Opinion
CASE NO. 8:02CV584
July 2, 2003
MEMORANDUM AND ORDER
This matter is before the Court on the Motion to Dismiss Count I of the Complaint against Defendant Edward Jones Co. ("Edward Jones") (Filing No. 15). The Plaintiff Jeanne M. Pestal has filed a brief in opposition to the motion (Filing No. 20), and Edward Jones sought leave to file a reply brief, which is granted, and the reply brief has been considered (Filing No. 22, Attachment No. 1).
The motion also seeks to dismiss claims against Defendant Kirk B. Hutton, but subsequent to the filing of the Defendant's Motion to Dismiss, the Plaintiff filed a motion to dismiss all claims against Hutton, which the Court granted in its Order at Filing No. 31.
Pestal's brief is styled as an "Objection," but it will be treated as a brief in opposition to the Defendant's motions consistent with the rules of the Court. The clerk shall be directed to terminate this objection.
In her Complaint, Pestal alleges that her former employer, Edward Jones, terminated her employment in violation of the Americans with Disabilities Act, 42 U.S.C. § 11201 et. seq. ("ADA"), and in violation of Employee Retirement Income Security Act, 29 U.S.C. § 1001 et. seq. ("ERISA"). In addition, Pestal alleges the common law claim of intentional infliction of emotional distress. By this motion, Edward Jones seeks dismissal of the intentional infliction of emotional distress claim on the basis that it is under the exclusive jurisdiction of the Nebraska Workers Compensation Act, Neb. Rev. Stats. §§ 48-101 — 1,118 (Reissue 1998) (hereafter the "Act"). Because I conclude that the claim is not under the exclusive jurisdiction of the Nebraska Workers Compensation Court, Edward Jones' motion will be denied.
Factual Background
According to the Complaint (Filing No. 1), Jeanne Pestal was employed with Edward Jones from September 1986 through November 2001. At the time of her termination, she was employed as a Senior Branch Office Administrator in Defendant's office located in Blair, Nebraska. In May 1999, Jeanne Pestal's spouse, Dennis Pestal, was diagnosed with multiple sclerosis. She alleges that Dennis Pestal is a qualified individual with a disability under the ADA. On or about January 1, 2000, Dennis became an insured under the Defendant's group health plan, which was part of Edward Jones' employee benefit package devised under and subject to ERISA.
Jeanne Pestal alleges that she made several claims under the health insurance policy on behalf of Dennis Pestal after January 12, 2000. On or about October 19, 2001, Edward Jones issued a memorandum to all branch offices that health care claims had increased by thirty percent from the number of claims made the previous year. On November 5, 2001, Jeanne Pestal's employment with Edward Jones was terminated. The reason given to her for the termination was that she had falsified time cards. Pestal alleges that Edward Jones' stated reason for her termination was a pretext for discriminating against her based on the basis of her husband's disability and health insurance claims.
Standard of Review
A motion to dismiss under Rule 12(b)(6) will only be granted if "it is clear that no relief can be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King and Spalding, 467 U.S. 69, 73 (1984). This Court will, as it must, accept all factual allegations as true and draw all reasonable inferences in favor of the non-moving party. Howard. v. Conventry Healthcare, 293 F.3d 442, 444 (8th Cir. 2002). Pestal alleges in Count III that Edward Jones' intentionally inflicted emotional distress upon her by engaging in outrageous conduct, and it is this count that Edward Jones seeks to dismiss.
Analysis
Edward Jones contends that Pestal's exclusive remedy for her claim alleging the intentional infliction of emotional distress is under the Nebraska Workers Compensation Act. It has long been recognized that, "The Nebraska Workers' Compensation Court has exclusive jurisdiction in actions arising under the Workers' Compensation Act." Peak v. Bosse, 202 Neb. 1, 272 N.W.2d 750 (1978); Abbott v. Gould, Inc., 232 Neb. 907, 909, 443 N.W.2d 591, 593 (1989). The issue presented to this Court is whether Pestal's claim based on the intentional infliction of emotional distress states a cause of action under the Act.
Defendant's primary argument is that because the injury that Pestal allegedly sustained arose out of her relationship with Edward Jones as her employer, the Plaintiff's exclusive remedy is in the workers' compensation courts of Nebraska. Edward Jones cites three cases for the proposition that the Act is the exclusive remedy against an employer for any injury arising out of and in the course of employment, but these cases can be distinguished from this case because 1) in each of those cases the existence of the employment relationship was at issue; and 2) in each of those cases, the claim brought by the plaintiffs was a negligence claim arising from an undisputed work-related accident. See Schweitzer v. American Nat. Red Cross, 256 Neb. 350, 356, 591 N.W.2d 524, 529 (1999) (observing that a determination of employee status under the Act is ordinarily sufficient for the district court to end its analysis and dismiss a purported negligence suit); Kaiser v. Millard Lumber, Inc., 255 Neb. 943, 945, 587 N.W.2d 875, 878 (1999) (finding that defendant was an employer under the Act and dismissing temporary worker's negligence action against it); and Daniels v. Pamida, Inc., 251 Neb. 921, 929, 561 N.W.2d 568, 572 (1997) (holding that Pamida was an employer vis-a-vis Daniels within the meaning of the Nebraska Workers' Compensation Act and dismissing plaintiff's negligence action). In this case, there is no dispute that Pestal was employed by Edward Jones. In addition, Pestal has not asserted a negligence claim against Edward Jones, and she has not alleged that she has been involved in a work-related accident or occupational disease.
The Complaint alleges that Pestal was employed by Edward Jones, and that because of the employment relationship, Pestal was eligible to participate in Edward Jones` employee benefit plan, including a group health plan. She alleges that because she took advantage of the benefits to which she and her spouse were entitled under the health plan, she was terminated. Obviously, there is no dispute that the claim is related to Pestal's employment relationship with Edward Jones. However, as the Nebraska Supreme Court has acknowledged, the exclusivity of the Workers Compensation remedy turns on the issue of coverage.
While the Act is intended to cover only claims arising out of and in the course of employment, the Nebraska Supreme Court has stated:
The operative fact is one of coverage, not of election to file a claim for compensation. If coverage exists, even though for some reason compensation may not be payable, the [Workers'] Compensation Act is exclusive. If the accident does not arise out of and in the course of the employment, there is no coverage, and the parties then are not subject to the act. An adjudication that an injury does not arise out of or in the course of the employee's employment is a conclusive determination only of the fact that the [Workers'] Compensation Court lacks jurisdiction in the matter. This determination does not bar recourse to the tort remedy, if one exists.Abbott v. Gould, Inc., 232 Neb. 907, 910-911, 443 N.W.2d 591, 594 (1989), citing with approval Marlow v. Maple Manor Apartments, 193 Neb. 654, 659, 228 N.W.2d 303, 306 (1975).
Relying on Neb. Rev. Stat. §§ 48-101, 109, and 114, Edward Jones argues that the Complaint's Count III is covered by the Act. Section 48-101 states in relevant part:
When personal injury is caused to an employee by accident or occupational disease, arising out of and in the course of his or her employment, such employee shall receive compensation therefor from his or her employer if the employee was not willfully negligent at the time of receiving such injury.
Neb. Rev. Stat. § 48-101 (Reissue 1998). Section 48-109 refers to workers' compensation being paid "in every case of injury or death caused by accident or occupational disease arising out of and in the course of employment," and Section 48-111 states that the employer and employee's agreement or election to proceed under the Act, "shall be a surrender by the parties thereto of their rights to any other method, form, or amount of compensation or determination thereof than as provided in the Nebraska Workers' Compensation Act." Neb. Rev. Stat. § 48-111 (Reissue 1998). Edward Jones contends that these sections require this Court to dismiss the intentional infliction of emotional distress claim because Pestal's alleged emotional distress arose "out of and in the course of . . . her employment" and, therefore, that Pestal may seek compensation only under the Act.
I reject Edward Jones' argument because it ignores two of the basic requirements of the Act. First, a worker must have sustained an "injury." Neb. Rev. Stat. § 48-101. "Injury" is defined under the Act at § 48-151(4) as follows: "The terms injury and personal injuries shall mean only violence to the physical structure of the body and such disease or infection as naturally results therefrom. . . ." Pestal's brief points out, quite accurately, that there is no Nebraska case holding that an "injury" under the Act can be a purely mental injury caused by a mental stimulus. Rather, the Nebraska Act and Nebraska courts have required proof that all "injuries" include the element of "violence to the physical structure of the body" under § 48-151(4). Because Pestal does not allege and does not contend that her emotional distress is related to or caused by a "violence to the physical structure of the body," this Court concludes that the injury is not one covered by the Act.
Edward Jones' exclusivity argument also fails because Pestal has not alleged that her emotional distress was caused by an accident or occupational disease. The gist of Pestal's Complaint is that she was terminated as a result of making legitimate claims pursuant to Edward Jones' health plan. The Act's definition of "accident" is "an unexpected or unforeseen injury happening suddenly and violently, with or without human fault, and producing at the time objective symptoms of an injury. The claimant shall have a burden of proof to establish by a preponderance of the evidence that such unexpected or unforeseen injury was in fact caused by the employment. See § 48-151(2). Nothing in that definition, nor the leading cases interpreting it, brings the facts as alleged in Pestal's Complaint within the Act's coverage. See Crosby v. American Stores, 207 Neb. 251, 254, 298 N.W.2d 157, 159 (1980); and Union Packing Co. of Omaha, Inc. v. Klauschie, 210 Neb. 331, 337, 314 N.W.2d 25, 29 (1982).
Comparing this case to Dyer v. Hastings Industries, Inc., 252 Neb. 361, 562 N.W.2d 348 (1997), is illustrative. In that case, the plaintiff sought recovery for emotional distress under the Act. The Court determined that claimant himself admitted that his depression was not the product of an accident but resulted, instead, from management harassment. Id. The Nebraska Supreme Court held that a claimant was not entitled to workers' compensation benefits for mental depression, where the claimant's depression was the product of the circumstances of management scrutiny and his termination from his employment, rather than the product of an accident or occupational disease arising out of his employment. Like the claimant in Dyer, Pestal's emotional injury is not the product of an accident; and she has not claimed emotional distress causally related to a work-related injury. Instead Pestal has alleged that Edward Jones has committed a separate, intentional tort against her, and under the authority of Abbott v. Gould, Inc., 232 Neb. at 910-911, 443 N.W.2d at 594, this Court finds that she is entitled to do pursue it.
Very recently, the Nebraska Supreme Court declined to adopt an exception to the Act that would have allowed an action by a third party tort-feasor against an employer, based on the employer's intentional acts, for either indemnity or contribution under Section 48-148. Harsh Intern., Inc. v. Monfort Industries, Inc., 266 Neb. 82, 83, 86-7, 662 N.W.2d 574, 577, 579 (2003). In rejecting the exception, the Nebraska Supreme Court stated:
[T]he Act provides the exclusive remedy by the employee against the employer for any injury arising out of and in the course of the employment. Abbott v. Gould, Inc., 232 Neb. 907, 443 N.W.2d 591 (1989). Thus, we have held that intentional acts of an employer fall within the scope of the Act. Id.
This language could be read to indicate that an action for the intentional infliction of emotional distress must be prosecuted under the Act. However, where there is neither an accident nor an injury as those terms are defined in the plain language of the Act, Pestal's emotional distress is not an "injury" bringing her claim within the exclusive jurisdiction of the Workers' Compensation Court. See Sorensen v. City of Omaha, 230 Neb. 286, 287-288, 430 N.W.2d 696, 696-697 (1988) (hold that a mental injury caused by a mental stimulus and without a physical manifestations is not an "injury" under the Act.)
Based on the language of the Act, the cases discussed herein, and the facts in the Complaint which I have taken as true for purposes of this motion, I conclude that Pestal's claim — though related to her employment relationship with Edward Jones — does not constitute a personal injury that is "caused . . . by accident or occupational disease." Thus, her injury is not covered under the Act, and Pestal is free to seek a remedy from Edward Jones under tort law. In so doing, Pestal will be put on her proof to demonstrate:
"(1) that there has been intentional or reckless conduct, (2) that the conduct was so outrageous in character and so extreme in degree as to go beyond all possible bounds of decency and is to be regarded as atrocious and utterly intolerable in a civilized community, and (3) that the conduct caused emotional distress so severe that no reasonable person should be expected to endure it.Brandon v. County of Richardson, 261 Neb. 636, 624 N.W.2d 604 (2001).
Edward Jones also urges this Court to dismiss Count III characterizing it as simply an end-run around Nebraska's long standing employment-at-will doctrine. Edward Jones contends that Pestal should not be allowed to proceed on the intentional infliction of emotional distress claim because it is simply a pretext for asserting a baseless wrongful discharge claim. I disagree. There are facts alleged that make this claim different from a wrongful discharge claim, including the claims in Counts I and II of the Complaint. The Court has set forth the elements that Pestal will have to prove to entitle her to recovery on a claim for the intentional infliction of emotional distress. At this early stage of the proceedings, this Court cannot say, in the context of the Defendant's Rule 12(b)(6) motion, that there is no set of facts that could be proved consistent with the allegations that would permit Plaintiff's recovery on the third count.
For all these reasons, the Defendant's motion to dismiss will be denied.
IT IS ORDERED:
1) Defendant's Motion for Leave to File a Reply Brief (Filing No. 22) is granted, and the reply brief has been received and considered;
2) Defendant's Motion to Dismiss Count III (Filing No. 15) as to Edward Jones Co. only is denied, and the motion as to Defendant Hutton is moot based on the Court's Order at Filing No 31;
3) Plaintiff's "Objection" (Filing No. 20) is construed to be a brief offered in opposition to the Defendants' Motion to Dismiss, and the Clerk of the Court is hereby directed to terminate same.