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Tovares v. Gallagher Bassett Services, Inc.

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

March 30, 2019





         Plaintiff Annie Tovares filed an action against the defendants Gallagher Bassett Services, Inc., and Praetorian Insurance Company alleging bad faith and misrepresentation in violation of South Dakota law. (Docket 1). Defendants filed separate answers to plaintiff's complaint.[1] (Dockets 37 & 39). Defendants filed a motion for summary judgment, together with a brief, an affidavit with nine exhibits and defendants' statement of undisputed material facts. (Dockets 62, 63, 64, 64-1 through 64-9 & 65). Plaintiff filed a responsive brief, together with plaintiff's response to defendants' statement of undisputed facts with ten exhibits and plaintiff's declaration in support of Fed.R.Civ.P. 56(d) discovery.[2] (Dockets 67, 67-1 through 67-10, 68 & 70). Defendants filed a reply brief with one exhibit in support of their motion for summary judgment. (Dockets 72 & 72-1).

         Plaintiff filed a motion seeking leave to file supplemental authority, a supporting brief and one case. (Dockets 78, 78-1 & 79). Defendants filed a brief in response to plaintiff's motion. (Docket 82).

         For the reasons stated below, plaintiff's motion to file supplemental authority is granted, defendants' motion for summary judgment is granted in part and denied in part, and plaintiff's motion for Rule 56(d) discovery is denied as moot.


         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.” 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).

         If a 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.

         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). 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.


         The following recitation consists of the material facts developed from the complaint (Docket 1), defendants' answers (Dockets 37 & 39), [3] the parties' statements of undisputed material facts (Dockets 65 & 67) and other evidence where indicated.[4] Where a statement of fact is admitted by the opposing party, the court will only reference the initiating document. These facts are “viewed in the light most favorable to the [party] opposing the motion.” Matsushita Elec. Indus. Co., 475 U.S. at 587.[5] The facts material to defendant's motion for summary judgment are as follows.

         Plaintiff Annie Tovares works at Menards in Rapid City, South Dakota. (Docket 67-1 ¶ 1). On Wednesday, March 19, 2014, she fell at work. Id. ¶ 3. One of Menards' surveillance cameras recorded her fall.[6] Ms. Tovares did not hit her head, but she immediately felt dazed, disoriented and like her brain got jarred. Id.¶ 4. It took a few minutes to collect herself. Id. ¶ 5.

         The following Tuesday, Ms. Tovares had a bloody nose at work and that night she had blurry vision and a sharp ringing in her ears. Id. ¶ 6; see also Docket 67-2 at p. 4. At work the following morning the lights hurt Ms. Tovares' eyes and head. (Docket 67-1 ¶ 7). She felt dizzy and was worried something serious happened because of her fall. Id. She spoke to her supervisor and went to the emergency room at the Rapid City Regional Hospital in Rapid City, South Dakota. Id.; see also Docket 67-2 at p. 4. After visiting the ER, Ms. Tovares went to see her ophthalmologist at Wright Vision Center. Id. ¶ 9; see also Docket 65 ¶ 29. As instructed by the ER physician, Ms. Tovares took a couple of days off work. (Docket 67-1 ¶ 14; see also Docket 65 ¶ 30).

         Ms. Tovares' bill for the hospital services, CT scan and ER activities totaled $2, 513. (Dockets 67-2 at p. 71; 67-3 at p. 4). The bill from Wright Vision Clinic was $185. (Docket 67-3 at p. 6). Dakota Radiology billed Ms. Tovares $165. Id. at p. 3. Ms. Tovares borrowed money to pay the medical bills and submitted a worker's compensation claim for these expenses. (Docket 67-1 ¶ 15).

         Defendant Praetorian Insurance Company (“Praetorian”) issued a policy of worker's compensation insurance to Ms. Tovares' employer, Menards, Inc. (Docket 1 ¶ 6). Gallagher Bassett Services, Inc. (“GBS”) is the claim administrator which handled Ms. Tovares' claim for Praetorian. (Docket 67-1 at p. 8).

         Christina Manwaring was the adjustor assigned by GBS to handle Ms. Tovares' workers' compensation claim. (Docket 67-2). Ms. Manwaring's notes of her telephone contact with Ms. Tovares on March 31, 2014, contain plaintiff's description of her incident at Menards:[7]

She ws done, pulling a box off the cart, next she new she was on the floor. She's not sure how it happened. Thinks L. foot slipped, hit L. hip, L. underarm struck the box she was handling, and it was scraped and bruised. Initially she was in so much pain she couldn't believe it. The impact of her body hitting the concrete, maybe the weight of the box made her fall even harder. She did not strike her head, however once she stood up, he whole body was vibrating. She knows she jarred her brain. She just stood there to try and re-gain her “marbles” says she was in shock. Once the pain subsided, she felt fine. She didn't have any broken bones. Physically she feels fine. A week later, she began experiencing lightheadedness and dizziness. Equilibrium was off. Numerous time of ringing in her head. Went to doctor on 3/26, and doctor asked which ear was ringing, she couldn't tell. Vision is slightly blurry and pain in her head. She's been better the last few days. Went to ER on 3/26/2013 b/c that morning when she went to work the bright lights in the building hurt her head and eyes. While she was at ER, the did a CT scan. They said everything was negative. But she was highly disappointed in the hospital staff. Never asked to see her bruises, no x-rays of her body were done. She felt like they didn't believe what happened to her. Up until that day, she had had a sharp ringing in her head, then went away. That night she had some minor ringing in head, so she knows she jarred her brain and she knows that can cause problems down the road. She had a minor cold about a month ago. Does not suffer from allergies/sinus issues. She did receive a call the next day to see how she was feeling. FU with optimologist [sic] ¶ 3/26/2014 and told her everything looked fine. She was concerned about the lens being dislodged.

(Docket 67-2 at p. 10; see also Docket 65 ¶ ¶ 3-7.).

         ER records obtained by GBS contain the following history of Ms. Tovares present illness:

Patient is a 64-year-old female who presents with blurred vision. She states that a week ago she fell and landed on her left hip and left elbow. She denies shooting her head at that time. Over the past week since the fall she has had intermittent blurred vision and ringing in her years. She has also had an intermittent sharp headache but has not required medication as the heading duration he was very brief. She denies numbness, tingling, or weakness. No vertigo or lightheadedness. She denies pain otherwise. A month ago she saw ophthalmology and they stented her left tear duct for dry eye.

(Docket 67-2 at p. 57; see also Docket 65 ¶¶ 9-10). A CT scan of Ms. Tovares' head reported “[v]entricles and sulci are normal. There is no intracranial hemorrhage or mass. No bony abnormality identified.” (Docket 67-2 at p. 58). The CT report concluded “[n]ormal CT head.” Id.; see also Docket 65 ¶ 28. ER physician Dr. Donald Neilson charted “[t]he most likely cause of her symptoms is that they are related to a head injury. She is comfortable with discharge and will follow up with her primary physician.” (Docket 67-2 at p. 59). A Registered Nurse signed an “Excused Absence from Work and School, ” excusing Ms. Tovares from work for two days. Id. at p. 47.

         An instruction sheet given to Ms. Tovares at discharge from the ER contained the following caution:

You have had a head injury which does not appear serious at this time. A concussion is a state of changed mental ability, usually from a blow to the head. You should take clear liquids for the rest of the day and then resume your regular diet. You should not take sedatives or alcoholic beverages for 48 hours after discharge. After injuries such as yours, most problems occur within the first 24 hours.

Id. at p. 45 (emphasis in original). The “minor symptoms” which may occur included “dizziness, ” “headaches” and “double vision.” Id. (capitalization omitted). Under “Home Care Instructions, ” the instruction sheet stated “[s]ide effects may occur up to 7-10 days following the injury. It is important for you to carefully monitor your condition and contact your caregiver or seek immediate medical attention if there is a change in your condition.” Id. (bold and capitalization omitted).

         On April 10, 2014, Ms. Manwaring noted in the claim file that the “[r]eserves are appropriate for probable ultimate cost. No changes are warranted at this time. Claimant has not lost anytime from work and medical reserves reflect conservative care.”[8] (Docket 67-2 at p. 15). Regarding resolution and closure of the claim file, Ms. Manwaring noted “[o]nce claimant is placed at MMI [maximum medical improvement], file can be prepared for closure as no permanency is anticipated. File closure may be viable within 90 days if claimant reaches MMI in the near future.” Id. Her recommendations for management of the claim file included the following:

1. Build rapport with claimant to avoid litigation.
2. Obtain updated medical reports and outline recommended treatment plan in the file. Push for eventual MMI release.
3. Document completion and submission of all state forms and filings.
4. Complete initial investigation and document compensability decision in the file notes in 010 note.
5. Complete updated POA no later than 5/6/14.


         On April 23, 2014, Ms. Manwaring sought permission to deny Ms. Tovares' claim. In that request, she stated in part the following:

The claimant maintains she did NOT hit her head when she fell. The ER notes indicate her complaints are likely from a head injury. Claimant was referred to eye doctor for FU due to blurred vision. These notes have also been received and indicate the claimant had had her tear ducts stinted one month prior as well as previous cataract surgery. There were no issued found. Requesting authority to deny file based on claimant's treatment appearing to have no relation to her work incident.

Id. at p. 17 (capitalization in original); see also Docket 65 ¶ 12). Ms. Manwaring's supervisor, Angela Smith, agreed. “Reviewed the file with adjuster and agree with recommendation for denial due to the head complaints not being related to her work incident. . . . Review and approval of the denial sent to ABM [Assistant Branch Manager], Dorothy Stolle this date.” (Docket 67-2 at pp. 17-18). On April 29, 2014, Ms. Stolle authorized closing the file. “Agree with denial of file at this time as medical diagnosis does not relate to work injury.” Id. at pp. 18-19.

         On April 30, 2014, Ms. Manwaring sent Ms. Tovares a letter on GBS letterhead. (Docket 67-2 at p. 63). The letter stated in part: “We have investigated this claim and found no evidence to support your claim for benefits under South Dakota Workers' Compensation provisions. We must, therefore, accordingly deny your claim.” Id.

         On May 16, 2014, Attorney Michael Simpson advised Ms. Manwaring he was representing Ms. Tovares on her claim. (Docket 67-2 at p. 84; see also Docket 65 ¶ 15). Ms. Manwaring responded to Attorney Simpson on May 28, 2014. (Docket 67-2 at p. 85). She provided him with the medical records which GBS obtained and advised him “[a]s the surveillance video is property of Menard, Inc., a subpoena will be required in order to release the information to you.” Id. She also wrote: “[p]lease note, your client acknowledges she did not strike her head in her fall. She presented to the ER on week later at which time a CT scan was obtained and negative for a head injury. She was diagnosed with blurred vision and headache and referred to her optometrist for FU.” Id.

         On September 17, 2014, Ms. Manwaring sent a follow-up letter to Attorney Simpson. Id. at p. 77. In part, her letter asked, “[t]o date we have received no further response from you. Can you please verify whether or not you still represent Ms. Tovares, and, if so, where you are with your investigation of her claim?” Id.; see also Docket 65 ¶¶ 16-17.

         On October 9, 2014, Attorney Simpson wrote Ms. Manwaring. (Docket 67-2 at pp. 78-79). After summarizing the content of their previous correspondence, he wrote:

In addition, you do not mention in your May 28th letter my request for a recorded statement of Ms. Tovares or other recorded statements or other information which supports your denial.
Clearly, the video tape is discoverable and I need this information in order to represent Ms. Tovares and give her good legal advice about whether or not her medical bills should be paid by workers' compensation. In addition, her recorded statement and any other recorded statements are relevant to this question as well.
If you do not provide me with the video tape and the recorded statement or statements, then I am forced to file a petition for hearing with the state Department of Labor in order that I can get this information.
I am going to calendar this for seven (7) days or until Thursday, October 16, 2014. If you do not provide me with the video and the recorded statement or statements by that time, I will be forced to file a petition for hearing with the state Department of Labor in order to get this information and in order to challenge your denial.
Please be advised that if I have to do this, I will be asking the Department of Labor for my attorney fees, as I believe it is unreasonable for you to withhold important information and force the Claimant to file a petition for hearing.
As I am sure you are aware, this claim only concerns medical bills and therefore it is very difficult for people such as Ms. Tavares to get lawyers to take on these claims, as it is financially difficult to do so. By withholding important evidence, you force Ms. Tovares to take legal action, which makes it very difficult for her (and other people like her) to simply get the evidence needed to determine whether their claim is valid.
I do not want to waste the Department of Labor's time with a formal petition if I do not have to. Please reconsider your decision to not provide me with important evidence concerning compensability. Thank you.


         On October 20, 2014, Attorney Simpson filed a petition for hearing with the South Dakota Department of Labor and Regulation, Division of Labor and Management, Worker's Compensation on Ms. Tovares' behalf. (Docket 67-2 at pp. 80-83; see also Docket 65 ¶ 18). On November 12, 2014, Praetorian filed an answer admitting Ms. Tovares fell on March 19, 2014, and that she sought medical attention on March 26, 2014. (Docket 1 ¶ 32).

         On January 31, 2015, Attorney Daniel Ashmore, as attorney for Praetorian, e-mailed Attorney Simpson. (Docket 67-3 at pp. 16-17). Attorney Ashmore asked “[c]an we resolve this case for $2, 500 for a full and final? That should allow her to get the bills paid and something for you. Let me know.” Id. at p. 17.

         On February 6, 2015, after talking with Ms. Tovares, Attorney Simpson rejected the $2, 500 offer. Id. at p. 16. He attached a summary of the bills to date and agreed to get the Wright Vision Center bill to Attorney Ashmore. Id. Attorney Simpson indicated “the bills plus interest total over $3, 000, not including the Wright ...

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