Hurdle & Son and MS Casualty Insurance Company v. Michael A. Holloway
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IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2006-WC-02101-COA
HURDLE & SON AND MS CASUALTY INSURANCE
COMPANY
APPELLANTS
v.
MICHAEL A. HOLLOWAY
DATE OF JUDGMENT:
TRIAL JUDGE:
COURT FROM WHICH APPEALED:
ATTORNEYS FOR APPELLANTS:
ATTORNEYS FOR APPELLEE:
NATURE OF THE CASE:
TRIAL COURT DISPOSITION:
DISPOSITION:
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
APPELLEE
9/13/2006
HON. HENRY L. LACKEY
MARSHALL COUNTY CIRCUIT COURT
J. KEITH PEARSON
SARAH JANE LEWIS
BARRETT JEROME CLISBY
JAMES KIZER JONES
CIVIL - WORKERS’ COMPENSATION
REVERSED IN PART
REVERSED AND REMANDED-03/04/2008
BEFORE MYERS, P.J., IRVING AND ISHEE, JJ.
ISHEE, J., FOR THE COURT:
¶1.
Due to a work-related accident in February 1996, Michael Holloway was rendered a
quadriplegic. Since his discharge from the hospital in May 1996, Holloway has been cared for by
his mother and stepfather, Nettie and James Wiseman, at their home. Holloway has been receiving
benefits under the workers’ compensation statute, and the Wisemans have been compensated for
their care of Holloway at a rate of seven dollars per hour for sixteen hours each day.
¶2.
In August 2002, Holloway filed a motion requesting that Hurdle & Son and Mississippi
Casualty Insurance Company (employer and carrier) be required to pay for a life-care planner and
that the Wisemans be compensated for their care of Holloway at a rate of seven dollars per hour for
twenty-four hours each day. After a hearing by an administrative law judge, an appeal to the full
Workers’ Compensation Commission (the Commission), and a subsequent appeal to the Circuit
Court of Marshall County, the employer and carrier were ordered to compensate the Wisemans for
twenty-four hour care.
¶3.
Aggrieved, the employer and carrier appeal, asserting that: (1) the evidence presented at the
initial administrative hearing violated their due process rights under the Fifth and Fourteenth
Amendments, as they received ineffective notice of Holloway’s intention to introduce evidence and
examine witnesses, resulting in them being unable to conduct adequate discovery and otherwise
prepare properly for the hearing; and (2) that the circuit court improperly re-weighed evidence in
its review of the case and was in error when it overturned the ruling of the Commission. Finding
that the constitutional rights of the employer and carrier were violated, we reverse the decision of
the circuit court and remand for further proceedings consistent with this opinion.
FACTS AND PROCEDURAL HISTORY
¶4.
On February 20, 1996, Holloway was involved in an automobile accident that left him a
complete quadriplegic. After several months spent in different hospitals, Holloway was discharged
from the North Mississippi Medical Center in May 1996. Since his release, he has been cared for
by his mother and stepfather, the Wisemans, at their home in Marshall County.
¶5.
After an initial round of litigation over whether Holloway was entitled to benefits under the
Workers’ Compensation Act, this Court affirmed previous administrative rulings granting Holloway
workers’ compensation benefits in Hurdle v. Holloway, 749 So. 2d 342 (Miss. Ct. App. 1999).
Since that time, the Wisemans have been compensated for their in-home care of Holloway at a rate
of seven dollars per hour, for sixteen hours a day, seven days a week.
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¶6.
In August 2002, Holloway filed several motions requesting that employer and carrier be
required to pay for a life-care planner, that the Wisemans be compensated for their care of Holloway
at a rate of seven dollars per hour for twenty-four hours each day, and that Holloway’s counsel
receive a lump-sum award of fees in excess of $2,000,000. Those motions were all set to be heard
by an administrative law judge.
¶7.
When the parties came before the administrative law judge for a hearing on the various
motions, it became apparent that counsel for the employer and carrier had not been properly notified
that Holloway’s attorneys had requested a court reporter and that they sought to introduce
substantive evidence during the hearing. Nevertheless, the administrative law judge allowed the
hearing to proceed over the objections of counsel for the employer and carrier because Holloway
and his witnesses had traveled a long distance. In June 2003, the administrative law judge found
for the employer and carrier on every issue presented at the hearing, but noted that if she had not,
she would have been compelled to hold another evidentiary hearing on the same issues in order to
give counsel for the employer and carrier time to conduct discovery and prepare cross-examinations
for Holloway’s witnesses.
¶8.
Holloway appealed the ruling of the administrative law judge to the full Workers’
Compensation Commission, which affirmed the ruling of the administrative law judge in May 2004.
Holloway next appealed the decision of the Commission to the Circuit Court of Marshall County.
The circuit court, sitting as an appellate court, reversed the Commission and the administrative law
judge on the issue of compensation for twenty-four hour care and affirmed on the issues of
appointment of a life-care planner and the award of attorneys’ fees. It is from this decision that the
employer and carrier appeal.
STANDARD OF REVIEW
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¶9.
With respect to decisions by a circuit or chancery court concerning the actions of an
administrative agency or board, we apply “the same standard of review that the lower courts are
bound to follow. We will entertain the appeal to determine whether the order of the administrative
agency (1) was unsupported by substantial evidence; (2) was arbitrary or capricious; (3) was beyond
the power of the administrative agency to make; or (4) violated some statutory or constitutional right
of the complaining party.” Miss. Sierra Club, Inc. v. Miss. Dep’t of Envtl. Quality, 819 So. 2d 515,
519 (¶15) (Miss. 2002) (citing Miss. Comm'n on Envtl. Quality v. Chickasaw County Bd. of
Supervisors, 621 So. 2d 1211, 1215-16 (Miss. 1993)).
¶10.
Furthermore, “[a] circuit court sitting as an appellate court reviewing a decision . . . may not
substitute its judgment for the judgment and discretion of the administrative agency on facts
introduced.” Pascagoula Mun. Separate Sch. Dist. v. Barton, 776 So. 2d 683, 684 (¶5) (Miss. 2001)
(citing County Bd. of Educ. v. Parents & Custodians of Students, 251 Miss. 195, 208, 168 So. 2d
814, 818-19 (1964)). Finally, the circuit court “must sustain the legal action of the agency if that
action is based on substantial evidence.” Id. at 685 (¶5).
DISCUSSION
¶11.
The employer and carrier raise two arguments on appeal. These are: (1) that their due
process rights under the Fifth and Fourteenth Amendments were violated in the initial administrative
hearing, in that counsel for employer and carrier were improperly notified of Holloway’s intention
to present evidence and examine witnesses during that hearing, compromising their ability to
conduct adequate discovery and otherwise properly prepare for the hearing; and (2) that the circuit
court improperly re-weighed evidence in violation of its standard of review, sitting as an
intermediate appellate court, and erroneously reversed the rulings of the Commission and the
administrative law judge. Finding that the circuit court was in error and violated the due process
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rights of the employer and carrier when it partially reversed the decision of the administrative law
judge and the full Commission, we need not reach the second issue raised in this appeal.
¶12.
Our supreme court has previously held that, at a bare minimum, due process in an
administrative hearing requires notice and an opportunity to be heard. State Oil & Gas Bd. v.
McGowan, 542 So. 2d 244, 248 (Miss. 1989). These requirements by themselves do not require
any mechanism for discovery be afforded to either party. However, when the procedures of an
administrative agency allow for more than these minimum requirements, such as allowing for some
form of discovery, courts in this state have recognized a strong interest in ensuring that those
procedures are followed, as “the failure to abide by recognized discovery rules impacts whether a
decision is seen as arbitrary and capricious, and an [sic] violation of due process.” Bermond v.
Casino Magic, 874 So. 2d 480, 484-85 (¶11) (Miss. Ct. App. 2004) (citing Mid-Delta Home Health,
Inc. v. Robertson, 749 So. 2d 379, 386-87 (¶28) (Miss. Ct. App. 1999)). Finally, this Court has held
in the past that “it is an ‘immutable’ aspect of due process that a person against whom evidence is
to be used be afforded an opportunity to refute the evidence.” Id. at 485 (¶11) (citing Goldberg v.
Kelly, 397 U.S. 254, 270 (1970)).
¶13.
In this case, it is clear from the record that Holloway failed to follow the proper procedures
for setting an evidentiary hearing before the administrative law judge. Among other things, the
Procedural Rules of the Mississippi Workers’ Compensation Commission require that, in order to
controvert an issue, a claimant must file a petition to controvert, giving the employer and carrier an
opportunity to answer and conduct discovery. Miss. Workers’ Comp. Comm’n P.R. 2-4, 7. Prehearing statements must then be filed with the administrative law judge, and only then can an
evidentiary hearing take place. Miss. Workers’ Comp. Comm’n P.R. 5. In this case, none of the
procedures listed above were followed. Counsel for the employer and carrier were never notified,
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through a petition or otherwise, that Holloway intended to present evidence and examine witnesses
at the motion hearing until their appearance before the administrative law judge.
¶14.
As a consequence, and as the administrative law judge noted in her ruling, the proper course
of action would have been to reschedule the hearing after following the proper procedure. The issue
concerning the procedural defects of the hearing was rendered moot solely because, after hearing
all of the evidence Holloway intended to present, the administrative judge effectively granted a
directed verdict to the employer and carrier, a decision which was later affirmed by the full
Commission.
¶15.
Under these facts, the circuit court had two options in this case. It could have affirmed the
judgments of the Commission and the administrative law judge, or it could have reversed and
remanded for a new administrative hearing on the merits in order to cure the constitutional defects
present in the initial hearing. It did not, however, have the authority to conduct an independent
evaluation of the evidence the administrative law judge allowed into the initial hearing and to reach
new legal conclusions concerning those facts. This is precisely what the circuit court did when it
partially reversed the decisions of the full Commission and the administrative law judge and ordered
the employer and carrier to provide additional compensation to the Wisemans for their care of
Holloway. Consequently, we find that the circuit court violated the procedural due process rights
of the employer and carrier in doing so and reverse the decision of the circuit court on this issue with
instructions to remand the case back to the Commission for a new hearing on the merits.
¶16. THE JUDGMENT OF THE CIRCUIT COURT OF MARSHALL COUNTY IS
REVERSED. THIS MATTER IS REMANDED TO THE CIRCUIT COURT OF
MARSHALL COUNTY FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS
OPINION. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLEE.
KING, C.J., LEE AND MYERS, P.JJ., IRVING, CHANDLER, GRIFFIS, BARNES,
ROBERTS AND CARLTON, JJ., CONCUR.
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