Schaefer v. Sioux Spine & Sport, Prof. LLC

• Decision Date: 10 January 2018
• Docket Number: 28214
• Citation: 906 N.W.2d 427
• Parties: Kathy A. SCHAEFER, Plaintiff and Appellant, v. SIOUX SPINE AND SPORT, PROF. LLC, Defendant, and Nathan J. Flanders, Defendant, Third-Party Plaintiff, and Appellee, v. Herbert Tollefson, Third-Party Defendant and Appellee.
• Court: South Dakota Supreme Court

906 N.W.2d 427

Kathy A. SCHAEFER, Plaintiff and Appellant,

v.SIOUX SPINE AND SPORT, PROF. LLC, Defendant,andNathan J. Flanders, Defendant, Third-Party Plaintiff, and Appellee,

v.Herbert Tollefson, Third-Party Defendant and Appellee.

28214

Supreme Court of South Dakota.

ARGUED NOVEMBER 8, 2017

OPINION FILED January 10, 2018

JAMI J. BISHOP, RONALD A. PARSONS, JR., A. RUSSELL JANKLOW, SARA E. SHOW of Johnson Janklow & Abdallah, LLP, Sioux Falls, South Dakota, Attorneys for plaintiffs and appellants.

MELANIE L. CARPENTER of Woods, Fuller, Shultz & Smith, PC, Sioux Falls, South Dakota Attorneys for defendant, third party plaintiff, and appellee Nathan Flanders.

HEIDI N. THOENNES of American Family Insurance, Legal Department, West Des Moines, IA, Attorney for third party defendant and appellee Herbert Tollefson.

GILBERTSON, Chief Justice

[¶1.] Kathy A. Schaefer filed an action against Nathan J. Flanders alleging negligence. The circuit court granted summary judgment in favor of Flanders on the basis of a release signed by Schaefer. Schaefer argues there are genuine issues of material fact as to whether her consent to the release was based on mistake and obtained by undue influence. She also argues there is a genuine issue of material fact as to whether the injury forming the basis for this negligence action was known at the time she signed the release. We reverse.

Facts and Procedural History

[¶2.] On June 9, 2013, 55-year-old Kathy Schaefer was a passenger in the front seat of a vehicle driven by her boyfriend, Herbert Tollefson. Tollefson attempted to turn left onto 85th Street in Sioux Falls. However, rather than using the left-turn lane, Tollefson stopped in a through-traffic lane. Tollefson's vehicle was struck from behind by a vehicle operated by Nathan Flanders. Flanders claimed that he looked down at his speedometer while accelerating and that when he looked up again, Tollefson's vehicle was stopped in front of him. Law enforcement cited Tollefson for unsafe lane usage and Flanders for careless driving. Flanders ultimately pleaded guilty to following Tollefson's vehicle too closely.

[¶3.] At the accident scene, Schaefer complained of pain in her neck and back. Schaefer was transported by ambulance to Avera McKennan Hospital where she complained of pain in her neck and ribs. She denied having a "headache, midsternal chest pain, nausea, vomiting, fever, chills, abdominal pain, back pain or extremity pains." The treating physician ordered an x-ray, which did not reveal any injury. Schaefer was diagnosed with an "acute cervical sprain

" and a "mild chest wall contusion." The physician prescribed medication for Schaefer's pain, and she returned home. Schaefer believed that her care providers did not find any evidence of injury on her chest x-ray. Following her discharge, Schaefer did not experience chest pain.

[¶4.] Two days after the collision, Dustin Parris, a claims adjuster for Flanders's automobile-insurance provider, Farmers Insurance Group, contacted Schaefer. Parris's notes from that conversation indicate Schaefer suffered from neck and back pain and "[c]hest pain from seatbelt." Schaefer and Parris met two weeks later, on June 25. According to Parris, Schaefer reported she was "still having pain in the neck and upper [trapezius] on both sides." But Parris's notes did not indicate that Schaefer described any chest pain. The two discussed a potential settlement, and Parris asked Schaefer for a demand. According to Parris, Schaefer, who had been receiving Social Security Disability Insurance (SSDI) benefits for an intellectual disability since before the collision, "had no idea as she has had no prior claims knowledge." Parris offered Schaefer $500 for "[g]enerals and [f]uture meds" and up to $3,000 for her initial treatment costs.

[¶5.] In exchange for $500 and reimbursement of up to $3,000 in medical bills, Farmers Insurance wanted Schaefer to sign a release. Under the release, Schaefer would

forever release, acquit and discharge Nate Flanders, Melinda Flanders, Alexandria Flanders, James Flanders, Abigail Flanders, Herbert Tollefson, American Family Mutual Insurance Company, and his/her/their agents, successors, heirs, executors, administrators, and assigns, from any and all claims, causes of action, actions, rights, demands, bodily injuries, personal injuries, damages including but not limited to any and all medical expenses wherever incurred and loss of wages and/or income, loss of consortium, loss of any services, other costs and expenses, and any other compensation of any kind, which the undersigned has incurred on account of or which are in any way related to an accident that occurred on or about June 9, 2013, at or near Souix [sic] Falls, SD.

Without consulting an attorney (or anyone else), Schaefer agreed to sign the release. At the time Schaefer signed the release, she had already received bills from Avera totaling more than $5,000. After learning the amount of Schaefer's existing medical expenses, Farmers Insurance increased the allowance from $3,000 to $8,000. Parris called Schaefer on June 28 to discuss signing a new release, and the two agreed to meet on July 1.

[¶6.] After signing the second release, Schaefer sought chiropractic treatment for her neck pain from Dr. Wade T. Scheurenbrand at Sioux Spine & Sport in Sioux Falls. On July 10, during her second treatment, Dr. Scheurenbrand performed a chest compression on Schaefer, who experienced a sharp, severe pain in her right shoulder and neck. Schaefer's pain did not subside, and on July 18, she returned to the emergency room by ambulance. Schaefer told emergency-room staff that the pain radiated up to her neck and down her arm into the chest wall. She rated her pain as 10 out of 10. Schaefer's treating physician ordered a CT scan

of her neck and chest, which revealed a nondisplaced sternal fracture and body fracture with hematoma. Schaefer was admitted to the hospital, where she developed a staph infection and abscess. As a result, she spent a month in the hospital, and her medical bills totaled over $400,000.

[¶7.] Schaefer filed an action on January 19, 2015, against Sioux Spine & Sport alleging professional negligence. After conducting some initial discovery, Schaefer amended her complaint, adding a negligence claim against Flanders. Flanders filed a cross-claim against Sioux Spine & Sport. He also filed a third-party complaint alleging negligence against Tollefson. On December 12, 2016, Flanders filed a motion for summary judgment on Schaefer's negligence claim against him. Tollefson joined Flanders's motion for summary judgment. And on January 19, 2017, Flanders filed a motion to strike Schaefer's SSDI documentation from the record, arguing that it lacked foundation and that it was hearsay. Schaefer responded with a motion to supplement the record, intending to obtain and submit affidavits from the Social Security Administration. The court did not rule on the motions relating to Schaefer's SSDI documentation, but after a hearing on January 23, 2017, the court issued a memorandum opinion granting Flanders's motion for summary judgment.

[¶8.] On April 6, 2017, Schaefer requested permission to file an intermediate appeal under SDCL 15-26A-3(6), which this Court granted on May 12, 2017.¹ On appeal, Schaefer raises the following issue: Whether the circuit court erred by granting summary judgment on Schaefer's negligence claim against Flanders.²

Standard of Review

[¶9.] "The judge's function at the summary judgment stage ... is not to weigh the evidence and determine the matters' truth." Hamilton v. Sommers , 2014 S.D. 76, ¶ 42, 855 N.W.2d 855, 868. Instead, summary judgment is appropriate "if 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 a judgment as a matter of law." SDCL 15-6-56(c). The party opposing summary judgment need only "substantiate [her] allegations with sufficient probative evidence that would permit a finding in [her] favor on more than mere speculation, conjecture, or fantasy." Peters v. Great W. Bank, Inc. , 2015 S.D. 4, ¶ 13, 859 N.W.2d 618, 624 (quoting Estate of Elliott ex rel. Elliott v. A & B Welding Supply Co. , 1999 S.D. 57, ¶ 16, 594 N.W.2d 707, 710 ). "We view the evidence ‘most favorably to the nonmoving party and resolve reasonable doubts against the moving party.’ " Gades v. Meyer Modernizing Co. , 2015 S.D. 42, ¶ 7, 865 N.W.2d 155, 158 (quoting Peters , 2015 S.D. 4, ¶ 5, 859 N.W.2d at 621 ). However, "[a] release is a contract," and "[c]ontract interpretation is a legal question we review de novo." Gores v. Miller , 2016 S.D. 9, ¶ 8, 875 N.W.2d 34, 36-37.

Analysis and Decision

[¶10.] Schaefer argues summary judgment was inappropriate under several theories. First, she contends the release is rescindable under SDCL 53-11-2(1) because Parris unfairly persuaded her to sign it. Second, she contends the release is rescindable under SDCL 53-11-2(1) because she gave her consent by mistake. Third, she contends the release is a general release under SDCL 20-7-11. According to Schaefer, her sternal fracture

was not a known injury at the time she signed the release; therefore, she concludes that even if the release is not rescindable, it does not apply to her sternal fracture. Because the circuit court granted summary judgment based solely on application of the release, summary judgment is precluded if there are genuine issues of material fact as to any one of these arguments. If the requirements of SDCL 53-11-2(1) are met, then the release is void. If the requirements of SDCL 20-7-11 are met, then the release simply does not apply.

[¶11.] Schaefer first contends that Parris unfairly persuaded her to consent to the release and that the release is therefore rescindable. Under SDCL 53-11-2(1), "[a] party to a contract may rescind the same ... [i]f consent of the party...