Tibbetts Lumber Co. v. Amerisure Ins. Co.
| Decision Date | 31 March 2020 |
| Docket Number | Case No. 8:19-cv-1275-T-35AAS |
| Citation | 451 F.Supp.3d 1295 |
| Parties | TIBBETTS LUMBER CO., LLC, Plaintiff, v. AMERISURE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Middle District of Florida |
David Lisko, Jason H. Baruch, Holland & Knight, LLP, Tampa, FL, for Plaintiff.
Bruce A. Aebel, Ryan Steven Stratton, Banker Lopez Gassler, Tampa, FL, for Defendant.
THIS CAUSE comes before the Court for consideration of Defendant's Motion to Dismiss, (Dkt. 15), Plaintiff's response in opposition thereto, (Dkt. 17), Defendant's reply in support, (Dkt. 24), and Plaintiff's sur-reply in opposition. (Dkt. 30) Upon consideration of the relevant filings, case law, and being otherwise fully advised, the Court finds that Defendant's Motion is due to be DENIED .
Plaintiff brings this case against its workers' compensation insurer for breach of contract, breach of fiduciary duty, breach of implied covenant of good faith and fair dealing, and negligent misrepresentation arising from Defendant's alleged failure to conduct good faith investigations into workers' compensation claims and acceptance of fraudulent claims out of expediency. (Dkt. 10) The relevant allegations in Plaintiff's Amended Complaint are as follows.
Defendant is a workers' compensation insurer in the State of Florida. (Id. at ¶ 1) In its advertisements, Defendant claims to help its insureds contain losses and fight workers' compensation fraud through a comprehensive program and highly trained and experienced team of investigators. (Id. at ¶¶ 1, 19) Plaintiff relied on Defendant's advertising in choosing a workers' compensation insurer. (Id. at ¶ 20) Plaintiff obtained a workers' compensation policy from Defendant that was renewed several times (the "Contract") and paid nearly $2,000,000 to Defendant pursuant to the terms of the Contract. (Id. at ¶ 2)
Plaintiff alleges that, pursuant to the terms of the Contract and in conjunction with the Workers' Compensation Statute, Chapter 440, Florida Statutes, Defendant was required to conduct good faith investigations into Plaintiff's employees' workers' compensation claims to determine if, to a reasonable degree of medical certainty based on objective medical findings, the injury arose out of work performed in the course and scope of the claimant's employment with Plaintiff and was a major contributing cause of the injury. (Id. at ¶ 5) Plaintiff contends that Defendant was required to conduct these investigations prior to accepting them and that Plaintiff relied on Defendant to do so. (Id. at ¶ 22) Plaintiff further alleges that Defendant did not have the authority to accept fraudulent claims out of expediency, as the Contract did not include a "deems-expedient" clause. (Id. at ¶ 5)
Despite this alleged contractual obligation, Plaintiff claims that Defendant failed to conduct any investigations into Plaintiff's employees' workers' compensation claims. (Id. at ¶ 6) As a result, Plaintiff alleges that it has suffered damages, including substantially increased workers' compensation insurance premiums, lost employee resources, and ancillary expenses, such as investigation costs. (Id. )
In the Amended Complaint, Plaintiff details specific examples of workers' compensation claims that Defendant accepted without investigation. For example, on September 25, 2015, an employee of Plaintiff ("Claimant") allegedly injured himself unloading a lightweight metal rod. (Id. at ¶ 26) Plaintiff reported Claimant's injury to Defendant and provided Defendant with the information Defendant requested related to Claimant's workers' compensation claim ("the Claim"), including an Injured Employee Report and a First Report of Injury or Illness Form, as well as access to any of its employees. (Id. at ¶¶ 26–27) Plaintiff alleges that the Claim was suspicious because Claimant was obese, had a history of hernias, and allegedly injured himself with no witnesses present by picking up a rod that weighed approximately two (2) lbs. (Id. at ¶ 28)
Although Plaintiff shared these concerns with Defendant, Defendant allegedly failed to conduct a good faith investigation into the Claim. (Id. at ¶¶ 28, 31) Defendant did not question Claimant regarding his prior medical history and never obtained any of Claimant's pre-injury medical records. (Id. ) Plaintiff alleges that Defendant accepted the Claim without determining whether (a) to a reasonable degree of medical certainty based on objective medical findings, Claimant's alleged injury arose out of work performed for Plaintiff, or (b) the alleged incident was a major contributing cause of the injury. (Id. at ¶ 32) Plaintiff further alleges that Defendant accepted the Claim without investigating whether Claimant's injury predated the incident. (Id. at ¶ 33)
After accepting the Claim, Defendant referred Claimant to Dr. Kevin J. Hirsch to perform hernia repair surgery. (Id. at ¶ 34) Dr. Hirsch determined that Claimant had three hernias, at least one of which predated the alleged injury. (Id. at ¶ 35) Plaintiff alleges that Dr. Hirsch never questioned Claimant regarding his pre-injury medical conditions, reviewed any of Claimant's pre-injury medical records, or questioned any of Claimant's medical providers. (Id. ) Nevertheless, Defendant entered into a contract with Dr. Hirsch to treat all three of Claimant's hernias. (Id. at ¶ 36) Dr. Hirsch performed outpatient hernia repair surgery on Claimant on June 23, 2016, which resulted in severe complications. (Id. at ¶¶ 36–37) The resulting treatments cost several hundreds of thousands of dollars. (Id. at ¶ 37)
Plaintiff remained suspicious of the Claim and again shared its concerns with Defendant, which continued to ignore Plaintiff. (Id. at ¶ 38) Plaintiff also allegedly became frustrated with Defendant regarding another workers' compensation claim that cost "tens of thousands of dollars" but "turned out to be a wood splinter the workers' compensation claimant sustained at home." (Id. )
In September of 2017, Defendant asked Plaintiff to pay for Claimant to have a weight loss surgery so that he could become medically fit to have another hernia surgery. (Id. at ¶ 39) Additionally, on September 19, 2017, Claimant filed a new workers' compensation claim, which was also accepted, for an alleged twisted ankle. (Id. ) Plaintiff was suspicious of this claim as well because a GPS device on Claimant's work truck established that he had been home for several hours at the time of the alleged injury. (Id. )
Plaintiff demanded that Defendant reopen its investigation into the validity of the Claim. (Id. at ¶ 41) However, Defendant did not reopen the investigation or request an independent medical examination of Claimant. (Id. at ¶ 42) Instead, Defendant sent a short letter to Dr. Hirsch but did not get a response or obtain any medical records. (Id. ) One of Defendant's representatives admitted during this process that Defendant never investigated the Claim and suggested that Plaintiff's outside legal counsel investigate because Defendant would not. (Id. )
Plaintiff engaged counsel and began its own investigation into the Claim in May of 2018, a process that cost Plaintiff tens of thousands of dollars. (Id. at ¶ 43) Plaintiff requested and was given Defendant's file regarding the Claim and subpoenaed medical records that showed the hernias were pre-existing on the date of the alleged injury. (Id. at ¶ 44) In June of 2018, Plaintiff also requested that Defendant investigate and obtain pre-injury medical records regarding another workers' compensation claimant who sustained an alleged back injury. (Id. at ¶ 45) Defendant claimed that it could not obtain these records. (Id. )
In July of 2018, Plaintiff shared the results of its investigation and the medical records it obtained, and Defendant admitted that it did not have any of Claimant's medical records of Claimant's pre-existing conditions. (Id. ) As a result, Defendant engaged counsel to investigate the Claim. (Id. at ¶ 47) Using the medical records Plaintiff provided to Defendant, Defendant's counsel determined the Claim was fraudulent and should have been denied. (Id. at ¶ 48)
On December 5, 2018, Defendant filed before a judge of compensation claims a Motion for Summary Final Order That Claims For Benefits Are Barred for Misrepresentation Pursuant to Sections 440.105 and 440.09, Florida Statutes. In that motion, Defendant asserted that "it is undisputed that the Claimant's hernias pre-existed the alleged date of accident" and requested entry of a summary final order concluding that all contested and outstanding requests for benefits are barred. (Id. at ¶ 49) On December 7, 2018, the Motion was summarily dismissed based on lack of jurisdiction because there was no petition for benefits pending. (Id. at ¶ 50) Defendant then denied the Claim, and Claimant has not contested the denial. (Id. at ¶ 51)
Plaintiff contends that as a result of Defendant's failure to investigate the Claim until July of 2018, Plaintiff's workers' compensation insurance premiums increased drastically because of the impact the Claim had on Plaintiff's workers' compensation experience modifier. (Id. at ¶ 52) Additionally, Plaintiff incurred costs for performing its own investigation and paid Claimant for approximately five hours of work missed per week after the date of alleged injury until the date of his termination.
(Id. ) Plaintiff alleges upon information and belief that it is Defendant's policy not to request medical records predating the alleged dates of injury for claimants. (Id. at ¶ 53)
Plaintiff and Defendant ended their contractual relationship in late 2018. (Id. at ¶ 54) However, Plaintiff alleges that Defendant continued to be responsible for multiple workers compensation claims, including a claim related to an employee's knee injury. (Id. ) In March of 2019, the Parties discovered that the knee injury claimant was dishonest regarding some aspects of the claim. (Id. at ¶ 55) Plaintiff...
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