Hardaway v. Howard Indus.
| Docket Number | 2022-CA-00787-SCT |
| Decision Date | 25 January 2024 |
| Parties | VINCE HARDAWAY v. HOWARD INDUSTRIES, INC. |
| Court | Mississippi Supreme Court |
ATTORNEYS FOR APPELLEE: LAURA W. GIVENS, ROBERT P. THOMPSON, RICHARD LEWIS YODER, JR
BEFORE KING, P.J., CHAMBERLIN AND ISHEE, JJ.
¶1. This appeal presents a claim by Vince Hardaway against Howard Industries, Inc., for the alleged bad faith denial of Hardaway's workers' compensation benefits. Howard Industries is a self-insured Mississippi corporation located in Jones County that "sells electrical transformers and other products worldwide." Howard Industries contracts with CorVel Enterprise, a third-party claims administrator, to manage the workers' compensation claims of Howard Industries' employees. Hardaway worked at Howard Industries, where he assisted with the assembling of electrical transformers. In July 2009, Hardaway was diagnosed with carpal tunnel syndrome. Hardaway's workers' compensation benefits were ultimately determined by the Mississippi Workers' Compensation Commission's decision to award Hardaway both temporary partial disability and permanent partial disability benefits. This decision was affirmed by the Court of Appeals. Howard Indus., Inc. v. Hardaway, 191 So.3d 1257, 1270 (Miss. Ct. App. 2015).
¶2. Hardaway subsequently brought this action against Howard Industries for bad faith denial of his temporary partial disability benefits. The trial court granted summary judgment against Hardaway, finding that the conduct of Howard Industries did not rise to the level of gross negligence or an independent tort. This Court affirms the judgment of the trial court.
¶3. In July 2009, Hardaway developed bilateral carpal tunnel syndrome and reported his injury to Cindy Ainsworth, a clerk at Howard Industries. Ainsworth in turn informed John Risher, Howard Industries' environmental health and safety manager, that Hardaway had reported "numbness and tingling and pain in the fingers" and that his doctor had found that this was a work related injury. Risher responded to the email from Ainsworth and inquired as to what Hardaway's job description and activities entailed. Risher stated, "[l]et's fill in all the blanks before we say it [is] workers' comp." Ainsworth also forwarded the doctor's report to Joe Bridewell, the senior claims specialist at CorVel who managed Howard Industries' workers' compensation claims.[1]
¶4. During the continuation of his employment after the diagnosis, Hardaway received treatment for his carpal tunnel. Hardaway had periods in which he was restricted to lightduty work and periods in which he was unable to work at all. Hardaway, 191 So.3d at 1260. Hardaway received payments from CorVel for temporary total disability during the periods when he was not working due to the injury, but he did not receive temporary partial disability during the periods he worked and received less weekly wage than his pre-injury wages. Id. at 1264. On September 7, 2010, Ainsworth emailed Bridewell to inform him of Hardaway's work hours on light duty and stated,
¶5. Hardaway was eventually fired for insubordination on October 6, 2010. Id. at 1260. Howard Industries continued paying for medical treatment until January 13, 2011, when Hardaway's doctor determined that Hardaway had reached "maximum medical improvement with a 13% permanent medical impairment to each upper extremity and with permanent work restrictions on repetitive grasping, gripping or using scissors or knives."
¶6. Hardaway filed a petition to controvert on January 18, 2011, and on February 7, 2011, he filed a Motion to Compel Temporary Partial Disability Benefits. Hardaway argued that he was denied temporary partial disability benefits for the time periods of July 9 to10, 2009; July 24 to August 5, 2009; and August 23, 2010, to January 13, 2011. On March 4, 2011, Doug Boone, an attorney for Howard Industries, sent Roger Doolittle, attorney for Hardaway, a letter informing him that Bridewell had been directed to send a check for temporary partial disability benefits in the amount of $4,782.33. Boone noted that this check was prior to the final determination of benefits by the administrative judge. On March 4, 2011, Bridewell issued a check for Hardaway's temporary partial disability benefits.
¶7. On July 29, 2011, at Howard Industries' request, Hardaway was seen by a second doctor who opined that his carpal tunnel syndrome was more likely to have occurred due to his obesity and gout than his work activities.
¶8. On July 15, 2013, the administrative judge awarded Hardaway temporary partial disability benefits for the periods of July 9 to 10, 2009; July 24 to August 5, 2009; and August 23 to October 6, 2010, the day he was fired. Hardaway was also awarded permanent partial disability benefits and medical fees, and a 10 percent penalty was imposed on all untimely paid installments of compensation. Howard Industries appealed. The Mississippi Workers' Compensation Full Commission amended the amounts granted by the administrative judge for the temporary partial disability, and the Court of Appeals affirmed the full commission's award of benefits to Hardaway.[2] Hardaway v. Howard Indust., Inc., MWCC No. 0906933-K-7217, 2014 WL 1724245, at *7 (Miss. Workers' Comp. Comm'n Apr. 22, 2014).
¶9. On March 16, 2017, Hardaway filed this suit against Howard Industries, and CorVel Enterprise for bad faith failure to pay workers' compensation benefits, gross negligence and punitive damages.[3] Hardaway alleged in his complaint that Howard Industries breached a duty to promptly and reasonably investigate and pay his temporary partial disability claims "by intentionally refusing to investigate whether Hardaway was owed temporary partial disability benefits under Mississippi's Workers' Compensation Act, and in refusing to pay Hardaway temporary partial disability benefits until forced to do so."
¶10. Howard Industries filed its answer on June 1, 2017, and CorVel filed its answer on August 21, 2018. The parties engaged in aggressive discovery proceedings involving motions to compel, motions for attorneys' fees and multiple protective orders. Eventually, Howard Industries filed a motion for summary judgment in which it argued that it had delegated the management of its workers' compensation claims to CorVel and that Hardaway's motion for payment on February 7, 2011, was the first notice that it had of any failure to pay temporary partial benefits to Hardaway. A check in the amount of $4,782.33 for temporary partial benefits was then paid to Hardaway on March 4, 2011, prior to the final determination by the Commission. Under such facts, Howard Industries argued that it should be dismissed from the case because it had fulfilled its duties under its agreement with CorVel, and it had not denied Hardaway his benefits in bad faith.
¶11. On February 28, 2022, the trial court held a hearing on the motion for summary judgment. At the close of the hearing, the trial court granted Howard Industries' motion for summary judgment. The trial court found that Howard Industries had not actively participated in the administration of Hardaway's claim or "intentionally refused to pay with reasonable promptness the temporary partial disability benefits." Further the trial court found that under the workers' compensation statutes, Howard Industries could delegate its responsibilities to CorVel. If Howard Industries then failed to monitor whether Hardaway was receiving his workers' compensation benefits, the trial court found that this would be "ordinary negligence at worst." Further, the court reasoned that Howard Industries "had paid so many benefits, not only for temporary total, but for medical benefits, [which] does not establish any kind of intentional scheme by Howard's not to pay the temporary partial benefits[.]"
¶12. The trial court entered a written order on March 11, 2022, incorporating its reasoning from the hearing, granting Howard Industries' motion for summary judgment. Hardaway made a motion for the court to reconsider. On July 7, 2022, the trial court entered a final order further detailing its reasons for granting summary judgment in favor of both CorVel and Howard Industries. Hardaway appealed the March 11, 2022, order and July 7, 2022, order against Howard Industries alone.
¶13. Hardaway argues that the trial court erred by granting summary judgment in favor of Howard Industries because he presented substantial summary judgment evidence from which a reasonable juror could conclude that (1) Howard Industries failed to investigate or pay Hardaway's claim for temporary partial disability and that (2) Howard Industries actively participated in the bad faith failure to timely pay Hardaway's temporary partial disability benefits. Hardaway also, however, commits a significant amount of his appellate arguments to whether Howard Industries could delegate its statutory duties to CorVel. Because the bad faith analysis is dependent on statutory interpretation, Hardaway's arguments will be addressed by this Court as follows:
I. Whether Howard Industries could delegate its administrative duty under the Mississippi workers' compensation law as a self-insured employer to CorVel. II. Whether Howard Industries denied Hardaway's workers' compensation benefits in bad...
To continue reading
Request your trial