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Teresa G. Patrick v. Wal-Mart

March 21, 2011

TERESA G. PATRICK
v.
WAL-MART, INC. -- STORE NO. 155 AND NATIONAL UNION FIRE INS. CO. OF PITTSBURGH, PA



The opinion of the court was delivered by: David A. Sanders United States Magistrate Judge

MEMORANDUM OPINION

This matter is before the court on motion of the defendants to dismiss the action (# 20). Also before the court is the defendants' motion to dismiss the second amended complaint (# 34). In accordance with the provisions of 28 U.S.C. § 636(c), the parties consented to have a United States Magistrate Judge conduct all proceedings in this case, including an order for entry of final judgment on any or all of the plaintiff's claims. After considering each of the motions, the court finds as follows:

I. FACTUAL AND PROCEDURAL BACKGROUND

On July 28, 1997, the plaintiff injured her back while working as a stocker for Wal-Mart. Wal-Mart's workers' compensation carrier, National Union Fire Insurance Company, initially denied coverage. On July 30, 1998, the plaintiff filed her Petition to Controvert, and on August 24, 1998, Administrative Law Judge Linda Thompson held an evidentiary hearing. On September 14, 1999, Judge Thompson entered a decision, finding that the plaintiff "received a work-related injury . . . as alleged in the petition to controvert, as amended." Judge Thompson then ordered the carrier to pay benefits "at the rate of $187.01 per week beginning July 8, 1998, and continuing until June 9, 1999 . . . ." Finally, Judge Thompson held "that a determination about permanent occupational disability or loss of wage-earning capacity, if any, will be reserved until a later time." Neither party appealed this decision, and the carrier paid as ordered.

Approximately six years later, on July 14, 2005, Administrative Law Judge Tammy Harthcock held a second evidentiary hearing and found the plaintiff totally and permanently disabled. Judge Harthcock ordered benefits of $187.01 per month, beginning July 28, 1997 and continuing for 450 weeks. The defendants appealed this decision, and eventually -- after decisions made by the Workers' Compensation Commission and the Tate County Circuit Court -- the Mississippi Court of Appeals affirmed the ALJ's decision that the plaintiff was totally and permanently disabled.*fn1 The court of appeals entered their decision on July 1, 2008 and denied a rehearing on December 16, 2008. The Mississippi Supreme Court denied certiorari on April 6, 2009. On July 9, 2010, the plaintiff filed the present action in the Tate County Circuit Court, arguing the decision to deny coverage in 1997 was made in bad faith, and on August 18, 2010, the defendants removed the action to this court.

The defendants now move to dismiss the present action, arguing that the three-year statute of limitations began running after Judge Thompson's decision in 1999, approximately eleven years before the plaintiff filed her complaint. After the defendants filed the motion to dismiss, the plaintiff filed a motion for leave to file a second amended complaint, and the court granted that motion. The defendants then moved to dismiss the second amended complaint, arguing essentially that the second amended complaint failed to meet the pleading requirements dictated by the Supreme Court's recent decisions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) and Ashcroft v. Iqbal, 129 S. Ct. 1937, 1948-50 (2009).

II. DISCUSSION

When the court considers a motion filed pursuant to Rul 12(b)(6) of the Federal Rules of Civil Procedure, it "accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff." In Re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). To overcome a Rule 12(b)(6) motion, the plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly 550 U.S. 544, 570 (2007). "Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id at 555.

Rule 12(d) provides that if on a motion under Rule 12(b)(6), matters outside the pleadings are considered by the court, "the motion must be treated as one for summary judgment under Rule 56." Fed. R. Civ. P. 12(d). However, there is no need to convert the matter to a motion for summary judgment when the matters considered include only the complaint and findings in a related administrative proceeding where the plaintiff had notice of the exhibit and the exhibit was integral to the plaintiff's claim. See Novo Nordisk of North America, Inc. v. Genentech, Inc., 885 F. Supp. 522, 526 (S.D.N.Y. 1995) (citing Cortec Industries, Inc. v. Sum Holding L.P., 949 F.2d 42, 47-48 (2d Cir. 1991)). Because the court considered only the complaint and the findings from the related administrative proceeding, it treats the present motions as motions to dismiss pursuant to Rule 12(b)(6).

A. FIRST MOTION TO DISMISS -- STATUTE OF LIMITATIONS

The defendants removed this action from the Tate County Circuit Court asserting diversity jurisdiction. Because complete diversity exists, the court has subject matter jurisdiction, and Mississippi law is controlling on all substantive issues. Erie R. Co. v. Tompkins, 304 U.S. 64, 78-80 (1934). The court, therefore, looks first to Mississippi's statutes of limitation. There is no statute of limitations designated specifically for a bad faith action. Consequently, the court looks to Mississippi's catch-all statute of limitations provided at § 15-1-49, which provides that an action must be brought within three years "after the cause of such action accrued." Miss. Code Ann. § 15-1-49 (Rev. 2003). According to the defendants, that period began to run on October 4, 1999 when Judge Thompson decided the plaintiff had received a work-related injury, and thus, the plaintiff had to file her action no later than October 4, 2002.*fn2

Because the plaintiff did not file the present action until July 9, 2010, the defendants argue she filed her claim almost eight years late. The plaintiff argues that because Judge Thompson's decision was not "final," the statute of limitations did not begin to run until April 30, 2009 when the court of appeals made its final decision. Both parties rely heavily on the Mississippi Supreme Court's decision, Bullock v. AIU Ins. Co., 995 So. 2d 717 (Miss. 2008). The court also finds the Bullock decision extremely helpful.

In Bullock, the plaintiff sued his employer's workers' compensation carrier for bad faith after it denied coverage and the Administrative Law Judge found he was an insured and entitled to benefits. Bullock, 995 So. 2d at 719. The ALJ made that determination on October 12, 1999 but found only that the defendants were liable for payment under the Act. The ALJ made no finding as to any amount the defendants owed. Id. Regardless, the insurer paid all back benefits and Bullock began receiving benefits. Neither party appealed that decision. Almost seven years later, a second hearing was held, and the ALJ awarded Bullock additional workers' compensation benefits. The commission approved this decision on May 25, 2004. Shortly thereafter, Bullock sued AIU for acting in bad faith, and the defendant removed the action to federal court. Id.*fn3

The defendant moved to dismiss the action, arguing that the three-year statute of limitations began to run following the October 12, 1999 decision, when ...


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