The Mississippi Court of Appeals upheld a trial court’s dismissal of an insured’s bad faith claim against her employer but reversed dismissal of her bad faith claim, finding that the conduct of the insurer prior to the insured’s exhaustion of administrative remedies could give rise to a bad faith claim. Walls v. Franklin Corp., 2015 WL 2024653 (Miss. App. May 5, 2015).
The insured sought reimbursement for costs associated with doctor-prescribed shoes and a whirlpool bath and brought a bad faith claim against her employer and insurer regarding whether the costs were reasonable and necessary prior to a determination by the Workers’ Compensation Commission. The Supreme Court found the bad faith suit premature because the insured could not maintain a bad faith action for refusal to pay disputed medical services and supplies absent the Commission’s prior determination. After the Commission’s determination that the services and supplies were reasonable and necessary, the insured again sued. The Court of Appeals, in reversing the trial court’s dismissal, held that the inability of an insured to maintain a bad faith action was separate and distinct from the actions of the insurer before the Commission’s determination, which can give rise to a bad faith claim. It held that it was error for the trial court to find that the insurer could not have acted in bad faith at any time before the insured exhausted her administrative remedies.