Wilson v. Accident Fund General Insurance Company et al

Filing 25

ORDER that Gorney's motion 13 to dismiss is denied. Signed by Judge H Russel Holland on 12/18/2013.(KMG)

WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA

JULIE WILSON,

)
)
Plaintiff,
)
)
vs.
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ACCIDENT FUND GENERAL INSURANCE )
COMPANY, COMPWEST INSURANCE
)
COMPANY, and DEB GORNEY,
)
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Defendants.
)
__________________________________________)

No. 2:13-cv-2012-HRH

ORDER
Motion to Dismiss
Defendant Deb Gorney moves to dismiss plaintiff’s claim1 against her.2 This motion
is opposed.3 Oral argument was requested but is not deemed necessary.

1

Plaintiff has alleged only an aiding and abetting claim against Gorney. Complaint at
9-10, ¶¶ 24-31, Docket No. 1; see also, Response to Motion to Dismiss Deb Gorney at 2, Docket
No. 19 (“The only cause of action alleged against Defendant Gorney is one for aiding and
abetting the insurance company defendants’ breach of the duty of good faith and fair
dealing”).
2

Docket No. 13.

3

Docket No. 19.
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Facts
Plaintiff is Julie Wilson. Defendants are Accident Fund General Insurance Company,
Compwest Insurance Company, and Deb Gorney.
Plaintiff alleges that she was “injured in the course and scope of her employment on
or about September 30, 2012.”4 Plaintiff filed a workers’ compensation claim, which was
adjusted by Gorney, acting within the scope and course of her employment for the insurance
company defendants.5 Plaintiff’s claim was originally denied, which “caused [plaintiff] to
initiate preliminary proceedings before the Industrial Commission of Arizona.”6 After plaintiff
initiated these preliminary proceedings, her claim was accepted on May 3, 2013.7
On October 3, 2013, plaintiff commenced this action, in which she asserts a breach of
the implied covenant of good faith and fair dealing claim against the insurance company
defendants and a claim of aiding and abetting against Gorney. Plaintiff alleges generally that
defendants “fail[ed] to conduct a reasonable investigation” of her claim.8 Plaintiff further
alleges that Gorney “knew that, after an adequate investigation, [plaintiff’s] claim was not
fairly debatable, that ACCIDENT FUND and COMPWEST delayed and denied [plaintiff’s]
4

Complaint at 5, ¶ 11, Docket No. 1.

5

Id. at ¶ 12.

6

Id. at 6, ¶ 14.

7

Id.

8

Id. at ¶ 15a.
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claim without any reasonable basis, and that ACCIDENT FUND and COMPWEST knew or
recklessly disregarded this lack of a reasonable basis to delay and deny [her] claim.”9
Defendant Gorney now moves to dismiss plaintiff’s claim against her.
Discussion
“To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual
allegations; rather, it must plead ‘enough facts to state a claim to relief that is plausible on its
face.’” Weber v. Dep’t of Veterans Affairs, 521 F.3d 1061, 1065 (9th Cir. 2008) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 571 (2007)). The court accepts all allegations in the
complaint as true and construes them in the light most favorable to plaintiff. United States v.
Corinthian Colleges, 655 F.3d 984, 991 (9th Cir. 2011).
“Arizona recognizes aiding and abetting as embodied in Restatement § 876(b), that a
person who aids and abets a tortfeasor is himself liable for the resulting harm to a third
person.” Wells Fargo Bank v. Ariz. Laborers, Teamsters and Cement Masons Local No. 395
Pension Trust Fund, 38 P.3d 12, 23 (Ariz. 2002).
Claims of aiding and abetting tortious conduct require proof of
three elements:
(1)

(2)

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the primary tortfeasor must commit a tort that
causes injury to the plaintiff;
the defendant must know that the primary tortfeasor’s conduct constitutes a breach of duty; and

Id. at 10, ¶ 27.
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(3)

the defendant must substantially assist or encourage the primary tortfeasor in the achievement of the
breach.

Id. As to the second element, the plaintiff must show “that the defendants knew the conduct
they allegedly aided and abetted was a tort.” Dawson v. Withycombe, 163 P.3d 1034, 1052
(Ariz. Ct. App. 2007). “This knowledge may be inferred from the circumstances presented.”
Id. “However, an inference of knowledge will not be made lightly.” Federico v. Maric, 226
P.3d 403, 405 (Ariz. Ct. App. 2010). As to the third element, “‘[s]ubstantial assistance means
more than a little aid.’” In re Amer. Continental Corp./Lincoln Sav. and Loan Securities Litig.,
794 F. Supp. 1424, 1435 (D. Ariz. 1992) (quoting Barker v. Henderson, Franklin, Starnes & Holt,
797 F.2d 490, 496 (7th Cir. 1986)).
Plaintiff has alleged sufficient facts to support an aiding and abetting claim against
Gorney. She has alleged that the insurance company defendants breached their duty of good
faith and fair dealing, primarily because they denied her claim without having a reasonable
basis for doing so. She has alleged that Gorney knew that plaintiff’s claim was not fairly
debatable and that the insurance company defendants did not have a reasonable basis for
denying her claim. Gorney’s knowledge can also be inferred from the fact that she was the
claims adjuster assigned to plaintiff’s claim.

And plaintiff has alleged that Gorney

substantially assisted the insurance company defendants by failing to do an adequate
investigation and by refusing to pay plaintiff’s claim.

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Gorney argues that plaintiff’s aiding and abetting claim is nonetheless implausible
because she was acting within the scope of her employment and thus her acts were legally the
acts or omissions of the insurance company defendants. See Southern Union Co. v. Southwest
Gas Corp., 165 F. Supp. 2d 1010, 1038 (D. Ariz. 2001) (“Where an officer is acting on behalf of
the corporation, he is for all practical purposes ‘the corporation.’”). If her acts or omissions
were those of the insurance company defendants, then Gorney argues that she could not have
aided and abetted their tortious conduct.
Gorney’s argument fails because “‘[i]t is well-established law that an agent will not be
excused from responsibility for tortious conduct [merely] because he is acting for his
principal.’” Warner v. Southwest Desert Images, LLC, 180 P.3d 986, 992 (Ariz. Ct. App. 2008)
(quoting Griffith v. Faltz, 785 P.2d 119, 120–21 (Ariz. Ct. App. 1990)). In Morrow v. Boston
Mutual Life Insurance Company, Case No. CIV 06-2635- PHX–SMM, 2007 WL 3287585 (D.
Ariz. Nov. 5, 2007), two defendants made an argument similar to Gorney’s. Boston Mutual,
through its claim administrator, hired Behavioral Management, Inc. (BMI), “which in turn
hired Dr. Kilburn, to perform a file review and provider consultation.” Id. at *1. Dr. Kilburn
prepared a report recommending that Morrow’s long-term disability benefits be terminated,
a recommendation Boston Mutual did not follow. Id. Morrow, nonetheless, brought suit
against Boston Mutual, BMI and Dr. Kilburn. In Count Two of his complaint, Morrow sought
to hold BMI and Dr. Kilburn “liable for aiding and abetting a tort committed by the

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principal[,]” Boston Mutual. Id. at *3. BMI and Dr. Kilburn argued “that the agency
relationship between [them] and Boston Mutual/DRMS precludes Defendants' liability under
Count Two.” Id. The court rejected that argument because “[a]s a general principle, agents
are liable to third parties harmed by the agent’s tortious conduct, even when the conduct
occurs within the scope of the agency.” Id. at *6.
Similarly, in Inman v. Wesco Insurance Company, Case No. CV-12-02518-PHXGMS, 2013 WL 2635603, at *1 (D. Ariz. June 12, 2013), the plaintiff asserted an aiding and
abetting claim against Murphy, the Wesco Insurance Company adjuster, assigned to handle
his worker’s compensation claim. Murphy moved to dismiss Inman’s aiding and abetting
claim, arguing “that a plaintiff cannot sue an adjuster for aiding and abetting her own
employer, the insurer, in breaching its duty of good faith and fair dealing.” Id. at *3. More
specifically, she argued that she “and Wesco were acting as one entity.... According to the
allegations in the Complaint, Defendant Murphy’s conduct was entirely within her course and
scope of employment, and therefore any alleged bad faith would be imputed to Wesco.” Id.
The court rejected this argument because it “ignore[d] longstanding principles of the law of
agency[,]” namely that “‘[i]t is well-established law that an agent will not be excused from
responsibility for tortious conduct [merely] because he is acting for his principal.’” Id.
(quoting Warner, 180 P.3d at 992 ). The court observed that “[w]hile the application of these
principles to the insurance setting may seem strange to Murphy, it is not unusual.” Id. at *4.

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The court concluded that
an aiding and abetting claim is not barred simply because a
person worked for the alleged primary tortfeasor and was acting
within the scope of her employment. It is true that there are not
many recorded cases where a claim is pressed against the adjuster;
nevertheless, Murphy has not shown any reason why principles
of agency law should not apply with equal force in the insurance
setting. Even if that application is uncertain, “uncertainties as to
the current state of controlling substantive law must also be
resolved in favor of plaintiff and against the defendant” at th[e
motion to dimiss] stage.
Id. (quoting Bertrand v. Aventis Pasteur Labs., Inc ., 226 F. Supp. 2d 1206, 1212 (D. Ariz. 2002)).
Gorney has cited to no authority that is contrary to Morrow and Inman. Rather,
Gorney relies on Federico, 226 P.3d 403. There, Federico was injured at his job and Liberty
Mutual, the worker’s comp carrier, requested an IME, which was completed by Maric. Id. at
404. Maric
submitted his results to Liberty Mutual suggesting that Federico
needed no further medical treatment. Maric noted Federico’s
subjective complaints of pain and concluded that Federico
demonstrated no objective evidence of physical injury or pain. He
also suggested a possibility of malingering by Federico. Thereafter, Liberty Mutual denied Federico’s worker’s compensation
claim.
Id. Federico offered the following as evidence that Maric aided and abetted Liberty Mutual:
1. Maric knew he was working for Liberty Mutual.
2. Maric had done work for Liberty Mutual before.
3. Maric knew that calling somebody a malingerer can have a
negative connotation.
4. Maric knew that opining that a claimant is motivated by
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secondary gains can have a negative affect on their claim.
5. Maric knew that his IME report would adversely affect the
outcome of Federico’s workmans’ compensation claim.
6. Maric prejudges the patients he sees because he believes that
the honest claims by legitimately injured people are settled and he
never sees those people.
7. Maric believes the people he sees are seeking monetary
damages far beyond what is appropriate.
8. Maric finds almost 60% of the people he sees are imagining their
pain or exaggerating their pain to make money from lawsuits.
9. Maric believes that he sees a skewed population of patients.
10. Maric finds only about 3.7% of the people on whom he
performs IMEs are truly injured, and that injury was caused by
the incident complained of.
11. Maric believes that lawsuits drive the amount of care because
that is how claimants’ attorneys make more money.
12. Maric performed an inadequate medical examination of
Federico.
Id. at 406.
On motion for summary judgment, the court found that Federico had not offered any
evidence that “suggest[ed] in any way that Maric had knowledge of Liberty Mutual’s intent
or even propensity to act in bad faith toward Federico’s claim.” Id. The court observed that
“[i]t is clear that the facts asserted by Federico pertain only to Maric’s own actions and the
propriety thereof with[out] any reference to the actions of Liberty Mutual or the knowledge
of those actions by Maric.” Id. The court rejected “Federico’s argument ... that any time
Liberty Mutual hires Maric, even through a third party intermediary, it does so to further its
bad faith intent and, because of that, any time Maric performs an IME for Liberty Mutual, even
when retained through a third party intermediary, he does so for the purpose of aiding and
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abetting Liberty Mutual in acting in bad faith.” Id. The court also found that “Federico failed
to provide any evidence to support even the inference that Maric’s IME assisted Liberty
Mutual in its acting in bad faith.” Id. at 407.
Gorney argues that like Federico, plaintiff has failed to present any evidence in support
of her aiding and abetting claim. However, the Federico case involved a motion for summary
judgment. Here, the court is deciding a Rule 12(b)(6) motion to dismiss. On a motion to
dismiss, the question is not whether plaintiff has presented any evidence in support of her
claim, but whether she has stated a plausible claim for relief, which plaintiff has done here.
Plaintiff has adequately alleged each of the three elements of such an aiding and abetting
claim, and the fact that Gorney was acting within the scope of her employment does not
preclude plaintiff from asserting an aiding and abetting claim against Gorney.
Conclusion
Gorney’s motion to dismiss10 is denied.
DATED at Anchorage, Alaska, this 18th day of December, 2013.
/s/ H. Russel Holland
United States District Judge

10

Docket No. 13.
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