United States District Court, D. South Dakota, Western Division
JEFFREY L. VIKEN CHIEF JUDGE.
Plaintiff Brooke LeBeau filed a three-count complaint against defendant Progressive Northern Insurance Company (“Progressive”). (Docket 1). Count 1 alleges a breach of contract, count 2 alleges bad faith, and count 3 asserts a claim for punitive damages. Id. at pp. 3-7. Progressive filed a motion for partial summary judgment, supported by the defendant’s statement of undisputed facts, seeking dismissal of counts 2 and 3. (Dockets 23 & 25). Plaintiff filed a response to defendant’s statement of undisputed facts and her own statement of disputed facts. (Dockets 29 & 30). For the reasons stated below, Progressive’s motion for partial summary judgment is granted.
STANDARD OF REVIEW
Under Fed.R.Civ.P. 56(a), a movant is entitled to summary judgment if the movant can “show that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Once the moving party meets its burden, the nonmoving party may not rest on the allegations or denials in the pleadings, but rather must produce affirmative evidence setting forth specific facts showing a genuine issue of material fact exists. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). Only disputes over facts that might affect the outcome of the case under the governing substantive law will properly preclude summary judgment. Id. at 248. “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Id. at 247-48 (emphasis in original).
If a dispute about a material fact is genuine, that is, if the evidence is that a reasonable jury could return a verdict for the nonmoving party, then summary judgment is not appropriate. Id. However, the moving party is entitled to judgment as a matter of law if the nonmoving party fails to “make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “There can be ‘no genuine issue as to any material fact, ’ since a complete failure of proof concerning an essential element of the nonmoving party’s case necessarily renders all other facts immaterial.” Id.
In determining whether summary judgment should issue, the facts and inferences from those facts must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986). In order to withstand a motion for summary judgment, the nonmoving party “must substantiate [her] allegations with ‘sufficient probative evidence [that] would permit a finding in [her] favor on more than mere speculation, conjecture, or fantasy.’ ” Moody v. St. Charles County, 23 F.3d 1410, 1412 (8th Cir. 1994) (citing Gregory v. Rogers, 974 F.2d 1006, 1010 (8th Cir. 1992), cert. denied, 507 U.S. 913 (1993)). “A mere scintilla of evidence is insufficient to avoid summary judgment.” Moody, 23 F.3d at 1412. The key inquiry is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 251-52.
Once the moving party meets its burden, the nonmoving party may not rest on the allegations or denials in the pleadings, but rather must produce affirmative evidence setting forth specific facts showing a genuine issue of material fact exists. Id. at 256; see also Thomas v. Corwin, 483 F.3d 516, 527 (8th Cir. 2007) (mere allegations, unsupported by specific facts or evidence beyond a nonmoving party’s own conclusions, are insufficient to withstand a motion for summary judgment); Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc) (“The nonmovant must do more than simply show that there is some metaphysical doubt as to the material facts, and must come forward with specific facts showing that there is a genuine issue for trial. Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.”) (internal quotation marks and citation omitted). The non-moving party’s own conclusions, without supporting evidence, are insufficient to create a genuine issue of material fact. Anderson, 477 U.S. at 256; Thomas, 483 F.3d at 527; Torgerson, 643 F.3d at 1042.
UNDISPUTED MATERIAL FACTS
The following recitation consists of the material facts undisputed by the parties. These facts are developed from the plaintiff’s complaint (Docket 1), defendant’s answer (Docket 7), defendant’s statement of undisputed material facts (Docket 25), plaintiff’s response to defendant’s statement of undisputed material facts (Docket 29) and plaintiff’s statement of disputed material facts (Docket 30). Additional facts from the record are included where indicated. Where a statement of fact is admitted by the opposing party, the court will only reference the initiating document.
Brook LeBeau is a resident of Eagle Butte, South Dakota. (Docket 1 ¶ 1). Progressive is an Ohio corporation, licensed to sell and service insurance products in South Dakota. Id. ¶ 4. Progressive issued an insurance policy insuring Ms. LeBeau’s vehicle which provided $25, 000 in uninsured motorist (“UM”) coverage. (Docket 25 ¶ 23). The policy did not provide medical payments coverage (“MPC”). Id. ¶ 24. By the terms of the UM coverage, Progressive promised to pay Ms. LeBeau for “damages . . . which [she] is legally entitled to recover from the owner or operator of an . . . uninsured motor vehicle because of bodily injury.” Id. ¶ 26.
On September 18, 2009, a two vehicle collision occurred in Eagle Butte, South Dakota. Id. ¶¶ 1 & 3. Ms. LeBeau was stopped at the intersection of Highway 212 and D Street when a vehicle driven by Narcisse Bruguier bumped her vehicle from the rear. Id. ¶ 3. The airbags did not deploy in either vehicle and there was no broken glass on either vehicle. Id. ¶ 4. Ms. LeBeau does not recall her body striking anything inside her vehicle and she had no visible injuries such as cuts, bruises or protruding bones. (Docket 29 ¶ 4).
Cheyenne River Sioux Tribal Officer Jody Charging Eagle was called to the scene and prepared an accident report. (Docket 25 ¶¶ 2 & 6; see also Docket 26-1). Ms. LeBeau acknowledges the report accurately describes the accident. (Docket 25 ¶ 2). Officer Charging Eagle reported that he “closely examined both vehicles but [he] did not see any visible damage on [Ms. LeBeau’s] S.U.V. . . .” (Docket 26-1 at p. 2). Mr. Bruguier reported “he barely tapped the rear of LeBeau’s vehicle.” Id.
In response to the officer’s inquiry, Ms. LeBeau stated “[m]y neck hurts real bad.” Id. She was told an ambulance would be summoned, but “she declined their services.” Id. The officer suggested she not drive herself to the hospital because “we didn’t know the extent or severity of the injuries.” The officer concluded his summary with the statement that “[a] short time later a female arrived on location and transported Brooke to the ER.” Id.
At the emergency room, Ms. LeBeau’s main complaints were neck and back muscle strain. (Docket 25 ¶ 10). The Indian Health Service (“IHS”) treating physician noted Ms. LeBeau had past chiropractic treatment for neck pain following a slip and fall episode seven months prior to the automobile accident. Id. The physician noted Ms. LeBeau’s neck was tender, but she had a full range of motion. Id. The diagnosis was acute neck strain and upper back muscle strain secondary to the motor vehicle accident. Id. Ms. LeBeau was given a cervical collar and pain medication. Id. Her condition was noted as stable on discharge. Id.
Three days later Ms. LeBeau treated with Dr. Curt Kuehl, a chiropractor. Id. ¶ 11. Dr. Kuehl had treated Ms. LeBeau seven months earlier for her slip and fall injury. Id. ¶ 12. Those earlier treatments were for back and neck pain. Id. Concerning Ms. LeBeau’s present physical condition, Dr. Kuehl noted she suffered from neck pain, upper back pain and a headache. (Dockets 25 ¶13 & 29 ¶ 13).
On December 2, 2009, Dr. Kuehl concluded Ms. LeBeau had reached pre-injury status. (Docket 25 ¶ 14). The doctor noted no follow-up care was recommended and discharged her from further treatment. Id. On December 15, Ms. LeBeau sought treatment with Dr. Kuehl. Id. ¶ 15. She reported her neck pain was gone and her mid-back pain was mild. Id. Dr. Kuehl again noted Ms. LeBeau had achieved pre-injury status and was maintaining. Id.
On January 14, 2010, Ms. LeBeau asked Dr. Kuehl for an x-ray of her neck. Id. ¶ 16. Dr. Kuehl noted the x-ray was essentially normal. Id. The record of that visit concluded “[o]nce again no further care is recommended for her injuries received in Sept. 09.” Id. Between September 18, 2009, and January 14, 2010, Ms. LeBeau treated with Dr. Kuehl a total of nine times.(Docket 26-7).
On June 3, 2010, Ms. LeBeau presented to Dr. Kuehl with what she described as “a new problem which was her mid-back, insidious onset.” (Dockets 25 ¶ 18 & 26-7 at p. 5). No further treatment by Dr. Kuehl is indicated in the record.
On July 15, 2010, Ms. LeBeau began treatment with Dr. Brandon Heck.(Docket 25 ¶ 19). The doctor’s note indicates she presented with headaches and neck pain, as well as general soreness throughout her back. (Docket 26-9). She described the rear-end collision of September 2009 and told Dr. Heck she had been dealing with intense headaches since then. Id. Ms. LeBeau was treated more than twenty times for soft tissue injuries over the next two years. (Docket 25 ¶ 20). Her last treatment with Dr. Heck was on October 12, 2012.Id.
On June 6, 2013, Ms. LeBeau was treated at the IHS clinic for sinus pressure and pain. (Docket 25 ¶ 21). During the examination, Ms. LeBeau indicated she was involved in an accident in 2009 and since then had been experiencing neck problems. Id. She requested an MRI. Id. The cervical MRI report indicated “[t]he soft tissues and in pervertebral soft tissue space are normal. The skeletal structures are well mineralized. The vertebral body heights and disc spaces are well maintained. The alignment of the cervical spine is normal.” (Docket 26-10).
On September 21, 2009, upon receiving notice of the September 18 accident, John Kurle, a claims representative for Progressive, contacted Ms. LeBeau. (Docket 25 ¶ 29). She indicated to Mr. Kurle that there was some question as to whether Mr. Bruguier had valid insurance. Id. Mr. Kurle advised Ms. LeBeau that he would contact the investigating officer and if there was no insurance on Mr. Bruguier’s vehicle, Progressive would open a UM file and transfer the case to an injury representative. Id. ¶ 30. Ms. LeBeau agreed with this plan. Id.
Between September 21 and 30, 2009, Mr. Kurle made nine calls trying to determine whether Mr. Bruguier’s vehicle was insured. (Docket 26-13 at pp. 1-2). After visiting with an insurance agent at the State Bank in Eagle Butte on September 30, Mr. Kurle concluded the Bruguier vehicle was not insured and Progressive opened a UM claim file. (Dockets 25 ¶¶ 22 & 32 and 26-13 at p. 2).
Lorie Rear, a UM claims representative, called Ms. LeBeau on September 30 and obtained a recorded statement. (Dockets 25 ¶ 33 & 26-13 at p. 3). Because Ms. LeBeau was going to be in Pierre the next week, Ms. Rear set up an appointment to meet in person. (Dockets 25 ¶ 33 & 26-13 at p. 4). Ms. Rear commented in the claim notes that the reserve “range is little higher do [sic] to possible egg shell issue and UM claim.” (Docket 26-13 at p. 4) (capitalization omitted).
Ms. Rear and Ms. LeBeau met in Pierre on October 7, 2009. Id. See also Docket 33-2 at pp. 3(27:18) & 4(30:10-12). Ms. LeBeau signed medical release authorizations at their meeting. (Dockets 25 ¶ 35 & 26-13 at p. 4). This permitted Progressive to obtain Ms. LeBeau’s pre- and post-accident medical records and bills. (Docket 25 ¶ 35). As part of their discussion, Ms. Rear explained the claim process and that Progressive would make a settlement offer in “30/60 days.” (Docket 26-13 at p. 5). Ms. LeBeau indicated she would prefer to wait, as she was afraid to settle too quickly and wanted to see how physical therapy and her chiropractic visits went. Id. On February 1, 2010, Progressive received notice that Attorney Rebecca Kidder of the Abourezk Law Firm would be representing Ms. LeBeau. Id. at p. 7.
Between the winter of 2009 and mid-2010 Progressive made a number of offers to Ms. LeBeau to “cover her post-accident medical expenses and some additional general damages.” (Docket 25 ¶ 37). Ms. LeBeau rejected each of these offers. Id.
On November 18, 2011, Attorney Robin Zephier of the Abourezk Law Firm tendered a settlement demand on Ms. LeBeau’s behalf to Progressive. (Docket 25 ¶ 39). The demand of $85, 304 included $4, 354.80 in past medical expenses. Id. See also Docket 26-14 at pp. 3-4. On December 1, Robert Hupp, a Progressive claims representative, called Mr. Zephier’s office and orally conveyed an offer of $6, 650. (Docket 26-13 at p. 8). This offer is the result of the following analysis in the claims notes: “totals 6648.00-8997.00 conceeding [sic] to meds will begin negs [negotiations] at low end of considered specials. - negotiation points[:] 隌 impact 님 [soft tissue injury] chiro release 3m [3 months] post loss. -1st party UM - prior hx [history], eggshell - long duration of care.” Id.
On December 14, Mr. Hupp called Attorney Zephier to see if there was a response to Progressive’s offer. Id. Mr. Zephier asked that the offer be faxed to him and he would meet with his client, hopefully around Christmas, with a follow-up after the New Year. Id. Mr. Zephier responded in May 2012, reducing Ms. LeBeau’s settlement demand to the UM policy limits of $25, 000. (Docket 25 ¶ 41). On May 31, 2012, Progressive increased its settlement offer to $9, 000. Id. ¶ 42. The claim notes say this offer was made “to spur negotiations, but [attorney] felt they would have to file for anything less than policy limits.” (Docket 26-13 at p. 9) (capitalization omitted). The claim note indicates an invitation was made to the attorney to call back when he decided the route Ms. LeBeau intended to take. Id.
On July 9, 2012, Ms. LeBeau filed her complaint in Federal District Court. (Docket 1). Plaintiff’s statement of disputed material facts (Docket 30) asserts a number of other disputed facts. Those are not discussed because “[o]nly disputes over facts that might affect the outcome of the [case] under the governing substantive law will properly preclude summary judgment.” Anderson, 477 U.S. at 248.
A. Applicable Law
The court has jurisdiction pursuant to 28 U.S.C. § 1332 because the case is a diversity action. (Dockets 1 ¶¶ 3 & 4 and 7 ¶ 4). In diversity actions, the court applies the substantive law of the forum state. See Jordan v. NUCOR Corp., 295 F.3d 828, 834 (8th Cir. 2002). “[F]ederal courts sitting in diversity cases, when deciding questions of ‘substantive’ law, are bound by state court decisions as well as state statutes.” Hanna v. Plumer, 380 U.S. 460, 465 (1965) (referencing Erie R. Co. v. Tompkins, 304 U.S. 64 (1938)). See also In re Baycol Products Litigation, 616 F.3d 778, 785 (8th Cir. 2010) (“in a suit based on diversity of citizenship jurisdiction the federal courts apply federal law as to matters of procedure but the substantive law of the relevant state.”) (internal citations omitted). Only then can the court determine ...