Whitten v. American Mut. Liability Ins. Co.

• Decision Date: 22 December 1977
• Docket Number: Civ. A. No. 77-703.
• Citation: 468 F. Supp. 470
• Parties: George C. WHITTEN, Sr., Plaintiff, v. AMERICAN MUTUAL LIABILITY INSURANCE CO., Defendant.
• Court: U.S. District Court — District of South Carolina

468 F. Supp. 470

George C. WHITTEN, Sr., Plaintiff, v. AMERICAN MUTUAL LIABILITY INSURANCE CO., Defendant.

Civ. A. No. 77-703.

United States District Court, D. South Carolina, Columbia Division.

December 22, 1977.

Ryan L. Scott, Columbia, S. C., for plaintiff.

Ernest J. Nauful, Jr., Callison, Tighe, Nauful & Rush, Columbia, S. C., for defendant.

ORDER

CHAPMAN, District Judge.

This matter is presently before the Court on the motion of defendant, American Mutual Liability Insurance Company (hereinafter "American Mutual"), to dismiss plaintiff's claim, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, on the ground that the complaint fails to state a claim upon which relief can be granted. In the alternative, defendant moves to strike certain allegations of plaintiff's complaint pursuant to FRCP 12(f).

Plaintiff sustained a compensable back injury under the South Carolina Workmen's Compensation Act on December 10, 1973, while employed by Galaxy Boat Manufacturing Co., Inc. Thereafter, plaintiff and American Mutual, as the workmen's compensation carrier for Galaxy, entered into an Agreement as to Compensation whereby defendant agreed to pay plaintiff the sum of sixty-three ($63.00) dollars per week as compensation for his injury from December 25, 1973, until terminated in accordance with the provisions of the South Carolina Workmen's Compensation Law, Section 72-1, et seq., of the Code of Laws of South Carolina 1962 (Section 42-1-10, et seq., of the Code of Laws of South Carolina 1976). This agreement was approved by the South Carolina Industrial Commission by its Notice of Award No. 8508 issued March 27, 1974.

American Mutual paid the temporary total disability payments to plaintiff from December 25, 1973, to September 8, 1975, at which time the compensation payments were stopped without an evidentiary hearing and approval of the Industrial Commission. Thereafter, a hearing was held on October 9, 1975, before Commissioner Sarah Leverette of the Industrial Commission, pursuant to an application by American Mutual to stop payment of compensation. In her Opinion and Award filed January 21, 1976, Commissioner Leverette ordered the following:

IT IS, THEREFORE, ORDERED that the defendants, Galaxy Boat Manufacturing Company, Inc., as the employer and American Mutual Liability Insurance Company as the carrier, shall pay to the claimant, George C. Whitten, Sr., compensation at the maximum compensable rate of Sixty-three and No/100 ($63.00) Dollars per week from and including the date his disability began on December 17, 1973, to December 25, 1973, and from the date of the last payment made on September 8, 1975, until maximum healing was reached on October 3, 1975.

IT IS FURTHER ORDERED that the defendants shall pay to the claimant, George C. Whitten, Sr., compensation at the maximum compensable rate of Sixty-three and No/100 ($63.00) Dollars per week for a period of one hundred, twenty (120) weeks representing a forty percent (40%) permanent partial loss of use of his back.

Appeal was made to the Full Commission where plaintiff and defendants challenged the findings with respect to the percentage of disability, and employer-carrier asserted a maximum healing date of March 15, 1975, rather than October 3, 1975, as found by Commissioner Leverette. On appeal, the Full Commission, by order filed September 10, 1976, found that maximum healing had not been achieved and ordered reinstatement of temporary total benefits. The Full Commission's order provides in part:

IT IS ORDERED that the defendants shall resume within fifteen (15) days of this Order weekly compensation to the claimant in the amount of Sixty-Three ($63.00) Dollars for total disability from October 3, 1975, to September 10, 1976, and such weekly compensation shall continue until further order of the Industrial Commission.

IT IS FURTHER ORDERED that the defendants shall pay to the claimant weekly compensation of total disability in the amount of Sixty-Three ($63.00) Dollars for the period from December 10, 1973, to December 17, 1973.

On September 24, 1976, defendant's attorneys mailed three checks for payment pursuant to the Order of the Full Commission. These checks were received by plaintiff's attorney on September 27, 1976. A final check for the amount in arrears as determined by the Full Commission was received by plaintiff's attorney on October 12, 1976, and, as plaintiff's attorney concedes in his memorandum in opposition to defendant's present motion, "this last payment paid all payments in arrears as ordered by the Industrial Commission."

Subsequently, on April 11, 1977, plaintiff filed a complaint in the Court of Common Pleas for Richland County averring, inter alia, and in essence, that from September 8, 1975, to September 27, 1976, defendant refused to make any compensation payments to plaintiff although plaintiff made numerous demands for the reinstitution of said payments; that plaintiff had no other source of income; that defendant willfully, knowingly, maliciously, recklessly, and negligently failed to make the compensation payments to which plaintiff had a right and for which defendant had an obligation to pay; that plaintiff was thus rendered incapable of securing the necessities of life and was thus caused to become nervous and upset and to suffer mental anguish and emotional distress, all to his damage in the amount of one million ($1,000,000.00) dollars. On April 19, 1977, defendant removed the case to this Court, and, on May 16, 1977, defendant filed its motion to dismiss.

It is well-settled that this Court, in considering a motion to dismiss for failure to state a claim upon which relief can be granted, must assume the truth of all material allegations of the complaint and must assume that said allegations will be sustained by competent proof at trial. Moreover, if any inference can be reasonably drawn to sustain plaintiff's cause of action, this Court cannot dismiss plaintiff's claim.

Even with these precepts in mind, this Court is constrained to grant defendant's motion to dismiss. As an initial proposition, it is this Court's belief that plaintiff's action should be construed as a suit for breach of contract in light of the fact that the non-payment of compensation monies by defendant was in violation of the Agreement as to Compensation executed by the parties on March 7, 1974. Consequently, under this construction, plaintiff's claim must be dismissed in light of the fact that the law of this state makes no provision for the recovery of damages for emotional distress or mental anguish resulting from breach of contract, no matter what the intent of the breaching party was in failing to fulfill its obligations.

Secondly, the provisions of the aforementioned agreement state that the payments shall be paid weekly "until terminated in accordance with the provisions of the Workmen's Compensation Law of the State of S. C." As noted hereinabove, this Agreement as to Compensation was approved by the South Carolina Industrial Commission by its Notice of Award No. 8508 issued March 27, 1974. Moreover, Section 72-352 of the 1962 Code (Section 42-17-20 of the 1976 Code) reads as follows:

If the employer and the injured employee or his dependents fail to reach an agreement in regard to compensation under this Title within fourteen days after the employer has knowledge of the injury or after a death or if they have reached such an agreement which has been signed and filed with the Commission and compensation has been paid or is due in accordance therewith and the parties thereto then disagree as to the continuance of any weekly payment under such agreement, either party may make application to the Commission for a hearing in regard to the matters at issue and for a ruling thereon. Immediately after such application has been received the Commission shall set a date for a hearing, which shall be held as soon as practicable, and shall notify the parties at issue of the time and place of such hearing. The hearing shall be held in the city or county in which the injury occurred, unless otherwise agreed to by the parties and authorized by the Commission.

This section of the Code certainly makes no provision for the stoppage of payments without approval by the Industrial Commission. Moreover, Rule 67-10 of the Commission provides in part as follows:

Compensation cannot be discontinued after an Award has been made or an agreement between the parties approved until the full Award has been paid, except as herein set forth. Disability will be presumed to continue until the employee returns to work. In the event the insurance carrier or employer desires to stop payment of compensation to the employee, the insurance carrier or employer shall file with the Commission a conditional waiver properly executed by the employee or a request for permission to discontinue compensation payments upon forms prepared by the Commission. The request shall set forth the reasons the insurance carrier or employer desires to discontinue compensation payments, and the request shall be accompanied by a proper medical certificate to certify that the employee is able to return to the same job or other suitable job, and that such job has been provided by the employer, or that the employee has refused medical treatment. The request shall also include evidence of service upon the employee, and his attorney if one be of record, by certified mail of the copy of the request.

Upon receipt of said application to stop payment of compensation, the Commission shall schedule the matter for a hearing which shall be held as soon as practicable.

* * * * * *

The Commission shall not entertain any application or any waiver signed by the employee to terminate or suspend benefits unless and until the employer or carrier is current with all payments due.

Halks v. Rust Engineering Co., 208 S.C. 39, 36 S.E.2d 852 (1946), holds that the aforementioned section of the Code and...