Gilbert v. Constitution State Service, Co.

• Decision Date: 26 May 2000
• Docket Number: No. Civ. 4-99-CV-30046.,Civ. 4-99-CV-30046.
• Citation: 101 F.Supp.2d 782
• Parties: Richard L. GILBERT, Plaintiff, v. CONSTITUTION STATE SERVICE, COMPANY and/or The Travelers, Defendant.
• Court: U.S. District Court — Southern District of Iowa

Page 782

101 F.Supp.2d 782

Richard L. GILBERT, Plaintiff, v. CONSTITUTION STATE SERVICE, COMPANY and/or The Travelers, Defendant.

No. Civ. 4-99-CV-30046.

United States District Court, S.D. Iowa, Central Division.

May 26, 2000.

Jerry Jackson, West Des Moines, IA, for plaintiff.

Steven P. Wandro, Cecelia Ibson Wagner, Wandro & Associates PC, Des Moines, IA, for defendants.

RULING ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

WALTERS, Chief United States Magistrate Judge.

This matter is before the Court on defendant's motion for summary judgment.¹ On December 31, 1998, plaintiff Richard L. Gilbert filed the present action in the Iowa District Court in and for Polk County, alleging a state law claim of bad faith in the handling of his workers' compensation claim. Defendant Constitution State Service Company (Constitution) removed this action to federal court on the basis of diversity jurisdiction, 28 U.S.C. §§ 1332, 1441. The parties consented to proceed before a United States Magistrate Judge and the case was referred to the undersigned for all further proceedings on June 24, 1999. See 28 U.S.C. § 636(c).

Constitution filed a motion for summary judgment on February 15, 2000 which Gilbert has resisted. The matter came on for hearing on April 12, 2000. Since then the Iowa District Court for Polk County has issued a ruling on an administrative appeal from the underlying workers' compensation decision which Constitution, by supplement to its motion, contends is issue preclusive. Gilbert has filed a responsive memorandum on this issue. The matter is now fully submitted.

I.

The motion for summary judgment is subject to well-established standards which will not be set out at length. In brief, a party is entitled to summary judgment when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Wabun-Inini v. Sessions, 900 F.2d 1234, 1238 (8th Cir.1990) (citing Fed. R.Civ.P. 56(c)); accord Munz v. Michael, 28 F.3d 795, 798 (8th Cir.1994); Woodsmith Publishing Co. v. Meredith Corp., 904 F.2d 1244, 1247 (8th Cir.1990). An issue of material fact is genuine if it has a real basis in the record. Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir.1992) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). A genuine issue of fact is material if it "might affect the outcome of the suit under governing law." Hartnagel, 953 F.2d at 395 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

II.

Plaintiff Richard Gilbert is employed by USF Holland as a truck driver. USF Holland is self-insured for workers' compensation claims and retains defendant Constitution, a member of the Travelers Group, to administer workers' compensation claims.

In January 1996 Gilbert filed a workers' compensation claim after suffering neck strain while backing up his truck. Mashell Welder was the claims handler when this claim was filed. Welder found that Gilbert's January 1996 injury was work-related and, therefore, compensable. Her decision was based on the fact that truck drivers are more likely to have to turn their heads sharply and suffer neck strain as a result than are members of the general population. Gilbert was fully released to return to work shortly after that incident.

On June 4, 1997 Gilbert suffered neck pain while at work. The circumstances of that incident are somewhat in dispute. Originally Gilbert told his supervisor that he had been signing a paper on the work premises and felt his neck pop. The Workers Compensation Claim Assignment Report, which was generated after the employer reported the injury to Travelers, noted that Gilbert stated he was bending over signing a bill of lading and when he stood up he felt his neck pop. (Ex. A). There is a blank on the Claim Assignment Report to list witnesses to the incident; Gilbert listed none. (Id.) On June 5, 1997, Gilbert and his supervisor filled out a Supervisor Employee Injury Investigation form, on which Gilbert wrote that his injury occurred when he bent over a desk to sign a bill, then stood back up. (Ex. B). Gilbert disputes that he was asked to list witnesses on the Supervisor Employee Injury Investigation form. On or about June 12, 1997, Gilbert was fully released to return to work. His claim was assigned to Welder for handling. On June 12, Welder received Gilbert's medical records regarding the incident, which included his statement that the injury occurred when he leaned over to sign some forms at work. (Ex. C).

Although Welder claims she called Gilbert on June 12 and 13, 1997, to discuss his claim and that he did not return the calls, Gilbert claims he called and left her messages, but Welder did not call back. On June 17, 1997, Welder called Gilbert's supervisor and asked him to have Gilbert contact her. Gilbert agrees he spoke to Welder on that date. Welder asked Gilbert to once again describe what happened just prior to the onset of pain. The remainder of the conversation between Welder and Gilbert is disputed as well as how long it lasted. Gilbert called Welder a second time that day and they discussed his case again. Welder claims she told Gilbert his injury was idiopathic which, by her definition, is one the worker is no more likely to suffer than is a member of the general population and/or those which are as likely to occur outside the workplace as within it. Constitution did pay Gilbert's medical expenses incurred in connection with the June 1997 injury. (Ex. O at 5-6). However, by a letter dated June 17, 1997, Travelers denied Gilbert's worker's compensation claim with respect to this injury. (Ex. D).

On July 12, 1997, Gilbert woke up with neck pain. He told his supervisor he wanted to go to the company doctor. No separate claim was filed by Gilbert concerning this injury.

Later in July Gilbert's attorney Jerry Jackson sent Welder a letter enclosing a statement from co-employee Robert Ray Prusia, who witnessed the incident in June 1997. Prusia claimed that Gilbert popped up a sticking dock plate, closed his trailer and then walked over to the desk where he bent over to sign his bills. Prusia then saw Gilbert grab his neck and groan. (Ex. F). In response to Jackson's request during a July 31, 1997 telephone call, Welder sent him her file on Gilbert's claim. On August 1, 1997, Jackson sent Welder a report from Dr. Thomas Carlstrom, who saw Gilbert after the July incident. Gilbert had told Dr. Carlstrom that he "pulled on" a "sticking" dock plate in June 1997. There is a dispute whether Gilbert had reported being in pain throughout June and July prior to the July 12 incident.

On August 13, 1997 attorney Jackson asked Welder to go back to the employer and ask them to reconsider the June denial. Welder did this, including with her letter of inquiry a copy of Jackson's position statement. (Ex. J). On August 26, 1997, Dr. Carlstrom released Gilbert to return to work without restrictions. (Ex. K).

On August 28, 1997, Gilbert filed a petition for workers' compensation benefits. His claim was in litigation before the Workers' Compensation Commissioner in 1997 and 1998. In a July 1998 report Dr. Carlstrom attributed Gilbert's injuries to a lifting, tugging work injury on the 4th of June. (Ex. L). In August 1998 Dr. Carlstrom authored a letter in which he stated that Gilbert "experienced significant deterioration of his symptoms after a July at home activity." (Ex. M). Constitution continued to deny Gilbert's claim.

Welder has stated in an affidavit that she found the statement by co-worker Prusia to be inconsistent with what Gilbert had told her; that coupled with its generation after Gilbert had been advised why his claim was being denied led Welder to continue to question whether the June and July incidents were compensable claims. (Welder Affidavit). Welder states that if she had been told initially about the pulling/tugging incident, this case might have gone differently.

As a result of an arbitration decision by a Deputy Workers' Compensation Commissioner in December 1998, Constitution and the employer were ordered to pay Gilbert over $62,000 in workers' compensation benefits. (Ex. 2). Constitution appealed the decision of the Deputy Commissioner to the Workers' Compensation Commissioner.² On November 29, 1999, the Commissioner reduced the award to about $17,000 in workers' compensation benefits. Both the Deputy Commissioner and the Commissioner awarded penalty benefits under Iowa Code § 86.13 based on a finding that continued denial of plaintiff's claim for healing period benefits after receipt of reports from two physicians was not fairly debatable and unreasonable.³ Both sides appealed the Commissioner's decision to the Iowa District Court.

In a ruling entered May 5, 2000, the court found:

... Petitioner provided a history about how the June 4, 1997, incident occurred. He provided it not once, but three separate times. Then Petitioner's workers' compensation claim was denied. After that he changed his history. It defies logic to suggest that this "abrupt change in facts" should now preclude the Respondents from disputing the work relatedness of the claim. The Commissioner's decision awarding penalty benefits was in error and, must be reversed.

Gilbert v. USF Holland, Inc. and Constitution State Service Company, ACCL AA 3385, Ruling at 9 (Iowa Dist.Ct. Polk Co. May 5, 2000). Plaintiff is planning to appeal the district court's ruling. Both sides have supplemented their motion papers in light of the district court's ruling, with Constitution now claiming the ruling is issue preclusive on a key element of the bad faith claim in this Court. Trial is set for June 5, 2000. At a status conference on May 22, 2000 both sides asked the Court to rule on the...