Davis v. State, 95-135

Decision Date09 January 1996
Docket NumberNo. 95-135,95-135
Citation910 P.2d 555
Parties, 7 NDLR P 328 Luanne DAVIS, Appellant (Plaintiff), v. The STATE of Wyoming; The Wyoming State Employees' and Officials' Group Insurance Board of Administration; and Great-West Life Assurance Company, Appellees (Defendants).
CourtWyoming Supreme Court

John E. Stanfield and Kathleen A. Hunt of Smith, Stanfield and Scott Law Offices, LLC, Laramie, for Appellant.

Terry L. Armitage, Cheyenne, for Appellees State and State Employees' and Officials' Group Ins. Bd. of Admin.

Patrick J. Murphy of Williams, Porter, Day & Neville, P.C., Casper, for Appellee Great-West Life Assur. Co.

Before GOLDEN, C.J., and THOMAS, MACY, TAYLOR and LEHMAN, JJ.

MACY, Justice.

Appellant Luanne Davis appeals from the summary judgment which was granted in favor of Appellees State of Wyoming and Wyoming State Employees' and Officials' Group Insurance Board of Administration and from the district court's order which granted Appellee Great-West Life Assurance Company's motion to dismiss and motion for a summary judgment.

We affirm.

ISSUES

Davis presents a number of issues on appeal:

1. Is it constitutionally permissible to limit State employees to an administrative hearing as their sole remedy for benefits and dam[a]ges whenever their claim is denied by the State's self insur[ ]ance carrier and to prohibit access to the judicial system or eliminate their independent claims?

2. Was it error to grant a summary judgment and/or a motion to dismiss against Ms. Davis on any of the claims asserted in her Complaint?

3. Under the appropriate rule of review, did Ms. Davis allege a claim under the Americans with Disabilities Act which was not subject to a motion to dismiss?

4. For an administrative hearing to be given binding effect on any other rights or privileges or to be used for collateral estoppe[l] or res [ ]judicata purposes,[ ] must it be shown that the party sought to be estopped had a fair hearing and a fair opportunity to protect his interests? [T]o defend his/her interests?

5. Where an administrative tribunal lacks the power to grant certain remedies or relief on the basis of the tort remedies which are available to its policyholder because of the manner in which his/her claim was investigated, handled and denied--is it constitutionally permissible to make a hearing by that tribunal the sole remedy of a policyholder and to deny the policyholder all rights of access to the court and jury sy[ ]stem?

6. Was the conduct of The State and/or the Board and/[or] Great West such that the defense of collateral estoppel should be banned in this case for violation of one or more [ ]equitable maxims?

7[.] Did the trial court err in ruling that an unfair administrative hearing collaterally estopped Ms. Davis from pursuing any of her independent claims and remedies--including those which were never even considered in the administrative hea[r]ing and which were beyond the power of the tribunal to consider or deal with?

8[.] Should insurance law principles such as the rules of construction [and] the good faith/fair dealing tort cause of action be applied to the State's self insurance carrier to the same extent they are applied in the case of other insurance companies?

. Should the State and/or the State Board and/or Great West be held liable for attorney fees under § 26-15-124?

. Does the Doctrine of governmental immunity apply to and protect any of the Appellees from possible liability to Ms. Davis?

FACTS

Davis, who was employed by the State of Wyoming, worked at the Coe Library on the University of Wyoming campus. She was covered under the State employees' group health care insurance plan. Great-West Life administered the insurance plan.

Davis suffered from cerebral palsy and arthritis. In 1991, her doctor prescribed weekly chiropractic treatments to relieve some of her symptoms. The insurance plan covered thirty chiropractic treatments per calendar year, and Great-West Life refused to approve Davis's claim for the treatments which were in excess of that amount. Davis filed a grievance with the Insurance Board, seeking to have all her chiropractic treatments covered. She participated in the grievance hearing by telephone on December 16, 1991. Although Davis was not represented by an attorney at the hearing, she testified about her condition and called her physician to testify as a witness on her behalf. She also questioned Great-West Life's witness. After the hearing had concluded, the Insurance Board issued its findings of fact, conclusions of law, and order, finding that the prescribed chiropractic treatments were medically necessary but denying Davis's claim because the insurance plan limited coverage to a maximum of thirty treatments per year.

Davis appealed to the district court, and that court affirmed the Insurance Board's decision to deny Davis's claim, concluding that the Insurance Board's determination was not arbitrary, capricious, or contrary to the law. Davis did not appeal to this Court.

On March 3, 1994, Davis filed an action in the district court against the appellees, claiming that she had been wrongly denied health insurance benefits. Davis's complaint was seventeen pages long and included twelve causes of action. Her causes of action may be generally summarized as follows:

1. A claim that Davis was denied due process and that statutorily required procedures were not followed at the administrative hearing;

2. A claim that Davis was denied due process because her request for a postponement of the hearing had been denied;

3. A claim that negligent supervision of employees who engaged in discrimination and unfair employment practices resulted in Davis being denied her constitutional and statutory rights which caused her to experience emotional distress;

4. A claim that Davis suffered emotional distress and punitive damages;

5. A claim that the appellees violated the provisions of 42 U.S.C. § 1983;

6. A claim that the Americans with Disabilities Act of 1990 (ADA) and the corresponding Wyoming statutes were violated because Davis had not been provided with due process at the hearing and because the State had not provided her with appropriate insurance coverage;

7. A claim that the duty of good faith and fair dealing was breached when the appellees handled Davis's claim and conducted the administrative hearing;

8. A claim that WYO.STAT. § 26-15-124 (1983) had been violated; 1

9. A claim that Davis was denied the insurance coverage which she "reasonably expected";

10. A claim that the implied duty of good faith and fair dealing was breached;

11. A claim that the insurance coverage was fraudulently, intentionally, or negligently misrepresented; and

12. A claim that Davis was entitled to receive punitive damages. 2

Great-West Life filed a motion to dismiss and/or a motion for a summary judgment, and the State and the Insurance Board filed a motion for a summary judgment. After holding a hearing, the district court granted

the appellees' motions. Davis perfected her appeal to this Court.

DISCUSSION
A. Summary Judgment

The district court granted summary judgments in favor of the appellees on the majority of Davis's claims because it found that Davis was collaterally estopped from asserting those issues in this lawsuit which were decided by the Insurance Board and the district court after the administrative hearing had been held.

Summary judgment is appropriate when no genuine issue as to any material fact exists and when the prevailing party is entitled to have a judgment as a matter of law. Kahrs v. Board of Trustees for Platte County School District No. 1, 901 P.2d 404, 406 (Wyo.1995); see also W.R.C.P. 56(c). A genuine issue of material fact exists when a disputed fact, if it were proven, would have the effect of establishing or refuting an essential element of the cause of action or defense which has been asserted by the parties. Adkins v. Lawson, 892 P.2d 128, 130 (Wyo.1995). We examine the record from the vantage point most favorable to the party who opposed the motion, and we give that party the benefit of all favorable inferences which may fairly be drawn from the record. Jack v. Enterprise Rent-A-Car Co. of Los Angeles, 899 P.2d 891, 893 (Wyo.1995). We do not accord any deference to the district court's decisions on issues of law. Kahrs, 901 P.2d at 406.

The collateral estoppel doctrine applies to final adjudicative determinations which have been rendered by administrative tribunals. Id.; Slavens v. Board of County Commissioners for Uinta County, 854 P.2d 683, 685 (Wyo.1993). Under the collateral estoppel doctrine, a party cannot relitigate issues which were involved actually and necessarily in a prior action between the same parties. Willowbrook Ranch, Inc. v. Nugget Exploration, Inc., 896 P.2d 769, 772 (Wyo.1995).

Courts consider four factors in determining whether the collateral estoppel doctrine applies:

(1) whether the issue decided in the prior adjudication was identical with the issue presented in the present action; (2) whether the prior adjudication resulted in a judgment on the merits; (3) whether the party against whom collateral estoppel is asserted was a party or in privity with a party to the prior adjudication; and (4) whether the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the prior proceeding.

Slavens, 854 P.2d at 686 (emphasis in original). See also US West Communications, Inc. v. Wyoming Public Service Commission, 907 P.2d 343, 347-48 (Wyo.1995).

Several of Davis's causes of action, including all of causes of action 1, 2, and 5 and parts of causes of action 3, 4, 6, 7, and 10, were directly concerned with whether or not the Insurance Board held a fair administrative hearing. The parties presented those issues to the district court in the initial petition for review of the Insurance Board's decision. The district court necessarily decided that the...

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