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Butler v. Mueller Copper Tube Company Inc.

United States District Court, N.D. Mississippi, Aberdeen Division

January 24, 2019

JOHN R. BUTLER and STEPHANIE BUTLER PLAINTIFFS
v.
MUELLER COPPER TUBE COMPANY, INC., NEW HAMPSHIRE INSURANCE COMPANY, INC., AND SEDGWICK CLAIMS MANAGEMENT SERVICE DEFENDANTS

          MEMORANDUM OPINION

          DAVID A. SANDERS UNITED STATES MAGISTRATE JUDGE

         This matter arises on competing motions for summary judgment. After considering the matter, the court finds as follows:

         Facts and Procedural History

         Plaintiffs seek to recover damages for alleged bad faith handling of John Butler's workers' compensation claim, which arose on the afternoon of August 22, 2013, when he suffered a crush injury to his right foot during the course and scope of his employment with Mueller Copper Tube Company, Inc. Butler had his right leg amputated below the knee on October 10, 2013. On August 22, 2014, he filed a petition to controvert his workers' compensation claim. Following two years of litigation before the Mississippi Workers' Compensation Commission (“MWCC”), the parties agreed to settle the indemnity, or wage, portion of his claim, while keeping the medical portion open.

         At the time of his injury, Mueller had workers' compensation insurance through New Hampshire Insurance Company (“NHI”). Mueller also had a service agreement with Sedgwick Claims Management Service to act as a third-party administrator of Butler's claim. Butler exhausted his administrative remedies before the MWCC, which compelled the employer and carrier to provide certain medical and indemnity benefits, and filed this action for bad faith delay of benefits.

         Plaintiffs seek partial summary judgment on the issues of delay and vicarious liability. Defendants seek summary judgment on all claims and complete dismissal with prejudice.

         Summary Judgment Standard

         Summary judgment is warranted when the evidence reveals no genuine dispute regarding any material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The Rule “mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

         The moving party “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Id. at 323. The nonmoving party must then “go beyond the pleadings” and “designate ‘specific facts showing that there is a genuine issue for trial.'” Id. at 324 (citations omitted). In reviewing the evidence, factual controversies are to be resolved in favor of the non-movant, “but only when . . . both parties have submitted evidence of contradictory facts.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). When such contradictory facts exist, the Court may “not make credibility determinations or weigh the evidence.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). Conclusory allegations, speculation, unsubstantiated assertions, and legalistic arguments are not an adequate substitute for specific facts showing a genuine issue for trial. TIG Ins. Co. v. Sedgewick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002); SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1997); Little, 37 F.3d at 1075.

         Analysis and Discussion

         The Mississippi Workers' Compensation Act is the exclusive remedy available to an injured worker in the state of Mississippi. Miller v. McRae's Inc., 444 So.2d 368, 370 (Miss. 1984). See also Miss. Code Ann. § 71-3-9 (“The liability of an employer to pay compensation shall be exclusive and in place of all other liability of such employer to the employee, his legal representative, husband or wife, parents, dependents, next-of-kin, and anyone otherwise entitled to recover damages at common law or otherwise from such employer on account of such injury or death[.]”). However, “an employee entitled to worker's compensation benefits from her employer has a separate and independent right to recover damages from the employer's worker's compensation insurer because of the insurer's intentional bad-faith refusal to pay compensation when due, which constitutes an independent intentional tort committed by the insurer outside the scope of the worker's employment.” Williams v. Liberty Mut. Ins. Co., 741 F.3d 617, 621 (5th Cir. 2014) (citing Southern Farm Bureau Casualty Ins. Co. v. Holland, 469 So.2d 55, 56-59 (Miss. 1984)). Holland was extended “to allow bad-faith refusal action against employers as well as insurance carriers.” Id. at 622 (citing Luckett v. Miss. Wood Inc., 481 So.2d 288, 290 (Miss.1985)).

To prove his claim against the employer, the employee would have to show, as he would to prove a claim against the carrier, that there has been “(1) an intentional refusal by the employer to pay with reasonable promptness the insured's claim; and, (2) the absence of any arguable reason for the defendant's refusal to pay with reasonable promptness.”

Toney v. Lowery Woodyards and Employer's Ins. Of Wausau, 278 F.Supp.2d 786, 794 (S.D.Miss. 2003). The standard is the same for a claim based on delay of benefits. See Bullocks v. Gottfried Corp., 403 Fed.Appx. 947, 950 (5th Cir. 2010).

         NHI and Sedgwick argue that any unreasonable delay in benefits was caused by Plaintiffs' tardiness in submitting documentation or due to the attorney who defended the underlying workers' compensation claim, David McLaurin.[1] Mueller seconds these arguments and also argues that it fulfilled its statutory duty by securing workers' compensation coverage and that it did not actively participate in the administration of the claim. Plaintiffs seek to impose liability on the defendants through a theory of vicarious liability, arguing that McLaurin acted as Defendants' agent and therefore his actions should be imputed to them. They further argue that ...


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