Kemper National Insurance Company v. Richard Coleman
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IN THE COURT OF APPEALS
OF THE
STATE OF MISSISSIPPI
NO. 2000-WC-01587-COA
KEMPER NATIONAL INSURANCE COMPANY AND LUMBERMENS
MUTUAL CASUALTY COMPANY
v.
RICHARD COLEMAN
DATE OF TRIAL COURT
JUDGMENT:
TRIAL JUDGE:
COURT FROM WHICH APPEALED:
ATTORNEYS FOR APPELLANTS:
ATTORNEY FOR APPELLEE:
NATURE OF THE CASE:
TRIAL COURT DISPOSITION:
DISPOSITION:
MOTION FOR REHEARING FILED:
CERTIORARI FILED:
MANDATE ISSUED:
APPELLANTS
APPELLEE
08/30/2000
HON. JOHN T. KITCHENS
MADISON COUNTY CIRCUIT COURT
KARL R. STEINBERGER
GINA BARDWELL TOMPKINS
JOHN GRIFFIN JONES
CIVIL - WORKERS' COMPENSATION
MISSISSIPPI WORKERS' COMPENSATION
COMMISSION ORDER AFFIRMED
AFFIRMED IN PART; REMANDED IN PART-01/22/2002
2/5/2002; denied 4/2/2002
4/23/2002
BEFORE KING, P.J., BRIDGES, AND IRVING, JJ.
IRVING, J., FOR THE COURT:
¶1. Kemper National Insurance Company, and its carrier, Lumbermens Mutual Casualty Company
(Kemper), appeal from a decision of the Circuit Court of Madison County affirming the ruling of the
Mississippi Workers' Compensation Commission (Commission) that Richard Coleman sustained a "mentalmental" work-related injury and that he was entitled to approximately eight months of temporary total
disability payments at $264.55, medical treatment costs, and statutory penalties and interest on unpaid
benefits pursuant to Mississippi Code Annotated Section 71-3-37 (Rev. 2000). In this appeal, Kemper
asserts three issues which we quote verbatim as follows:
(1) that the Administrative Law Judge, the Commission, and the circuit court applied an
incorrect legal standard when the finding was reached that the evidence presented in this
case was sufficient to establish by clear and convincing evidence that the claimant's mental
injury arose from or related to some "untoward event or unusual occurrence" or was
caused by "more than the ordinary incidents of employment;"
(2) that the finding of the Administrative Law Judge, the Commission, and the circuit court
that Coleman suffered a compensable injury under the Mississippi Workers' Compensation
Act and was entitled to an award of temporary total disability benefits was contrary to the
overwhelming weight of the evidence and was unsupported by substantial evidence, and
(3) that the Administrative Law Judge, the Commission, and the circuit court erred in
imposing a penalty and awarding interest to Coleman as he had received non-occupational
disability benefits and long term benefits during the entirety of the period for which the
Administrative Judge awarded temporary total disability benefits.
¶2. Coleman cross appeals and alleges: (1) that the Commission's denial of permanent disability benefits is
contrary to the overwhelming weight of the evidence and entirely unsupported by substantial evidence, and
(2) that although the Commission did find the injury compensable, it erred as a matter of law in applying a
legal analysis in determining the existence of a compensable "injury" in light of the 1988 amendment to
Mississippi Code Annotated Section 71-3-3(b) (Supp. 2000).
FACTS
¶3. Coleman was employed by Kemper at its Jackson/Ridgeland office beginning on December 1, 1980.
For years he specialized in handling workers' compensation claims and those claims represented the bulk of
the work coming through that office. In 1993, Coleman was promoted to senior claims manager. During the
late 1980's and early 1990's, Kemper's automobile and property insurance claims increased, though the
workers' compensation claims remained at a fairly constant level. In the mid-1990's, the volume of workers'
compensation claims decreased, though Coleman's workload did not decrease, as he took on supervision
of automobile claims and handled complex workers' compensation issues.
¶4. Joe Kitchens was hired shortly before Coleman to work in Kemper's Jackson/Ridgeland office.
Eventually, Coleman and Kitchens were in competition for the promotion to supervise that office. Kitchens
was responsible for handling automobile, property, and some workers' compensation claims. For a short
time during the early 1980's, Coleman actually supervised Kitchens. Kitchens eventually completed more
training programs, and handled a wider variety of claims, than did Coleman. Kitchens became the manager
of the Jackson/Ridgeland office on January 1, 1995. Coleman was disappointed because he was passed
over for the position.
¶5. With Kitchens as his supervisor, Coleman's workload increased. He also differed with Kitchens's
emphasis on keeping Kemper's internal work tracking computer system updated. Nevertheless, through
1995 his job ratings indicated he was "promotable." In 1995, however, his annual raise was less than
before. On January16, 1996, Kitchens sent Coleman a form informing him he had "topped out" and was
only eligible for a two percent raise. In fact, this was not true because he was eligible for a larger raise.
¶6. In March of 1996, Kitchens sent a memorandum to his supervisor concerning Coleman's workload, but
the memorandum failed to reflect that he had been assigned 300 new property claims. Four witnesses, all of
whom had worked in the Jackson/Ridgeland office, testified that this assignment of 300 additional claims
was a difficult, or even impossible burden to place on an employee. Coincidentally, at approximately the
same time, Mississippi suffered a series of hail and wind storms, and this too, added additional work to
Coleman's assignments.
¶7. On June 13, 1996, Gloria Hanna, one of the witnesses who testified to the reasonableness of assigning
the 300 claims to Coleman, found a memorandum locked inside her desk. She had no knowledge of how it
came to be there. The memorandum was written by Kitchens and stated his opinion that neither she nor
Coleman was suitable for promotion, and that Coleman should be demoted two steps. Kitchens had never
discussed this assessment with Coleman, despite the fact that Kitchens had been rated as "promotable" in
his annual performance reviews during the previous six years.
¶8. Coleman believed that Kitchens was trying to "set him up" to fail, and that Kitchens was deliberately
trying to terminate his employment. Due to the extraordinary amount of stress on the job, Coleman noticed
the toll it was taking on him and his family. In response, he went to his family physician, in part because he
was concerned about his blood pressure, and asked for a psychiatric referral. Ultimately on July 22, 1996,
he saw Dr. Webb, who diagnosed and treated him for depression.
¶9. Dr. Webb told Coleman to take off from work on July 22, 1996, and prescribed anti-anxiety and
antidepressant medication. Subsequently, Kemper terminated Coleman's employment. However, the date
and reason for Coleman's termination are somewhat clouded. Coleman testified that he was terminated on
February 12, 1997. Yet, the parties stipulated that Coleman was terminated in October of 1997, but
reinstated and was still employed by Kemper on January 21, 1998. Nevertheless, during the hearing which
was conducted on February 27, 1998, the parties indicated Coleman was no longer employed, and
Kemper does not deny that it involuntarily terminated Coleman at some point in time. Coleman took a
position with American Federated Insurance Company, on May 27, 1997, and never returned to work for
Kemper after his doctor's prescribed leave.
¶10. On June 16, 1997, Coleman filed a motion to controvert alleging that he received a work related
injury known as mental-mental, which is a major depression resulting from an emotional stimulus. Kemper
denied compensability. Subsequently, there were administrative proceedings held on February 27, 1998,
and May 27, 1998, to adjudicate a mental injury claim against Kemper on behalf of Coleman. The
administrative law judge entered an order which held that Coleman received a compensable work-related
psychiatric injury on or about June 16, 1996, as alleged in the petition to controvert. The administrative law
judge determined:
Coleman's illness was the unexpected result of an untoward event, and unusual occurrence - or
sequence of extraordinary events and occurrences -- that was more than the ordinary incident of
employment, more than the ordinary wear and tear of life in the workplace. Mr. Coleman was
overworked, overloaded with files, and expected by cold administrators to do the near impossible
while -- without private personal discussion -- was being passed over for promotability status in spite
of fifteen plus years of good service to the company and a history of excellent performance appraisals.
Psychologically he could not bear what was happening, and he suffered a medically documented
"nervous" injury that his treating psychiatrist unequivocally connected to job stress. The administrative
Judge finds by clear and convincing evidence that the resulting psychiatric/psychological
disability arose out of and in the course of Mr. Coleman's employment and that there was direct
causal connection between Mr. Coleman's employment experience and his injury.
(emphasis added).
¶11. She also ruled that Coleman did not receive permanent occupational work injury and ordered that
temporary total disability benefits be paid beginning the first day of Coleman's prescribed leave until June 1,
1997, and assessed penalties on all due and unpaid compensation benefits. On September 8, 1999, the Full
Commission affirmed the order of the administrative law judge.
¶12. The Full Commission's order was amended by an order dated September 29, 1999, to provide that
the employer/carrier is entitled to credit against the award of temporary total disability benefits for thirteen
weeks of non-occupational disability benefits paid to Coleman by the employer from July 22, 1996, through
October 20, 1996. The Circuit Court of Madison County affirmed the Full Commission's order. From this
affirmance, Coleman and Kemper now appeal.
ANALYSIS AND DISCUSSION OF THE ISSUES
1. Evaluative Standard and Sufficiency of the Evidence
¶13. Although Kemper asserts three issues in its statement of the issues, the discussion in its brief of the
second issue concerns additional medical testimony which was not a part of the record before the
Commission but which Coleman seeks to have us consider as a part of his cross-appeal. In our discussion
of the issues, we have recast and consolidated Kemper's first two issues into one. We discuss the additional
medical testimony as issue number two.
¶14. Kemper asserts that the Commission and the circuit court erred by applying an incorrect legal standard
when the finding was reached that the evidence presented in this case was sufficient to establish by clear and
convincing evidence that his mental injury arose from or related to some "untoward event or unusual
occurrence" or was caused by "more than the ordinary incidents of employment." Specifically, Kemper
contends that the Commission erred when it approved the finding of the administrative law judge that
"whether or not the employer intended to make life extraordinarily difficult for Richard Coleman is not
relevant." It is Kemper's contention that a finding of some type of intent or deliberate conduct is required for
compensability of this claim under Mississippi law. Although Kemper contends the Commission's utilized an
incorrect legal standard, Kemper's argument is in actuality an assertion that intent to injury on the part of the
employer is an element of a mental-mental injury.
¶15. We turn now to our long-recognized standard of review which is that the factual findings of the
Commission are binding on the appellate court so long as they are supported by substantial evidence.
Hedge v. Leggett & Platt, Inc., 641 So. 2d 9, 12 (Miss. 1994). An appellate court will reverse an order
of the Commission only when such order is clearly erroneous and contrary to the overwhelming weight of
the evidence. Id. However, appellate courts use a de novo standard of review when passing on questions
of law. ABC Mfg. Corp. v. Doyle, 749 So. 2d 43 (¶2) (Miss. 1999). "Generally an administrative agency
is accorded deference, but when the agency has misapprehended a controlling legal principle, no deference
is due." Id., citing Smith v. Jackson Constr. Co., 607 So. 2d 1119, 1125 (Miss. 1992). "If there is
substantial evidence to support the Commission, absent an error of law, this Court must affirm." Smith, 607
So. 2d at 1125.
When a worker seeks compensation benefits for disability resulting from a mental or psychological
injury, he must not only prove a (1) disability that is (2) work-related, but also, (3) and . . . to be
compensable, a mental injury, unaccompanied by physical trauma, must have been caused by
something more than the ordinary incidents of employment.
Borden, Inc. v. Eskridge, 604 So. 2d 1071, 1073 - 74 (Miss. 1992)(citing Fought v. Stuart C. Irby
Co., 523 So. 2d 314, 318 (Miss. 1988).
¶16. Mississippi law allows compensability for mental nervous situations not caused by physical trauma.
Brown & Root Construction Company v. Duckworth, 475 So. 2d 813, 815 (Miss. 1985). In such
cases, a claimant must prove the connection between the employment and the injury by clear and
convincing evidence. Fought, 523 So. 2d at 317. In addition, the law requires "that the injury be related to
some 'untoward event, unusual occurrence,' accident or injury incident to employment." Duckworth, 475
So. 2d at 815. "Untoward event" and "unusual circumstances" can be defined as an injury incident to
employment caused by something more than the ordinary incident of employment. Bates v. Countrybrook
Living Ctr., 609 So. 2d 1247, 1248 (Miss. 1992). 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
in ordinary cases. In Smith and Sanders, Inc. v. Peery, 473 So. 2d 423, 425 (Miss. 1985), the court
noted the only exception to the traditional rule of liberal construction of the Act and specifically held that
layoffs and terminations cannot be characterized as unusual occurrences or untoward events when such are
rightful or based upon economic reasons.
¶17. In this case, the specific events that happened to Coleman included: (a) the assignment of 300 claims
which, according to the testimony of various witnesses, was an unreasonable assignment, (b) the
memorandum, inexplicably left on a co-worker's desk, that contained statements to the effect that Kitchens
wanted to demote Coleman despite the fact that Coleman had good job performance evaluations in his
previous six annual performance evaluations (Coleman was never told of Kitchens's desire to demote him),
(c) the admittedly false statement by Kitchens that Coleman was not eligible for a five percent raise, and (d)
the series of hail and wind storms that dramatically increased Coleman's normal workload. Given our
deferential standard of review to factual matters, this Court cannot say the Commission erred in finding
these events arose out of Coleman's employment and were a "sequence of extraordinary events and
occurrences -- that was more than the ordinary incidents of employment, more than the ordinary wear and
tear of life in the workplace." Therefore, there is no merit to Kemper's assertion that Coleman suffered
merely the ordinary incidents of employment. Although Kemper asserts that a deliberate attempt by the
employer to injury must be proven, our review of Mississippi's case law reveal no such requirement, and
Kemper has cited no authority specifying such a requirement. This assignment is without merit.
2. The New Medical Testimony
¶18. In his notice of cross-appeal, Coleman included as one of his two issues information regarding new
medical evidence given by Dr. Webb, his medical expert, in collateral litigation. In testimony before the
Commission, Dr. Webb had not found that Coleman suffered any permanent disability. However, in the
collateral litigation, the expert found that Coleman suffered a twenty-five percent permanent disability.
¶19. Following the filing of his notice of cross-appeal, Coleman filed a motion to supplement the record on
appeal to include this new opinion by Dr. Webb. Kemper has filed a motion to strike from Coleman's
cross-appeal the issue concerning the new medical testimony. Coleman's motion is presently pending before
this Court pursuant to an order entered on April 4, 2001, by Justice Waller of the Mississippi Supreme
Court. We now address the merits of the motion to allow supplementation of the record to include this new
evidence.
¶20. Mississippi Rules of Appellate Practice 10 (e) provides that this Court "may" grant a motion to
supplement the record, if the record contains an "omission or misstatement." We do not consider this
evidence an omission. Therefore, Coleman's motion to allow supplementation is overruled. Furthermore, we
decline to consider evidence not considered by the Commission as such would be improper and beyond
our authority on appeal. However, we note that Coleman could have petitioned the Commission to consider
this evidence. The Mississippi Workers' Compensation Act allows a party to petition the Commission to
review a compensation case, issue a new compensation order which may terminate, continue, reinstate,
increase, or decrease such compensation, or award compensation, at any time prior to one year after date
of last payment of compensation. Miss. Code Ann. § 73-3-53 (Rev. 2000). If the time has not expired,
Coleman may still petition the Commission.
3. Imposition of Penalties and Awarding of Interest
¶21. Kemper contends that the administrative law judge's imposition of penalty and award of interest along
with the Full Commission's and circuit court's affirmance is contrary to the overwhelming weight of
evidence. Although Coleman advances that this issue was not properly preserved for the purpose of appeal,
Kemper prays for this relief in the lower court. Kemper argues that Coleman already received nonoccupational disability benefits and long term disability benefits during the entire period for which the
administrative judge awarded temporary total disability benefits from July 22, 1996 through June 1, 1997;
therefore, it should not be penalized for not paying under the requirements of Mississippi Code Annotated
Section 71-3-37 (Rev. 2000).
¶22. Mississippi Code Annotated Section 71-3-37 (Rev. 2000), provides:
If any installment of compensation payable without an award is not paid within fourteen (14) days
after it becomes due, as provided in subsection (2) of this section, there shall be added to such unpaid
installment an amount equal to ten percent (10%) thereof, which shall be paid at the same time as, but
in addition to, such installment unless notice is filed under subsection (4) of this section, or unless such
nonpayment is excused by the commission after a showing by the employer that owing to conditions
over which he had no control such installment could not be paid within the period prescribed for the
payment.
****
If any installment payable under the terms of an award is not paid within fourteen (14) days after it
becomes due, there shall be added to such unpaid installment an amount equal to twenty percent
(20%) thereof, which shall be paid at the same time as, but in addition to, such compensation unless
review of the compensation order making such award is had.
Miss. Code Ann. § 71-3-37(5) & (6) (Rev. 2000).
¶23. Three conditions are set forth in South Central Bell v. Aden, 474 So. 2d 584, 597 (Miss. 1985),
which allow an employer of right to claim relief from the burden of the penalty: (1) the employer has paid
compensation installments within fourteen days of when they became due, (2) the employer has filed a
notice to controvert within fourteen days of the day he received notice of the injury, (3) that nonpayment, if
it occurred, was as a result of conditions over which the employer had no control. More important, the
supreme court has determined that an employer can avoid statutory penalties in circumstances where the
employer has paid claimant payments via a company benefit plan within the fourteen days of when statutory
payments were due. Id.
¶24. Kemper began payments to Coleman for salary continuation beginning on the date of injury, July 22,
1996, through October 20, 1996, and long term disability benefits from October 21, 1996, through
December 31, 1997. Therefore, Kemper can avoid statutory penalties because it had paid Coleman within
fourteen days, as required by the statute. Thus, we reverse on this issue.
CROSS-APPEAL
1. Denial of Permanent Disability Benefits
¶25. Coleman asserts that the Commission erred in denying permanent disability benefits. There are two
factual bases for this assertion. First, Coleman asserts that the medical testimony in the record shows he
suffered a permanent impairment. Second, Coleman asserts that he suffered a functional loss by virtue of a
loss of income. Coleman earned $58,292 per year with Kemper at the time he suffered the compensable
injury, but after reaching maximum recovery and after the temporary disability ceased, he was making only
$39,400 per year with his new employer, a difference of $18,892 or $363.30 per week.
¶26. Dr. Webb's medical testimony concerning a permanent impairment was, "I do feel that with the
extraordinary pressure that [Coleman] went though, that the permanent effects will be [his] skittishness
about work, his ability to trust future bosses. Those are the two big areas. The ability to trust his future
employer." However, Dr. Webb declined to assign a permanent disability rating to Coleman. It was this
testimony that the Commission relied upon in denying Coleman permanent partial benefits. The
administrative law judge found:
Mr. Coleman has not sustained a permanent occupational disability because of the work injury. Dr.
Webb assigned no psychiatric restrictions but simply said that Mr. Coleman would probably always
have skittishness about work and an inability to trust future bosses. This Administrative Judge would
call that within the realm of normal, healthy skepticism about life in any workplace. That Kemper
eliminated Mr. Coleman's position is not indicative of a loss of wage-earning capacity or permanent
occupational disability. There were many changes at Kemper in 1997, both nationally and locally, and
in an employment-at-will state the employer need not keep a position available for an employee. Mr.
Coleman continues to have excellent credentials, intellectual capabilities, work history, and work
skills, and Dr. Webb's testimony would indicate no significant psychiatric impairment beyond the date
of maximum medical improvement.
As stated, the Commission affirmed the findings of the administrative law judge. Factual findings of the
Commission are affirmed if supported by evidence. Metal Trims Indus. Inc. v. Stovall, 562 So. 2d 1293,
1297 (Miss. 1990). Given this standard of review and the medical evidence offered, this Court finds no
error in the Commission's finding that Coleman suffered no permanent mental impairment.
¶27. Coleman further asserts that as a consequence of Kemper's actions that led to his mental injury, he has
suffered losing a job that paid $58,292 per year and has only been able to find employment paying $39,400
per year. However, regardless of a change in income, there must be some ongoing injury to justify an award
of permanent benefits. Miss. Code Ann. § 71-3-7 (Rev 2000). A determination of permanent injury must
be premised upon medical evidence. Dunn, MISSISSIPPI WORKERS COMPENSATION § 76, (3d ed. 1990).
In this case, the Commission found that Coleman failed to prove the element of permanent mental injury.
Such a determination is a finding of fact, and subject to the familiar discretionary review given to factual
findings. See Hale v. Ruleville Health Care Ctr., 687 So. 2d 1221, 1228 (Miss. 1997); Mid-Delta
Home Health, Inc. v. Robertson, 749 So. 2d 379, 386 (¶27) (Miss. Ct. App. 1999). Given this standard
of review, this Court can find no error in the denial of permanent benefits based on a change in income. This
issue is also without merit.
2. Application of Incorrect Legal Standard
¶28. Coleman asserts that in cases involving mental injuries, the "preponderance of the evidence," rather
than the heightened "clear and convincing evidence," burden of proof should be utilized. Additionally, he
asserts the use of the heightened burden has no basis in law, and thus the line of cases applying the
heightened burden should be overruled. Coleman urges this Court to disregard the well-established case
law which requires a "clear and convincing" evidence standard to be utilized in mental-mental cases. Earlier
in this opinion, we have stated that the proper standard of review, as established by the Mississippi
Supreme Court, is "clear and convincing." Fought, 523 So. 2d at 317 (Miss. 1988). For this reason, this
issue lacks merit.
¶29. THE JUDGMENT OF THE CIRCUIT COURT OF MADISON COUNTY IS AFFIRMED
ON THE ISSUES OF TEMPORARY AND PERMANENT INJURIES AND REMANDED TO
THE MISSISSIPPI WORKERS COMPENSATION COMMISSION FOR DETERMINATION
OF STATUTORY PENALTIES. THE APPELLANTS ARE ASSESSED ALL COSTS OF THIS
APPEAL.
McMILLIN, C.J., KING AND SOUTHWICK, P.JJ., BRIDGES, THOMAS, LEE, MYERS
AND CHANDLER, JJ., CONCUR. BRANTLEY, J., NOT PARTICIPATING.
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