United States Court of Appeals Fifth Circuit F I L E D UNITED STATES COURT OF APPEALS October 21, 2003 For the Fifth Circuit Charles R. Fulbruge III Clerk
No. 02-60907
LESTER WHITEHEAD
Plaintiff-Appellant,
VERSUS
ZURICH AMERICAN INSURANCE COMPANY
Defendant-Appellee.
Appeal from the United States District Court For the Northern District of Mississippi, Aberdeen
Before BARKSDALE, DeMOSS and BENAVIDES, Circuit Judges.
DeMoss, Circuit Judge:
Plaintiff-Appellant, Lester Whitehead (“Whitehead”), appeals
the dismissal of his intentional tort claims against Defendant-
Appellee, his employer’s workers’ compensation insurance carrier,
Zurich American Insurance Company (“Zurich”). The district court
dismissed Whitehead’s claim as premature because he had failed to
exhaust his administrative remedies. The district court also
denied Whitehead’s motion to amend his complaint and add his
employer as a defendant. BACKGROUND
Whitehead is an employee of F.E. Moran, Inc. Fire Protection
(“Moran”). Moran is not a party to this action. Zurich is Moran’s
workers’ compensation insurance carrier. Zurich is the Defendant-
Appellee in this case.
Whitehead injured his leg on the job on July 12, 2000. He was
taken to an emergency room that day by another Moran employee. He
returned to work the next day but was sent home because he was
unable to work. On September 5, 2000, Whitehead underwent a
surgical procedure on his leg. Whitehead initially alleged that
his work-related injury had caused the recurrence of his non-
Hodgkins lymphoma, which had been in remission. He later withdrew
this allegation.
Although it is clear that Whitehead filed a workers’
compensation claim with the Mississippi Workers’ Compensation
Commission (“Commission”), it is unclear when he did so. Zurich
did not learn of Whitehead’s injury until October 16, 2000. In any
event, Whitehead filed a petition to controvert his workers’
compensation case on March 16, 2001. Zurich filed an answer to the
petition on April 9, 2001, contesting the nature, degree, and
extent of Whitehead’s disability and the causal connection between
the injury and his medical expenses. On August 3, 2001, Zurich
paid for the emergency room treatment Whitehead received in July
2000. On October 17, 2001, Zurich paid Whitehead $1582.15 for
2 temporary total disability benefits covering the period between
September 5, 2000, the day of Whitehead’s leg surgery, and October
9, 2000.
On June 7, 2001, Whitehead sued Zurich in state court alleging
both negligent and bad faith failure to investigate his workers’
compensation claim and to compensate him for his medical expenses
and lost wages. He sought compensatory and punitive damages.
Zurich removed the suit to the Northern District of Mississippi on
July 5, 2001. Whitehead several times unsuccessfully moved to
amend his complaint to name Moran as a defendant. The district
court subsequently granted Zurich’s motion to dismiss and dismissed
the case without prejudice, concluding that Whitehead’s suit was
premature because his workers’ compensation claim was still pending
before the Commission. The district court did not permit Whitehead
to amend his complaint and add Moran because the court believed the
issue moot due to its ruling that the case must be dismissed as
premature. This appeal followed the district court’s denial of
Whitehead’s motion to reconsider.
On September 2, 2003, counsel for Whitehead filed a Suggestion
of Death and Motion for Substitution of Plaintiff/Appellant with
this Court. Lester Whitehead died on July 16, 2003, due to health
reasons not related to injuries at issue in this litigation.
Whitehead’s counsel requested that Whitehead’s only natural child,
only named heir, and personal representative, Bryan O’Neal
Whitehead, be permitted to be substituted for Whitehead. At oral
3 arguments on September 4, 2003, the panel requested that both
parties submit letter briefs to the Court concerning whether
Whitehead’s claim before the Commission survives and whether his
civil claim for bad faith survives. Because we are affirming the
district court’s dismissal of Whitehead’s claim without prejudice
and it appears that Whitehead’s claim for benefits under the
Mississippi Workers’ Compensation Act survives to his heirs and
likewise the executor of his estate may refile his civil claim at
the appropriate time, Whitehead’s death does not affect this
current appeal.
DISCUSSION
I. Whether the district court erred in granting Zurich’s motion to dismiss.
We review a district court’s dismissal pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure de novo, applying
the same standards followed below. Kaiser Aluminum & Chem. Sales,
Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir.
1982). In deciding a Rule 12(b)(6) motion, we accept all factual
allegations made by the plaintiff as true and resolve any doubts
about the sufficiency of the evidence in his favor. Id. Dismissal
is warranted only if “it appears beyond doubt that the plaintiff
can prove no set of facts in support of his claim that would
entitle him to relief.” Id. Further, a case may be dismissed
without prejudice for failure to exhaust administrative remedies
under Rule 12(b)(6). Taylor v. United States Treasury Dept., 127
4 F.3d 470, 478 n.8 (5th Cir. 1997). In determining whether a party
must exhaust administrative remedies, a federal court balances the
individual’s interest in “retaining prompt access” to the federal
courts against the “institutional interests favoring exhaustion.”
Zephyr Aviation, L.L.C. v. Dailey, 247 F.3d 565, 570 (5th Cir.
2001).
The Mississippi Workers’ Compensation Act provides that
statutory compensation is the exclusive remedy available to an
employee who suffers an injury on the job:
The liability of an employer to pay compensation shall be exclusive and in place of all other liability of such employer to the employee . . . or otherwise from such employer on account of such injury or death, except that if an employer fails to secure payment of compensation as required by this chapter, an injured employee . . . may elect to claim compensation under this chapter, or to maintain an action at law for damages on account of such injury or death . . . .
Miss. Code Ann. § 71-3-9 (2000). This statute bars an employee’s
common law tort action against his employer’s insurance carrier
based on a negligent failure to pay workers’ compensation benefits.
Taylor v. United States Fid. & Guar. Co., 420 So. 2d 564, 566
(Miss. 1982).1 It does not, however, prevent the employee’s action
against the carrier “for the commission of an intentional tort”
independent of the compensable injury. Southern Farm Bureau Cas.
Ins. v.
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United States Court of Appeals Fifth Circuit F I L E D UNITED STATES COURT OF APPEALS October 21, 2003 For the Fifth Circuit Charles R. Fulbruge III Clerk
No. 02-60907
LESTER WHITEHEAD
Plaintiff-Appellant,
VERSUS
ZURICH AMERICAN INSURANCE COMPANY
Defendant-Appellee.
Appeal from the United States District Court For the Northern District of Mississippi, Aberdeen
Before BARKSDALE, DeMOSS and BENAVIDES, Circuit Judges.
DeMoss, Circuit Judge:
Plaintiff-Appellant, Lester Whitehead (“Whitehead”), appeals
the dismissal of his intentional tort claims against Defendant-
Appellee, his employer’s workers’ compensation insurance carrier,
Zurich American Insurance Company (“Zurich”). The district court
dismissed Whitehead’s claim as premature because he had failed to
exhaust his administrative remedies. The district court also
denied Whitehead’s motion to amend his complaint and add his
employer as a defendant. BACKGROUND
Whitehead is an employee of F.E. Moran, Inc. Fire Protection
(“Moran”). Moran is not a party to this action. Zurich is Moran’s
workers’ compensation insurance carrier. Zurich is the Defendant-
Appellee in this case.
Whitehead injured his leg on the job on July 12, 2000. He was
taken to an emergency room that day by another Moran employee. He
returned to work the next day but was sent home because he was
unable to work. On September 5, 2000, Whitehead underwent a
surgical procedure on his leg. Whitehead initially alleged that
his work-related injury had caused the recurrence of his non-
Hodgkins lymphoma, which had been in remission. He later withdrew
this allegation.
Although it is clear that Whitehead filed a workers’
compensation claim with the Mississippi Workers’ Compensation
Commission (“Commission”), it is unclear when he did so. Zurich
did not learn of Whitehead’s injury until October 16, 2000. In any
event, Whitehead filed a petition to controvert his workers’
compensation case on March 16, 2001. Zurich filed an answer to the
petition on April 9, 2001, contesting the nature, degree, and
extent of Whitehead’s disability and the causal connection between
the injury and his medical expenses. On August 3, 2001, Zurich
paid for the emergency room treatment Whitehead received in July
2000. On October 17, 2001, Zurich paid Whitehead $1582.15 for
2 temporary total disability benefits covering the period between
September 5, 2000, the day of Whitehead’s leg surgery, and October
9, 2000.
On June 7, 2001, Whitehead sued Zurich in state court alleging
both negligent and bad faith failure to investigate his workers’
compensation claim and to compensate him for his medical expenses
and lost wages. He sought compensatory and punitive damages.
Zurich removed the suit to the Northern District of Mississippi on
July 5, 2001. Whitehead several times unsuccessfully moved to
amend his complaint to name Moran as a defendant. The district
court subsequently granted Zurich’s motion to dismiss and dismissed
the case without prejudice, concluding that Whitehead’s suit was
premature because his workers’ compensation claim was still pending
before the Commission. The district court did not permit Whitehead
to amend his complaint and add Moran because the court believed the
issue moot due to its ruling that the case must be dismissed as
premature. This appeal followed the district court’s denial of
Whitehead’s motion to reconsider.
On September 2, 2003, counsel for Whitehead filed a Suggestion
of Death and Motion for Substitution of Plaintiff/Appellant with
this Court. Lester Whitehead died on July 16, 2003, due to health
reasons not related to injuries at issue in this litigation.
Whitehead’s counsel requested that Whitehead’s only natural child,
only named heir, and personal representative, Bryan O’Neal
Whitehead, be permitted to be substituted for Whitehead. At oral
3 arguments on September 4, 2003, the panel requested that both
parties submit letter briefs to the Court concerning whether
Whitehead’s claim before the Commission survives and whether his
civil claim for bad faith survives. Because we are affirming the
district court’s dismissal of Whitehead’s claim without prejudice
and it appears that Whitehead’s claim for benefits under the
Mississippi Workers’ Compensation Act survives to his heirs and
likewise the executor of his estate may refile his civil claim at
the appropriate time, Whitehead’s death does not affect this
current appeal.
DISCUSSION
I. Whether the district court erred in granting Zurich’s motion to dismiss.
We review a district court’s dismissal pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure de novo, applying
the same standards followed below. Kaiser Aluminum & Chem. Sales,
Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir.
1982). In deciding a Rule 12(b)(6) motion, we accept all factual
allegations made by the plaintiff as true and resolve any doubts
about the sufficiency of the evidence in his favor. Id. Dismissal
is warranted only if “it appears beyond doubt that the plaintiff
can prove no set of facts in support of his claim that would
entitle him to relief.” Id. Further, a case may be dismissed
without prejudice for failure to exhaust administrative remedies
under Rule 12(b)(6). Taylor v. United States Treasury Dept., 127
4 F.3d 470, 478 n.8 (5th Cir. 1997). In determining whether a party
must exhaust administrative remedies, a federal court balances the
individual’s interest in “retaining prompt access” to the federal
courts against the “institutional interests favoring exhaustion.”
Zephyr Aviation, L.L.C. v. Dailey, 247 F.3d 565, 570 (5th Cir.
2001).
The Mississippi Workers’ Compensation Act provides that
statutory compensation is the exclusive remedy available to an
employee who suffers an injury on the job:
The liability of an employer to pay compensation shall be exclusive and in place of all other liability of such employer to the employee . . . or otherwise from such employer on account of such injury or death, except that if an employer fails to secure payment of compensation as required by this chapter, an injured employee . . . may elect to claim compensation under this chapter, or to maintain an action at law for damages on account of such injury or death . . . .
Miss. Code Ann. § 71-3-9 (2000). This statute bars an employee’s
common law tort action against his employer’s insurance carrier
based on a negligent failure to pay workers’ compensation benefits.
Taylor v. United States Fid. & Guar. Co., 420 So. 2d 564, 566
(Miss. 1982).1 It does not, however, prevent the employee’s action
against the carrier “for the commission of an intentional tort”
independent of the compensable injury. Southern Farm Bureau Cas.
Ins. v. Holland, 469 So. 2d 55, 59 (Miss. 1984). In particular,
the employee can sue the carrier for bad faith refusal to pay
1 Whitehead has not appealed the district court’s dismissal of his negligence claim.
5 benefits owed because such a claim arises not from the work-related
injury but from an independent act that is not compensable under
the Workers’ Compensation Act. Id. at 58-59.
The Mississippi Supreme Court, however, has required the
exhaustion of the administrative remedial process before an
intentional tort claim against a carrier can be brought. Walls v.
Franklin Corp., 797 So. 2d 973, 977 (Miss. 2001) (en banc). In
Walls, the court held that an employee cannot allege that a carrier
has refused to pay for certain medical services and supplies in bad
faith in the absence of a determination by the Commission that
those services and supplies were reasonable and necessary. Id.
The Walls court examined the earlier Mississippi Supreme Court
cases dealing with viable bad faith claims and determined that
although in those cases the court did not require exhaustion of
administrative remedies it appears that exhaustion was either not
an issue or the plaintiffs had exhausted their administrative
remedies prior to bringing the bad faith suit. Id. at 975-76
(discussing Leathers v. Aetna Cas. & Sur. Co., 500 So. 2d 451
(Miss. 1986); McCain v. Northwestern Nat’l Ins. Co., 484 So. 2d
1001 (Miss. 1986); Luckett v. Mississippi Wood Inc., 481 So. 2d 288
(Miss. 1985); Holland, 469 So. 2d at 55)). Ultimately in Walls,
the Mississippi Supreme Court reinstated the lower state circuit
court opinion which held that “‘exhaustion of the administrative
remedial process is a mandatory condition precedent to the
maintaining of a ‘bad faith’ suit for an allegedly wrongful denial
6 of any workers[’] compensation benefits.’” Id. at 975 (quoting the
judgment of the Chickasaw County Circuit Court).
As the district court noted in its October 3, 2002, Order,
Walls requires that the Mississippi Workers’ Compensation
Commission make a determination as to whether Whitehead’s claimed
benefits are reasonable and necessary before he can commence a
civil action for denial of benefits. Therefore, the district court
did not err in dismissing without prejudice Whitehead’s case.
II. Whether the district court erred in denying Whitehead’s motion to amend his complaint to add Moran as a defendant.
The Mississippi Supreme Court has also held that employees are
allowed to bring bad faith failure to pay claims against employers.
Luckett, 481 So. 2d at 290 (“Today we extend Holland to include a
bad faith refusal action against the employer, as well as the
carrier, and hold that [the plaintiff] may recover if he can prove
his claim.”); Holland, 469 So. 2d at 58-59. Yet, the same
exhaustion requirement applies to any potential claim Whitehead may
have against Moran. See Sawyer v. Head, 510 So. 2d 472, 474 (Miss.
1987). Therefore, the district court did not err in denying
Whitehead’s motion to amend.
CONCLUSION
Having carefully reviewed the record of this case, the
parties’ respective briefing and arguments, for the reasons set
forth above and essentially for the reasons given by the district
court, the denial of Whitehead’s motion to amend and the dismissal
7 of his claim without prejudice are affirmed.
AFFIRMED.