Joseph E. Leichtnam, a resident of South Dakota, worked for Rommesmo Companies d/b/a Dakota Steel & Supply, Inc. from May 2001 until April 6, 2009. American Zurich Insurance Company, Zurich American Insurance Company, and Zurich North America (collectively, Zurich) provided workers' compensation insurance for the employer.
On August 29, 2007, Leichtnam injured his head, neck, and low back when he fell off a forklift and landed on the back of his head, neck, and back. He sought medical care and incurred medical expenses as a result of the injury. He continued to have headaches and neck and back pain. Lumbar and cervical MRIs showed a disk herniation at L5-S1 and marked right-sided facet arthropathy at C3-4, C4-5, and C5-6.
On July 17, 2008, Zurich arranged to have Leichtnam see Dr. Wayne Anderson, an occupational medicine specialist. He opined that the work injury was a major contributing cause of the L5 radicalopathy, the low back pain, the headaches, and the neck pain. He assigned permanent impairments for the neck and low back injuries.
Dr. Richard Farnham
On May 16, 2009, Zurich arranged to have Leichtnam see Dr. Richard Farnham. Here are some comments about him in the February 2015 complaint filed in the Leichtnam lawsuit:
Dr. Farnham is not board certified in occupational medicine, having failed the examination on several occasions, and doesn't treat patients. He is widely known as regularly and routinely providing opinions to insurance companies that reduce the insurer's claim payments.
Comments about Dr. Farnham by a magistrate judge appeared in the case of Gowan v. Mid Century (U.S. District Court, District of South Dakota, Case No. 5:14-cv-5025). This paragraph was in a September 2015 order in response to Gowan's motions to compel:
Mid Century hired Richard Farnham, M.D. to conduct an independent medical exam (IME) on Mr. Gowan. Mid Century had previously hired Dr. Farnham on 11 occasions between 2000 and 2012 to provide it with IMEs on various Mid Century claimants. Mr. Gowan alleges that Mid Century hired Dr. Farnham because he was "notoriously biased in favor of insurance companies." Mr. Gowan alleges it was Mid Century's expectation in hiring Dr. Farnham that he would render an opinion that would support Mid Century denying or limiting medical treatment to Mr. Gowan.
Dr. Farnham provided a report saying Leichtnam's injury did not cause anything other than some "post concussion headaches early on." On June 4, 2009, after Dr. Farnham's report, Zurich discontinued payment for any appointment or medication that resulted from Leichtnam's injury.
In the June 2010 issue of The Insurance Forum, I wrote an article about a physician who specialized in providing reports that insurance companies could use to deny or reduce claims. The article is in the complimentary package offered at the end of this post.
On July 15, 2009, Leichtnam filed a petition for hearing with the South Dakota Department of Labor, in part to restore his right to payment of medical bills and prescriptions by Zurich. On October 28, 2009, Zurich offered to pay $1,500 for a full, final, and complete settlement. Leichtnam declined the offer.
In May 2012 Zurich agreed to pay for a doctor's visit with Dr. Lawlor for treatment of the neck condition, back condition, and headaches. Leichtnam saw Dr. Lawlor on June 20, 2012. Dr. Lawlor prescribed medications, physical therapy, an orthotic, and an inversion table. Zurich for many months refused to pay for the medications, orthotic, and inversion table.
In early June 2013, the parties reached a settlement in which Zurich agreed to retract its denial of medical treatments and pay for future medical expenses for the neck and back condition and headaches. On June 7, 2013, Zurich sent a settlement agreement for Leichtnam to sign, but it was not what the parties had agreed upon. It would have released any claim for attorney fees and bad faith. Zurich agreed to remove the release for attorney fees and bad faith. On June 19, 2013, Zurich agreed to pay for future medical expenses for the neck and back condition and headaches. On June 21, 2013, the South Dakota Department of Labor approved the settlement.
On February 27, 2015, Leichtnam filed a lawsuit in federal court against Zurich. He alleged: (1) Zurich repeatedly denied benefits without a reasonable basis and with knowledge of the lack of a reasonable basis; (2) Zurich failed to conduct a reasonable investigation; (3) Zurich's conduct is part of a pattern of conduct designed to reduce compensation to injured workers; (4) Zurich acted with fraud, malice, and oppression, making punitive damages appropriate; (5) he has been harmed by delay in payment of his medical expenses, delay and obstruction in his medical care, loss of use of his benefits, emotional upset, aggravation, annoyance, and embarrassment, and it should have been unnecessary for him to incur attorney fees and expenses; and (6) Zurich has shown a reckless disregard of his interests, making punitive damages appropriate. He sought compensatory damages, punitive damages, pre-judgment interest, attorney fees and costs, and any other relief deemed appropriate. (See Leichtnam v. Zurich, U.S. District Court, District of South Dakota, Case No. 5:15-cv-5012.)
The case is in the hands of Chief U.S. District Judge Jeffrey L. Viken. President Obama nominated him in June 2009, and the Senate confirmed him in September 2009. He became Chief Judge in 2013. U.S. Magistrate Judge Daneta Wollmann is also involved in the case.
Progress of the Case
The case is progressing, but slowly. On April 30, 2015, Zurich filed a perfunctory answer to the complaint. On October 7, 2015, Chief Judge Viken signed a protective order. Thereafter both parties obtained court approval of numerous extensions of deadlines.
On December 18, 2017, Leichtnam filed a motion to compel discovery. The same day he filed a sealed document that included many exhibits. The next day he filed a redacted document that included many exhibits. On December 28, 2017, Chief Judge Viken referred the motion to compel discovery to Magistrate Judge Wollmann.
On January 8, 2018, Zurich filed a response to the motion to compel discovery. On September 7 Zurich filed a motion to dismiss the complaint. The motion has been briefed but has not been ruled on.
On September 30 Magistrate Judge Wollmann issued an order granting in part and denying in part Liechtnam's motion to compel discovery. Although that description is technically accurate, the order is a victory for Leichtnam. It compels Zurich to provide virtually everything Leichtnam had requested. The order is in the complimentary package offered at the end of this post.
On November 13, Zurich filed an unopposed motion to extend various deadlines. Discovery is to be completed by March 29, 2019, and other matters are to be completed by April 30, 2019. Chief Judge Vilken has not set a trial date.
I think Zurich will never allow this case to reach a jury, the case will be settled, and, because it is an individual case rather than a class action, the terms of the settlement will be confidential. Furthermore, I think Leichtnam will be in a strong bargaining position, and therefore able to obtain a substantial settlement. I plan to follow this case and report significant developments.
I am offering a 31-page complimentary package consisting of the complaint (5 pages), Magistrate Judge Wollmann's order (23 pages), and the article in the June 2010 issue of the Forum (3 pages). Email firstname.lastname@example.org and ask for the December 2018 package relating to the case of Leichtnam v. Zurich.