Tholen v. Assist America, Inc.
Filing
95
ORDER granting 87 Motion to Alter/Amend/Supplement Pleadings. Signed by Magistrate Judge Steven E. Rau on 8/13/2018. (BDB)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Richard H. Tholen, M.D.,
Case No. 17-cv-3919 (DWF/SER)
Plaintiff,
v.
ORDER
Assist America Inc.,
Defendant.
STEVEN E. RAU, United States Magistrate Judge
The above-captioned case comes before the Court on Plaintiff Richard H. Tholen, M.D.’s
(“Tholen”) Renewed Motion for Leave to Amend the Complaint to Assert Punitive Damages
(“Second Motion to Amend”) [Doc. No. 87]. This matter has been referred for the resolution of
pretrial matters pursuant to 28 U.S.C § 636(b)(1) and District of Minnesota Local Rule 72.1. For
the reasons stated below, the Court grants Tholen’s Second Motion to Amend.
I.
BACKGROUND
On May 15, 2018, Tholen filed a Motion for Leave to Amend the Complaint to Assert
Punitive Damages (“First Motion to Amend”) [Doc. No. 31] against Defendant Assist America,
Inc. (“Assist America”). This Court held a hearing regarding Tholen’s First Motion to Amend on
May 29, 2018. (Minute Entry Dated May 29, 2018) [Doc. No. 78]. In briefing the issues and
during oral argument, Tholen raised various facts that he alleges demonstrate that Assist America
willfully disregarded his rights. See, e.g., [Doc. Nos. 33–45] (memorandum in support, affidavit,
and exhibits). None of these facts, however, appeared in Tholen’s Proposed Amended
Complaint. See generally (Proposed Am. Compl., Attached to First Mot. to Amend, “First
Proposed Am. Compl.”) [Doc. No. 31-2]. This prevented the Court from engaging in the proper
analysis under the Federal Rules. See Order Dated May 15, 2018, Urbeita v. Mentor, 13-cv-1927
(ADM/LIB) (D. Minn.) (Rau Mag. J.) [Doc. No. 114] (concluding that Rule 15 of the Federal
Rules of Civil Procedure and not Minnesota Statutes section 549.191 controls), aff’d, Order
Dated July 19, 2018 [Doc. No. 118] (Montgomery, J.); see also Arias v. Am. Family Mut. Ins.,
No. 13-cv-1681 (PJS/JJG), 2013 WL 12145854, at *1–2 (D. Minn. Oct. 28, 2013) (Graham,
Mag. J.) (stating “no matters outside the pleading may be considered” when conducting a futility
analysis under Rules 12(b)(6) and 15). On June 29, 2018, this Court denied Tholen’s First
Motion to Amend without prejudice and allowed Tholen to file a new motion that comports with
Rule 15 of the Federal Rules of Civil Procedure. See (Order Dated June 29, 2018, “June 29
Order”) [Doc. No. 85].
On July 13, 2018, Tholen filed his Second Motion to Amend, Proposed Second
Amendment, and Memorandum in Support of his Motion. (Second Mot. to Amend); (Mem. in
Supp. of Second Mot. to Amend “Mem. in Supp.”) [Doc. No. 88]; see also (Proposed First Am.
Compl., Attached to Second Motion to Amend, “Second Proposed Am. Compl.”) [Doc. No. 871]. Tholen asserts that Assist America deliberately disregarded its policies and refused to
evacuate Tholen when he needed it. (Mem. in Supp. at 8, 13–15). Further, Tholen asserts Assist
America did not have a clinical doctor assess whether Tholen could receive appropriate care in
Mexico. (Id. at 21–22). Tholen also argues that Assist America made certain misrepresentations
regarding the quality of care he was receiving in Mexico and made these misrepresentations in
deliberate disregard of Tholen’s safety. (Id. at 23–24). In addition, Tholen asserts a decisionmaker at Assist America did not timely evaluate his request for a medical evacuation. (Id. at 12–
13). Specifically, Tholen alleges that only one clinical director (“Dr. Krohn”) responsible for
making medical determinations was contacted regarding Tholen’s condition. See (id. at 14–15,
2
25–27). Furthermore, Tholen asserts that Assist America did not contact the other clinical
director (“Dr. Shaffrey”) knowing that Dr. Krohn was unavailable for at least ten hours as he
traveled on vacation. See (id. at 14–15). All of these allegations appear in Tholen’s Second
Amended Complaint. See, e.g., (Second Am. Compl. ¶¶ 71, 76–80, 85, 90–97, 104, 106, 113,
118, 121–25).
In response, Assist America filed a Memorandum in Opposition on July 20, 2018. (Def.’s
Mem. of Law in Opp’n to Pl.’s Second Mot. to Amend “Mem. in Opp’n”) [Doc. No. 91]. Assist
America argues generally that the evidence does not support Tholen’s allegations and that
Tholen’s Second Motion to Amend is futile because his claims are not subject to punitive
damages. See (id. at 24–31). With respect to futility, Assist America argues that Tholen’s claims
for punitive damages cannot survive a motion to dismiss because the punitive damages are not
premised on an independent tort as required by Minnesota law. 1 (Id. at 29–31).
Tholen argues in his Reply that Assist America’s argument with respect to whether
evidence supports his claims and whether his claims for punitive damages survive as a matter of
law are better addressed at the summary judgment stage and analyzed under Rule 56 of the
Federal Rules of Civil Procedure. See generally (Reply).
II.
DISCUSSION
A.
Legal Standard
1
The Court also received letters from the parties contesting whether the Court should grant
Tholen leave to file a Reply Memorandum in support of his Motion to Amend. See (Letter Dated
July 27, 2018) [Doc. No. 92]; (Letter Dated July 30, 2018) [Doc. No. 93]. Because this Court
allows the filing of reply memorandum in the context of non-dispositive motions, Tholen’s
request is granted and this Court considers his arguments in his Reply. See (Pretrial Scheduling
Order) [Doc. No. 14 at 2–3] (stating that reply memorandum for non-dispositive motions are
allowed); see also (Reply, Attached to Letter Dated July 27, 2018) [Doc. No. 92–1] (Tholen’s
proposed Reply).
3
Under Rule 15(a), a court should “freely give leave” to amend a pleading when justice so
requires. Fed. R. Civ. P. 15(a). Nonetheless, leave to amend should not be given when there is
“undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue
of allowance of the amendment, [or] futility of amendment[.]” Foman v. Davis, 371 U.S. 178,
182 (1962).
It is not an abuse of discretion to deny amendments that are futile. See, e.g., DeRoche v.
All Am. Bottling Corp., 38 F. Supp. 2d 1102, 1106 (D. Minn. 1998) (Erickson, Mag. J.); see also
Lunsford v. RBC Dain Rauscher, Inc., 590 F. Supp. 2d 1153, 1158 (D. Minn. 2008) (Doty, J.).
That is, “[d]enial of a motion for leave to amend on the basis of futility means the district court
has reached the legal conclusion that the amended complaint could not withstand a motion to
dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure.” Zutz v. Nelson, 601 F.3d
842, 850 (8th Cir. 2010) (internal quotation marks omitted).
To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is plausible on its face. A
claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.
Iqbal v. Ashcroft, 556 U.S. 662, 678 (2009) (internal quotation marks and citations omitted).
B.
Analysis
First, the Court declines to conduct the evidentiary analysis that both parties urge this
Court to undertake to decide this issue. See, e.g., (Second Am. Compl. ¶¶ 85, 115–116, 118, 121)
(references to specific paper exhibits and audio recordings filed in connection with the Second
Motion to Amend); (Mem. in Opp’n at 24–29) (arguing that the evidentiary record does not
support a claim for punitive damages). As stated above, motions to amend should be freely given
4
so long as they have facial plausibility. See Iqbal, 556 U.S. at 678. To that end, the Eighth
Circuit has instructed the courts to focus on the specific allegations of the pleading at issue. See
Gibb v. Scott, 958 F.2d 814, 816 (8th Cir. 1992) (stating generally that “a 12(b)(6) motion will
succeed or fail based upon the allegations contained in the face of the complaint”); see also
Selective Ins. Co. of S.C. v. Sela, No. 16-cv-4077 (PJS/SER), 2018 WL 1960450 at *6 (D. Minn.
Apr. 28, 2018) (Rau. Mag., J.) (stating “analysis under Rules 15 and 12(b)(6) generally requires
a court not consider matters outside the pleadings to determine whether leave to amend should be
given”).
The Court next turns to Assist America’s futility argument, namely that Minnesota law
does not support a claim for punitive damages under the circumstances. See (Mem. in Opp’n at
29–31). For example, Assist America asserts “Tholen’s tort and contract claims stem from a
contractual relationship between AMA Insurance and Assist America. Dr. Tholen has not
demonstrated an independent, willful tort.” (Id. at 31). Tholen asserts that he “may pursue both
tort and contract claims under the circumstances. Minnesota has long recognized that a party
may voluntarily accept a duty of care based on a contractual obligation.” See (Reply at 6). The
parties did not assert—and this Court could not independently identify—any Minnesota cases
that specifically address whether the performance of an emergency medical services contract can
give rise to an independent tort, as required by Minnesota law. Cf. Olson v. Rugloski, 277
N.W.2d 385, 388 (Minn. 1979) (“Punitive damages are not recoverable for breach of contract
except in exceptional cases where the breach of contract constitutes or is accompanied by an
independent, wilful [sic] tort.”).
That said, the body of Minnesota caselaw on this issue tends to suggest that Tholen is
correct. For example, the Minnesota Supreme Court has “frequently relied on the Restatement of
5
Torts to guide . . . development of tort law in areas that” the court has “not previously had an
opportunity to address.” Larson v. Wasemiller, 738 N.W.2d 300, 306 (Minn. 2007). This Court
also notes that under the Restatement of Torts, “one who undertakes to render services in the
practice of a profession or trade is required to exercise the skill and knowledge normally
possessed by members of that profession or trade in good standing in similar communities.”
Restatement (Second) of Torts § 299A (1965). Thus, “[a] person who undertakes to provide
professional services has a duty to the person for whom the services are performed to use such
skill and care ordinarily exercised by others in the same profession; liability in tort for breach of
that duty may arise as the result of negligence during the performance of the contract . . . .”
4 Stuart M. Speiser, Charles F. Krause, & Alfred W. Gans, American Law of Torts §15.1 n.1
(2018) (citing Restatement (Second) of Torts § 299A).
But more to the point—given the current state of Minnesota law—this Court cannot
conclusively determine that it is “clear that no relief could be granted under any set of facts that
could be proved consistent with the allegations.” See Neitzke v. Williams, 490 U.S. 319, 326
(1989) (internal quotation marks omitted). Specifically, Tholen claims Assist America’s
representatives misrepresented themselves as physicians, Assist America failed to obtain medical
records from the Mexican hospital that would allow it to make an informed choice regarding
Tholen’s care, and that the proper clinical directors were either not contacted or declined to
review Tholen’s medical case in a timely manner, among many other allegations. See, e.g.,
(Second Am. Compl. ¶¶ 71, 76–80, 85, 90–97, 104, 106, 113, 118, 121–25). In short, Tholen
alleges a parade of horribles, that if proved true, plausibly alleges that Assist America was both
negligent in the provision of its professional services and willfully disregarded Tholen’s rights
under its care. Thus, Tholen’s Second Proposed Amended Complaint survives under Rule
6
12(b)(6) and is therefore not futile. Accord Neitzke, 490 U.S. at 326; Zutz, 601 F.3d at 850;
Larson, 738 N.W.2d at 306; Restatement (Second) of Torts § 299A.
It may well be that more thorough briefing leads to the conclusion that Tholen’s punitive
damages claim is foreclosed as a matter of law. But these arguments are best left for summary
judgment where the benefit of a fully developed factual record and more fulsome briefing of the
legal issue will allow the Court to address the specific legal implications of the facts as applied to
the law. Under the circumstances here, however, Tholen’s Second Motion to Amend is granted.
III.
CONCLUSION
Based on the files, records, and proceedings herein, IT IS HEREBY ORDERED that
Plaintiff Richard H. Tholen, M.D.’s Renewed Motion for Leave to Amend the Complaint to
Assert Punitive Damages [Doc. No. 87] is GRANTED.
s/Steven E. Rau
STEVEN E. RAU
United States Magistrate Judge
Dated: August 13, 2018
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?