United States District Court, D. South Dakota, Western Division
JEFFREY L. VIKEN CHIEF JUDGE.
FirstComp Insurance Company filed a motion to dismiss
plaintiff Harold Hollow Horn's complaint pursuant to
Fed.R.Civ.P. 12(c). (Docket 13). Plaintiff opposes
defendant's motion. (Docket 19). For the reasons stated
below, defendant's motion is denied.
12(c) provides that “[a]fter the pleadings are
closed--but early enough not to delay trial--a party may move
for judgment on the pleadings.” Fed.R.Civ.P. 12(c). To
analyze the motion to dismiss, plaintiff's factual
allegations must be taken as true. Braden v. Wal-Mart
Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009);
Ashcroft v. Iqbal, 556 U.S. 662, 678(2009). A court
is “not bound to accept as true a legal conclusion
couched as a factual allegation.” Bell Atlantic
Corporation v. Twombly, 550 U.S. 544, 555
(2007).See also Crooks v. Lynch, 557 F.3d
846, 848 (8th Cir. 2009) (the court must review a
“motion to dismiss for failure to state a claim,
accepting the facts alleged in the complaint as true and
granting all reasonable inferences in favor of [the
plaintiff], the nonmoving party.”). “Factual
allegations must be enough to raise a right to relief above
the speculative level . . . .” Twombly, 550
U.S. at 555. “The pleadings must contain something more
. . . than . . . a statement of facts that merely creates a
suspicion [of] a legally cognizable right of action, on the
ASSUMPTION THAT ALL THE allegations in the complaint are true
(even if doubtful in fact) . . . .” Id.
(emphasis in original). “[A] well-pleaded complaint may
proceed even if it strikes a savvy judge that actual proof of
those facts is improbable, and that a recovery is very remote
and unlikely.” Id. at 556.
a complaint that states a plausible claim for relief survives
a motion to dismiss.” Iqbal, 556 U.S. at 679.
In keeping with these principles a court considering a motion
to dismiss can choose to begin by identifying pleadings that,
because they are no more than conclusions, are not entitled
to the assumption of truth. While legal conclusions can
provide a framework of a complaint, they must be supported by
factual allegations. When there are well-pleaded factual
allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement
plausibility standard requires a plaintiff to show at the
pleading stage that success on the merits is more than a
‘sheer possibility.' It is not however, a
‘probability requirement.' ” Braden,
588 F.3d at 594 (citing Iqbal, 556 U.S. at 679)
(citing Twombly, 550 U.S. at 570). “A
complaint states a plausible claim for relief if its factual
content . . . allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Id. “[T]he complaint should be
read as a whole, not parsed piece by piece to determine
whether each allegation, in isolation, is plausible.”
Plausibility . . . does not imply that the district court
should decide whose version to believe, or which version is
more likely than not. Indeed, the Court expressly distanced
itself from the latter approach in Iqbal, “the
plausibility standard is not akin to a probability
requirement.” 129 S.Ct. at 1949 (quotation marks
omitted). As we understand it, the Court is saying instead
that the plaintiff must give enough details . . . to present
a story that holds together. . . . [C]ould these
things have happened, not did they happen.
Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th
Cir. 2010) (emphasis in original). “In assessing a
motion [to dismiss] . . . a court should . . . not dismiss
[a] complaint ‘unless it appears beyond doubt that the
[plaintiff] can prove no set of facts in support of [his]
claim which would entitle [him] to relief.' ”
Holloway v. Lockhart, 792 F.2d 760, 761 (8th Cir.
1986) (citing Conley v. Gibson, 355 U.S. 41, 45-46
filed an 18-page complaint detailing his accusation against
the defendant. (Docket 1). The complaint asserts four
separate causes of action against the defendant. Those causes
of action are: count I, bad faith; count II, barratry; count
III, abuse of process; and count IV, punitive damages.
(Docket 1 at pp. 15-18). Attached as exhibits to the
complaint are the findings of fact and conclusions of law
dated November 4, 2015, of an administrative law judge
(“ALJ”) of the Division of Labor and Management
of the South Dakota Department of Labor (“Division of
Labor and Management Decision”) and the memorandum
decision dated June 15, 2016, of Circuit Court Judge Mark
Barnett of the Sixth Judicial Circuit of the State of South
Dakota (“Circuit Court Decision”). (Dockets 1-1
the complaint's factual allegations must be taken as
true, the court incorporates the facts alleged in the
complaint, together with the Division of Labor and Management
Decision and the Circuit Court Decision into this order.
Iqbal, 556 U.S. at 678; Braden, 588 F.3d at
594. Further recitation of salient facts from the complaint
and its attachments will be discussed in this order.
for the three-year period of 1999 to 2001, Mr. Hollow Horn
was a full-time bus driver for the Porcupine School from 1992
until his resignation in mid-September 2011. (Docket 1
¶¶ 9, 10 & 35). In 2008, Mr. Hollow Horn suffered
a work related back injury. Id. ¶ 12-15. Dr.
deGrange of Black Hills Orthopedics in Rapid City, South
Dakota, determined Mr. Hollow Horn suffered an 8 percent
whole person impairment and attributed 50 percent of his
disability to his work injuries. Id. ¶¶
14-15 & 25. On March 1, 2009, FirstComp Insurance
(“FirstComp”) stipulated Mr. Hollow Horn's
injuries were compensable under the South Dakota workers'
compensation statutes and paid him a permanent partial
disability benefit based on the 8 percent whole person
impairment. Id. ¶ 16.
2011, while driving his school bus, Mr. Hollow Horn
experienced a re-injury of his back. Id. ¶ 22.
Dr. Rand Schleusener of Black Hills Orthopedics became Mr.
Hollow Horn's treating physician. Id. ¶ 24.
A 2011 MRI found the same general condition as indicated in a
2008 MRI, that is, Mr. Hollow Horn had “mild left
lumbar scoliosis with multilevel degenerative disc disease
and disc displacement.” Id. ¶ 44. Dr.
Schleusener charted the 2011 injury as an aggravation of the
2008 injury. Id. ¶ 26. He gave Mr. Hollow Horn
work restrictions of no bending or twisting and no lifting
over 25 pounds. Id. ¶ 27. On August 30, 2011,
Mr. Hollow Horn was released by Dr. Schleusener to drive bus
again. Id. ¶ 28.
the 2011-12 school year, Mr. Hollow Horn's job duties
expanded to an eight-hour work day in which he was required
to supervise students, and perform custodial duties,
including cleaning, sweeping and mopping floors, hauling
trash and performing other duties as assigned. Id.
¶ 29-31. Dr. Schleusener suggested Mr. Hollow Horn
should try to perform these new job assignments. Id.
¶ 32. About a week later, Mr. Hollow Horn reported back
to Dr. Schleusener, who changed the work restrictions and
limited Mr. Hollow Horn to working two hours in the morning
and two hours in the afternoon. Id. When the
Porcupine School could not accommodate these work
restrictions, it asked Mr. Hollow Horn to resign.
Id. ¶ 35. Mr. Hollow Horn resigned shortly
thereafter. Id. On September 30, 2011, FirstComp
denied Mr. Hollow Horn's claims for further medical or
wage replacement benefits under the South Dakota workers'
compensation statutes. Id. ¶ 37.
March 28, 2012, Dr. Schleusener performed his last physical
examination of Mr. Hollow Horn. Id.; see also Docket
1-1 ¶ 24. Dr. Schleusener recommended Mr. Hollow Horn
remain on the work and lifting restrictions imposed earlier.
Docket 1-1 ¶ 24. On April 3, 2012, Dr. Schleusener gave
Mr. Hollow Horn a disability rating for Social Security
benefits purposes, identified his work restrictions and
detailed the work he was capable of performing, including a
restriction that he was unable to drive a bus. (Docket 1
11, 2012, Mr. Hollow Horn filed a petition with the Division
of Labor and Management seeking workers' compensation
benefits for his 2011 injury. Id. ¶ 40. On
April 25, 2013, at FirstComp's direction, Mr. Hollow Horn
submitted to a medical examination by Dr. Nolan Segal.
Id. ¶ 41. It was Dr. Segal's opinion Mr.
Hollow Horn's back condition was the result of
degenerative and hypertrophic disc disease and Scheuermann
juvenile disc disease. Id. ¶ 42. Dr.
Segal's opinion was that any work injuries were “at
most . . . temporary aggravations of his preexisting
degenerative condition.” Id. ¶ 43. Dr.
Segal's causation opinion for workers' compensation
purposes was that Mr. Hollow Horn's back condition, his
disability rating and his need for treatment were never work
related, but were directly caused by his degenerative disc
disease. Id. ¶¶ 47-48.
Segal's opinion contradicted FirstComp's stipulation
with Mr. Hollow Horn in the earlier workers' compensation
proceeding that his 2008 injury was compensable as an 8
percent whole person permanent partial
disability. Id. ¶ 49. Dr. Segal agreed
with Dr. Schleusener's work restriction that Mr. Hollow
Horn should not lift more than 25 pounds or engage in
repetitive bending, twisting, lifting, crawling or any high
impact type physical activities at work. Compare id.
¶¶ 27 & 68. Dr. Segal imposed an additional
restriction that Mr. Hollow Horn could not drive on rural or
pot-holed roads. Id. ¶ 76.
work restrictions imposed by both Dr. Schleusener and Dr.
Segal made the work activities assigned to Mr. Hollow Horn at
the beginning of the 2011-12 school year beyond his physical
capabilities. Id. ¶ 69. Mr. Hollow Horn's
vocational consultant, Richard Ostrander, found Mr. Hollow
Horn “obviously unemployable” given his physical
restrictions, location of residency, age and abilities.
(Docket 1-1 at p. 8 ¶ 56).
August 12, 2013, FirstComp offered to settle Mr. Hollow
Horn's workers' compensation claim for $2, 000.
(Docket 1 ¶ 113). It made the same offer a second time
on November 4, 2013. Id.
hired Thomas Karrow as its vocational consultant for Mr.
Hollow Horn's claim. Id. ¶ 73. When
speaking with potential employers, Mr. Karrow did not discuss
the physical limitations imposed by Dr. Schleusener or Dr.
Segal. Id. ¶¶ 76 & 79. When he
identified a potential employer with an open bus driver
position, Mr. Karrow did not discuss those restrictions as
they would preclude Mr. Hollow Horn from qualifying for the
position. Id. ¶ 77. FirstComp continued to
assert in the 2012-15 workers' compensation proceedings
that Mr. Hollow Horn could work as a bus driver, even though
the requirements for that position were not supported by the
opinions of Dr. Segal. Id. ¶ 70.
Division of Labor and Management held a workers'
compensation hearing on September 19, 2014. Id.
¶ 87. On September 4, 2015, an ALJ entered a written
decision rejecting FirstComp's expert witnesses and
finding in favor of Mr. Hollow Horn. Id. ¶ 88.
Findings of Fact and Conclusions of Law and an Order were
entered on November 4, 2015. Id. ¶ 89
(referencing Docket 1-1). The ALJ found Mr. Hollow Horn was
entitled to permanent total disability benefits from the time
of his discharge from employment on September 15, 2011,
together with medical benefits for his back pain
condition. (Docket 1-1 at p. 13 ¶¶ 14-14).
The decision awarded Mr. Hollow Horn past due benefits as of
October 1, 2015, of $90, 483.14, together with accrued
interest of $21, 695.50. Id. ¶¶ 19 &
20. Future lifetime permanent total disability benefits were
calculated and discounted to the date of the ALJ's
decision as $360, 485.24. Id. at p. 14 ¶ 24.
appealed the ALJ's decision to the Sixth Judicial Circuit
Court, Hughes County, Pierre, South Dakota. Id.
¶ 91 (referencing Docket 1-2). On June 15, 2016, Circuit
Court Judge Mark Barnett issued a 19-page opinion denying
FirstComp's appeal and ...