Smith and Sanders, Inc. v. Peery

Decision Date17 July 1985
Docket NumberNo. 54539,54539
Citation473 So.2d 423
PartiesSMITH AND SANDERS, INC. and The Travelers Insurance Company v. R.B. PEERY, Jr.
CourtMississippi Supreme Court

Donald V. Burch, Gary K. Jones, Daniel, Coker, Horton & Bell, Jackson, for appellants.

Jim Phyfer, Jackson, for appellee.


PATTERSON, Chief Justice, for the Court:

This worker's compensation case from the Circuit Court of the First Judicial District of Hinds County presents the question of whether an employee is entitled to benefits for mental injury unaccompanied by physical trauma.

The facts are essentially without dispute. The claimant, R.B. Peery, Jr., had been employed since 1964 as a civil engineer, land surveyor and draftsman with Smith and Sanders, Inc. The company's business began to decline in the late 1970's. On May 22, 1981, while he was at work and on the premises of his employer, Peery was informed by his supervisor that he was to be laid off effective two weeks from that date. As he was packing his belongings, Peery threw a stereoscope through a plate glass window and asked to be taken to see a psychiatrist. Peery suffered what is commonly referred to as a nervous breakdown, requiring a 59 day hospitalization and six (6) shock treatments.

The record indicates Peery began experiencing psychiatric difficulties in 1965, when he was hospitalized and given shock treatments for a nervous condition and depression. The following year he was again hospitalized after exhibiting suicidal tendencies.

Dr. Robert Ritter, a psychiatrist, testified Peery consulted him in 1978 requesting medication to help control his obsessive-compulsive behavior. Noting that Peery was in layman's terms a "workaholic," Ritter prescribed an anti-anxiety drug and renewed the prescriptions for approximately two years. Dr. Ritter also treated Peery following the May 22, 1981 incident.

Uncontroverted testimony by Smith and Sanders' representative is that although the quality of Peery's work had been declining for several years, the reason for his lay off was the company had experienced a dramatic decrease in workload rendering Peery's job unnecessary. Moreover, three employees in Peery's division were terminated prior to May 22, 1981. Smith and Sanders' Vice President Phillip Browning testified he believed "the company showed a great deal of favoritism toward Mr. Peery because he was a long time employee, by not laying him off sooner."

Peery filed a claim for workmen's compensation benefits under Mississippi Code Annotated, Sec. 71-3-7 (1972). In denying this claim the administrative judge made the following findings of fact:

(1) That the claimant ... suffers from a psychiatric condition characterized by Dr. Robert M. Miller as severe depressive neurosis, obsessive-compulsive neurosis, and phobic neurosis; (2) That the claimant's psychiatric condition according to ... Dr. Robert M. Miller ... was caused by being notified of the termination of his employment ... (3) That the claimant has been temporarily and totally disabled from May 22, 1981, through the date of this order, and claimant will continue to be temporarily totally disabled into the foreseeable future; (4) That the claimant has not reached maximum medical improvement; (5) That the claimant's psychiatric condition and resulting disability did not arise out of the claimant's employment with the employer and, therefore, the claimant has failed to prove that he sustained an accidental injury as contemplated by Mississippi Code Annotated, Sec. 71-3-3(b) (1972). (Emphasis added.)

Peery appealed first to the full Workmen's Compensation Commission, which affirmed the administrative judge in holding the claim was non-compensable. Thereafter the Circuit Court of the First Judicial District of Hinds County reversed the case and held the claim compensable because in the circuit court's opinion there was no evidence to support finding of fact number (5).

Aggrieved with that decision, Smith and Sanders perfected an appeal to this Court, assigning as error the circuit court's reversal of the holding of the Mississippi Workmen's Compensation Commission. Smith and Sanders argues the claim is outside the scope of the Mississippi Workers Compensation Act.

Section 71-3-7 of that act provides in part as follows:

Compensation shall be payable for disability or death of an employee from injury or occupational disease arising out of and in the course of employment, without regard to fault as to the cause of the injury or occupational disease. An occupational disease shall be deemed to arise out of and in the course of employment when there is evidence that there is direct causal connection between the work performed and the occupational disease.

Where a preexisting physical handicap, disease, or lesion is shown by medical findings to be a material contributing factor in the results following injury, the compensation which, but for this paragraph would be payable shall be reduced by that proportion which such preexisting physical handicap, disease or lesion contributed to the production of the results following the injury.

"Injury" is defined in Sec. 71-3-3(b) in part as an "accidental injury or accidental death arising out of and in the course of employment ..."

"Disability" is defined in Sec. 71-3-3(i) as "incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or other employment, which incapacity and the extent thereof must be supported by medical findings."

Dunn's Workmen's Compensation, Sec. 114 (1982) (3rd Ed.), states the following:

In general, where the claim is based upon a mental or nervous disease, it is viewed with the normal suspicion attending claimed disabilities which have no physical cause traceable to objective findings, and the burden of proof, which rests upon the claimant, is greater than ordinary cases. The accident must be established by evidence bringing within the realm of probability, and the causal connection with the accident must be shown by "clear evidence," and must not be remote.

Citing Johnson v. Gulfport Laundry & Cleaning Co., 249 Miss. 11, 162 So.2d 859 (1964).

In the Johnson case the claimant sought workmen's compensation benefits for a nervous condition alleged to be the result of overwork. At a hearing before the Workmen's Compensation Commission the claimant testified "the interruptions of the telephone caused her to be nervous and upset to the extent she could not work." 249 Miss. at 14, 162 So.2d at 860. No specific event could be pinpointed as the cause of Mrs. Johnson's leaving her job; she simply did not return after the Christmas holidays. In its findings of fact the Commission stated, " 'The evidence in the case does not reveal the occurrence of any incident, accident or traumatic experience, which did or could have caused or aggravated any physical disability to the claimant;' ..." 249 Miss. at 16, 162 So.2d at 860-61.

This Court affirmed the Commission's holding

... that the claimant's disability at the time of the hearing was not due to any injury arising out of and in the course of her employment by the Laundry Company, but was attributable solely to a psychoneurotic condition or emotional disturbance due to causes other than her employment by the Laundry Company.

249 Miss. at 21, 162 So.2d at 863.

The court also noted the lack of evidence that there was "any untoward event, unusual occurrence, accident, or injury incident to her employment by the Laundry Company to which the claimant's disability could be causally related." 249 Miss. at 18, 162 So.2d at 862. (Emphasis added.)

We interpret the Johnson case to require a claimant seeking worker's compensation benefits for mental injury unaccompanied by physical trauma to prove such injury can be directly linked to some "untoward event, unusual occurrence, accident or injury incident to ... employment." 249 Miss. at 18, 162 So.2d at 862. We are of the opinion Peery failed to satisfy this requirement in two ways.

First, there is much credible evidence to the effect that Smith and Sanders terminated Peery because business conditions had eliminated the need for his employment. In an economic system such as ours, layoffs are unfortunate but not unusual events. They cannot in our opinion be characterized as untoward or unusual occurrences. Were compensation proper for Peery, benefits could be held to extend to any employee who suffers depression or anxiety upon being rightfully discharged. We do not think this was the legislative purpose of the Worker's Compensation Act, which provides for neither unemployment compensation nor general health insurance, but for compensation for injuries arising out of and in the course of employment. For these reasons we are of the opinion the holding of the circuit court must be reversed.

We observe additionally that Peery failed to prove the injury was caused by the termination. Rather, the record discloses a long history of mental and emotional disorders prior to May 22, 1981. Peery would thus be entitled to apportioned benefits if he were entitled to any compensation at all. Because we hold he is not, we do not discuss this issue further.

We note our decision comports with the rule announced in other jurisdictions that a mental condition to be compensable must have been caused by something more than the ordinary incidents of employment. Motorola, Inc. v. Industrial Commission, 125 Ariz. 211, 608 P.2d 788 (1980); Archer v. Industrial Commission, 127 Ariz. 199, 619 P.2d 27 (1980); Loh Lin v. Burroughs Corp., 427 N.Y.S.2d 78, 75 A.D.2d 702 (1980); Thomas v. Workmen's Compensation Appeal Board, 423 A.2d 784 (Pa.Cmwlth.Ct.1980); Sloss v. Industrial Commission, 121 Ariz. 10, 588 P.2d 303 (1978); Jose v. Equifax, Inc., 556 S.W.2d 82 (Tenn.1977); School District # 1 v. Dept. of Industry, Labor & Human Relations, 62 Wis.2d 370, 215 N.W.2d 373 (1974).

For the foregoing reasons the judgment of the Circuit Court of the ...

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