Christoffersen v. United Parcel Service et al
Filing
27
MEMORANDUM DECISION AND ORDER finding as moot 8 Motion to Dismiss ; granting 9 Motion to Dismiss for Failure to State a Claim ; granting 9 Motion to Dismiss for Lack of Jurisdiction. Signed by Judge Ted Stewart on 6/25/13. (ss)
IN THE UNITED STATES COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
KAREN CHRISTOFFERSEN,
Plaintiff,
MEMORANDUM DECISION AND
ORDER GRANTING MOTIONS TO
DISMISS
vs.
UNITED PARCEL SERVICE, INC.,
LIBERTY MUTUAL INSURANCE
COMPANY, and HELMSMAN
MANAGEMENT SERVICES, LLC,
Case No. 2:13-CV-68 TS
Defendants.
This matter is before the Court on two Motions to Dismiss. The first was filed by
Defendant United Parcel Service Inc. (“UPS”). The second was filed by Defendants Liberty
Mutual Insurance Company (“Liberty Mutual”) and Helmsman Management Services, LLC
(“Helmsman”) (collectively, the “Insurance Defendants”). For the reasons discussed below, the
Court will grant both Motions.
I. BACKGROUND
Al Christoffersen was killed in a motor vehicle accident in the scope of his employment
with UPS on December 1, 2008. Mr. Christoffersen’s wife, the plaintiff in this matter,
1
subsequently brought a wrongful death action against Western Excavating LLC and its driver
(collectively referred to as “Western”), the parties at fault for the accident. Western responded
by offering its policy limits to settle the action.
On August 30, 2012, Ms. Christoffersen filed her Complaint in this case, alleging that
“defendants have not paid their proportionate share of the reasonable expense of the third-party
action [with Western], including attorney’s fees” pursuant to Utah Code Ann. § 34A-2-106(5),
and that “UPS and/or Liberty Mutual breached the fiduciary duty that it owed the plaintiff,”
pursuant to Utah Code Ann. § 34A-2-106(2).1
Defendants subsequently moved to dismiss the Complaint. Liberty Mutual and
Helmsman argue that this Court lacks jurisdiction to hear this case while UPS argues that
Plaintiff’s claims are barred by the doctrines of collateral estoppel and claim preclusion.
II. LEGAL STANDARD
In considering a motion to dismiss for failure to state a claim upon which relief can be
granted under Rule 12(b)(6), all well-pleaded factual allegations, as distinguished from
conclusory allegations, are accepted as true and viewed in the light most favorable to Plaintiff as
the nonmoving party.2 Plaintiff must provide “enough facts to state a claim to relief that is
plausible on its face,”3 which requires “more than an unadorned, the-defendant-unlawfully
1
Docket No. 8-1, at 8–9.
2
GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir.
3
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007).
1997).
2
harmed-me accusation.”4 “A pleading that offers ‘labels and conclusions’ or ‘a formulaic
recitation of the elements of a cause of action will not do.’ Nor does a complaint suffice if it
tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’”5 “The court’s function on
a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial,
but to assess whether the plaintiff’s complaint alone is legally sufficient to state a claim for
which relief may be granted.”6
III. DISCUSSION
The Insurance Defendants argue that the Complaint should be dismissed because this
Court lacks jurisdiction to hear Plaintiff’s claims and because the Complaint fails to meet the
pleadings standards of Fed. R. Civ. P. 8(a)(2). UPS, on the other hand, argues that Plaintiff’s
Complaint should be dismissed because her claims are barred by the doctrines of issue preclusion
and claim preclusion.
As the parties’ arguments all involve the Workers’ Compensation Act (“WCA” or “the
Act”), a short introduction to the Act is appropriate.
“The Workers’ Compensation Act is a comprehensive scheme enacted to provide speedy
compensation to workers who are injured as a result of an accident occurring in the course and
scope of their employment, irrespective of negligence on the part of employers or employees.”7
4
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
5
Id. (quoting Twombly, 550 U.S. at 557) (alteration in original).
6
Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).
7
Sheppick v. Albertson’s, Inc., 922 P.2d 769, 773 (Utah 1996).
3
“The remedies provided by the Act for injuries to workers are exclusive of common law
remedies.”8
A.
INSURANCE DEFENDANTS’ MOTION TO DISMISS
The Insurance Defendants move to dismiss Plaintiff’s Complaint on two grounds: (1) the
Court lacks jurisdiction to consider Plaintiff’s claims and (2) Plaintiff’s Complaint fails to meet
the pleadings standards of Fed. R. Civ. P. 8(a)(2).
1.
JURISDICTION
The Insurance Defendants argue that the Court lacks jurisdiction in this matter because
exclusive jurisdiction to hear claims arising under the WCA (including Plaintiff’s claims) is
vested in the Utah Labor Commission. Plaintiff disagrees, arguing that the Labor Commission
has exclusive jurisdiction only over claims that involve traditional workers’ compensation
benefits. Because Plaintiff’s claim involves the disbursement of proceeds obtained from a thirdparty, and not traditional workers’ compensation benefits, Plaintiff believes her claim is properly
brought in this Court.
Plaintiff’s claims in this case are based on sections 34A-2-106(5) and 34A-2-106(2) of
the Utah Code, both of which are part of the WCA. Section 34A-2-106(5) states that the Act
does not bar a lawsuit that a plaintiff may have against a person other than an employer and sets
forth the procedure for distributing any funds recovered through such lawsuit. Section 34A-2106(2) states that in certain situations the employer or insurance carrier becomes “the trustee of
the cause of action against the third party . . . .”
8
Id.
4
The Court will provide an overview of two cases cited by the parties that are particularly
relevant to the issues before the Court.
The first is the Utah Supreme Court’s decision in Sheppick v. Albertson’s, Inc. In
Sheppick, an injured worker sought reimbursement of medical expenses under the Act. The selfinsured employer paid for the employee’s initial treatment, but when the employee later argued
that the injury had caused additional damage, the employer refused to pay, claiming that the
additional damage was caused by subsequent, unrelated events. The employee filed an
application for a hearing with the Labor Commission but later withdrew the application and filed
a complaint in state district court.
The Utah Supreme Court subsequently held that the district court lacked jurisdiction
because the issue of whether the additional injury was compensable under the WCA fell within
the Labor Commission’s exclusive jurisdiction. In reaching this decision, the court stated that
“[a]lthough the Act does not specifically state that no court may award benefits provided by the
Act, that is its clear import. District courts have no jurisdiction whatsoever over cases that fall
within the purview of the [WCA].”9 The Court further stated that the “Commission has
exclusive jurisdiction not only to issue compensation awards authorized by the Act, but also to
make the necessary factual findings upon which such awards may be made
9
Id.
10
Id. at 775.
5
. . . .”10
The second case is Working RX, Inc. v. Workers’ Compensation Fund.11 In Working RX,
the Utah Court of Appeals relied on Sheppick to hold that claims regarding the reasonableness of
payments for prescription benefits under the WCA fell within the Labor Commission’s exclusive
jurisdiction. The plaintiff in Working RX was a company that processed prescriptions for injured
workers. It claimed that the workers’ compensation carrier had underpaid it for prescriptions. In
support of its decision, the court stated that although the WCA did not “explicitly state that a
prescription provider may file an application for a hearing with the Commission . . . the statutory
scheme provides that claims regarding the reasonableness of payments for prescriptions come
within the Commission’s exclusive jurisdiction.”12 The court also stated that
[e]ven without a specific statement establishing so, “the right to exercise
[exclusive] jurisdiction, in our judgment, is clearly implied as necessary and
incident to the exercise of the other powers granted and compliance with the duty
imposed by the other provisions of the act.” For us to “hold otherwise would . . .
run contrary to the entire spirit and purpose of the law.”13
The Insurance Defendants assert that the Labor Commission has exclusive jurisdiction to
hear Plaintiff’s claims because the jurisdictional reach of the Act is broad—applying to virtually
all claims that invoke rights under the Act—and because the Labor Commission is in the best
position to apply the Act’s provisions at issue in this matter. Plaintiff disagrees, arguing that the
Labor Commission’s exclusive jurisdiction is limited to claims for traditional workers’
11
173 P.3d 853 (Utah Ct. App. 2007).
12
Id. at 856.
13
Id. at 856–57 (quoting Utah Copper Co. v. Indus. Comm’n of Utah, 193 P. 24, 27
(1920)).
6
compensation benefits, and that a court of general jurisdiction is in the best position to determine
the allocation of any funds obtained from a third party.
The Court finds that the Labor Commission has exclusive jurisdiction over Plaintiff’s
claims for two reasons. First, the Labor Commission’s broad, exclusive jurisdiction deprives this
Court of jurisdiction. The WCA provides that administration of the Act “is vested in the [Labor
C]ommission.”14 The Act also states that “[t]o contest an action of the employee’s employer or
its insurance carrier concerning a compensable industrial accident . . . alleged by the employee or
a dependent[, the plaintiff] shall file an application for hearing with the Division of Adjudication
. . . .”15 In this case, Plaintiff is contesting an “action” of Defendants (their alleged failure to pay
proportionate attorney fees) that “concern[s] a compensable industrial accident” (the accident in
which Mr. Christoffersen was killed), and the mandatory “shall” requires that Plaintiff file her
claim regarding this alleged action with the Labor Commission, not this Court.16
The Labor Commission’s broad jurisdiction is also exemplified by the Utah Supreme
Court’s statement that, aside from two exceptions not present in this case, “[d]istrict courts have
no jurisdiction whatsoever over cases that fall within the purview of the Workers’ Compensation
Act.”17
14
Utah Code Ann. § 34A-2-112.
15
Id. § 34A-2-801(1)(a).
16
See id.
17
Sheppick, 922 P.2d at 773.
7
Second, Sheppick, and Working RX, Inc., demonstrate that the Labor Commission’s
exclusive jurisdiction applies to claims that invoke rights under the Act. In Sheppick, an injured
employee’s claim for benefits pursuant to a specific provision of the Act was committed to the
exclusive jurisdiction of the Commission even though the Act did “not specifically state that no
court may award benefits by the Act.”18 In Working RX, Inc., the court determined that a trial
court had no jurisdiction to address the plaintiff’s claim that the defendant had a “statutory duty
. . . to pay for injured workers’ prescription medicines” because it was “a claim alleging a
violation under the Act and, as such, comes within the Commission’s exclusive jurisdiction.”19
Under the same reasoning, Plaintiff’s claim invokes rights under the Act, thus falling
within its purview and becoming subject to the exclusive jurisdiction of the Labor Commission.
Like Sheppick, the fact that the Act does “not specifically state that no court may” determine the
allocation of attorney fees pursuant to Section 34A-2-106(5), is of little consequence.20 By
claiming that Defendants failed to comply with a statutory duty to pay proportionate attorney fees
as required by the Act, Plaintiff claims a violation of the Act “and, as such, comes within the
Commission’s exclusive jurisdiction.”21
Plaintiff argues that the instant case is distinguishable because, instead of traditional
workers’ compensation benefits, she is seeking a portion of the proceeds of a third-party lawsuit.
18
Id.
19
Working RX, Inc., 173 P.3d at 855.
20
See Sheppick, 922 P.2d at 773.
21
Working RX, 173 P.3d at 855.
8
This argument fails because, as discussed, the Commission’s exclusive jurisdiction is not limited
to issues involving traditional workers’ compensation benefits, but rather extends to all claims
“alleging a violation under the Act . . . .”22
Plaintiff’s claim for breach of fiduciary duty is similarly committed to the exclusive
jurisdiction of the Labor Commission. Plaintiff asserts that her claim for breach of fiduciary duty
is a “common-law tort claim that can be adjudicated in courts of law.”23 The Utah Court of
Appeals rejected a similar argument in Working RX, Inc. The plaintiff in that case argued that his
unjust enrichment claim was merely a common-law claim “that the Commission ha[d] no
jurisdiction to adjudicate . . . .”24 The court found, however, that the unjust enrichment claim
was “more properly categorized as a recharacterization of [the plaintiff’s] claim, which plainly
allege[d] a violation of the Act.”25 The same is true here. According to Plaintiff, Defendants
“breached their fiduciary duty that they owed the plaintiff as trustee of the claim (by not paying
their proportionate share of the reasonable expenses of the third-party action).”26 Thus, just as in
Working RX, Inc., Plaintiff’s common-law claim “plainly alleges a violation of the Act” and must
be committed to the exclusive jurisdiction of the Labor Commission.
22
Id.
23
Docket No. 13, at 9.
24
Working RX, Inc. 173 P.3d at 857.
25
Id.
26
Docket No. 13, at 12.
9
Plaintiff also argues that it is not the Labor Commission, but this Court, that has the
expertise to determine her claims. According to Plaintiff, because courts of general jurisdiction
have jurisdiction over third parties, the Commission should not be relied on to adjudicate
disputes regarding the proceeds generated through litigation with third parties. Instead, the court
that decided the underlying lawsuit would be in the best position to determine the reasonableness
of costs and attorney fees. The Court disagrees. It is true that the court that oversees a particular
proceeding is in a fine position to determine the reasonableness of costs and fees, but the
Commission is also equal to the task. The same is not true, however, of disputes that arise under
the Act. While the Commission has particular expertise in addressing “the special situations to
which the Act applies,”27 a trial court does not. More importantly, unlike the claims arising
under the Act, there is no statutory mandate that issues of costs and attorney fees be determined
by a trial court.
The Court therefore holds that exclusive jurisdiction to determine Plaintiff’s claims is
vested in the Labor Commission. As Plaintiff brings the same claims against all Defendants, this
holding also deprives the Court of jurisdiction over Plaintiff’s claims against UPS. Having
determined that the Court lacks jurisdiction over Plaintiff’s claims, the Court cannot address the
parties’ remaining arguments.
27
Sheppick, 922 P.2d at 775.
10
V. CONCLUSION
Based on the above, it is hereby
ORDERED that Defendant United Parcel Service Inc.’s Motion to Dismiss (Docket No.
8) is MOOT. It is further
ORDERED that Defendants Liberty Mutual Insurance Company and Helmsman
Management Services, LLC’s Motion to Dismiss (Docket No. 9) is GRANTED.
The Clerk of the Court is directed to close this case forthwith.
DATED June 25, 2013.
BY THE COURT:
_____________________________________
TED STEWART
United States District Judge
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