MWCC NO. 96-07344-F-7461

HOWARD MCDONALD                                                                                                                 CLAIMANT

vs.

ANDY KISER LOGGING                                                                                                               EMPLOYER
                                                                                                                                                         UN-INSURED
AND
COLUMBUS LUMBER COMPANY                                                                     STATUTORY EMPLOYER
AND
AMERICAN FEDERATED INSURANCE CO.                                                                                CARRIER
AND
KCS LUMBER COMPANY                                                                                    STATUTORY EMPLOYER
AND
INDIANA LUMBERMEN'S MUTUAL                                                                                             CARRIER
AND
MISSISSIPPI PACIFIC COMPANY                                                                      STATUTORY EMPLOYER
AND
GRAIN DEALERS MUTUAL                                                                                                             CARRIER
AND
MS. LOGGERS SELF-INSURED FUND, INC.                                                     ANCILLARY CLAIMANT

APPEARING FOR CLAIMANT:
Hon. John T. Ball, Attorney at Law, Natchez, Mississippi

APPEARING FOR THE DEFENDANTS:
Hon. Richard M. Edmonson Jr., Attorney at Law, Jackson, Mississippi
Hon. Clifford Ammons, Attorney at Law, Jackson, Mississippi
Hon. Christopher E. Kelley, Attorney at Law, Natchez, Mississippi
Hon. Steven D. Slade, Attorney at Law, Meridian, Mississippi
 

The Commission heard the above styled cause on February 12, 2001 in the offices of the Mississippi Workers' Compensation Commission in Jackson, Mississippi on Ancillary Claimant's "Petition for Review" and "Motion for Reimbursement from Solely Liable Party".

Having heard the arguments offered on behalf of the parties and having thoroughly studied the record and the applicable law, the Commission affirms the "Order on Ancillary Claimant's Motion for Reimbursement for Lien under Section 71-3-37 (13), or for Utimate Determination of Liable Party/Parties" dated October 25, 2000.

Ancillary Claimant's "Motion for Reimbursement from Solely Liable Party", filed with the Commission on November 3, 2000, is denied.

SO ORDERED, this the 13th day of February, 2001.

MISSISSIPPI WORKERS' COMPENSATION COMMISSION
BY: BARRETT SMITH
BARNEY SCHOBY
COMMISSIONERS

ATTEST:
Joann McDonald, Secretary
___________________________
 

MWCC No. 96 07344-F-7461

HOWARD MCDONALD                                                                                                                 CLAIMANT

vs.

ANDY KAISER LOGGING                                                                                                             EMPLOYER
AND
MISSISSIPPI LOGGERS ASSOCIATION
SELF INSURED FUND                                                                                                                    CLAIMANT

APPEARING FOR CLAIMANT:
Honorable John T. Ball, Attorney at Law, Natchez, Mississippi

APPEARING FOR EMPLOYER:
Honorable Barry H. Powell, Attorney at Law, Jackson, Mississippi
 
APPEARING FOR CLAIMANT (MISSISSIPPI LOGGERS):
Honorable Steven D. Slade, Attorney at Law, Meridian, Mississippi
 

A hearing was held on June 24, 1997 at the Adams County Courthouse in Natchez, Mississippi at 10:00 a.m. on the carrier's Motion To Suspend And Discharge Requirement To Pay Benefits. This cause concerns an alleged date of injury of April 3, 1996 and is noted for the record that the carrier represents that same has tendered in excess of $1 00,000.00 in medical expenses and compensation benefits but indicates such monies and benefits were expended because of an anticipated bad faith allegation.

Michael J. McElhaney, Esquire, was also present in the courtroom on that date and indicated to the Commission that he represents Andy Kaiser Logging with reference to the compensation claim only.

The carrier herein references the ability to discharge the requirement to pay benefits in this cause pursuant to the authority of Mississippi Code Annotated, Section 71-3-77 (1972). In support thereof carrier asserts that the policy between the carrier and Andy Kaiser Logging, the employer, was terminated and canceled prior to the injury which is the subject of this cause. Official records of the Commission show that notice of the cancellation of policy was properly received and documented by the
Commission with reference thereto the carrier respectfully requests that judicial notice be taken of all the documents in its possession with reference to Andy Kaiser Logging and Mississippi Loggers Association Self Insured Fund (MLSIF). According to these official records, the effective date of cancellation for the policy was December 25, 1995, prior to the alleged date of injury. The carrier attest that they complied with all statutory requirements for proper cancellation pursuant to the terms of Mississippi Code Annotated, Section 71-3-77 (1972). The employer admits to having received notice in accordance with the statutory prescription and the Commission had obtained such notification which is referenced hereto. Cancellation of the policy was effectuated more than thirty (30) days prior to the subject inquiry giving rise to this cause. The carrier contends that such cancellation constituted public notice to all the world that the policy had been canceled prior to the date of injury. Therefore, according to the carrier, the employer possessed imputed knowledge of the cancellation notwithstanding his actual notification pursuant to the terms of the statute. The testimony on the date of the hearing indicated that the employer has not now nor has it ever filed a form B-3 commensurate with Commission rules. The MLSIF began payment of benefits arising under this claim upon a demand by the employer to do so. The MLSIF in consideration of the beneficent purposes and intents of the act that injured employers receive medical care began paying benefits under a reservation of rights. Pursuant to the language of the statute, however, the terms of any such policy and its construction are deemed to be made subject to the provisions of the Act, therefore it is contended that the Commission maintains proper jurisdiction over the narrowly defined question presented in this Motion and, thus, would have the statutory authority to render a ruling as this particular issue. At that time that the MLSIF began paying medical costs and benefits under its reservation of rights there was insufficient information available to determine what parties, if any, -may otherwise be responsible for the claim pursuant to the Act. For clarification, it is noted that upon information and belief the employer was engaged in a business relationship at the time of the injury with Tri-Lake Timber Company, Columbus Lumber Company, LLC and KCS Lumber Companies. There was "some business relationship" which existed by and between the employer and third parties i.e., Columbus Lumber, LLC and KCS Lumber from which the subject injury arose. As to the actual date of injury, claimant was employed by Andy Kaiser Logging who was doing work for and under the direction of the employer and these other cited entities. Without asserting that the employer was a subcontractor or independent contractor with or for the. third parties as mentioned, the carrier submits that there did exist "some business relationship" between these entities at and from which the injury arose. Further, the availability of ample coverage avenues apart from the carrier grants the Commission security to grant the relief sought as asserted by the carrier. Given the fact that there exists other avenues for potential coverage, even if the employer was not otherwise covered, combined with the prima facie cancellation subject policy, would make the appearance clear that the issue of which party is or should be held responsible for payment of the claimant's workers' compensation benefits falls under a dispute properly existing between any of these third parties and/or any combination of them.and the employer. The carrier, however, is not properly before the Commission and should be discharged, according to the carrier. The employer has asserted that it was not subject to the provisions Act when the injury occurred and has alternatively suggested that it mistook itself to be covered by the carrier, notwithstanding Commission records to the contrary. It is fully recognized by the MILSIF that the issue of cancellation of this policy is and continues to be contested by the employer. The carrier contends that the Commission is without the requisite statutory authority to deny the substance and meaning of its own records forcing this issue to be brought for proper determination elsewhere if at all. The carrier asserts that it is well established that the Commission may'only operate within the confines of its statutory authority. Either the employer or the claimant or either of them must and should be given the opportunity to verify and assert the possibility of other coverage as directed by the statute and case law defining the Act, through third parties and potential statutory employers. Moreover, raising and litigating those issues should not be the responsibility of the carrier which has properly canceled itself from these proceedings pending a ruling from the contrary by some court of competent jurisdiction. The carrier contends however, that prior to such a ruling the Commission can only review its own records. The carrier elucidates that if the employer did not otherwise have in effect workers' compensation coverage as it contends, then the issue arises to whether the claimant, the employer, or any of them, should be required by Order of the Commission to confirm these other entities as statutory employers. On.the other hand, if the employer was otherwise covered and the carrier still properly informed the Commission pursuant to the terms of Mississippi Code Annotated, Section 71-3-77 (1) (1972), the carrier contends that notwithstanding any of the foregoing potential- issues to be raised, it is abundantly clear that the carrier should be absolved of any present and future obligation to pay for the remaining benefits arising from this claim and some resolution made as to which party should properly be ordered to reimburse the carrier for those amount already expended in payment or defense thereof. Pending resolution of that issue, this Commission is bound by the statutory authority granted, and the relief sought by this Motion is entirely within those boundaries, whereas any Order to the contrary would, according to the carrier, fall outside of the statutory margins granted to the Commission. The Mississippi Loggers Association Self Insured Fund merely requests that the Commission recognize the verity of its own documentation and implement the statutory authority granted herein, discharging and suspending the continued and future liability for this claim and the obligation of the carrier pending resolution of the issue of the status of the relationship between the third parties as referenced above, and the employer. William Andy Kaiser d/b/a as Andy Kaiser Logging responded to the Motion of the carrier in this proceeding, Mississippi Loggers Association Self Insured Fund, Inc., to suspend and discharge the requirements to pay benefits and noted as its first defense that there is presently pending in the Circuit Court of Lauderdale County, Mississippi, the Civil Action No. 96 CV-146B by the carrier against William Andy Kaiser and Howard McDonald, the employer and claimant in the proceeding seeking declaratory relief that carrier has no coverage or responsibility for Howard McDonald's workers' compensation claim in this proceeding. A copy of the complaint was filed by the carrier and the Answer is attached to the response and made a part by reference hereto to this Motion and Order. The employer contends that the proper jurisdiction for the relief which the carrier is seeking in its Motion resides with the Circuit Court of Lauderdale County, Mississippi. Furthermore, Commission should not attempt to assert jurisdiction over the issue of coverage but should abstain since that issue is presently being litigated in the aforementioned Circuit Court. As a second defense, the employer indicates that by law an Order to terminate the coverage of Andy Kaiser Logging required the carrier to either serve notice of termination to the Mississippi Workers' Compensation Commission personally or by registered mail. Upon information and belief they contend that the carrier has done neither and the attempted termination by the carrier would therefore be rendered ineffective. As a third defense, they indicate that the carrier is estopped from denying coverage in this proceeding and, further, assert that Andy Kaiser Logging received a notice of cancellation from the carrier dated September 8, 1995 stating that its policy would be canceled for non-payment of premiums. At that time, Andy Kaiser Logging was in arrears as to its June, July, and August, 1995 premium payment. Andy Kaiser Logging paid premiums as follows: September 25, it paid its July premium and on October 3, it paid the August premium. The carrier reinstated Andy Kaiser Logging's policy. On December 22, however, the carrier gave Andy Kaiser Logging notice of cancellation effective December 25, 1995 for non payment of premiums. On November 15, 1995 the logging company had paid its September premium and on December 4, paid the October premium. The November premium was not yet due. On February 27, 1996 the November payment was paid and accepted by the insurance company. However on February 29, 1996 Andy Kaiser Logging received a return deposit in the amount of $4,502.32 and Andy Kaiser Logging assumed that this was a premium adjustment. Employer notes that in the past it has been the carrier's standard practice with respect to Andy Kaiser Logging and other loggers to send out notices of cancellation for non-payment of premiums and then to reinstate the policies without notice to the policy holder when the past due premiums were paid. Andy Kaiser Logging relied on this past practice and procedure and if Andy Kaiser Logging had known that its policy had actually been canceled as of December 25, 1995 it would have indeed secured other workers' compensation coverage, but it relied on the carrier's policy and practice and assumed that the policy had been reinstated when it "caught up with its premiums." The employer further notes as a latter defense that the carrier has voluntarily assumed payment of workers' compensation benefits to Howard McDonald while attempting to deny coverage to Andy Kaiser Logging and defend under reservations of rights. Because the carrier did not give Andy Kaiser Logging its choice of attorneys to defend it in the workers' compensation claim, but chose to defend the claim through counsel's own choosing, the carrier has waived its claim. Therefore William Andy Kaiser d/b/a Andy Kaiser Logging Company would request that carrier's Motion be denied for lack of jurisdiction because the issue is already pending in the Circuit Court of Lauderdale County and, alternatively, that the Commission abstain from hearing the Motion because this issue is pending therein, and, further, that the carrier's Motion be denied because the carrier has not followed the statutory requirements for filing a termination notice with this Commission and the carrier's Motion should be denied because the carrier is estopped from denying coverage and, further, in the alternative, that the carrier's Motion should not be granted because there are material issues of fact as to whether the carrier is estopped from denying coverage in this proceeding and.that the carrier has voluntarily assumed the payment of workers' compensation benefits to Howard McDonald in this proceeding. Alternatively, there is a material issue of fact concerning the carrier's voluntary assumption of the payment of workers' compensation benefits in this proceeding.

In response herein as to the affirmative defenses cited by the employer, the carrier replied that the mere existence of the A-24 form, which is properly on record as an official document of the Mississippi Workers' Compensation Commission, creates a prima facie case for the carrier that the subject policy was canceled when the record indicates that it was canceled. The document should be construed by the Commission as valid and speaking for itself until proven otherwise. Implementing thewords of the employer, the proper place to prove otherwise is before the Circuit Court of Lauderdale county and if the document is valid, and if the Commission recognizes the document, then the Commission should properly rule that the carrier is not properly before the Commission and the pending motion should be granted. The carrier indicates that "at best" the employer has disputed coverage to the carrier for the purposes of this claim. The carrier asserts.that more appropriate coverage may exist through statutory employers and in this situation such information could only assist the employer. Respectfully, the carrier should not now be in the position of having to find other avenues of which the employer might "cover his tail." The purpose of this motion was to properly allocate such responsibility to other parties which, unlike the carrier, have failed to provide the Commission proof of their non-liability for payment of benefits arising from this cause. The carrier does not deny the existence and nature of the pending action of Circuit Court of Lauderdale County, but emphasizes that within that forum the employer should properly argue its surmises, assumptions, beliefs, conjectures and other such evidence illustrated throughout and, in truth, all that the carrier's pending Motion would request of the Commission is that they recognize the verity of its own records, specifically the A-24 on file which demonstrates that the employer had no coverage through the carrier more than thirty (30) days prior to the subject injury. If the employer wishes to collaterally attack the verity of the Commission records, such a collateral attack would, according to the carrier, be more properly carried out before the Circuit Court of Lauderdale County. But in the interim, all the carrier would request of the Commission within the pending motion is that inter alia it enforce the terms of its own official documentation governed by the statutory margins of the Act. Further, with reference to the employer's indication of a waiver on the part of the carrier, the carrier asserts they have waived nothing. From the date carrier was first notified of the injury, the employer was made fully aware that the coverage to the carrier was in its best form disputed. In an exercise of reasonable diligence, the employer and/or the alleged statutory employers with whom the employer was engaged should have known that the employer's coverage had been properly canceled with the Mississippi Workers' Compensation Commission. Further, the carrier indicates that they have graciously provided the carrier medical treatment and, simultaneously, the carrier has provided the employer an avenue by which it could voice it arguments through a Circuit Court of law and through this latter venue the employer must properly seek reversal of what Commission records prove to be a proper cancellation. The employer would have the Commission ignore its own records and subordinate statutory authority to the conjecture and surmise the employer has submitted. The Carrier contends that the Commission is without authority to overrule its'own records based upon such evidence and cannot and should not recognize such other evidence persuasively and contend that if any forum should entertain the employer's constructions, it should be the Circuit Court of Lauderdale County. Absent a ruling to the contrary by a court of, competent jurisdiction, the carrier would submit that the Commission should'only recognize the validity of its own records as "speaking for themselves."

Representation was made that the appropriateness of this motion at this particular time and point was well-defined in that the claimant had reached maximum medical improvement, thereby bolstering the carrier's request that they be excused at this time under the circumstances as recited herein. Reference must be had to a clinic note referencing the patient Howard McDonald from Dr. Michael Winkelmann and dated June 10, 1997 which indicates as follows:

Mr. McDonald is here today. He has good improvement from the medication that he is on. He is continuing to do real well. At this point, we will add Elavil to his regimen as he still has significant dysesthetic pain. For now, it appears that he will be approaching maximum medical improvement in August and I will see him back after an FCE.

IT IS, THEREFORE, ORDERED AND ADJUDGED that the carrier's Motion To Suspend And Discharge Requirement To Pay Benefits be, and the same is, hereby granted.

SO ORDERED this the 18th day of August, 1997.

VIRGINIA WILSON MOUNGER
ADMINISTRATIVE JUDGE

ATTEST:
Brenda H. Goolsby, Secretary