Summary
striking affidavit of deceased affiant because affiant "would not be available to present the evidence through direct testimony, and the affidavit itself would be objectionable hearsay at trial."
Summary of this case from Thorson v. Aviall Servs., Inc.Opinion
No. 3:00-CV-1779-N
February 6, 2003
MEMORANDUM OPINION AND ORDER
Before the Court are the motions of Defendant Key Risk Management, Inc. ("Key Risk") to apply North Carolina law and for summary judgment. For the reasons stated below, those motions are granted.
I. BACKGROUND
Plaintiffs decedent, Tara Sue Engel, lived and worked in North Carolina. She was employed by "Mister Omelet," an employer covered under North Carolina's workers' compensation laws. Engel fell at work in North Carolina on January 1, 1995, and she submitted a claim for and received workers' compensation benefits in North Carolina, pursuant to the workers' compensation laws of North Carolina. Engel began having disputes over her treatment in March, 1995. She fell again on April 24, 1995, and terminated her employment with Mister Omelet on May 4, 1995.
Over the next several months, Engel moved around and continued to have disputes over her treatment. Her moves include: Virginia, May, 1996; Tennessee, October, 1996; Florida, November, 1996; Texas, March, 1997; South Carolina, May, 1997; North Carolina, July, 1997; Texas, October, 1997. Key Risk became claim administrator in January, 1997. The North Carolina Industrial Commission ("NCIC") terminated Engel's benefits in July 31, 1998, and reinstated them on July 9, 1999. Engel continued to have disputes with Key Risk over her treatment.
She commenced this action against Key Risk on August 15, 2000, for various statutory and Common law extra-contractual claims under Texas substantive law, including the Texas Deceptive Trade Practices Act and Article 21.21 of the Texas Insurance Code. Engel committed suicide on December 18, 2000, and Reinhardt substituted in as plaintiff in her capacity as independent executor of the estate of Engel. Reinhardt moved for leave to amend to assert a wrongful death claim, but the Court denied leave. Accordingly, the only claims presently before the Court are those personal to Engel arising out of Key Risk's claims handling practices before Engel's death. Key Risk now moves the Court to take judicial notice of and apply North Carolina substantive law to Plaintiffs extra-contractual claims, and moves for summary judgment. As a preliminary matter, Key Risk objects to some of Reinhardt's summary judgment proof. The Court will address those issues in turn.
Plaintiff earlier sought leave to file a surreply addressing those evidentiary objections. The Court denied such leave by Order of August 28, 2002. The Court now VACATES that order and GRANTS Plaintiff leave to file her surreply. The Court has fully considered that additional brief in making its rulings in this Order.
II. SUMMARY JUDGMENT PROOF
As part of her summary judgment proof, Reinhardt relies on the Affidavit of Tara Sue Engel in Opposition to Defendants' Motion to Dismiss for Want of Personal Jurisdiction, filed September 6, 2000. Key Risk argues that because Ms. Engel has died, that affidavit is not competent summary judgment proof. Under Rule 56(e) of the Federal Rules of Civil Procedure, affidavits "shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." In Tatum v. Cordis Corp., 758 F. Supp. 457, 463 (M.D. Tenn. 1991), the court sustained an objection to an affidavit when the affiant had died, stating: "Hearsay evidence may be considered by the Court in response to a motion for summary judgment as long as the out-of-court declarant would be available to present the evidence through direct testimony." As in Tatum, the affiant here would not be available to present the evidence through direct testimony, and the affidavit itself would be objectionable hearsay at trial. Accordingly, Key Risk's objection to Engel's affidavit is sustained.
Key Risk also objected to a letter of Brian Lake as unauthenticated and privileged. As Plaintiff responds, the letter is authenticated as part of a business records deposition on written questions, and any privilege attaching to the document is waived. Accordingly, Key Risk's objection to the Lake letter is overruled.
III. CHOICE OF LAW
Sitting in diversity, this Court applies Texas' choice of law rules. See Patin v. Thoroughbred Power Boats, Inc., 294 F.3d 640, 646 (5th Cir. 2002). In tort cases, Texas applies the "most significant relationship" test as set forth in sections 6 and 145 of the Restatement (Second) of Conflict of Laws. See Gutierrez v. Collins, 583 S.W.2d 312 (Tex. 1979). Texas has also adopted section 184 of the Restatement as providing "the standards by which a court is to determine immunity from a tort suit when an employee is covered by workers' compensation insurance." Hughes Wood Prods., Inc. v. Wagner, 18 S.W.3d 202, 205 (Tex. 2000). "Section 184 articulates and applies the principles of section 6 to the workers' compensation exclusive-remedy issue." Id. at 206. Section 184 provides:
Section 6 provides:
(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law.
(2) Where there is no such directive, the factors relevant to the choice of the applicable rule of law include:
(a) the needs of the interstate and international systems;
(b) the relevant policies of the forum;
(c) the relevant policies of other interested states and the relative interest of those states in the determination of the particular issue;
(d) the protection of justified expectations;
(e) the basic policies underlying the particular field of law;
(f) certainty, predictability and uniformity of result; and
(g) ease in determination and application of the law to be applied.
RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 6 (1971).
Section 145 provides:
(1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6.
(2) Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:
(a) the place where the injury occurred;
(b) the place where the conduct causing the injury occurred;
(c) the domicile, residence, nationality, place of incorporation and place of business of the party; and
(d) the place where the relationship, if any, between the parties is centered.Id. § 145.
Recovery for tort or wrongful death will not be permitted in any state if the defendant is declared immune from such liability by the workmen's compensation statute of a state under which the defendant is required to provide insurance against the particular risk and under which (a) the plaintiff has obtained an award for the injury, or (b) the plaintiff could obtain an award for the injury, if this is the state (1) where the injury occurred, or (2) where employment is principally located, or (3) where the employer supervised the employee's activities from a place of business in the state, or (4) whose local law governs the contract of employment under the rules of §§ 187-188 and 196.
RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 184 (1971).
Section 184 may not literally apply as it applies expressly to cases in which "the defendant is required to provide insurance . . . ." The language used by the Texas Supreme Court suggests that Texas may read section 184 as having broader application by particularizing the principles of section 6 in the workers' compensation context. The comments to the Restatement acknowledge this possibility: "Some workmen's compensation statutes extend immunity from liability in tort or wrongful death to certain designated persons, such as fellow employees, who are not required to provide insurance against the particular risk. Id. comment b. It is uncertain whether such immunity will be given effect in other states." It is unnecessary for this Court to make an Erie guess as to whether the Texas Supreme Court would apply section 184 literally here, or whether that simply is an example of how the factors of section 6 might apply in the workers' compensation context, as the result is the same either way.
Here we have a North Carolina employer and a North Carolina employee who suffered an injury in North Carolina and requested and received benefits under North Carolina workers' compensation law, and who subsequently obtained review of treatment decisions before the NCIC, now complaining of benefits administered by a third party administrator who undertook that task assuming the applicability of North Carolina law. Moreover, as discussed in the following section, it is the policy of North Carolina that disputes such as these be resolved through an exclusive administrative remedy, rather than through the courts; that policy would be frustrated by the application of Texas substantive law. Balanced against that, we have Texas' interest in the welfare of its residents and in controlling the actions of insurers within the state. These events are centered in North Carolina and North Carolina law. Taking into account the factors of sections 6 and 145, as well as the policy considerations inherent in section 184, the Court holds that North Carolina law applies to the claims in this action.
The Court would reach the same result even if it considered the allegation in the stricken Tara Sue Engel affidavit that an employee of Key Risk recommended to Engel that she return to live with her parents in Texas in 1997.
II. SUMMARY JUDGMENT
Key Risk moves for summary judgment under North Carolina law, arguing that claims such as these are within the exclusive jurisdiction of the NCIC. In Johnson v. First Union Corp., 131 N.C. App. 142, 504 S.E.3d 808 (1998) rev. allowed by 349 N.C. 529, 526 S.E.2d 175, rev. improvidently allowed by 351 N.C. 339, 525 S.E.2d 171 (2000), plaintiffs claimed their employers, workers compensation carriers, and administrators conspired to defeat their compensation claims before the NCIC. Plaintiffs sought to recover under theories of fraud, bad faith, deceptive trade practices, intentional infliction of emotional distress, and civil conspiracy. The court noted the "comprehensive system" and "comprehensive regulatory scheme" established by the North Carolina Workers' Compensation Act. Id. at 809, 810. It expressly agreed with defendants position that the "North Carolina Workers Compensation Act [cit. omitted] gives the [NCIC] exclusive jurisdiction over workers' compensation claims and all related matters, including issues such as those raise in the case at bar." Id. at 809. North Carolina has repeatedly followed that holding. See Riley v. Debaer, 149 N.C. App. 520, 562 S.E.2d 69 (2002); Deem v. Treadaway Sons Painting Wallcovering, Inc., 142 N.C. App. 472, 543 S.E.2d 209, rev. denied, 354 N.C. 216, 553 S.E.2d 911 (2001).Reinhardt relies on Hogan v. Forsyth Country Club Co., 79 N.C. App. 483, 340 S.E.2d 116 (1986). Hogan held that the exclusivity of remedies in the Workers' Compensation Act did not extend to a claim of intentional infliction of emotional distress arising out of sexual harassment by a co-worker. The Riley court distinguished Hogan and several other North Carolina cases involving intentional or negligent infliction of emotional distress arising in the workplace from the circumstance in which the emotional distress was allegedly inflicted during the course of treatment of a work-related injury. 149 N.C. App. at 526-27. This Court will follow Riley and not apply Hogan when the alleged emotional distress occurred during the course of treatment of a work-related injury.
Accordingly, under North Carolina law, Reinhardt's exclusive remedy lies before the NCIC. The Court, therefore, GRANTS Key Risk's motion for summary judgment and DISMISSES WITHOUT PREJUDICE Reinhardt's claims.