United States District Court,

M.D. Pennsylvania.

Bruce RUNION, Plaintiff

v.

EQUIPMENT TRANSPORT, LLC, Defendant

CIVIL ACTION NO. 1:15-CV-2159

|

Signed 09/01/2017

Attorneys and Law Firms

Sidney L. Gold, Jamie L. Ford, Neelima Vanguri, Law Offices of Sidney L. Gold & Associates PC, Philadelphia, PA, for Plaintiff.

Christopher R. Nestor, Overstreet & Nestor, LLC, Harrisburg, PA, for Defendant.

 

 

MEMORANDUM

Christopher C. Conner, Chief Judge

*1 Plaintiff Bruce Runion (“Runion”) brings this action against his former employer, defendant Equipment Transport, LLC (“Equipment Transport”), alleging that Equipment Transport terminated him in retaliation for filing a workers’ compensation claim. Before the court is Equipment Transport’s motion (Doc. 27) for summary judgment. The court will grant Equipment Transport’s motion.

 

 

1. Factual Background & Procedural History1

Equipment Transport provides drilling and completion services to oil and gas operators. (Doc. 27-2 ¶ 1). Equipment Transport hired Runion on May 6, 2014 as a laborer to perform sundry tasks as assigned including, but not limited to, washing and cleaning tanks and equipment used in the natural gas drilling industry. (Id. ¶¶ 2-5). Runion served on a six-person labor crew under the supervision of Beverly Miszler (“Miszler”). (Id. ¶¶ 6-7). As part of his employment application, Runion executed various documents outlining his rights and duties under the Workers’ Compensation Act, 77 PA. STAT. AND CONS. STAT. ANN. § 1 et seq. (Doc. 27-3; Runion Dep. 84:13-85:6, Oct. 25, 2016 (“Runion Dep.”)).2

 

On September 30, 2014, Runion and fellow laborers were attempting to suction byproduct out of a Newaltas machine into a waste truck. (Doc. 27-2 ¶ 14, Pearson Dep. 10:5-11:2, Dec. 1, 2016 (“Pearson Dep.”)). Runion ingested byproduct when the hoses came apart and sprayed the laborers. (Pearson Dep. 11:2-7; Runion Dep. 43:9-44:2). Runion informed Miszler, his immediate supervisor, that he was going home to wash off the byproduct and then to the hospital to get “checked out.” (Runion Dep. 44:3-6). Runion claims to have also informed Miszler that he was “going to tell the hospital that it was going to be a workmen’s comp. related incident.” (Id. at 44:6-8). Runion vomited several times at home and then checked into the Montrose Hospital emergency room. (Id. at 48:12-49:2).

 

*2 Emergency room physician Dr. Hassan Khalil attended to Runion and took bloodwork and induced vomiting. (Id. at 49:21-50:8). Runion does not recall whether he told Dr. Khalil that his treatment would be a workers’ compensation claim. (Id. at 60:6-15). Runion testified that he did inform a hospital billing administrator and a nurse regarding same and filled out paperwork related to his injury and workers’ compensation. (Id. at 58:24-60:5). Dr. Khalil cleared Runion to return to work with instructions to schedule a follow-up appointment and to see a toxicologist because the waste byproduct might contain radon or other harmful substances. (Id. at 50:11-53:5; Pearson Dep. 18:12-20:7; Witbeck Dep. 26:1-29:13, Nov. 21, 2016 (“Witbeck Dep.”)).

 

Safety supervisor Marc Vincent (“Vincent”) visited the work site on October 1, 2014 and spoke with Runion about the incident and his decision to seek medical attention. (Runion Dep. 66:8-69:12). Vincent was purportedly upset that Runion had “put [his injury-related medical expenses] through workmen’s comp. at the hospital.” (Id. at 69:13-17). On October 2, 2014, supervisor Bryan Witbeck (“Witbeck”) visited the job site and Runion apprised him of the incident and that he “put [his injury] under workmen’s comp. to cover for the hospital bill.” (Id. at 72:2-24).

 

Equipment Transport assigned Runion exclusively to flow back containment tank cleaning duties during the two weeks following the September 30, 2014 incident. (Id. at 76:1-5; Doc. 34-6). Runion experienced a significant decrease in scheduled hours over that two week period. (Doc. 34-7). Equipment Transport terminated Runion’s employment on October 15, 2014. (Doc. 27-3, Ex. D, Decl. of Beverly Miszler ¶¶ 12, 14, Jan. 16, 2017 (“Miszler Decl.”); Runion Dep. 32:2-5, 90:8-14). Equipment Transport listed the following reasons for Runion’s termination: failure to wear personal protective equipment; damaging company property; and making terroristic threats against Equipment Transport employees and company property.3 (Doc. 27-2 ¶ 24). Runion’s past disciplinary history also included insubordination, (Doc. 27-3, Ex. A, Tab G; Doc. 27-3, Ex. D, Tab A), and turning in a timesheet containing sexual content. (Doc. 27-3, Ex. A, Decl. of Arthur Streeter ¶ 18, Jan. 16, 2017; Doc. 27-3, Ex. A, Tab C).

 

Runion clarifies that the reprimand for failing to wear personal protective equipment was due to his visor being tilted at an incorrect angle. (Runion Dep. 88:20-89:14). He denies damaging company property, specifically an eyewash station. (Id. at 89:15-22). He also denies making terroristic threats toward Equipment Transport employees or company property. (Doc. 33 ¶¶ 17, 23, 24). Runion does not recall being reprimanded for turning in a timesheet containing sexual content. (Runion Dep. 87:15-88:16). Runion avers that the true reason Equipment Transport decreased his hours, assigned him to tank cleaning duty, and ultimately fired him was his decision to pursue workers’ compensation. (Doc. 33 ¶¶ 24, 29, 30). Equipment Transport maintains that the actions listed supra were legitimate, non-retaliatory reasons for Runion’s termination. (Doc. 35 at 7-9). Equipment Transport also points to an industry-wide slowdown as a factor. (Doc. 27-2 ¶ 32). Equipment Transport closed the Hallstead, Pennsylvania plant where Runion worked six months later in April 2015. (Id. ¶ 33).

 

*3 Runion initiated the case by filing a complaint (Doc. 1) on November 11, 2015. Therein, Runion asserts one common law claim: that Equipment Transport violated the public policy of Pennsylvania by terminating Runion in retaliation for exercising his rights under the Workers’ Compensation Act. (Doc. 1 ¶¶ 21-25). Runion filed an amended complaint (Doc. 19) on March 1, 2016 with leave of court (Doc. 18) for the purpose of clarifying the scope of his protected activity to include expressing an intent to file for workers’ compensation. Following a period of discovery, Equipment Transport filed the instant motion (Doc. 27) for summary judgment, together with supporting papers.4 The motion is fully briefed and ripe for disposition.

 

 

1. Legal Standard

Through summary adjudication, the court may dispose of those claims that do not present a “genuine dispute as to any material fact” and for which a jury trial would be an empty and unnecessary formality. FED. R. CIV. P. 56(a). The burden of proof tasks the non-moving party to come forth with “affirmative evidence, beyond the allegations of the pleadings,” in support of its right to relief. Pappas v. City of Lebanon, 331 F. Supp. 2d 311, 315 (M.D. Pa. 2004); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). This evidence must be adequate, as a matter of law, to sustain a judgment in favor of the non-moving party on the claims. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-57 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-89 (1986). Only if this threshold is met may the cause of action proceed. See Pappas, 331 F. Supp. 2d at 315.

 

 

III. Discussion

Pennsylvania law provides that employers may terminate employees “for any or no reason” unless the employee is subject to an employment agreement. Shick v. Shirey, 716 A.2d 1231, 1233 (Pa. 1998) (quoting Geary v. U.S. Steel Corp., 319 A.2d 174, 176 (Pa. 1974)). The Pennsylvania Supreme Court, however, has carved out an exception to the at-will employment doctrine: employees may bring wrongful termination claims when their termination “would violate a ‘clear mandate of public policy.’ ” McLaughlin v. Gastrointestinal Specialists, Inc., 750 A.2d 283, 313 (Pa. 2000) (quoting Geary, 319 A.2d at 180). The exception applies only when the Pennsylvania legislature formulates a public policy or “a given policy is so obviously for or against public health, safety, morals, or welfare that there is a virtual unanimity of opinion in regard to it.” Weaver v. Harpster, 975 A.2d 555, 563 (Pa. 2009) (quoting Mamlin v. Genoe, 17 A.2d 407, 409 (Pa. 1941)).

 

 

1. Public Policy and Workers’ Compensation

A Pennsylvania employee may not be terminated for seeking workers’ compensation benefits. Rothrock v. Rothrock Motor Sales, Inc., 883 A.2d 511, 515-16 (Pa. 2005) (citing Shick, 716 A.2d at 1238). Unfortunately, the Pennsylvania Supreme Court has not articulated the precise elements of such a retaliation claim. Theriault v. Dollar General, 336 Fed.Appx. 172, 175 (3d Cir. 2009) (nonprecedential). The Third Circuit predicts that, when presented with the opportunity, the Pennsylvania Supreme Court will apply the familiar Title VII framework to Pennsylvania retaliation claims. Id.; see McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). District courts within the Third Circuit have likewise resolved that federal retaliation standards apply to state law retaliation claims.5 See, e.g., Sharkey v. Fed. Exp. Corp., No. 98-CV-3351, 2001 WL 21500, at *7 (E.D. Pa. Jan. 9, 2001); Landmesser v. United Air Lines, Inc., 102 F. Supp. 2d 273, 277 (E.D. Pa. 2000); Alderfer v. Nibco Inc., No. 98-6654, 1999 WL 956375, at *6 (E.D. Pa. Oct. 19, 1999). We agree with the ratio decidendi of this emerging consensus.

 

*4 To establish a prima facie case of retaliation, a plaintiff must prove that: (1) he engaged in a protected activity; (2) his employer took an adverse employment action against him; and (3) a causal nexus existed between his protected activity and the adverse employment action. See id. at 174; see also Moore v. City of Phila., 461 F.3d 331, 340-41 (3d Cir. 2006). Once the plaintiff establishes a prima facie case of retaliation, the burden shifts to the employer to provide a legitimate, non-retaliatory reason for its decision. Moore, 461 F.3d at 342; see also Owens, 103 A.3d at 863. If the employer proffers a legitimate, non-retaliatory reason for its decision, the burden of persuasion returns to the plaintiff to prove that the proffered non-retaliatory rationale is pretextual and that the unlawful motive was the “but-for” cause of the adverse action. See Univ. of Tex. Sw. Med. Ctr. v. Nassar, 570 U.S. ––––, 133 S. Ct. 2517, 2533 (2013); Moore, 461 F.3d at 342.

 

Equipment Transport’s termination of Runion’s employment on October 15, 2014 constitutes an adverse employment action. LeBoon v. Lancaster Jewish Cmty. Ctr. Ass’n, 503 F.3d 217, 232 (3d Cir. 2007). Equipment Transport does not dispute this point. (See Doc. 28 at 12-16). Equipment Transport also does not challenge whether there is a sufficient causal nexus between Runion’s alleged exercise of his rights under the Workers’ Compensation Act and his termination. (See Doc. 28, 35). Equipment Transport only disputes the first element of Runion’s prima facie case: whether he engaged in protected activity.

 

 

1. Prima Facie Retaliatory Discharge Claim

Equipment Transport claims Runion did not engage in protected activity because he did not file a workers’ compensation claim with either the Pennsylvania Workers’ Compensation Bureau or his employer. (Doc. 28 at 12-13). Equipment Transport also argues Runion cannot sustain his retaliatory discharge action on the ground that Equipment Transport had notice of his intent to file for workers’ compensation. (Id. at 13). Pennsylvania courts have not explicitly extended the public policy exception to at-will employees who merely express an intention to file for workers’ compensation. Equipment Transport views this as a bar to Runion’s retaliatory discharge claim. (Id. at 13).

 

Pennsylvania courts have provided limited guidance on the proper application of this public policy exception to the at-will employment presumption, stating only that it is an exceedingly narrow exception. See Shick v. Shirey, 716 A.2d 1231, 1238 (1998) (Flaherty, C.J., concurring); Owens, 103 A.3d at 862, 869; McLaughlin v. Gastrointestinal Spec. Inc., 750 A.2d 283, 290 (Pa. 2000). District courts in Pennsylvania have grappled with what conduct, short of actually filing a workers’ compensation claim, may be sufficient to constitute protected activity. Several federal courts have predicted that the Pennsylvania Supreme Court will determine that injured employees who have expressed their intent to pursue workers’ compensation claims to their employers will fall within the ambit of “protected activity.” See, e.g., Smith v. R.R. Donnelley & Sons Co., No. 10-1417, 2011 WL 4346340, at *6 (E.D. Pa. Sept. 16, 2011); Worthington v. Chester Downs & Marina, LLC, No. 17-1360, 2017 WL 3457031, at *7 (E.D. Pa. Aug. 11, 2017); Kofa-Lloyd v. Brookside Healthcare & Rehab. Ctr., LLC, No. 14-00668, 2014 WL 1159677, at *3 (E.D. Pa. Mar. 21, 2014).

 

The reasoning in Smith is particularly persuasive. The court in Smith held that a plaintiff must (1) report the work-related injury and (2) express the “intent to file” a workers’ compensation claim to the employer in order to trigger the protection of the public policy exception. Smith, 2011 WL 4346340, at *6. An employer’s knowledge of a work-related injury alone is insufficient to establish the plaintiff engaged in protected activity. Id. The court furnished this two-step rule to further the purpose of the public policy exception. Id. This ensures employees seeking workers’ compensation have “the opportunity to complete the administrative task” and prevents employers from escaping their obligations under the Workers’ Compensation Act. Id. We will follow the lead of our sister courts in the Third Circuit and apply the test laid out in Smith.

 

 

1. Work-Related Injury

*5 Ample evidence supports that Runion suffered a workplace injury. Runion swallowed waste material not intended for ingestion while working to clear a line from a Newaltas machine. (Doc. 27-3, Ex. A, Tab D & E). Runion vomited at home several times and sought medical attention at Montrose Hospital emergency room. (Runion Dep. 48:12-49:6; Doc. 27-3, Ex. A, Tab E). Multiple employees were aware that Equipment Transport was testing this waste product for radon or other forms of radiation. (Witbeck Dep. 26:1-29:13; Runion Dep. 55:6-56:18; Pearson Dep. 18:12-20:7). At least two Equipment Transport supervisors reacted strongly to the incident report, with the truck supervisor stating that “it was some pretty nasty stuff that [Runion] had … in his mouth.” (Witbeck Dep. 17:2-18:14, 24:3-13). The doctor treating Runion took bloodwork and induced vomiting. (Runion Dep. 50:6-8). Surveying the record in the light most favorable to Runion, there is sufficient evidence to establish Runion suffered a workplace injury.

 

 

2. Filed or Intended to File for Workers’ Compensation

Equipment Transport asserts that Runion did not engage in protected activity because he did not actually file a workers’ compensation claim. (Doc. 28 at 14). Indeed, the record is devoid of evidence that Runion filed any claim with the Workers’ Compensation Bureau, Equipment Transport, or other appropriate authority. (Doc. 27-3, Ex. G at 7).

 

Equipment Transport further asserts that Runion did not notify Equipment Transport of his intention to file a claim for workers’ compensation. (Doc. 28 at 14). Equipment Transport argues that Runion’s sole evidence to the contrary is his “conclusory, self-serving” deposition testimony which is insufficient to create a genuine issue of material fact. (Id.) The court agrees. Generally, self-serving affidavits and deposition testimony are alone insufficient to withstand a motion for summary judgment when “impeached by a well-supported showing to the contrary.” Gonzalez v. Sec’y of Dep’t of Homeland Sec., 678 F.3d 254, 263-64 (3d Cir. 2012) (quoting United States v. 717 S. Woodward St., 2 F.3d 529, 533 (3d Cir. 1993)); Irving v. Chester Water Auth., 439 Fed.Appx. 125, 127 (3d Cir. 2011) (nonprecedential). Runion relies solely on his own deposition testimony in opposing Equipment Transport’s motion. The issue is not whether the testimony is self-serving, but whether Runion’s testimony is sufficient for a rational factfinder to credit it when juxtaposed with the other, contrary record evidence. See Johnson v. MetLife Bank, N.A., 883 F. Supp. 2d 542, 549 (E.D. Pa. 2012).

 

Runion avers that he expressed his intent to file a worker’s compensation claim to six individuals: Dr. Hassan Khalil, an unnamed Montrose Hospital nurse, an unnamed Montrose Hospital billing administrator, his labor crew supervisor (Miszler), Miszler’s supervisor (Witbeck), and another Equipment Transport supervisor (Vincent). (Runion Dep. 44:4-46:23, 49:21-50:8, 60:6-15, 69:13-22, 70:9-21, 72:12-73:12).

 

Runion initially testified that he may have mentioned to Dr. Khalil in the Montrose Hospital emergency room that his treatment would be a workers’ compensation claim, but later admitted he did not specifically recall. (Id. at 49:21-50:8; 60:6-15). Runion testified that he advised both the hospital billing administrator and the nurse who cared for him of his intent to file for workers’ compensation. (Id. at 58:24-60:5). Runion recollects completing paperwork with these hospital employees, but he is unable to provide any documentation to support his recollections or to show he initiated the process of filing a workers’ compensation claim at the hospital. (Id.) Assuming this testimony to be true, none of the hospital representatives is an employee of Equipment Transport, and Runion adduces no evidence to suggest that anyone informed Equipment Transport of Runion’s intent to file a claim.

 

On the day of the incident, Runion informed Miszler, his direct supervisor, that he was going to go to the hospital to “get checked out” and he “was going to tell the hospital that it was going to be a workers’ comp. related incident.” (Id. at 44:3-9). Runion testified at his deposition that he also informed safety supervisor Vincent, in a one-on-one conversation at the job site, of his hospital visit and that he “put it through workmen’s comp. at the hospital.” (Id. at 69:13-22, 70:9-21). Runion also testified that when Witbeck visited the job site after the incident, Runion apprised Witbeck of the incident, the hospital visit, and that he “put it under workmen’s comp.” (Id. at 72:12-73:12). Other individuals were present for the conversations with Miszler and Witbeck including fellow laborers Nathan Pearson, Dave Husney, and Cody, and a Newaltas representative. (Id. at 44:4-46:23, 72:12-73:12).

 

*6 The remainder of the record wholly refutes Runion’s version of events. Witbeck testified that Runion never expressed to him a desire to file a workers’ compensation claim. (Witbeck Dep. 18:24-19:1). He did not know whether Runion had expressed such a desire to anyone else at Equipment Transport. (Id. at 19:2-20:19). Pearson, who left Equipment Transport shortly after Runion did, testified that he did not know if Runion informed anyone of his intent to file a workers’ compensation claim. (Pearson Dep. 13:15-17). Miszler submitted a sworn declaration stating that she was unaware of Runion’s intent to file a workers’ compensation claim or whether any such filing might have occurred. (Miszler Decl. ¶ 10). Inexplicably, Runion elected not to depose witnesses to the alleged statements he made to Equipment Transport supervisors about his intent to file a workers’ compensation claim. Runion did not depose his direct supervisor Miszler, safety supervisor Vincent, or fellow laborers Cody and Dave Husney. Runion provides no documentation of communications with Equipment Transport or its employees regarding a desire to file workers’ compensation claim in response to its interrogatories. (Doc. 27-3, Ex. H at 4). Nor does Runion provide any documentary evidence of an attempted or actual filing of a workers’ compensation claim at the hospital or with the Workers’ Compensation Bureau, which might have been shared with Equipment Transport.

 

Despite the full benefit of discovery, Runion offers no support beyond his own deposition testimony to corroborate his claim that Equipment Transport was on notice of his intent to file a workers’ compensation claim. (Doc. 35 at 3). Runion’s self-serving deposition testimony, when juxtaposed against the rest of the record, is insufficient to meet his burden of “point[ing] to some evidence in the record that creates a genuine issue of material fact.” Berckeley Inv. Grp., Ltd. v. Colkitt, 455 F.3d 195, 201 (3d Cir. 2006); Irving, 439 Fed.Appx. at 127. Moreover, “arguments made in briefs ‘are not evidence and cannot by themselves create a factual dispute sufficient to defeat a summary judgment motion.’ ” Eastman v. Lackawanna Cty., 95 F. Supp. 3d 773, 783 (M.D. Pa. 2015) (quoting Jersey Cent. Power & Light Co. v. Lacey Twp., 772 F.2d 1103, 1109-10 (3d Cir. 1985)). Runion’s allegata of expressed intent to file a workers’ compensation claim may have been sufficient to satisfy his pleading burden, but litigation discovery has resulted in a dearth of probata in the Rule 56 record. Thus, the court concludes that Runion has not demonstrated that there is a genuine issue of material fact concerning whether he notified his employer of his intent to pursue workers’ compensation benefits. The court will grant Equipment Transport’s motion for summary judgment on Runion’s retaliatory discharge claim for want of record evidence of protected activity.6

 

 

1. Conclusion

The court will grant Equipment Transport, LLC’s motion (Doc. 27) for summary judgment. An appropriate order shall issue.

 

All Citations

Slip Copy, 2017 WL 3839917

 

 

Footnotes

1

Local Rule 56.1 requires that a motion for summary judgment pursuant to Federal Rule of Civil Procedure 56 be supported “by a separate, short, and concise statement of the material facts, in numbered paragraphs, as to which the moving party contends there is no genuine issue to be tried.” LOCAL RULE OF COURT 56.1. A party opposing a motion for summary judgment must file a separate statement of material facts, responding to the numbered paragraphs set forth in the moving party’s statement and identifying genuine issues for trial. See id. Unless otherwise noted, the factual background herein derives from the parties’ Rule 56.1 statements of material facts. (See Docs. 27-2, 33). To the extent the parties’ statements are undisputed or supported by uncontroverted record evidence, the court cites directly to the statements of material facts.

2

Partial and full transcripts of Runion’s deposition have been filed by the parties at separate docket entries. Unless otherwise noted, the court will cite to this deposition passim as “Runion Dep.” without docket entry citations. The court employs this citation convention for deposition transcripts throughout this memorandum.

3

Runion denies this paragraph of Equipment Transport’s Rule 56.1 statement and asserts that Equipment Transport terminated his employment in retaliation for his expression of an intent to file a workers’ compensation claim. (Doc. 33 ¶ 24). Importantly, Runion does not deny the substance of this paragraph, that Equipment Transport provided these reasons for his termination. Nor does Runion cite to any contradictory evidence regarding same. The record evidence supports the fact that these are the reasons provided by Equipment Transport, regardless of whether they were the “real” reasons. (Doc. 27-3, Ex. A, Tab F & G; Doc. 27-3, Ex. D, Tab A; Witbeck Dep. 33:5-20, 38:3-10).

4

In addition to providing responses to each of Equipment Transport’s statements of fact, Runion’s brief in opposition (Doc. 34) to Equipment Transport’s motion for summary judgment includes a section styled as “Counter Statement of Facts.” Neither Federal Rule of Civil Procedure 56 nor Local Rule 56.1 authorizes this filing, and Runion did not request leave of court therefor. The court will not consider this portion of Runion’s brief as same fails to conform to our procedural rules.

5

Both parties cite Owens v. Lehigh Valley Hospital, 103 A.3d 859 (Pa. Commw. Ct. 2014), in their briefs. The trial court in Owens relied upon a federal district court’s predictive reasoning that the Pennsylvania Supreme Court would apply the Title VII framework to a wrongful discharge claim. Id. at 861 (citing Landmesser v. United Air Lines, Inc., 102 F. Supp. 2d 273 (E.D. Pa. 2000)). On appeal, the commonwealth court declined to endorse this predictive reasoning and instead concluded that a case specific method of analysis was appropriate. Id. at 868-69. However, in light of the Pennsylvania Supreme Court’s continued silence on the matter, this court will follow the clear trend of federal courts in the Third Circuit. The parties do not dispute that this is the appropriate framework to be applied to Plaintiff’s claim. (See Doc. 28 at 11; Doc. 34 at 10).

6

Runion seeks spoliation sanctions, including but not limited to an adverse inference, against Equipment Transport as a result of Equipment Transport’s failure to preserve the tape recording of Runion’s alleged terroristic threats against Equipment Transport employees and property. (Doc. 34 at 15-16). Because the court does not reach the issue of whether or not Equipment Transport has a legitimate, non-retaliatory reason for terminating Runion’s employment, it is unnecessary to address Runion’s request for spoliation sanctions.

United States District Court,

1. Arizona.

Manuel ROMAN, Plaintiff,

v.

BERKSHIRE HATHAWAY HOMESTATE INSURANCE CO., Defendant.

No. CV-15-02447-PHX-NVW

|

Signed 09/06/2017

Attorneys and Law Firms

Michael Patrick Doyle, Patrick Mason Dennis, Doyle LLP, Phoenix, AZ, for Plaintiff.

Sheila K. Carmody, Snell & Wilmer LLP, Phoenix, AZ, for Defendant.

 

 

ORDER

Neil V. Wake, Senior United States District Judge

*1 Before the Court is Defendant’s Motion for Summary Judgment. (Doc. 55). For the following reasons, the Motion will be granted.

 

 

1. LEGAL STANDARD

Summary judgment should be granted if the evidence reveals no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A material fact is one that might affect the outcome of the suit under the governing law, and a factual dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). It is the moving party’s burden to show there are no genuine disputes of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Upon such a showing, however, the burden shifts to the non-moving party, who must then “set forth specific facts showing that there is a genuine issue for trial” without simply resting on the pleadings. Anderson, 477 U.S. at 256. To carry this burden, the non-moving party must do more than simply show there is “some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Where the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial. Id. at 587.

 

 

1. UNDISPUTED MATERIAL FACTS

Plaintiff Manuel Roman (“Roman”) worked as a truck driver for Shipper’s West Truckline, Inc. On September 3, 2013, he fell from the company truck as he exited the cab and suffered a head injury. A few days later, on September 7, 2013, Roman went to the emergency room at Wheaton Franciscan Healthcare (“Wheaton”) in Wisconsin. At Wheaton, he was diagnosed with systolic hypertension and a concussion.

 

Roman next sought medical care on October 11, 2013, at Arrowhead Regional Medical Center (“Arrowhead”) in California. At Arrowhead, a CT scan and examination revealed a subdural hematoma. Roman received a subdural drain to dispel blood and relieve pressure and was discharged on October 15, 2013. The discharge instructions noted that Roman should “Resume Normal Activity and Return to work” the next day. Roman returned to Arrowhead on October 31, 2013. The physician’s notes from that appointment concluded: “Today the patient is doing well, with no symptoms, no complaints, including denies pain or any neurological deficit.”

 

Roman filed a Worker’s Report of Injury with the Industrial Commission of Arizona (“ICA”) on or around November 8, 2013. In the report, Roman noted he suffered a “brain injury” described as a “blood clot in brain.” The report also included contact information for Roman’s employer and limited information about medical treatment Roman received.

 

Neither Roman nor his employer notified Berkshire Hathaway Homestate Insurance Co. (“Berkshire”) of Roman’s injury after the incident. Berkshire first learned of Roman’s claim when it received a “Notification of Claim” from the ICA, dated November 14, 2013. The notification is a one-page document. It does not provide any contact information for Roman, specify the nature or extent of any injury, or indicate whether Roman sought or received any medical treatment. Although the notification is dated November 14, 2013, the record does not reveal when Berkshire actually received it.

 

*2 On November 22, 2013, Berkshire opened a claim file based on the notification, and by November 25, it had assigned an adjuster to handle the claim. The assignment directed the adjuster to “verify [Roman’s] correct mailing address” and “obtain other missing info,” explaining the file was set up based on limited information. It also stated that Berkshire unsuccessfully attempted to find Roman’s address before assigning the file to the adjuster.

 

The adjuster began evaluating the claim on the same day he received it. His first contact was a phone call with the employer on November 25, 2013. The employer informed the adjuster that Roman had not reported an injury and that his final day with the company was on September 13, 2013. The adjuster called again two days later, on November 27, to request Roman’s correct contact information, but was unable to reach the employer or leave a message. The adjuster called again on December 2 and emailed on December 4 to request Roman’s correct contact information. Finally, on December 5, after obtaining Roman’s phone number, the adjuster contacted Roman to discuss his claim. He described the conversation in his notes as follows:

I was able to speak with [Roman], but he did not go into specifics of the claim or his injury. He informed me that he needs medical treatment and that he has suffered brain hemorrhaging. He also informed me that he did report the injury to his employer and that his injury is due to his employer’s negligence. When I asked [Roman] to provide more information about the claim and injury, he indicated that he would prefer to have an attorney speak with me; [Roman] was not willing to continue the conversation. I provided my contact information and instructed [Roman] to have his attorney contact me as soon as possible.”

That same day, the claims adjuster called the employer. The employer again informed him it “never received any report of injury from [Roman]” and that Roman drove an additional ten days after his injury.

 

Based on this preliminary investigation, the adjuster concluded he needed more information to determine the compensability of Roman’s claim. He noted in the claims diary: “As neither the claimant nor the employer were able to provide any information about the alleged injury, the compensability of said injury is in question.” Accordingly, on December 6, 2013, Berkshire submitted a “Notice of Claim Status” to the ICA, which indicated Roman’s claim was denied pending further investigation.

 

The claims adjuster called Roman again on December 6. In that call, he obtained more information about the incident and medical care Roman received, including phone numbers for both Wheaton and Arrowhead. He called both facilities that same day and requested Roman’s medical records. The Wheaton records arrived on December 19, 2013, and indicated two diagnoses: systolic hypertension and a concussion. The records also showed a neurosurgeon reviewed the medical findings, including a CT scan, and concluded they were “not consistent with traumatic injury.”

 

The adjuster made multiple efforts to procure the records from Arrowhead. He sent a faxed request for records, as Arrowhead required, on December 6. The request was not processed, however, and in a follow-up call with the hospital on January 3, 2014, the hospital required another faxed request. The adjuster sent another request that same day and then another on January 7, 2014. On January 17, 2014, he called Arrowhead to check on the request. The hospital said it was more than two weeks behind on processing such requests and suggested he call back the following week. He did so on January 24, 2014. In that call, Arrowhead confirmed it had processed the request and that the records would be mailed either that same day or the next business day. Berkshire received the Arrowhead records on January 30, 2014. The records indicated Roman suffered a subdural hematoma and received a subdural drain to dispel blood and relieve pressure. They made no finding of a concussion.

 

*3 On February 3, 2014, within days of receiving and reviewing the Arrowhead records, the adjuster sought to schedule an independent medical examination (“IME”). The appointment was scheduled for February 27, 2014, with an independent neurologist, Dr. Leo Kahn. Dr. Kahn concluded, in a report received no earlier than March 3, 2014, that Roman’s “subdural hematoma is directly related to the 09/03/13 industrial injury” and that his treatment at Arrowhead was “in essence life-saving.” Based on this report, Berkshire accepted Roman’s claim on March 6, 2014. Berkshire has paid all of Roman’s medical bills submitted to it for related medical treatment since that time.

 

Roman filed this action on December 2, 2015. The lawsuit alleges Berkshire breached its duty of good faith and fair dealing in handling Roman’s workers’ compensation claim and seeks compensatory and punitive damages. Berkshire moves for summary judgment on all claims.

 

 

III. ANALYSIS

Berkshire argues it is entitled to judgment as a matter of law on Roman’s bad faith claim because (1) there is no evidence of a causal link between the alleged injury and Berkshire’s “repeated delays” in processing Roman’s claim and (2) Roman’s claim was fairly debatable. Berkshire further argues (3) the evidence does not support a claim for punitive damages. Each argument is addressed in turn.

 

 

1. Proximate Causation

“An insurer’s bad faith handling of an insurance claim, like any other tort, is analyzed according to the principles of duty, breach, and proximately caused damages.” Michelman v. Lincoln Nat’l Life Ins. Co., 685 F.3d 887, 900 (9th Cir. 2012). “Proximate cause is found where, without any intervening cause and without the defendant’s act, the injury would not have occurred.” Ferguson v. Cash, Sullivan & Cross Ins. Agency, Inc., 171 Ariz. 381, 386, 831 P.2d 380, 385 (App. 1991).

 

Roman alleges Berkshire’s “repeated delays” in processing his claim resulted in compensable injury. But Roman was injured on September 3, 2013, and Berkshire had no notice of his claim until receiving the “Notification of Claim,” dated November 14, 2013, from the ICA. Thus, the relevant period for which Berkshire may be liable for any aggravation of his medical condition is from the time it first received the November 14, 2013 notification and when it later accepted the claim on March 6, 2014.

 

In his deposition, Roman’s treating neurologist, Dr. Michael A. Epstein, testified Roman probably would have had a better outcome had he been treated in a more timely fashion. He testified the overall delay in treatment affected Roman, but could not say “with any degree of medical certainty” whether (1) the delay between Roman’s injury and Berkshire’s notification of his claim or (2) the delay between Berkshire’s notification and when it later accepted the claim made more of a difference. Indeed, he testified, “I can’t say which delay absolutely made the critical difference at all.” Thus, the testimony of Dr. Epstein does not establish with any degree of medical certainty that Berkshire proximately caused Roman’s aggravation of injury. Roman’s failure to present any expert testimony to establish this causal link is fatal to his claim. See Gentry v. Daugherity, CV-13-02136-PHX-ESW, 2015 WL 1346097, at *3 (D. Ariz. Mar. 24, 2015) (“Unless an injury is obvious to the jury, expert medical testimony is required to establish the nature and extent of the injury as well as its relationship to the accident.”); Rasor v. Nw. Hosp., LLC, 239 Ariz. 546, 550, 373 P.3d 563, 566 (App. 2016) (“Expert medical testimony is … generally required to establish proximate cause unless a causal relationship is readily apparent to the trier of fact.”). Therefore, Berkshire is entitled to summary judgment on that component of damages.

 

*4 Roman does not directly address the causation argument in his response. He does argue, however, that he is entitled to damages for mental anguish, pain and suffering, financial damage, and loss of enjoyment of life. See Mendoza v. McDonald’s Corp., 222 Ariz. 139, 149, 213 P.3d 288, 298 (App. 2009). Roman prayed for such damages in the complaint (Doc. 1, at 10-11.) and expert medical testimony is not needed to establish such damages. Accordingly, Berkshire is not entitled to summary judgment on this component of damages for lack of evidence of causation.

 

 

1. Bad Faith

Summary judgment must be granted against Roman’s bad faith claim for lack of bad faith. Bad faith arises when an insurer “intentionally denies, fails to process, or pay a claim without a reasonable basis.” Zilisch v. State Farm Mut. Auto. Ins. Co., 196 Ariz. 234, 237, 995 P.2d 276, 279 (2000) (quotation omitted). The tort of bad faith has two elements: (1) that the insurer acted unreasonably toward the insured and (2) that the insurer acted knowingly or with reckless disregard of the unreasonableness of its actions. See id. at 238. Unreasonable actions include failure to “immediately conduct an adequate investigation,” failure to “act promptly in paying a legitimate claim,” “forc [ing] an insured to go through needless adversarial hoops to achieve its rights under the policy,” and “lowball[ing] claims.” Id. An insurer may challenge claims which, after adequate investigation, are “fairly debatable.” Id. at 237. “But … while fair debatability is a necessary condition to avoid a claim of bad faith, it is not always a sufficient condition.” Id. at 238.

 

Roman points to three separate actions by Berkshire which he argues constitutes bad faith. First, Berkshire failed to provide equal consideration to Roman because it instructed its adjusters to target and deny claims, as opposed to honestly investigate the facts and evidence. Second, Berkshire failed to adequately investigate the claim because it delayed initiating its claims process for eight days, failed to contact Roman for 20 days, and failed to contact medical providers for 21 days. Third, Berkshire required an IME, which was not necessary for a compensability determination related to Roman’s concussion and subdural hematoma. None of these arguments has merit.

 

 

1. Policy or Practice of Berkshire

The first argument—that Berkshire instructed its adjusters to target and deny claims—is unsupported by the record. Roman hinges this argument on a single quote within a three-page “Claims Bulletin” of the insurer, which states: “The majority of delays and investigate denials are issued to gather information needed to support a denial.” As an initial matter, it is perfectly proper for an insurer to seek information to support a denial. The insured must also seek out the information that would support a claim. In any event, the quote is misleading when read in isolation. As the Bulletin explains, there are four “strategic tracks” when evaluating the compensability of a claim, including the initial “Investigate” track, which is where the quote is found. The Investigate track is used when “[t]he Claims Professional does not have enough information to make a compensability determination.” The track is merely one of several stages in evaluating a claim. As the Bulletin makes clear, additional action will always follow the completion of an investigation, including accepting a claim: “The Investigate strategic track will always result in additional action to be taken once the investigation has been completed. In some instances it will mean accepting the claim….” In short, the very document on which Roman relies says all investigation will be done. Moreover, there is no evidence here that the adjuster failed to investigate or give equal consideration to all of the facts and circumstances favorable to Roman. The investigation was prompt and earnest. Berkshire sought out the evidence favorable to Roman.

 

 

2. Adequacy of Investigation

*5 The second argument regarding Berkshire’s investigation similarly fails because the investigation indisputably was adequate. As discussed above, neither Roman nor Roman’s employer notified Berkshire of the injury he suffered on September 3, 2013. Ten weeks passed before Roman filed a worker’s compensation claim with the ICA and more than another week passed before Berkshire first learned the claim. The “Notification of Claim” is a one-page document that does not include information about the nature or extent of Roman’s injury, the medical treatment he received, or Roman’s address or phone number.

 

Roman complains about the adequacy of the investigation from when Berkshire received the ICA notification and when it submitted a response on December 6, 2013. The record does not indicate when Berkshire received the notification. However, even assuming it was received on the earliest possible date, November 14, 2013, the record shows Berkshire opened a case file within seven business days, on November 22. By November 25, Berkshire assigned a claims adjuster to evaluate the claim and had attempted at least once to verify Roman’s contact information.

 

On the same day the adjuster received the file, November 25, he started investigating the claim. He contacted the employer at least four times from November 25 to December 4 to discuss the claim and to try to obtain Roman’s correct contact information. When he finally received Roman’s contact information, the adjuster promptly called Roman on December 5. In that call, Roman “did not go into specifics of the claim or his injury.” As the adjuster noted, “When I asked [Roman] to provide more information about the claim and injury, he indicated that he would prefer to have an attorney speak with me; [Roman] was not willing to continue the conversation. I provided my contact information and instructed [Roman] to have his attorney contact me as soon as possible.”

 

Neither Roman nor his attorney called the adjuster back by the next day, December 6, 2013, the deadline for Berkshire to file its notice of claim status with the ICA. However, the adjuster did reach Roman by phone again that day and learned more about Roman’s injury and medical treatment he received, including phone numbers for both Wheaton and Arrowhead. Berkshire was in no way at fault for not reaching Roman earlier and not contacting the then-unknown medical providers earlier.

 

Roman complains that “[e]ven after Defendant finally contacted Mr. Roman, Defendant continued to delay its investigation,” citing the length of time it took to receive the medical records. But on the same day the adjuster received the contact information for both Wheaton and Arrowhead, December 6, he called both facilities to request Roman’s medical records and sent faxed requests as well. The Wheaton records arrived within two weeks, on December 19. The Arrowhead records arrived several weeks later, on January 30, 2014. The adjuster’s efforts in the interim were far from unreasonable: between December 6, 2013, and January 24, 2014 (when Arrowhead confirmed it had processed the request), the adjuster called or faxed Arrowhead on at least six separate occasions to try to obtain the records. Berkshire is not responsible for the medical providers’ delays in sending medical records despite Berkshire’s repeated requests.

 

Moreover, on February 3, 2014, within days of receiving the Arrowhead records on January 30, 2014, the adjuster sought to schedule an IME. The IME occurred on February 27, 2014, which was prompt. Based on the IME report, which Berkshire received no earlier than March 3, 2014, Roman’s claim was accepted on March 6, 2014.

 

*6 In sum, the record reveals the investigation was adequate.1

 

 

3. Independent Medical Examination

Finally, Roman attacks Berkshire’s decision to schedule an IME, asserting it was not necessary for making a compensability determination. An insurer is entitled to seek an independent medical examination not only to determine a claimant’s need for treatment, Mendoza, 222 Ariz. at 159, 213 P.3d at 308, but also “to ensure further medical treatment is necessary.” Demetrulias v. Wal-Mart Stores Inc., 917 F. Supp. 2d 993, 1007 (D. Ariz. 2013). In addition, an insurer may reasonably schedule an IME to determine the cause and extent of an injury. See, e.g., Bronick v. State Farm Mut. Auto. Ins. Co., CV-11-01442-PHX-JAT, 2013 WL 3716600, at *9-12 (D. Ariz. July 15, 2013) (granting insurer’s motion for summary judgment on bad faith claim even though insurer required plaintiff to attend an IME to determine the cause of plaintiff’s injury).

 

Here the medical records gave a focused need for an IME. The Wheaton records indicate Roman went to the emergency room a few days after the fall reporting a headache that would not resolve. Roman reported a history of hypertension and not being complaint with his medications. As was later explained, the headaches Roman complained of “may … have been amplified by uncontrolled hypertension.” The Wheaton records unclearly presented the nature of Roman’s injury and were divergent in that they indicated a concussion yet concluded Roman’s symptoms were “not consistent with traumatic injury.” The Arrowhead records identified a subdural hematoma, which required a subdural drain to dispel the blood, but not a concussion. The Arrowhead discharge report noted Roman could return to work the next day and the notes from his follow-up appointment stated: “Today the patient is doing well, with no symptoms, no complaints, including denies pain or any neurological deficit. The patient did not need all of his pain medicines per his report.”

 

The medical records thus raised questions regarding the nature, cause and extent of Roman’s injury. For example, the records did not establish whether or when Roman’s subdural hematoma resolved; the extent to which Roman’s uncontrolled hypertension played a role; whether Roman’s delay in seeking treatment impacted his condition; and whether the treatment Roman received was reasonable and necessary. In light of the conflicting records and unresolved questions, the insurer reasonably sought an IME to assess the compensability of Roman’s claim. Berkshire asked the IME physician to answer the following questions:

*7 1. Please advise Mr. Roman’s diagnosis from both Wheaton Franciscan Healthcare and Arrowhead Regional Medical Center. Please explain the diagnosis in relation to his method of injury.

2. Please address whether assuming there is some injury attributable to the fall on 09/03/13 his delay in seeking treatment or reporting to his employer made or makes [it] more difficult to investigate.
3. Do you feel the recommended surgical treatment was reasonable and necessary? Please explain.
4. Has Mr. Roman reached maximum medical improvement in relation to the 09/03/13 injury, and if so on what date?
5. If Mr. Roman has not reached maximum medical improvement, what type of medical treatment would you recommend?
6. Has Mr. Roman sustained any permanent impairment in relation to the 09/03/13 injury?
7. Please address work capabilities in relation to the 09/03/13 injury.

(Doc. 61, Ex. 14 at 4-6.)

 

Based on the assessment of the IME physician, Berkshire promptly accepted Roman’s claim. Thus, contrary to Roman’s characterization, the IME was not “an unnecessary hoop,” but rather a reasonable part of the investigation. As there is no evidence of bad faith, summary judgment on this claim will be granted.

 

 

1. Punitive Damages

To receive punitive damages, a defendant must be liable for bad faith and “a plaintiff must prove by clear and convincing evidence that the defendant’s conduct was undertaken with an evil mind.” Tritschler v. Allstate Ins. Co., 213 Ariz. 505, 517, 144 P.3d 519, 532 (App. 2006) (quotation omitted). As discussed above, Berkshire is not liable for bad faith; therefore, punitive damages are not available. But even if Berkshire were liable on the tort claim, there would still be an insufficient basis for punitive damages. An “evil mind” requires either that the “defendant intended to injure the plaintiff” or that the “defendant consciously pursued a course of conduct knowing that it created a substantial risk of significant harm to others.” Rawlings, 151 Ariz. at 162, 726 P.2d at 578. Here the undisputed evidence does not allow an inference of either. Summary judgment will be granted against Roman’s claim for punitive damages.

 

IT IS THEREFORE ORDERED that Defendant’s Motion for Summary Judgment (Doc. 55) is granted.

 

IT IS FURTHER ORDERED that the Clerk enter judgment against Plaintiff on his complaint and in favor of Defendant, and that Plaintiff take nothing.

 

The Clerk shall terminate this case.

 

All Citations

Slip Copy, 2017 WL 3896291

 

 

Footnotes

1

There was no slack in Berkshire’s investigation. But even if there was, that would not make a case of bad faith. See Rawlings v. Apodaca, 151 Ariz. 149, 157, 726 P.2d 565, 573 (1986) (“Insurance companies … are far from perfect. Papers get lost, telephone messages misplaced and claims ignored because paperwork was misfiled or improperly processed. Such isolated mischances may result in a claim being unpaid or delayed. None of these mistakes will ordinarily constitute a breach of the implied covenant of good faith and fair dealing, even though the company may render itself liable for at least nominal damages for breach of contract in failing to pay the claim.”); Miel v. State Farm Mut. Auto. Ins. Co., 185 Ariz. 104, 110, 912 P.2d 1333, 1339 (App. 1995) (“Mere mistake and inadvertence are not sufficient to establish a claim for bad faith.”).