Suzor v. Int'l Paper Co.

• Decision Date: 27 December 2016
• Docket Number: DA 15-0510
• Parties: Charlotte Suzor, Plaintiff, Appellant and Cross-Appellee, v. International Paper Company, Sedgwick Claims Management Services Inc., Cindy Berglind-Grooms, and Dorothy "Dot" Scott, Defendants, Appellees and Cross-Appellants.
• Court: Montana Supreme Court

386 Mont. 54

386 P.3d 584

2016 MT 344

Charlotte Suzor, Plaintiff, Appellant and Cross-Appellee,

v.International Paper Company, Sedgwick Claims Management Services Inc., Cindy Berglind-Grooms, and Dorothy "Dot" Scott, Defendants, Appellees and Cross-Appellants.

DA 15-0510

Supreme Court of Montana.

Submitted on Briefs: October 12, 2016

Decided: December 27, 2016

For Appellant: Rex Palmer, Attorneys Inc., P.C., Missoula, Montana.

For Appellees: Gerry Fagan, Moulton Bellingham PC, Billings, Montana.

Justice Patricia Cotter delivered the Opinion of the Court.

¶ 1 Charlotte Suzor injured her knees in a workplace accident in 1982, and her knees have been prone to giving out unpredictably ever since. She settled her workers' compensation claims in 1987 with her self-insured employer, Champion International Corporation, but reserved the right to seek future medical benefits for ongoing complications from her injury. In 2009, Suzor fell and broke her hip after her knees gave out. Her physician filed a claim with Sedgwick Claims Management Services, Inc. (Sedgwick), the third-party administrator for the workers' compensation plan now funded by her employer's successor in interest, International Paper Company. Sedgwick initially denied the claim, leading Suzor to sue International Paper Company, Sedgwick, and two of Sedgwick's employees (collectively, the "Appellees") for bad faith and breach of fiduciary duty. Following a jury trial in the Fourth Judicial District Court, Missoula County, judgment was entered in favor of the Appellees. Suzor timely appealed. We affirm.

ISSUES

¶ 2 We address the following issues on appeal:

1. Did the Appellees owe Suzor a fiduciary duty?

2. Did the District Court abuse its discretion in denying Suzor's jury instruction on causation?

3. Was the mistaken association of the wrong juror questionnaire with a juror a structural error that necessitates a new trial?

4. Is the jury's award of no damages supported by sufficient evidence?

5. Did the District Court abuse its discretion in its award of attorney's fees?

BACKGROUND

¶ 3 In 1982, Suzor injured her knees while working for Champion International. At the time of her injury, Champion International self-insured its workers' compensation liability. Suzor eventually settled her workers' compensation claim, reserving the right to be reimbursed for all medical treatment that would result from her injury. At some point after her injury, International Paper bought Champion International and assumed its outstanding workers' compensation obligations. International Paper contracted with Sedgwick to handle workers' compensation claims as a third-party administrator.

¶ 4 In the spring of 2009, Suzor fell and fractured her hip while getting into her pickup truck. According to her orthopedist, Dr. Michael Woods, the patellectomy Suzor underwent to treat her prior injury had made her knees unstable, and that instability was the cause of the fall that broke her hip. Under the terms of her workers' compensation settlement, Suzor was entitled to medical benefits for the broken hip, as it was a consequence of her workplace injury.

¶ 5 Suzor made an appointment with Dr. Woods for April 23, 2009. The day after her appointment, Woods initiated a worker's compensation claim by requesting authorization for an MRI. Cindy Berglind-Grooms, a claims adjustor at Sedgwick, fielded the request and denied it the same day. Suzor visited Dr. Woods again on May 4, and Dr. Woods sent his notes from that appointment to Sedgwick to substantiate the claim. Sedgwick again denied the claim, concluding that it was "not related to the original claim."

¶ 6 Suzor met with Dr. Woods again on May 18. At that appointment, Suzor indicated the pain medication Dr. Woods had prescribed was working. Suzor and Dr. Woods chose to wait and see how the hip would heal, and scheduled another appointment to reevaluate her progress in June. According to Dr. Woods' notes from the June appointment, Suzor and Dr. Woods decided to give the hip another month of healing without surgery, even though Suzor was feeling worse. Suzor met with Dr. Woods once more on July 9, 2009, and the treatment notes from that appointment indicate Suzor and Dr. Woods decided to pursue surgery instead of waiting for the hip to heal.

¶ 7 By August, Suzor had hired an attorney who wrote to Berglind-Grooms, asking her to reconsider the denial. On August 19, Sedgwick accepted the claim. The next day, Suzor underwent a pre-operative physical to prepare for hip surgery. Although the surgery was scheduled for August 26, Suzor postponed the operation due to a family emergency. On September 16, 2009, Suzor underwent surgery for her broken hip, and Sedgwick approved payment for all of Suzor's visits with Dr. Woods, and for the surgery.

¶ 8 Suzor filed suit on August 18, 2010, to recover damages for the Appellees' alleged breach of a fiduciary duty and bad faith. Suzor claimed that the initial denial of her medical benefits resulted in months of pain and suffering while she waited for Sedgwick to approve her surgery. Suzor joined as defendants Sedgwick, International Paper, Berglind-Grooms, and Dorothy Scott, a claims adjuster and Berglind-Grooms' supervisor at Sedgwick.

¶ 9 During discovery, Suzor requested production of contracts among Sedgwick, International Paper and Champion International, as well as financial and tax information from each defendant. When the Appellees objected to production of the requested documents, Suzor filed a motion to compel discovery. On April 17, 2014, the District Court granted the motion in part and ordered the Appellees to turn over the requested contracts, but denied without prejudice Suzor's demand for tax and financial information, concluding that discovery of that information was premature because it pertained only to the question of punitive damages.

¶ 10 The Appellees filed a motion for summary judgment on Suzor's claim of breach of a fiduciary duty and punitive damages. On June 24, 2014, the District Court granted summary judgment to the Appellees on Suzor's fiduciary duty theory, determining that no legal authority supported the proposition that employers owe fiduciary duties to their employees in the context of workers' compensation insurance. At the same time, the District Court denied summary judgment on the question of punitive damages. On March 10, 2015, the District Court issued an order compelling production of the Appellees' financial and tax information, reasoning that the denial of summary judgment on punitive damages counseled in favor of discovery.

¶ 11 The case was tried before a jury over five days in April 2015. At the beginning of jury selection, the clerk of court called the roll of prospective jurors. The clerk called the name Steven Schmidt, to which Steven E. Schmidt (Juror Schmidt) responded. Unbeknownst to the parties, the clerk had mistakenly provided them with the completed jury questionnaire of Steven A. Schmidt before voir dire. This mistake was not realized until after the trial. Nonetheless, Suzor's counsel questioned Juror Schmidt during voir dire and passed the jury for cause.

¶ 12 Suzor submitted proposed jury instructions before the trial, including the following jury instruction on causation: "Defendants are liable if their conduct was a cause of Charlotte Suzor's harms. The conduct of Defendants is the cause of the harm if it helped produce it and if the harm would not have occurred without it." The District Court refused this instruction, reasoning the instruction was "a negligence instruction that doesn't apply well to the facts of this case and is confusing." Instead, the District Court instructed the jury that Charlotte had the burden to show that the Appellees breached a duty to her and caused her to suffer losses or harms.

¶ 13 At the end of the trial, the jury returned its verdict on a special verdict form, which posed two questions relevant to this appeal. First, the form asked whether "any of the Defendants breach[ed] their duty to Charlotte Suzor," and the jury answered in the affirmative. Second, the form asked whether "the breach of duty by any of the Defendants cause[d] Charlotte Suzor to suffer loss or harm," to which the jury answered "No." Because the jury found the Appellees did not cause Suzor any damages, the District Court entered judgment in favor of the Appellees.

¶ 14 After trial, Suzor filed a motion for fees related to her earlier motion to compel discovery, pursuant to M. R. Civ. P. 37. Appellees objected to the per-hour rate charged for Suzor's attorney's time, as well as 320 minutes of time calculated toward Suzor's attorney's fees, arguing that time was recorded after the District Court ruled on the motion to compel and therefore could not be awarded under M. R. Civ. P. 37. The District Court deducted the 320 minutes from the time awarded and split the difference between the parties' requested hourly rates.

¶ 15 Suzor timely appealed from the District Court's grant of summary judgment on the question of fiduciary duty, the jury's verdict, and the post-trial award of attorney's fees.

STANDARDS OF REVIEW

¶ 16 We review de novo a district court's grant of summary judgment, applying the criteria of M. R. Civ. P. 56. Pilgeram v. GreenPoint Mortg. Funding, Inc. , 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839. Whether a fiduciary duty exists between two parties is a question of law. Gliko v. Permann , 2006 MT 30, ¶ 24, 331 Mont. 112, 130 P.3d 155. We review questions of law de novo. Johnson v. Costco Wholesale , 2007 MT 43, ¶ 19, 336 Mont. 105, 152 P.3d 727.

¶ 17 Generally, we review a district court's denial of a motion for a new trial on the grounds listed in § 25–11–102, MCA, for a manifest abuse of discretion. Cooper v. Hanson , 2010 MT 113, ¶ 28, 356 Mont. 309, 234 P.3d 59. We have made an exception to that general standard in the case of § 25–11–102(6), MCA, which provides for a new trial if there is insufficient evidence to justify the verdict. The sufficiency...