THOMAS E. CHAPMAN AND BRENDA CHAPMAN, APPELLANTS
COCA-COLA BOTTLING CO., CONSOLIDATED, AMERICAN CASUALTY COMPANY OF READING, PA. AND CNA CLAIMPLUS, INC., APPELLEES
OF JUDGMENT: 10/07/2013.
[Copyrighted Material Omitted]
FROM WHICH APPEALED: JASPER COUNTY CIRCUIT COURT. TRIAL
JUDGE: HON. RICHARD W. MCKENZIE. TRIAL COURT DISPOSITION:
GRANTED SUMMARY JUDGMENT IN FAVOR OF APPELLEES.
APPELLANTS: JOHN HINTON DOWNEY, THOMAS L. TULLOS.
APPELLEES: H. BENJAMIN MULLEN, H. WESLEY WILLIAMS III,
BRITTNEY PINKHAM THOMPSON, JOHN A. BANAHAN.
P.J., FOR THE COURT. ISHEE, ROBERTS AND CARLTON, JJ., CONCUR.
BARNES, J., CONCURS IN PART AND IN THE RESULT WITHOUT
SEPARATE WRITTEN OPINION. IRVING, P.J., DISSENTS WITH
SEPARATE WRITTEN OPINION, JOINED BY LEE, C.J., AND JAMES, J.;
MAXWELL, J., JOINS IN PART. FAIR, J., NOT PARTICIPATING.
Thomas and Brenda Chapman appeal the grant of summary
judgment to Coca-Cola Bottling Company (Coke), American
Casualty Company (American Casualty), and CNA ClaimPlus
(CNA). We affirm.
AND PROCEDURAL HISTORY
On June 4, 2001, Thomas, while working as a route salesman
for Coke, injured his back when building a display at a store
in Bay Springs, Mississippi. Thomas called the Coke plant
manager, Willie Meador, who instructed him to go to
Occupational and Rehabilitative Associates LLC (ORA), for
evaluation and treatment.
At ORA, Thomas saw Dr. Rob Coleman, who prescribed
epidural-steroid injections and continued him on muscle
relaxers, which Thomas took due to a prior injury. Thomas
previously injured his lower back while working at Coke in
1991. Thomas was also in a vehicle rollover accident in 2000.
Dr. Coleman further recommended that Thomas undergo physical
therapy at Southeastern Regional Medical Center. When Thomas
returned to work, he was placed on light duty. However,
despite being placed on light duty, he was unable to perform
his assignments without help from other employees, and he
eventually left Coke.
After administering some treatment, Dr. Coleman referred
Thomas to Dr. David Lee, a neurosurgeon at the Southern
Neurological Institute in Hattiesburg, Mississippi. Thomas
first visited Dr. Lee on July 14, 2001. Subsequently, Dr. Lee
performed decompression back surgery on Thomas on August 28,
2001. Dr. Lee found that Thomas reached maximum medical
improvement on March 15, 2002.
After Thomas's June 4, 2001 incident, Tammy Saul, an
administrator at Coke, submitted an " Employer's
First Report of Injury or Occupation Disease" (B3) form
on June 6, 2001. Based on Coke's B3 form, CNA, as
American Casualty's claims adjuster, opened an active
investigation file. Coke initially approved some of
Thomas's medical expenses. However, Thomas's doctors
at ORA determined that Thomas's injuries resulted from a
preexisting condition and not the June 4, 2001 incident.
In a letter dated June 26, 2001, ORA reported to Coke:
The doctors of our clinic have all reviewed the chart of Mr.
Thomas Chapman and are all in agreement that Mr.
Chapman's condition is not work-related but it is
aggravated by work. We have reviewed the MRI done by our
clinic and reviewed the MRI that was done previously. We feel
that all of his injuries are from previous accidents and no
new injury was noted. We also agree that Mr. Chapman needs to
continue to be off work as the condition is not caused by
work but aggravated by work.
report was signed by Dr. Ronnie Ali, head of ORA at the time.
On June 29, 2001, Margaret Redferrin, an adjustor for CNA,
spoke with Meador regarding Coke's information on the
incident. Meador told Redferrin that Thomas's doctors
indicated the injuries resulted from the 2000 vehicle
accident and not the June 4, 2001 incident.
On August 24, 2001, Redferrin spoke to Meador again, and
Meador confirmed the previous determination that Thomas's
injuries stemmed from the 2000 vehicle accident. After
speaking with Meador and
reviewing Thomas's medical records received by CNA at the
time, Redferrin closed Thomas's file on September 17,
2001, after finding no workers' compensation claim
On July 31, 2002, Thomas filed a petition to controvert with
the Mississippi Workers' Compensation Commission. After
notice of the petition to controvert, Redferrin reopened
Thomas's file on August 13, 2002.
On December 16, 2005, the administrative judge held a hearing
on the issues of whether Thomas sustained a work-related
injury to his back on June 4, 2001, the existence of
temporary disability, and the reasonableness and necessity of
medical treatments. Both sides presented medical testimony at
The judge ruled that the injury was compensable and awarded
past-due compensation for temporary total disability from
June 6, 2001, through March 15, 2002. American Casualty, CNA,
and Coke appealed the ruling to the Commission. The
Commission heard the case on July 31, 2006, and affirmed the
ruling by an order dated August 23, 2006.
On May 30, 2007, the parties agreed to, and the Commission
approved, a settlement between the parties.
On April 21, 2008, Thomas and Brenda filed a complaint in
circuit court against Coke, CNA, American Casualty, and ORA.
The Chapmans claimed that Coke, CNA, and American Casualty
acted in bad faith by wrongfully denying benefits that arose
from Thomas's underlying compensable workers'
compensation claim and refusing to pay Thomas's
workers' compensation claim. The Chapmans also claimed
that CNA wrongfully denied and delayed payments of medical
bills as part of the agreed settlement. Further, the Chapmans
asserted Coke, CNA, and American Casualty all conspired with
ORA to provide a " sham" report in order to prevent
workers' compensation payments.
ORA filed a motion for summary judgment, which the circuit
court granted on April 30, 2013. The circuit court granted
the motion in light of ORA's uncontested status as a
dissolved corporation without assets. See Miss. Code
Ann. § 79-4-14.21 (Rev. 2013). No appeal was taken from
After the completion of discovery, American Casualty and CNA
filed a motion for summary judgment. Coke joined the motion.
The circuit court granted summary judgment in favor CNA,
American Casualty, and Coke, and issued a final order on
November 6, 2013. It is from this decision that the Chapmans
" We review the grant or denial of a motion for summary
judgment de novo, viewing the evidence in the light most
favorable to the party against whom the motion has been
made." Karpinsky v. Am. Nat'l Ins. Co., 109
So.3d 84, 88 (¶ 9) (Miss. 2013).
Under a de novo review,
summary judgment is appropriate if the evidence before the
Court--admissions in the pleadings, answers to
interrogatories, depositions, affidavits, etc.--shows there
is no genuine issue of material fact, and the moving party is
entitled to [a] judgment as a matter of law. This Court does
not try issues on a [Mississippi] Rule [of Civil Procedure]
56 motion, but only determines whether there are issues to be
tried. In reaching this determination, the Court examines
affidavits and other evidence to determine whether a triable
issue exists, rather than the purpose of resolving that
Harper v. Cal-Maine Foods Inc., 43 So.3d 401, 403
(¶ 4) (Miss. 2010) (citations omitted).
Whether the circuit court erred in granting summary judgment
to American Casualty and CNA.
" [S]ummary judgment 'is appropriate when the
non-moving party has failed to make a showing sufficient to
establish the existence of an element essential to the
party's case, and on which that party will bear the
burden of proof at trial.'" Buckel v.
Chaney, 47 So.3d 148, 153 (¶ 10) (Miss. 2010)
(quoting Watson Quality Ford Inc. v. Casanova, 999
So.2d 830, 832 (¶ 7) (Miss. 2008)). Therefore, the
Chapmans had the burden to provide sufficient evidence to
show the existence of bad faith on the part of American
Casualty and CNA.
For a claimant to maintain a bad-faith claim against an
insurer, he " must show that the insurer lacked an
arguable or legitimate basis for denying the claim, or that
the insurer committed a wil[l]ful or malicious wrong, or
acted with gross and reckless disregard for the insured's
rights." Liberty Mut. Ins. Co. v. McKneely, 862
So.2d 530, 533 (¶ 9) (Miss. 2003) (citing State Farm
Ins. Co. v. Grimes, 722 So.2d 637, 641 (Miss. 1998)).
However, the " fact that an insurer's decision to
deny benefits may ultimately turn out to be incorrect does
not in and of itself warrant an award of punitive damages if
the decision was reached in good faith." Id.
" Where an insurance carrier denies or delays payment of
a valid claim, punitive damages will not lie if the carrier
has a reasonable cause for such denial or delay."
Id. (citation omitted).
In order to sustain a bad-faith claim, the burden falls on
the claimant to prove that the insurer either lacked a
legitimate or arguable basis for denying his claim or that it
committed a willful or malicious wrong or acted with gross
and reckless disregard for his rights. Id.
Thomas argues that American Casualty had no arguable basis
for denying his claim and maliciously denied then delayed his
workers' compensation payments. American Casualty
counters that it retained an arguable basis for delaying his
workers' compensation claims, which Thomas affirmed in
After the June 4, 2001 accident, American Casualty, through
CNA, received information that linked Thomas's medical
treatments to a preexisting condition. Between June 4, 2001,
and September 17, 2001, all information obtained by CNA
indicated that Thomas had a preexisting condition, which did
not require any payments under workers' compensation.
CNA's adjuster Redferrin spoke with Coke's Meador on
at least two occasions about Thomas's injury. These
conversations indicated Coke believed Thomas's injury
resulted from the 2000 vehicle accident, that medical
insurance covered Thomas's medical bills relating to the
June 4 incident, and no workers' compensation claim
American Casualty also did not act in a wrong or malicious
manner by denying Thomas's claim. Prior to the petition
to controvert, American Casualty found Thomas's injury
resulted from the 2000 vehicle accident, or at least found
the source of his injury in dispute. Once Thomas filed a
petition to controvert, the petition, by its very nature,
placed the claim in further dispute until the Commission
resolved the claim.
The claim remained in dispute until August 23, 2006, when the
Commission affirmed the AJ's order, which ruled
in favor of Thomas. The parties did not reach a final
agreement on the amount of compensation until the Commission
approved a settlement on May 30, 2007. Therefore, American
Casualty correctly asserts an arguable claim existed from at
least June 4, 2001, to August 23, 2006, when the Commission
ruled, if not until May 30, 2007 when the parties finally
Thomas admitted as much in his deposition on March 18, 2013:
Question: All right. And so according to this document that
you signed on your oath, there was a legitimate dispute
between you and Coke and the insurance company for the
workers' (sic) comp?
Thomas: Uh-huh, that's right.
Question: Okay. That was true in May of 2007, right?
Thomas: That's what the date is, yes.
In the settlement petition to the Commission referred to in
Thomas's deposition, he attested that a legitimate or
arguable basis for denying his claim existed. In the
petition, Thomas stated:
Petitioner would further show the Commission that there
is a bona fide, legitimate dispute between Petitioner and his
Attorney, on the one hand, and Employer [Coke] and Carrier
[American Casualty], on the other hand as to the
nature and extent of disability, loss of wage earning
capacity, and/or industrial loss, if any, of Petitioner, as
to medical expenses, hospital expenses, and other expenses,
extent of injuries, disability, loss of wage earning
capacity, and/or industrial loss of Petitioner which is
related to his employment with Employer, and as to the
medical and disability status of Petitioner, but that
notwithstanding these disputes and acting through and on the
advice of his Attorney, Petitioner has agreed to settle any
and all workers' compensation claims against Employer and
Carrier based on the following payments for indemnity and
medical as follows: . . . .
(Emphasis added). Further, the Petition stated:
Petitioner would further show to the Commission that he has
consulted with his Attorney as to all matters pertinent to
this claim and that his Attorney has explained to him and
Petitioner is aware of the hearing procedures afforded in
such cases and the possibility that he might receive an award
of a greater amount or lesser amount than agreed herein or an
award of other relief and benefits if this matter were
adjudicated. Petitioner would further show to the Commission
that his Attorney has explained and he understands and is
aware of the prospects of recovery and the possibility of
medical, hospital, and other expenses respecting this claim,
and the possibility of additional benefits and additional
forms of relief against Employer and Carrier, and that these
expenses and benefits, as well as all other expenses and
benefits respecting this claim, will not be the
responsibility of Employer and Carrier and/or either of them,