Walden et al v. Maryland Casualty Company

Filing 129

ORDER denying 78 MOTION for Summary Judgment On Count I for Brittany (Dean) Houston and Anna Radford filed by Maryland Casualty Company Signed by Judge Dana L. Christensen on 11/29/2017. (KJH)

FILED
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION

BREANNE WALDEN, DANIELLE
DESCHENES AZURE, JESSICA
BLACKWEASEL, SABRINA REMUS
COYNE, BRITTANY DEAN, JENNIFER
DEMENT, DANIELLE DUNCAN,
JACKIE GREAVU, BETH HAYES,
JANA HEILIG, KEALLIE LIETZ,
JACKIE MULLENNAX, SARA
ONSAGER, ANNA RADFORD,
BARBARA SLOAN, MOLLY STILSON,
and KYRA TILSON, Individually and as
Assignees ofDB&D, LLC (d/b/a
DAHL'S COLLEGE OF BEAUTY),

NOV 2 9 2017
Cler!<. l!·S District Court
DtStrict Of Montana
Missoula

CV 13-222-M-DLC

ORDER

Plaintiffs,
vs.
MARYLAND CASUAL TY COMPANY,
and DOES 1-5, inclusive,
Defendants.
Before the Court is Defendant's Motion for Summary Judgment (Doc. 78.)
For the reasons explained below, the Court denies Defendant's motion.
PROCEDURAL AND FACTUAL BACKGROUND

On October 7, 2015, the Court granted Defendant Maryland Casualty
Company's ("Maryland") motion for summary judgment, and denied all other
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pending motions as moot. The Ninth Circuit reversed and mandate was issued on
July 7, 2017. The parties submitted a joint status report on August 18, 2017,
pursuant to the Court's request, outlining the motions that are now ripe and need
to be resolved. Defendant's July 31, 2015 Motion for Summary Judgment is one
of the ripe and pending motions.
Because the parties are familiar with the facts of this case they will only be
recited as necessary to understand the Court's Order.
LEGAL STANDARD

A party is entitled to summary judgment if it can demonstrate that "there is
no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law." Fed. R. Civ. P. 56(a). Summary judgment is warranted where
the documentary evidence produced by the parties permits only one conclusion.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). Only disputes over

facts that might affect the outcome of the lawsuit will preclude entry of summary
judgment; factual disputes that are irrelevant or unnecessary to the outcome are
not considered. Id. at 248. In ruling on a motion for summary judgment, a court
must view the evidence "in the light most favorable to the opposing part." Tolan
v. Cotton, 134 S. Ct. 1861, 1866 (2014) (quoting Adickes v. S.H Kress & Co., 398

U.S. 144, 157 (1970)). "[T]he evidence of the nonmovant is to be believed, and
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all justifiable inferences are to be drawn in his favor." Id. at 1863 (quoting

Anderson, 477 U.S. at 255). "If the moving party has the burden of proof at trial,
that party must carry its initial burden at summary judgment by presenting
affirmative evidence as to the essential elements of its case such that no reasonable
jury could find for the non-moving party." Alliance for the Wild Rockies v. United

States Dept. ofAgric., 938 F. Supp. 2d 1034, 1039 (D. Mont. 2013), rev'd in part
on other grounds, 772 F.3d 592 (9th Cir. 2014).
ANALYSIS

Maryland argues that summary judgment is proper because Plaintiffs
Brittany Houston ("Houston") and Anna Radford ("Radford") have failed to prove
they suffered physical manifestations from their emotional distress, which is a
prerequisite to finding coverage under Maryland's insurance policy. Since
Maryland filed its motion, Plaintiffs have supplemented the record with affidavits
claiming physical manifestations of their emotional distress. Maryland argues the
new statements are sham affidavits and the Court should strike them and award
summary judgment to Maryland.
Plaintiffs argue that summary judgment is not appropriate because the
affidavits raise an issue of material fact regarding whether they suffered physical
manifestations of emotional distress. Additionally, their testimony is
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supplemented with the affidavit of Katy Nicholls ("Nicholls"), a LCSW who
diagnosed both Plaintiffs and concluded that they both suffered from physical
manifestations due to their emotional distress.
Prior to reaching the merits of Maryland's summary judgment motion, the
Court must first address whether the affidavits are a "sham."

I.

Sham Affidavits
The general rule in the Ninth Circuit is that a party cannot create an issue of

material fact to preclude summary judgment by raising additional facts that are
inconsistent to their prior sworn testimony. Kennedy v. Allied Mut. Ins. Co., 952
F .2d 262, 266 (9th Cir. 1991 ). "If a party who has been examined at length on
deposition could raise an issue of fact simply by submitting an affidavit
contradicting his own prior testimony, this would greatly diminish the utility of
summary judgment as a procedure for screening out sham issues of fact." Id.
(quoting Perma Research and Dev. Co. v. Singer Co., 410 F .2d 572, 578 (2d Cir.
1969)).
However, this rule "should be applied with caution." Van Asdale v.

International Game Tech., 577 F.3d 989, 998 (9th Cir. 2009). The "sham
affidavit" rule is contrary to the court's general role in deciding a summary
judgment motion, which is not to make "credibility determinations or weigh
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conflicting evidence." Id. Thus, the Ninth Circuit has limited the rule to cases
where (1) the affidavit is "actually a sham" and (2) the inconsistencies are "clear
and unambiguous." Id. Courts analyzing the rule look to whether subsequent
testimony "flatly contradicts" previous testimony, or whether the inconsistencies
are attributable to confusion. Van Asdale, 577 F.3d at 999; Kennedy, 952 F.2d at
267. "The nonmoving party is not precluded from elaborating upon, explaining or
clarifying prior testimony." Van Asdale, 577 F.3d at 999 (quoting Messick v.

Horizon Indus., 577 F.3d 989, 998-99 (9th Cir. 1995).
There is nothing in Houston's initial deposition that "flatly contradicts" her
later affidavit. In her initial testimony, Houston described that she "couldn't
handle" the stress of her experience at Dahl's. (Doc. 81-3 at 11.) Although she
indicated that she did not experience difficulty sleeping, have difficulty eating, or
experience stomach problems, she stated she "did not know" whether she had
experienced nausea, tension or anxiety. (Id.) None of these statements "flatly
contradict" her later testimony that she experienced panic attacks with shaking in
her hands, arms and perfuse perspiration. (Doc. 85-2 at 4.) Further, her testimony
at deposition in response to questions regarding the nature of her emotional
distress reveals possible confusion:
Mr. Connor: And so how would that stress manifest itself?
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Ms. Houston: Like with me?
Mr. Connor: Yeah, with you, how would it manifest itself?
Ms. Houston: I bit my tongue up until when I had my little blowout; I
guess I couldn't handle it.

Mr. Connor: When you get tense, how do you feel that tension and
anxiety?
Ms. Houston: I don't know, I kind of over think things.

Mr. Connor: And when you really got low, what did these real lows
feel like?
Ms. Houston: Like coming in the room myself, and ignoring
everybody(Doc. 81-3 at 11-12.)
It is not clear from the transcript that Houston understood the question to

mean "what did these real lows [physically] feel like" or "how would that stress
[physically] manifest itself?" (Id.) In response, Houston provides three
descriptions of her mental and emotional condition: ( 1) "I bit my tongue up until I
had my[] blowout," (2) "I couldn't handle it," and (3) it felt like "coming in the
room ... and ignoring everybody." (Id.) Houston's lack of any physical
descriptors for her emotional state may reflect the non-existence of any physical
symptoms, or it may indicate her confusion to the question. For these reasons, the
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Court cannot conclude that the Houston's second affidavit is "actually a sham," or
that the inconsistencies are "clear and unambiguous."
Similarly, Radford's testimony is also void of any "fla[t] contradictions."
Id. In her initial testimony she described that the stress of her experience at Dahl's

built over time, that she was often angry to the point of tears, and that she finally
reached her breaking point. (Doc. 81-4 at 10-11.) In her later affidavit she
provides more detail. Radford describes that the stress caused her to experience
panic attacks, during which her breathing became short and shallow, "like [she]
was hyperventilating." (Doc. 85-1at4.) She experienced a pounding heart,
aggravated asthma, migraines, insomnia and changes in appetite. (Id. at 6-7.)
Because Radford's subsequent affidavit does not conflict with her earlier
testimony, but rather "elaborates upon, explain[s] or clariflies] prior testimony" it
is not a sham affidavit. Van Asdale, 577 F.3d at 999 (quoting Messick v. Horizon
Indus., 577 F.3d 989, 998-99 (9th Cir. 1995)).

Accordingly, the Court will consider both affidavits in analyzing
Maryland's summary judgment motion.
II.

Maryland's Motion for Summary Judgment

Maryland claims it is entitled to summary judgment because the only
symptoms raised by the Plaintiffs are panic attacks, and Montana law has not
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recognized panic or its associated symptoms as physical manifestation of
emotional distress. (Doc. 92 at 2.) Thus, there is no issue of fact and summary
judgment should be decided in its favor. Plaintiffs contend that Montana law
recognizes "bodily injury" to include a mental or psychological injury
accompanied by physical manifestations, including symptoms associated with
panic. Allstate Ins. Co. v. Wagner-Ellsworth, 188 P.3d 1042, 1051-1052 (Mont.
2008). Because the affidavits reflect physical symptoms including difficulty
breathing, a pounding heart, and shaking limbs, summary judgment is not
appropriate. (Doc. 84 at 4-5, 8.) The Court agrees that Plaintiffs have raised a
question of fact.
Despite Maryland's contention that Montana law does not recognize panic
attacks as a form of"bodily injury," this Court can find no case in direct support of
that claim. Rather, the law provides that each claim of mental and psychological
"bodily injury" is a highly fact-intensive inquiry that requires careful individual
analysis. Tucker v. Farmers Ins. Exch., 215 P.3d 1, 6 (Mont. 2009). The Montana
Supreme Court first recognized emotional distress as a "bodily injury" to find
insurance coverage in Allstate Ins. Co. v. Wagner-Ellsworth. The Court concluded
that "bodily injury" "could mean a strictly physical injury or could also include
physical manifestations arising from a mental injury or sickness." Allstate Ins.
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Co., 188 P.3d at 1051. Recognizing the difficulty in distinguishing between a
purely mental injury and a mental injury supported by physical symptoms, the
Court provided anecdotal guidance of the types of symptoms that would likely
qualify for coverage. Allstate Ins. Co., 188 P.3d at 1051. The Court indicated that
a dry throat, rise in body temperature, and stomach knots could be physical
symptoms, as could high blood pressure on its own. Id. at 1052. Physical
symptoms such as weight loss, sleep loss, headaches, stomach and muscle pains
were likely enough. Id. The Court contrasted these with three examples of
symptoms that likely did not constitute a "bodily injury": ( 1) humiliation, mental
anguish, and mental suffering; (2) loss of sleep, loss of self-esteem, humiliation
and irritability; and (3) crying, shaking hands and sleep difficulties. Id.
In Allstate, the mother of a young child struck by a car reported increased
levels of stress, migraines, a rapid heart rate when she heard sirens, physical pain
and depression. Id. at 1044. While her son only manifested signs of having
"withdrawn." Id. On these facts, the Montana Supreme Court reversed the district
court's grant of summary judgment. Id. at 1052. Likewise, in Tucker the Court
found that a rapid heart rate and increased perspiration were sufficient indicators
of bodily injury, in context with the testimony from numerous sources that the
plaintiff suffered a dramatic personality change. Tucker, 215 P.3d at 6. The
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mother of an 11-year old killed in a car accident suffered from PTSD, depression,
and obsession with her daughter's death. Id. Her relationship with her husband
deteriorated, she spent long hours at work and at her daughter's grave site and her
symptoms persisted for years. Id. These examples provide a range of physical
responses to emotional distress, and serve to illustrate that there is no set formula.
Once a plaintiff raises mental suffering accompanied by physical symptoms, the
existence of the injury becomes a question of fact.
Houston alleges that as a result of her experience at Dahl's she became
depressed, suffered from panic attacks that made her hands and arms shake, and
that she was not able to mentally or physically function normally. (Doc. 85-2 at
4.) Radford alleges that she suffered panic attacks which made it difficult to
breathe. (Doc. 85-1 at 4.) These attacks exacerbated her asthma and required
additional medication. (Id.) Additionally, she suffered from repeated bouts of
insomnia and loss of appetite. (Doc. 85-1 at 5.) The Court finds these symptoms
are sufficient to raise an issue of fact, concerning whether Plaintiffs have physical
manifestations of emotional distress. By comparison, in Allstate, the Montana
Supreme Court found that an allegation of being withdrawn was enough to
preclude summary judgment in that particular instance. Allstate Ins. Co., 188 P .3d
at 1044, 1052.
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Further, the Plaintiffs' claims are bolstered by the factual support provided
in Nicholls' affidavit. The Court has instructed that "[w]hen an emotional distress
claim is not supported factually, the insurer can and should move to dismiss the
meritless claim." Id. at 1052. In Nicholls' initial May 28, 2015 report she
examined the Plaintiffs' records in order to diagnose their emotional distress and
concluded that "all of the Plaintiffs suffered physical manifestations of emotional
distress as a result of what they went through at Dahl's." (Doc. 85-4 at 2-4.)
Nicholls' spoke with Houston and Radford again in August of2015, and
reaffirmed her opinion. Id.
Taking this evidence in the light most favorable to the Plaintiffs, and
considering the Montana Supreme Court's instruction that each claim be
determined by a fact intensive, case by case inquiry, this Court concludes there is
an issue of material fact as to whether Plaintiffs Houston and Radford suffered
physical manifestations of their emotional distress.
Accordingly, IT IS ORDERED that Defendants' Motion for Summary
Judgment (Doc. 78) is DENIED.

~ay ofNovembe ,

DATED this 2 q

Dana L. Christensen, Chief Judge
United States District Court
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