Spencer v. Annett Holdings, Inc. (905 F. Supp. 2d 953, 2012)

ORDER

ROBERT W. PRATT, District Judge.

Before the Court are two motions: 1) Douglas Spencer’s (“Plaintiff’ or “Spencer”) Motion for Partial Summary Judgment (Clerk’s No. 17); and 2) Annett Holdings, Inc.’s (“Defendant” or “Annett”) Motion for Summary Judgment (Clerk’s No. 18). Annett filed a resistance to Spencer’s Motion for Partial Summary Judgment (Clerks’ No. 23) and Spencer replied (Clerk’s No. 28). Spencer filed a resistance to Annett’s Motion for Summary Judgment (Clerk’s No. 22) and An-nett replied (Clerk’s No. 26). The Court held a hearing on the pending motions on September 25, 2012. Clerk’s No. 52. The matters are fully submitted.

I. FACTUAL AND PROCEDURAL BACKGROUND

As Spencer aptly states in his Motion for Partial Summary Judgment, “the facts of this case are immense and convoluted.” PL’s Mot. for Partial Summ. J. ¶ 4 (Clerk’s No. 17). The case reaches back five years and involves a number of state-court and agency proceedings, motions, and filings. At their most basic, the facts can be summarized as follows: Spencer claimed he injured himself at work. Annett began providing care, but Spencer was dissatisfied with the care provided. As a result of his dissatisfaction, Spencer initially filed this federal case on December 15, 2011 alleging multiple bad faith causes of action. See Clerk’s No. 1. In response to an Order (Clerk’s No. 5) finding the jurisdictional allegations of the Complaint lacking, Spencer filed an Amended Complaint on January 19, 2012. Clerk’s No. 9. Annett answered the Amended Complaint and asserted counterclaims for fraud and related issues on February 8, 2012. See Clerk’s No. 11. Annett denies bad faith and alleges that Spencer fabricated a story about a work injury in an effort to defraud the company and receive workers’ compensation benefits for a non-work-related injury. Although complex, the relevant facts are largely undisputed.

Annett is a self-insured trucking company based out of Des Moines, Iowa that operates throughout the contiguous forty-eight states. Statement of Material Facts in Supp. of Annett’s Mot. for Summ. J. (“Def.’s Facts”) ¶3 (Clerk’s No. 18.1); Br. in Supp. of Resistance to Annett’s Motion for Summ. J. (“PL’s Resistance Br.”) at 1 (Clerk’s No. 22.1). Spencer was an over-the-road truck driver who worked for An-nett from January 2006 through April of 2008. PL’s App. in Resp. to Annett’s Mot. for Summ. J. (“PL’s App.”) at 50, 52 (Clerk’s No. 22.5-22.22). In addition to his employment as a truck driver, Spencer was a luthier who specialized in making guitars in a workshop he created in a shed behind his home in Smithville, Tennessee. PL’s App. at 289-90 (Spencer Dep., Feb. 1, 2011, at 17-18).

A. Spencer’s Alleged Work Injury and Immediate Treatment

Spencer claims that on the morning of January 2, 2007, he slipped off the back of his flatbed trailer near Smithville and injured himself. Def.’s Facts ¶ 5. Spencer informed his employer, Annett, of the accident and immediately sought medical attention from a doctor in a nearby town. Id.; Pl.’s Statement of Additional Material Facts (“Pl.’s Add’l Facts”) ¶2 (Clerk’s No. 22.2). The medical report from the date of the alleged injury indicates that Spencer complained of severe left knee pain, some shoulder pain, and claimed that the injuries resulted from a fall off the back of his trailer. Def.’s App. in Supp. of Annett’s Mot. for Summ. J. (“Def.’s App.”) at 61-66 (Clerk’s Nos. 18.2-18.7). Two days later, at Annett’s urging and with Annett’s authorization, Spencer saw a second doctor in Tennessee, Dr. Ramsey Walker (“Dr. Walker”). Def.’s Facts ¶ 7. Dr. Walker reported the same symptoms as the original emergency room doctor, restricted Spencer’s work to light-duty tasks, stated Spencer should not drive a truck, and recommended a follow-up appointment in one week. Id.; Def.’s App. at 69. Annett offered Spencer light-duty work in Des Moines, and Spencer returned to Des Moines on January 8. Def.’s Facts ¶ 8.

Upon Spencer’s return, Annett followed the recommendation of the authorized physician, Dr. Walker, and scheduled a January 11 appointment with Dr. Kary Schulte (“Dr. Schulte”), an orthopedic specialist in Des Moines. Id. ¶ 9. Dr. Schulte saw Spencer on January 11 and noted that Spencer said his left knee felt better. Id. ¶ 11. Dr. Schulte reported that Spencer’s swelling had subsided, Spencer had 5/5 strength with flexion and extension of both knees, and that the “exam was essentially within normal limits.” Id. ¶ 13; Def.’s App. at 18. Additionally, Dr. Schulte diagnosed Spencer with mild underlying degenerative arthritis in the knee. Def.’s Facts ¶ 12. Following the examination, Dr. Schulte indicated no further medical intervention was necessary and released Spencer to work without restrictions. Id. ¶ 14.

B. Spencer’s Continued Pain and Doctor’s Visits in April 2007

On January 12, 2007, after obtaining a medical clearance from the Iowa Department of Transportation, Spencer returned to work driving for Annett. Id. ¶¶ 17-18. From January 12 to March 30, 2007, Spencer performed all duties adequately, and never informed Annett that he was having any problems performing job duties or having any problems with his knee. Id. ¶ 18. Spencer claims, however, that although he did not report anything to An-nett, he was in severe pain and was taking measures to ease pain and swelling. Pl.’s Resp. to Def.’s Statement of Material Facts ¶ 18 (Clerk’s No. 22.3).

Without seeking authorization from An-nett, Spencer visited his family doctor, Dr. Bryan, on March 31, 2007, citing pain in his left knee. Def.’s Facts ¶ 20. Spencer told Dr. Bryan that, in addition to his knee pain, he was having pain in the heel of his left foot (later diagnosed as plantar fasciitis) and numbness in his hands and arms. Id. Spencer began a week-long pre-scheduled vacation the next day. Id. ¶ 19. On April 4, 2007, again without informing An-nett or seeking authorization, Spencer returned to see Dr. Bryan. Id. ¶ 23. At the appointment, Dr. Bryan ordered an MRI and referred Spencer to an orthopedic specialist in Tennessee — Dr. Dalton. Id. Dr. Bryan also put Spencer on no-work status. Def.’s App. at 53-54. Spencer underwent the unauthorized MRI on April 6. Id. at 109. Despite his pain, his multiple doctor visits, and the MRI, Spencer did not call or inform Annett of any problems until April 9, 2007. Id. at 54.

A week after informing Annett of his problems, Spencer saw the orthopedic specialist, Dr. Dalton. Def.’s Facts ¶ 25. At this unauthorized April 16, 2007 appointment, Dr. Dalton interpreted the MRI results, diagnosed Spencer with a left medial meniscus tear, and opined that arthroscopic surgery was necessary. Id. At this visit, Spencer again complained of pain in his left heel and pain and numbness in both of his hands. Id. ¶ 26. Dr. Dalton then renewed Spencer’s no-work status. Pl.’s Add’l Facts ¶ 59.

On the same day, April 16, 2007, Spencer’s wife (“Mrs. Spencer”) faxed the MRI report to Annett along with paperwork stating that Spencer had scheduled surgery for May 4, 2007. Id. ¶ 31. The fax indicated that Spencer needed authorization for this surgery. Id. Mrs. Spencer also called Annett and asserted that the surgery was related to the alleged fall on January 2. Id. In addition, during her phone call, Mrs. Spencer reported that Spencer was experiencing bilateral carpal tunnel syndrome that he believed was work-related. Id. On April 24, 2007, An-nett received a handwritten letter from Spencer explaining that he had plantar fasciitis and that he wanted to give notice that the condition was also work-related. Id. ¶33. The same day, Annett began investigating Spencer’s claims and requested medical records from Dr. Dalton. Id. ¶ 32. Annett also faxed Dr. Schulte a copy of the MRI for his review. Id. Schulte responded, however, that he could not offer a proper diagnosis without seeing Spencer and the original films. Id. A few days later, Annett refaxed record requests to Dr. Dalton and, for the first time, faxed medical record requests to Dr. Bryan. Def.’s App. at 55.

C. The Jurisdictional Dispute

On May 2, 2007, Annett received a letter from Attorney Russell Thomas (“Thomas”) explaining that Spencer had retained Thomas to represent him in a workers’ compensation case. Def.’s Facts ¶ 34. The letter stated that Spencer was electing to proceed with his workers’ compensation claim under Tennessee, rather than Iowa, law. Id. It went on to explain that, due to the circumstances of the case, under Tennessee law, Spencer had the ability to make his own arrangements for medical care. Id. Finally, the letter conclusively stated that Spencer was going to have surgery on May 11, 2007, and that Annett would have to reimburse Spencer for the surgery. Id. On May 3, 2007, Spencer filed for workers’ compensation benefits in Tennessee. Id. ¶ 37.

Annett’s counsel responded to Thomas on May 8, 2007, explaining that Iowa law controlled the case, per Spencer’s election, and requested that Spencer return to Des Moines to be evaluated by Dr. Schulte. Id. ¶ 35. The letter further stated that if Dr. Schulte determined that the surgery was required and was related to the alleged work injury, Annett would authorize the procedure. Id. On May 10, Annett received a response from Thomas stating that Spencer had applied for Tennessee benefits and was postponing his surgery until the jurisdictional dispute was settled. Id. ¶ 39. On May 21, Annett received a letter from Dr. Dalton indicating the same, i.e., Spencer’s surgery was postponed until the resolution of the jurisdictional issue. Id. ¶40. Further, Dr. Dalton indicated that he was recommending knee surgery and attached a no-work order. Def.’s App. at 119-21.

Throughout the jurisdictional dispute, Spencer refused to return to Des Moines, and at no point in April, May, or June of 2007 did Spencer see Dr. Schulte as requested by Annett. Def.’s Facts ¶ 36. Additionally, during this time, Annett continuously sought medical records from Drs. Dalton and Bryan, but was unsuccessful. Id. ¶ 38. A month after Annett received Dr. Dalton’s letter, on June 21, 2007, the Tennessee Workers’ Compensation Specialist determined that Tennessee did not have jurisdiction over Spencer’s claim due to Spencer’s original employment contract. Def.’s App. at 122. Spencer did not appeal this decision, and there has since been no dispute that Iowa law controls the claim. Def.’s Facts ¶ 42. After the Tennessee Workers’ Compensation decision, no one from Thomas’s office called or attempted to contact Annett regarding Spencer’s case. Id. ¶ 43. In fact, neither party had contact with the other between June 21 and July 23, 2007. Hr’g Tr. at 32-33.

D. Spencer’s Knee Surgery

On July 23, 2007, a month after Tennessee rejected jurisdiction, Annett received a letter from Spencer’s new (and current) attorney, Christopher Spaulding (“Spaulding”). Def.’s Facts ¶ 46. The letter stated that Spencer had retained Spaulding, and requested copies of any medical records that defense counsel might possess. Id. Spaulding sent a follow-up letter on August 9, 2007, requesting authorization for the knee surgery recommended by Dr. Dalton. Id. ¶ 47. On August 15, Annett replied that it had not received any medical records from Spencer’s unauthorized physicians and that it required more information and additional time to investigate before it could decide whether to authorize the surgery. Def.’s App. at 177. The letter also requested that Spencer sign a patient waiver allowing doctors to release, and Annett to receive, medical records to determine whether to move forward with the surgery. Def.’s Facts ¶ 48.

In response to Annett’s immediate refusal to authorize the surgery, Spencer filed an alternate medical care petition with the Iowa workers’ compensation commissioner on August 24, 2007, requesting authorization for surgery with Dr. Dalton. PL’s Add’l Facts ¶ 52. That petition was eventually dismissed. Def.’s Resp. to PL’s Statement of Add’l Material Facts ¶ 53. Spencer, however, filed a second petition for alternate medical care on September 10, again requesting the surgery. PL’s Add’l Facts ¶ 53. In contemplation of this petition, Annett sent a letter to Spencer’s counsel on September 19, 2007. Def.’s Facts ¶ 49. The letter explained that while the change in Spencer’s condition between January and April was “fairly remarkable,” if Spencer were willing to represent that the only known injury to his left knee was the alleged work injury on January 2, then Annett would authorize the surgery. Id. As part of this agreement, Annett agreed that Dr. Dalton would become Spencer’s authorized physician. Def.’s App. at 197. Spencer responded five days later to confirm the parties’ agreement that Annett would authorize the recommended surgery and pay healing-period benefits from the date of the surgery until the date that Spencer was allowed back to work or the doctor declared maximum medical improvement. Id. ¶ 50.

Annett authorized surgery on September 27, 2007. PL’s Add’l Facts ¶ 54. Dr. Dalton performed the surgery less than two weeks later, on October 5, 2007. Def.’s Facts ¶ 51. Following the surgery, Annett immediately began paying healing-period benefits; these benefits lasted until January 13, 2008, when Dr. Dalton authorized Spencer to return to work. See Def.’s App. at 400 (tracking Annett’s payment records to Spencer); Def.’s Facts ¶ 69. After this date, Annett paid permanent partial disability benefits on a weekly basis until August 2008. Def.’s App. at 400-01.

E. The Arbitration Petition and Eventual Settlement

Following surgery, Spencer filed an arbitration petition with the workers’ compensation commissioner on November 27, 2007. Def.’s Facts ¶ 54. He alleged injuries to his left knee, left foot, and bilateral hands. Id. Annett responded to this petition on December 7, questioning whether Spencer’s injuries were causally related to the alleged fall on January 2, 2007. Id. ¶ 55. A hearing was set for November 6, 2008. Hr’g Tr. at 25.

Additionally, in December 2007, Spencer’s counsel sent a letter to Annett asking about healing-period benefits from the time of Spencer’s debilitating knee pain, in April of 2007, until the date of the surgery, October 2007. Def.’s Facts ¶ 56. Annett responded that it believed it did not owe benefits during this time period because it had not received records from an authorized doctor stating Spencer could not work and because Spencer did not inform An-nett of his desire to seek additional care. Id. ¶ 57; Def.’s App. at 197. Neither Spencer nor his counsel inquired about the April-to-October healing-period benefits again until settlement negotiations in November of 2008. Def.’s Facts ¶ 58.

On January 14, 2008, Dr. Dalton cleared Spencer to return to work without restriction, but Spencer did not return to work at this time. Id. ¶ 69; Def.’s App at 60. Just before he was to return to work, Spencer was involved in a car accident on March 7, 2008. Def.’s Facts ¶ 70. As a result of the accident, Spencer suffered “[cjontusions up and down both legs, seat belt marks, [and] air-bag marks.” Def.’s App. at 95 (Spencer Dep. at 136-37). X-rays immediately following the accident showed no fractures, dislocations, or foreign bodies in Spencer’s left knee. Def.’s Facts ¶ 71. Spencer informed Annett of this accident on March 17, 2008, but did not follow up with Annett over the next three weeks. Def.’s App. at 60; PL’s App. at 50. Due to his lack of communication, Annett placed Spencer on inactive status effective April 7, 2008. PL’s App. at 50.

No relevant events took place between March and November of 2008. However, in contemplation of the workers’ compensation action filed on November 27, 2007, the two parties began negotiating a settlement in November 2008. Def.’s Facts ¶ 58. On December 8, 2008, the parties reached a two-part settlement. Id. ¶ 59. They settled Spencer’s bilateral carpal tunnel claim on a closed-file basis and Spencer’s knee injury claim on an open-file basis. Id. As part of the settlement, An-nett admitted liability for Spencer’s knee injury. Def.’s App. at 230. In addition to a lump-sum payment, Annett agreed to pay all outstanding and future medical bills related to Spencer’s knee injury. Def.’s Facts ¶ 60. In January of 2009, An-nett complied with part of the settlement and paid the lump sum it owed to Spencer. PL’s App. at 51.

F. Spencer’s Various Petitions to the Iowa Workers’ Compensation Commissioner Following Settlement, the State Bad Faith Case, and Meredith Landrum’s Testimony

Later in January 2009, Spencer’s counsel sent a letter to Annett indicating that certain medical bills remained unpaid. Def.’s Facts ¶ 61. Specifically, the letter concerned a bill for $271.41 for pre-operative heart testing from DeKalb Community Hospital dated April 25, 2007. Id. Annett had first disputed this bill before the settlement agreement, claiming it was not related to Spencer’s knee injury. Id. ¶ 62. Annett still refused the bill after Spencer’s letter. Id.

In response, Spencer filed a petition for medical benefits with the workers’ compensation commissioner on March 30, 2009, alleging that Annett “simply refuse[d] to pay work-related medical bills.” Def.’s App. at 241. Annett filed an answer stating that all known medical bills related to the knee injury had been paid. Def.’s Facts ¶ 64. A hearing took place almost a year later, on March 23, 2010. Def.’s App. at 250. Deputy Commissioner Clair Cramer rejected the petition on jurisdictional grounds, opining that the necessity of paying such bills arose from the settlement agreement between the parties rather than from a workers’ compensation case; thus, the workers’ compensation commission did not have jurisdiction. Def.’s Facts ¶ 65. In his May 2010 arbitration ruling, however, Deputy Commissioner Cramer stated that if the workers’ compensation commission did have jurisdiction, all bills would have to be paid in a timely manner. Def.’s App. at 254. By the time the parties participated in the hearing, though, Annett had paid all but one outstanding bill. Def.’s Supp. App. at 427-28 (Tr. of Arbitration Proceeding at 11-14) (Clerk’s No. 26-8). Annett claims that the failure to pay the heart-testing bill after the settlement agreement was due to erroneous record-keeping that indicated Annett already had paid the bill. Def.’s Facts ¶ 92; Pl.’s App. in Supp. of Mot. for Partial Summ. J. (“PL’s Partial Summ. J. App.”) at 143 (Clerk’s Nos. 17.3-17.6). Once it realized its mistake in July 2009, Annett paid the bill. Def.’s Facts ¶ 94; PL’s Partial Summ. J. App at 143.

Spencer, being discontent with the situation, filed a claim in the Iowa District Court for Polk County against Annett for various bad faith claims on July 9, 2009. Mem. of Authorities in Supp. of Def.’s Mot. for Summ. J. (“Def.’s Br.”) at 4 (Clerk’s No. 21). While the state-court bad faith litigation progressed, Annett received a call from a former friend of Spencer and his wife, Meredith Landrum (“Landrum”). Def.’s Facts ¶ 66. This call took place on August 19, 2009. Id. Landrum claimed that Spencer had not injured himself falling off of his truck, but rather fell while walking out of a shed he used as a guitar shop at his home. Id. Landrum gave a recorded statement on March 25, 2010 reaffirming her story. Id. ¶ 67. As a result of Landrum’s testimony, on September 8, 2010, Annett filed a counterclaim in the state bad faith case alleging fraud, unjust enrichment, money had and received, and restitution-mistake of fact, and requested actual damages, punitive damages, attorneys’ fees, and interest. PL’s Second Supp.App. at 3-8 (Clerk’s No. 50-1).

As part of the state-court proceedings, Annett filed a motion for summary judgment on December 21, 2009, similar to the one presently before the Court. See PL’s App. at 26-45. Judge Eliza Ovrom denied the motion in January 2011. Id. at 1-11. Thus, the parties set a trial date for August 2011. Def.’s Br. at 4. However, in late July 2011 and for unknown reasons, Spencer voluntarily dismissed the ease and Annett, likewise, dismissed its counterclaims. PL’s App. at 107.

G. Spencer’s 2010 Alternate Medical Care Petitions and Request for a Total Knee Replacement

In January 2010, while the state-court case was ongoing, Spencer complained about additional problems with his knee. Def.’s Facts ¶ 72. In response, Annett authorized an appointment with Dr. Dalton for early March 2010. Id. At the appointment, “Dr. Dalton diagnosed Spencer with ‘degenerative arthropathy, left knee, worst medial compartment.’ ” Id. ¶ 73. Dr. Dalton recommended an injection to help with the knee and opined that a total knee replacement was going to be necessary within the next two to three years. Id. Soon after this appointment, in May 2010, Dr. Dalton retired and recommended Spencer see Dr. McClure, an orthopedic doctor practicing in Nashville. Id. ¶ 74; Def.’s App. at 366. Upon learning of Dr. Dalton’s retirement, and despite knowing that Dr. Dalton had referred Spencer to a different doctor, Annett directed Spencer to Dr. Blake Garside, another Nashville doctor, to replace Dr. Dalton. Def.’s Facts ¶ 75; Def.’s App. at 367.

In response, Spencer filed an alternate medical care petition with the workers’ compensation commissioner requesting that Dr. McClure be named as the authorized physician. Pl.’s Statement of Undisputed Material Facts (“PL’s Partial Summ. J. Facts”) ¶ 7 (Clerk’s No. 17.1). The Commissioner heard the case on June 10, 2010, and ruled in favor of Annett. Id. fill. At this hearing, Annett never contested liability, and liability was deemed admitted. See PL’s Partial Summ. J. App. at 27 (“Liability is admitted on this claim.”). Indeed, to participate in an alternate medical care proceeding, liability must not be at issue. Iowa Admin. Code r. 876-48.7 (“Application cannot be filed under this rule if the liability of the employer is an issue.”). Spencer filed for judicial review of the Commissioner’s decision on July 19, 2010. PL’s Partial Summ. J. Facts ¶ 11.

Dr. Garside saw Spencer on June 21 and again on July 21. Def.’s App. at 370-71. At these two appointments, Dr. Gar-side indicated that while non-operative treatment might help, potential operative treatment would include a complete knee replacement. Id. Following these appointments, Spencer chose to continue with non-operative measures. Def.’s App. at 371.

On August 11, 2010, however, Spencer changed his mind regarding treatment and asked Annett, through counsel, to authorize a total knee replacement. Id. at 372. Annett ignored the request and Spencer petitioned for alternate medical care seeking authorization for a total knee replacement. Def.’s App. in Supp. of Its Resistance to PL’s Mot. for Partial Summ. J. (“Def.’s Partial Summ. J. App.”) at 3, 20 (Clerk’s No. 23.3). Annett answered the petition and contested liability for the injury. Id. at 14-15. It argued that no medical opinion showed the knee replacement was reasonable and necessary or stated that the injury was causally related to the alleged work injury in January 2007. Id. In its answer, Annett never mentioned Landrum’s testimony. Id. Indeed, at oral argument, Annett asserted its denial of liability for the total knee replacement surgery was in no way related to Landrum’s statements; rather, it was due to questions of causation. Hr’g Tr. at 40. As a result of the contested liability, the workers’ compensation commissioner dismissed Spencer’s claim on September 3, 2010. Def.’s Partial Summ. J. App. at 16. The deputy commissioner explained that since Annett now contested liability, it could no longer direct Spencer’s medical care and Annett was foreclosed from asserting a lack-of-authorization defense if a claim was made for reimbursement of medical expenses. Id.

Meanwhile, Annett had continued to seek information from Landrum about her claim that Spencer fell at his home rather than off his truck. On October 7, 2010, Landrum signed and notarized her recorded statement given March 25, 2010. Def.’s Facts ¶¶ 67-68. Annett then sent a “1-inch stack of medical records” to Dr. Schulte and sought an opinion from him as to whether Spencer’s total knee replacement was necessary and causally related to the alleged work injury on January 2, 2007. Def.’s Facts ¶ 78; Def.’s App. at 378. Dr. Schulte responded on December 17, 2010 that if Spencer had a fall like the one described by Landrum, the cause of his injuries more than likely would be a result of that fall in conjunction with Spencer’s underlying left knee degenerative arthritis. Def.’s Facts ¶ 79; Def.’s App. at 378.

Shortly after receiving Dr. Schulte’s report, Annett informed Spencer’s counsel by letter dated January 26, 2011 that it was disputing liability and would refuse to authorize any additional care. Def.’s Facts ¶ 80. About six months after this denial of liability, on July 29, 2011, Spencer filed a review-reopening petition with the workers’ compensation commissioner. PL’s Partial Summ. J. Facts ¶ 19. Annett responded on August 16 by denying liability for the injury and questioning whether the injury occurred. Id. ¶ 20.

Despite relinquishing control of Spencer’s care by denying liability for the alleged work injury in September 2010 and continuously denying liability since this time, Annett continued to participate in the appeals process of the June 2010 alternate medical care proceeding. Id. ¶¶ 11-17. Iowa District Court Judge Karen Romano granted Spencer’s July 2010 Petition for Judicial Review and heard the case on May 20, 2011. Id. ¶¶ 12-13. Judge Romano reversed the workers’ compensation commissioner’s ruling, and Annett appealed Judge Romano’s decision on July 1, 2011. Id. ¶ 14. On March 28, 2012, the Iowa Court of Appeals ruled in favor of Annett by reversing the district court and reinstating the workers’ compensation commissioner’s ruling. Id. ¶ 15. The Court of Appeals, however, premised its ruling on the idea that “[t]he facts are not in dispute^ and that] Douglas Spencer sustained a work-related injury.” Pl.’s Partial Summ. J. App. at 43 (quoting Spencer v. Annett Holdings, Inc., No. 11-1032, 815 N.W.2d 410, 2012 WL 1058205 at *1 (Iowa Ct.App. Mar. 28, 2012)). Spencer then filed a Petition for Further Review with the Iowa Supreme Court, and Annett resisted. PL’s Partial Summ. J. Facts ¶¶ 16-17. Eventually, the Iowa Supreme Court denied further review. Hr’g Tr. at 5.

II. STANDARD FOR SUMMARY JUDGMENT

The term “summary judgment” is something of a misnomer. See D. Brock Hornby, Summary Judgment Without Illusions, 13 Green Bag 2d 273 (Spring 2010). It “suggests a judicial process that is simple, abbreviated, and inexpensive,” while in reality, the process is complicated, time-consuming, and expensive. Id. at 273, 281. The complexity of the process, however, reflects the “complexity of law and life.” Id. at 281. “Since the constitutional right to jury trial is at stake,” judges must engage in a “paper-intensive and often tedious” process to “assiduously avoid deciding disputed facts or inferences” in a quest to determine whether a record contains genuine factual disputes that necessitate a trial. Id. at 281-82. Despite the seeming inaptness of the name and the desire for some in the plaintiffs’ bar to be rid of it, the summary judgment process is well-accepted and appears “here to stay.” Id. at 281. Indeed, “judges are duty-bound to resolve legal disputes, no matter how close the call.” Id. at 287.

Federal Rule of Civil Procedure 56(a) provides that “[a] party may move for summary judgment, identifying each claim or defense — or the part of each claim or defense- — on which summary judgment is sought.” “[Sjummary judgment is an extreme remedy, and one which is not to be granted unless the movant has established his right to a judgment with such clarity as to leave no room for controversy and that the other party is not entitled to recover under any discernible circumstances.” Robert Johnson Grain Co. v. Chem. Interchange Co., 541 F.2d 207, 209 (8th Cir.1976) (citing Windsor v. Bethesda Gen. Hosp., 523 F.2d 891, 893 n. 5 (8th Cir.1975)). The purpose of summary judgment is not “to cut litigants off from their right of trial by jury if they really have issues to try.” Poller v. Columbia Broad. Sys., Inc., 368 U.S. 464, 467, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962) (quoting Sartor v. Ark. Natural Gas Corp., 321 U.S. 620, 627, 64 S.Ct. 724, 88 L.Ed. 967 (1944)). Rather, it is designed to avoid “useless, expensive and time-consuming trials where there is actually no genuine, factual issue remaining to be tried.” Anderson v. Viking Pump Div., Houdaille Indus., Inc., 545 F.2d 1127, 1129 (8th Cir.1976) (citing Lyons v. Bd. of Educ., 523 F.2d 340, 347 (8th Cir.1975)). Summary judgment can be entered against a party if that party fails to make a showing sufficient to establish the existence of an element essential to its case, and on which that party will bear the burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Federal Rule of Civil Procedure 56 mandates the entry of summary judgment upon motion after there has been adequate time for discovery. Summary judgment is appropriately granted when the record, viewed in the light most favorable to the nonmoving party and giving that party the benefit of all reasonable inferences, shows that there is no genuine issue of material fact, and that the moving party is therefore entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a); Harlston v. McDonnell Douglas Corp., 37 F.3d 379, 382 (8th Cir.1994). The Court does not weigh the evidence, nor does it make credibility determinations. The Court only determines whether there are any disputed issues and, if so, whether those issues are both genuine and material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Wilson v. Myers, 823 F.2d 253, 256 (8th Cir.1987) (“Summary judgment is not designed to weed out dubious claims, but to eliminate those claims with no basis in material fact.”) (citing Weight Watchers of Quebec, Ltd. v. Weight Watchers Int’l, Inc., 398 F.Supp. 1047, 1055 (E.D.N.Y.1975)).

In a summary judgment motion, the moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact based on the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, if any. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548; Anderson, 477 U.S. at 248, 106 S.Ct. 2505. If the moving party has carried its burden, the nonmoving party must then go beyond its original pleadings and designate specific facts showing that there remains a genuine issue of material fact that needs to be resolved by a trial. See Fed.R.Civ.P. 56(c). This additional showing can be by affidavits, depositions, answers to interrogatories, or the admissions on file. Id.; Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548; Anderson, 477 U.S. at 257, 106 S.Ct. 2505. “[T]he mere existence of some alleged factual dispute between the parties will not defeat a motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505. An issue is “genuine” if the evidence is sufficient to persuade a reasonable jury to return a verdict for the non-moving party. See id. at 248, 106 S.Ct. 2505. “As to materiality, the substantive law will identify which facts are material .... Factual disputes that are irrelevant or unnecessary will not be counted.” Id.

Courts do not treat summary judgment as if it were a paper trial. Therefore, a “district court’s role in deciding the motion is not to sift through the evidence, pondering the nuances and inconsistencies, and decide whom to believe.” Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 920 (7th Cir.1994). In a motion for summary judgment, the Court’s job is only to decide, based on the evidentiary record that accompanies the moving and resistance filings of the parties, whether there really is any material dispute of fact that still requires a trial. See id. (citing Anderson, 477 U.S. at 249, 106 S.Ct. 2505 and 10 Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 2712 (3d ed. 1998)).

III. LAW AND ANALYSIS

In his Amended Complaint, Spencer alleges that Annett acted in bad faith by: 1) “refus[ing] to pay outstanding medical bills”; 2) “Denfying] and Delaying] necessary medical care and treatment to [Spencer]”; 3) “Denfying] and Delaying] healing period benefits to [Spencer]”; 4) “Breach[ing] the settlement agreement approved by the Iowa Workers’ Compensation Commissioner”; and 5) “Specifically denfying] and delaying] left total knee replacement surgery recommended by the authorized treating surgeon selected by Defendant----” Compl. ¶¶ 9a-e. (Clerk’s No. 9). Annett filed an Answer to Spencer’s Amended Complaint and asserted counterclaims for fraudulent misrepresentation, unjust enrichment, money had and received, and restitution-mistake of fact. Clerk’s No. 11 at 1-3.

On June 1, 2012, both parties moved for summary judgment. Annett claims that it is entitled to summary judgment on all of Plaintiffs bad faith claims, arguing: 1) many of Spencer’s asserted causes of action are not recognized under Iowa law; and 2) those claims that are cognizable concern situations in which Annett had a reasonable basis for denying or delaying care, thus making the claims fairly debatable as a matter of law. See generally Clerk’s No. 18. Spencer, by contrast, seeks only partial summary judgment on the issue of liability. See Clerk’s No. 17. Specifically, Spencer claims that, because Annett participated in the June 2010 alternate medical care proceeding and in the later appeals of that proceeding, Annett should be prohibited from contesting liability under a theory of judicial estoppel. See Pl.’s Br. in Supp. of Mot. for Partial Summ. J. (“PL’s Br.”) at 7-8 (Clerk’s No. 17.2) (“[T]he doctrine of judicial estoppel prohibits the Defendant from now denying liability.... [U]pon finding that Defendant is barred from denying liability, Plaintiff requests that the Court dismiss all of Defendant’s counterclaims as they are based on a denial of liability.”). The Court will address each Motion in turn.

A. Arnett’s Motion for Summary Judgment

Annett asserts in its Motion for Summary Judgment that Spencer’s bad faith claims fail for two reasons. First, it contends many of the actions for which Spencer is alleging bad faith are not recognized under Iowa law. Second, to the extent that any of the bad faith claims are recognized by Iowa law, Annett argues that it did not act in bad faith because Spencer’s claims were fairly debatable. Spencer responds that his claims are recognized by Iowa law and that Annett had no reasonable basis to deny or delay any medical care or benefits following Spencer’s knee injury. Further, he argues that the law-of-the-case doctrine applies and prevents the Court from considering Annett’s motion because the state-court judge in the previous bad faith action considered and denied the motion.

1. An overview of bad faith.

First-party bad faith is an intentional tort that arises in the insurance context due to a defendant’s “ ‘knowing failure to exercise an honest and informed judgment’ ” when an insured seeks compensation for an injury. McIlravy v. N. River Ins. Co., 653 N.W.2d 323, 329 (Iowa 2002) (quoting Kiner v. Reliance Ins. Co., 463 N.W.2d 9, 12 (Iowa 1990)). It applies to all insurers regardless of the origin of the case, and includes self-insured employers. McIlravy, 653 N.W.2d at 329 (“The two-part test for first-party bad faith applies no matter what type of insurance is provided by the defendant insurer, including workers’ compensation.”); Reedy v. White Consol. Indus., Inc., 503 N.W.2d 601, 603 (Iowa 1993) (“For the purposes of a bad faith tort claim, we see no distinction between a workers’ compensation insurance carrier for an employer and an employer who voluntarily assumes self-insured status .... ”); see also Boylan v. Am. Motorists Ins. Co., 489 N.W.2d 742, 744 (Iowa 1992) (“[Rjecognition of tort liability on the part of workers’ compensation insurance carriers guilty of the type of bad faith conduct ... recognized in Dolan is a logical extension of that decision.”); Dolan v. Aid Ins. Co., 431 N.W.2d 790, 794 (Iowa 1988) (“We conclude it is appropriate to recognize the first-party bad faith tort to provide the insured an adequate remedy for an insurer’s wrongful conduct.”).

In the workers’ compensation context, however, the tort has its limits. See Petrillo v. Lumbermens Mut. Cas. Co., 378 F.3d 767, 770 (8th Cir.2004) (explaining that no bad faith claim can survive on the basis of an employee who is merely dissatisfied with care); Kloster v. Hormel Foods Corp., 612 N.W.2d 772, 774-75 (Iowa 2000) (denying district court jurisdiction where a plaintiff has not yet exhausted or pursued all agency remedies first); White v. Nw. Bell Telephone Co., 514 N.W.2d 70, 77 (Iowa 1994) (prohibiting a finding of first-party bad faith where a party breached a workers’ compensation settlement agreement); Harned v. Farmland Foods, Inc., 331 N.W.2d 98, 101 (Iowa 1983) (holding that where a party is dissatisfied with care, the proper forum is the workers’ compensation commission); Good v. Tyson Foods, Inc., 756 N.W.2d 42, 45 (Iowa Ct.App.2008) (“Claims of dissatisfaction with care, including claims of failure to provide requested care, come under workers’ compensation law.”). Indeed, due to the nature and the goals of the workers’ compensation division, almost all work-injury cases fall within the ambit of the so-called exclusivity principle embodied in Iowa Code § 85.20, which provides that “[t]he rights and remedies provided in this chapter ... shall be the exclusive and only rights and remedies of the employee ... against ... the employee’s employer.” Thus, for the mine run of workers’ compensation cases, a district court will only hear those cases in which the parties have exhausted all administrative remedies. See Kloster, 612 N.W.2d at 774-75. Because federal district courts are courts of limited jurisdiction and the legislature has generally given the workers’ compensation commissioner jurisdiction over work-injury cases, a district court must first ask itself whether a case falls within one of the limited exceptions to the general exclusivity principle.

Assuming that the case falls outside the workers’ compensation exclusivity principle, a district court has jurisdiction to hear a first-party bad faith case. See McIlravy, 653 N.W.2d at 328-29 (“[A] method by which a ... workers’ compensation carrier may be penalized ... is by a private cause of action for first-party bad faith.”). To prevail on a claim for bad faith, a plaintiff must prove by substantial evidence: “1) that the insurer had no reasonable basis for denying benefits under the policy and, 2) the insurer knew, or had reason to know, that its denial was without basis.” Id. at 329 (quoting United Fire & Cas. Co. v. Shelly Funeral Home, Inc., 642 N.W.2d 648, 657 (Iowa 2002)) (internal quotation marks omitted). “The first element is an objective one; the second element is subjective.” Bellville v. Farm Bureau Mut. Ins. Co., 702 N.W.2d 468, 473 (Iowa 2005) (citing Reuter v. State Farm Mut. Auto. Ins. Co., 469 N.W.2d 250, 251 (Iowa 1991)).

A defendant can show a reasonable basis for denying benefits and thus disprove the first element of bad faith by showing that a claim for benefits is objectively “fairly debatable.” Rodda v. Vermeer Mfg., 734 N.W.2d 480, 483 (Iowa 2007). Whether a claim is fairly debatable is a question of law that a court usually can answer. Id. To determine whether a claim is fairly debatable, the Court must examine the claim to determine if it is “ ‘open to dispute on any logical basis.’ ” Id. (quoting Bellville, 702 N.W.2d at 473). Whether an insurer’s position actually lacks merit is insufficient to prove the first element of bad faith. Bellville, 702 N.W.2d at 473. Instead, “[t]he focus is on the existence of a debatable issue, not on which party was correct.” Id. Thus, when considering conflicting evidence, the Court should not weigh the evidence; rather it should “ ‘decide whether evidence existed to justify denial of [a] claim.’ ” Id. at 474 (quoting State Farm Lloyds, Inc. v. Polasek, 847 S.W.2d 279, 285 (Tex.App.1992)). If the court concludes that there exists a reasonable basis for denying benefits, summary judgment is appropriate because “where an objectively reasonable basis for denial of a claim actually exists, the insurer cannot be held liable for bad faith as a matter of law,” and the bad faith causes of action should be dismissed. Id. at 473-74 (quoting Gardner v. Hartford Ins. Accident & Indem. Co., 659 N.W.2d 198, 206 (Iowa 2003)) (internal quotation marks omitted). Assuming a plaintiff proves the first, objective element of bad faith, he still must demonstrate the second, subjective element — that the defendant knew or had reason to know that it lacked a reasonable basis for denying benefits. Rodda, 734 N.W.2d at 483. If a plaintiff fails to show either of these elements, the claim will fail. See id.

With this framework in mind, the Court turns to analysis of Annett’s Motion for Summary Judgment. It begins by evaluating Spencer’s law-of-the-case argument. The Court then will examine each of Spencer’s bad faith claims. For each claim, the Court will determine whether such claim is cognizable under Iowa law and, if so, whether the claim is fairly debatable as a matter of law.

2. The law of the case doctrine.

The law of the ease doctrine in its most basic form states that “a court will generally refuse to reopen or reconsider what has already been decided at an earlier stage of the litigation.” Suel v. Sec’y of Health & Human Servs., 192 F.3d 981, 985 (Fed.Cir.1999); see also State v. Grosvenor, 402 N.W.2d 402, 405 (Iowa 1987) (“The doctrine of the law of the case represents the practice of courts to refuse to reconsider what has once been decided.”). In Iowa, the law of the case doctrine focuses on appellate decisions and posits that “an appellate decision becomes the law of the case and is controlling on ... the trial court.” Bahl v. City of Asbury, 725 N.W.2d 317, 321 (Iowa 2006). Many Iowa decisions have interpreted the law of the case doctrine in the same way—that appellate court decisions are final. See, e.g., City of Okoboji v. Iowa Dist. Ct. for Dickinson Cnty., 744 N.W.2d 327, 331 (Iowa 2008) (“It is a fundamental rule of law that a trial court is required to honor and respect the rulings and mandates by appellate courts in a case.”); Grosvenor, 402 N.W.2d at 405 (“It is a rule which provides that the legal principles announced ... by a reviewing court in an opinion, right or wrong, are binding throughout further progress of the case .... ”). In other words, a “downward mandate” from a higher court, regardless of its correctness, applies throughout the duration of the case. Grosvenor, 402 N.W.2d at 405; see Okoboji, 744 N.W.2d at 331-32.

This principle, however, is limited and “is not applicable ... if the facts before the court upon the second trial are materially different than the first.” Grosvenor, 402 N.W.2d at 405. Likewise, if issues are raised in the second case that were not litigated in the first, the doctrine does not apply. See id. (“[T]he doctrine does not preclude consideration of issues that ... were not[ ] raised in the first appeal.”); see also Okoboji 744 N.W.2d at 331 (“The first task of the district court ... is to determine the precise action directed to be done by the appellate court.”); Winnebago Indus., Inc. v. Haverly, 727 N.W.2d 567, 573 (Iowa 2006) (prohibiting application of the law of the case doctrine where the issue was not decided in the previous case). Thus, under Iowa law, various courts have only applied the doctrine when: 1) a trial court is implementing a ruling of an appellate court, 2) the facts of the case are substantially the same, and 3) the issues were the same.

When dealing with a more “horizontal” challenge — a challenge in which a party seeks to implement a ruling from one trial court to another — Iowa law seems to be silent. The same cannot be said of federal jurisprudence; in federal court, the doctrine has a more defined presence. As Annett aptly points out in its Reply Brief (Clerk’s No. 27 at 5), the law of the case doctrine applies differently depending on context; the doctrine “is applied more or less strictly depending on the circumstances of the case.” Jamesbury Corp. v. Litton Indus. Prods., Inc., 839 F.2d 1544, 1550 (Fed.Cir.1988). “At the trial level ... the law of the case is little more than a management practice to permit logical progression toward judgment. Orderly and efficient case administration suggests that questions once decided not be subject to continued argument, but the court has the power to reconsider its decisions until a judgment is entered.” Id. (emphasis added). District courts in the Eighth Circuit have adopted this rule. See Dethmers Mfg. Co. v. Automatic Equip. Mfg. Co., 299 F.Supp.2d 903, 911-12 (N.D.Iowa 2004) (quoting the above portion of Jamesbury). Judge Bennett further explained in Dethmers:

“On a renewed motion for summary judgment before a second judge, the district court must balance the need for finality against the forcefulness of any new evidence and the demands of justice. With respect to non-appealable denial of summary judgment, the law of the case is not a limit on the court’s jurisdiction, but a rule of practice which may be departed from in the sound discretion of the district court. The first judge always has the power to change a ruling .... A fortiori, if the first judge can change his mind after denying summary judgment, and change his ruling, a second judge should have and does have the power to do so as well.”

Id. at 912 (quoting Corporacion de Mercadeo Agricola v. Mellon Bank Int’l, 608 F.2d 43, 48 (2d Cir.1979)). As Judge Bennett summarized, “the standard for reconsideration of a prior summary judgment ruling by the trial court — at least in the absence of an intervening appeal — is quite generous.” Id. Additionally, Judge MacLaughlin, writing for the United States District Court for the District of Minnesota, explained the “horizontal” concept two years before Jamesbury was decided. In Paulson v. Greyhound Lines, Inc., Judge MacLaughlin commented, “[t]he doctrine of the law of the case has less force at the trial court level.” 628 F.Supp. 888, 891 (D.Minn.1986). In discussing summary judgments, he continued, “[o]ne judge denying a summary judgment motion does not preclude a successor judge from granting it. A successor judge has the same discretion to reconsider a ruling as the first judge would.” Id. (internal citations omitted).

Spencer contends that this Court should reject Annett’s motion under the law of the case doctrine. He asserts that since a judge considered and denied a substantially similar motion during the state-court bad faith case, this Court should prohibit Annett from succeeding on its Motion for Summary Judgment. Pl.’s Resp. Br. at 6-7. The Court disagrees with Spencer’s argument for two reasons. First, the summary judgment in question, although similar, is not so substantially similar as to implicate the law of the case doctrine. The motion presently before this Court concerns additional causes of action, additional arguments, additional case citations, and additional facts. See Grosvenor, 402 N.W.2d at 405 (refusing to apply the law of the case doctrine where a party offered additional facts that varied from the court of appeals ruling). As An-nett correctly points out, many of the issues at play in the state court summary judgment proceeding have changed and were not previously litigated.

Second, even assuming that the motions were identical, federal precedent dictates that a subsequent trial court is not bound by a former trial court where the former court did not reach the merits of the case. See Paulson, 628 F.Supp. at 891. As applied in Iowa, the doctrine only covers trial courts considering issues on remand from appellate courts. Indeed, even those decisions cited by Spencer in the present case apply the doctrine only from an appellate court to a trial court or other lower court. Spencer fails to reveal any Iowa case law in support of his argument that the law of the case doctrine should operate in the horizontal direction he claims. At best, Spencer suggests that this Court could choose to apply the doctrine, but presents no authority that this Court must apply the doctrine. The Court declines Spencer’s invitation to adopt Judge Ovrom’s ruling, and will consider all summary judgment arguments de novo.

3. Spencer’s claim that Annett refused to pay outstanding medical bills and breached the settlement agreement.

Spencer’s first bad faith claim is that Annett failed to pay outstanding medical bills related to his knee injury pursuant to the settlement agreement signed in December 2008. See Am. Compl. ¶ 9a. Spencer separately alleges that Annett breached the settlement agreement in bad faith. Id. ¶ 9c. Deputy Commissioner Cramer correctly found in his March 2010 ruling that any duty to pay for past or ongoing medical care arises out of the settlement agreement between the parties. Def.’s App. at 252. Indeed, Spencer admits so in his brief. PL’s Br. at 12 (“Simply put, Annett knowingly failed to pay numerous medical bills related to Spencer’s authorized surgery in direct violation of the settlement agreement.”). Accordingly, the Court finds that these two claims are substantially the same, and it would be prudent to consider them together.

a. Is a bad faith claim based on the breach of a settlement agreement cognizable?

The first question the Court must consider. is the threshold question of whether the claim is cognizable under Iowa law. To answer this question in a breach-of-settlement context, the Court must contemplate the rationale behind the first-party bad faith tort. An important reason that Iowa adopted the tort of first-party bad faith was due to “the inherently unequal bargaining power between the insurer and the insured.” Dolan, 431 N.W.2d at 794; see White, 514 N.W.2d at 77 (recognizing that the bad faith tort is recognized in insurance contracts and the reason for the tort involves unequal bargaining power); Boylan, 489 N.W.2d at 744 (Iowa 1992) (“[Rjecognition of tort liability on the part of workers’ compensation insurance carriers guilty of the type of bad faith conduct ... recognized in Dolan is a logical extension of that decision.”). As the Iowa Supreme Court explained, “Recognition of the first-party bad faith tort addresses this inequality.” Dolan, 431 N.W.2d at 794. Annett responds that a bad faith claim for breach of a settlement agreement does not address the same policy concerns and asserts that such a claim is not recognized under Iowa law due to the Iowa Supreme Court’s holding in White, 514 N.W.2d at 70.

Unlike Dolan or Boylan, White concerned an insurance carrier’s breach of a settlement agreement following an industrial-commission-approved settlement in which both parties were represented by counsel. White, 514 N.W.2d at 72. This agreed-upon settlement stood in stark contrast to the contracts of adhesion generally found in the insurance context. Id. at 77. The plaintiff in the case had sued the self-insured employer requesting punitive damages for breach of a settlement agreement. Id. at 74. Under Iowa law, a party can only recover punitive damages for a breach of a contract if two elements are met: “1) that the breach also constitutes an intentional tort and 2) that the breach was committed maliciously, in a manner meeting the standards of section 668A.1 [, the Iowa Code section describing punitive damages].” Id. at 77. The trial court presumably accepted that the underlying intentional tort was a claim for bad faith. Id. (“The court’s first ground appears to be based on a finding of bad faith on the part of U.S. West.”). The Iowa Supreme Court, however, rejected this argument and held that the policy reasons behind a bad faith tort for insurance carriers — unequal bargaining power between the parties — did not apply in a breach-of-settlement-agreement claim, and thus the plaintiff did not prove that an intentional tort occurred. Id. (“This agreement resulted from negotiations between U.S. West and White, who was represented throughout by counsel.... Thus the concerns expressed in Dolan regarding unequal bargaining power are not implicated.”). Although the defendant likely breached the settlement agreement, “its conduct furnished no basis for an intentional tort claim premised on insurer bad faith.” Id.

As White recognized, when two parties have entered into an agreement through counsel, the concerns surrounding insurance contracts are not in play; thus, bad faith is not cognizable. Id.; see Pool v. Orkin, Inc., No. 3:09-cv-91, 2010 WL 5452712, at *9-10 (S.D.Iowa Aug. 30, 2010) (declining to extend bad faith outside the insurance context). The circumstances in White are sufficiently similar to the present case to apply the Iowa Supreme Court’s reasoning. Spencer’s claims arise from the breach of a settlement agreement in which counsel represented both parties. Therefore, like the contract in White, the settlement agreement does not involve the same unequal bargaining circumstances present in an insurance context. As a result, the Court finds that a bad faith claim for breach of a contractual settlement agreement between two represented parties is not cognizable under Iowa law. Thus, Annett is entitled to summary judgment on any of Plaintiff’s claims arising out of breach of the settlement agreement.

b. Bad faith delay of payments.

Even assuming that the breach of settlement agreement bad faith claim is cognizable under Iowa law, the Court agrees with Annett that Spencer’s claims in that regard fail as a matter of law. As described above, to succeed on a bad faith claim, a party must show both that there was no reasonable basis for denying or delaying benefits and that the party knew or should have known there was no reasonable basis for denying benefits. While Annett admits that certain bills may not have been paid in a timely fashion, it asserts that it had a reasonable basis for denying payments or was unaware that no reasonable basis existed for delaying such payments.

Spencer alleges Annett “simply refuse[d] to pay work-related medical bills.” Pl.’s Br. at 11. Annett admits that some bills were not paid promptly, but asserts that a clerical error was the cause for denying payments, and Annett has since paid all medical bills related to the knee injury. Def.’s Br. in Supp. of Def.’s Mot. for Summ. J. (“Def.’s Br.”) at 31 (Clerk’s No. 21). In a motion for summary judgment, the moving party bears the initial burden to demonstrate to the court the absence of any genuine issues of material facts. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548; Anderson, 477 U.S. at 248, 106 S.Ct. 2505. After making such a showing, the burden then shifts to the nonmoving party to demonstrate facts beyond its original pleadings to show the Court a genuine issue of material fact exists that a trial must resolve. See Fed.R.Civ.P. 56(c). Further, when considering a motion for summary judgment, the Court must consider all inferences in the light most favorable to the nonmoving party. See Fed.R.Civ.P. 56(a); Harlston, 37 F.3d at 382. This does not mean, however, that a party can fabricate a material fact solely by means of disagreeing with the other party — “[i]t must have a real basis in the record.” Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir.1992) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)).

In the present case, Spencer does little more than disagree with Annett’s conclusions as to why Annett delayed paying certain bills. It fails to point to any facts in the record that would contradict or rebut Annett’s account that clerical errors led to the delayed payments. Therefore, this Court is bound to accept Annett’s characterization of the circumstances surrounding the delayed payment of bills. Accepting Annett’s uncontested assertion of a clerical error, the question then becomes: Did these clerical errors provide a reasonable basis for delaying payment of medical bills and did Annett know or have reason to know that no reasonable basis for delaying payments existed?

The Court finds that Annett’s internal review and inaccurate records provides a reasonable basis for Annett’s delay in paying medical bills. Even assuming that An-nett had no objective basis to delay the payment of the bills, the Court finds that Annett neither knew nor had reason to know that such a delay was unreasonable under the circumstances. Further, once discovered, Annett paid the medical bills promptly. A good-faith belief that all bills had been paid along with Annett’s promptly paying the bills once the mistake was discovered is sufficient to absolve Annett from liability on Plaintiffs claim of bad faith.

4. Spencer’s claim that Annett failed to provide medical care.

Spencer next alleges that Annett, in bad faith, denied and delayed necessary medical care to Spencer between April 2007, when Spencer first went to Dr. Dalton, and October 2007, when Spencer underwent arthroscopic surgery. Annett’s response is two-fold. First, it claims that the workers’ compensation exclusivity principle embodied in Iowa Code § 85.20 prohibits the district court from hearing this case. Second, and in the alternative, Annett claims that any delay was reasonable given that the claim was fairly debatable.

a. Is the claim cognizable under Iowa law?

Annett argues that Spencer’s claim is one for dissatisfaction with medical care, and as a result, it should be heard by the workers’ compensation commissioner under the exclusivity principle embodied in Iowa Code § 85.20 and existing Iowa precedent. See Def.’s Br. at 36. Spencer responds that the claim is not one for dissatisfaction with medical care, but rather is a claim for failure to provide medical care, and thus is distinguishable from Iowa precedent. See PL’s Resp. Br. at 14-15.

Both parties agree that, prior to bringing a claim in the district court for dissatisfaction with medical care, a party must first exhaust all agency remedies. See Def.’s Br. at 36 (“A claim alleging dissatisfaction of medical treatment falls under the exclusivity provision.”); PL’s Resp. Br. at 14-15 (distinguishing Spencer’s case from Iowa precedent and explaining that one reason for the distinction is that “the plaintiff [in the precedential case] was not denied medical benefits but was dissatisfied with the benefits being given by the insurance company” and in another precedential case “the plaintiff was provided medical care and treatment but was dissatisfied apparently with the treatment being offered. In the case at bar, we have a refusal to provide treatment”). Indeed, Iowa law dictates that the proper remedy for dissatisfaction with medical care is through the workers’ compensation commissioner, not in a district court. Iowa Code § 85.27(4); see Petrillo v. Lumbermens Mut. Cas. Co., 378 F.3d 767, 770 (8th Cir.2004); Kloster, 612 N.W.2d at 774-75; Harned, 331 N.W.2d at 101; Good, 756 N.W.2d at 45. The issues before the Court, then, are: 1) whether the circumstances of the present case indicate a claim of failure to provide medical care or merely a claim for dissatisfaction with medical care; and 2) if the present case gives rise to a claim for failure to provide care, whether a bad faith cause of action for failure to provide care is recognized under Iowa law. Because a brief review of Iowa precedent leads it to conclude that the present case is properly characterized