A unanimous Mississippi Supreme Court held that an injured worker’s settlement with his employer exhausted his administrative remedies and that he could proceed with a bad faith claim against the employer.
Jeremy Thornhill was working for Walker-Hill Environmental when he injured his back on the job in July 2017. After a doctor recommended surgery, Mr. Thornhill filed a workers’ compensation claim. Walker-Hill filed a response admitting that his injury occurred in the course of his employment and that it had been properly notified, but the company insisted that he was not entitled to benefits because he had refused to submit to a drug test after reporting the injury, according to Thornhill v. Walker-Hill Environmentalpublished Thursday in Jackson.
Walker-Hill later filed an amended answer denying that Mr. Thornhill had suffered any work-related injury and denied that it had received proper notice. After a hearing, an administrative law judge ordered Mr. Thornhill to undergo an independent medical examination, which resulted in a recommendation for surgery because the work injury had significantly aggravated a pre-existing condition and Mr. Thornhill had not yet achieved maximum medical improvement.
After receiving the medical report, Walker-Hill agreed to arbitrate Mr. Thornhill̵7;s claim, after which the parties agreed to settle for $145,000, without Walker-Hill acknowledging that Mr. Thornhill had suffered a compensable injury. The Mississippi Workers’ Compensation Commission approved the deal.
Pursuant to the settlement, Mr. Thornhill a general release that released Walker-Hill from all claims arising out of or connected to his alleged work injury. The release further stated that Mr. Thornhill reserves the right to bring a bad faith action against any party and that the parties agreed that administrative remedies for the claim have been fully exhausted.
Mr. Thornhill later filed a bad faith claim against Walker-Hill. The company moved to dismiss, arguing that Mr. Thornhill had failed to exhaust his administrative remedies.
A trial judge granted the motion, reasoning that before a lawsuit can be filed for a bad faith denial of workers’ compensation benefits, a claimant must first obtain a determination from the Commission that he is entitled to the benefits in question. The Court of Appeals reversed, finding that the commission’s approval of the compromise settlement exhausted Mr. Thornhill’s administrative remedies and that his bad faith lawsuit can go forward.
The Mississippi Supreme Court affirmed, saying its precedent requires only a determination that a plaintiff is “entitled” to relief before a bad faith action can be brought. “Because Thornhill’s settlement was approved and because he had no further dealings with the commission, we find that he had exhausted his administrative remedies when his pre-commission claim was terminated by settlement.”
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