E-Filed Document Oct 2 2014 21:28:49 2013-CA-00524-COA Pages: 16 IN THE SUPREME COURT OF MISSISSIPPI NO. 2013-CA-00524 CINDY WALLS APPELLANT V. FRANKLIN CORPORATION AND EMPLOYERS INSURANCE COMPANY OF WAUSAU APPELLEE REPLY BRIEF On Appeal from the Chancery Court Of Chickasaw County, Mississippi Cause No. H-2002-00082 Oral Argument is Requested Roy O. Parker, Jr. MSB #4015 P.O. Box 7033 Tupelo, MS 38802-7033 Telephone: (662)823-4949 Facsimile: (662)823-4113 E-mail: royparkeratty@gmail.com Attorney for the Appellant, Cindy Walls {058630.DOCX}
TABLE OF CONTENTS Section Page Table of Cases, Statutes and Other Authorities Cited...ii Argument...1 Conclusion...11 Certificate of Service...13 {058630.DOCX} ii
TABLE OF CASES, STATUTES AND OTHER AUTHORITIES CITED Cases Page Hugh Dancy Co. v. Mooneyham, 68 So.3d 76, 79 ( 6) (Miss. Ct. App. 2011)...7 Walls v. Franklin Corp., 797 So.2d 973 (Miss.2001)...5 Whittle v. Tango Transport, 2013-WC-00034-COA, April 8, 2014....7 Other Sources The Modesto Bee, Parade magazine, December 29, 1985...1 {058630.DOCX} iii
ARGUMENT The defense has taken to The Last Resort Rule of appellate advocacy to justify the rulings (whether mistaken or not) that were made in their favor. This rule was credited to Jerome Michael, a teacher at Columbia Law School, who taught a course in appellate advocacy. At the last moment in the last class of the course, when he had taught everything he knew, he said: These are my final words on advocacy. If you have the facts on your side, hammer the facts. If you have the law on your side, hammer the law. If you have neither the facts nor the law, hammer the table. 1 A slight variation changes the punchline to an alternate: How shall I manage a case where both the law and the facts are dead against me? In that case talk around it, and the worse it is, the harder you pound the table. Here, the Defendants are talking around the issues, and are pounding the table hard. 1 1985 December 29, The Modesto Bee, Parade magazine, You Can Be Persuasive by Morton L. Janklow, Page 10, Modesto, California. (Google News archive) Doubtlessly, many others have used a variation of this admonition. {058630.DOCX} 1
From the day the first complaint for bad faith was filed, this case has been about Wausau terminating Cindy Walls medical benefits without an arguable reason. Apparently, when a new adjuster [Alan Daigrepont] was assigned to Cindy s claim, he disregarded all the previous commitments Wausau had made, and set about to force Cindy into settling her medical entitlement, or failing at that, deny her benefits, and see if she would allow the one year statute of limitations to run, thus closing Cindy s medical. Wausau adjuster Daigrepont is the focus of this claim, because he is the employee of Wausau that made the decisions. He breached an agreement Sylvia, a Wausau adjuster, had with Cindy to pay for Cindy s installation of a whirlpool bath in her home, instead of paying Cindy mileage and whirlpool baths at a hospital, the nearest to Cindy being in Tupelo. He also breached the long standing approval of Cindy s entitlement to Nike Air Shoes, which Wausau had been paying, as recommended by their attorney Mike Soper, and authorized and paid for by Jim Williams, Wausau s prior adjuster. Wausau closed Cindy Walls file, terminating her right to benefits. Wausau told two stories as to why Cindy s benefits were terminated; the first, to Dr. William Bowlus, stated erroneously that Cindy s claim had been dismissed. {058630.DOCX} 2
Ex. 25 10/8/1996. This could have been an honest mistake, but for the letter Wausau sent to Cindy. Wausau s letter to Cindy falsely stated that Cindy s claim had been settled without an open ended medical clause. This was totally false, and not supported by any evidence. There was no possibility of a mistake. Ex. 27. November 13, 1996. Cindy had to hire an attorney to get her benefits restored. Roy Parker wrote Wausau a demand letter, notifying Wausau of its error. Parker demanded payment within 15 days, or he would file suit against Wausau for bad faith refusal to pay benefits. Ex. 29, November 25, 1996. 15 days would have been December 10, 1996. Once confronted with a demand letter from Roy Parker, Wausau delayed until December 10, 1996 to inquire from its own attorney, Ben Logan, if Cindy s claim was still open. Ex. 30. Ben Logan, Wausau s attorney, [working in Mike Soper s office], responded to Daigrepont on December 19, 1996, informing Daigrepont that Wausau was still on the hook for her continued medical treatment. Ex. 32 December 19, 1996. Cindy submitted receipts for the purchase and installation of the whirlpool tub, previously authorized by Sylvia, adjuster for Wausau. Ex. 31. {058630.DOCX} 3
Cindy submitted receipts for the purchase of Nike Air shoes, previously authorized and paid for by Wausau. Ex. 31. Cindy submitted a mileage reimbursement request on December 28, 1996, for traveling to Tupelo to purchase the shoes. Ex. 35. Carolyn [another Wausau employee] first questioned payment for Cindy s shoes on January 23, 1997, asking Daigreont was Wausau responsible for them. This is the first notation in Wausau s file questioning payment of the shoes that Wausau had been paying for years. Ex. 35. The proper manner to challenge this would have been for Wausau to file a Motion with the Workers Compensation Commission, and have it determined, if they [Wausau] desired to challenge it. They should have done so years before. Previous adjusters for Wausau had approved the charges for shoes, and paid them. This leads to the conclusion that Wausau was acting without the required good faith and fair dealing that attaches to contracts. Instead, Wausau did nothing. Wausau ignored four letters from Roy Parker, Cindy s attorney, demanding payment of the benefits, or if Wausau was not going to pay, demanding they give each and every reason why they were denying the benefits. Ex. 29, 39, 40, 41. Here, again, if Wausau were acting in good faith and fair dealing, they would have responded to the demand letters, and explained why they were denying benefits. Instead, Wausau did nothing. [They made several entries into {058630.DOCX} 4
their logs, both in Metairie and in Atlanta, but no response to Roy Parker was ever generated.] Ex. 18. Cindy couldn t get Wausau to pay. She sent a certified letter to Wausau requesting to be reimbursed for her benefits, when she was not reimbursed by submitting requests via regular mail. Wausau did nothing. Ex. 36, 37. Finally, Roy Parker filed a bad faith suit against Wausau, for the bad faith handling of her Workers Compensation medical claim. Only then did Wausau respond. On advice of counsel, Ben Logan, Wausau fabricated a claim before the Workers Compensation Commission challenging the reasonableness and necessity of the payment for the whirlpool tub and the Nike Air Shoes. Logan s letter of October 13, 1997, clearly states that this manufactured claim might help them defend the bad faith claim. Ex. 42. Logan couldn t in good faith challenge the reasonableness of the Nike Air Shoes, because Mike Soper, for whom he worked, had authorized and ordered Wausau to pay for the shoes years before. Ex. 64. Because the fabricated claim before the Workers Compensation Commission had not been finalized, this Court upheld a Circuit Court dismissal of the bad faith lawsuit, ordering that the fabricated claim before the Workers Compensation Commission had to be decided before a bad faith claim could be brought. 2 2 Walls v. Franklin Corp., 797 So.2d 973 (Miss.2001) {058630.DOCX} 5
The Commission held a hearing, and the Administrative Law Judge (ALJ) ruled that the whirlpool tub and the Nike Air Shoes were both reasonable and necessary, and ordered Franklin/Wausau to pay Cindy for them. Ex. 56. Wausau failed to pay for the ordered benefits for ten (10) months, claiming an administrative mistake. This was the second instance of Wausau failing to act in good faith and fair dealing with Cindy. Ex. 57. The bad faith lawsuit was refiled, and the Circuit Court granted a partial summary judgment, for actions that were not related to the failure to pay for the whirlpool bath and the Nike Air Shoes. However, each time the Circuit Court revisited that ruling, it expanded the ruling. Finally, the Circuit Court ruled that no acts of bad faith prior to the ALJ Decision of April 10, 2002 could be entered into evidence. This changed the partial summary judgment ruling into a complete summary judgment for the defendants on the first bad faith claim, without them requesting such relief. The defendants didn t attempt to correct the erroneous ruling, and instead today attempt to have this Court uphold that ruling. If this Court were to uphold that ruling, that would eliminate the law of bad faith from the Workers Compensation setting in totality. If that ruling is the law in this state, there can be no bad faith, unless an insurance company denies a claimant specific benefits after the Commission has ruled that the claimant is entitled to those challenged benefits. {058630.DOCX} 6
Therefore, according to the Circuit Court s erroneous ruling, no amount of unfair dealing by Wausau could amount to culpable conduct. The Circuit Court was confused as to the law. The Circuit Court authorized the interlocutory appeal, hoping for guidance from this Court. Failing to receive that because the interlocutory appeal was denied, the Circuit Court held fast to its previous ruling, only increasing the scope of the ruling to the point that it excused all of Wausau s acts prior to the ruling of the ALJ in April of 2002. This is not an abuse of discretion issue. The Circuit Court failed to follow the law. This is a mistake of law. The proper standard of review is de novo when the issue is one of law and not of fact. Hugh Dancy Co. v. Mooneyham, 68 So.3d 76, 79 ( 6) (Miss. Ct. App. 2011), Whittle v. Tango Transport, 2013-WC- 00034-COA, April 8, 2014. If that is the law, what is Cindy s remedy? There is no provision for attorney fees in the Workers Compensation laws for Cindy in this situation. Her only benefits remaining are medical, and without the threat of a bad faith lawsuit, she could not get an attorney to represent her and challenge the bad faith denial of her medical benefits claim. Her attorney fees are a part of her actual damages in a bad faith claim. If the Circuit Court ruled correctly, Cindy has a right with no remedy. The Defendants failed to cite any authority for being given blanket immunity from tortious acts of bad faith, committed in the Workers Compensation claim. That is because no such right exists. {058630.DOCX} 7
The acts of Wausau in denying Cindy s rights, closing her file without an arguable reason, and refusing to pay for shoes and a whirlpool bathtub they had previously authorized was bad faith. Those acts failed for lack of good faith and fair dealing. All of those acts within three years of filing the initial lawsuit for bad faith should be admissible into evidence, to show the intent of Wausau to deny benefits in bad faith. This is motive pure and simple. Wausau did it for money. All of their files that support the bad faith denial leading up to the closing of Cindy s medical claims entitlement should be admissible. There is no factual dispute that: The Workers Compensation Commission ordered Franklin/Wausau to pay reasonable and necessary medical benefits to Cindy in 1992. Ex. 10. Mike Soper, attorney for Wausau, stated Wausau authorized Roy Parker to communicate directly with Wausau, without going through him, on December 2, 1993. Ex. 19. P. 136. See also Ex. 14, January 14, 1993. [Contrary to defendants claim that Mr. Parker should have made the demands to their attorney.] Mike Soper, attorney for Wausau, in a letter dated March 8, 1993, to Wausau, recommended payment to Cindy for purchase of Nike Air Shoes in 1993. Ex. 64 Composite Exhibit relating to shoes. [DC-00007-00011] {058630.DOCX} 8
Wausau terminated Cindy s medical benefits without an arguable reason. In a letter to Cindy, Wausau falsely claimed she settled her claim without leaving the medical open. Ex. 27. Dated November 13, 1996. Wausau received and failed to answer four demand letters from Roy Parker, Cindy s attorney. [Contrary to Defendant s claim that they may have never received the letters. Ex. 18. [titled page 19 of 28; EIW 061] The Atlanta office stated it received a letter from Metairie office, regarding a letter from plaintiff attorney, Roy Parker, Sr. stating a filing of bad faith if benefits are not picked up by 9-9. Alan Daigrepont of the Metairie office entered a computer note on 06-12- 97 stating he received a letter from Roy Parker, attorney, demanding Wausau pay for the whirlpool bath within 10 days or a bad faith claim will be brought. If your company has just reason for not paying the claim, other than falsely accusing my client to get something for nothing, please notify me of each and every reason for the refusal. Ex. 18. [pages 17-18 of 28; EIW 060] {058630.DOCX} 9
Wausau never considered contesting the reasonableness or necessity of the whirlpool tub or the prescription for Nike Air Shoes, until after they were sued for bad faith. Because Cindy had settled her claim to permanent benefits, there was no money available to Cindy to pay an attorney to litigate entitlement of her medical benefits, wrongfully denied by Wausau. Wausau intentionally used the fabrication of challenging the reasonableness and necessity of the medical benefits denied Cindy, to create a defense to their bad faith handling of Cindy s claim. Ben Logan, attorney for Wausau, stated that Wausau could create a defense to the bad faith by filing a challenge to the reasonableness and necessity of the medical benefits before the Workers Compensation Commission. This advice was followed. The Defendants failed to point out any Motion they filed that requested the expansive ruling that the Circuit Court made, when it expanded its order on Summary Judgment, into a complete defense to any bad faith committed before the ALJ opinion of April 10, 2002. The Defendants failed to deny that they fraudulently filed a claim with the Workers Compensation Commission for the sole purpose of creating a defense to the bad faith lawsuit, so it should be deemed admitted. {058630.DOCX} 10
Reviewing the complaint, this case has always been about how Wausau did not act in good faith or fair dealing with Cindy Walls. The only remedy for Cindy is for this Court to reverse the ruling of the Circuit Court, instruct the Circuit Court in the admissible acts of bad faith that are to be allowed into evidence, and render this cause as to a finding of liability for bad faith in the handling of this claim, and remand to the Circuit Court for a trial on damages, both actual and punitive. As to the Defendant, Franklin Corporation, it is the opinion of the plaintiff that they have no liability for the acts of Wausau, under the present state of the law of this state. Should this Court decide to overrule that precedent, Cindy Walls would be in favor of that. CONCLUSION 1. The Circuit Court erred when it ruled that Wausau was immune from liability for any acts of bad faith committed prior to the ALJ order of April 10, 2002. 2. Wausau committed bad faith by sending letters to Cindy and her treating physician, Dr. William Bowlus, lying by stating that Cindy s medical coverage was not still in effect. 3. Wausau committed bad faith by failing to pay for the whirlpool tub it had agreed to pay for. {058630.DOCX} 11
4. Wausau committed bad faith by failing to pay for the prescription shoes they had previously paid for numerous times. 5. Wausau committed bad faith by fraudulently claiming it was contesting the necessity and reasonableness of the whirlpool tub and the prescription shoes, when in fact, they filed the claim in the Workers Compensation Commission for the purpose of defending the Bad Faith claim filed against them, not for challenging the reasonableness or necessity of the medical services. 6. The Circuit Court was manifestly wrong by failing to grant a peremptory instruction finding Wausau liable for bad faith. 7. This case should be reversed and rendered as to liability, and remanded to the Circuit Court of Chickasaw County, Mississippi with instructions to the Trial Court to determine the amount of damages, both actual and punitive, including attorney fees and expenses. Respectfully submitted, this the 2 nd day of October, 2014. Roy O. Parker, Jr. MSB #4015 P.O. Box 7033 Tupelo, MS 38802-7033 Telephone: (662)823-4949 Facsimile: (662)842-4113 E-mail: royparkeratty@gmail.com Attorney for Appellant By: /s/ Roy O. Parker, Jr. Roy O. Parker Jr., MSB #4015 {058630.DOCX} 12
CERTIFICATE OF SERVICE I hereby certify that on this day I electronically filed the foregoing Reply Brief with the Clerk of the Court using the MEC system which sent notification of such filing to the following: Clifford K. Bailey, III (MBN 1686) Russell Latino III (MBN 102281) WELLS MARBLE & HURST, PLLC 300 Concourse Boulevard, Suite 200 Ridgeland, Mississippi 39157 Further, I hereby certify that I have mailed by United States Postal Service, the document to the following non-mec participant: Hon. Andrew K. Howorth Circuit Judge 1 Courthouse Square, Suite 201 Oxford, MS 38655 This the 2 nd day of October, 2014. Roy O. Parker, Jr. MSB #4015 P.O. Box 7033 Tupelo, MS 38802-7033 Telephone: (662)823-4949 Facsimile: (662)842-4113 E-mail: royparkeratty@gmail.com Attorney for Appellant By: /s/ Roy O. Parker, Jr. Roy O. Parker Jr., MSB #4015 {058630.DOCX} 13