Nunn v. Noodles & Co.

Decision Date02 May 2012
Docket NumberNo. 11–1531.,11–1531.
Citation674 F.3d 910
PartiesHeather A. NUNN, Appellant, v. NOODLES & COMPANY; Zurich American Insurance Company, Appellees.
CourtU.S. Court of Appeals — Eighth Circuit

OPINION TEXT STARTS HERE

Benjamin A. Lavoie, argued, James Eric Lindell, on the brief, Minneapolis, MN, for appellant.

Gregory L. Peters, argued, Minneapolis, MN, for appellee, Noodles & Company.

Peter G. Van Bergen, argued, Jo Ann Strauss, on the brief, Minneapolis, MN, for appellee, Zurich American Insurance Company.

Before WOLLMAN, MURPHY, and BENTON, Circuit Judges.

BENTON, Circuit Judge.

Heather Alexandra Nunn sued her employer, Noodles & Company, and its workers' compensation insurer, Zurich American Insurance Company, for intentional obstruction of workers' compensation in violation of Minnesota statute § 176.82. Noodles and Zurich moved for summary judgment, which the district court granted. Jurisdiction being proper under 28 U.S.C. § 1291, this court reverses and remands.

I.

This court states the facts most favorably to Heather A. Nunn.

Nunn was a shift supervisor at a Noodles restaurant in Eagan, Minnesota. In the spring of 2007, Noodles was opening a new restaurant in West St. Paul where Nunn would be assistant manager. Raymond (Ray) Gibson, general manager of the Eagan restaurant, was Nunn's supervisor. Gibson was to temporarily manage the new restaurant; Eagan's assistant manager Tom Mako was to replace Gibson temporarily as manager in Eagan. Gibson was responsible to train Nunn for her new position.

On May 28, 2007, at about 9:30 p.m., Nunn clocked out, closed the Eagan restaurant, got on her motorcycle, and headed to Gibson's home to meet with Gibson and Mako. Nunn had other plans for the evening and asked to have the meeting rescheduled. Gibson directed her to attend. En route to his home, Nunn ran a red light, making a left turn in front of an oncoming car. She suffered serious injuries, with medical bills over $250,000. Nunn had no health or disability insurance, which Noodles knew.

From the outset of Nunn's workers' compensation case, Zurich's claims representative Tara Draves–Blandin and its attorneys Kristin B. Maland and Patrick T. Grove understood that if Gibson called the meeting for business purposes, Nunn's claim was compensable. Maland told Noodles that. The Noodles area manager testified that Grove also explained to Gibson and Mako the importance of characterizing the meeting as “social.”

In June 2007, the area manager answered questions from another executive by consulting Gibson, and copied him on the return email. The area manager quoted Gibson as telling her that the accident “was not work related” and that Nunn “was meeting with the GM (Ray Gibson) and the AM (Tom Mako) after work for a social gathering.” Gibson told a similar story to Noodles' Vice–President of Human Relations, who passed it on to claims representative Draves–Blandin.

On or shortly before June 24, Gibson gave Draves–Blandin a recorded statement, which contradicted his prior reports. In this statement, he said that the purpose of the meeting was to discuss work, specifically the new restaurant and training issues. Gibson said, “It was work,” then after prompting, said “work plus additional things.” Gibson also admitted previously conducting off-site business meetings where he gave attendees food and drink.

Despite Gibson's statement, on June 28, Draves–Blandin, after advice from Maland, denied Nunn's workers' compensation claim, stating that Nunn may have been traveling to a social function and “was not ordered or assigned to go to the party.” The denial also stated that all business meetings are held on-site with employees clocked in.

Gibson and Mako were deposed before the workers' compensation trial. Asked his agenda for the meeting, Gibson discussed numerous business-related issues he planned to cover with Nunn and Mako. Mako's deposition testimony corroborated Gibson's description of the anticipated meeting. Mako also testified that Nunn did not want to attend the meeting and asked to reschedule it—which Gibson refused to do. Mako felt the meeting was almost exclusively planned to discuss business issues and made reference to an itinerary or agenda Gibson prepared. Attorney Grove's correspondence reveals that he thought this information would guarantee Nunn's victory if introduced in court. Summarizing the depositions of Gibson and Mako in her own words, attorney Maland stated that “the testimony of Ray Gibson and Tom Mako suggests that the meeting on the day of the accident had more of a business flavor than social event....”

Zurich repeatedly discussed settling Nunn's claim. In November 2007, Maland requested a demand to resolve the claim. Citing the deposition testimony, Nunn demanded full payment. Attorney Grove, Draves–Blandin, and two Noodles representatives discussed accepting liability. According to one of the Noodles representatives, Draves–Blandin counseled against accepting liability because the medical expense exposure would be open indefinitely. In January 2008, Draves–Blandin wrote that Nunn's attorney still insisted on full payment.

Nunn obtained an order that Draves–Blandin give a deposition duces tecum. Asked specifically what she learned from Ray Gibson, Draves–Blandin stated three times that he told her the intended meeting was a “social gathering.” Draves– Blandin did not reveal that she possessed Gibson's recorded statement to the contrary (despite the duces tecum request for all contacts between Zurich and any Noodles employees). Zurich continued to deny the claim, repeatedly noting Nunn's refusal to negotiate.

In September 2008, Grove wrote a “pre-trial report” to Zurich's adjuster. Grove described the evidence that the off-site get-together was work-related, making it “extremely difficult” to prove that the meeting was not mandatory. Grove also noted that Nunn's attorney would not discuss settlement or mediation.

In his opening statement at the trial of the workers' compensation case in October 2008, Grove told the administrative law judge (ALJ) that the evidence—including the expected testimony of Mako and Gibson—would prove that the meeting was a social gathering. When asked the purpose of the meeting, Gibson listed numerous personal matters—not mentioned during his deposition—with a brief reference to the new restaurant. Denying a set agenda, Gibson discussed the intersection of the group's personal lives and work, commenting that Mako and Nunn “needed to blow off some steam.” Confronted with his deposition testimony describing business issues he intended to cover with Nunn and Mako, Gibson endorsed its truth too. Contrary to his deposition testimony, Gibson admitted that Nunn objected to coming to his home that night. Gibson also admitted that the meeting's purpose was primarily “business.” 1

At trial, Mako asserted that the meeting was “similar to the other get-togethers.” Nunn's counsel then reviewed Mako's deposition with him. Mako eventually admitted the business purpose of the intended meeting, as he had described it in his deposition. Like Gibson, Mako stated that Nunn did not want to attend the meeting.

In written closing argument to the ALJ, Grove repeatedly described the intended meeting as a social gathering. Grove argued that both Gibson and Mako testified that the gathering was social in nature, repeating his assertion that Nunn was injured on her way to an “offsite happy hour.”

In the Findings and Order, the ALJ found that Nunn was expressly requested to attend a business meeting at Gibson's home and that her injury thus arose out of and in the course of her employment. The ALJ concluded that Nunn's injuries were compensable under any one of three different theories of liability, including the dual purpose doctrine. About Gibson, the ALJ observed:

His deposition testimony, that there was no planned agenda for the meeting and the employee's new position at the West St. Paul store would merely have come up, is simply not believable.... His deposition testimony that he scheduled the meeting at his home and the employee voluntarily attended so that she could blow off steam is simply not genuine, self-serving, and lacking in credibility.

II.

This court reviews de novo a grant of summary judgment. Mason v. Corr. Med. Servs., Inc., 559 F.3d 880, 884 (8th Cir.2009). Summary judgment should be granted when—viewing the facts most favorably to the nonmoving party and giving that party the benefit of all reasonable inferences—the record shows that there is no genuine issue of material fact. See Fed.R.Civ.P. 56(c); Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir.2011) (en banc). An issue is “genuine” if the evidence is sufficient to persuade a reasonable jury to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “As to materiality, the substantive law will identify which facts are material....” Id. At summary judgment, the court's function is not to weigh the evidence and determine the truth of the matter itself, but to determine whether there is a genuine issue for trial. Id. at 249, 106 S.Ct. 2505. “Our holding that the clear-and-convincing standard of proof should be taken into account in ruling on summary judgment motions does not denigrate the role of the jury.” Anderson, 477 U.S. at 255, 106 S.Ct. 2505.

In Minnesota, a worker may sue an entity that, in a manner that is outrageous and extreme, or egregiously cruel or venal, intentionally obstructs the worker's right to benefits. Bergeson v. United States Fid. & Guar. Co., 414 N.W.2d 724, 727 (Minn.1987), interpreting Minn.Stat. § 176.82. The insurer “must also desire, for unworthy motives, to deprive the injured worker of benefits.” Id. at 728. An unfounded refusal to pay, or even a substantial delay in payment, designed to induce settlement qualifies as intentional...

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