Scott Penn, Inc. v. Mississippi Workers' Compensation Group Self-Insurer Guaranty Ass'n
235 So. 3d 85
| Miss. | 2017Background
- Mississippi Comp Choice surrendered its Certificate of Authority on January 20, 2009; the Workers’ Compensation Commission found Comp Choice in default and authorized transfer of claim administration to the Group Guaranty Association.
- The Commission determined Comp Choice’s remaining assets were insufficient and on April 19, 2010 ordered a $1,948,463 assessment against former Comp Choice members, allocated pro rata by earned premiums, with a 5% monthly penalty for late payment.
- Former members had executed indemnity agreements as a condition of membership, making members jointly and severally liable for each other’s workers’ compensation obligations.
- The Guaranty Association invoiced former members; after sixty days without payment it sued in Madison County Circuit Court to collect individual assessment amounts (including penalties).
- Many former members appealed the Commission’s April 19, 2010 order in Hinds County but did not obtain a supersedeas; the Madison County court denied a motion to dismiss and granted summary judgment to the Guaranty Association against remaining defendants for their billed shares.
- The Mississippi Supreme Court affirmed the Madison County summary judgment as to Austin, Inc. and Winona Hardwood, Inc., holding no genuine material fact precluded judgment and noting appellants failed to produce evidence or obtain supersedeas relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity/enforceability of Commission assessment for collection | Guaranty Assn.: Commission order valid; members liable under indemnity agreements; collection may proceed | Members: Commission order invalid/unsupported; appeal in Hinds County pending so collection premature | Held: Assessment enforceable for collection absent supersedeas; Madison County properly allowed collection against members who failed to procure a stay |
| Existence of contractual liability (indemnity agreements) | Guaranty Assn.: Members signed indemnity agreements making them jointly/severally liable for fund obligations | Members: Indemnity unenforceable unless fund assets fully exhausted; dispute whether assets were exhausted | Held: Indemnity agreements valid and enforceable; plaintiffs produced evidence showing exhaustion and assessment notice; defendants produced no contrary evidence |
| Sufficiency of evidence for specific assessed amounts | Guaranty Assn.: Invoices based on Commission’s ordered allocation; amounts due as invoiced | Members: No accounting/support for $1,948,463 total or individual shares; requested discovery | Held: Defendants failed to introduce evidence or obtain discovery in five+ years; summary judgment appropriate on undisputed amounts |
| Ripeness / procedural bar due to pending Hinds County appeal | Members: Pending appeal in Hinds County renders Madison collection action premature; collection barred without resolution | Guaranty Assn.: Appeal does not operate as supersedeas; collection may proceed absent supersedeas or bond | Held: Pending appeal does not stay collection; without supersedeas order or bond, Guaranty Assn. may pursue collection actions |
Key Cases Cited
- Indem. Ins. Co. of N. Am. v. Guidant Mut. Ins. Co., 99 So. 3d 142 (Miss. 2012) (de novo review of summary judgment)
- Daniels v. GNB, Inc., 629 So. 2d 595 (Miss. 1993) (view evidence in light most favorable to nonmovant on summary judgment)
- Children’s Med. Group, P.A. v. Phillips, 940 So. 2d 931 (Miss. 2006) (nonmoving party must present probative evidence to create triable issues)
- Stuckey v. Provident Bank, 912 So. 2d 859 (Miss. 2005) (summary judgment standards and requirements for opposing evidence)
- Franklin Collection Serv. v. Kyle, 955 So. 2d 284 (Miss. 2007) (parties should respond to summary judgment with affidavits, discovery, or admissible evidence)
- Commercial Bank v. Hearn, 923 So. 2d 202 (Miss. 2006) (Rule 56 does not allow reliance on evidence that might be developed later)
- Bowie v. Montfort Jones Mem’l Hosp., 861 So. 2d 1037 (Miss. 2003) (reversal of summary judgment only when triable issues of fact exist)
- Reynolds v. Amerada Hess Corp., 778 So. 2d 759 (Miss. 2000) (mere allegation of factual dispute insufficient to defeat properly supported summary judgment)