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Sydney E. McKenna, Esq. syd@mslawmt.com Justin Starin, Esq. justin@mslawmt.com MCKENNA & STARIN, PLLC 815 E. Front Street, Suite 4A P.O. Box 7009 Missoula, MT 59807-7009 Tel. (406) 327-0800 Fax (406) 327-8706 Leslae Dalpiaz, Esq. ldalpiaz@dalpiazlaw.com LESLAE J. E. DALPIAZ, PC P.O. Box 8291 Missoula, MT 59807-8291 Tel. (406)-549-9200 Fax (406) 728-0790 Attorneys for Plaintiff IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA MISSOULA DIVISION ELISA PEDERSEN Plaintiff, vs. COMPLAINT ACE AMERICAN INSURANCE CO., DBA ACE USA, ACE COMMERCIAL RISK SERVICES, OR ESIS, INC.; SPECIALTY RISK SERVICES, LLC; HILTON WORLDWIDE, INC., FKA HILTON HOTELS CORPORATION; AND JOHN DOES 1-5 Defendants. Parties Tjl The Plaintiff Elisa Pedersen ("Elisa") submits this complaint against ACE American Cause No.

Insurance Co., dba ACE USA, ACE Commercial Risk Services, or ESIS, rNC. ("ACE");

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Specialty Risk Services, LLC ("SRS"); Hilton Worldwide, Inc., formerly known as Hilton Hotels Corporation ("Hilton"); and John Does 1-5. Jurisdiction Tf2 Elisa is a citizen of Montana and at all times pertinent to this action resided in Missoula

County, Montana. P ACE is a corporation incorporated under the laws of a state other than Montana and has

its principal place of business in a state other than Montana. ]}4 Defendant SRS is a corporation incorporated under the laws of a state other than Montana

and has its principal place of business in a state other than Montana. ]}5 Defendant Hilton is a corporation incorporated under the laws of a state other than

Montana and has its principal place of business in a state other than Montana. ]}6 John Does 1-5 are persons or entities, identities presently unknown, who contributed to,

caused, or participated in the acts and omissions complained of below and are believed to be citizens of a different state other than Montana. f7 Jurisdiction is founded on diversity of citizenship pursuant to 28 U.S.C. 1332. Plaintiff

and Defendants are citizens of different states. The amount in controversy for the Plaintiffs individual claims exceeds $75,000, exclusive of costs, interest and attorneys' fees. Allegation Common to All Counts Tf8 Elisa is currently 32 years old, single, and the mother of two financially dependent

children. Tf9 Elisa worked as a banquet hostess at the Hilton Hotel and Restaurant, which, at all times

pertinent to this case, was doing business as the Doubletree Hotel located in Missoula.

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]}10

On November 27, 2009, while performing her duties for the Hilton, Elisa injured her left

shoulder dragging a garbage can from the dining room to the inside trash area. Ifl 1 ACE provided workers' compensation insurance to the Hilton on the day of the accident,

November 27, 2009, under Plan II of the Montana Workers' Compensation Act (the "Act"). Tfl2 Tfl3 Elisa timely and properly reported her injury and filed a claim for benefits under the Act. The Act provides, without regard to fault, a wage supplement and medical benefits to

workers who suffer work related injury. It provides four distinct types of disability benefits. Three types are relevant to Elisa's claim: temporary total disability ("TTD"), temporary partial disability ("TPD") and permanent partial disability ("PPD"). It provides medical, hospital, and related services ("medical benefits"). It also provides for an impairment award if there is a permanent ratable impairment. It also provides for rehabilitation services and benefits. Tfl4 ACE accepted liability for Elisa's claim and directed SRS, a third party administrator and

ACE's agent, to adjust the claim. Ifl 5 The work related injury was temporarily disabling and Elisa was restricted from work by

Eric Ravitz, MD. Tfl6 Elisa was subsequently referred to Valerie Benzschawel, FNP, who assumed the role of

treating physician. Tfl7 Elisa's claim was handled by several different adjusters and at one point was transferred

to an out of state adjuster. Tfl8 The Hilton's human resource director requested the name of Elisa's treating physician so

he could contact Elisa's physician regarding her return to work. The human resource director also directed Elisa to turn over her medical records to the Hilton.

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Tfl9

Defendant SRS failed to pay Elisa's TTD benefits that were initially owed for at least

three weeks and then failed to pay them in a timely manner throughout the course of the claim. 1}20 Defendant SRS failed to authorize recommended treatment by the treating physician,

including, but not limited to, physical therapy for up to four months, extending Elisa's incapacity, and pain and suffering. ]}21 Defendant SRS failed to authorize massage therapy recommended by the treating

physician to assist Elisa in healing from her injury and managing her pain during her attempts to return to work. ]}22 Defendant SRS failed to timely process prescriptions, which created numerous

difficulties for Elisa in obtaining prescription refills due to mismanagement of her claim. ]}23 On March 32, 2010, Elisa was evaluated by John Schumpert, MD as part of the insurer's

medical evaluation. Dr. Schumpert concurred with the treating physician's diagnosis of left shoulder trapezius muscle strain, noted Elisa was not yet at maximum medical improvement, and recommended a gym membership and pool therapy. Dr. Schumpert also indicated that Elisa was unable to return to work. ]}24 In early June 2010, Elisa was approved to return to modified duty work by her treating

physician for a very limited number of hours per week. However, even this caused her increased pain and a flare up of her shoulder condition. During this attempt to return to work, the Hilton harassed Elisa, threatening to terminate her if she was even one minute late from the doctor ordered five minute breaks. 1}25 To alleviate the harassment, Elisa's counsel requested that the insurer assign a vocational

consultant to her claim to assist Elisa in a safe return to work. The insurer denied the request.

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]}26

Elisa was in considerable pain during the attempt to return to work, and yet the gym

membership and pool therapy recommended by Dr. Schumpert, the insurer's doctor, and the massage therapy that was prescribed were also delayed, disregarded, or denied by ACE. 1}27 Due to her increasing physical complaints and substantial emotional stress, Elisa was

restricted from work by her treating physician on July 7, 2010. ]}28 Elisa's temporary total disability benefits were converted to wage loss or temporary

partial disability benefits on May 22, 2010, the day she returned to part-time work at the Hilton. ACE did not pay her these benefits at that time. ]}29 On July 7, 2010, Elisa's wage loss or temporary partial disability benefits should have

been converted back to temporary total disability benefits, as she had been restricted from work by her physician. However, ACE failed to do this. ]}30 From May 22, 2010 to August 9, 2010, a period of approximately 12 weeks, Elisa did not

receive any type of disability benefits from the insurer, despite being entitled to the same. This resulted in extreme financial and emotional stress. P1 At one point in time, Elisa learned that the out-of-state adjuster assigned to supervise the

claim did not authorize the in-state adjuster to process Elisa's disability benefits and, because the out of state adjuster was on vacation, Elisa's benefits were not processed. ]}32 By the end of the summer in 2010, Elisa's cell phone had been cut off, she had received

an eviction notice, and had other financial problems due to her weak financial condition. Elisa was relying on her mother for diapers for her two-year-old child and food for herself and her children. ]}33 Due to the erratic and delayed payments of disability benefits, Elisa and her family were

eventually forced to move and began looking to public welfare for help. Elisa required a

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payment history from the insurer so she could apply for food stamps. The Montana adjuster at the time advised that he was off the file and that Elisa would need to contact an out-of-state adjuster, Laurie Toper, from Aurora, Illinois. Despite the urgency of the request, it took well over a week to get this information. ]}34 At the request of the insurer, Elisa participated in a second independent medical

examination on August 17, 2010 with Catherine Capps, MD and Robert Vincent, MD. The examiners diagnosed a labreal tear and bursitis. They suggested that she see a psychologist regarding her mental state, referred her to an orthopedic specialist for an injection, and indicated that she was not at maximum medical improvement. ]}35 The authorization for the recommended orthopedic evaluation took approximately three

months and it took over 60 days for the psychological counseling to be approved. ]}36 In December 2010, Elisa attempted a second part-time return to work. For reasons yet

unknown, Elisa worked for six weeks without any wages from the Hilton. Despite incurring travel and childcare expenses, Elisa was afraid that if she did not show up, despite not getting paid, she would be terminated. ]}37 Elisa's return to work also resulted in a demeaning situation where she was required to sit

in the corner in the lobby of the hotel and do absolutely nothing. ]}38 The purpose of the Act is to provide injured workers with wage supplement and medical

benefits without regard to fault. ]}39 For over a period of 18 months and in complete disregard of the purpose of the Act, ACE

chose not to provide Elisa with timely indemnity benefits, medical benefits, and vocational rehabilitation benefits, although she was clearly eligible for them.

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1}40

On July 19, 2011 Elisa entered into a settlement agreement with ACE American

Insurance to settle her entitlement to indemnity and rehabilitation benefits related to her workers' compensation claim. Medical benefits related to her claim remain open. The settlement agreement was approved by the Department of Labor with the State of Montana on August 3, 2011. ]}41 Pursuant to MCA 39-71-107(3)(b), an insurer shall pay settlements within 30 days of

the date the Department issues an order approving the settlement. ]}42 The settlement check was received on September 7, 2011, 37 days after the settlement

was approved by the Department of Labor. The last biweekly benefit that Elisa received was on August 1, 2011, meaning that once again she had gone over five weeks without receiving any type of workers' compensation benefits. COUNT I - VIOLATION OF MONTANA'S UNFAIR TRADE PRACTICES ACT ]}43 All of the foregoing allegations are incorporated by reference in this Count as though

fully set forth herein. ]}44 Montana's Unfair Trade Practices Act ("UTPA") prohibits an insurer from engaging in

trade practices that are unfair or deceptive. An insurer must promptly and fairly investigate, evaluate, and settle insurance claims. Defendants violated the UTPA when they failed to fairly and promptly handle Elisa's claim for workers' compensation benefits. COUNT II - COMMON LAW BAD FAITH ]}45 All of the foregoing allegations are incorporated by reference in this Count as though

fully set forth herein. ]}46 Montana common law prohibits an insurer from engaging in bad faith when handling

insurance claims. An insurer must promptly and fairly investigate, evaluate, and settle insurance

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claims. Defendants violated Montana common law when they failed to fairly and promptly handle Elisa's claim for workers' compensation benefits. ]}47 Throughout the course of the handling, adjustment and supervision of this claim, the

Defendants allowed Elisa's employer to be involved in the handling and direction of Elisa's workers' compensation claim, in violation of 39-71-2203, MCA and Hernandez v. National Union Fire Ins. Co. of Pittsburgh, 2003 MTWCC 5. ]}48 Defendants had an obligation and duty to exclude the employer from Elisa's workers'

compensation claim and their failure to do so on multiple occasions amounts to negligence per se and violates Montana's Unfair Trade Practices Act and Montana's common law of good faith and fair dealing. ]}49 Defendants failed to have a resident adjuster with full settlement authority in Montana

and allowed an out-of-state adjuster to handle, direct and adjust Elisa's workers' compensation claim, in violation of ARM 24.29.804. ]}50 Defendants' violation of ARM 24.29.804 is evidence of negligence and is a violation of

the UTPA and Montana's common law of good faith and fair dealing. COUNT III - EMOTIONAL DISTRESS \51 All of the foregoing allegations are incorporated by reference in this Count as though

fully set forth herein. 1}52 A party suffering harm as a result of the negligent or intentional infliction of serious or

severe emotional distress by another party is entitled to recover damages from that party for such harm. When the Defendants failed to fairly and promptly handle Elisa's claim, it was reasonably foreseeable she would suffer severe emotional distress. When Defendant Hilton invaded Elisa's privacy by insisting on seeing private confidential medical information and when it harassed her

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in her attempts to return to work and delayed paying her wages, it was reasonably foreseeable that she would suffer severe emotional distress. 1}53 As a result of the Defendants' actions, Elisa suffered severe or serious emotional distress. COUNT V - PUNITIVE DAMAGES ]}54 All of the foregoing allegations are incorporated by reference in this Count as though

fully set forth herein. ]}55 Montana law provides for punitive damages when the defendant has committed actual

fraud and actual malice as defined in 27-1-221, MCA. Defendants committed actual fraud or actual malice when they failed to fairly and promptly adjust Elisa's claim for workers' compensation benefits. ]}56 Defendants engaged in actual malice. Defendants knew that their claims handling

practices created a high probability of injury to Elisa. Defendants deliberately proceeded to act in conscious or intentional disregard of the high probability of injury to Elisa. Defendants deliberately proceeded to act with indifference to the high probability of injury to Elisa. Defendants intentionally disregarded the fact that their failure to pay Elisa's workers' compensation benefits created a high probability of injury to Elisa. Defendants deliberately proceeded to act in conscious or intentional disregard of the high probability of injury to Elisa. Defendants deliberately proceeded to act with indifference to the high probability of injury to Elisa. Defendants disregarded medical information. ]}57 Defendants engaged in actual fraud. Defendants concealed material facts regarding

Elisa's workers' compensation benefits with the purpose of depriving Elisa of her workers' compensation benefits or otherwise causing her injury. Defendants delayed or denied paying owed TTD, TPD, medical benefits and rehabilitation benefits. Defendants repeatedly delayed

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and denied medical benefits to Elisa, despite knowing that such delay and denial was exacerbating her pain, delaying her recovery and her return to work. Defendants failed to process owed disability benefits, although they knew Elisa was impoverished. As a result, there is a long history of Defendants proceeding with indifference to Elisa's serious problems and claim. PRAYER ]}58 Elisa prays for Judgment against the Defendants as follows: a. For an amount sufficient to compensate her for special and general damages,

including emotional distress; b. c. For punitive damages; and For other and further relief as the Court shall deem just and proper.

Dated this 17th day of October 2011.

/s/ Sydney E. McKenna Sydney E. McKenna Attorney Attorney for Plaintiff

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