SCOTT PENN, INC., AUSTIN, INC., KENT HILLMAN LOGGING, INC., WINONA HARDWOOD, INC., TALLAHATCHIE HARDWOOD, INC., GREG WINSTEAD LOGGING, INC. AND SOUTHERN LOGGING, INC.
MISSISSIPPI WORKERS' COMPENSATION GROUP SELF-INSURER GUARANTY ASSOCIATION
OF JUDGMENT: 06/02/2016
COUNTY CIRCUIT COURT, HON. JOHN HUEY EMFINGER TRIAL JUDGE
COURT ATTORNEYS: ANDREW D. SWEAT KIMBERLY NELSON HOWLAND
JAMES D. SHANNON KATHRYN LINDSEY WHITE M. GARNER BERRY TROY
PHILIP HUSKEY JOHN DAVID PRICE
ATTORNEYS FOR APPELLANTS: KATHRYN LINDSEY WHITE JAMES D.
ATTORNEYS FOR APPELLEE: JENNIFER HUGHES SCOTT ANDREW D. SWEAT
KIMBERLY NELSON HOWLAND
RANDOLPH, P.J., KITCHENS AND CHAMBERLIN, JJ.
RANDOLPH, PRESIDING JUSTICE.
The Mississippi Workers' Compensation Group Self-Insurer
Guaranty Association ("Guaranty Association") was
ordered by the Mississippi Workers' Compensation
Commission ("Commission") to assess former members
of the Mississippi Comp Choice Workers' Compensation
Self-Insurers Fund ("Comp Choice"). Subsequently,
the Guaranty Association filed suit in the Madison County
Circuit Court to collect the assessments. Former members of
Comp Choice appealed the circuit court's grant of
summary judgment in favor of the Guaranty Association.
Finding no error, we affirm the judgment of the Madison
County Circuit Court, as to Austin Inc.-Randolph, MS and
Winona Hardwood, Inc.
AND PROCEDURAL HISTORY
On January 20, 2009, the Commission entered an order
accepting the surrender of Comp Choice's Certificate of
Authority and terminated Comp Choice's status as an
approved group self-insurer fund. Subsequently, the
identified several failures by Comp Choice to satisfy its
obligations and requirements as a self-insurer, and despite
repeated attempts by the Commission and Comp Choice to
rehabilitate these wrongs, surrender of the Certificate
became the only viable option at the end of the day. Based on
the facts leading to the surrender of the Certificate of
Authority, the Commission could easily find Mississippi Comp
Choice to be a "self-insurer in default" pursuant
to the broad definition of such found in § 71-3-157, and
we do hereby find that in several respects, Mississippi Comp
Choice has failed to satisfy many of its obligations under
the Mississippi Workers' Compensation Law. Such default,
which we hereby find to have occurred as of the effective
date of surrender of Certificate, or as of January 20, 2009,
by operation of statute authorizes this transfer of
responsibility to the Group Guaranty Association for the
administration and payment of the workers' compensation
liability of the Fund. . . .
The Commission finds that the indemnity agreements required
by Commission General Rule 7, which jointly and severally
bind all members of Mississippi Comp Choice to meet the
workers' compensation obligations of each and every other
member, are valid and enforceable. The Commission further
finds that should the remaining assets of Mississippi Comp
Choice be exhausted in the payment and administration of
claims, the Group Guaranty Association should then look to
the enforcement of those agreements including making any
assessments necessary to satisfy those financial obligations.
Guaranty Association is a "statutorily created legal
entity formed to provide a mechanism for payment of covered
claims under the Workers' Compensation Law, to avoid
financial loss to claimants because of the insolvency of a
group self insurer, and to provide an association to assess
the cost of such protection among self-insurers."
On April 19, 2010, the Commission found that "a careful
evaluation of the remaining assets and outstanding claims
unfortunately shows an insufficient amount of Comp Choice
assets to cover the projected claim payout." The
Commission ordered an assessment in the amount of $1, 948,
463 of the former members of Comp Choice for the last four
years showing losses. The amount was necessary to "cover
the fund deficiency, the proper estimated value of
non-current assets, and the anticipated administrative and
legal fees." The Commission ordered that all assessments
be calculated based on each member's share of the total
premiums earned and be paid within sixty days of receiving
the assessment notice. The Commission also imposed a 5% per
month fine, with a minimum fine of $100, for any member
failing to timely pay the assessment.
On May 18, 2010, former members of Comp Choice filed a Notice
of Appeal in the Hinds County Circuit Court, challenging the
April 19, 2010, order of the Commission. Comp Choice asserted
that the order and assessment (1) were not supported by
substantial evidence and law; (2) were arbitrary and
capricious; (3) were beyond the power of the Commission; and
(4) violated statutory and/or constitutional rights of Comp
Choice. Comp Choice requested that the appeal act as
supersedeas to the ...