Flоyd and Judy CORNELISON, Appellants, v. TIG INSURANCE, Crawford & Company/Broadspire Services, Griffin & Smith, Robert Griffin, Christi Niemann, Northern Investigative Associates, Dennis Johnson, Denara, Inc. and Joel Seres, M.D., Appellees.
Supreme Court No. S-15647
Supreme Court of Alaska.
August 12, 2016
381 P.3d 254 | 1262
Adolf V. Zeman, Landye Bennett Blumstein LLP, Anchorage, for Appellees TIG Insurance and Crawford Company/Broadspire. Ray R. Brown, Jessica Dillon, and Michelle Nesbett, Dillon & Findley, P.C., Anchorage, for Appellees Griffin & Smith, Robert Griffin, and Christi Niemann.
Matthew D. Regan and Alex Vasauskas, Holmes Weddle & Barcott, PC, Anchorage, for Appellees Northern Investigative Associates, Dennis Johnson, and Denara, Inc. Scott Leuning, Leuning & Renner, LLC, Sioux Falls, South Dakota, for Appellee Joel Seres, M.D.
Before: Fabe, Winfree, and Bolger, Justices.
OPINION
BOLGER, Justice.
I. INTRODUCTION
An employer and its workers’ compensation insurer challenged a former employee‘s continuing eligibility for workers’ compensation, relying on surreptitious video surveillance and a doctor‘s report issued after the doctor viewed an edited surveillance video. The employee and his wife sued the employer‘s workers’ compensation carrier and a number of others involved in the attempt to terminate benefits; they alleged several causes of action, contending that the video had been purposely edited to provide a false picture of the employee‘s physical abilities and that the defendants had participated to varying degrees in a scheme to defraud the Alaska Workers’ Compensation Board. The trial court granted summary judgment or dismissal as to all of the defendants on all counts. We affirm in part, reverse in part, and remand for further proceedings.
II. FACTS AND PROCEEDINGS
Floyd Cornelison injured his back at work in 1996 while shoveling dirt. He had back surgery later that year, but it did little to improve his condition. The Board found he was permanently and totally disabled (PTD) in 2001 under the odd-lot doctrine.1 TIG Insurance, the workers’ compensation insurer for Floyd‘s employer, did not contest that he was PTD; it reclassified his workers’ compensation benefits as PTD in 2000. Floyd also received Social Sеcurity disability payments, and the employer received an offset for those payments.
In 2007 TIG began an investigation into Floyd‘s claim; in pleadings before the superior court, TIG said it sought “potential evidence to show that the benefits being paid [to Floyd] may be excessive.” TIG hired a private investigation firm, Northern Investigative Associates, to conduct surveillance and search for information about Floyd. Dennis Johnson was the president and owner of Northern Investigative Associates and an officer of Denara, Inc., which did business under the name Northern Investigative Associates. After investigators employed by the firm surreptitiously filmed Floyd, Johnson created edited videos and presented those videos to TIG. Johnson also wrote reports based on the investigators’ notes.
Floyd and his wife, Judy, alleged that Johnson edited the video to create a false impression of Floyd‘s physical capacities, making him look more capable than he was in reality and editing out behaviors that showed he was in pain, and contended that Johnson knew from prior experience in workers’ compensation cases what type of evidence he needed to produce. They alleged Johnson created this false video to bolster his own business because he knew that if he did not provide sufficient evidence to terminate Floyd‘s benefits, the insurer would likely not use his investigative services in the future.
After Johnson reported that Floyd was more active than he claimed to be and pro-
Before the 2008 EME, TIG supplied Dr. Seres with copies of the edited video and Johnson‘s reports. In his 2008 report, Dr. Seres had a completely different impression of Floyd, writing, “His exaggerated physical limitations as demonstrated in today‘s evaluation are in sharp contrast to the movements recorded in the surveillance reports and videos.” Dr. Seres concluded Floyd had “an exaggerated pain syndrome, which is not supported adequately by the physical findings and is virtually invalidated by the surveillance study.” Dr. Seres‘s report raised “the possibility of drug diversion” and mentioned the edited videos multiple times. According to an email between the insurance adjuster and the law firm representing the employer, Dr. Seres “strongly indicate[d] he [did] not believe [Floyd] is permanently and totally disabled based on the information contained in the surveillance video and the inconsistencies in the evaluation.”
TIG subsequently authorized more surveillance by Johnson; the adjuster‘s notes record a conversation with one of Johnson‘s investigators in which the investigator reported that Floyd was “active in his shop and yard on a level of 10 hours a day every day.” Johnson created anоther edited video, which TIG again sent to Dr. Seres. In a 2009 report, Dr. Seres noted that the new edited video contained “remarkable new material ... that strongly argues that [Floyd] is actually not impaired in any significant way from a physical standpoint.” Dr. Seres also commented, “I have never seen a more remarkable discrepancy between the severe disability that the patient demonstrates when he is seen by me, in comparison to the remarkably normal behavior and physical abilities seen in these surveillance films.” He then proceeded to present his “conclusions based upon [his] medical review of the patient‘s physical capacities demonstrated during the surveillance.” Dr. Seres concluded Floyd was “capable of returning to any type of work without restrictions on a full time basis.” After acknowledging that he had been retained to give an opinion on Floyd‘s PTD benefits, Dr. Seres included the following comment in his report: “[Floyd] has indicated to me in the past that he is receiving Social Security Disability (SSDI) income as well. If this is true I believe that the [edited videos] demonstrate Social Security [f]raud.”
In April 2009 TIG filed a petition asking the Alaska Workers’ Compensation Board to terminate Floyd‘s PTD benefits; the law firm of Griffin & Smith represented the insurer, with a paralegal, Christi Niemann, signing the petition itself. Although the petition alleged “new evidence” supported terminating Floyd‘s benefits, no evidence accompanied the petition, and the petition did not set out any specific facts to support the assertion that Floyd was no longer PTD. Floyd filed a pro se opposition to the petition, denied that he was no longer PTD, and said, “There was no evidence stated or attached in the Petition.” The next month, Griffin & Smith filed Dr. Seres‘s 2008 and 2009 reports with the Board.
The Board proceedings progressed toward a hearing. Floyd eventually obtained representation, but for a portion of the Board proceedings a non-attorney represented him. In 2012 the employer filed an amended peti-
In 2011 both Floyd and Judy, representing themselves, filed suit in superior court against some of those involved in the attempt to terminate Floyd‘s benefits.4 In their initial complaint they sued only TIG; its adjusters, Crawford & Company and Broadspire Services, Inc.; Griffin & Smith; and two of Griffin & Smith‘s employees, Niemann and attorney Robert Griffin. The Cornelisons alleged several tort claims and requested damages in excess of $100,000. About a month later they filed an amended complaint, adding as defendants Dr. Seres, Johnson, Northern Investigative Associates, and Denara, Inc. They filed a second amended complaint in October 2011; this is the latest complaint they filed. An out-of-state attorney, appearing with local counsel, represented the Cornelisons when they filed the second amended complaint.
In the second amended complaint, the Cornelisons’ causes of action included tortious interference with contract rights; negligent infliction of emotional distress (NIED); intentional infliction of emotional distress (IIED); abuse of process; fraud, false light, defamation, libel, slander, and “other misrepresentations“; breach of professional obligations on the part of the defendants; and violations of the
Litigation ensued, including discovery disputes. The Board proceeding continued toward a hearing as well. In February 2012 the Cornelisons asked the superior court to stay the proceedings until the Board case ended, basing their argument on two alternative grounds: primary jurisdiction and a balancing test imported from situations with both civil and criminal cases proceeding at the same time. In their motion for a stay they referred to
In March 2013 Dr. Seres moved for summary judgment on all of the claims against him. That month Griffin & Smith moved for judgment on the pleadings under
In May 2013 the Cornelisons’ attorneys asked to withdraw, and the Cornelisons moved for a stay of the proceedings so they could find new counsel. After an ex parte hearing on the motion to withdraw, the court permitted the withdrawal and granted a 90-day stay; the court also stated that it would not grant further continuances for the Cornelisons to get an attorney.
The Cornelisons did not find new counsel within 90 days, so they again asked the court to stay the proceedings pending resolution of the Board case. The court denied the stay. The Cornelisons petitioned this court for review of the order denying the stay; we denied review because by the time we considered the petition, the Board had already issued its final decision denying the petition to terminate Floyd‘s benefits. The Cornelisons filed a copy of the Board‘s decision and order with the superior court in December 2013.7 In its decision, the Board found that Floyd continued to be permanently and totally disabled, declined to give any weight to Dr. Seres‘s reports, described Johnson‘s edited videos as “flawed” based in part on its review of one day of surveillance footage, and decided there was no evidence that Floyd had committed fraud in obtaining either his PTD or Social Security benefits. The Board awarded attorney‘s fees and costs to the Cornelisons.
TIG moved for summary judgment in the superior court in November 2013, arguing that there were no issues of material fact with regard to any of the claims against it. In June 2014 Johnson moved for summary judgment on some counts and for dismissal of others under
The superior court granted summary judgment to Dr. Seres in May 2014. It concluded that Dr. Seres owed no duty to the Cornelisons, so there could be no breach of a duty. It also decided that claims against Dr. Seres were time-barred because the evaluation that was the basis of the claims occurred in 2008, and the Cornelisons did not bring suit until 2011.8 The superior court explained that the discovery rule for statute of limitations did not apply because the Cornelisons had alleged that Dr. Seres injured Floyd during the EME.9 The court next decided that Dr. Seres was shielded from liability by
In July the court granted Griffin & Smith‘s motion for judgment on the pleadings. It first concluded that, because Griffin & Smith served as attorneys for TIG in the workers’ compensation case, Griffin & Smith “stepped into the shoes of TIG” and was thus “a party to the initial economic relationship,” so that no liability for interfering with an economic relationship could attach. The court also observed that Floyd‘s benefits were “never unilaterally terminated,” so no breach occurred. The court concluded the Cornelisons had not adequately pleaded either their negligent or intentional infliction of emotional distress claim against Griffin & Smith, so it granted judgment on the pleadings on those claims as well. It also found no abuse of process because (1) the proceeding that served as the basis for the abuse of process claim was administrative rather than judicial and (2) the defendants were “simply exercising [their] right to be heard.” The court decided any defamatory statements were privileged because they had been made in the workers’ compensation proceeding. It also decided there was no misrepresentation, no plausible professional malpractice claim, and no plausible UTPA claim.
That day, the court also granted summary judgment to TIG. For the tortious interference with contract claim, the court used essentially the same rationale as it had in its order on Griffin & Smith‘s motion. Its reasoning for the abuse of process claim and the emotional distress claims was also similar. As for the misrepresentation claim, the court decided the Cornelisons had failed tо show justifiable reliance on any statement and dismissed that claim. The court granted summary judgment on the defamation claims, noting that the defendants have an absolute privilege to publish defamatory matter within the bounds of an adjudicative proceeding. Finally, the court determined that the Cornelisons did not have a cause of action against TIG for professional malpractice or for a UTPA violation.
The court also granted Johnson‘s motion for summary judgment or for failure to state a claim. It decided that Johnson was an agent or employee of TIG, so no cause of action for tortious interference with any contract between TIG and the Cornelisons existed; the court accordingly dismissed this claim for failure to state a claim. With respect to the intentional infliction of emotional distress claim, the court cited Chizmar v. Mackie11 for the proposition that it must make a “threshold determination ‘whether the severity of the emotional distress and the conduct of the offending party warrant an instruction on intentional infliction of emotional distress.‘” The court concluded that the Cornelisons did “not present any specific emotional injuries resulting from [the] defendants’ conduct” but “only generally claim[ed] ‘emotional distress.‘” After summarizing some case law, the court decided Johnson‘s conduct did not “[]rise to [the] level of outrageous conduct necessary to attach liability.” It granted summary judgment to Johnson on that claim. With respect to the NIED claim, the court decided that there was no physical injury to the Cornelisons and that they did not fall within any exception to the rule requiring some type of physical injury, so it granted Johnson‘s
The court decided that under
At the end of the three July 31, 2014 orders, the court included the following paragraph:
The court finds itself an improper forum for claims of emotional distress resulting from [Board] hearings, yet, is concerned that claimants have little protection from poorly constructed and pursued claims for termination of benefits pursuant to the AWCA. The AWCA provides penalties for several types of actions under
AS 23.30.250 throughAS 23.30.260 . However, the Act does not contemplate the emotional distress suffered by claimants who are the victim[s] of injudicious, imprudent claims. The Department of Labor and Workforce Development should consider implementing mechanisms to ensure that only well-founded complaints are allowed to protract over time.
The Cornelisons appeal.
III. STANDARD OF REVIEW
We review grants of summary judgment de novo.12 Summary judgment is appropriate if there is no genuine factual dispute and the moving party is entitled to judgment as a matter оf law.13 In reviewing summary judgment, we draw all reasonable inferences in favor of the nonmoving party.14 We can affirm a grant of summary judgment on any basis appearing in the record.15
We review the grant of a motion for judgment on the pleadings de novo.16 When reviewing a dismissal granted under
We review grants of motions to dismiss under
“Interpretation of a statute is a question of law to which we apply our independent judgment; we interpret the statute according to reason, practicality, and common sense, considering the meaning of the statute‘s language, its legislative history, and its purpose.”22
IV. DISCUSSION
A. The Superior Court Properly Dismissed Or Granted Summary Judgment On The Abuse Of Process Claims.
The Cornelisons argue that the superior court improperly dismissed their abuse of process claims on several grounds, including
The Cornelisons claimed in their complaint that the defendants committed the tort of abuse of process in the course of the petition to terminate Floyd‘s benefits. They alleged the defendants submitted “junk evidence” to the Board and in so doing breached various duties; they also alleged some defendants failed to follow prescribed Board processes, thereby thwarting the purposes of the AWCA.23 But they did not allege any purpose in bringing the petition except to terminate Floyd‘s benefits.
In Greywolf v. Carroll we defined abuse of process as “the misuse of a legal process against another primarily to accomplish a purpose for which it was not designed.”24 Alaska law requires two elements for such a claim: (1) an “ulterior purpose independent from the process” and (2) “a willful act in the use of the process that is not proper in the regular conduct of the proceeding.”25 In Sands v. Living Word Fellowship, we emphasized that “a claim for abuse of process is a claim that the defendant misused process to attain some separate ulterior purpose independent from the process—for example, to extort the plaintiff and force him to take some action by the use of the process as a threat.”26 The tort of abuse of process applies to those who “us[e] the process to put
pressure upon the other to compel him to pay a different debt or to take some other action or refrain from it.”27
The Cornelisons implicitly argued that TIG wanted to terminate Floyd‘s benefits because the benefits were expensive, not because TIG thought Floyd was in fact no longer disabled. But even accepting this claim as true, TIG used the appropriate process—a Board proceeding—to accomplish this goal. The Cornelisons do not point to a “separate ulterior purpose” in bringing the petition to terminate Floyd‘s workers’ compensation, so they have not alleged facts sufficient to support this claim. Their allegation that Johnson hoped to further his business by supplying TIG with an edited video that would result in termination of Floyd‘s benefits is not the type of ulterior purpose that supports an abuse of process claim. The required motive in an abuse of process claim is to put pressure on the person who is wrongfully sued to perform or to refrain from performing an action unrelated to the process.28 The superior court properly dismissed or granted summary judgment on the abuse of process claims.
B. The Superior Court Properly Dismissed The UTPA Claims.
The Cornelisons’ UTPA claim alleged that the defendants had committed “many acts or practices” that “were and are intentional or reckless, unfair and deceptive, immoral, unethical, oppressive, and unscrupulous and offend public policy and constitute an inequitable assertion of power or position.” The superior court relied on different reasons to dismiss or grant summary judgment to the defendants on this claim. It decided that “neither trade nor commerce”
C. The Superior Court Properly Dismissed The Interference With Contract Claims.
The Cornelisons alleged a cause of action they called tortious interference with their financial rights and interests. As part of this cause of action, they alleged they had “an established and continuing financial property right and interest” in the PTD benefits Floyd received under the Board‘s 2001 order. They alleged the defendants interfered with this property right through the investigation, the medical evaluation, and the subsequent filing of the petition to terminate Floyd‘s benefits.
The superior court analyzed this claim as either a tortious interference with contract claim or a tortious interference with a prospective economic advantage claim. We consider the Cornelisons’ claim to be one for tortious interference with contract because no prospective business relationship is at issue in this case.30
The tort of intentional interference with contractual relations has six elements: “(1) an existing contract between [the plaintiff] and a third party; (2) defendant‘s knowledge of the contract and intent to induce a breach; (3) breach; (4) wrongful conduct of the defendant causing the breach; (5) damages; and (6) absence of privilege or justification for the dеfendant‘s conduct.”31 The Cornelisons’ claim appears to be based on their theory that Floyd is a third-party beneficiary of the insurance contract between his former employer and the employer‘s workers’ compensation insurer.
But even if we were to accept this theory—and we do not now decide the question whether workers’ compensation recipients are third-party beneficiaries of the insurance contract between the insurer and employer—there was never a breach of the contract because Floyd continued to receive benefits throughout the litigation.32 As a result, we agree with the superior court that the Cornelisons failed to set out a prima facie case of interference with contract rights. Therefore this cause of action was properly dismissed.
The Cornelisons alleged common law fraud against the defendants, but this cause of action fails as a matter of law. The elements of common law fraud are “(1) a false representation of fact; (2) knowledge of the falsity of the representation; (3) intention to induce reliance; (4) justifiable reliance; and (5) damages.”33 “As a general rule, in common law fraud, a person cannot justifiably rely on a statement she knows to be false.”34 The Cornelisons alleged that the defendants made false representations about Floyd‘s physical capabilities in the context of the workers’ compensation case; they also contended that the statements in Dr. Seres‘s reports about possible drug diversion and Social Security fraud, with the implication that Dr. Seres would report the suspected fraud, were misrepresentations. The Cornelisons alleged that the defendants “launch[ed] and orchestrate[d] an extreme and outrageous offense” on them and “perpetuate[d] a fraud upon” both them and the Board by making misrepresentations about them.
The misrepresentations about Floyd‘s physical capabilities cannot serve as a basis of a misrepresentation claim by the Cornelisons. Presumably the Cornelisons were aware these representations were false; if so, they could not have justifiably relied on those representations as a matter of law. Without this required element of justifiable reliance, their common law fraud claim was inadequate, and the superior court correctly dismissed the common law fraud claim.
But the Cornelisons also appear to advance a second theory of misrepresentation: they apparently also allege that (1) Dr. Seres and Griffin & Smith misrepresented their intention to report Floyd to Social Security for fraud; (2) Dr. Seres and Griffin & Smith knew they were not going to report fraud but falsely implied to the Board and the Cornelisons that they would do so; (3) they intended this threat of a fraud report to intimidate the Cornelisons and possibly cause the Cornelisons not to contest the petition to terminate benefits; (4) the Cornelisons justifiably relied on the statement of intent; and (5) the Cornelisons were damaged.
But the Cornelisons cannot show justifiable reliance on this asserted misrepresentation either. According to the Restatement, “[t]he recipient of a fraudulent misrepresentation can recover against its maker for [his] pecuniary loss resulting from [the misrepresentation] if, but only if, (a) he relies on the misrepresentation in acting or refraining from action, and (b) his reliance is justifiable.”35 The Cornelisons did not allege they suffered a loss because of any action they took or failed to take in reliance on the misrepresentation. They appear to allege they suffered emotional distress because they were concerned that Dr. Seres or Griffin & Smith would report Floyd for Social Security fraud; they have also alleged damages based on the time and energy expended in this lawsuit and in opposing the petition to terminate. But as we understand their argument, the emotional distress resulted from the misrepresentation itself, not from some action they took in reliance on it. And the action they took—vigorously opposing the petition to terminate benefits and suing the defendants in this case—does not show any reliance on the statements “in Dr. Seres‘s reports suggesting social security fraud and Dr. Seres‘s duty to report it.” To the contrary, it indicates that the Cornelisons did not believe the truth of the statements and wanted to clear their name. The superior court thus correctly dismissed or granted summary judgment on the common law fraud claim.
E. The Superior Court Properly Dismissed The Professional Negligence Claims.
The Cornelisons brought a professional negligence action against Dr. Seres, TIG, and
“A professional malpractice action involves ‘a professional‘s alleged breach of a duty of due care which was implied by law as a result of a сontractual undertaking.‘”38 In this case, the Cornelisons did not have a contract with Johnson, and thus the superior court determined they had no cause of action for professional malpractice against him. The court also decided there was no attorney-client or doctor-patient relationship between the Cornelisons and Griffin & Smith or Dr. Seres, so there could be no professional liability.
Our decision in Smith v. Radecki held that an employer‘s doctor in a workers’ compensation case generally does not enter into a physician-patient relationship with the injured worker; we also acknowledged a “growing body of case law from other states” that recognizes independent medical examiners may have limited duties to those they examine.39 But as in Smith,40 these limited duties are not implicated here. The superior court thus correctly dismissed the professional negligence action against Dr. Seres. Because any professional malpractice action against TIG is barred by
F. Summary Judgment On Or Dismissal Of The Negligent Infliction Of Emotional Distress Claims Was Error.
The Cornelisons alleged that the defendants negligently caused them “severe emotional distress, unnecessary pain and suffering[] and inconvenience” by their conduct during the workers’ compensation proceedings. In their complaint they also alleged that the defendants had caused them “physical distress” and “great physical ... harm.” We have held that “there is no recovery of damages for emotional distress where the emotional distress arises from negligent conduct and is unaccompanied by physical injury.”42 We have recognized two exceptions to this rule: the bystander exception and the preexisting duty exception.43
The superior court granted summary judgment to Dr. Seres on the NIED
1. Dr. Seres
While we agree with the superior court that Dr. Seres did not owe the Cornelisons a preexisting duty that would excuse them from pleading a physical injury, we disagree that
Dr. Seres did not render an opinion as an independent medical examiner under
2. Griffin & Smith
The superior court granted Griffin & Smith judgment on the pleadings under
Griffin & Smith denied in its answer the Cornelisons’ allegations that they suffered great physical harm and physical distress. We have previously stаted that “a
On appeal, Griffin & Smith also contends that
tion due under [certain sections of the AWCA].” Griffin & Smith is not liable for the compensation due Floyd; TIG, as the compensation carrier for his former employer, is liable for that compensation. Griffin & Smith points to no authority supporting its contention that the employer‘s attorney is protected by the exclusive remedy provision, and we have found none.57 The superior court erred in granting judgment on the pleadings to Griffin & Smith on this basis as well. We therefore reverse the superior court‘s grant to Griffin & Smith of judgment on the pleadings as to the NIED claim.
3. Johnson
The superior court dismissed the NIED claim against Johnson pursuant to
4. TIG
On аppeal the Cornelisons do not assert that the superior court was mistaken in its determination that the exclusive liability provision of the AWCA barred the NIED claim against TIG because it is a negligence claim.59 They have waived any argument that the court erred in dismissing the NIED claim against TIG,60 so we affirm the dismissal of the NIED claim against TIG.
G. The Superior Court Did Not Address The Statutory Fraud Claims, Which We Remand For Consideration.
On appeal to this court, the Cornelisons contend that the superior court failed to recognize the duties imposed on the defendants by
We disagree with the contention that the statutory fraud claim was raised for the first time on appeal. The Cornelisons cited the statute in several contexts in the superior court, including the discussion related to primary jurisdiction and their opposition to Dr. Seres‘s motion for summary judgment. Both Griffin & Smith and the adjusters argued
with regard to primary jurisdiction thatThe Cornelisons’ pleadings alleged that the defendants were aware that the information they were submitting to the Board was false or misleading—that the defendants were perpetrating a fraud on the Board. They alleged the defendants presented “tainted, dishonest” and “outrageously contrived” evidence and made “knowing misstatements [or] misrepresentations” to the Board for the purpose of terminating Floyd‘s benefits. They have consistently argued that the allegation of Social Security fraud in Dr. Seres‘s report to the Board was false and served no legitimate purpose in the Board proceedings. They contend on appeal, as they did in the superior court, that Griffin & Smith and Dr. Seres knew the allegation of Social Security fraud was untrue, pointing to Dr. Seres‘s deposition testimony that he had communicated with a “legal beagle[]” and together they decided not to make a report to Social Security.61 Additionally, as the Cornelisons point out, Robert Griffin signed an affidavit in the Board proceeding stating that neither the adjuster nor Floyd‘s former employer had ever “asserted a claim of fraud” or “a claim of drug diversion in this case.”62 Implicit in the Cornelisons’ argument is the contention that TIG and Griffin & Smith must have known the allegations of fraud and drug diversion were false because they did not make a claim about either one before the Board.
It appears from their motions for a stay and for a continuance, which included a primary jurisdiction argument, that their theory of the application of this statutory tort was that the Board needed to determine in the first instance whether the evidence presented was false.63 This was not an unreasonable position in light of the Board‘s statutory role as the fact finder with “the sole power to determine the credibility of a witness”64 in workers’ compensation proceedings. It would also be consistent with the manner in which a plaintiff must proceed in the tort of malicious prosecution, where a plaintiff must have first won the lawsuit that provides the basis for the claim.65
The legislative history we have discussed in prior cases, and upon which TIG relies, is related to
Because the superior court did not address the statutory fraud claim in the first instance, we remand this claim.
H. The Cornelisons Waived The Defamation Claim As To Johnson, Griffin & Smith, And TIG On Appeal; We Remand The Defamation Claim Against Dr. Seres.
The superior court decided that Johnson, Griffin & Smith, and TIG were entitled to absolute immunity from liability for any defamatory statements they made because those statements had been made in the context of the Board proceeding and were thereforе privileged. The superior court used two rationales to grant summary judgment on the defamation claim to Dr. Seres: it decided both that the statute of limitations barred all claims against Dr. Seres because the EME took place in 2008 and that Dr. Seres had absolute immunity based on
The Cornelisons included the defamation claim in their statement of points on appeal, but in their briefing before us, they failed to advance any argument that the superior court‘s privilege analysis as to Johnson, Griffin & Smith, and TIG was incorrect, so this claim is waived as to those defendants.73 But they did argue that the superior court erred in granting Dr. Seres summary judgment on the statute of limitations.
The other rationale the superior court used to grant summary judgment to Dr. Seres on the defamation claim was absolute immunity under
While we do not address the superior court‘s decision regarding the Cornelisons’ defamation claim against the other defendants, we reject the argument that the litigation privilege to defamation claims applies to protect the defendants from all possible claims against them based on the defamatory statements. To accept this blanket defense would effectively eviscerate
I. Granting Summary Judgment Or Dismissal On The Intentional Infliction Of Emotional Distress Claims Was Error.
The Cornelisons alleged that the defendants committed the tort of intentional infliction of emotional distress through their participation in the termination proceedings. To present a prima facie case of IIED, a plaintiff must show: “(1) the conduct is extreme and outrageous, (2) the conduct is intentional or reckless, (3) the conduct causes emotional distress, and (4) the distress is severе.”79 In considering summary judgment on an IIED claim, the trial court “should accept as true those facts most favorable to the plaintiff” and then “decide whether the severity of the emotional distress and the conduct of the offending party warrant submission of the claim to the jury.”80 According to the Restatement, to support a claim of IIED, the conduct in question must be “so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community” that it would cause “an average member of the community ... to exclaim, ‘Outrageous!‘”81 The superior court summarily adjudicated the IIED claims against all of the defendants, but it did so for different reasons. We thus discuss each defendant separately.
Griffin & Smith moved for judgment on the pleadings under Civil Rule 12(c); it did not ask the court to grant it summary judgment. We have previously stated that “a Rule 12(c) motion ‘only has utility when all material allegations of fact are admitted in the pleadings and only questions of law remain.‘”82 A party can prevail on a Rule 12(c) motion only if the nonmoving party‘s “pleadings contain no allegations that would permit recovery if proven.”83 In considering a Rule 12(c) motion for judgment on the pleadings, the court is limited to the pleadings: per Rule 12(c), if “matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment.” Thus the requirements for a Rule 12(c) motion are akin to the requirements of Rule 12(b)(6).84
Rule 12(c) has limited utility here because the material facts were subject to dispute. The Cornelisons alleged that the defendants, including Griffin & Smith, perpetrated a fraud on the Board by presenting evidence that was manipulated or false and had engaged in “extreme and outrageous conduct” against them, that the defendants’ cоnduct was “intentional and/or reckless,” and that the conduct had caused the Cornelisons “severe emotional distress.” In its answer Griffin & Smith simply denied the factual allegations on which the Cornelisons’ IIED claim was based. Griffin & Smith did not contend that the statements were legal conclusions not amenable to admission or denial. In McGrew v. State, Department of Health & Social Services, we held that the plaintiffs had adequately pleaded an IIED claim when they alleged “that [the division‘s] conduct was ‘extreme, outrageous, and atrocious‘; that its conduct was ‘intentional and/or reckless‘; that its conduct ‘caused emotional distress’ to the [plaintiffs]; and that their distress was ‘severe’ and that they ‘suffered personal injury, personal humiliation, mental anguish, pain and suffering.‘”85 The allegations in the Cornelisons’ complaint are comparable, so the Cornelisons adequately pleaded the elements of an IIED claim.
Griffin & Smith argue that its conduct was absolutely privileged because it had the right to bring a petition to terminate Floyd‘s benefits and the alleged outrageous conduct was part of their efforts to terminate his benefits. But as the Restatement notes, liability is barred only when the actor “has done no more than to insist upon his legal rights in a permissible way.”86 The Cornelisons alleged that the defendants participated in a fraud on the Board by presenting evidence they knew or should have known was false with the purpose of terminating Floyd‘s benefits because they hoped to close an expensive claim, not because they thought he was in fact no longer disabled.
The Cornelisons thus adequately set out the elements of an IIED claim in their complaint, so granting a judgment on the pleadings to Griffin & Smith on this claim was erroneous.
2. Dr. Seres
The superior court granted summary judgment to Dr. Seres on statute of limitations grounds, deciding that the IIED claim against Dr. Seres was based solely on the Cornelisons’ contention that Dr. Seres had intentionally injured Floyd during the 2008 EME. The court also determined that
With respect to the statute of limitations, the superior court erred in considering only claims of intentional injury during the EME in 2008.88 The Cornelisons stated in both the interrogatory response the superior court cited and their opposition to Dr. Seres‘s motion for summary judgment that their IIED claim was also based on the allegations in Dr. Seres‘s reports that Floyd should be investigated for drug diversion and that he was committing Social Security fraud. In support of their opposition to Dr. Seres‘s motion they included a copy of deposition testimony from Judy stating that the IIED claim was based in part on Dr. Seres‘s calling Floyd a fraud; Judy included in that testimony information about the severity of Floyd‘s emotional distress. As we discussed above, the statute of limitations could not have begun on claims related to the allegation of fraud аt least until Dr. Seres wrote the report.89 Granting summary judgment to Dr. Seres on the IIED claim with respect to the allegations of Social Security fraud and drug diversion was error.
3. TIG
The superior court granted summary judgment to TIG on the basis that its “presentation of evidence to the [Board] [was] not outrageous conduct” in that TIG was “specifically and legally entitled to present such evidence.” The court also stated that the Cornelisons had “not present[ed] any specific emotional injuries resulting from defendants’ conduct.” The court also found that the conduct did not meet the standard of outrageousness set out in the Restatement and in case law. Quoting Shehata v. Salvation Army,90 the court characterized TIG‘s conduct as follows:
The defendants took reasonable steps in pursuit of [their] ‘obligation to protect [their] interests.’ While the [Cornelisons] claim that Dr. Seres‘s opinion was biased or the investigator‘s work was biased, the [Board] will take into account a potential witness[‘s] bias in making its determination of credibility under
AS 23.30.122 , before rendering a decision to terminate or modify benefits.91
(Footnote omitted.)
TIG characterized the Cornelisons’ claims as “essentially that they don‘t like the procedures in place under the [AWCA]” and asserted it had “followed established legal procedures.” The Cornelisons asserted that the defendants, including TIG, had presented false or maniрulated evidence to the Board and had perpetrated a fraud on the Board. In their opposition to TIG‘s motion, the Cornelisons stated that, even though TIG had no evidence to support the allegations about Floyd diverting drugs or committing Social Security fraud, it nonetheless submitted reports containing those allegations to the Board, and they additionally contended that TIG had brought the Board proceedings in bad faith.
TIG failed to offer any admissible evidence to support its contention that it had done nothing more than take actions it was “specifically and legally entitled to take.” The evidence it presented to support its summary judgment motion was mainly deposition testimony or discovery responses from the Cornelisons and one of the Cornelisons’ witnesses.94 The discovery responses included statements alleging the adjuster knew the evidence supporting the petition to terminate “was corrupt and submitted in bad faith” and that the adjuster “opt[ed] to aid and abet and perpetuate false, fraudulent, misrepresentative, defamatory, libelous, and legally insufficient claims against the Cornelisons” by continuing to use both the surveillance materials and Dr. Seres‘s reports containing the accusations of fraud and improper drug use. The evidence TIG presented also included deposition testimony from Floyd that, read in the light most favorable to him, indicated he became so angry and despondent after reading the allegations of fraud contained in Dr. Seres‘s report that he became suicidal and had to seek treatment with a therapist. TIG offered no evidence to support its claim that it had done nothing more than follow established process in its attempt to terminate Floyd‘s benefits; it did not, for example, submit an employee‘s affidavit explaining the proсess it used to investigate the accuracy of the evidence it relied on.
Because TIG failed to offer any evidence to support its argument, granting summary judgment to TIG on the IIED claim was error.
4. Johnson
In granting summary judgment to Johnson on the IIED claim, the superior court decided that the “investigation was so covert that neither [Floyd] nor [Judy] was ever aware of [the investigators‘] presence.” From this the court concluded that “[t]he defendants’ conduct during the investigation does not present as outrageous conduct.” The court also stated that the Cornelisons did “not present any specific emotional injuries resulting from [Johnson‘s] conduct,” but rather “only generally claim[ed] ‘emotional distress.‘” It then explained that even if the Cornelisons “had presented sufficient facts to show severe emotional distress, that distress did not emanate from [Johnson‘s] actions.”
In support of their opposition to Johnson‘s motion for summary judgment, the Cornelisons included an affidavit from Judy about discrepancies between the investigators’ notes and the corresponding footage and a log of the times that were edited out of one day‘s video.96 Judy‘s affidavit also noted inconsistencies in Johnson‘s deposition testimony about the edited videos. The Cornelisons submitted a copy of their expert report from the Board proceeding, which detailed several examples of what a reasonable person could infer were relevant omissions from the edited videos. For example, the report identifies at least three instances when the edited video did not show Floyd getting up from a bending or squatting position, with gaps in the time stamps at those points. Because the court is required at summary judgment to construe all evidence in favor of the nonmoving party, the Cornelisons provided adequate evidence to raise material issues of fact about the accuracy of the edited videos, Johnson‘s state of mind in producing them, and causation.
The record does not support the superior court‘s statement that the Cornelisons “only generally claim[ed] ‘emotional distress.‘” In their opposition to summary judgment, the Cornelisons included copies of deposition testimony by both Floyd and Judy about their emotional distress. Floyd testified that he was suicidal for a period of time and sought counseling. While Judy‘s distress was not as severe, she testified about stress-related physical symptoms. Both attributed their distress to Johnson‘s edited videos as well as Dr. Seres‘s statements that were made after viewing the edited videos.97
The superior court relied on this statutory subsection in granting summary judgment to Johnson on the defamation claim, but the statute forecloses any civil damages, not just those for defamation. As the superior court noted, the statute expressly states it does not preclude liability for civil damages if the liability arose as a result of gross negligence or reckless or intentional misconduct.101 The superior court focused on the “misconduct” aspect of this exception to immunity and decided that the edited videos “accurately depicted [Floyd‘s] outdoor activities” and that “editing, however sloppily, the high numbers of hours of footage into a compact presentable report” did not amount to misconduct.
The superior court did not explain the basis for its decision that there was no material factual dispute that the edited videos accurately depicted Floyd‘s activities. The superior court appears to have misunderstood the Cornelisons’ assertions аbout why the edited videos were inaccurate. They did not dispute that Floyd was the person in the edited videos; rather what they alleged was that Johnson had deleted Floyd‘s pain behaviors or otherwise edited the video to depict Floyd as more physically capable than he was. The Cornelisons’ expert report documented several instances of missing or omitted material from the edited videos. The Board echoed these concerns about the edited videos’ accuracy in its decision, noting that the edited video of the August 15 surveillance footage showed Floyd “sitting or bent down” followed by a shot of him standing “without capturing his efforts to rise.” Dr. Seres specifically noted the absence of pain behaviors in the edited videos in his report; from this absence of pain behaviors he concluded that Floyd “does not likely have significant back pain.”
We conclude the Cornelisons provided enough evidence to show that a material factual dispute existed about the accuracy of the edited videos and the manner in which Johnson created them. They also presented more than generalized claims of emotional distress. Because the superior court failed to address the issues in dispute in the IIED claim against Johnson, we reverse the grant of summary judgment on this claim and remand to the superior court.
J. The Cornelisons Waived The Invasion Of Privacy Claim.
The Cornelisons contend that the superior court failed to address their invasion of privacy claim. They do not provide a record cite to show where they alleged this claim in their second amended complaint. We were unable to identify a claim in the second amended complaint similar to one the Cornelisons discuss in their brief before us, so we deem this argument waived.
V. CONCLUSION
We VACATE the judgments entered against the Cornelisons. We REVERSE the superior court‘s grant of summary judgment or dismissal as to all defendants on the IIED claims, REVERSE the dismissal of the NIED claims as to Johnson and Griffin & Smith, and REVERSE the grants of summary judgment to Dr. Seres on the NIED and defamation claims. We REMAND those claims and the Cornelisons’
Stowers, Chief Justice and Maassen, Justice, not participating.
WINFREE, Justice, dissenting in part.
I respectfully disagree with the court‘s conclusion that the Cornelisons failed to adequately brief the superior court‘s dismissal of their defamation claim against TIG Insurance and Griffin & Smith based on “absolute privilege.”
I start with the general proposition that the absolute litigation privilegе applies only to statements that are pertinent to or have some relationship to the legal proceedings in which they are made.1 The court itself makes it abundantly clear that one of the Cornelisons’ primary arguments against TIG and Griffin & Smith in the superior court was the illegitimacy of using Dr. Seres‘s Social Security fraud and drug diversion allegations in the workers’ compensation proceeding.2 Yet the superior court did not expressly address the Cornelisons’ argument when it dismissed their defamation claims against TIG and Griffin & Smith. Although noting the general rule I have just stated, the sum and substance of the superior court‘s actual rulings—the former by summary judgment and the latter by judgment on the pleadings—was that because the alleged defamation took place within the workers’ compensation proceeding the absolute privilege applied. One of two things must be true: Either the superior court failed to appreciate the threshold legal predicate to the application of the absolute litigation privilege or the superior court failed to expressly note it was concluding as a matter of law that Dr. Seres‘s statements about possible Social Security fraud and drug diversion were pertinent to and reasonably connected to the workers’ compensation proceedings.3
TIG understood the Cornelisons were challenging the superior court‘s absolute privilege ruling, as a section of TIG‘s appellee‘s brief was devoted to that challenge. TIG argued that anything it submitted in the workers’ compensation proceeding was absolutely privileged. Its fallback position was that any statements not absolutely privileged were not false or defamatory or did not cause quantifiable damages, issues the superior court never addressed. But TIG studiously ignored the Cornelisons’ argument that the introduction into the workers’ compensation proceedings of Dr. Seres‘s statements about Social Security fraud and drug diversion had no real pertinence or connection to those proceedings.
Griffin & Smith also understood the Cornelisons were challenging the superior court‘s ruling on absolute privilege, as a section of its appellee‘s brief was devoted to that challenge. Griffin & Smith argued that Alaska follows the rule of absolute litigation privilege, that the Cornelisons’ allegations of defamation arose from actions within a legal proceeding, and therefore it had been entitled to judgment on the pleadings.4 But Griffin & Smith also studiously ignored the Cornelisons’ argument that the introduction into the workers’ compensation proceedings of Dr. Seres‘s statements about Social Security fraud and drug divеrsion had no real pertinence or connection to those proceedings.
Notes
A person who (1) knowingly makes a false or misleading statement, representation, or submission related to a benefit under this chapter; (2) knowingly assists, abets, solicits, or conspires in making a false or misleading submission affecting the payment, coverage, or other benefit under this chapter; (3) knowingly misclassifies employees or engages in deceptive leasing practices for the purpose of evading full payment of workers’ compensation insurance premiums; or (4) employs or contracts with a person or firm to coerce or encourage an individual to file a fraudulent compensation claim is civilly liable to a person adversely affected by the conduct, is guilty of theft by deception as defined in
AS 11.46.180 , and may be punished as provided byAS 11.46.120 —11.46.150 .
Except as provided in (f) of this section, a person is not liable for civil damages for filing a report concerning a suspected, anticipated, or completed fraudulent act or a false or misleading statement or representation with, or for furnishing other information, whether written or oral, concerning a suspected, anticipated, or completed fraudulent act or false or misleading statements or representation to
(1) law enforcement officials or their agents and employees;
(2) the division of wоrkers’ compensation, the division of insurance in the Department of Commerce, Community, and Economic Development, or an agency in another state that regulates insurance or workers’ compensation;
(3) an insurer or adjuster or its agents, employees, or designees, or the risk manager of a self-insured employer under this chapter.