United States District Court, D. South Dakota, Western Division
JEFFREY L. VIKEN, CHIEF JUDGE.
a diversity action before the court on Plaintiff Leona Van
Dusseldorp's complaint alleging breach of contract, bad
faith, and misrepresentation regarding a long term care
policy issued by Defendant Continental Casualty Co.
(hereinafter “Continental”) and serviced by
Defendant Long Term Care Group, Inc. (hereinafter
“LTCG”). Plaintiff also seeks a declaratory
judgment regarding the rights and obligations of the parties
under the terms of the contract.
before the court is plaintiff Leona Van Dusseldorp's
motion for partial summary judgment. (Docket 45). Defendant
Continental cross-moved for summary judgment. (Docket 50).
Defendant LTCG moved to join Continental's cross-motion
for summary judgment. (Docket 53). Plaintiff contests
defendants' motion for summary judgment. (Docket 60). The
court referred the motions to United States Magistrate Judge
Daneta Wollmann pursuant to 28 U.S.C. § 636(b)(1)(B) and
the standing order of March 9, 2015. (Docket 68). The
magistrate judge issued a report and recommendation
(“R&R”) concluding the court should deny
plaintiff's motion for partial summary judgment and grant
defendants' motion for summary judgment. (Docket 98 at p.
12). Plaintiff filed timely objections to the R&R and
defendants responded to plaintiff's objections. (Dockets
102 & 105).
court reviews de novo those portions of the R&R
which are the subject of objections. Thompson v.
Nix, 897 F.2d 356, 357-58 (8th Cir. 1990); 28 U.S.C.
§ 636(b)(1). The court may then “accept, reject,
or modify, in whole or in part, the findings or
recommendations made by the magistrate judge.” 28
U.S.C. § 636(b)(1). The court completed a de
novo review of those portions of the R&R to which
objections were filed. The court finds the R&R is an
appropriate application of the law to the issues presented by
the parties. For the reasons stated below, the
plaintiff's objections are overruled and the R&R is
adopted as supplemented and modified by this order.
outset, the court will address defendants' contention
that the plaintiff's objections to the R&R do not
merit de novo review. (Docket 105 at pp. 2-3).
Defendants argue plaintiff's objections are not
sufficiently specific under Fed.R.Civ.P. 72(b)(2) and the
objections merely restate arguments made to the magistrate
judge. Id. The court finds plaintiff's
objections are reviewable.
does restate arguments in her objections to the R&R in
support of her motion for partial summary judgment.
Compare Docket 45 at pp. 13-16, with Docket
102 at pp. 13-25. The R&R did not fully examine the
arguments which plaintiff raised in the first instance and
now repeats in her objections. For the sake of completeness,
the court will review, de novo, all of
plaintiff's objections to the R&R. Those objections
are summarized as follows:
1. TLC Independent Living (“TLC”) and its
provided services fall within the definition of an Assisted
Living Center as stated in the long-term care policy. (Docket
102 at pp. 13-25).
2. The terms of the policy control and the magistrate judge
erred in considering external statutory and regulatory
authority in interpreting the policy. Id. at pp.
3. The magistrate judge erred in finding TLC could not
qualify as an Assisted Living Center because a separate
benefit provided under the policy, the home and
community-based care benefit, also encompasses residential
care facilities. Id. at pp. 25-30.
4. The magistrate judge erred in finding plaintiff's
argument that TLC provides services which may be
impermissible under South Dakota law amounts to an absurdity.
Id. at pp. 38-39.
5. The magistrate judge erred because plaintiff would be
entitled to payment under the policy's home and
community-based care benefit for TLC's residential care
services. Id. at pp. 39-41.
also raises several policy arguments against what she sees as
defendants' concerted scheme to incorporate state
statutory and regulatory definitions into insurance policies
as a method of increasing claim denials. Id. at pp.
1 and 8. The court finds these arguments are not relevant to
the legal question of contract interpretation at issue here
and will not address them.
did not object to the magistrate judge's findings of
fact. See Docket 102. The court adopts the material
facts set forth in the R&R. (Docket 98 at pp. 2-4).
court's jurisdiction is based on diversity of citizenship
pursuant to 28 U.S.C. § 1332(a). (Docket 1 ¶¶
1, 3, 13, 18-19). “It is a long-recognized principle
that federal courts sitting in diversity apply state
substantive law and federal procedural law.” Shady
Grove Orthopedic Associates, P.A. v. Allstate Ins. Co.,
559 U.S. 393, 417 (2010) (internal citation and quotation
marks omitted). The parties acknowledge the interpretation of
the long-term care policy at issue here is governed by the
substantive laws of the state of South Dakota. (Dockets 45 at
p. 16 & 54-1 at pp. 11-16).
STANDARD OF REVIEW
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.” Fed.R.Civ.P. 56(a). 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 that 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 p.
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).
dispute about a material fact is genuine, that is, if the
evidence is such 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 failed 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). In such a case,
“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. at p. 323.
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). 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 pp. 251-52.