Franklin Corp. v. Tedford

• Decision Date: 10 September 2009
• Docket Number: No. 2007-CA-01454-SCT.,2007-CA-01454-SCT.
• Citation: 18 So.3d 215
• Parties: FRANKLIN CORPORATION v. Pauline TEDFORD, Lora Smith, Judy Haire and Samantha Mixon.
• Court: Mississippi Supreme Court

18 So.3d 215

FRANKLIN CORPORATION v. Pauline TEDFORD, Lora Smith, Judy Haire and Samantha Mixon.

No. 2007-CA-01454-SCT.

Supreme Court of Mississippi.

September 10, 2009.

James Lawton Robertson, Jennifer Hughes Scott, Elizabeth G. Hooper, Bridget E. Kobs, Jackson, attorneys for appellant.

Heber S. Simmons, III, Ridgeland, William Melvin Rosamond, Douglas G. Mercier, Ridgeland, John Robin Bradley, Jr., Oxford, attorneys for Appellees.

EN BANC.

ON MOTION FOR REHEARING

RANDOLPH, justice, for the Court.

¶ 1. The motion for rehearing filed by Franklin Corporation is denied. The previous opinions of this Court are withdrawn and these opinions are substituted therefor.

¶ 2. Today we are presented with the latest conflict in the ongoing legal struggle between industry and labor regarding compensation and medical indemnity for employees injured in the workplace. The appellees/employees seek to expand the scope of egregious conduct excluded from the Mississippi Workers' Compensation Law ("Act") to include acts which are "substantially certain" to cause injury to the employee. Not surprisingly, the appellant/employer clamors for the opposite, requesting that this Court overrule Miller v. McRae's, Inc., 444 So.2d 368 (Miss. 1984), and its progeny and retreat from these decisions, which exclude employers' tort immunity for certain egregious acts accompanied by an "actual intent to injure" the employee. After due consideration and deliberation, this Court chooses to do neither. The constitutionally delineated forum for change is the Mississippi Legislature, not this Court. We find that the correct balance is in place and so shall remain, unless the Legislature should decide otherwise.

¶ 3. In the case sub judice, Pauline Tedford, Lora Smith, Judy Haire, and Samantha Mixon ("Plaintiffs") filed suit alleging multiple claims against multiple defendants, including claims against their employer, Franklin Corporation, for battery and intentional infliction of emotional distress arising from injuries sustained in the course and scope of their employment. Franklin Corporation filed a "Motion to Dismiss" and a "Motion for Summary Judgment," contending that the exclusive remedy for the Plaintiffs was provided by the Act. After due consideration by the circuit court, the trial judge denied the relief sought and set the matter for trial. At trial, the jury found in favor of the Plaintiffs, awarding both compensatory and punitive damages. Thereafter, the circuit court denied Franklin Corporation's "Motion for J.N.O.V., or in the Alternative, for New Trial or Remittitur," but reduced the punitive damage award. From those rulings, Franklin Corporation appeals.

HISTORICAL BACKGROUND

¶ 4. The demand of labor for the protection of workers' compensation laws is well-established. See O.W. Holmes, The Path of the Law, 10 Harv. L.Rev. 457, 466-67 (1897) ("[s]ince the last words were written, I have seen the requirement of such insurance put forth as part of the programme of one of the best known labor organizations."). This was largely in response to the denial of employer indemnity in the majority of workplace accidents, due to the lack of proof of employer fault¹ or employer defenses such as contributory negligence, assumption of risk, and the fellow-servant rule. See Downey, History of Work Accident Indemnity in Iowa at 5, 17, 78. The prevailing view of labor was that:

[a]n indemnity system which tediously grinds out such results as these is no better than a gamble — a gamble which awards a few prizes to injured persons and deludes all other injured persons into thinking they are going to draw prizes, too, when, as a matter of fact, they are going to draw blanks; a gamble which makes the employer pay preposterous sums to certain people and so prevents him from paying reasonable sums to all. It is on the same level as faro.

Id. at 80 (internal quotation marks omitted). See also P.V. Fishback & S.E. Kantor, A Prelude to the Welfare State: The Origins of Workers' Compensation, 11 (University of Chicago 2000) ("[r]eformers decried the common law system" for uncompensated injuries, "uncertain and unequal payouts," high transactional costs, and delay). By the early 1900s, President Theodore Roosevelt included "comprehensive workmen's compensation acts" within his progressive program for economic reform, the "Square Deal." T. Roosevelt, The New Nationalism (Aug. 31, 1910), in 13 The Annals of America 250, 253 (Encyclopedia Britannica, Inc.1976).

¶ 5. The subsequent "advent of state workers' compensation laws after 1910 marked the removal from the tort system of most suits by injured workers against employers." Note, Exceptions to the Exclusive Remedy Requirements of Workers' Compensation Statutes, 96 Harv. L.Rev. 1641, 1641 (1983). In fact, "[b]etween 1911 and 1920, 41 states enacted workers' compensation statutes." Id. at 1641 n. 1 (citing E.H. Downey, Workmens' Compensation, 162 n. 18 (1924)). Initially, some courts deemed such statutes to be so radical as to constitute an unconstitutional deprivation of the employer's property without due process of law. See Ives v. South Buffalo Ry., 201 N.Y. 271, 94 N.E. 431 (1911); J.C. Satterfield, An Introduction to the Mississippi Workmens' Compensation Act, 20 Miss. L.J. 27, 31 (1948) ("three of the four acts adopted prior to 1911 were declared unconstitutional ..."). However, after their widespread acceptance had been established:

Mississippi became the last state to adopt a system of Workmen's Compensation. This type of legislation is generally viewed as a compromise between the interest of labor and business. Because of the exclusive nature of the remedy labor surrenders the right to assert a common law tort action along with the attendant possibility of achieving punitive damages. In exchange it receives assurance that an award is forthcoming. Industry surrenders its three major common law defenses: contributory negligence, assumption of risk, and the fellow servant rule. In exchange it receives the knowledge that there will be no outrageously large judgments awarded to injured employees.[²] The entire system was designed to insure that those injured as a result of their employment would not be reduced to a penniless state and thereby become dependent on some form of governmental public assistance.

Miller, 444 So.2d at 370. See also Stevens v. FMC Corp., 515 So.2d 928, 932 (Miss. 1987) (quoting Sawyer v. Head, 510 So.2d 472, 477 (Miss.1987)) ("[b]y the exchange, the remedy of workers' compensation benefits, insofar as the right of the employee against [the] employer and fellow employees are concerned, is abrogated."); John R. Bradley & Linda A. Thompson, Mississippi Workers' Compensation § 1:1 (2007) ("[t]hus, compensation by the employer for most employment injuries has been taken out of the tort law and placed within a separate branch of law — worker's compensation, a no-fault plan[³] handled in an administrative setting by an executive branch agency."). Ultimately, the workers' compensation system lends valuable predictability to both employees and employers. Employees receive guaranteed compensation for covered injuries, bypassing the civil-litigation risks of either no recovery or uncollectible judgments against insolvent employers. Employers receive fixed levels of potential liability which they can anticipate and treat as a general "cost of doing business."

¶ 6. Mississippi Code Section 71-3-9 provides, in part, that "[t]he liability of an employer to pay compensation shall be exclusive and in place of all other liability of such employer to the employee. ..." Miss.Code Ann. § 71-3-9 (Rev.2000) (emphasis added). However, based upon the statutory requirement that the "injury" be "accidental" to be compensable under the Act, see Mississippi Code Sections 71-3-3(b), 71-3-7, this Court has found that some intentional torts are outside the scope of the exclusivity provision in Mississippi Code Section 71-3-9. Miss.Code Ann. §§ 71-3-3(b), 71-3-7 (Rev.2000). See Royal Oil Co. v. Wells, 500 So.2d 439, 442 (Miss.1986) ("the [Act] does not bar an employee from pursuing a common law remedy against his employer for an injury caused by his employer's wilful and malicious act"); Miller, 444 So.2d at 371 ("where an injury is caused by the willful act of an employee acting in the course and scope of his employment and in the furtherance of his employer's business, the [Act] is not the exclusive remedy available to the injured party") (emphasis added). This limitation on the Act's exclusivity "reflects the public policy that certain courses of conduct (intentional torts) are so shockingly outrageous and beyond the bounds of civilized conduct that the person responsible should not be rewarded with tort immunity." Bradley & Thompson, Mississippi Workers' Compensation at § 11:8.

¶ 7. In Peaster v. David New Drilling Co., 642 So.2d 344 (Miss.1994), this Court held that "[a] mere willful and malicious act remains insufficient to give rise to the exception under the Act." Id. at 348. See also Blailock v. O'Bannon, 795 So.2d 533, 535 (Miss.2001) ("[r]eckless or grossly negligent conduct is not enough to remove a claim from the exclusivity of the Act."). The employee also must establish that the egregious act was accompanied by an "actual intent to injure" in order to except the Act's grant of exclusivity. See id.; Peaster, 642 So.2d at 348-50; Griffin v. Futorian Corp., 533 So.2d 461, 464 (Miss.1988). Thus, Mississippi is in concurrence with an overwhelming majority of states in requiring an "actual intent to injure" the employee. See 6 Arthur Larson, Larson's Workers' Compensation Law § 103.01 nn. 4-6, § 103.04[1] (2008).

¶ 8. Having set forth the law in existence at the time the subject events unfolded, we turn to the specific facts developed and stipulated in this case.

FACTS

¶ 9. Franklin Corporation is a furniture manufacturer located in Houston, Mississippi. In January 1999, George Parker,...