A Pennington County jury returned a $42 million verdict in a bad faith claim to a Rapid City woman after she was denied medical benefits from her previous employer and the employer's insurer.
The United Parcel Service and Liberty Mutual, the worker's compensation insurer, were ordered to pay Fern Johnson $41 million in punitive damages and an additional $1 million in compensatory damages in a verdict Friday. Seventh Circuit Pennington County Judge Jane Wipf Pfeifle presided.
Johnson took a worker's compensation claim to court following an injury on the job while working for UPS in 1996.
Johnson worked for UPS from 1973 to 1982 and again from 1988 to 1997, according to court documents.
"In November 1995, Johnson noticed pain in her right groin area, especially with lifting. On January 4, 1996, Johnson experienced a sharp pain in her groin area at the end of her shift. She saw her gynecologist that day for what she believed was pain from endometriosis, a previously diagnosed medical condition. Following a laparoscopy two weeks later, Johnson learned she had a hernia and reported it to her employer the next day," court records state. "Johnson underwent a combined hysterectomy and hernia repair surgery the following month. She returned to work on March 19, but experienced increased groin pain that kept her off work during a period of time that spring. Johnson subsequently quit working at UPS on December 9, 1997, due to groin and back pain."
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In August 2002, the South Dakota Department of Labor determined that Johnson's hernia was causally related to her employment at UPS, but her groin pain was not.
Johnson appealed that decision to the circuit court, which reversed the decision in March of 2004.
Johnson's compensable medical expenses were paid for by the employer up until spring of 2010, at which point the appellants requested their attorney to review the case.
"The Appellants hired Dr. Bruce Norback, a board-certified neurologist, to conduct Johnson's independent medial examination," court records state. "Dr. Norback opined that what had been described as Johnson's 'neuroma condition' relating to her groin pain did not remain a major contributing cause of her need for continuing medical treatment. Indeed, Dr. Norback believed 'a definite diagnosis of a neuroma has never been made.' He also thought that Johnson's employment at UPS was no longer a major contributing cause of her need for medical treatment related to her groin pain because she had not worked for UPS for almost 13 years, but still experienced worsening symptoms."
The verdict awarding $45 million to Johnson was then reversed by the South Dakota Supreme Court and remanded back to circuit court for retrial.
In 2004 and 2006, the Department of Labor and the Circuit Court had ordered Liberty Mutual and UPS to pay for medical benefits in 2009. The South Dakota Supreme Court affirmed those orders making them final judgments that Liberty Mutual and UPS must follow.
The attorneys representing Johnson were G. Verne Goodsell, David Barari, and Nate Oviatt of the Goodsell & Oviatt, LLP, law firm in Rapid City.
"It is very meaningful to have the second jury confirm the bad conduct of Liberty Mutual and UPS by arriving at a similar verdict," said Barari, the plaintiff's lead attorney.
Goodsell also commented in a news release on the case, saying “The consistency of the two verdicts confirms that our community will not tolerate bad and reckless behavior by insurance companies who harm our citizens, particularly when the companies pocket the money for medical care that belongs to the injured worker."