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Nichols v. Mmic Insurance Inc.

United States District Court, D. South Dakota, Southern Division

December 17, 2014


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For Nicole Nichols, Robert Nichols, Plaintiffs: Mark D. Fitzgerald, LEAD ATTORNEY, Fitzgerald, Vetter, & Temple, Norfolk, NE; Timothy Lee James, LEAD ATTORNEY, James Law, PC, Yankton, SD.

For MMIC Insurance Inc., Defendant: Eric J. Steinhoff, LEAD ATTORNEY, Lind, Jensen, Sullivan & Peterson, P.A., Minneapolis, MN.

For Michael P. Woods, M.D., Bellevue Obstetrics & Gynecology Associates, P.C., Defendants: Kathryn Jean Hoskins, LEAD ATTORNEY, Jeffrey L. Bratkiewicz, Siegel, Barnett & Schutz, L.L.P., Sioux Falls, SD; William R. Settles, LEAD ATTORNEY, PRO HAC VICE, Lamson Dugan and Murray, LLP, Omaha, NE.

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Plaintiffs, Nicole and Robert Nichols, bring claims against defendant Dr. Michael P. Woods and Bellevue Obstetrics & Gynecology Associates, P.C., (Bellevue) alleging medical malpractice, negligent infliction of emotional distress, and loss of consortium. Additionally, plaintiffs bring claims against defendant MMIC Insurance, Inc., (MMIC) alleging intentional interference with a business relationship and intentional infliction of emotional distress, as well as seeking punitive damages. Woods and Bellevue move to dismiss for lack of personal jurisdiction or, alternatively for dismissal or transfer of the case due to improper venue. MMIC moves to dismiss for lack of subject matter jurisdiction or, alternatively, to dismiss for failure to state a claim.[1] For the following reasons, Woods and Bellevue's motion to dismiss is granted, and MMIC's motion is granted in part and denied in part.


The facts, according to the amended complaint (Docket 17),[2] are as follows:

Plaintiffs are residents of South Dakota. Defendant MMIC is a Minnesota corporation with its principal place of business in Minneapolis, Minnesota. Defendant Woods is a licensed medical physician who currently resides in Iowa. During the events giving rise to this dispute, however, Woods was a resident of and licensed physician in the state of Nebraska, with medical malpractice insurance provided by MMIC. Additionally, during this time, Woods was employed by defendant Bellevue, a Nebraska corporation.

On approximately March 16, 2012, Woods performed a cystourethroscopy[3] on Nicole Nichols in Bellevue, Nebraska. Following this procedure, Woods diagnosed Nicole with interstitial cystitis.[4]

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Subsequently, Woods obtained Nicole's consent to perform a series of bladder instillations[5] as part of Woods' recommended treatment regime. On June 15, 2012, Woods recommended and performed a hysterectomy in order to resolve Nicole's condition. After the procedure, however, Woods informed Nicole that additional bladder instillations would still be required. Following the treatment and procedures Woods performed, Nicole began to suffer from bladder irritation, infection, incontinence, loss of sensation, and vaginal pain.

Sometime after the hysterectomy procedure, Nicole discontinued receiving care from Woods. In August 2012, Nicole began a physician-patient relationship with Dr. Andrew E. Bourne, a urologist at Siouxland Urology Associates, P.C., in Dakota Dunes, South Dakota. On September 11, 2012, Bourne performed a cystouresthroscopy on Nicole, which revealed no evidence of a condition that would support a diagnosis of interstitial cystitis. Further, Bourne informed Nicole of his belief that Woods' diagnosis and treatment amounted to professional negligence.

Plaintiffs subsequently informed Bourne of their intention to bring legal action against Woods and asked if Bourne would be willing to testify as an expert witness on their behalf. Bourne agreed and, on August 23, 2013, plaintiffs engaged counsel for the purpose of initiating a malpractice action against Woods. Bourne continued to treat Nicole during this time and, up until January 29, 2014, discussed aspects of plaintiffs' claims against Woods with plaintiffs and their counsel.

On September 25, 2013, Woods received notice of plaintiffs' malpractice suit. On November 1, 2013, MMIC advised plaintiffs' counsel that it provided malpractice insurance to Woods and requested medical authorization to investigate plaintiffs' claims. On November 19, 2013, plaintiffs provided MMIC with signed authorization to obtain Nicole's medical records.

MMIC also provided malpractice insurance to Bourne and became aware that he was Nicole's treating urologist. On January 29, 2014, Bourne informed plaintiffs that he could no longer discuss plaintiffs' case without MMIC's approval. On January 30, 2014, Bourne further advised plaintiffs that MMIC would not allow him to act as an expert witness on their behalf. Consequently, Bourne would not be able to provide his opinion regarding the appropriate standard of care applicable to plaintiffs' malpractice suit against Woods.

I. Does This Court Have Personal Jurisdiction Over Woods and Bellevue?

The party asserting personal jurisdiction bears the burden of establishing a prima facie case, and the burden does not shift to the party challenging jurisdiction. Epps v. Stewart Info. Servs. Corp., 327 F.3d 642, 647 (8th Cir. 2003) (internal citations omitted). A plaintiff's prima facie showing may be tested by reference to the pleadings, affidavits, exhibits, or other evidence. Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004) (citing Block Indus. v. DHJ Indus., Inc., 495 F.2d 256, 260 (8th Cir. 1974)). Nonetheless, " [w]hile the plaintiffs bear the ultimate burden of proof, jurisdiction need not be proved by a preponderance of the evidence[.]" Epps, 327 F.3d at 647 (citing Dakota Indus., Inc. v. Dakota Sportswear, Inc.,

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946 F.2d 1384, 1387 (8th Cir. 1991)).

In a diversity action, the court " 'may assume jurisdiction over nonresident defendants only to the extent permitted by the long-arm statute of the forum state and by the Due Process Clause.'" Romak USA, Inc. v. Rich, 384 F.3d 979, 984 (8th Cir. 2004) (quoting Dever, 380 F.3d at 1073). In South Dakota, the reach of the state's long-arm statute is coextensive with the Due Process Clause. See SDCL 15-7-2(14); see also Austad Co. v. Pennie & Edmonds, 823 F.2d 223, 225 (8th Cir. 1987). Thus, for this court to exert personal jurisdiction over Woods and Bellevue depends on " 'whether the exercise of jurisdiction comports with the limits imposed by federal due process' on the State of [South Dakota]." See Walden v. Fiore, 134 S.Ct. 1115, 1121, 188 L.Ed.2d 12 (2014) (quoting Daimler AG v. Bauman, 134 S.Ct. 746, 753, 187 L.Ed.2d 624 (2014)).

" Due process mandates that jurisdiction be exercised only if [the] defendant has sufficient 'minimum contacts' with the forum state, such that summoning the defendant to the forum state would not offend 'traditional notions of fair play and substantial justice.'" Digi-Tel Holdings, Inc. v. Proteq Telecomms., Ltd., 89 F.3d 519, 522 (8th Cir. 1996) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). Additionally, analyzing the " minimum contacts" requirement depends on whether the court's jurisdiction over a party is said to be specific or general. See Helicopteros Nacionales de Colombia, S. A. v. Hall, 466 U.S. 408, 414-15, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). A forum may exercise specific jurisdiction when the cause of action is " arising out of or related to the defendant's contacts with the forum[.]" Id. at 414. By contrast, general jurisdiction may be asserted when a defendant's contacts with the forum are said to be " continuous and systematic," irrespective of whether the cause of action relates to the defendant's activities in the forum. Id. " Both theories of personal jurisdiction require 'some act by which the defendant purposely avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'" Dever, 380 F.3d at 1073 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)).

Here, plaintiffs contend this court may properly exercise specific jurisdiction over Woods and, by extension, Bellevue. Docket 29 at 4. The court's inquiry, therefore, requires an analysis of " 'the defendant, the forum, and the litigation.'" Walden, 134 S.Ct. at 1121 (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984)). " [T]he defendant's suit-related conduct must create a substantial connection with the forum State." Id. Additionally, the Eighth Circuit has established a five-factor approach to determine if the " substantial connection" test is met. See, e.g., Johnson v. Woodcock, 444 F.3d 953, 956 (8th Cir. 2006); Porter v. Berall, 293 F.3d 1073, 1076 (8th Cir. 2002). These factors are: (1) the nature and quality of a defendant's contacts with the forum state; (2) the quantity of such contacts; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties. Johnson, 444 F.3d at 956. While the first three factors receive significant weight, " [t]he last two factors are considered less important and are not determinative." Dever, 380 F.3d at 1074.

The parties do not dispute that, during the time relevant here, Woods was a licensed medical provider in the state of Nebraska. Woods further asserts, and

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plaintiffs do not contradict, that Woods has not provided any medical care in South Dakota, nor has he held a license to practice medicine in South Dakota. See Docket 28 at ¶ 6 (Woods Affidavit). Moreover, no challenge is made to Woods' statement that he has not advertised his services in South Dakota. Id. at ¶ 5. Further, there is no dispute that the interstitial cystitis diagnosis, bladder instillations, and hysterectomy procedure were made or performed outside of South Dakota. Additionally, plaintiffs acknowledge Bellevue is a Nebraska corporation, Docket 17 at ¶ 7, and no argument is presented that Bellevue conducts or is licensed to conduct business in South Dakota. Cf. Docket 27 at 6 (contending Bellevue " does not own or operate clinics in South Dakota" and that Bellevue " is not even registered to conduct business in South Dakota." ).

Plaintiffs maintain, however, that this court may properly exert personal jurisdiction over Woods due to several specific contacts with the forum which give rise to plaintiffs' claims. For instance, plaintiffs assert that Woods made numerous telephone calls to plaintiffs' home in Dakota Dunes, South Dakota, in order to convey medical advice related to different phases of Nicole's treatment. Docket 29 at 5; see also Docket 18 ¶ ¶ 14, 20-22 (Nicole Affidavit) (noting Woods' phone calls directed Nicole to continue taking medication and to schedule additional treatment in Nebraska). Additionally, plaintiffs contend Woods made several phone calls to a Dakota Dunes pharmacy for the purpose of filling Nicole's medication prescription. Docket 29 at 5. Moreover, plaintiffs argue that Woods requested Nicole to come to Nebraska for additional treatment, despite her desire to find treatment closer to home. Id. Plaintiffs conclude that Woods therefore should have anticipated being haled into federal court in South Dakota. Id. at 6.

In support of their argument, plaintiffs direct this court to follow a district court decision from the Tenth Circuit, Ray v. Heilman, 660 F.Supp. 122 (D. Kan. 1987). Docket 29 at 6. The Ray case involved a medical malpractice suit brought by the conservator of the estate of the defendant's former patient. There, the defendant argued personal jurisdiction could not be exerted over him by the Kansas federal court. Ray, 660 F.Supp. at 123. The defendant emphasized he was licensed only to practice medicine in Missouri, that the acts giving rise to the suit occurred in Missouri, that he had never practiced medicine in Kansas, and that he had never treated the decedent in Kansas. Id. Plaintiff countered that the defendant phoned in prescription refills to a pharmacy in Kansas, that the decedent took the medication in Kansas, that the defendant arranged monthly medical tests to be performed in Kansas, and that the results of those tests were sent to the defendant in Missouri. Id. Additionally, following the decedent's development of a leg hemorrhage, the defendant provided several instructions and orders to the decedent ...

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