Free Response to Motion - District Court of Colorado - Colorado

Case 1:04-cv-01187-PSF-MJW

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Judge Phillip S. Figa Civil Action No. 04-CV-01187-PSF-MJW SUSAN PENA, Plaintiff, v. TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, and SUZANNE LIENING, Defendants.

PLAINTIFF'S RESPONSE TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT ON OUTRAGEOUS CONDUCT CLAIM Comes now the Plaintiff, Susan Pena, by and through her attorneys, Bendinelli Law Office, P.C., and submits PLAINTIFF'S RESPONSE TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT ON OUTRAGEOUS CONDUCT CLAIM, stating and alleging as follows: FACTUAL BACKGROUND This case arises out of Travelers Property Casualty Insurance Company's (hereinafter "Defendant Travelers") and claims adjuster, Suzanne Liening's (hereinafter "Defendant Liening") bad faith handling of Plaintiff's workers' compensation claim. Plaintiff was injured in a work-related incident on March 7, 1999. As a result of her incident, she sustained a comminuted compound left ankle fracture requiring numerous surgical procedures: 1. Ankle surgery on March 7, 1999 to repair Plaintiff's left fibia;

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2. Ankle surgery on March 24, 1999 to repair Plaintiff's left tibia; and 3. Ankle surgery on January 13, 2000 to remove the hardware in Plaintiff's left ankle. 4. Ankle surgery on June 14, 2001 to fuse Plaintiff's left ankle. To add to her misfortune, on March 21, 2000, Plaintiff was diagnosed with Regional Pain Syndrome (RSD) in her left ankle. As a result of Plaintiff's ongoing left ankle problems, her doctor's prescribed taxicab vouchers, permitting her transportation to and from doctor's appointments. See Dr. Morgan's May 17, 2000 Taxicab Prescription, attached hereto as EXHIBIT 1. Taxicab vouchers were essential to Plaintiff because, as Defendant was aware, Plaintiff did not have, nor know how to drive, a car. See Travelers' May 4, 2000 claim note, attached hereto as EXHIBIT 2. Given Plaintiff's lack of progress from her prior surgeries, she underwent an ankle fusion on June 14, 2001. On October 18, 2001, Plaintiff began running out of taxicab vouchers and informed Defendants that she only had four (4) left. See October 18, 2001 letter, attached hereto as EXHIBIT 3. At that time, Defendants were aware that Plaintiff was suffering from severe depression, requiring a referral. See Travelers' October 19, 2001 claim note, attached hereto as EXHIBIT 4; see also Lynn Best's October 22, 2001 letter to Defendant Liening, attached hereto as EXHIBIT 5. Despite knowledge of Plaintiff's continuing ankle problems and her onset of depression, Defendants refused to authorize further taxicab vouchers necessary for Plaintiff to attend her medical appointments. See EXHIBITS 3-5. On November 1, 2001, Dr. Morgan sent a letter to Defendants, outlining the medical necessity of the

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taxicab vouchers. See Dr. Morgan's November 1, 2001 letter, attached hereto as EXHIBIT 6. Despite receiving Dr. Morgan's letter, Defendants continued to refuse Plaintiff necessary taxicab vouchers. Instead of providing Plaintiff access to her necessary medical appointments, Defendants instead decided to dispatch a surveillance team on Plaintiff. See Travelers' November 15, 2001 Claims note, attached hereto as EXHIBIT 7. On November 19, 2001, Lynn Best, Defendants' nurse case manager, reiterated to Defendants that, due to Plaintiff's injury and resulting status, Plaintiff's depression had become a major problem. See Traveler's November 19, 2001 Claim Note, attached hereto as EXHIBIT 8. Moreover, on November 29, 2001, Defendants' surveillance team determined that Plaintiff was not active and was forced to answer her front door on her knees. See Traveler's November 29, 2001 Claim Note, attached hereto as EXHIBIT 9. Despite knowledge of Plaintiff's documented lack of mobility and severe depression, Defendants' continued to deny her necessary taxicab vouchers. See EXHIBITS 8-9. As a result of Defendants' unreasonable and outrageous denial, Plaintiff was unable to attend critical medical appointments. Plaintiff was forced to miss an emergency psychiatric evaluation (Dr. Morgan's referral in response to Plaintiff's verbalization of suicidal idealizations) and other rehabilitation appointments for her ankle. Plaintiff was forced to file for a Workers' Compensation hearing for the care she required. On March 26, 2002, Administrative Law Judge Barbara S. Henk issued a Specific Findings of Fact, Conclusions of Law and Order stating that the Defendant willfully and unreasonably failed or refused to provide transportation to and from

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medical appointments from December 6, 2001 to March 26, 2002. See Specific Findings of Fact, Conclusions of Law, and Order, p. 3, attached hereto as EXHIBIT 10. The Order further stated that the behavior of the carrier was a willful refusal to provide medical treatment and their actions were unreasonable under an objective standard. See EXHIBIT 10, p. 4. In ALJ Henk's Specific Findings of Fact, Conclusions of Law and Order, Defendant was penalized $100.00 per day, from December 6, 2001 to March 26, 2002. See EXHIBIT 10, p. 3. After subsequent appeals, the Court of Appeals upheld ALJ Henk's findings. On June 16, 2003, Plaintiff filed the instant action, alleging, among other claims, a claim for outrageous conduct. Plaintiff's outrageous conduct claim is based on Defendants above conduct, and bolstered by the conclusions of Plaintiff's insurance expert. See Richard M. Hodges' Expert Report, attached hereto as EXHIBIT 11 (finding that the conduct exhibited by Def endants under the circumstances of this case to be extreme and outrageous). Defendant seeks to preclude the jury from hearing Plaintiff's claim for outrageous conduct. However, as a genuine issue of material fact exists, Defendant's Motion must be denied. LEGAL ARGUMENT I. Summary Judgment Standard. Summary Judgment is appropriate only where there exists no genuine issue of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-59 (1970). As a matter of law, the movant must show entitlement to summary disposition beyond all reasonable doubt. Norton v. Liddel, 620 F.2d 1357, 1381 (10th Cir. 1980). In order to determine the

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propriety of summary judgment, all pleadings, affidavits, and depositions must be liberally construed in favor of the party against whom the motion is made. Id.; United States, etc. v. Santa Fe Engineers, Inc., 515 F. Supp. 512 (D. Colo. 1981); Otteson v. United States, 622 F.2d 516, 519 (10th Cir. 1980); Commercial Iron & Metal Co. v. Bache & Co., 478 F.2d 39 (10th Cir. 1973). Where different inferences can be drawn from conflicting affidavits, depositions and pleadings, summary judgment should not be granted. United States v. Diebold, Inc., 369 U.S. 654 (1962); Romeo v. Union Pac. Railroad, 615 F.2d 1303, 1309 (10th Cir. 1980). II. Genuine Issues of Material Facts Exist as to Plaintiff's Claim for Outrageous Conduct. The question of whether certain conduct is outrageous is ordinarily a question for the jury. Simmons v. Prudential Ins. Co. of America, 641 F.Supp. 675, 683 (D. Colo. 1886); Enrihht v. Groves, 560 P.2d 851 (Colo. App. 1977). However, it is for the court to determine, in the first instance, whether reasonable persons could differ on the outrageous conduct issue. First National Bank v. Collins, 616 P.2d 154 (Colo. App. 1980). In Rawson v. Sears Roebuck Co., 530 F.Supp. 776, 780 (D. Colo. 1982), the United States District Court for the District of Colorado determined that there is a certain threshold level of conduct that must first be established for plaintiff to state a cause of action for outrageous conduct. Id. To meet this threshold, plaintiff must allege either that: 1). Defendant has engaged in a pattern of conduct that was intended to cause or recklessly did cause severe emotional distress, or 2). If the incident is isolated, defendant blatantly and severely harassed plaintiff. Id.; Simmons, 641 F.Supp. at 683; Bresinski v. Woolworth, 626 F.Supp. 240 (D. Colo. 1986).

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A. Facts Relating to Defendant's Outrageous Conduct. Here, Plaintiff alleges that Defendants, workers' compensation company and adjuster, engaged in a pattern of conduct that was intended to cause or recklessly did cause severe emotional distress. Defendants refused to provide Plaintiff transportation to her medical appointments, despite knowledge of the following: 1. Defendants were aware that Plaintiff did not know how to drive. See EXHIBIT 2; 2. Defendants were aware that Plaintiff relied on taxicab vouchers to get to her doctor appointments. See, e.g. EXHIBIT 3; 3. Defendants were aware that Plaintiff had undergone four surgical procedures on her ankle ­ the latest surgery occurring in June 2001, four (4) months prior to Plaintiff's request for additional taxicab vouchers; 4. Defendants were aware that Plaintiff was continually suffering from RSD in her ankle; 5. Defendants were aware of Plaintiff's depression. See EXHIBITS 4-5; and 6. Defendants were aware that Plaintiff's doctors prescribed additional vouchers because Defendants received a letter/prescription from Dr. Morgan, indicating Plaintiff's need for additional taxicab vouchers. See EXHIBIT 6. Rather than providing the necessary taxicab vouchers, Defendants choose to conduct sixteen (16) hours of surveillance. See EXHIBIT 7. Ironically, shortly after surveillance commenced, Defendants' investigator determined that Plaintiff was not active and had to answer her door on her knees. See EXHIBIT 9. Despite this knowledge, Defendants continued to refuse Plaintiff necessary taxicab vouchers.

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Additionally, on January 15, 2005, Lynn Best, the nurse case manager and agent of Defendants, requested taxicab vouchers for Plaintiff. See Lynn Best's January 15, 2002 letter, attached hereto as EXHIBIT 12. Despite this request, Defendants still choose to refuse Plaintiff necessary taxicab vouchers. See EXHIBIT 12; see also, Lynn Best's July 21, 2005 deposition, p. 53, attached hereto as EXHIBIT 13 (stating that it makes Ms. Best sad when her recommendations are not followed and the patient subsequently does not get what she needs). Further, on January 22, 2005, Dr. Morgan provided an additional letter to Defendants regarding Plaintiff's need for taxicab vouchers. According to Dr. Morgan: As expected, postoperatively the complex regional pain syndrome increased in severity. Currently it would appear that she is achieving union of her tibial talar fusion site, yet she remains in a cam-walker. She is only able to bear minimal weight secondary to her complex regional pain syndrome for which she is actively undergoing treatment with Dr. Wilhelm Nel. ... If riding the bus or utilizing other public transportation only required a minimal, short-distance of ambulation on crutches to reach the bus and to reach her appointment status, it would be possible for her to use public transportation. However, secondary to the fact that she apparently does require crutches for ambulation, any travel for a distance greater than 100 yards is significantly time and energy consuming for anyone who requires crutch-ambulation. See Dr. Morgan's Answers to Defendants' Questions, dated January 22, 2002, attached hereto as EXHIBIT 14. Despite Dr. Morgan's second request, Defendants refused to provide taxicab vouchers for Plaintiff's continued treatment. B. First Party Relationship Effect and Defendant's Outrageous Conduct. The Colorado Supreme Court has equated an insured employee who claims benefits for himself from his employer's workers' compensation insurance carrier to a "first party" or "direct" coverage situation. Travelers Ins. Co. v. Savio, 706 P.2d 1258,

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1272 (Colo. 1985). Thus, a covered employee stands in the same position as an insured in a private insurance contract. Id. According to this Court's opinion in Simmons v. Prudential Ins. Co. of America, this relationship is important because it has been recognized that the adhesion aspects of an insurance policy and resulting lack of bargaining power of the insured implies a special relationship between the insured and the insurer. Simmons, 641 F.Supp. at 683; Hiatt v. Schreiber, 599 F.Supp. 1142 (D. Colo. 1984). "The obvious disparity in bargaining positions justifies a higher standard of care in evaluating an outrageous conduct claim." Id. at 684 (emphasis added). In this case, Defendants conduct was outrageous. Defendants took advantage of their higher bargaining position to Plaintiff's extreme detriment. Defendants, aware of Plaintiff's debilitating physical and worsening psychological condition, refused her transportation to necessary medical appointments for six (6) months. Additionally, according to the Restatement (Second) of Torts § 46 comment f, an actor's knowledge that the other person is peculiarly susceptible to emotional distress, by reason of some physical or mental condition or peculiarity may render the conduct extreme and outrageous. Id. Here, Defendants were aware of Plaintiff's continuing fall into depression, yet continued to refuse the proper medical help. See EXHIBITS 5, 12, and 14 As a result of Defendants outrageous conduct, Plaintiff was unable to attend necessary medical appointments, including the emergency psychiatric appointment requested by Dr. Morgan.

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CONCLUSION Based on the above, at the very least, reasonable men could differ on the question of whether this series of conduct was outrageous. See Meiter v. Cavanaugh, 580 P.2d 399, 401 (Colo. App. 1978). WHEREFORE, as a genuine issue of material fact exists, Plaintiff respectfully requests that this Court deny Defendants' Motion for Summary Judgment. Dated this 29th day of August 2005. Respectfully Submitted, BENDINELLI LAW OFFICE, P.C. ___s/ Marc F. Bendinelli________ Marc F. Bendinelli, (# 28425) W. Joseph Lapham II, (#35061) BENDINELLI LAW OFFICE, P.C. 11184 Huron St., Suite 10 Denver, CO 80234 Phone: (303) 940-9900 Fax: (303) 940-9933 Attorney for Plaintiff

By:

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CERTIFICATE OF SERVICE I hereby certify that on this 29th day of August 2005, a true and correct copy of the foregoing PLAINTIFF'S RESPONSE TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT ON OUTRAGEOUS CONDUCT CLAIM was: Served via Facsimile transmission;

and was addressed to: Erik R. Neusch MONTGOMERY, KOLODNY, AMATUZIO & DUSBABEK, L.L.C. 475 17th St., 16th Floor Denver, CO 80202 United States District Court Clerk's Office - Civil Alfred A. Arraj United States Courthouse 901 19th Street Denver, Colorado 80294-3589

__s/ Sarah Holliday___________ Sarah Holliday

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