Brewer v. Liberty Mutual Insurance Co.

Filing 80

ORDER granting Defendants' 37 Motion for Summary Judgment; and finding as moot Defendants' 79 Motion to Stay Proceedings. A separate Final Judgment shall be entered in accordance with Rule 58 of the Federal Rules of Civil Procedure. Signed by District Judge Keith Starrett on June 9, 2015 (dsl)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
EASTERN DIVISION
JERRE BREWER, ADMINISTRATOR OF THE
ESTATE OF KYLEW. BREWER, DECEASED
V.

PLAINTIFF

CIVIL ACTION NO. 2:14-CV-95-KS-MTP

LIBERTY MUTUAL INSURANCE CO.
AND U.S. XPRESS ENTERPRISES, INC.

DEFENDANTS

MEMORANDUM OPINION AND ORDER
For the reasons stated below, the Court grants Defendant’s
Motion for Summary Judgment (ECF No. “[37]”).
I. BACKGROUND
This is a suit for bad faith denial of workers’ compensation
benefits brought by Kyle Brewer against his former employer, U.S.
Xpress Enterprises, Inc. (“USX”), and its insurer, Liberty Mutual
Insurance Company (“LM”). On or about October 16, 2011, Brewer
purportedly sustained various injuries when the cabin of an eighteenwheeler he was operating filled with smoke. See Am. Compl. [19] at 2.
On December 12, 2011, Brewer filed a Petition to Controvert before the
Mississippi Workers’ Compensation Commission (“MWCC”). See Am.
Compl. [19] at 10. On April 23, 2014, Brewer executed a General
Release and Settlement of All Claims (the “Release”) in favor of USX
and LM. See Def.’s Mot. for Summ. J. Attach. 1 Ex. 3, [37-1]. On this
same day, the MWCC entered an Order Granting Application for

Compromise Settlement. See Def.’s Mot. for Summ. J. Attach. 1 Ex. 2,
[37-1].
On May 21, 2014, Brewer filed suit against LM in the Circuit
Court of Forrest County, Mississippi alleging LM had committed
intentional/negligent infliction of emotional distress and six counts of
bad faith. Compl. [3 at ECF pp. 9-14]. On June 26, 2014, LM removed
the proceeding to this court on the basis of diversity of citizenship
jurisdiction under Title 28 U.S.C. § 1332. See Notice of Removal, [1].
On September 3, 2014, Kyle Brewer died. Jerre Brewer, the
Administrator of the Estate of Kyle Brewer, was subsequently
substituted as the Plaintiff in this action. See Order, [18]. On October
30, 2014, Plaintiff filed an amended complaint adding USX as a
defendant in the suit. See Am. Compl. [19].
On January 13, 2015, LM filed its Motion for Summary
Judgment. [37]. On January 21, 2015, USX joined in LM’s Motion for
Summary Judgment. See Def.’s Joinder in Mot. for Summ. J. [44].
Defendants contend summary judgment is due in their favor because
the Release Brewer signed released and discharged any and all claims
arising out of or in any way connected to Brewer’s work accident.
Plaintiff contends the Release is neither valid nor enforceable because
it did not represent the settlement between the parties.

II. STANDARD OF REVIEW
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Federal Rule of Civil Procedure 56 provides that “[t]he court
shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). Initially, the
movant has “the burden of demonstrating the absence of a genuine
issue of material fact.” Cannata v. Catholic Diocese of Austin, 700 F.3d
169, 172 (5th Cir. 2012) (citing Celotex Corp. v. Catrett, 477 U.S. 317,
323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)). If the movant meets this
burden, the nonmovant must go beyond the pleadings and point out
specific facts showing the existence of a genuine issue for trial. Id. “‘An
issue is material if its resolution could affect the outcome of the
action.’” Sierra Club, Inc. v. Sandy Creek Energy Assocs., L.P., 627
F.3d 134, 138 (5th Cir. 2010) (quoting Daniels v. City of Arlington,

Tex., 246 F.3d 500, 502 (5th Cir. 2001)). “An issue is ‘genuine’ if the
evidence is sufficient for a reasonable jury to return a verdict for the
nonmoving party.” Cuadra v. Houston Indep. Sch. Dist., 626 F.3d 808,
812 (5th Cir. 2010) (citation omitted).
The Court is not permitted to make credibility determinations or
weigh the evidence. Deville v. Marcantel, 567 F.3d 156, 164 (5th Cir.
2009) (citing Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343
(5th Cir. 2007)). When deciding whether a genuine fact issue exists,
“the court must view the facts and the inferences to be drawn
therefrom in the light most favorable to the nonmoving party.” Sierra
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Club, Inc., 627 F.3d at 138. However, “[c]onclusional allegations and
denials,

speculation,

improbable

inferences,

unsubstantiated

assertions, and legalistic argumentation do not adequately substitute
for specific facts showing a genuine issue for trial.” Oliver v. Scott, 276
F.3d 736, 744 (5th Cir. 2002) (citation omitted).
III. DISCUSSION
The question presented by Defendant’s Motion for Summary
Judgment is whether the Release executed and signed by Brewer
extinguished the claims at issue in this case. Generally, Mississippi
courts favor settlements. Chantey Music Publ’g, Inc. v. Malaco, Inc.,
915 So.2d 1052, 1055 (Miss.2005). Furthermore, the Court “will enforce
the agreement which the parties have made, absent any fraud,
mistake, or overreaching.” Id.

Likewise, “the construction and

enforcement of settlement agreements is governed by principles of
state law applicable to contracts generally.” Smith v. N. Ins. Co. of

N.Y., No. 5:14CV56, 2014 WL 6680611, at *2 (S.D. Miss. Nov. 25, 2014)
(citing Lee v. Hunt, 631 F.2d 1171, 1173-74 (5th Cir. 1980)). In
interpreting settlement agreements, Mississippi courts “have set out a
three-tiered approach.” Tupelo Redevelopment Agency v. Abernathy,
913 So.2d 278, 284 (Miss.2005).
First, the “four corners” test is applied, wherein the
reviewing court looks to the language that the parties
used in expressing their agreement. Second, if the court is
unable to translate a clear understanding of the parties’
intent, the court should apply the discretionary canons of
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contract constructions. Finally, if the contract continues
to evade clarity as to the parties’ intent, the court should
consider extrinsic or parol evidence. It is only when the
review of a contract reaches this point that prior
negotiations, agreements and conversations might be
considered in determining the parties’ intentions in the
constructions of the contract.

Id. (citations omitted). Furthermore, “in a summary judgment case, the
reviewing Court need not go through the entire three-step analysis . . .
. If the reviewing Court finds the terms of the contract to be ambiguous
or subject to more than one interpretation, the case must be submitted
to the trier of fact, and summary judgment is not appropriate.”

Epperson v. SOUTHBank, 93 So.3d 10, 17 (Miss.2012).
The Defendants claim the ensuing language in the Release
effected the release and discharge of Brewer’s bad faith claim:
[T]he undersigned, Kyle Brewer, does hereby release,
acquit, remise and forever discharge US Xpress
Enterprises, Inc. and Liberty Mutual Insurance
Company… from any and all claims, demands, damages,

liabilities, equities, and causes of actions of every kind
and character, both known and unknown, legal and
equitable, including those past and present, accruing or
accrued to the undersigned, Kyle Brewer, at any time

prior to the signing of the General Release and
Settlement of all Claims, including those past and

present, or future medical expenses or workers’
compensation benefits, or any other damages arising out
of or in any way connected with any personal injuries the
undersigned, Kyle Brewer, claims to have sustained while
employed by US Xpress Enterprises, Inc. or subsequent
thereto, or while seeking benefits under the Mississippi
Workers’ Compensation Act for that injury of October 16,

2011, or otherwise.

Release [37-1 at ECF p. 11] (emphasis added).
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Based on the language within the “four corners” of the Release,
it is clear the claims brought by Brewer subsequent to signing the
Release are barred. All of Brewer’s claims against USX and LM arise
out of or relate to the injuries Brewer purportedly sustained while he
was employed by USX. But for those purported injuries, Brewer would
have no cause of action against the Defendants for their alleged bad
faith acts or omissions in handling Brewer’s claim for workers’
compensation benefits. The causes of action in the complaint
unambiguously fall within the broad scope of the Release. See Ward v.

Royal Ins. Co., 662 F.Supp. 1079, 1081-82 (S.D. Miss. 1986) (holding
that the release executed by the plaintiff in connection with the
settlement of his workers’ compensation claim barred his subsequent
bad faith action), aff’d, 820 F.2d 1222 (5th Cir. 1987).
Plaintiff, like the plaintiff in Smith, 2014 WL 6680611, argues
that the language of the settlement is ambiguous. Pl.’s Resp. in Opp’n
to Defs.’ Mot. for Summ. J., [48] at 7. The distinction between Smith
and this case is that in Smith the “Plaintiff declined to execute the
release as drafted by the Defendant. Before signing the release, he
[Plaintiff] altered some of its terms, refusing to release Defendant from
any claims except the claim for workers’ compensation benefits.”

Smith, 2014 WL 6680611, at *1. Because the Plaintiff altered the
release, the Court examined the language in the Application for
Approval of Compromise Settlement. The Court then determined the
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language in the Application was ambiguous. Here, the Plaintiff,
without making any changes, signed the Release. Because Plaintiff
signed the Release, the court determines whether its language is
ambiguous, not the Application. As stated above, the language within
the “four corners” of the Release has a clear and unambiguous
meaning.
Plaintiff further relies on emails and certain documents filed in
the underlying workers’ compensation proceeding in arguing that the
settlement did not encompass any bad faith claims. Such evidence
should only be considered when the intent of the parties is unclear
based on the language within the “four corners” of the parties’
agreement. Brothers v. Winstead, 129 So.3d 906, 914 (Miss.2014).
Because the Court finds the language of the Release to be clear and
unambiguous, parol evidence need not be considered.
Plaintiff also argues that the Release is unenforceable because it
encompasses claims beyond the jurisdiction of the MWCC. This is
substantially similar to the argument before the Court in Ward, “that
any release which purports in connection with a lump sum settlement
of a workers’ compensation claim, to discharge anything more than an
employer’s liability for workers’ compensation benefits is invalid . . . .”

Ward, 662 F.Supp. at 1082. The Court responded to this argument by
stating:

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Neither statue prevents a party from discharging the
workers’ compensation carrier or from releasing claims
other than claims for benefits under the Act. Moreover,
nothing in the Workers’ Compensation Act prohibits the
release of the carrier for claims other than for
compensation.

Id. at 1083. The reasoning in Ward applies here. Further, Brewer fails
to cite any rule of contract law that renders a settlement agreement
void merely because it resolves claims in one proceeding and additional
claims capable of being filed in a separate proceeding.
Because the language in the Release clearly and unambiguously
discharges and releases Defendants from any and all claims relating to
or arising out of the work accident, the bad faith and emotional
distress claims brought by Plaintiff in this case are barred.
IV. CONCLUSION
For the reasons stated above, the Court grants Defendant’s
Motion for Summary Judgment [37]. The Court will issue a separate
final judgment in accordance with Federal Rule of Civil Procedure 58.
All other pending motions are denied as moot.
SO ORDERED this the 9th day of June, 2015.

s/Keith Starrett

UNITED STATES DISTRICT JUDGE

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