Alabama and Mississippi Bad Faith Springs From WC Claim
Alabama and Mississippi had a bad faith case filed from a Workers Comp claim.
Adjusters are usually protected from any type of Workers Comp mistake or oversight. The Exclusive Remedy doctrine has always protected other parties including employers, adjusters, and other insurance personnel from bad faith suits.
The Exclusive Remedy doctrine usually means that if an employee accepts workers comp benefits, then that is the only avenue of collection of benefits from his/her employer. Every now and then a case makes it through and or around the WC courts or Industrial Commissions .
According to this article by Business Insurance (click here), an employee that was paid Workers Comp benefits in Mississippi could also file a bad faith action. The ruling said:
The “Mississippi Supreme Court recognized, under common law, that an injured worker may recover damages from a workers compensation insurer for an independent tort, outside the scope of the worker’s employment, when the insurer intentionally and in bad faith refuses to pay workers compensation to which the worker is entitled
The four elements that I saw from the ruling are:
- The bad faith claim release was not part of the WC settlement
- The US District Court in Mississippi said that Alabama was the proper jurisdiction
- The employer was based in Alabama
- Mississippi allows bad faith suits out of WC
The US District court was overruled on their determination that only Alabama had jurisdiction as the employer was based in Alabama.
The Court of Appeals applied the WALSH test for jurisdiction when overruling the US District Court. There are more circumstances in the case. It may be a good idea to follow the link provided to read the article.
I will cover the WALSH jurisdiction test tomorrow.
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