On January 16, 2019, the Supreme Court of South Dakota published its opinion in Skjonsberg v. Menard, Inc., 2019 S.D. 6. This decision, which provides favorable language for Employers and Insurers, has potential ramifications on the bad faith environment in South Dakota.
In Skjonsberg, Cassandra Skjonsberg (“Claimant”) injured her right foot while working for Menard, Inc. (“Employer”). Claimant’s workers’ compensation claim was eventually denied, causing her to file a Petition for Hearing with the Department of Labor. Claimant alleged to have incurred medical expenses related to her injury after the denial of her claim. During litigation, Claimant issued written discovery requests. After multiple attempts to have Employer and Insurer answer her discovery, Claimant moved for partial summary judgment. In doing so, she asked the Department to find Employer and Insurer responsible for payment of her medical expenses. Employer and Insurer responded, arguing that the discovery requests were burdensome and excessive. The Department granted Claimant’s motion for partial summary judgment and ordered that Employer and Insurer pay Claimant’s medical expenses.
Despite the Department’s order, Claimant’s medical expenses went unpaid for two years. Claimant then filed a second motion for partial summary judgment, again seeking payment of unpaid medical expenses. Employer and Insurer responded by sending a letter to the Department claiming that they were taking care of the outstanding medical bills. Counsel for Employer and Insurer later submitted an affidavit, providing that Claimant’s medical bills had been resolved. Employer and Insurer also filed a two-line response to Claimant’s motion for partial summary judgment, arguing the motion should be denied because the issue was moot – in other words, that there was no controversy for the Department to decide because the bills had been paid.
Despite the Employer and Insurer’s argument, the Department granted the second motion for partial summary judgment. Employer and Insurer requested a reconsideration which the Department denied. On appeal, Circuit Court Judge John Pekas affirmed the Department’s order, and the issue was appealed to the Supreme Court. The Supreme Court reversed and remanded, finding that the second motion for partial summary judgment was granted in error because the issue was moot at the time of adjudication.
The parties likely litigated this issue in anticipation of future bad faith litigation, hoping to collect a pile of orders finding against the employer and insurer. With increasing frequency, Claimants’ attorneys have filed actions where there is no dispute over benefits owed. Instead, it appears that the goal is getting the Department to enter an Order that may assist a future potential bad faith claim. This decision is useful as the basis for a motion for summary judgment when claims of this nature are filed with the Department.
Reach out to one of us here at Boyce Law Firm to discuss more.