Gibson v. ITT Hartford Ins. Co.

• Decision Date: 18 January 2001
• Docket Number: No. 99-0386.,99-0386.
• Citation: 621 N.W.2d 388
• Parties: Lee GIBSON and Corrine Gibson, Appellants, v. ITT HARTFORD INSURANCE COMPANY, Appellee.
• Court: Iowa Supreme Court

621 N.W.2d 388

Lee GIBSON and Corrine Gibson, Appellants, v. ITT HARTFORD INSURANCE COMPANY, Appellee.

No. 99-0386.

Supreme Court of Iowa.

January 18, 2001.

W. Curtis Hewitt of W. Curtis Hewitt, P.C., Council Bluffs, for appellants.

Philip Willson of Willson & Pechacek, P.L.C., Council Bluffs, for appellee.

Considered en banc.

LAVORATO, Chief Justice.

Lee Gibson filed this action against ITT Hartford Insurance Company (ITT) alleging multiple theories of recovery and punitive damages arising out of ITT's handling of Gibson's claim for workers' compensation benefits. Before submitting the case to the jury, the district court granted ITT's motion for directed verdict on several of the liability theories and on punitive damages. The court then submitted the balance of the liability theories to the jury, which returned a verdict on each of them. Later, the court granted ITT's motion for judgment notwithstanding the verdict on all but two of the theories.

Gibson appealed, challenging the ruling on the motion for directed verdict only as to punitive damages and challenging the district court's ruling sustaining the motion for judgment notwithstanding the verdict. ITT has not appealed. We reverse the directed verdict ruling on punitive damages and affirm the ruling on ITT's motion for judgment notwithstanding the verdict.

I. Scope of Review.

Our review of rulings granting motions for directed verdict is for correction of errors at law. Iowa R.App. P. 4; Balmer v. Hawkeye Steel, 604 N.W.2d 639, 640 (Iowa 2000). In our review, "we view the evidence in the same light as the district court to determine whether the evidence generated a jury question." Id. at 640-41. We therefore view the evidence in the light most favorable to the party opposing the motion, who in this case is Gibson. See Iowa R.App. P. 14(f)(2); Econ. Roofing & Insulating v. Zumaris, 538 N.W.2d 641, 649 (Iowa 1995). If reasonable minds could differ on an issue of fact, the issue is for the jury. Id.

In ruling on such motions, the district court must decide whether the nonmoving party has presented substantial evidence on each element of the claim. Balmer, 604 N.W.2d at 641. "Evidence is substantial if a jury could reasonably infer a fact from the evidence." Id. A directed verdict is appropriate if the evidence is not substantial. Id.

We likewise review a district court ruling on a motion for judgment notwithstanding the verdict for correction of errors at law. Iowa R.App. P. 4; Midwest Home Distrib., Inc. v. Domco Indus. Ltd., 585 N.W.2d 735, 738 (Iowa 1998). We inquire whether substantial evidence exists to support each element of the plaintiff's claim, justifying submission of the case to the jury. See Midwest, 585 N.W.2d at 738

. In making this determination, we view the evidence in the light most favorable to the nonmoving party. Iowa R.App. P. 14(f)(2); Midwest, 585 N.W.2d at 738.

II. Facts.

Viewing the evidence in the light most favorable to Gibson, we think the evidence supports the following facts. In November 1990, Gibson, while employed by a Nebraska employer, sustained a work-related injury to his lower back. Dr. Patrick Bowman, after performing five surgeries on Gibson, rated him as having a twenty-two percent permanent partial impairment.

In May 1992, Gibson began working for The Garden Café as a line cook and later as a prep-cook. In March 1993, he sustained a temporary aggravation to his preexisting low back condition when his vehicle was struck from the rear by another vehicle. Dr. Bowman diagnosed and treated Gibson for "posttraumatic cervical and lumbar strain with a history of inter-body fusion" of vertebrae.

Following the accident, Gibson missed several weeks of work. Dr. Bowman allowed him to return to light-duty work at The Garden Café. On May 6, 1993, Dr. Bowman released Gibson to return to full-duty work at The Garden Café. The following day, Gibson slipped and fell while removing food from one of the restaurant coolers. He was hospitalized for a week. At the hospital, Dr. John Marshall treated Gibson's injury, which he diagnosed as "back pain related to musculoskeletal strain of the lumbosacral region aggravated by trauma."

Gibson filed a claim for workers' compensation benefits. ITT was the workers' compensation carrier for The Garden Café. ITT assigned Gibson's claim to Darlene Haverstock, a claims representative for ITT. Haverstock investigated the incident and determined Gibson had in fact suffered an injury arising out of and in the course of his employment on May 7, 1993. On May 18, ITT began making weekly benefit payments to Gibson and began paying Gibson's medical expenses, including those related to his hospitalization. ITT did not file with the Iowa Industrial Commissioner a Commissioner's Form 2 denying liability on Gibson's claim. See Iowa Admin. Code r. 876—3.1(2) (1998). Nor did ITT advise Gibson that it denied he had suffered a work-related injury. After his release from the hospital, Gibson returned to Dr. Bowman's care. Dr. Bowman diagnosed Gibson's condition as "an aggravation of a preexisting condition." The doctor prescribed medication and directed Gibson to begin physical therapy and restricted him from working.

Sometime in May, Haverstock obtained a neurological consultation report from Dr. Behrouz Rassekh concerning Gibson's May 7 injury. At the time of the consultation, Gibson was complaining of severe back pain, had difficulty standing in an upright position, and could not extend his spine because of "the recent fall."

On July 12, Haverstock submitted her "Initial Report" to ITT and reported her conclusion that Gibson's injury was compensable as an aggravation of his preexisting lumbar spine condition.

In the same month, Dr. Bowman prescribed a myelogram, a diagnostic procedure. Following ITT's refusal to pay for the procedure, Gibson filed an application for alternate care in September. See Iowa Code § 85.27 (1993) ("If the employer and employee cannot agree on such alternate care, the commissioner may, upon application and reasonable proofs of the necessity therefor, allow and order other care."); see also Iowa Admin. Code r. 876—4.48 (1998). At the hearing on the application, Haverstock told the presiding deputy commissioner that Gibson had suffered a compensable injury arising out of and in the course of his employment on May 7, 1993, and that ITT was liable on his claim for compensation benefits. Following a hearing, the Iowa Industrial Commissioner issued an alternate care decision on October 6.

The deputy commissioner who handled the application concluded that Dr. Bowman was an authorized treating physician in this matter and that ITT had acquiesced in Gibson's care since the May 7 injury. The deputy commissioner further concluded that (1) Dr. Bowman had recommended the myelogram to assess Gibson's condition and to determine a future course of treatment; (2) Gibson was entitled to reasonable care, which included care necessary to diagnose the condition; (3) Gibson had not yet received all of the care that Dr. Bowman had recommended; (4) ITT was not entitled to interpose its judgment in contravention of Dr. Bowman's recommendation; and (5) ITT's failure to follow the recommendations constituted a failure to provide reasonable treatment. See Iowa Code § 85.27 (providing that "the employer is obliged to furnish reasonable services and supplies to treat an injured employee" and that "treatment must be offered promptly and be reasonably suited to treat the injury"). The deputy commissioner ordered ITT to provide Gibson with a diagnostic myelogram and follow-up care as Dr. Bowman had recommended.

Dr. Bowman apparently concluded that a myelogram was not needed. Instead, he did an MRI, which showed no encroachment into the neural canal at any level and a solid fusion from the surgeries performed in connection with the prior 1990 Nebraska accident. ITT paid for the MRI procedure.

In November, Dr. Bowman referred Gibson to Dr. John Stark, a psychologist, for an evaluation and short-term psychotherapy. In a report to Dr. Bowman, Dr. Stark stated that Gibson was depressed and that he needed a "few sessions to help him deal with his chronic pain syndrome." ITT received a copy of this report in February 1994.

In February 1994, ITT hired Lee McMullen, a nurse who is a rehabilitation and vocational specialist, to work on Gibson's claim. Later that month, McMullen met with employees of The Garden Café. Together they crafted a "job analysis" of a light-duty job the employees told McMullen was then available to Gibson.

On March 14, McMullen met with Gibson and Dr. Bowman to discuss the light-duty job at The Garden Café. Dr. Bowman told McMullen he wanted a functional capacities evaluation conducted before he would release Gibson for work. About a month later, Dr. Bowman wrote McMullen that he had reviewed the results of the functional capacity assessment, which indicated that Gibson's medical condition was "generally compatible with the job" that The Garden Café had offered him.

On May 18, McMullen wrote Dr. Bowman requesting a rating of Gibson's disability from his May 7, 1993 work injury. A week later, Dr. Bowman informed McMullen that Gibson was at maximum medical improvement and had a twenty-eight percent impairment of the body as a whole. However, the doctor assigned only two percent of that total impairment to the May 7 injury. On that day, Dr. Bowman released Gibson to return to work.

At some point before May 18, McMullen had learned that The Garden Café was not going to allow Gibson to return to work. McMullen did not inform Dr. Bowman of this development when she requested the disability rating. Gibson was unable to find another job until February 1996.

As early as the middle of July 1994, ITT knew that Gibson's impairment rating from his 1990 injury was twenty-two percent and his total impairment after the May 7, 1993 injury was twenty-eight percent. Therefore, his...