Ragaller v. Ace American Insurance Company et al

MOTION for Partial Summary Judgment

D. Ariz.September 6, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 Joseph G. Adams (#018210) Courtney Henson (#030825) Carlie Tovrea (#029709) SNELL & WILMER L.L.P. One Arizona Center 400 E. Van Buren, Suite 1900 Phoenix, Arizona 85004-2202 Telephone: 602.382.6000 Facsimile: 602.382.6070 E-Mail: jgadams@swlaw.com chenson@swlaw.com ctovrea@swlaw.com Attorneys for Defendants IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Brian James Ragaller, Plaintiff, v. ACE American Insurance Company; Sedgwick Claims Management Services, Inc., Defendants. 4:15-cv-00327-TUC-DCB DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING DAMAGES Assigned to Hon. David C. Bury (Oral Argument Requested) Defendants ACE American Insurance Company (“ACE”) and Sedgwick Claims Management Services, Inc. (“Sedgwick”) move for partial summary judgment on plaintiff’s claim to punitive damages and his claimed damages for mental anguish, pain and suffering, and emotional distress. Now that discovery has been completed, it is plain that plaintiff has failed to identify any evidence that would allow him to make out a claim for punitive damages. As matter of law, plaintiff is required to demonstrate something more than the breach of the duty of good faith and fair dealing to support a punitive damages claim. There is no evidence, let alone clear and convincing evidence, to support a claim that ACE and Sedgwick acted with an evil mind or spiteful motive or that their conduct was so outrageous, oppressive or intolerable as required for the imposition of punitive damages Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 1 of 19 - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 under Arizona law. Without such evidence, summary judgment regarding punitive damages in favor of defendants is warranted. Further, plaintiff has failed to substantiate his claimed damages for mental anguish, pain and suffering, and emotional distress. Plaintiff offers no evidence other than his conflicting personal statements to support his claim that he suffered an invasion of property rights that was caused by defendants. Without such evidence, plaintiff cannot recover emotional distress damages as a result of any of defendants’ alleged bad faith conduct. In any event, defendants’ mental anguish, pain and suffering, and emotional distress damages are too speculative and unsupported by any admissible evidence that shows these alleged damages were actually caused by defendants. Plaintiff testified in his deposition that his emotional distress and mental anguish consisted of an aggravation of his existing mental health issues, namely depression and anxiety. However, there is no record evidence or expert testimony from which a jury could find a causal connection between his purported mental anguish and defendants’ alleged conduct. This motion is supported by the following memorandum of points and authorities, Defendants’ Separate Statement of Undisputed Facts in Support of Motion for Partial Summary Judgment (“SOF”) and the entire record before this Court. MEMORANDUM OF POINTS AND AUTHORITIES I. THE UNDISPUTED FACTS DO NOT SUPPORT PLAINTIFF’S DAMAGES CLAIMS. A. Plaintiff’s Employment, Injury, and Workers’ Compensation Case. This case is based on a claim of bad faith relating to the payment of workers compensation benefits. Plaintiff began working for Sears, Roebuck & Co. (“Sears”) on December 9, 2013 as a preventative maintenance technician. SOF ¶ 1. He began his employment by working as an assistant to a lead repair technician. SOF ¶ 2. On December 23, 2013, plaintiff reported to Sears human resources employee Kate Cadotte that he had injured his knee. SOF ¶ 3. On that same day, plaintiff visited Concentra and complained “about his leg which was injured on 12/18/2013.” SOF ¶ 4. Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 2 of 19 - 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 The doctor wrote, “Pt. denies any specific injury but reports woke up with knee pain and swelling after a day of moving washing machines around using left knee.” SOF ¶ 5. The doctor diagnosed him with a “Sprain of Unspecified Site of Knee And Leg” and put plaintiff on modified duty. Id. Plaintiff’s claim was handled by Sedgwick, which served as the Third Party Administrator for worker’s compensation claims for plaintiff’s employer. SOF ¶ 6. ACE is the worker’s compensation insurance carrier for the employer, subject to a high deductible. SOF ¶ 7. Sedgwick’s records show that the claim was received on December 23, 2013, that the date of injury was December 16, 2013, and that “[t]he associate states that he does not know when it happened, but he states that his right knee is swollen. The associate states that it may have happened when he bumped his knee into a dryer at a customer’s home.” SOF ¶ 8. Elizabeth Young, Sedgwick’s adjuster, was assigned to handle plaintiff’s claim on December 24, 2013. SOF ¶ 9. Plaintiff’s supervisor, Mark Verhagen, wrote on a “Manager’s Investigation Report” on December 26, 2013 that plaintiff “is unsure as to when it happened or how it happened but could speculate that it might have happened when he was pushing back into place a washing machine while training with a senior technician.” SOF ¶ 10. Plaintiff continued to receive treatment at Concentra in late December, 2013, receiving physical therapy on December 26, 27, and 31, 2013. SOF ¶ 11. Plaintiff spoke with Ms. Young on January 2, 2013. SOF ¶ 12. Although Ms. Young believed the incident had occurred on December 16, 2013 based on other information, plaintiff at that time told her it occurred on December 20, 2013. SOF ¶ 13. On January 3, 2014, Ms. Young spoke with plaintiff and sent him a letter identifying Sedgwick’s position that his claim would be denied, noting that he “did not obtain any medical care to support a work related injury” and telling him he had a right to appeal this decision. SOF ¶ 14. Plaintiff did not object to the January 3 letter. SOF ¶ 15. Plaintiff did not fill out an Associate Statement of Injury until January 9, 2014, at which time he wrote that the incident occurred on December 20, 2013. SOF ¶ 16. Sedgwick Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 3 of 19 - 4 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 subsequently submitted a Notice of Claim Status to the Industrial Commission of Arizona on January 21, 2014 denying plaintiff’s claim. SOF ¶ 17. Plaintiff’s claim was denied because the conflicting stories made it so Sedgwick could not identify when Plaintiff was actually injured or how the injury occurred. SOF ¶ 18. Plaintiff, on his own, pursued and received medical care through a provider chosen by him and paid for by his private medical insurer. SOF ¶ 19. Plaintiff visited Brent Walker, a Physician’s Assistant for Dr. John Wild on January 9, 2014 and January 16, 2014. SOF ¶ 20. On January 30, 2014, plaintiff underwent orthopedic surgery on his knee. SOF ¶ 21. After his surgery, complications arose and plaintiff had a second knee surgery on February 15, 2014. SOF ¶ 22. Plaintiff was hospitalized and developed an infection. SOF ¶ 23. Plaintiff’s medical insurance covered the surgeries, doctor visits, and hospital stay. SOF ¶ 24. Plaintiff did not notify Sedgwick of these surgeries, complications, or subsequent doctor’s visits and treatment. SOF ¶ 25. Plaintiff testified that he experienced no delays in receiving medical care. SOF ¶ 26. Plaintiff further agrees that there are no medical bills that remain unpaid by Sedgwick. SOF ¶ 27. Nearly three months after the formal denial, on April 17, 2014, plaintiff’s attorney, Barton Baker, filed a Request for Hearing with the Industrial Commission of Arizona (“ICA”). SOF ¶ 28. Plaintiff never attempted to contact Sedgwick to dispute the claim denial prior to hiring an attorney. SOF ¶ 29. Plaintiff’s attorney reported to the ICA on April 17, 2014, that the injury occurred on December 18, 2013. SOF ¶ 30. Upon receipt of the Request for Hearing, Sedgwick reopened its claim on April 28, 2014. SOF ¶ 31. Plaintiff continued to receive medical treatment, and on May 29, 2014, Dr. Wild released plaintiff to work on July 14, 2014. SOF ¶ 32. As of May 29, 2014, plaintiff felt 90% improved. SOF ¶ 33. On August 11, 2014, Drs. James Hess and Raymond Schumacher conducted an independent medical evaluation of plaintiff. SOF ¶ 34. In the report completed by Drs. Hess and Schumacher on August 11, 2014, there were conflicting dates of injury as between December 18, 2013 and December 20, 2013. SOF ¶ 35. Even in this case, Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 4 of 19 - 5 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 plaintiff continues to state various dates of injury. See SOF ¶ 36 (Plaintiff’s Initial Rule 26.1(a) Disclosure Statement at 2) (stating plaintiff . . . “was injured in the course and scope of his employment on or about December 16, 2013”). The ICA held a hearing on September 17, 2014, and issued a decision on November 17, 2014 awarding plaintiff medical and indemnity benefits. SOF ¶ 37. The award became final on December 17, 2014. SOF ¶ 38. In this time period, the parties’ attorneys were attempting to negotiate a resolution. SOF ¶ 39. Plaintiff’s attorney did not pursue the indemnity benefits until January 27, 2015. SOF ¶ 40. Plaintiff’s attorney subsequently filed a petition for an A.R.S. § 23-1061(J) investigation for bad faith. Id. On February 23, 2015, the employer’s attorney submitted a response to the ICA, noting that all bills received in compliance with the statute had been paid and that Sedgwick was establishing the applicant’s wage relating to the indemnity benefits. SOF ¶ 41. On March 12, 2015, the employer’s attorney identified to the ICA and plaintiff that a check had been issued to cover indemnity due from the date of surgery through July 2014 and that the employer was “in the process of retaining a labor market expert to assist in determining what benefits may be due to the applicant during the time periods when he was placed on modified duty as the applicant has not as of yet produced any information as to his efforts to obtain work within those limitations as is required (or his own labor market expert opinion in lieu thereof, as case law permits). Once I have the opinion of my labor market expert, I will file that into evidence and request the adjuster pay any additional benefits the expert indicates.” SOF ¶ 42. In a conference memorandum dated March 18, 2015, the ALJ noted that most of the medical bills had been paid and that temporary compensation was paid from the date of plaintiff’s surgery on January 30, 2014 through July 14, 2014. SOF ¶ 43. Sedgwick issued a Notice of Claim Status on March 26, 2015, noting temporary compensation and active medical treatment terminated on February 26, 2015 because the claimant was discharged and that the injury resulted in permanent disability. SOF ¶ 44. Sedgwick also issued a Notice of Permanent Disability of “2% for knee” and awarding Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 5 of 19 - 6 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 $949.55 on March 26, 2015, and a Notice of Supportive Medical Maintenance Benefits authorizing two years of “2-4 evaluations per year by treating orthopedic surgeon,” “analgesics as felt to be necessary by said orthopedic surgeon,” and “left knee corticosteroid injection as felt to be indicated by said orthopedic surgeon” on March 25, 2015. SOF ¶ 45. The ICA Claims Manager denied plaintiff’s bad faith complaint on April 7, 2015. SOF ¶ 46. On April 14, 2015, defendants’ labor market expert identified that plaintiff would have no loss of earning capacity if he worked at a variety of sedentary jobs. SOF ¶ 47. The parties reached a settlement, and notified the ICA on July 16, 2015. SOF ¶ 48. Sedgwick ultimately paid all benefits, including benefits on previously denied care. SOF ¶ 49. B. Plaintiff’s Alleged Damages and Testimony. Plaintiff seeks damages for, among other things, past and future mental anguish and past and future pain and suffering. When asked to describe his anguish and pain, plaintiff testified that since at least the early 1990s he has suffered from “major depression, anxiety attacks and attention deficit disorder.” SOF ¶ 50. He also testified that the experience of “being in pain” “exacerbates the emotional and mental side of it,” which caused him to go into “a fairly steep, steep depression.” SOF ¶ 51. According to plaintiff, the physical pain that he referred to was “the pain in my knee.” SOF ¶ 52. He admitted that ACE and Sedgwick did not cause his knee injury. SOF ¶ 53. He also found fault with the medical care of Dr. Cole, who initially treated his injury. He stated that “Dr. Cole did not diagnose the seriousness of the injury and didn’t recommend any further specialist, and . . . my injuries could have been identified earlier.” SOF ¶ 54. Plaintiff subsequently acknowledged that defendants had “nothing” to do with Dr. Cole. SOF ¶ 55. Instead, plaintiff maintains that he suffered from depression and anxiety because of defendants denied his claim initially and then delayed payment. SOF ¶ 56. Plaintiff testified that while he had already been seeing a psychiatrist for consultation and medical treatment at the time that he suffered his work injury, and he continued to see the Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 6 of 19 - 7 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 psychiatrist. SOF ¶ 57. However, he did not seek any additional help or treatment to deal with his claimed additional depression. SOF ¶ 58. He admitted that he did not have a good understanding of his mental illness or what types of incidents and actions make his condition work, saying only that “[i]t is a mystery” to him. SOF ¶ 59. He also admitted that none of his medical providers agreed with his personal opinion that his depression was the responsibility of ACE and Sedgwick. SOF ¶ 60. II. SUMMARY JUDGMENT STANDARD A party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Although the initial burden is on the moving party, the entry of summary judgment is mandated “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Id. at 322. Although ACE and Sedgwick are the moving parties here, the burden to prove entitlement to damages is on plaintiff and the record demonstrates that plaintiff cannot meet his burden. III. SUMMARY JUDGMENT IS APPROPRIATE ON PLAINTIFF’S PUNITIVE DAMAGES CLAIM. “To obtain an award of punitive damages, a plaintiff must prove by clear and convincing evidence that the defendant engaged in ‘reprehensible conduct combined with an evil mind over and above that required for commission of a tort.’” Desert Palm Surgical Grp., P.L.C. v. Petta, 236 Ariz. 568, 343 P.3d 438, 454 (App. 2015) (quoting Linthicum v. Nationwide Life Ins. Co., 150 Ariz. 326, 723 P.2d 675, 681 (Ariz. 1986)). Punitive damages “are recoverable in bad faith tort actions when, and only when, the facts establish that defendant’s conduct was aggravated, outrageous, malicious or fraudulent. Indifference to facts or failure to investigate are sufficient to establish the tort of bad faith but may not rise to the level required by the punitive damage rule.” Rawlings v. Apodaca, 151 Ariz. 149, 726 P.2d 565, 578 (Ariz. 1987) (emphasis in original). Plaintiff’s claim for Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 7 of 19 - 8 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 punitive damages fail for two reasons. First, Plaintiff cannot offer clear and convincing evidence that he is entitled to punitive damages. Second, the alleged conduct of defendants does not, and cannot, rise to the level sufficient to justify an award of punitive damages. A. Plaintiff Cannot Offer Clear and Convincing Evidence That He Is Entitled To Punitive Damages. Punitive damages are only available “upon clear and convincing evidence of the defendant’s evil mind.” Linthicum, 150 Ariz. at 332, 723 P.2d at 681; Rawlings, 151 Ariz. at 162, 726 P.2d at 578. “Clear and convincing evidence” of a claim exists only when the truth of the factual contentions is “highly probable.” Colorado v. New Mexico, 467 U.S. 310, 316 (1984); see also State v. King, 158 Ariz. 419, 424, 763 P.2d 239, 244 (1988) (same). Punitive damages are, therefore, an extraordinary civil remedy that must only “be awarded in the most egregious of cases.” Linthicum, 150 Ariz. at 330, 723 P.2d at 679. “It is only when the wrongdoer should be consciously aware of the evil of his actions, or the spitefulness of his motives or that his conduct is so outrageous, oppressive or intolerable in that it creates a substantial risk of tremendous harm to others that the evil mind required for the imposition of punitive damages may be found.” Id. at 330, 723 P.2d at 679. Because a punitive damages claim must be supported by clear and convincing evidence, when considering motions for summary judgment on such a claim, courts must “view the evidence presented through the prism of the substantive evidentiary burden.” Anderson, 477 U.S. at 254; see also Scottsdale Publishing, Inc. v. Superior Court, 159 Ariz. 72, 764 P.2d 1131 (App. 1988) (adopting this standard). Accordingly, this Court must grant this Motion for Partial Summary Judgment because a jury applying the “clear and convincing” evidentiary standard could not reasonably find the evil mind necessary to support punitive damages. Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 8 of 19 - 9 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 B. Punitive Damages Are An Extraordinary Remedy That Are Not Appropriate Here. In Arizona, punitive damages are available only in certain narrow circumstances – circumstances that do not exist in this case. As the Arizona Supreme Court has explained, “punitive damages are those damages awarded in excess of full compensation to the victim in order to punish the wrongdoer and to deter others from emulating his conduct.” Linthicum, 150 Ariz. at 330, 723 P.2d at 679. Accordingly, an award of punitive damages “is limited to situations where those objectives can be furthered.” Olson v. Walker, 162 Ariz. 174, 177, 781 P.2d 1015, 1018 (App. 1989). Arizona courts have uniformly held, both in bad faith cases and in cases involving other torts, in order for punitive damages to be available, “something more is required over and above ‘the mere commission of a tort.’” Linthicum, 150 Ariz. at 330, 723 P.2d at 679. That “something more” is evidence that an “evil mind” motivated the defendant’s actions. Rawlings, 151 Ariz. at 162, 726 P.2d at 578 (1986); see also Volz v. Coleman Co., 155 Ariz. 567, 570, 748 P.2d 1191, 1194 (1987). This is so for bad faith cases as well – as the Arizona Supreme Court stated: [i]t is only when fault is intentional that the enhanced deterrents of punitive damages become necessary. Thus, in bad faith cases, unless the evidence establishes that, in addition to bad faith, the defendants acted with an evil mind, punitive damages are unnecessary because compensatory damages adequately deter. Gurule v. Illinois Mut. Life & Cas. Co., 152 Ariz. 600, 601-02, 734 P.2d 85, 86-87 (1987) (internal citations omitted). The Gurule Court further commented that if nothing more than bad faith were required to obtain punitive damages, insurers might choose to pay “legitimately questionable claims” rather than risk being hit with a punitive damages judgment, and stated that such a result “would be bad policy as well as bad law.” Id. In order for the requisite “evil mind” to be inferred from a defendant’s conduct to support punitive damages, on the other hand, the conduct must be “aggravated and outrageous . . . the conscious action of a reprehensible character.” Linthicum, 150 Ariz. at 333, 723 P.2d at 682. Accordingly, a plaintiff seeking punitive damages must prove by Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 9 of 19 - 10 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 clear and convincing evidence the defendant either: (1) intended to injure the plaintiff; (2) was motivated by spite or ill will; or (3) acted to serve its own interests, having reason to know and consciously disregarding a substantial risk that its conduct might significantly harm others. See Walter v. Simmons, 169 Ariz. 229, 240, 818 P.2d 214, 225 (App. 1991); Linthicum, 150 Ariz. at 330-31, 723 P.2d at 679-80 (holding that punitive damages may only be awarded where the wrongdoer is “consciously aware of the wrongfulness of his actions” or has consciously disregarded “the unjustifiably substantial risk of significant harm” to the plaintiff). The requisite “evil mind” may only be inferred from a defendant’s conduct if that conduct was “so oppressive, outrageous, or intolerable” that such an inference is proper. Bradshaw v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 411, 422, 758 P.2d 313, 323 (1988). Far more than mere negligence, or even gross negligence, must be shown by the plaintiff. Volz, 155 Ariz. at 570, 748 P.2d at 1194. In fact, conduct giving rise to punitive damages must involve an “element of outrage similar to that usually found in crime.” Rawlings, 151 Ariz. at 162, 726 P.2d at 578. An insurer’s “[i]ndifference to facts or failure to investigate” are not enough to support a punitive damages claim. Id. at 162, 726 P.2d at 578. In fact, even in cases involving highly questionable actions by insurers, punitive damages are rarely imposed upon insurers in bad faith suits. For example, in Walter, the plaintiff was involved in an accident that caused damage to his truck and submitted a claim to his insurer. See Walter, 169 Ariz. at 240, 818 P.2d at 225. The insurer (1) offered the plaintiff $7,000 less than what the plaintiff believed the truck was worth and failed to investigate whether the truck might actually be worth what the plaintiff thought; (2) sold the truck for salvage without the plaintiff’s authorization; (3) refused to disclose the truck’s location (thereby preventing the plaintiff from settling with the adverse carrier for the truck’s value); and (4) delayed in processing the plaintiff’s claim despite knowing that the delay was causing financial hardship to the plaintiff. See id. Upon reviewing the above facts, the Court of Appeals held that, although the evidence was “undoubtedly sufficient” to support a claim of bad faith, “reasonable people could not have found by clear and convincing evidence that the Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 10 of 19 - 11 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 [insurer] was liable for punitive damages.” Id. As another example, in Filasky v. Preferred Risk Mutual Insurance Company, the Arizona Supreme Court agreed that the jury’s bad faith finding was supported by the record because Preferred Risk’s delays in settling Filasky’s three claims “resulted from Preferred Risk taking a groundless position or failing to adequately investigate its position.” 152 Ariz. 591, 597, 734 P.2d 76, 82 (1987). Even though the carrier did not even seek medical records until after suit had been filed, did not settle a theft claim until nineteen months after the burglary, and did not even inspect a roof loss until six months after the loss, the Court held that punitive damages could not be supported where there was nothing more than indifference to facts and failure to properly and timely investigate. Id. at 594, 596, 599, 734 P.2d at 79, 81, 84. Likewise, in Linthicum, the plaintiff obtained a health insurance policy covering herself and her husband, who, at the time, had been previously treated for what was thought to be a benign tumor and who was undergoing monthly check-ups as a result. See Linthicum, 150 Ariz. at 327-28, 723 P.2d at 676-77. The policy contained an exclusion for conditions treated within 90 days prior to the effective date of the policy. See id. at 327, 723 P.2d at 676. The husband received three monthly check-ups during the 90-day exclusionary period and then, after the policy became effective, was diagnosed with cancer. See id. at 327-28, 723 P.2d at 676-77. The insurer requested information from the husband’s doctors, without ever advising the plaintiff that it was investigating with an eye toward potential denial of the claim, received conflicting information as to whether or not the condition pre-dated the policy, and then denied the claim as a pre-existing condition. See id. at 328-29, 723 P.2d at 677-68. The Linthicum court agreed that the insurer did not act in good faith, but despite finding that the insurer (1) sent the denial letter only to the plaintiff’s employer when it knew she was no longer working there; (2) did not disclose the medical basis for the denial; (3) investigated all dependent claims filed in the first year of coverage with an eye toward denial; and (4) strictly construed the policy against the insured, the court determined that there was insufficient evidence to impose punitive Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 11 of 19 - 12 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 damages on the insurer. See id. at 332-33, 723 P.2d at 681-82. Where courts have found the jury could consider punitive damages, the conduct has been particularly egregious. For example, in Mendoza v. McDonald’s Corp, the Court held that punitive damages was a jury issue where McDonald’s delayed and took meritless positions to further its delay and for the purpose of supporting denial, knowing that its positions were meritless and that the delay would likely result in deterioration in the plaintiff’s medical condition and could result in permanent dysfunction. 222 Ariz. 139, 158-59, 213 P.3d 288, 308 (App. 2009). The claim file reflected that McDonald’s sought independent medical examinations for the purpose of cutting or closing the claim. Id. Also, although McDonald’s knew the plaintiff spoke Spanish and needed an interpreter, it terminated her benefits because McDonald’s doctor could not complete his examination because the plaintiff did not understand English. Id. In Nardelli v. Metropolitan Group Property and Casualty Insurance Company, the Arizona Court of Appeals held there was clear and convincing evidence entitling the plaintiffs to punitive damages where there was evidence the carrier (1) “instituted an aggressive company-wide profit goal,” (2) assigned to the claims department a significant role in achieving the goal,” (3) “aggressively communicated this goal to the claims department,” (4) “tied the benefits of claims offices and individuals to . . . the average amount paid on claims,” and (5) “implemented these actions without taking steps to ensure its efforts to drive up its corporate profits would not affected whether it treated its insureds fairly.” 230 Ariz. 592, 604-05, 277 P.3d 789, 801-02 (App. 2012) This is not a case like Mendoza or Nardelli. There is no evidence that ACE (or its agents) purposely sought to delay paying a claim in the face of medical evidence that delay could cause permanent damage. Quite the opposite, defendants acted upon the information they received from plaintiff and Sears—including denying plaintiff’s claim because it was not clear when the injury occurred and whether it related to his employment. Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 12 of 19 - 13 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 Plaintiff first reported his injury to Sears on December 23, 2013. SOF ¶ 3. Plaintiff’s supervisor, Mark Verhagen, wrote on a “Manager’s Investigation Report” on December 26, 2013 that plaintiff “is unsure as to when it happened or how it happened but could speculate that it might have happened when he was pushing back into place a washing machine while training with a senior technician.” SOF ¶ 10. Sears reported to Sedgwick that the injury occurred on December 16, 2013 and that plaintiff stated “he does not know when it happened,” but that “it may have happened when he bumped his knee into a dryer at a customer’s home.” SOF ¶ 8. To the doctor at Concentra, Dr. Cole, plaintiff reported that his injury occurred on December 18, 2013 and “denie[d] any specific injury,” but reported waking up with knee pain and swelling after moving washing machines around using his knee. SOF ¶¶ 4-5. Plaintiff’s story continued to change, reporting to Ms. Young on January 2, 2014, that the incident occurred on the 20th of December. SOF ¶¶ 12-13. Plaintiff later wrote in his “Associate Statement of Injury” on January 9, 2014, that the injury occurred on December 20, 2013 in the afternoon. SOF ¶ 16. Plaintiff’s attorney reported to the ICA on April 17, 2014, that the injury occurred on December 18, 2013. SOF ¶ 30. Even in the Independent Medical Evaluation completed by Drs. Hess and Schumacher on August 11, 2014, there were conflicting dates of injury as between December 18, 2013 and December 20, 2013. SOF ¶ 35 . Even in this case, plaintiff continues to state various dates of injury. See SOF ¶ 36. Sedgwick, acting on the information it had before it, denied plaintiff’s claim because the conflicting stories made it so Sedgwick could not identify when plaintiff was actually injured or how the injury occurred. See SOF ¶ 18. The undisputed evidence demonstrates that defendants continued to react reasonably to plaintiff’s actions (and inactions). After plaintiff received Sedgwick’s denial letter in January of 2014, he did not follow up with Sedgwick or Ms. Young and identify that he believed his injury was work-related. SOF ¶ 15. In fact, plaintiff never attempted to contact Sedgwick prior to hiring an attorney. SOF ¶ 29. Plaintiff, on his own, pursued and received medical care through a provider chosen by him and paid for by Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 13 of 19 - 14 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 his private medical insurer. SOF ¶ 19. After visiting Dr. Cole at Concentra on December 23, 2013, see SOF ¶ 4, plaintiff received physical therapy on December 26, 27, and 31, 2013, see SOF ¶ 11. Plaintiff visited Brent Walker, a Physician’s Assistant for Dr. John Wild, soon after on January 9, 2014 and January 16, 2014. See SOF ¶ 20. Plaintiff underwent his first knee surgery on January 30, 2014, and after follow up visits with Dr. Wild, a second surgery due to complications on February 14, 2014. See SOF ¶¶ 21-22. Due to the complications, Plaintiff remained in the hospital for an extended period. SOF ¶ 23. Plaintiff did not provide Sedgwick with any of these medical records throughout this time period. SOF ¶ 25. Plaintiff testified that he experienced no delays in receiving medical care. SOF ¶ 26. Plaintiff further agrees that there are no medical bills that remain unpaid by Sedgwick. SOF ¶ 27. Additionally, any delays in the worker’s compensation process were not caused by defendants. Instead, they were related to plaintiff’s failure to pursue the claim until April 2014, the ICA’s delay in setting a hearing until and issuing a ruling that was not final until December 2014, and the fact that in early 2015, plaintiff had not produced “information as to his efforts to obtain work within those limitations as [was] required.” See SOF ¶¶ 28 - 43. The only delay that could possibly be attributable to defendants is the delay in the complete payment of benefits in early 2015—but plaintiff received everything to which he was entitled. At the most, even assuming all of plaintiff’s allegations are true, defendants may have been negligent with respect to the delayed payments to plaintiff in early 2015. Negligence, even gross negligence, is insufficient to support a punitive damages award. Volz, 155 Ariz. at 570, 748 P.2d at 1194. Defendants conduct in this case is inconsistent with the conduct discussed in Mendoza and Nardelli and cannot support a punitive damages award. Based on the evidence before this Court, a reasonable jury could not find the requisite evil mind by clear and convincing evidence, and the Court, therefore, should grant summary judgment in favor of defendants on the issue of punitive damages. Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 14 of 19 - 15 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 IV. PLAINTIFF CANNOT SUPPORT HIS CLAIMS FOR COMPENSATORY DAMAGES FOR PAST AND FUTURE MENTAL ANGUISH, PAST AND FUTURE PAIN AND SUFFERING, OR PHYSICAL IMPAIRMENT. Plaintiff continues to seek damages for “past and future mental anguish” “past and future pain and suffering,” “physical impairment,” and “financial damage.” See SOF ¶ 61. Plaintiff cannot recover for his alleged emotional damages and pain and suffering because he cannot prove defendants’ alleged bad faith resulted in an invasion of his property rights, as plaintiff has not offered evidence to show that his pain or pecuniary losses were caused by defendants. Even if plaintiff could prove defendants caused an invasion of his property rights, plaintiff’s evidence of emotional distress damages is speculative and not causally connected to defendant’s actions. A. Plaintiff Cannot Show Defendants’ Conduct Resulted In An Invasion of His Property Rights. “To recover damages for emotional distress caused by an insurer’s bad faith, the insured must demonstrate that the insurer’s bad faith resulted in an invasion of property rights.” Filasky, 152 Ariz. at 597, 734 P.2d at 82. “Damages for pain, humiliation, or inconvenience, as well as pecuniary losses for expenses such as attorney’s fees, trigger an invasion of protected property rights.” Id. The pain, humiliation, inconvenience, and pecuniary losses must be caused by the defendant’s conduct—which plaintiff cannot prove here. See id. “Although questions of causation are usually left to the jury,” summary judgment is appropriate here because plaintiff’s evidence proves that his damages were not proximately caused by defendant’s conduct. See Pompeneo v. Verde Valley Guidance Clinic, 226 Ariz. 412, 414, 249 P.3d 1112, 1114 (citing Gipson v. Kasey, 214 Ariz. 141, 143 n.1, 150 P.3d 228, 230 n.1 (2007)). Plaintiff cannot show any of his subjective pain was caused by defendants. Plaintiff simply alleges in his initial disclosure that he suffers “continuous pain due to the delay and denial of medical benefits” by defendants and because defendants “refus[ed] to timely authorize [his] treatment.” See SOF ¶ 62. But plaintiff testified that the fact that his claim was denied by defendants did not stop him from receiving medical care, that he Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 15 of 19 - 16 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 received the care he felt he needed under his private health insurance. SOF ¶¶ 19, 26. Further, plaintiff asserted that it was Dr. Cole who “did not diagnose the seriousness of [his] injury and didn’t recommend any further specialist” that could have identified his injuries earlier, but acknowledged that defendants had “nothing” to do with Dr. Cole. SOF ¶¶ 54-55. Simply put, defendants’ conduct had no effect on plaintiff’s pain. Further, plaintiff has not offered sufficient evidence to show any pecuniary losses were actually caused by defendants’ conduct. All that plaintiff has offered is his own conflicting statements about how much he actually paid. In his disclosure statement, he states that he paid $16,200 in damages for out-of-pocket medical expenses and attorneys’ fees. SOF ¶ 63 In his deposition, plaintiff speculated that his deductible was $5,000 and his co-pays were “18.” SOF ¶ 64. Regardless, plaintiff has offered no documentary evidence to resolve this conflicting evidence about how much money was actually spent. Accordingly, there is no evidence from which a factfinder could base an award of damages for invasion of property rights, which is a requirement for recovering emotional distress or mental anguish damages. B. Even if the Court Finds Plaintiff Has Suffered an Invasion of Property Rights, Plaintiff’s Evidence of Emotional Distress is Speculative and Not Causally Related to Defendants’ Conduct. In any event, plaintiff’s evidence of his emotional distress damages is too speculative and not causally connected to any of defendants’ conduct. “Speculative or uncertain damages . . . will not support a judgment and proof of the fact of damages must be of a higher order than proof of the extent thereof.” Farr v. Transamerica Occidental Life Ins. Co. of California, 145 Ariz. 1, 6, 699 P.2d 376, 381 (App. 1984) (citing Coury Bros. Ranches, Inc. v. Ellsworth, 103 Ariz. 515, 446 P.2d 458 (1968)). Plaintiff testified that he was diagnosed with major depression and anxiety in early 1990. SOF ¶ 50. As part of his treatment, he sees a psychiatrist every two to four months for consultation and prescription refills. SOF ¶ 57. Plaintiff did not seek treatment specifically for mental anguish allegedly caused by defendants. SOF ¶58. There is no evidence in the record of any medical opinion to connect defendants’ alleged actions with Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 16 of 19 - 17 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 plaintiff’s claimed mental and emotional distress. Indeed, plaintiff candidly admits that he does not know why his mental health gets worse or better, saying only that “[i]t is a mystery” to him. SOF ¶ 59. He also admitted that none of his medical providers agreed with his personal opinion that his depression was the responsibility of ACE and Sedgwick. SOF ¶ 60. “Ordinarily, expert medical testimony is required to establish proximate cause . . . unless a causal relationship is readily apparent to the trier of fact.” Gregg v. Nat'l Med. Health Care Servs., Inc., 145 Ariz. 51, 54, 699 P.2d 925, 928 (App. 1985) (discussing causation in the context of a medical malpractice claim); see also Allen v. Industrial Comm'n, 124 Ariz. 173, 175, 602 P.2d 841, 843 (App. 1979) (“Whenever the causal relationship is a medical question and is not readily apparent to a layman, expert medical evidence is required to establish it.”). Just as with medical malpractice or workers’ compensation claims, here, where the claim involves medical causation, expert medical testimony “helps to ensure that the plaintiff’s alleged injury was not caused by the progression of a pre-existing condition or was the result of some other cause, such as natural aging or a subsequent injury.” Gorney v. Meaney, 214 Ariz. 226, 231, 150 P.3d 799, 804 (App. 2007). The evidence presented shows that plaintiff’s emotional distress pre-dated any of the defendants’ alleged conduct, and plaintiff has no real evidence to prove his alleged mental anguish was proximately caused by any of the defendants’ conduct. Based on plaintiff’s long history of mental illness, expert medical testimony is required to establish the causal relationship between defendants’ alleged conduct and plaintiff’s mental anguish. Accordingly, the Court should grant summary judgment to preclude plaintiff from recovering damages for past and future pain and suffering and mental anguish. V. CONCLUSION. Accordingly, defendants respectfully request this Court enter summary judgment in defendants’ favor on plaintiff’s punitive damages claim and precluding plaintiff from recovering damages for mental anguish, emotional distress, and pain and suffering. Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 17 of 19 - 18 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 DATED this 6th day of September, 2016. SNELL & WILMER L.L.P. By: s/ Joseph G. Adams Joseph G. Adams Courtney Henson Carlie Tovrea One Arizona Center 400 E. Van Buren, Suite 1900 Phoenix, Arizona 85004-2202 Attorneys for Defendants Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 18 of 19 - 19 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sn el l & W ilm er L .L .P . L A W O F F IC E S O n e A ri zo n a C en te r, 4 0 0 E . V an B u re n , S u it e 1 9 0 0 P h o en ix , A ri zo n a 8 5 0 0 4 -2 2 0 2 6 0 2 .3 8 2 .6 0 0 0 CERTIFICATE OF SERVICE I hereby certify that on September 6, 2016, I electronically transmitted the foregoing document to the Clerk’s Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Michael Patrick Doyle Patrick M. Dennis DOYLE LLP 2633 East Indian School Road, Suite 320 Phoenix, AZ 85016 Attorneys for Plaintiff s/ Mandy Garsha 24686337 Case 4:15-cv-00327-DCB Document 44 Filed 09/06/16 Page 19 of 19