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Smith v. Northern Insurance Company of New York

United States District Court, S.D. Mississippi, Western Division

November 25, 2014

TERRY SMITH, Plaintiff,
v.
NORTHERN INSURANCE COMPANY OF NEW YORK, Defendant.

MEMORANDUM OPINION AND ORDER

KEITH STARRETT, District Judge.

For the reasons below, the Court denies Defendant's Motion for Summary Judgment [4].

I. BACKGROUND

In August 2012, Plaintiff sustained a work-related injury. At the time of the accident, his employer had a workers' compensation policy issued by Defendant. In January 2013, Plaintiff filed a Petition to Controvert with the Mississippi Workers' Compensation Commission, seeking workers' compensation benefits. On May 21, 2014, he filed an Application for Approval of Compromise Settlement [4-1]. Therein, he requested that the Commission:

... enter an order approving said compromise and settlement as set forth above as a full and complete settlement, accord and satisfaction for all disability of every kind and nature sustained by your claimant as a result of the injury which occurred on or about August 12, 2012, and that said payment, when made, shall fully acquit and discharge said employer and carrier from any further liability because, arising out of, or in any way connected with said accidental injury.

Defendant joined [4-2] the Application, and the Commission granted it [4-3].

After the Commission approved the settlement, Plaintiff deposited the funds [4-4]. However, Plaintiff declined to execute the release as drafted by Defendant. Before signing the release, he altered some of its terms [4-5], refusing to release Defendant from any claims except the claim for workers' compensation benefits. A couple of weeks later, he filed this lawsuit [1-1] and alleged that Defendant denied and/or delayed payment of benefits in bad faith.

Defendant filed a Motion for Summary Judgment [4]. It argues that Plaintiff is barred from bringing this suit by the express terms of the parties' settlement. The motion is ripe for review.

II. STANDARD OF REVIEW

Rule 56 provides that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a); see also Sierra Club, Inc. v. Sandy Creek Energy Assocs., L.P., 627 F.3d 134, 138 (5th Cir. 2010). "An issue is material if its resolution could affect the outcome of the action." Sierra Club, Inc., 627 F.3d at 138. "An issue is genuine' if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party." Cuadra, 626 F.3d at 812.

The Court is not permitted to make credibility determinations or weigh the evidence. Deville v. Marcantel, 567 F.3d 156, 164 (5th Cir. 2009). When deciding whether a genuine fact issue exists, "the court must view the facts and the inference to be drawn therefrom in the light most favorable to the nonmoving party." Sierra Club, Inc., 627 F.3d at 138. However, "[c]onclusional allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation do not adequately substitute for specific facts showing a genuine issue for trial." Oliver v. Scott, 276 F.3d 736, 744 (5th Cir. 2002).

III. DISCUSSION

The question presented by Defendant's Motion for Summary Judgment [4] is whether the parties intended for the settlement to encompass Plaintiff's potential bad faith claims. "[T]he construction and enforcement of settlement agreements is governed by principles of state law applicable to contracts generally." Lee v. Hunt, 631 F.2d 1171, 1173-74 (5th Cir. 1980). "Parties to a settlement must have a meeting of the minds." Estate of Davis v. O'Neill, 42 So.3d 520, 527 (Miss. 2010). Like other contracts, an enforceable settlement agreement generally "consists of an offer, an acceptance of that offer, and consideration." Id. "Mississippi law requires that the party claiming benefit from the settlement prove by a preponderance of the evidence that there was a meeting of the minds." Howard v. TotalFina E & P USA, Inc., 899 So.2d 882, 889 (Miss. 2005).

The parties agree that there was a settlement, but they disagree as to its terms. Mississippi courts employ "a three-tiered approach to contract interpretation." Tupelo Redevelopment ...


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