Wittig v. Allianz, A.G.
| Decision Date | 26 June 2006 |
| Docket Number | No. 26227.,26227. |
| Citation | 145 P.3d 738 |
| Parties | Sue Sun Won WITTIG, And As To Some Claims, On Behalf of the Class of Other Similarly Situated, Plaintiff-Appellant, v. ALLIANZ, A.G.,; Fireman's Fund, and Nelson B. Befitel, Director, Department of Labor, State of Hawai`i, Defendants-Appellees, and John Doe 1-10, et al., Defendants. |
| Court | Hawaii Court of Appeals |
Stephen M. Shaw, on the briefs, for Plaintiff-Appellant.
Richard F. Nakamura, Steven L. Goto, (Ayabe, Chong, Nishimoto, Associate Judge Sia & Nakamura), on the briefs, Honolulu, for Defendants-Appellees.
In this case, a workers' compensation insurer made an offer to settle a workers' compensation claim on terms that included the employee's resignation. The employee sued, alleging bad faith on the part of the insurer. We hold that the insurer's inclusion of a resignation term in its settlement offer did not constitute bad faith per se. We further hold that summary judgment in favor of the insurer was proper because the evidence proffered by the employee did not support her allegations of insurer bad faith.
Plaintiff-Appellant Sue Sun Won Wittig (Wittig or Plaintiff) appeals from the Judgment entered in favor of Defendant-Appellee Fireman's Fund Insurance Co. (Fireman's Fund) on November 10, 2003, in the Circuit Court of the First Circuit (the circuit court).1 The Judgment was entered pursuant to the circuit court's findings of fact, conclusions of law, and order which denied Wittig's motion for summary judgment and granted Fireman's Fund's cross-motion for summary judgment.
On January 29, 2003, Wittig filed a "Complaint in Tort for Insurer Bad Faith" (the Complaint), naming as defendants: Allianz, A.G. (Allianz), Fireman's Fund, Nelson B. Befitel, in his capacity as the Director of the Department of Labor and Industrial Relations (DLIR) of the State of Hawai`i, and various Doe individuals and entities.2 The Complaint arose out of a workers' compensation claim filed by Wittig against her employer, Grace Business Development Corporation (GBDC), and GBDC's workers' compensation insurer, Fireman's Fund (collectively referred to as the "Employer/Carrier"). Fireman's Fund had offered to settle Wittig's workers' compensation claim on terms that required Wittig to resign her employment in exchange for payment of additional consideration. Wittig alleged that Fireman's Fund's offer was improper and constituted bad faith.
The parties stipulated to the dismissal of Allianz and the Director of the DLIR from the lawsuit with prejudice. Wittig moved for summary judgment against Fireman's Fund, and Fireman's Fund countered with a cross-motion for summary judgment against Wittig. The focus of the competing motions for summary judgment was on whether Fireman's Fund's offer to settle Wittig's workers' compensation claim constituted bad faith as a matter of law. On September 3, 2003, the circuit court denied Wittig's motion for summary judgment and granted summary judgment in favor of Fireman's Fund on all claims and causes of action filed against Fireman's Fund.
On appeal, Wittig argues that the circuit court erred in granting Fireman's Fund's cross-motion for summary judgment and in denying her motion for summary judgment. For the reasons set forth below, we affirm the circuit court's Judgment.
Wittig was employed as a housekeeper for GBDC. On April 13, 1998, Wittig reported injuring her left knee by hitting it on a refrigerator as she stepped down from a chair while dusting a picture frame. On September 7, 2000, following a contested case hearing before the Department of Labor and Industrial Relations Disability Compensation Division (DLIR-DCD), the Director of the DLIR awarded Wittig benefits for temporary total disability (TTD), permanent partial disability (PPD), disfigurement, and reasonable medical care as a result of her left knee injury. GBDC and Fireman's Fund paid the awarded benefits which totaled $16,287.05.
On January 30, 2000, Wittig reported that while vacuuming the floor, she caught her foot in the electrical cord and fell on her right shoulder and back. She sustained injuries to her neck, shoulder, upper and lower back, hip, wrist, and buttock. On the day of the accident, Wittig went to the emergency room at Pali Momi Hospital. She was later treated by Terry Vernoy, M.D. (Dr. Vernoy), an orthopedic surgeon, who had been treating Wittig for her 1998 knee injury. Wittig did not return to work until March 2000, at which time she resumed work on a reduced schedule, cleaning less rooms per day.
Wittig was referred to Robert L. Smith, M.D. (Dr. Smith), for an independent medical evaluation (IME). In his July 25, 2000, evaluation, Dr. Smith opined that Wittig's complaints were suggestive of psychosocial stresses and that on a physical basis, there was nothing to preclude her from returning to work full-time. Wittig was next referred to James R. Langworthy, M.D. (Dr. Langworthy), for an IME. In his November 30, 2000, report, Dr. Langworthy diagnosed Wittig as having: 1) chronic low back pain with early degenerative disc disease; and 2) De Quervain's tenosynovitis of the right wrist. Dr. Langworthy concluded that Wittig was medically stable and rated her as having a 5 percent impairment of the person for the low back injury and a 2 percent impairment of the upper extremity for the right wrist injury.
Based in part on Dr. Langworthy's disability assessment, Fireman's Fund extended a settlement proposal to Wittig by a letter to her dated October 17, 2001, which provided in relevant part as follows:
As you are aware, we had submitted you for an evaluation with Dr. James Langworthy. A copy is provided for your review . . . . We would like to extend a settlement proposal as noted below:
Proposal
5% PPD Back (WM) - $ 8252.40
3% subjectives - $ 4951.44
2% PPD Right Arm - $ 3300.96
Waivers - $ 15000.00
Total - $ 31504.80
The total amount of $31,504.00 would be for closure of your entire workers' compensation claim and request for your resignation with your employer.
We request that you contact our office to discuss this matter further and we will explain all the details. Thereafter, should you be in agreement, the appropriate documents will be prepared.
(Emphasis added.)
Wittig did not respond to Fireman's Fund's settlement proposal. A hearing was scheduled for July 10, 2002, before the DLIR-DCD to determine the extent of Wittig's permanent impairment. On March 4, 2002, Wittig submitted to a second evaluation by Dr. Langworthy, who reassessed her condition and increased her PPD rating to 8 percent impairment of the whole body for her back injury and 2 percent impairment of the upper extremity for her wrist injury.
From the time of the January 30, 2000, accident through June 2002, Fireman's Fund appears to have paid for Wittig's medical treatment with Dr. Vernoy. On June 25, 2002, Fireman's Fund informed Wittig that it would not pay for Dr. Vernoy's medical services because his June 1, 2002, treatment plan was deficient. Thereafter, Fireman's Fund continued to deny payment for medical services rendered by Dr. Vernoy based on alleged deficiencies in his treatment plans. On July 10, 2002, Wittig's counsel notified the Director of the DLIR and Fireman's Fund that counsel had been retained by Wittig the previous day. The parties stipulated to a continuance of the July 10, 2002, hearing before the DLIR-DCD. Wittig submitted to a second IME by Dr. Smith, who sent his report to Fireman's Fund on November 8, 2002. Dr. Smith diagnosed Wittig's injury as a contusion of the left buttock, which should have resolved within six weeks of the accident, and rated her as 0 percent impairment of the whole person. Dr. Smith characterized Wittig's claimed symptoms as psychogenic (arising in her mind) and not based on her physiological condition.
On November 29, 2002, thirteen months after Fireman's Fund had extended its settlement proposal, Wittig's counsel sent a letter to Fireman's Fund inquiring about some of the terms contained in Fireman's Fund's proposal. The letter from Wittig's counsel stated in relevant part as follows:
In order that I may evaluate Fireman's Fund's offer, please provide the following information within fourteen (14) days relating to what Fireman's referred in the 10/17/01 offer (¶ 4) as "all the details" or "the appropriate documents":
1. will Fireman's Fund require, as a condition of settlement of the claim it referred to in its proposal of 10/12/01 [sic], the inclusion of Fireman's Fund as an entity or party to be released from liability?
2. if the answer to the above question is other than "no", is Fireman's Fund offering any sum of money to be released? If so, is this in addition to the $31,504.80 Fireman's fund proposed on 10/17/01?
The attorney for Fireman's Fund wrote a letter dated December 6, 2002, to Wittig's counsel which acknowledged the receipt of his November 29, 2002, letter but did not specifically address the questions he posed. Rather, the letter from the attorney for Fireman's Fund advised Wittig's counsel:
At this time, my clients are inclined to have the hearing which was continued on July 10, 2002 rescheduled. However, if Ms. Wittig has a settlement proposal at this time, please forward it to me and I will discuss it with my clients.
The record indicates that when the attorney for Fireman's Fund wrote his December 6, 2002, letter, he knew that Wittig's counsel, in September of 2002, had filed a complaint against Fireman's Fund with the Insurance Division of the State Department of Commerce and Consumer Affairs. In that complaint, Wittig's counsel alleged that Fireman's Fund had engaged in unfair settlement practices with respect to Wittig's workers' compensation claim. Wittig's counsel also made related complaints against...
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