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Injured worker can pursue old claim dispute over hot tub and Nikes


An Mississippi worker can pursue a bad-faith claim against the workers compensation insurer that refused to pay for her whirlpool bath tub and Nike sneakers after a 1984 injury, the state Court of Appeals ruled.

Cindy Walls was working for Houston, Mississippi-based furniture wholesaler Franklin Corp. when she injured her back in 1984, court records show. She filed a workers comp claim, and a Mississippi Workers' Compensation Commission administrative judge ordered Franklin's workers comp insurer, Mutual of Wausau Insurance Corp., to pay for Ms. Walls' injury-related medical expenses.

Wausau reimbursed Ms. Walls for most all of her medical expenses, but the insurer refused to reimburse her for the whirlpool bath and Nike Air Max sneakers she said her physician prescribed, according to records.

Ms. Walls sued Franklin and Wausau in 1997 in Chickasaw County Justice Court in Mississippi for bad faith, as the expenses had not yet been paid, records show.

Franklin and Wausau then filed a motion with the Mississippi Workers' Compensation Commission to ask if the expenses were reasonable and medically necessary, according to records.

The commission decided to postpone a decision until the justice court resolved the bad-faith action. However, the justice court dismissed Ms. Walls's action since she failed to first exhaust her administrative remedies, records show. The Mississippi Supreme Court affirmed the dismissal in November 2001, noting that “disputes over what is reasonable and necessary should be resolved through the commission's procedures.”

Records show that an administrative judge for the commission then determined the tub and sneakers were medically necessary, and ordered Franklin and Wausau to pay for them and any other unpaid medical expenses.

In 2002, Ms. Walls again sued Franklin and Wausau, saying they acted in bad faith by still not paying the expenses, according to records. She sought $2,433.18 in compensatory damages and an unspecified amount of punitive damages.

Seven months later, Wausau reimbursed her for the tub and the sneakers, records show.

Ms. Walls amended her complaint in January 2008, chronicling “two decades worth of allegedly unpaid medical expenses and bad faith actions by Wausau,” according to records. Her claim for actual damages was $600,000, and she requested $5.4 million in punitive damages, as well as $100,000 in attorney's fees.

According to records, a Chickasaw County Justice Court judge granted Franklin and Wausau's request to dismiss “all claims other than those relating to the tennis shoes and whirlpool bath addressed in the (administrative judge's) 2002 order.”

Franklin and Wausau then filed a motion to keep Ms. Walls from mentioning the dismissed claims, and the justice court agreed.

The judge reasoned that “the life of this case began the day Walls exhausted her administrative remedies,” records show.

The trial began in January 2013, and the evidence was limited to Wausau's delay in payment following the administrative judge's April 2002 ruling, according to records.

The jury sided with Wausau, leading Ms. Walls to appeal, records show.

Franklin and Wausau argued there was no duty to reimburse Ms. Walls until the administrative judge ordered them to do so, so “there could not be any bad-faith conduct before April 2002,” according to records.

The Mississippi Court of Appeals on Tuesday reversed the judgment dismissing Ms. Walls's bad-faith claim against Wausau and remanded the case to the justice court, noting its “hope for a speedy resolution of this old dispute.”

According to the appellate court's ruling, Wausau's duty to pay arose under its contract as Franklin's workers comp insurer, and that the administrative judge's order was merely a confirmation of Wausau's duty to pay.

“The judge erred by strictly limiting Walls' evidence, and thus Walls' bad-faith action, to how Franklin and Wausau handled her claims for the shoes and bath after the (administrative judge's) April 2002 order,” the ruling states. “Walls did, however, have evidence of Wausau's alleged bad-faith conduct before April 2002. So she was prejudiced by not being able to present this evidence against Wausau at trial.”

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