Shaw v. Whirlpool Corp.
| Decision Date | 18 April 2019 |
| Docket Number | No. C19-5-LTS,C19-5-LTS |
| Parties | TEODORA SHAW, Plaintiff, v. WHIRLPOOL CORPORATION, et al., Defendants. |
| Court | U.S. District Court — Northern District of Iowa |
This case is before me on a motion (Doc. No. 8) by defendants Whirlpool Corporation (Whirlpool) and Gallagher Bassett Services, Inc. (Gallagher Bassett), to dismiss Count II (Intentional Infliction of Emotional Distress) of plaintiff's petition (Doc. No. 6) as well as plaintiff's claim for severe emotional distress damages alleged under Count I (Breach of Contract). Defendant ExamWorks Clinical Solutions, LLC (ExamWorks) joins in the motion. See Doc. No. 9. Plaintiff Teodora Shaw (Shaw) has filed a resistance (Doc. Nos. 15, 16).1 ExamWorks has filed a reply (Doc. No. 18), as have Whirlpool and Gallagher Bassett (Doc. No. 21). I find that oral argument is not necessary. See Local Rule 7(c).
Shaw filed her petition (Doc. No. 6) in the Iowa District Court for Linn County on December 3, 2018. On January 11, 2019, ExamWorks removed the case to this court based on diversity of citizenship jurisdiction pursuant to 28 U.S.C. § 1332. See Doc. No. 1. Gallagher Bassett and Whirlpool consented to the removal. See Doc. No. 4.
Generally speaking, Shaw alleges:
breach of contract and/or tortuously wrongful conduct in the failure to carefully, reasonably, promptly and transparently, and in good faith, complete settlement, obtain Medicare approval and agreement as to conditional Medicare payments and lien, obtain Medicare approval and agreement as to a Medicare Set-Aside Agreement and to promptly provide payments as required under the settlement agreement of [Shaw]'s worker compensation claims.
Doc. No. 6 at 1. She describes the relationship between the parties as follows:
At times relevant to the processing of the underlying case as alleged herein, Ms. Shaw, as an injured worker from Whirlpool and with a proposed worker compensation claim and/or settlement with Whirlpool, which involved a Medicare Set Aside ("MSA") proposal and Medicare conditional payment proposals ("MSP")2 as stated hereinafter, was a third-party beneficiary of a contract between Whirlpool and/or Gallagher Bassett, and with ExamWorks for the provision of services to submit and obtain approval of Center for Medicare and Medicaid Services [CMS] as to a Medicare Set Aside Arrangement and Medicare conditional payment terms to complete the proposed worker compensation settlement agreement alleged hereinafter.
Shaw alleges that she worked for Whirlpool when she suffered injuries on October 8, 2009, and March 21, 2011. Id. at 4-5. As a result of her work-related injuries, Shaw filed for workers' compensation benefits. Id. at 5. Gallagher Bassett worked asWhirlpool's third-party administrator concerning workers' compensation claims. Whirlpool and Gallagher Bassett disputed Shaw's claim for workers' compensation benefits. While her claim was pending, Whirlpool terminated Shaw's employment.
On July 7, 2016, Shaw and Whirlpool (through Gallagher Bassett) entered into a contingent compromise settlement agreement (Settlement Agreement) of the workers' compensation claim pursuant to Iowa Code § 85.35(3). Id. at 5-6. According to the petition, the Settlement Agreement provided that:
Id. at 6. That contingency provided:
As part of the Settlement Agreement, Shaw agreed to a release in which she waived any and all claims against Whirlpool and Gallagher Bassett and their agents, including all past claims for bad faith in the processing of the worker compensation claims and claims arising from her employment and termination with Whirlpool. Id. at 7. The release did not include a release of actions related to performance of the Settlement Agreement. Id. The Iowa Worker Compensation Commissioner approved the Settlement Agreement on September 16, 2016.
Pursuant to the Settlement Agreement, Whirlpool and Gallagher Bassett were to submit the MSA and MSP conditional payment requests to CMS and obtain promptapproval of the MSA and MSP conditional payment liens. Id. Shaw alleges that ExamWorks did not submit a report to CMS for MSA approval until January 23, 2017, despite several requests by Shaw to Whirlpool, ExamWorks and Gallagher Bassett for an update on completion of the contingencies and after Shaw and her attorney had to hire Medivest Allocation Services, Inc. (Medivest), to assist in obtaining the necessary CMS MSA approval. Id. at 8. Medivest prepared and submitted a package for approval from CMS of an MSA Agreement. Id. CMS approved an MSA in the amount of $19,135 on February 15, 2017. Id. That same day, Shaw (through her attorney) requested documentation between the adjuster and vendor(s) used by Whirlpool, Gallagher Bassett or ExamWorks for purposes of transparency. Id. at 9. No documentation was provided.
Medivest submitted a request for reconsideration to CMS by March 22, 2017, and CMS confirmed its previous decision to determine the MSA to be $19,135. Id. This completed the process for approval of the MSA for settlement. Id. On March 24, 2017, Shaw attempted to complete the settlement and payment of the monies under the settlement. Id. Whirlpool and Gallagher Bassett refused on the grounds that the agreement of the amount and extent of the MSP conditional payments had not yet been obtained by Whirlpool, Gallagher Bassett or ExamWorks. Shaw requested that Whirlpool and Gallagher Bassett authorize Medivest to directly work with CMS for approval of the MSP conditional payment resolution. This request was rejected. Id.
On April 10, 2017, Shaw's attorney contacted CMS and discovered that the claims for the March 21, 2011, and October 8, 2009, injuries were incorrectly reported and further work on the MSP conditional payments could not be completed until the claims were amended or corrected. Id. at 9-10. Shaw relayed this information to Whirlpool and Gallagher Bassett. Id. at 10. On April 24, 2017, Whirlpool, Gallagher Bassett and ExamWorks obtained an MSP conditional benefits letter stating there were no conditional payments as to the October 8, 2009, injury date. Shaw and her attorney requested that Whirlpool make corrections to complete the process so the proper MSP conditional payment agreements and resolutions could be concluded. Id.
By June 16, 2017, Whirlpool, upon requests from Shaw's attorney, authorized Medivest to act as its representative to access information and act to obtain appropriate MSP conditional payment letters. Medivest worked with Shaw and her attorney and was able to obtain a final MSP conditional letter payment amount. On July 28, 2017, CMS issued an MSP conditional payment letter showing no monies were due and owing for the March 21, 2011, injury. Shaw alleges that Whirlpool and Gallagher Bassett acknowledged this letter on August 4, 2017, but did not immediately provide the final settlement payment. In carrying out the actions for approval of the MSA and calculation and payment of any MSP conditional payments made and/or due to CMS, Shaw alleges that Whirlpool and Gallagher Bassett:
Shaw obtained a judgment dated August 18, 2017, from the Iowa District Court under Iowa Code § 85.42 for a judgment on the order of the Iowa Worker Compensation Commissioner and payment of the monies due and owing thereunder. Id. at 13. Despite this judgment, she alleges that Whirlpool and Gallagher Bassett continued to fail and refuse to complete the settlement, including the payment of the remaining lump sum due and owing from the settlement amount of $172,400. Shaw received the payment due under the Settlement Agreement in September 2017.
Shaw alleges two counts against all defendants as a result of the above-described actions:
Id. at 13-16. As part of Count I, Shaw alleges the following:
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