Borgman v. State Farm Ins. Co.

• Decision Date: 09 June 1999
• Docket Number: No. 30A04-9810-CV-515.,30A04-9810-CV-515.
• Citation: 713 N.E.2d 851
• Parties: Estie Darlene BORGMAN and Dennis Borgman, Appellants-Plaintiffs, v. STATE FARM INSURANCE CO. and Sugar Creek Animal Hospital, Appellees-Defendants.
• Court: Indiana Appellate Court

713 N.E.2d 851

Estie Darlene BORGMAN and Dennis Borgman, Appellants-Plaintiffs, v. STATE FARM INSURANCE CO. and Sugar Creek Animal Hospital, Appellees-Defendants.

No. 30A04-9810-CV-515.

Court of Appeals of Indiana.

June 9, 1999.

Transfer Denied October 13, 1999.

Lawrence Strodtman, L. Strodtman & Associates, Cumberland, Indiana, Attorneys for Appellants.

John S. Beeman, Paul A. Logan, Leeuw & Doyle, P.C., Indianapolis, Indiana, Attorneys for Appellees.

OPINION

BAKER, Judge.

Appellants-plaintiffs Estie and Dennis Borgman (collectively, the Borgmans), appeal the trial court's dismissal of their complaint against the appellees State Farm Insurance Company (State Farm) and Sugar Creek Animal Hospital (the Animal Hospital) for lack of subject matter jurisdiction. Specifically, the Borgmans make the following allegations: (1) the trial court erroneously determined that the Worker's Compensation Act (the Act) barred their claims for negligence and the bad faith denial of Estie's request for worker's compensation benefits in the trial court because their cause of action was beyond the scope of the Act; and (2) the Act is unconstitutional because it violates the "open courts" provision of Article 1, Section 12 of the Indiana Constitution.

FACTS

On July 24, 1995, while Estie was working at the Animal Hospital in Greenfield, she fell in one of the kennels and injured her arm and neck. That afternoon, Estie sought medical care from her family physician because the pain in her arm had worsened. State Farm, the worker's compensation insurance carrier, paid for that doctor visit. The Worker's Compensation Board (the Board) determined that Estie had been injured through a fall in the course and scope of her employment with the Animal Hospital.

On February 19, 1996, Estie resigned from her employment at the Animal Hospital. Three days later, she returned to her family physician seeking treatment for shoulder and neck pain. That physician referred her to a neurologist, Dr. John Chase, for further diagnosis and treatment. On March 6, 1996, Dr. Chase determined that Estie had "tenderness over the supraspinatus and in the low cervical paraspinals on the left" and advised treatment consisting of pain medication and anti-inflammatory drugs. R. at 44. On April 24, 1996, Dr. Chase advised Estie that she could return to work with severe restrictions and informed her that he would conduct a follow-up examination in three months. On May 13, 1996, however, Estie returned to her family physician seeking further medical attention because of increasing pain in her shoulder and arm. Following this visit, Estie was advised that the Animal Hospital was claiming that her condition was not the result of a work-related injury and was denying worker's compensation coverage. Thereafter, on June 25, 1996, Estie was evaluated by Dr. John Shay, a physician appointed by State Farm. Dr. Shay's diagnosis revealed that Estie sustained damage to a portion of her neck and advised that surgery was necessary to eliminate compression of the nerve root. Notwithstanding the diagnosis and recommended treatment plan, the Animal Hospital and State Farm denied Estie's claim on July 29, 1996.

On November 21, 1996, Estie filed an Application for Adjustment with the Board. On November 10, 1997, State Farm, through counsel, informed Estie that it desired to have her evaluated by a different attending physician. Following that evaluation, State Farm agreed to provide worker's compensation medical benefits to Estie.

On July 22, 1998, the Borgmans filed a complaint for damages against State Farm and the Animal Hospital, contending that the defendants had wrongfully denied Estie's claim for worker's compensation benefits for approximately eighteen months. Additionally, the Borgmans alleged that State Farm acted in bad faith and in contravention of their duties under the Act in denying her claim for benefits. R. at 46. Thus, the Borgmans asserted that State Farm's continuing bad faith denial of her request for benefits was "willful and wantonly negligent and resulted in injuries to [her] that were far beyond the scope that would have resulted from the work-related accident had medical care been provided as required by the Worker's Compensation Act." R. at 47. The Borgmans requested damages for pain and suffering, punitive damages and attorney fees. Dennis also asserted a claim for loss of consortium. R. at 47.

On September 11, 1998, State Farm and the Animal Hospital filed a motion to dismiss the action, contending that the trial court lacked subject matter jurisdiction for the reason that the Board has the exclusive jurisdiction to determine whether State Farm acted with a lack of diligence or bad faith with respect to adjusting and settling the claim. On October 7, 1998, the trial court ordered the cause dismissed with prejudice. The Borgmans now appeal.

DISCUSSION AND DECISION

I. Standard Of Review

A motion to dismiss for lack of subject matter jurisdiction presents the threshold question concerning the court's power to act. Sons v. City of Crown Point, 691 N.E.2d 1237, 1239 (Ind.Ct.App.1998). In ruling on a motion to dismiss for lack of subject matter jurisdiction, the court may resolve factual disputes. Id. Additionally, the court has considerable latitude in devising procedures to ferret out the facts pertinent to jurisdiction, and it is well established that in doing so it may consider not only the complaint and motion but any affidavits or other evidence submitted. Perry v. Stitzer Buick GMC, Inc., 637 N.E.2d 1282, 1286 (Ind.1994). Moreover, when considering a motion to dismiss for want of subject matter jurisdiction, a court may weigh the evidence to determine the existence of the requisite jurisdictional facts. Id.

II. Applicability of The Act

The Borgmans contend that it was error to dismiss the complaint for lack of subject matter jurisdiction because the defendants' alleged acts of negligence were committed subsequent to, and independent of, the original injury that Estie sustained while working at the Animal Hospital. Therefore, they assert that the exclusivity provisions of the Act do not bar their claims.

To resolve this issue, we first turn to the exclusivity provisions of the Act which are set forth in I.C. § 22-3-2-6:

The rights and remedies granted to an employee ... on account of personal injury or death by accident shall exclude all other rights and remedies of such employee, the employee's personal representatives, dependents, or next of kin, at common law or otherwise, on account of such injury or death, except for remedies available under I.C. § 5-2-6.1.

This statute limits an employee whose injury meets the jurisdictional requirements of the Act to the rights and remedies provided therein. Campbell v. Eckman/Freeman & Assoc., 670 N.E.2d 925, 929 (Ind.Ct.App.1996), trans. denied. Thus, if an employee's injury occurred by an accident which arose out of and in the course of his employment, that individual is entitled to worker's compensation benefits, and the exclusivity provisions bar a court from hearing any common-law action brought by the employee for the same injuries. Id. However, we noted in Campbell that the Act will permit actions against third party tortfeasors, so long as the third party is neither the plaintiff's employer nor his fellow employee. Id. at 930.

In Vakos v. Travelers Ins., 691 N.E.2d 499 (Ind.Ct.App.1998), trans. denied, this court was recently called upon to interpret the applicability of the Act's exclusivity provision. In Vakos, the injured plaintiff-employee instituted a cause of action against his employer's insurance carrier seeking damages for direct physical harm as a result of the insurance company's purported negligence involving its advice and direction regarding medical care to the plaintiff. In reversing the trial court's grant of the insurance company's motion to dismiss the cause of action for lack of subject matter jurisdiction, we relied on our supreme court's decision in Stump v. Commercial Union, 601 N.E.2d 327 (Ind.1992). In Stump, the court determined that an injured employee could proceed with a cause of action against a worker's compensation insurance carrier for fraud or gross negligence in the trial court, notwithstanding the exclusive remedy provisions of the Act. Id. at 334. Following the holding of Stump, we noted that:

[T]he acts of negligence, which Vakos alleges the Appellees committed, were committed subsequent to and independent of the original injury. Such injuries allegedly occurred as the result of the Appellees' negligence in directing Vakos' medical treatment, and not in processing the claim for benefits for the underlying injury. We, therefore, find that the Worker's Compensation Act does not preclude Vakos' suit and that the trial court erred in granting the Appellees' motion to dismiss.

Vakos, 691 N.E.2d at 503.

While the Borgmans urge that Vakos and Stump should permit their action against State Farm to proceed in the trial court, we note that our legislature enacted IND.CODE § 22-3-4-12.1(a), the bad faith statute, which became effective in July, 1997. This statute provides as follows:

The worker's compensation board, upon hearing a claim for benefits, has the exclusive jurisdiction to determine whether the employer, the employer's worker's compensation administrator, or the worker's compensation insurance carrier has acted with a lack of diligence, in bad faith, or has committed an independent tort in adjusting or settling the claim for compensation.

In light of this amendment to the Act, it is apparent that the...