Wentworth v. Crawford & Co.

Wentworth v. Crawford & Company (2001-089); 174 Vt. 118; 807 A.2d 351

[Filed 24-May-2002]
[Motion for Reargument Denied 26-Jul-2002]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal  revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of  Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any  errors in order that corrections may be made before this opinion goes
  to press.




                                No. 2001-089



Joan Wentworth	                                 Supreme Court

                                                 On Appeal from
     v.	                                         Chittenden Superior Court


Crawford and Company	                         January Term, 2002


Matthew I. Katz, J.

Thomas C. Nuovo of Bauer, Anderson & Gravel, Burlington, for 
  Plaintiff-Appellant.

James E. Preston of Pierson, Wadhams, Quinn & Yates, Burlington, for 
  Defendant-Appellee.


PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.


       AMESTOY, C.J.   Plaintiff Joan Wentworth appeals the trial court's
  dismissal of her  negligence complaint against defendant Crawford &
  Company, a firm Wentworth's employer hired  to provide her with vocational
  rehabilitation benefits after a workplace injury.  The trial court 
  dismissed Wentworth's complaint pursuant to V.R.C.P. 12(b)(6) because it
  determined that the  Workers' Compensation Act provided the exclusive
  remedy for harm flowing from her workplace  injury.  We affirm, although on
  different grounds.  See Sorge v. State, 171 Vt. 171, 174 n.*, 762 A.2d 816, 818 n.* (2000) (Supreme Court may affirm correct result
  below for different reasons on  appeal).

       Motions to dismiss for lack of a cognizable legal claim are not
  favored and are rarely granted.  Ass'n of Haystack Prop. Owners, Inc. v.
  Sprague, 145 Vt. 443, 446-47, 494 A.2d 122, 124 (1985).    Dismissal is
  inappropriate unless there is no doubt that the plaintiff could prove no
  facts or  circumstances entitling her to relief.  Id.  The motion tests
  whether the complaint adequately states a  claim; thus, the court must
  restrict its inquiry to the facts alleged in the complaint. See Bennett
  Estate  v. Travelers Ins. Co., 138 Vt. 189, 190-91, 413 A.2d 1208, 1209
  (1980); see also Leonard F. v. Israel  Discount Bank of N.Y., 199 F.3d 99,
  107 (2d Cir. 1999) (when deciding a motion under F.R.C.P.  12(b)(6), the
  court must limit its consideration to facts stated in the complaint,
  attachments thereto,  or to matters the court may judicially notice); 5A C.
  Wright & A. Miller, Federal Practice &  Procedure § 1356, at 298 (1990) (a
  Rule 12 (b)(6) motion tests only whether the plaintiff has  adequately
  stated a claim and court's inquiry must be limited to complaint's
  contents).  We regard as  true the complaint's well-pleaded factual
  allegations when reviewing an order on a motion under  V.R.C.P. 12(b)(6). 
  Sprague, 145 Vt. at 444, 494 A.2d  at 123.   

       In this case, Wentworth's complaint alleged that she was employed by
  Fanny Allen Hospital  as a licensed practical nurse for over twenty years.
  (FN1)  In October 1992, she injured her back.   She returned to work in the
  fall of 1993, but reinjured her back that November while attempting to 
  move 

 

  a deceased patient.  The following month, defendant Crawford & Company, who
  was hired to  provide Wentworth with vocational rehabilitation benefits
  pursuant to the Workers' Compensation  Act, see 21 V.S.A. § 641(a) (Cum
  Supp. 2001), made an initial evaluation of Wentworth, including  her
  physical limitations.  Crawford determined that Wentworth's limitations
  prevented her from  returning to her former position at Fanny Allen.  She
  was directed to stay in touch with the hospital  to determine what other
  jobs might be available to her.

       Although Crawford completed its initial evaluation of Wentworth, it
  did not prepare a written  report detailing an appropriate vocational
  rehabilitation plan for her.  From December 1993 to  January 1999, Crawford
  contacted Fanny Allen on one occasion only to ascertain the availability of 
  suitable alternative employment for Wentworth, and did not inform Wentworth
  of her rights to  reinstatement at Fanny Allen under 21 V.S.A. § 643b. 
  Fanny Allen had a unit secretary position  available which Wentworth could
  have performed after minimal training.  Wentworth sought  employment
  elsewhere, however, and further injured her back. 

       In December 1999, Wentworth filed her complaint against Crawford in
  Chittenden Superior  Court.  She alleged that the workers' compensation
  rules required Crawford to prepare an individual  written rehabilitation
  plan, but it failed to do so.  She claimed Crawford also failed to inform
  her of  her rights to reinstatement with Fanny Allen.  The complaint
  alleged that Crawford owed Wentworth  a duty to "uphold the law and provide
  competent rehabilitation services to her," and it breached that  duty by
  failing to assist her in obtaining employment and by violating the workers'
  compensation  rules promulgated by the Vermont Department of Labor and
  Industry.  Consequently, Wentworth 

 

  alleged, she suffered economic harm in the form of lost wages and benefits. 
  The complaint did not  allege that Crawford's conduct caused Wentworth any
  physical injury.

       Crawford moved to dismiss the complaint for failure to state a cause
  of action under V.R.C.P.  12(b)(6).  The court granted the motion on the
  grounds that Wentworth's complaint did not allege a  cognizable claim
  outside the exclusivity provision of the Workers' Compensation Act.  See 21 
  V.S.A. § 622.  It reasoned that Crawford was hired by her employer after
  her compensable back  injury, and therefore Wentworth's remedies lie
  exclusively under the Act pursuant to 21 V.S.A. §  622.  Unless Wentworth
  could show that Crawford undertook a duty outside and independent of the 
  Act, and that she suffered additional physical injuries flowing from
  Crawford's breach of that duty,  her claim fell within § 622 and dismissal
  was required.  Although we analyze Wentworth's claim  differently than did
  the trial court, we agree that dismissal of her complaint was proper.

       Wentworth's brief, like her complaint, demonstrates that her primary
  grievance was  Crawford's alleged failure to abide by the Department's
  vocational rehabilitation rules.  She argues  that the rules required
  Crawford to prepare and have her sign a written rehabilitation plan so that
  she  could obtain suitable employment with Fanny Allen.  She also claims
  that Crawford was required to  provide training and to pursue alternative
  employment for her at the hospital, as well as preserve her  reinstatement
  rights.  Crawford disputes those allegations, and argues that she should
  have pursued  and exhausted available administrative remedies with the
  Department of Labor and Industry to  address her dissatisfaction with
  Crawford's services.  Under the exhaustion doctrine one must  generally
  pursue available administrative remedies prior to filing a civil complaint. 
  See In re D.A.  Assocs., 150 Vt. 18, 20, 547 A.2d 1325, 1326 (1988)
  ("[W]hen an administrative remedy is 

 

  established by statute or regulation, relief must not only be sought in
  accordance therewith, but must  first be exhausted before recourse to the
  courts is available.").  A review of the statutory and  regulatory scheme
  persuades us that Crawford's exhaustion-of-remedies argument has merit.

       Vocational rehabilitation benefits are available when a workplace
  injury prevents the  employee from performing work for which she had
  previous training or experience.  21 V.S.A. §  641(a).  The benefits
  include retraining and job placement, and their purpose is "to restore the 
  employee to suitable employment."  Id.  The statue does not "impose a duty
  on the employer or its  insurer to develop a rehabilitation plan for [an
  injured employee]," but, rather, it "contemplates that  the parties will
  cooperate in the development and implementation of a plan."  Wroten v.
  Lamphere,  147 Vt. 606, 612, 523 A.2d 1236, 1239 (1987).  The rules the
  Commissioner of the Department of  Labor and Industry promulgated in 1994
  (FN2) required the vocational rehabilitation service  provider to file an
  "Individual Written Rehabilitation Plan" (IWRP), "[w]here appropriate,"
  after  assessing the injured worker's eligibility for vocational
  rehabilitation services.  Vt. Workers'  Compensation & Occupational Disease
  Act Rule 29 (eff.  Feb. 7, 1994).  The rules defined an IWRP  as a "written
  document completed by a rehabilitation service provider and an injured
  worker which  describes the manner and means by which the injured worker
  will be returned to suitable  employment through  the

 

  use of rehabilitation services."  Rule 26(b).  The IWRP's purpose was "to
  document not only the  vocational goal(s) agreed upon but also each party's
  responsibilities in achieving the goal(s)."  Id. 

       The Department's rules also required the injured worker, the employer
  or its insurance  carrier, and the rehabilitation service provider to sign
  the IWRP.  Rule 29(d).  The Commissioner  would approve the IWRP if the
  Commissioner determined that the vocational goal, and the plan  established
  to meet that goal, were appropriate.  Rule 29(e).  If any party to the plan
  did not sign the  IWRP, or if the Commissioner had "reason to doubt" the
  plan's appropriateness, the Rules  authorized the Department to convene an
  informal conference or a formal hearing to resolve the  matter.  Rule
  29(e).  Most importantly, Rule 32 authorized the Commissioner to order a
  change in  rehabilitation service provider "upon a showing that the current
  provider is not complying with the  spirit and/or letter of [the] rules,"
  is not qualified under standards set forth in rules, and/or is not able  to
  engage in an effective working relationship with the injured employee as a
  result of irreconcilable  differences between the two parties.  Rule 32. 
  The rule's obvious purpose was to ensure that a  claimant entitled to
  vocational rehabilitation benefits obtained effective and competent service
  from  the provider.  Rule 32 also furthered the Legislature's directive
  that the Commissioner of the  Department of Labor and Industry be the
  primary authority for determining questions arising under  the Workers'
  Compensation Act.  See 21 V.S.A. § 606; DeGray v. Miller Bros. Constr. Co.,
  Inc.,  106 Vt. 259, 268, 173 A. 556, 559 (1934).  Wentworth should have
  sought to remedy Crawford's  alleged failures through the relief available
  under Rule 32.

       Wentworth argues that exhaustion was not required for two reasons. 
  She first claims that the  Department's rules did not allow her to request
  a change in service provider until sometime in 2000. 
 
 

  That claim is without support because since at least 1994, the rules have
  authorized the  Commissioner to order a change in service provider upon a
  showing that the provider is not  complying with the rules. (FN3) 
  Wentworth also argues that the Department of Labor and Industry  is not
  authorized to adjudicate a claim for economic losses due to a vocational
  rehabilitation service  provider's malpractice, and therefore no
  administrative remedy for her complaint was available.    That argument
  entirely misses the point of the exhaustion requirement in cases such as
  this one.  One  salutary effect of the requirement is its potential to
  mitigate or eliminate a plaintiff's damages.   Westlake Cmty. Hosp. v.
  Superior Ct., 551 P.2d 410, 416 (Cal. 1976); Long v. Samson, 568 N.W.2d 602, 605 (N.D. 1997).  Had Wentworth timely availed herself of the
  regulatory remedy under Rule  32, she may have avoided her alleged injury
  and consequent damages altogether.  Moreover, by  bringing Crawford's
  alleged deficiencies to the Department's attention under Rule 32, Wentworth 
  may have gained an understanding of her own responsibilities under the
  vocational rehabilitation  regulations as well as Crawford's obligations. 
  The trial court's dismissal was therefore appropriate  because Wentworth
  did not first pursue and exhaust the administrative remedies the Department 
  designed to redress any problems associated with Crawford's provision of
  vocational rehabilitation  services.

       By requiring Wentworth to pursue the remedies available under the
  Department's workers'  compensation rules, we are not suggesting that the
  exclusivity provision of the Workers'  Compensation Act barred her claim as
  Crawford argues, and as the trial court concluded.  See 21 

 

  V.S.A. § 622.  Section 622 limits a worker's rights and remedies for a
  workplace injury to those  provided in the workers' compensation statutes. 
  Id. § 622.  The Act's provisions apply to accidental  personal injuries
  that arise out of employment and occur during its course.  Id. § 618(a)(1);
  Miller v.  IBM Corp., 161 Vt. 213, 214, 637 A.2d 1072, 1072-73 (1993).  The
  Act does not define "personal  injury" other than stating that the term
  includes death resulting from an injury, occupational diseases,  and
  "injury to and cost of acquiring and replacement of prosthetic devices,
  hearing aids and eye  glasses."  21 V.S.A. § 601(7).  Nevertheless, the
  statutory scheme evidences the legislature's intent  to compensate
  employees for bodily or mental injuries, not economic injuries alone.  See,
  e.g., 21  V.S.A. § 640 (obligating employer to provide reasonable medical
  services, including surgery and  nursing services); id. § 642 (temporary
  total disability benefits); id. § 644 (setting forth  nonexhaustive list of
  permanent total disabilities like loss of hands, permanent loss of sight in
  both  eyes, and loss of both feet); id. § 645 (compensation payments for
  permanent total disability); id. §  648 (setting forth method for computing
  compensation for permanent partial impairments); see also  3 A. Larson,
  Larson's Workers' Compensation Laws, ch. 55, at 55-1 (2001) ("Personal
  injury"  includes any adverse change in the body, including disease and
  traumatic neurosis); Black's Law  Dictionary 541 (6th abr. ed. 1991) (in
  workers' compensation acts, "personal injury" means harm or  damage to
  employee's health).  In addition, the injury must arise out of or during
  the course of the  injured worker's employment.  Miller, 161 Vt. at 214,
  637 A.2d  at 1072-73. 

       In this case, Wentworth alleged an economic injury wholly separate
  from, and subsequent to,  the physical back injury for which she received
  workers' compensation payments and vocational  rehabilitation benefits. 
  The facts set forth in her complaint allege that the economic injury
  occurred 

 

  during her rehabilitation and resulted from the vocational rehabilitation
  specialist's failure to fulfill  its obligation to provide plaintiff with
  training and job placement services.  Because Wentworth  alleged a purely
  economic injury subsequent to her compensable back injury which did not
  arise out,  or during the course, of her employment with Fanny Allen, § 622
  does not apply to her claim  because her injury was not compensable under
  the Act.  Cf.  Demag v. American Ins. Co., 146 Vt.  608, 611, 508 A.2d 697,
  698-99 (1986) (deceased employee's wife's claim against workers' 
  compensation insurance carrier for emotional distress did not arise out of
  husband's employment but  stemmed from her status as a claimant seeking
  compensation after husband's death; therefore claim  was not barred by
  exclusivity provision of the Act); Stump v. Commercial Union, 601 N.E.2d 327,  330-31 (Ind. 1992) (claims against a workers' compensation carrier
  for employee injuries which do  not occur by accident, or arise out of and
  during course of employment, may be pursued in court).

       Although § 622 does not prohibit Wentworth's claim against Crawford,
  dismissal was also  proper because Wentworth's complaint does not allege
  facts sufficient to find that Crawford owed  her any actionable duty to
  prevent her economic losses.  It is well established in Vermont that absent 
  some accompanying physical harm, there is no duty to exercise reasonable
  care to protect another's  economic interests.  O'Connell v. Killington,
  Ltd., 164 Vt. 73, 77, 665 A.2d 39, 42 (1995); see also  Springfield
  Hydroelectric Co. v. Copp, ___ Vt. ___, ___, 779 A.2d 67, 71 (2001)
  (economic loss  doctrine bars recovery of damages for harm other than
  physical harm to persons or property under  negligence principles); Gus'
  Catering, Inc. v. Menusoft Sys., 171 Vt. 556, 558, 762 A.2d 804, 807 
  (2000) (mem.) (absent accompanying physical harm, no duty to avoid
  intangible economic losses to  another exists under negligence law). 
  Without a legal duty of care, an action for negligence 

 

  cannot stand.  Gus' Catering, Inc., 171 Vt. at 559, 762 A.2d  at 808. 
  Whether a duty exists in  particular circumstances is a legal question for
  the court's consideration.  Sorge, 171 Vt. at 174, 762 A.2d  at 818.

       In her appellate briefs, Wentworth argues that Crawford's duty to her
  arose from its contract,  the requirements of the trade, and statute;
  however, neither the brief nor the complaint set forth any  facts
  supporting the existence of a contractual duty.  Even if the facts in
  Wentworth's complaint  established the existence of a contract, our caselaw
  prohibits a claimant from seeking damages for  contractual losses through
  tort law.  Springfield Hydroelectric, ___ Vt. at ___, 779 A.2d  at 70-71.  
  "The underlying analysis turns on whether there is 'a duty of care
  independent of any contractual  obligations.' " Id. at ___, 779 A.2d  at 71
  (quoting Grynberg v. Agri Tech, Inc., 10 P.3d 1267, 1269  (Colo. 2000))
  (emphasis in original).  Wentworth fails to show, however, that Crawford
  owed her  any independent duty to protect her economic interests.

       Although Wentworth argues that the requirements of Crawford's trade
  also give rise to a  legal duty by Crawford to protect her economic
  interests, the complaint is devoid of any facts  supporting the existence
  of such duty.  Neither Wentworth's complaint nor her brief allege that 
  Crawford held itself out as a provider of a licensed professional service
  requiring a professional  rather than ordinary standard of care.  See
  Springfield Hydroelectric, ___ Vt. at ___, 779 A.2d  at 72  (noting that
  professional malpractice claim must be predicated on licensed professional
  service  requiring professional rather than ordinary standard of care). 
  Nor did her complaint or brief identify  any professional standards to
  which entities like Crawford must adhere in the provision of vocational 
  rehabilitation services.  Instead, Wentworth relies on the requirements she
  alleges the Workers' 

 

  Compensation Act and implementing regulations establish for vocational
  rehabilitation service  providers.

       Wentworth alleges that Crawford owed her a duty under the Department's
  rules to prepare,  and have her sign, an IWRP to help her procure suitable
  employment with Fanny Allen.  Wentworth  also alleges that the rules
  required Crawford to pursue employment opportunities for her at the 
  hospital, preserve her right to reinstatement with the hospital, and
  provide her with training for an  open position there. We find no support
  for Wentworth's allegations.

       Neither § 641(a) nor the Department's implementing regulations place
  sole responsibility for  preparing an IWRP on the vocational rehabilitation
  service provider.  As we explained previously, an  IWRP is a collaborative
  document prepared by the service provider and the injured worker.  One 
  chief purpose of the IWRP is to set forth each party's obligations towards
  attaining the identified  rehabilitation goal to place the worker in
  suitable employment.  The statutory and regulatory scheme  therefore do not
  support imposing a legal duty on Crawford to protect Wentworth's economic 
  interests through preparation of an IWRP. 

       Wentworth's assertions that Crawford owed her a duty under the Act to
  pursue employment  opportunities on her behalf, preserve her reinstatement
  rights, and provide her with training are  similarly insufficient as a
  matter of law to find that Crawford owed Wentworth a legal duty to  sustain
  an action in negligence.  We find nothing in the relevant statutes or the
  Department's rules  requiring a vocational rehabilitation service provider
  to "pursue employment opportunities" for  Wentworth or preserve her right
  to reinstatement.  Indeed, Wentworth's complaint alleges facts to 

 

  the contrary.  It states that Crawford's initial assessment noted that
  Wentworth "should stay in touch  with Fanny Allen Hospital to determine
  what other jobs might be available to her."  

       Similarly, the relevant statutes and regulations do not support
  Wentworth's contention that  Crawford had a legal obligation to provide her
  with training.  Training may or may not be required to  obtain suitable
  employment for an injured worker; whether training is necessary depends on
  the  rehabilitation goal the employee identifies through cooperation with
  the service provider.  Rule  26(b); Rule 29(b).  Where no such goal has
  been identified and agreed to, the responsibilities for  pursuing
  employment opportunities and the methods for obtaining suitable employment
  remain  undefined.  Consequently, there are no set of facts and
  circumstances alleged in the complaint from  which we could say that, if
  proved, would entitle Wentworth to relief.  See Sprague, 145 Vt. at 446, 
  494 A.2d  at 125.  The trial court therefore did not err by dismissing
  Wentworth's complaint under  V.R.C.P. 12(b)(6).

       Affirmed.



                                       FOR THE COURT:


                                       _______________________________________
                                       Chief Justice


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                                  Footnotes


FN1.  This is the second lawsuit Wentworth has filed in connection with
  circumstances related to  her employment and injury at Fanny Allen, now
  Fletcher Allen Health Care, Inc.  In Wentworth v.  Fletcher Allen Health
  Care, 171 Vt. 614, 765 A.2d 456 (2000) (mem.), we affirmed the trial
  court's  dismissal of Wentworth's suit against the hospital for
  retaliation, breach of contract, and emotional  distress after the hospital
  terminated her employment following her back injury.

FN2.  The earliest set of rules available to this Court became effective on
  February 7, 1994.  The  relevant portions were amended on April 1, 1995. 
  Additional amendments were promulgated after  Wentworth filed her
  complaint.  Because Wentworth's alleged injury arose sometime between 
  December 1993 and December 1999 when she initiated this action in superior
  court, our analysis  focuses on the rules effective February 7, 1994 -
  April 1, 1995, and April 1, 1995 - August 15, 2000.  All citations are to
  the 1994 rules unless otherwise indicated.  The current rules can be found
  at 3  Code of Vt. Rules 24 010 003-1 to 24 010 003-28 (2002).

FN3.  In 1995, the Department further clarified the rule by directing that
  change-of-provider  requests be filed with the Commissioner.  See Rule 33
  (eff. Apr. 1, 1995). The 1995 clarification did  not, however, create a new
  substantive right that did not exist previously as Wentworth's argument 
  implies.