Downey Chiropractic Clinic v. Nampa Restaurant Corp.

• Citation: 127 Idaho 283,900 P.2d 191
• Decision Date: 10 July 1995
• Docket Number: No. 20903,20903
• Parties: DOWNEY CHIROPRACTIC CLINIC, Plaintiff-Respondent-Cross Appellant, v. NAMPA RESTAURANT CORPORATION, d/b/a Shilo Restaurant and Lounge, and Liberty Northwest Insurance Corporation, Defendants-Appellants-Cross Respondents. Boise, December 1994 Term
• Court: United States State Supreme Court of Idaho

Page 191

900 P.2d 191

127 Idaho 283

DOWNEY CHIROPRACTIC CLINIC, Plaintiff-Respondent-Cross Appellant, v. NAMPA RESTAURANT CORPORATION, d/b/a Shilo Restaurant and Lounge, and Liberty Northwest Insurance Corporation, Defendants-Appellants-Cross Respondents.

No. 20903.

Supreme Court of Idaho,

Boise, December 1994 Term.

July 10, 1995.

Rehearing Denied Aug. 31, 1995.

Eberle, Berlin, Kading, Turnbow & McKlveen, Chtd., Boise, for appellants. Derrick J. O'Neill argued.

White, Peterson, Perry, Pruss, Morrow & Gigray, P.A., Nampa, for respondent. Christopher S. Nye argued.

McDEVITT, Chief Justice.

I. BACKGROUND AND PRIOR PROCEEDINGS

The facts of this case, as found by the magistrate, are as follows:

Norman Peterson (Peterson) was employed as a sous chef for Nampa Restaurant Corporation's Shilo Inn restaurant in Nampa, Idaho. Peterson injured his back in the course of his employment on May 20, 1990. Liberty Northwest Insurance Corporation (Liberty) is Shilo Inn's surety for worker's compensation claims.

On June 11, 1990, Peterson sought chiropractic treatment from Dr. John Downey, doing business as Downey Chiropractic Clinic (Downey).

On July 6, 1990, Liberty's claims adjustor, Tom Harrison (Harrison), became aware of Peterson's claim for benefits and informed him that Nampa Restaurant Corporation had a designated medical provider, Medical Center Physicians. Harrison then advised Peterson that, unless he undertook treatment by that provider, his temporary total disability benefits would cease. When Peterson informed Harrison that he would like to continue treatment with Downey, Harrison further advised Peterson that any future such treatment would be at his own expense. Harrison did not base this determination on any medical consultation with a health care provider, or on the basis of a physical examination of Peterson.

As a result of this conversation, Peterson terminated his treatment with Downey, despite the fact that Downey offered to continue treatment free of charge if Liberty would not pay. Peterson declined this offer because he felt it would be wrong to accept free treatment.

At the time Peterson discontinued treatment with Downey, Downey was uncertain as to Peterson's prognosis, but gave a conservative estimate that Peterson would require eight weeks of additional treatment. On July 17, 1990, Peterson was evaluated by an orthopedic surgeon, Dr. Schneider, who diagnosed Peterson's condition as a herniated disk. Dr. Schneider testified that the conservative chiropractic treatment that Peterson had received was reasonable given his condition, and that such treatment would have continued to be reasonable for at least another month. After receiving additional physical therapy, Peterson eventually underwent surgery.

Downey filed this action on May 29, 1991, followed by an amended complaint two days later. In his complaint, Downey claimed that Liberty intentionally interfered with Downey's prospective economic relationship with Peterson by refusing to pay for Downey's continued treatment of Peterson. Downey prayed for judgment against Liberty in the amount of $1,118.00 together with accruing interest to the date of judgment, and statutory interest from and after the date of judgment. Downey also prayed for relief to amend his complaint to include punitive damages and for an award of attorney fees.

On July 18, 1991, Liberty filed a Motion to Dismiss pursuant to I.R.C.P. 12(b)(1), challenging the magistrate court's jurisdiction. That motion was denied, and the matter was tried on July 17, 1992. Liberty again moved to dismiss for lack of jurisdiction, which motion was likewise denied. Judgment for Downey was entered on September 17, 1992.

As the prevailing party, Downey moved for an award of reasonable attorney fees under I.C. § 12-120(1) and (3). The court granted Downey's motion and an amended judgment was entered November 30, 1992.

Liberty appealed the case to the district court. Downey cross-appealed for attorney fees on appeal under I.C. § 12-120(1). Judgment affirming the magistrate's decision in favor of Downey, but denying Downey's motion for attorney fees on appeal, was entered by the district court on September 7, 1993.

Liberty now appeals to this Court.

II. ANALYSIS

This Court exercises free review over questions of law. When this Court reviews a case appealed from the district court's appellate review of a magistrate's decision, we independently review the magistrate's decision, giving due regard to the district court's ruling. Ausman v. State, 124 Idaho 839, 840-41, 864 P.2d 1126, 1127-28 (1993).

III. SUBJECT MATTER JURISDICTION

The threshold issue in this appeal is whether the magistrate court had jurisdiction to adjudicate this matter. Liberty argues that the magistrate court did not have subject matter jurisdiction to adjudicate Downey's claim because it presents a question of law arising under our worker's compensation law, namely: Whether Liberty, as Shilo Inn's surety, has a statutory duty to pay for Downey's reasonable medical treatment of Peterson.

The Idaho Industrial Commission (Commission) has exclusive jurisdiction of all questions arising under our worker's compensation law. I.C. § 72-707. As we recently noted in Van Tine v. Idaho State Ins. Fund, 126 Idaho 688, 889 P.2d 717 (1994), when a claim arises under our worker's compensation laws, the trial court lacks jurisdiction. Id. at 689, 889 P.2d at 718. Thus it is our task to examine the worker's compensation law to determine whether there is any portion of that law under which the present claim may be said to arise. Id.

In Van Tine, the plaintiffs alleged that the employer's surety violated its duty of good faith and fair dealing and its fiduciary duty by initially refusing to satisfy Kerby Van Tine's worker's compensation claims. Id. The district court dismissed the Van Tines' claim for lack of subject matter jurisdiction. Id. We affirmed the district court's dismissal, concluding that:

To the extent that the Van Tines allege that SIF contested claims for compensation without reasonable ground, refused within a reasonable time to pay compensation, or without reasonable ground discontinued payment of compensation justly due and owing, their claims arise under I.C. § 72-804, and the trial court did not have jurisdiction over the claims.

Id.

Here, Downey's claim does not arise under, nor require interpretation or application of, our worker's compensation law. Rather, it is a separate tort, wholly distinct from our worker's compensation statutory scheme. Unlike the plaintiffs' claim in Van Tine, our worker's compensation law does not provide a remedy for Downey's claim. Thus, the exclusive jurisdiction of the Commission is not implicated.

IV.

THE MAGISTRATE COURT DID NOT ERR IN ALLOWING DOWNEY'S CLAIM FOR INTENTIONAL INTERFERENCE WITH A PROSPECTIVE ECONOMIC RELATIONSHIP

A. THE TORT OF INTENTIONAL INTERFERENCE WITH A PROSPECTIVE ECONOMIC RELATIONSHIP.

In Idaho First Nat'l Bank v. Bliss Valley Foods, Inc., 121 Idaho 266, 824 P.2d 841 (1991), we held that, in order to establish a prima facie case of intentional interference with a prospective economic relationship, a plaintiff must show that the claimed interference was wrongful by some measure beyond the fact of the interference itself. Id. at 286,

                [127 Idaho 286] 824 P.2d at 861.   Accordingly, the plaintiff must prove that
                

(1) The defendant had an improper purpose or objective to harm the plaintiff; or

(2) The defendant used a wrongful means to cause injury to the prospective business relationship.

Id.

In so ruling, we adopted the Oregon Supreme Court's formulation of this tort, as outlined in Top Serv. Body Shop, Inc. v. Allstate Ins. Co., 283 Or. 201, 582 P.2d 1365 (1978). In that case, the plaintiff alleged that Allstate:

sought to and did induce Top Service's patrons not to have Top Service repair their automobiles, making false statements about the quality of plaintiff's workmanship and threats about withdrawing insurance coverage or subjecting the settlement of claims to possible arbitration.

Id. 582 P.2d at 1371. Top Service also alleged that Allstate's conduct was "with the sole design of injuring Plaintiff and destroying his business." Id. The Oregon Supreme Court held that these allegations, if proven along with causation and damages, would satisfy the elements of the tort of intentional interference with a prospective economic relationship. Id.

Although there was no direct evidence that Allstate acted with a specific purpose to destroy Top Service's business, Top Service argued that such a purpose could be inferred from evidence of Allstate's conduct in directing customers to other body repair shops. Id. at 1371-72. However, the Oregon Supreme Court ruled that the record would not support such an inference. Id. at 1372. In particular, the court held that Allstate's designation of certain repair shops as "competitive shops" to which it preferred to send insurance claimants, together with its discontinued use of Top Service as a "drive-in" shop where claimants were directed for estimates by an Allstate claims adjuster following a dispute with Top Service, and Allstate adjusters' active discouragement of claimants' use of Top Service and their disparagement of the quality of Top Service's work, were acts "wholly consistent with Allstate's pursuit of its own business purposes as it saw them and did not suffice to support an inference of the alleged improper purpose to injure Top Service." Id.

In discussing the elements necessary to establish the tort of intentional interference with a prospective economic relationship by improper means, the Top Service court stated that improper means may be wrongful by reason of a statute or other regulation, or a recognized rule of common law, or an established standard of a trade or profession. Top Serv., 582 P.2d at 1371. Some additional examples of improper means cited by the Top Service court include violence,...