#25906-rev & rem-JKK

2011 S.D. 61

                           IN THE SUPREME COURT
                                   OF THE
                          STATE OF SOUTH DAKOTA

                                    ****
DAVID THYEN                                Claimant and Appellant,

      v.

HUBBARD FEEDS, INC.,                       Employer and Appellee,

and

SENTRY INSURANCE,                          Insurer and Appellee.

                                    ****

                  APPEAL FROM THE CIRCUIT COURT OF
                     THE THIRD JUDICIAL CIRCUIT
                  CODINGTON COUNTY, SOUTH DAKOTA

                                    ****

                    THE HONORABLE ROBERT L. TIMM
                               Judge

                                    ****

RONALD L. SCHULZ
Watertown, South Dakota                    Attorney for claimant
                                           and appellant.

MICHAEL S. MCKNIGHT
WILLIAM J. GASSEN III of
Boyce, Greenfield, Pashby & Welk, LLP
Sioux Falls, South Dakota                  Attorneys for employer,
                                           insurer, and appellees.

                                    ****

                                           CONSIDERED ON BRIEFS
                                           ON AUGUST 22, 2011

                                           OPINION FILED 09/21/11
#25906

KONENKAMP, Justice

[¶1.]        In this workers’ compensation appeal, we reverse and remand for a

new hearing before the Department of Labor to consider the employee’s claim that

the employer intentionally destroyed relevant evidence that would have assisted the

employee in establishing causation for his injuries.

                                    Background

[¶2.]        Claimant, David Thyen, has worked for Hubbard Feeds, Inc. since

January 30, 2003, as a mix operator. In addition to his work at Hubbard, Thyen

and his wife ran a small dairy farm. On July 2, 2008, before going to work, Thyen

helped his wife feed the dairy cows by mixing the feed and driving it to the feed

bunks with a skid-steer loader. After finishing, Thyen arrived at Hubbard for work

at 9:00 a.m. He was asked to monitor the flow of wheat middlings being removed

from a tank that had accidentally become contaminated with a load of limestone the

previous day. While monitoring the flow, he also cleaned up an area near the “meat

and bone tank” where old feed had spilled and become moldy and “raunchy

smelling.” Shortly thereafter, Thyen felt his face turn red and “burn red hot.” He

immediately went inside the plant and threw cold water on his face. But the cold

water did not help, and within minutes his stomach, arms, hands, legs, and neck

were hot and tingling, with a pins-and-needles burning sensation.

[¶3.]        Hubbard’s plant manager took Thyen in a work vehicle to the Brown

Clinic in Watertown. There, Thyen began to shake uncontrollably. Dr. Allison

Geier diagnosed an allergic reaction, and treated him with an epinephrine injection,

along with benadryl and solumedrol by IV. Thyen’s redness lightened, but he


                                         -1-
#25906

continued to shake. He was transferred to Prairie Lakes Hospital and admitted for

observation. He was released on July 3, 2008.

[¶4.]        Dr. Geier made an appointment for Thyen to see Dr. Kenneth

Rogotzke, an ear, nose, and throat doctor, for allergy testing on July 10, 2008. Dr.

Rogotzke believed Thyen experienced “an anaphylactic event or angioneurotic

edema event.” He asked Thyen to obtain a Materials Safety Data Sheet (MSDS)

from Hubbard, listing the ingredients stored or used at Hubbard. On July 16, 2008,

Thyen’s daughter brought him to Hubbard to retrieve the MSDS. Upon entering

the office, he experienced symptoms similar to those on July 2, 2008. His daughter

drove him to Dr. Rogotzke’s office. Dr. Rogotzke was not available, but his office

contacted him by phone. Thyen injected himself with epinephrine, and returned the

next day to see Dr. Rogotzke. Dr. Rogotzke referred him to an allergist in Sioux

Falls.

[¶5.]        On July 22, 2008, Thyen saw Dr. Brian Brennan. Dr. Brennan

examined Thyen and reviewed his history. In his report, Dr. Brennan wrote, “At

this time I am at a loss for determining the cause of this from his history.” He

added,

             Perhaps a pesticide exposure could cause symptoms such as this,
             but also symptoms of pesticide exposure are lacking and there is
             no history of pesticide exposure. This could represent a flushing
             syndrome, but again, many of the symptoms are lacking.
             Certainly, some of this flushing could be related to his Niacin
             therapy but at this time it is unclear whether he was taking
             Niacin on the dates of these reactions.

Dr. Brennan referred Thyen to the Mayo Clinic.




                                         -2-
#25906

[¶6.]        On July 28, 2008, Thyen was seen by Dr. Joseph Butterfield at the

Mayo Clinic for an allergy consultation. After examining Thyen, Dr. Butterfield

decided to “check allergy skin tests to common inhalants and molds.” But Dr.

Butterfield “informed Mr. Thyen that we [Mayo] do not have tests for any of the 250

additives in grains which he mixes.” He diagnosed a flushing episode and

hypertension. At a follow-up visit on September 5, 2008, Dr. Butterfield told Thyen

that the skin tests for mold came back negative.

[¶7.]        Thyen was again examined by Dr. Rogotzke on August 22, 2008. In his

report, Dr. Rogotzke wrote, “The question is whether this is inhalant or chemicals.

This would be hard to prove the chemicals. Certainly seems to be work related in

my mind. I got to see the second episode and that was to me very profound. It

mimicked the first reaction he had.”

[¶8.]        Dr. Douglas Pay with Avera Dermatology examined Thyen on August

25, 2008. Dr. Pay diagnosed Thyen with “[o]ccupational dermatitis secondary to

work related exposure, exact etiology undetermined at this time.” He referred

Thyen to “occupational health.” On August 25, 2008, Dr. Bruce Elkins, a certified

medical examiner, provided a second opinion. He examined Thyen, his history, the

MSDS, and opined that “[t]he most likely explanation for Mr. Thyen’s symptoms is

an unrecognized workplace exposure.” In particular, Dr. Elkins believed that the

insecticide Tempo could cause symptoms such as Thyen’s and that “additional

information regarding potential exposure to Tempo still needs to be explored.” He

recommended that Thyen follow up with an allergist for additional testing.




                                         -3-
#25906

[¶9.]         Thyen saw allergist Dr. Mark Bubak on September 10, 2008. Dr.

Bubak reported, “I am unable to give an allergic reaction for this and unfortunately

I do not know enough about toxic mold exposures to say that is what happened to

him either. It is unusual that just going to the office would have a similar flushing

episode.” Dr. Bubak concluded, “I am unable to give worthwhile recommendations

at this point[.]”

[¶10.]        Thyen submitted his first report of injury to Hubbard on July 3, 2008.

On August 22, 2008, Hubbard’s insurer, Sentry Insurance, sent Thyen a conditional

denial of his claim. Thyen then asked Hubbard to provide him with random

samples of various materials in the areas around the plant. The first request came

by prescription from Dr. Geier in August 2008, for “samples of areas pt [patient] in

contact with prior to reaction – at least 10 places & clothing if needed.” Hubbard

refused to give Thyen a sample because no protocols were in place. Then, in

September 2008, Thyen gave Hubbard another prescription from Dr. Geier, which

provided a collection protocol and collection boxes. Hubbard did not collect the

requested samples. In a letter dated October 6, 2008, Hubbard acknowledged

Thyen’s request for samples and again denied his request. On November 5, 2008,

Thyen returned to work at Hubbard. In a letter from the human resources

manager, Hubbard instructed Thyen that he was “not to remove from the plant any

property, products or other items belonging to the Company” or his job would be

terminated.




                                         -4-
#25906

[¶11.]      On October 15, 2008, Thyen petitioned the Department of Labor for a

hearing on his workers’ compensation claim. In preparation for the hearing, his

attorney provided a letter to the Department:

            Claimant has made a request of his employer to obtain samples
            of the materials that he was exposed to and the employer has
            denied his request. We believe that the temperature around
            July 2 and July 16, 2008 caused a toxic situation and it is our
            understanding that the work area is in the same condition today
            as it was on those dates. We expect that a like condition will
            occur when the temperature reaches the same degree in 2009 as
            it did on those days. Claimant would like the opportunity to
            obtain samples for analysis assuming the employer does not
            clean up the work area. Counsel for Employer and Insurer has
            indicated to me [counsel for Thyen] that sampling will be
            allowed.

Hubbard never allowed Thyen to obtain samples and no testing was done because

Hubbard cleaned up the spilt moldy feed on June 26, 2009. Hubbard brought

Thyen’s empty collection boxes to the hearing.

[¶12.]      At the hearing in January 2010, Thyen, his wife, and his daughter

testified, while the testimony of Dr. Rogotzke and Dr. Beth Baker (Hubbard’s

independent medical examiner) were submitted by deposition. The parties

stipulated to the admission of Thyen’s medical records. Following the hearing, the

Department ordered the parties to submit briefs. In Thyen’s brief, he asserted that

his injury arose out of and in the course of his employment. He further asserted

that Hubbard agreed to allow him to obtain samples, but then cleaned up the plant

area without allowing sampling.

[¶13.]      On August 4, 2010, the Department issued a letter decision holding

that Thyen “failed to demonstrate that he sustained a compensable injury arising

out of and in the course of his employment.” It concluded that Thyen only offered

                                        -5-
#25906

evidence of a temporal sequence, assigning blame because the injury occurred at

work. No expert testified on what exactly caused the injury, only that it was likely

work related. Although the Department found that Hubbard’s “action[s] showed a

total disregard for [Thyen’s] health, the health of its other employees and its

customers” because it “did not make a greater effort to collect samples to test for

toxins,” the Department concluded Hubbard’s failure did not alter or shift Thyen’s

burden to prove causation. It later issued findings of fact, conclusions of law, and

an order denying Thyen’s workers’ compensation claim. The circuit court affirmed

the Department’s decision. Thyen appeals to this Court.

                               Analysis and Decision

[¶14.]       To recover on a workers’ compensation claim, Thyen must establish by

a preponderance of the evidence that he sustained an injury arising out of and in

the course of his employment at Hubbard. See SDCL 62-1-1(7); Rawls v. Coleman-

Frizzell, Inc., 2002 S.D. 130, ¶ 20, 653 N.W.2d 247, 252 (citation omitted). But

Thyen contends that his efforts to prove causation were thwarted by Hubbard’s

refusal to allow collection of samples and its later destruction of potential samples.

Hubbard responds that Thyen waived the issue of spoliation of evidence because he

did not specifically present the issue to the Department or the circuit court.

[¶15.]       Our review of the record indicates that the issue was raised and

preserved. Thyen did not use the word “spoliation,” but he clearly placed the issue

of Hubbard’s evidence destruction before the Department. Counsel for Thyen wrote

the Department seeking to schedule the hearing after Thyen obtained samples of

the materials he was exposed to because Hubbard gave Thyen permission to obtain


                                          -6-
#25906

the samples. Then, during the hearing, Thyen submitted testimony and

documentary evidence about his efforts in obtaining samples. He entered into

evidence two prescriptions from Dr. Geier requesting samples from Hubbard. He

testified that Hubbard twice denied his requests, with one denial established by a

letter from Hubbard. Thyen also entered into evidence the letter he was asked to

sign, agreeing that upon returning to work he would not obtain or take any property

from Hubbard. Finally, during the hearing, Hubbard and Thyen stipulated that

Hubbard gave Thyen permission to obtain samples, and that no samples were

obtained because Hubbard cleaned up the area.

[¶16.]       Spoliation is the intentional destruction of evidence. State v. Engesser,

2003 S.D. 47, ¶ 44, 661 N.W.2d 739, 753; State v. Kietzke, 85 S.D. 502, 514-15, 186

N.W.2d 551, 558 (1971). “When it is established, a fact finder may infer that the

evidence destroyed was unfavorable to the party responsible for its destruction.”

Engesser, 2003 S.D. 47, ¶ 44, 661 N.W.2d at 753. Although this Court has

predominately addressed spoliation in criminal cases, we recognized in Engesser

that the rule applies with equal force in civil cases. Id. ¶ 45 (citing Spesco v. Gen.

Elec. Co., 719 F.2d 233 (7th Cir. 1983)); see also Richter v. City of Omaha, 729

N.W.2d 67, 72 (Neb. 2007); Manpower, Inc. v. Brawdy, 62 P.3d 391, 392 (Okla. Civ.

App. 2002); Morris v. J.C. Penney Life Ins. Co., 895 S.W.2d 73, 77 (Mo. Ct. App.

1995). Spoliation is established along with an unfavorable inference against the

spoliator “when substantial evidence exists to support a conclusion that the

evidence was in existence, that it was in the possession or under the control of the

party against whom the inference may be drawn, that the evidence would have been


                                           -7-
#25906

admissible at trial, and that the party responsible for destroying the evidence did so

intentionally and in bad faith.” Engesser, 2003 S.D. 47, ¶ 46, 661 N.W.2d at 755.

Cf. Wal-Mart Stores, Inc. v. Johnson, 106 S.W.3d 718, 721-22 (Tex. 2003).

[¶17.]       Because the Department failed to properly consider the spoliation

question, Thyen is entitled to a new hearing before the Department so that the

issue can be determined and the negative inference applied if it is established that

spoliation occurred.

[¶18.]       Reversed and remanded.

[¶19.]       GILBERTSON, Chief Justice, and ZINTER and SEVERSON, Justices,

concur.

[¶20.]       WILBUR, Justice, did not participate.




                                         -8-
