August

In the case of Robert Stephenson v. Lindsey Heaston (2016CV031355), Hillary Patterson obtained an Order of Dismissal for Continued Violation of Discovery Obligations.  This is an important victory not only because it dismissed all claims against the defendant, but also because it reflects the firm’s goals and commitment to clients to vigorously defend their interests while avoiding unnecessary and excessive litigation fees and costs.

The revised Colorado Rules of Civil Procedure aim to promote more complete disclosure and to curtail discovery costs. While dismissal is a drastic sanction, the circumstances of this litigation and the discovery violations warranted dismissal.  In the Order of Dismissal, Adams County District Court Judge Moss astutely quoted the following excerpt from a timely and relevant article in the Colorado Lawyer:

“‘[T]he elephant in the living room of civil litigation is that even ‘proportionate’ litigation costs in the average case are so high [as] to be out of reach for all but the wealthiest of individuals and corporations…. Judges have some responsibility for this situation, because many of us are so resistant to enforcing the existing rules with the bite of sanctions.’ Wang & Hoffman, A Year after Significant Civil Justice Reforms in Colorado, Colorado Lawyer (Jan. 2017).

Order of Dismiss. For Cont’d Violation of Discov. Obligations. Aug. 8, 2017.


Heather Salg is speaking at a National Business Institute seminar on September 7, 2017 on Insurance Bad Faith: Investigation and Discovery Tips . For more information, or to register for the event, click on the link above.


Heather Salg won the case of Arena v. State Farm in a 5-day trial in Boulder District Court.

Plaintiff Arena was involved in a car accident December 9, 2002 in which he alleged he sustained permanent neck and back injuries which were so debilitating he was unable to work, or stand or sit for more than 15 min., and he could not lift more than 5 pounds. He sued Front Range Barricade et al, in Case No. 05CV1118, Boulder,  trial June 4-8, 2007. (It was reported in JVR Vol. 25, No. 47, Dec. 3, 2007). Mr. Arena was awarded $1,765,700 (before interest and costs) on June 8, 2007 by a Boulder jury.

The Court precluded defendant from telling the jury that there had been a lawsuit, or from telling the jury what plaintiff had recovered. However, defendant was permitted to tell the jury that plaintiff and some of the treating providers called in this trial had also given statements under oath in a “prior proceeding”.

Between 2008 and 2010, Mr. Arena bought a speedboat, an ATV, and an RV. He posted pictures of those on Facebook which were admitted at the trial of this matter.

Mr. Arena treated extensively at the Centeno-Schultz clinic from 2004-June 6, 2011. He received “massive” amounts of narcotic medications, in excess of 4 times the amount the Federal Government recommends as the high dosage for daily morphine equivalents during that time. The Centeno-Schultz clinic, during that time, told Mr. Arena they would not continue his “medication management” unless he underwent injections, branch blocks and other “interventional pain management”, which would cost upward of $15,000 in a day. The Centeno-Schulz clinic was unable to produce a narcotic contract signed by Mr. Arena. Dr. Schultz and Dr. Kleiner agreed that all of the very expensive treatment Mr. Arena received at the Centeno-Schultz clinic was not “theraputic” (it did not reduce Mr. Arena’s pain) and it was not “diagnostic” (there was no indication that the treatment actually helped determine an organic origin for Mr. Arena’s pain).

On June 6, 2011, Mr. Arena (who was having trouble paying for his treatment) was told by Physician’s Assistant Bock at the Centeno-Schultz clinic that he was being discharged from the clinic and he would have to obtain narcotic medication elsewhere.

Three days later, on June 9, 2011, Mr. Arena was rear ended. Mr. Arena resumed treatment with the Centeno Schultz clinic who charged an additional $132,339.29 before discharging Mr. Arena from care in September, 2013 as the Centeno Schultz clinic was no longer accepting Medicare after that time.

At trial, Mr. Arena contended that his primary complaint after the 2002 accident was neck pain, and that his primary complaint after the 2011 accident was low back pain. His doctors apportioned his neck pain 20% to the 2011 accident and his back pain 80% to the 2011 accident.

Mr. Arena made claims for MPC and then UIM coverage. State Farm paid about $2.5k in MPC benefits before asking Dr. Wunder to evaluate whether expenses sought were reasonable, necessary, or accident related. Dr. Wunder opined they were not, and State Farm denied the claim for further MPC benefits. Plaintiff then sued the tortfeasor, and her liability carrier paid $100,000. Plaintiff then sought UIM benefits. The claim was denied. Plaintiff provided a new apportionment opinion from Dr. Schultz. Plaintiff’s counsel  alleged Dr. Wunder was biased, but provided no evidence to support that allegation.  A second opinion was sought from Dr. Wunder who again opined plaintiff’s claimed expenses were not related to the accident. Dr. Wunder also noted that plaintiff’s claims appeared to have a significant psychological overlay. The UIM claim was denied. Plaintiff submitted to State Farm a report from psychologist David Robinson, who claimed there was no psychological component to plaintiff’s claims. This did not change State Farm’s position.

Plaintiff filed suit. On June 5, 2017, just two months before trial, plaintiff endorsed a brand new (non-treating, and retained only) expert, Dr. Kleiner, as a “rebuttal” expert, to also opine on apportionment. Over defendant’s objection Dr. Kleiner was permitted to testify.

At trial plaintiff claimed that as a result he had $97,217.55 in post-accident related medical care. He also contended he had $224,200 in pain and suffering and $100,000 in permanent impairment. Plaintiff asserted State Farm breached its contract with Mr. Arena for failing to pay UIM benefits; that it unreasonably denied the benefits; and that State Farm acted in “bad faith”.

Damages alleged

$97,217.55 in post-accident related medical care to treat neck and back pain. He also contended he had $224,200 in pain and suffering and $100,000 in permanent impairment. He sought $100k for unreasonable denial and $100-500 per day, for life (29.5 years) for the bad faith claim.

Final demand/offer

$100k demand; no offers.

Experts

Plaintiff:

John Schultz, MD

Jeffrey Kleiner, MD

Stephen Strzelec (industry standard expert)

David R. Robinson, PhD

Defendant:

Jeffrey Wunder, MD

Verdict

Jury found that plaintiff did cooperate with State Farm in its investigation and that he did not make material misrepresentations to State Farm. However, jury found plaintiff did not sustain any damages in the June 9, 2011 accident (Jury Instruction Form provided Court would offset, if appropriate, the $100,000 liability amount).

Other Comments

Prior to trial, State Farm filed a Motion for Summary Judgment asserting plaintiff’s unreasonable denial and bad faith claims were barred by applicable statutes of limitation. The Court agreed the applicable SOL for unreasonable denial was 1 year. However the Court found that because State Farm  reopened its file after new information was submitted by plaintiff, there was a fact question with respect to when plaintiff knew his claims had accrued. There was therefore a Special Interrogatory provided to the jury with this question: “On what date did Mr. Arena know, or should he have known, that State Farm was denying his claim for UIM benefits?” The jury answered 12/5/14 (the date of State Farm’s initial denial). Suit was filed April 8, 2016.


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