitive damages.

Zurich removed the suit to the Northern District of Mississippi on

July 5, 2001.      Whitehead several times unsuccessfully moved to

amend his complaint to name Moran as a defendant.           The district

court subsequently granted Zurich’s motion to dismiss and dismissed

the case without prejudice, concluding that Whitehead’s suit was

premature because his workers’ compensation claim was still pending

before the Commission. The district court did not permit Whitehead

to amend his complaint and add Moran because the court believed the

issue moot due to its ruling that the case must be dismissed as

premature.      This appeal followed the district court’s denial of

Whitehead’s motion to reconsider.

       On September 2, 2003, counsel for Whitehead filed a Suggestion

of Death and Motion for Substitution of Plaintiff/Appellant with

this Court.     Lester Whitehead died on July 16, 2003, due to health

reasons not related to injuries at issue in this litigation.

Whitehead’s counsel requested that Whitehead’s only natural child,

only    named   heir,    and   personal   representative,   Bryan    O’Neal

Whitehead, be permitted to be substituted for Whitehead.            At oral

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arguments on September 4, 2003, the panel requested that both

parties submit letter briefs to the Court concerning whether

Whitehead’s claim before the Commission survives and whether his

civil claim for bad faith survives.    Because we are affirming the

district court’s dismissal of Whitehead’s claim without prejudice

and it appears that Whitehead’s claim for benefits under the

Mississippi Workers’ Compensation Act survives to his heirs and

likewise the executor of his estate may refile his civil claim at

the appropriate time, Whitehead’s death does not affect this

current appeal.

                            DISCUSSION

I.   Whether the district court erred in granting Zurich’s motion
     to dismiss.

     We review a district court’s dismissal pursuant to Rule

12(b)(6) of the Federal Rules of Civil Procedure de novo, applying

the same standards followed below.    Kaiser Aluminum & Chem. Sales,

Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir.

1982).   In deciding a Rule 12(b)(6) motion, we accept all factual

allegations made by the plaintiff as true and resolve any doubts

about the sufficiency of the evidence in his favor.   Id.   Dismissal

is warranted only if “it appears beyond doubt that the plaintiff

can prove no set of facts in support of his claim that would

entitle him to relief.”    Id.   Further, a case may be dismissed

without prejudice for failure to exhaust administrative remedies

under Rule 12(b)(6).   Taylor v. United States Treasury Dept., 127

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F.3d 470, 478 n.8 (5th Cir. 1997).       In determining whether a party

must exhaust administrative remedies, a federal court balances the

individual’s interest in “retaining prompt access” to the federal

courts against the “institutional interests favoring exhaustion.”

Zephyr Aviation, L.L.C. v. Dailey, 247 F.3d 565, 570 (5th Cir.

2001).

     The   Mississippi   Workers’   Compensation    Act   provides   that

statutory compensation is the exclusive remedy available to an

employee who suffers an injury on the job:

     The liability of an employer to pay compensation shall be
     exclusive and in place of all other liability of such
     employer to the employee . . . or otherwise from such
     employer on account of such injury or death, except that
     if an employer fails to secure payment of compensation as
     required by this chapter, an injured employee . . . may
     elect to claim compensation under this chapter, or to
     maintain an action at law for damages on account of such
     injury or death . . . .

Miss. Code Ann. § 71-3-9 (2000).        This statute bars an employee’s

common law tort action against his employer’s insurance carrier

based on a negligent failure to pay workers’ compensation benefits.

Taylor v. United States Fid. & Guar. Co., 420 So. 2d 564, 566

(Miss. 1982).1   It does not, however, prevent the employee’s action

against the carrier “for the commission of an intentional tort”

independent of the compensable injury.        Southern Farm Bureau Cas.

Ins. v. Holland, 469 So. 2d 55, 59 (Miss. 1984).          In particular,

the employee can sue the carrier for bad faith refusal to pay

     1
      Whitehead has not appealed the district court’s dismissal of
his negligence claim.

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benefits owed because such a claim arises not from the work-related

injury but from an independent act that is not compensable under

the Workers’ Compensation Act.             Id. at 58-59.

     The Mississippi Supreme Court, however, has required the

exhaustion   of   the    administrative       remedial     process   before    an

intentional tort claim against a carrier can be brought.               Walls v.

Franklin Corp., 797 So. 2d 973, 977 (Miss. 2001) (en banc).                    In

Walls, the court held that an employee cannot allege that a carrier

has refused to pay for certain medical services and supplies in bad

faith in the absence of a determination by the Commission that

those services and supplies were reasonable and necessary.                    Id.

The Walls court examined the earlier Mississippi Supreme Court

cases dealing with viable bad faith claims and determined that

although in those cases the court did not require exhaustion of

administrative remedies it appears that exhaustion was either not

an issue or the plaintiffs had exhausted their administrative

remedies prior to bringing the bad faith suit.                  Id. at 975-76

(discussing Leathers v. Aetna Cas. & Sur. Co., 500 So. 2d 451

(Miss. 1986); McCain v. Northwestern Nat’l Ins. Co., 484 So. 2d

1001 (Miss. 1986); Luckett v. Mississippi Wood Inc., 481 So. 2d 288

(Miss. 1985); Holland, 469 So. 2d at 55)).               Ultimately in Walls,

the Mississippi Supreme Court reinstated the lower state circuit

court opinion which held that “‘exhaustion of the administrative

remedial   process      is   a   mandatory    condition    precedent    to    the

maintaining of a ‘bad faith’ suit for an allegedly wrongful denial

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of any workers[’] compensation benefits.’” Id. at 975 (quoting the

judgment of the Chickasaw County Circuit Court).

      As the district court noted in its October 3, 2002, Order,

Walls    requires   that   the    Mississippi       Workers’     Compensation

Commission make a determination as to whether Whitehead’s claimed

benefits are reasonable and necessary before he can commence a

civil action for denial of benefits. Therefore, the district court

did not err in dismissing without prejudice Whitehead’s case.

II.   Whether the district court erred in denying Whitehead’s motion
      to amend his complaint to add Moran as a defendant.

      The Mississippi Supreme Court has also held that employees are

allowed to bring bad faith failure to pay claims against employers.

Luckett, 481 So. 2d at 290 (“Today we extend Holland to include a

bad faith refusal action against the employer, as well as the

carrier, and hold that [the plaintiff] may recover if he can prove

his claim.”); Holland, 469 So. 2d at               58-59.      Yet, the same

exhaustion requirement applies to any potential claim Whitehead may

have against Moran.   See Sawyer v. Head, 510 So. 2d 472, 474 (Miss.

1987).    Therefore, the district court did not err in denying

Whitehead’s motion to amend.

                                 CONCLUSION

      Having   carefully   reviewed       the   record   of   this   case,   the

parties’ respective briefing and arguments, for the reasons set

forth above and essentially for the reasons given by the district

court, the denial of Whitehead’s motion to amend and the dismissal

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of his claim without prejudice are affirmed.

AFFIRMED.

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