Opinion
Civil Action 20-cv-02519-CMA-STV
11-04-2021
SHERRI SIMPSON, CHRIS SIMPSON Plaintiffs, v. P.F. CHANG'S CHINA BISTRO, INC., SAFETY NATIONAL CASUALTY CORPORATION, and GALLAGHER BASSETT SERVICES, INC., Defendants.
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Scott T. Varholak United States Magistrate Judge
This matter is before the Court on two motions: (1) Defendants Gallagher Bassett Services, Inc., (“Gallagher”) and P.F. Chang's China Bistro, Inc.'s (“P.F. Chang's”) Motion to Dismiss First Amended Complaint for Failure to State a Claim Upon Which Relief Can be Granted (the “Gallagher Motion”) [#75]; and (2) Defendant Safety National Casualty Corporation's (“Safety National's”) Motion to Dismiss Plaintiff's First Amended Complaint for Failure to State a Claim Upon Which Relief Can be Granted (the “Safety National Motion”) [#76]. The Motions have been referred to this Court. [#77] The Court has carefully considered the Motions and related briefing, the entire case file, and the applicable case law, and has determined that oral argument would not materially assist the Court. For the following reasons, the Court respectfully RECOMMENDS that the Motions be GRANTED IN PART and DENIED IN PART.
I. BACKGROUND
P.F. Chang's had a policy of insurance (the “Policy”) from Safety National. [#74 at ¶ 47] The Policy contained a self-insured retention and/or deductible to be paid by P.F. Chang's. [Id.] Gallagher served as an administrator on the Policy. [Id. at ¶ 48] Gallagher “charges a flat fee regardless of the outcome of the claim, which incentivizes it to deny claims.” [Id. at ¶ 57] Gallagher also charges more for litigated claims, which incentivizes it to turn claims over to an attorney. [Id. at ¶ 58] “Upon information and belief, [P.F. Chang's] has an internal worker's compensation coordinator that works in conjunction with [Gallagher and Safety National] in the handling of workers compensation claims for [P.F. Chang's] employees.” [Id. at ¶ 51]
On November 24, 2017, Plaintiff Sherri Simpson hyperextended and twisted her right knee when she slipped and fell on a wet floor while working for Defendant P.F. Chang's. [Id. at ¶ 8] Ms. Simpson reported the incident to her manager almost immediately. [Id. at ¶ 9] At the time of the incident, Ms. Simpson had been employed with P.F. Chang's for approximately nineteen years. [Id. at ¶ 10] She had never before filed a worker's compensation claim for her right knee, had never pursued a personal injury claim for her right knee, and had never had surgery on her right knee. [Id. at ¶ 11]
Over the next few days following her injury, Ms. Simpson's condition worsened. [Id. at ¶ 12] On December 1, 2017, “agents and/or employees” of P.F. Chang's directed Ms. Simpson to seek medical treatment. [Id. at ¶ 13] As part of this medical evaluation, Ms. Simpson was noted to have right knee pain and back pain as a result of her work-related fall. [Id. at ¶ 14]
Over the following months, Ms. Simpson continued medical care for her right knee. [Id. a t¶ 15] She sought reduced shifts and help from her co-workers to accommodate the on-going problems in her right knee. [Id.] When her symptoms did not resolve, an MRI of her knee was ordered, and she was referred for a series of orthopedic evaluations. [Id. at ¶ 16] On April 29, 2019, Ms. Simpson saw Dr. Philip Stull, an orthopedic surgeon, who took a history and conducted a physical examination. [Id. at ¶ 17] Dr. Stull concluded that Ms. Simpson was a good candidate for either arthroscopy or joint replacement of the right knee. [Id.] Following this visit, Dr. Stull submitted a request that “Defendants” authorize arthroscopic surgery on Ms. Simpson's right knee. [Id. at ¶ 18]
On June 6, 2018, “Defendants” submitted Ms. Simpson's records to Dr. Henry Roth, a physical medicine and rehabilitation physician, for a record review. [Id. at ¶ 19] “Dr. Roth is known by Defendants to provide reports favorable to Defendants' position in contested workers compensation claims.” [Id. at ¶ 21] As a result, he is someone that insurers and self-insured employers (like P.F. Chang's) know that they can count on to help support decisions to deny claims and deny benefits. [Id. at ¶ 22] “Defendants knew when they requested a report from Dr. Roth that he would not provide fair and objective opinions, but instead would say whatever was necessary to help Defendants deny, delay, or reduce the value of Ms. Simpson's workers compensation claim.” [Id. at ¶ 23] Defendants further knew that Dr. Roth lacked the training, experience, and qualifications to render an opinion regarding the causation of Ms. Simpson's injury and the need for knee surgery. [Id. at ¶¶ 24-25] “On June 7, 2018, following receipt of Dr. Roth's report, Defendants denied authorization for arthroscopic surgery on Ms. Simpson's knee.” [Id. at ¶ 27]
On June 27, 2018, Ms. Simpson visited Dr. Corson. [Id. at ¶ 28] Dr. Corson noted that Ms. Simpson was not at the end of her healing and her symptoms were constant and unchanged. [Id.] Dr. Corson further noted that Ms. Simpson's injury precluded her from returning to her waitressing position. [Id.]
On October 30, 2018, Plaintiff underwent a Division Independent Medical Examination (“DIME”) with Dr. William Watson, an orthopedic specialist. [Id. at ¶ 29] A DIME is a procedure under Colorado's Worker's Compensation Act that permits a party to seek an independent medical examination from a state appointed physician. [Id. at ¶ 30] After examining Plaintiff, Dr. Watson concluded: (1) Dr. Roth failed to discuss the actual type of injuries sustained by Ms. Simpson; (2) Dr. Roth did not explain why Ms. Simpson could function for over nineteen years as a waitress and then after one episode of traumatic injury to her knee, develop symptoms requiring surgery; and (3) until Ms. Simpson underwent total joint arthroplasty of her right knee, she would not be at maximum medical improvement (“MMI”). [Id. at ¶ 31]
On January 25, 2019, Plaintiff returned to see Dr. Stull, who agreed with Dr. Watson's recommendation for a total joint arthroplasty of Plaintiff's right knee. [Id. at ¶ 32] Dr. Watson “submitted a request for authorization for surgery to Defendants.” [Id.] “On February 14, 2019, [Gallagher] filed an Admission of Liability on behalf of all Defendants accepting Dr. Watson's determination that Plaintiff was not at [MMI] and reinstated her loss benefits.” [Id. at ¶ 33] Nonetheless, after filing the Admission of Liability, “Defendants continued to deny authorization for surgery recommended by Dr. Watson and all of [Ms. Simpson's] treating physicians.” [Id. at ¶ 34]
On March 1, 2019, Ms. Simpson returned to see Dr. Corson. [Id. at ¶ 35] Dr. Corson agreed that a total joint arthroscopy to Ms. Simpson's right knee was reasonably necessary and related to her work-related fall. [Id.] Nonetheless, though “Defendants agreed [Ms. Simpson] was not at MMI[, ] [they] continued to deny Ms. Simpson's need for surgery, which now required a total knee replacement instead of an arthroscopic procedure.” [Id. at ¶ 36]
On March 20, 2019, Ms. Simpson began to litigate her claim in the Colorado worker's compensation system. [Id. at ¶ 38] “Despite the opinions of the DIME physician and all treating providers, Defendants sought another medical opinion from Dr. John Schwappach in an attempt to substantiate their unreasonable and lawless position.” [Id. at ¶ 40] On July 16, 2019, a hearing was held before an Administrative Law Judge (“ALJ”). [Id. at ¶ 41] The ALJ ordered the authorization of and payment for the total joint arthroplasty. [Id. at ¶ 42] The ALJ further found: (1) Dr. Schwappach ignored significant records which directly contradicted his findings; (2) Dr. Schwappach apparently overlooked an earlier medical report; and (3) Dr. Schwappach did not appear to have reviewed the physical therapy records. [Id.] As a result of the ALJ's findings, Ms. Simpson was finally able to have her surgery on November 20, 2019. [Id. at ¶ 44]
On June 4, 2020, Plaintiffs initiated this action in the District Court for the City and County of Boulder. [#7] On August 21, 2020, Defendants removed the matter to this Court. [#1] The Amended Complaint alleges four causes of action: (1) bad faith breach of an insurance contract against all Defendants, (2) aiding and abetting against all Defendants, (3) civil conspiracy against all Defendants, and (4) loss of consortium against all Defendants. [#74] On August 5, 2021, Defendants Gallagher and P.F. Chang's filed the Gallagher Motion seeking to dismiss all claims against them. [#75] That same day, Defendant Safety National filed the Safety National Motion seeking to dismiss all claims against it. [#76] Plaintiffs have responded to each Motion [##78, 79] and Defendants have replied [##83, 84].
II. LEGAL STANDARD
Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” In deciding a motion under Rule 12(b)(6), a court must “accept as true all well-pleaded factual allegations . . . and view these allegations in the light most favorable to the plaintiff.” Casanova v. Ulibarri, 595 F.3d 1120, 1124 (10th Cir. 2010) (alteration in original) (quoting Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)). Nonetheless, a plaintiff may not rely on mere labels or conclusions, “and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). Plausibility refers “to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs ‘have not nudged their claims across the line from conceivable to plausible.'” Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Twombly, 550 U.S. at 570). “The burden is on the plaintiff to frame a ‘complaint with enough factual matter (taken as true) to suggest' that he or she is entitled to relief.” Id. (quoting Twombly, 550 U.S. at 556). The ultimate duty of the court is to “determine whether the complaint sufficiently alleges facts supporting all the elements necessary to establish an entitlement to relief under the legal theory proposed.” Forest Guardians v. Forsgren, 478 F.3d 1149, 1160 (10th Cir. 2007).
III. ANALYSIS
Defendants argue that the First Amended Complaint fails to distinguish between each of the Defendants, and therefore gives inadequate notice of the grounds for the claims made against each Defendant. [#75 at 4-5; #76 at 4] The Court agrees. As a result, the Court does not address the other arguments made by Defendants in their Motions.
“Th[e] requirement of plausibility serves not only to weed out claims that do not (in the absence of additional allegations) have a reasonable prospect of success, but also to inform the defendants of the actual grounds of the claim against them.” Robbins v. Okla., 519 F.3d 1242, 1248 (10th Cir. 2008). “Context matters . . . [and] [f]air notice under Rule 8(a)(2) depends on the type of case.” Id. (quotation omitted). Thus, “[a] simple negligence action based on an automobile accident may require little more than the allegation that the defendant negligently struck the plaintiff with his car while crossing a particular highway on a specified date and time.” Id. But the plausibility standard “‘may have greater bite' when dealing with ‘complex claims against multiple defendants.'” GeometWatch Corp. v. Hall, No. 1:14-cv-00060-JNP-PMW, 2017 WL 1136946, at *5 (D. Utah Mar. 27, 2017) (quoting Robbins, 519 F.3d at 1249). In such cases, it is “particularly important . . . that the complaint make clear exactly who is alleged to have done what to whom, to provide each individual with fair notice as to the basis of the claims against him or her.” Robbins, 519 F.3d at 1250 (emphasis in original).
Here, Plaintiffs allege a conspiracy to deny Ms. Simpson benefits under the Policy. [#74] Ms. Simpson's employer, the worker's compensation carrier, and the worker's compensation administrator are each alleged to have engaged in this conspiracy. [#74] But the Amended Complaint fails to identify which particular actions each Defendant is alleged to have taken to further that conspiracy. [Id.] Indeed, nearly every allegation refers to “Defendants” generally, without specifying “who is alleged to have done what.” Robbins, 519 F.3d at 1250 (emphasis in original). The Amended Complaint thus fails to give fair notice to the Defendants as to the allegations against them.
The Court acknowledges that some “courts have allowed pleading against a collective group of defendants where it would be unfair to require Plaintiff to . . . identify which specific Defendant committed which specific act during the incident in question . . . based on the circumstances alleged.” Carrado v. Daimler AG, No. 17-cv-3080-WJM-SKC, 2018 WL 4565562, at *4 (D. Colo. Sept. 24, 2018) (quotation omitted). But such is not the case here. This case went through the administrative process [#74 at ¶¶ 38, 41], and Plaintiffs appear to have the claims notes from this case [#78 at 8]. Plaintiffs certainly could have used information from the administrative process and the claims notes to identify which Defendant took which action, and it is not unfair to require them to do so.
The cases cited by Plaintiffs are inapposite. [##78 at 23-24; 79 at 23] In Carrado, after acknowledging it was a “close call, ” the court allowed the complaint to proceed despite group pleading because the one defendant was “a wholly- or partially- owned subsidiary” of the second defendant which “ma[de] it more reasonable for [p]laintiffs to allege common allegations against the two . . . [d]efendants.” 2018 WL 4565562, at *4. By contrast here, Defendants are independent companies with independent interests, and Plaintiffs have not proffered any reason for why they cannot identify each Defendant's individual actions.
The other two cases cited by Plaintiffs are even less relevant to the Court's analysis. In City of Perry, Iowa v. Procter & Gamble Co., the court allowed the complaint to continue where it “contain[ed] factual allegations specific to each [d]efendant” and “list[ed] the specific products of each [d]efendant that [we]re at issue . . . and each [d]efendant's representations about the products to which [the plaintiff] objects.” 188 F.Supp.3d 276, 285-86 (S.D.N.Y. 2016). By contrast here, the Amended Complaint is nearly devoid of any factual allegations “specific to each Defendant.” Id. at 286. The final case cited by Plaintiffs, O'Connor v. BMW of N. Am., LLC, was a case with a single defendant, so the court did not need to address which allegations were lodged against which defendant. No. 18-cv-03190-CMA-STV, 2020 WL 2309617, at *12 (D. Colo. Jan. 7, 2020), report and recommendation adopted 2020 WL 1303285 (D. Colo. Mar. 19, 2020).
Thus, for the reasons set forth herein, the Court finds that the Amended Complaint fails to provide sufficient detail “to inform the defendants of the actual grounds of the claim against them.” Robbins, 519 F.3d at 1248. The Court therefore respectfully RECOMMENDS that the Motions be GRANTED and that the Amended Complaint be dismissed. Because this is an Amended Complaint and Defendants had raised this issue previously, the Court would be justified in recommending dismissal with prejudice. [##25 at 3; 26 at 3] Nonetheless, because Plaintiffs have “never before received an opportunity to cure deficiencies identified by this Court, ” the Court respectfully RECOMMENDS that the dismissal be without prejudice. Dyer v. Lajeunesse, No. 15-cv-02404-WJM-CBS, 2017 WL 262692, at *4 n.4 (D. Colo. Jan. 20, 2017).
IV. CONCLUSION
For the foregoing reasons, the Court respectfully RECOMMENDS that:
(1) The Gallagher Motion [#75] be GRANTED to the extent it seeks dismissal of all claims against Gallagher and P.F. Chang's but DENIED to the extent it seeks a dismissal with prejudice; and
(2) The Safety National Motion [#76] be GRANTED to the extent it seeks dismissal of all claims against Safety National but DENIED to the extent it seeks a dismissal with prejudice.