Spencer v. Annett Holdings, Inc.

Decision Date27 November 2012
Docket NumberNo. 4:11–cv–598.,4:11–cv–598.
Citation905 F.Supp.2d 953
PartiesDouglas SPENCER, Petitioner, v. ANNETT HOLDINGS, INC., Respondent. Annett Holdings, Inc., Counter Claimant, v. Douglas Spencer, Counter Defendant.
CourtU.S. District Court — Southern District of Iowa

OPINION TEXT STARTS HERE

Sasha Lace Monthei, Scheldrup Blades Smith Schrock & Aranza PC, Cedar Rapids, IA, for Respondent/Counter Claimant.

Donald G. Beattie, Beattie Law Firm PC, Christopher D. Spaulding, Berg Rouse Spaulding & Schmidt PLC, Des Moines, IA, for Petitioner/Counter Defendant.

ORDER

ROBERT W. PRATT, District Judge.

Before the Court are two motions: 1) Douglas Spencer's (Plaintiff or “Spencer”) Motion for Partial Summary Judgment (Clerk's No. 17); and 2) Annett Holdings, Inc.'s (Defendant or “Annett”) Motion for Summary Judgment (Clerk's No. 18). Annett filed a resistance to Spencer's Motion for Partial Summary Judgment (Clerks' No. 23) and Spencer replied (Clerk's No. 28). Spencer filed a resistance to Annett's Motion for Summary Judgment (Clerk's No. 22) and Annett replied (Clerk's No. 26). The Court held a hearing on the pending motions on September 25, 2012. Clerk's No. 52. The matters are fully submitted.

I. FACTUAL AND PROCEDURAL BACKGROUND

As Spencer aptly states in his Motion for Partial Summary Judgment, the facts of this case are immense and convoluted.” Pl.'s Mot. for Partial Summ. J. ¶ 4 (Clerk's No. 17). The case reaches back five years and involves a number of state-court and agency proceedings, motions, and filings. At their most basic, the facts can be summarized as follows: Spencer claimed he injured himself at work. Annett began providing care, but Spencer was dissatisfied with the care provided. As a result of his dissatisfaction, Spencer initially filed this federal case on December 15, 2011 alleging multiple bad faith causes of action. See Clerk's No. 1. In response to an Order (Clerk's No. 5) finding the jurisdictional allegations of the Complaint lacking, Spencer filed an Amended Complaint on January 19, 2012. Clerk's No. 9. Annett answered the Amended Complaint and asserted counterclaims for fraud and related issues on February 8, 2012. See Clerk's No. 11. Annett denies bad faith and alleges that Spencer fabricated a story about a work injury in an effort to defraud the company and receive workers' compensation benefits for a non-work-related injury. Although complex, the relevant facts are largely undisputed.

Annett is a self-insured trucking company based out of Des Moines, Iowa that operates throughout the contiguous forty-eight states.1 Statement of Material Facts in Supp. of Annett's Mot. for Summ. J. (“Def.'s Facts”) ¶ 3 (Clerk's No. 18.1); Br. in Supp. of Resistance to Annett's Motion for Summ. J. (“Pl.'s Resistance Br.”) at 1 (Clerk's No. 22.1). Spencer was an over-the-road truck driver who worked for Annett from January 2006 through April of 2008. Pl.'s App. in Resp. to Annett's Mot. for Summ. J. (“Pl.'s App.”) at 50, 52 (Clerk's No. 22.5–22.22).2 In addition to his employment as a truck driver, Spencer was a luthier who specialized in making guitars in a workshop he created in a shed behind his home in Smithville, Tennessee. Pl.'s App. at 289–90 (Spencer Dep., Feb. 1, 2011, at 17–18).

A. Spencer's Alleged Work Injury and Immediate Treatment

Spencer claims that on the morning of January 2, 2007, he slipped off the back of his flatbed trailer near Smithville and injured himself. Def.'s Facts ¶ 5. Spencer informed his employer, Annett, of the accident and immediately sought medical attention from a doctor in a nearby town. Id.; Pl.'s Statement of Additional Material Facts (“Pl.'s Add'l Facts”) ¶ 2 (Clerk's No. 22.2). The medical report from the date of the alleged injury indicates that Spencer complained of severe left knee pain, some shoulder pain, and claimed that the injuries resulted from a fall off the back of his trailer. Def.'s App. in Supp. of Annett's Mot. for Summ. J. (“Def.'s App.”) at 61–66 (Clerk's Nos. 18.2–18.7).3 Two days later, at Annett's urging and with Annett's authorization, Spencer saw a second doctor in Tennessee, Dr. Ramsey Walker (“Dr. Walker”). Def.'s Facts ¶ 7. Dr. Walker reported the same symptoms as the original emergency room doctor, restricted Spencer's work to light-duty tasks, stated Spencer should not drive a truck, and recommended a follow-up appointment in one week. Id.; Def.'s App. at 69. Annett offered Spencer light-duty work in Des Moines, and Spencer returned to Des Moines on January 8. Def.'s Facts ¶ 8.

Upon Spencer's return, Annett followed the recommendation of the authorized physician, Dr. Walker, and scheduled a January 11 appointment with Dr. Kary Schulte (“Dr. Schulte”), an orthopedic specialist in Des Moines. Id. ¶ 9. Dr. Schulte saw Spencer on January 11 and noted that Spencer said his left knee felt better. Id. ¶ 11. Dr. Schulte reported that Spencer's swelling had subsided, Spencer had 5/5 strength with flexion and extension of both knees, and that the “exam was essentially within normal limits.” Id. ¶ 13; Def.'s App. at 18. Additionally, Dr. Schulte diagnosed Spencer with mild underlying degenerative arthritis in the knee. Def.'s Facts ¶ 12. Following the examination, Dr. Schulte indicated no further medical intervention was necessary and released Spencer to work without restrictions. Id. ¶ 14.

B. Spencer's Continued Pain and Doctor's Visits in April 2007

On January 12, 2007, after obtaining a medical clearance from the Iowa Department of Transportation, Spencer returned to work driving for Annett. Id. ¶¶ 17–18. From January 12 to March 30, 2007, Spencer performed all duties adequately, and never informed Annett that he was having any problems performing job duties or having any problems with his knee. Id. ¶ 18. Spencer claims, however, that although he did not report anything to Annett, he was in severe pain and was taking measures to ease pain and swelling.4 Pl.'s Resp. to Def.'s Statement of Material Facts ¶ 18 (Clerk's No. 22.3).

Without seeking authorization from Annett, Spencer visited his family doctor, Dr. Bryan, on March 31, 2007, citing pain in his left knee. Def.'s Facts ¶ 20. Spencer told Dr. Bryan that, in addition to his knee pain, he was having pain in the heel of his left foot (later diagnosed as plantar fasciitis) and numbness in his hands and arms. Id. Spencer began a week-long pre-scheduled vacation the next day. Id. ¶ 19. On April 4, 2007, again without informing Annett or seeking authorization, Spencer returned to see Dr. Bryan. Id. ¶ 23. At the appointment, Dr. Bryan ordered an MRI and referred Spencer to an orthopedic specialist in Tennessee—Dr. Dalton. Id. Dr. Bryan also put Spencer on no-work status. Def.'s App. at 53–54. Spencer underwent the unauthorized MRI on April 6. Id. at 109. Despite his pain, his multiple doctor visits, and the MRI, Spencer did not call or inform Annett of any problems until April 9, 2007. Id. at 54.

A week after informing Annett of his problems, Spencer saw the orthopedic specialist, Dr. Dalton. Def.'s Facts ¶ 25. At this unauthorized April 16, 2007 appointment, Dr. Dalton interpreted the MRI results, diagnosed Spencer with a left medial meniscus tear, and opined that arthroscopic surgery was necessary. Id. At this visit, Spencer again complained of pain in his left heel and pain and numbness in both of his hands. Id. ¶ 26. Dr. Dalton then renewed Spencer's no-work status. Pl.'s Add'l Facts ¶ 59.

On the same day, April 16, 2007, Spencer's wife (“Mrs. Spencer”) faxed the MRI report to Annett along with paperwork stating that Spencer had scheduled surgery for May 4, 2007. Id. ¶ 31. The fax indicated that Spencer needed authorization for this surgery. Id. Mrs. Spencer also called Annett and asserted that the surgery was related to the alleged fall on January 2. Id. In addition, during her phone call, Mrs. Spencer reported that Spencer was experiencing bilateral carpal tunnel syndrome that he believed was work-related. Id. On April 24, 2007, Annett received a handwritten letter from Spencer explaining that he had plantar fasciitis and that he wanted to give notice that the condition was also work-related. Id. ¶ 33. The same day, Annett began investigating Spencer's claims and requested medical records from Dr. Dalton. Id. ¶ 32. Annett also faxed Dr. Schulte a copy of the MRI for his review. Id. Schulte responded, however, that he could not offer a proper diagnosis without seeing Spencer and the original films. Id. A few days later, Annett refaxed record requests to Dr. Dalton and, for the first time, faxed medical record requests to Dr. Bryan. Def.'s App. at 55.

C. The Jurisdictional Dispute

On May 2, 2007, Annett received a letter from Attorney Russell Thomas (“Thomas”) explaining that Spencer had retained Thomas to represent him in a workers' compensation case. Def.'s Facts ¶ 34. The letter stated that Spencer was electing to proceed with his workers' compensation claim under Tennessee, rather than Iowa, law. Id. It went on to explain that, due to the circumstances of the case, under Tennessee law, Spencer had the ability to make his own arrangements for medical care. Id. Finally, the letter conclusively stated that Spencer was going to have surgery on May 11, 2007, and that Annett would have to reimburse Spencer for the surgery. Id. On May 3, 2007, Spencer filed for workers' compensation benefits in Tennessee. Id. ¶ 37.

Annett's counsel responded to Thomas on May 8, 2007, explaining that Iowa law controlled the case, per Spencer's election, and requested that Spencer return to Des Moines to be evaluated by Dr. Schulte.5Id. ¶ 35. The letter further stated that if Dr. Schulte determined that the surgery was required and was related to the alleged work injury, Annett would authorize the procedure. Id. On May 10, Annett received a response from Thomas stating that Spencer had applied for Tennessee benefits and was postponing his surgery until the jurisdictional dispute was settled. Id. ¶ 39. On May 21, Annett received a...

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