Tenet Healthsystem Hahnemann, Llc v. Global Excel Management, Inc. et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

E.D. Pa.April 3, 2017

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA TENET HEALTHSYSTEM HAHNEMANN, LLC d/b/a HAHNEMANN UNIVERSITY HOSPITAL, Plaintiff, vs. GLOBAL EXCEL MANAGEMENT, INC.; IHC HEALTH SOLUTIONS; INNOVATIVE MEDICAL RISK MANAGEMENT, INC.; STANDARD SECURITY LIFE INSURANCE COMPANY OF NEW YORK; and IHC ADMINISTRATIVE SERVICES, INC., Defendants. : : : : : : : : : : : : : : : : : : : : : Case No. 2:17-CV-00536-LDD ______________________________________________________________________________ MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS STANDARD SECURITY LIFE INSURANCE COMPANY OF NEW YORK, IHC HEALTH SOLUTIONS, INC. AND IHC ADMINISTRATIVE SERVICES, INC. MOTION TO DISMISS AMENDED COMPLAINT ______________________________________________________________________________ Defendants Standard Security Life Insurance Company of New York and IHC Health Solutions, Inc. (n/k/a Ebix Health Administration Exchange, Inc.), and IHC Administrative Services, Inc. (collectively referred to herein as “Moving Defendants”), by its attorneys, Eckert Seamans Cherin & Mellott, LLC, respectfully submit this Memorandum of Law in support of their Motion to Dismiss Plaintiff’s Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Case 2:17-cv-00536-LDD Document 21 Filed 04/03/17 Page 1 of 8 2 Plaintiff brings three different claims against five (now four1) different defendants without making any allegations about what any individual defendant did wrong. For this reason alone, this Court should dismiss the Amended Complaint. Even if this Court could overlook Plaintiff’s threadbare allegations, Plaintiff cannot sustain its claim for unjust enrichment. Even after amending its complaint, Plaintiff has not resolved the deficiencies with this claim. Consequently, Moving Defendants respectfully request the Court dismiss Plaintiff’s Amended Complaint against Defendants for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). FACTS AND PROCEDURAL BACKGROUND Plaintiff, Tenet Healthsystem Hahnemann, LLC d/b/a Hahnemann University Hospital (“Tenet” or “Plaintiff”), a medical care provider in Pennsylvania brought suit in the Court of Common Pleas in Philadelphia County against Defendants Global Excel Management, IHC Health Solutions, Innovative Medical Risk Management, Inc., Standard Security Life Insurance Company of New York, and IHC Administrative Services (hereinafter collectively referred to as “Defendants”) related to unpaid medical services provided to an individual referred to as W.D. (Dkt. 1, Attachment 5, Complaint (“Complaint”) at ¶ 1.) This matter was removed to this Court on February 6, 2017. (Dkt. 1.) After several Defendants moved to dismiss, Plaintiff amended its Complaint, dropping one claim and modifying a few other paragraphs. (Dkt. 17.) In its Amended Complaint, Plaintiff alleges that all of the Defendants had some involvement in providing insurance, underwriting insurance or administering insurance, but fails to specifically allege which defendant was involved in what activity. (Dkt. 17 at ¶¶ 4-9.) 1 Since amending its complaint, Plaintiff agreed to voluntarily dismiss one Defendant, Innovative Medical Risk Management, Inc. (Dkt. 18 & 19). Case 2:17-cv-00536-LDD Document 21 Filed 04/03/17 Page 2 of 8 3 Plaintiff further alleges that all five Defendants have a contract amongst themselves “to be bound by one another’s handling, processing, insuring, underwriting, arranging, and administering of medical insurance for their own pecuniary gain and benefit.” (Dkt. 17 at ¶ 12.) Additionally, Plaintiff alleges that the treatment of W.D. was “necessary, reasonable, and covered” under one or more policies of insurance. (Dkt. 17 at ¶ 23.) Yet, Plaintiff never explains which policy covers this treatment. (See generally Dkt. 17.) Plaintiff asserts that it is a third-party beneficiary of the policy or policies at issue and that all five Defendants were unjustly enriched by not paying for this treatment. (Dkt. 17 at ¶¶ 28-50.) Plaintiff alleges that one or more Defendants (although Plaintiff does not specify which one(s)) represented to it that all Defendants would be responsible for payment of the goods and services rendered. (Dkt. 17 at ¶ 52.) Even though Plaintiff has no idea which Defendants made representations, Plaintiff alleges that it was induced to rely upon these representations and therefore rendered medical care to W.D. (Dkt. 17 at ¶¶ 52-57.) LEGAL STANDARD Federal Rule of Civil Procedure 12(b)(6) permits a defendant to move to dismiss a complaint for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). In deciding a motion to dismiss pursuant to Rule 12(b)(6), courts must “accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n. 7 (3d Cir. 2002)). Case 2:17-cv-00536-LDD Document 21 Filed 04/03/17 Page 3 of 8 4 ANALYSIS Moving Defendants raise two issues on this motion to dismiss. First, Plaintiff fails to meet the basic notice pleading standard with respect to any of its claims against any of the Moving Defendants. Second, Plaintiff fails to state a claim as to its unjust enrichment allegation because Plaintiff does not set forth a basis for the unjust enrichment. Accordingly, Moving Defendants ask this Court to dismiss Plaintiff’s Amended Complaint. I. PLAINTIFF FAILS TO PROVIDE SUFFICIENT FACTUAL ALLEGATIONS TO MEET THE PLEADING STANDARDS. After the Supreme Court’s decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007), “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the alleged misconduct.” Id. (citing Twombly, 550 U.S. at 556). This standard, which applies to all civil cases, “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.; accord Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (“[A]ll civil complaints must contain more than an unadorned the defendant- unlawfully-harmed-me accusation.”) (quoting Iqbal, 556 U.S. at 678). Moreover, “the factual detail in a complaint [must not be] so undeveloped that it does not provide a defendant [with] the type of notice of claim which is contemplated by Rule 8 [of the Federal Rules of Civil Procedure].” Villegas v. Weinstein & Riley, P.S., 723 F. Supp. 2d 755, 756 (M.D. Pa. 2010) (quoting Phillips, 515 F.3d at 232). Plaintiff has not met the minimum pleading standards here. Plaintiff has not alleged what role any of these individual defendants played. According to Paragraph No. 11 of the Amended Complaint, all Defendants had contracts with each other, “to provide, underwrite, arrange and/or Case 2:17-cv-00536-LDD Document 21 Filed 04/03/17 Page 4 of 8 5 administer medical insurance to their insured and members.” (Amended Complaint at ¶ 11.) However, Plaintiff makes no allegations as to any Defendant’s specific role in the underlying facts. For example, Plaintiff alleges that it relied upon allegations in providing medical services to a patient, but fails to allege which Defendant made those representations. (See Amended Complaint at ¶¶ 53-54.) Even a cursory review of the Amended Complaint demonstrates that, with respect to any individual Defendant, Plaintiff fails to allege much more than it was harmed. Rule 8 and its progeny require Plaintiff to provide more information regarding its allegations that somehow Defendants caused it harm than currently contained in its Amended Complaint. Plaintiff claims that some of the Defendants made misrepresentations to it by claiming services would be covered that were not. (Id.) Assuming those allegations are true, Plaintiff must plead who said what. Plaintiff is required to file a complaint that notifies each individual defendant of the claims against it. This Court should dismiss Plaintiff’s complaint for failing to provide appropriate notice of the claims facing each defendant. II. PLAINTIFF FAILS TO ALLEGE AN UNJUST ENRICHMENT CLAIM. Plaintiff cannot maintain a claim for unjust enrichment because Plaintiff fails to allege it conferred a benefit upon Defendants. A plaintiff who claims unjust enrichment must “show that the party against whom recovery is sought either wrongfully secured or passively received a benefit that would be unconscionable for the party to retain without compensating the provider.” Bair v. Purcell, 500 F. Supp. 2d 468, 495 (M.D. Pa. 2007) (quoting Hershey Foods Corp. v. Ralph Chapek, Inc., 828 F.2d 989, 999 (3d Cir. 1987)). Plaintiffs must allege three elements in order to bring a claim for unjust enrichment: (1) benefits conferred on defendants by plaintiff; (2) appreciation of such benefits by defendant; and Case 2:17-cv-00536-LDD Document 21 Filed 04/03/17 Page 5 of 8 6 (3) acceptance and retention of such benefits under such circumstances that would be inequitable for defendant to retain the benefit without payment of value. Mitchell v. Moore, 729 A.2d 1200, 1203 (Pa. Super. Ct. 1999). Moreover, because Plaintiff is alleging that Defendants were unjustly enriched with respect to a contract Defendants had with a third-party (W.D. and/or W.D.’s parents), Plaintiff must allege that there is an injustice in allowing the benefit to be retained without compensation. For example, in Meehan v. Cheltenham Township, 189 A.2d 593, 596 (Pa. 1963), a subcontractor was unable to recover from a township for streets and sewers installed in a development after the developer went bankrupt and failed to pay for the work. The Pennsylvania Supreme Court denied the unjust enrichment claim because “the mere fact that one party benefits from the act of another is not of itself sufficient to justify restitution. There must also be an injustice in permitting the benefit to be retained without compensation.” Id. at 596. The court looked to Section 110 of the Restatement of Restitution to determine whether the enrichment was unjust in the situation where a third party benefits from a contract entered into between two other parties. It provides: “[I]n the absence of some misleading by the third party, the mere failure of performance by one of the contracting parties does not give rise to a right of restitution against the third party.” Id. at 596. Here, Plaintiff failed to allege facts supporting the three elements of unjust enrichment described above, and that some injustice exists in allowing W.D. to retain these benefits without Defendants paying for it. Specifically, Plaintiff fails to allege: (1) it conferred any benefits upon Defendants, (2) Defendants appreciated such benefits, and (3) Defendants accepted and retained those benefits. Rather, Plaintiff alleges that W.D. received the benefit in the form of medical services. None of the Defendants received this benefit. Case 2:17-cv-00536-LDD Document 21 Filed 04/03/17 Page 6 of 8 7 Instead, Plaintiff alleges that Defendants “directly benefited” from the provision of these services in light of their contractual relationship and obligations in receiving insurance premiums, (Amended Complaint at ¶ 40). But unjust enrichment requires that Defendants receive the benefit, not benefit from someone else receiving it. Plaintiff does not (and cannot) allege that Defendants received these services or even asked that those services be provided. The patient received those services. Nor does Plaintiff allege that Defendants accepted and retained those services, but instead alleges W.D. did. (Complaint at ¶ 24.) In fact, Plaintiff does not even allege that all of these Defendants were carriers of the insurance at issue, making it even less clear as to how all of the Defendants were unjustly enriched. Moreover, Plaintiff does not allege that Defendants misled it into providing these services. Rather, Plaintiff alleges that Defendants originally told it that Defendants would cover these services. Plaintiff has not alleged an unjust enrichment claim, but rather seems to have alleged that Defendants breached their contract with W.D. and/or W.D.’s parents. See Meehan, 410 Pa. at 450-51, 189 A.2d at 596 (1963). Accordingly, this Court should dismiss Plaintiff’s claims for unjust enrichment. CONCLUSION Plaintiff has failed to meet the basic standards of notice pleading with respect to Moving Defendants by failing to identify what it claims each Defendant did to it and thus failing to provide appropriate notice of the claims facing each Defendant. Additionally, this Court should dismiss Plaintiff’s unjust enrichment claim because Plaintiff fails to allege any facts sufficient to maintain such a claim. Therefore, Moving Defendants respectfully request Plaintiff’s Amended Complaint be dismissed in its entirety. Case 2:17-cv-00536-LDD Document 21 Filed 04/03/17 Page 7 of 8 8 Dated: April 3, 2017 ECKERT SEAMANS CHERIN & MELLOTT, LLC By: /s/ Heather R. Olson Albert G. Bixler Heather R. Olson Two Liberty Place 50 South 16th Street, 22nd Floor Philadelphia, PA 19102 Tel: (215) 851-8400 Fax: (215) 851-8383 Of Counsel: Emily Feinstein QUARLES & BRADY LLP 33 East Main Street Suite 900 Madison, WI 53703-3095 Tel: (608) 283-2470 Attorneys for Defendants IHC Health Solutions, Standard Security Life Insurance Company of New York, and IHC Administrative Services, Inc. Case 2:17-cv-00536-LDD Document 21 Filed 04/03/17 Page 8 of 8 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA TENET HEALTHSYSTEM HAHNEMANN, LLC d/b/a HAHNEMANN UNIVERSITY HOSPITAL, Plaintiff, vs. GLOBAL EXCEL MANAGEMENT, INC.; IHC HEALTH SOLUTIONS; INNOVATIVE MEDICAL RISK MANAGEMENT, INC.; STANDARD SECURITY LIFE INSURANCE COMPANY OF NEW YORK; and IHC ADMINISTRATIVE SERVICES, INC., Defendants. : : : : : : Case No. 2:17-CV-00536-LDD : : : : : : : : : : : : : : : ORDER AND NOW, this day of _, 2017, upon consideration of the Motion to Dismiss of defendants Standard Security Life Insurance Company of New York, IHC Health Solutions, Inc. (n/k/a Ebix Health Administration Exchange, Inc.), and IHC Administrative Services, Inc. (collectively, “Defendants”), and any opposition thereto, it is hereby ORDERED that Defendants’ Motion is GRANTED, and Plaintiff’s Amended Complaint is dismissed with prejudice. Honorable Legrome D. Davis United States District Judge Case 2:17-cv-00536-LDD Document 21-1 Filed 04/03/17 Page 1 of 3 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA TENET HEALTHSYSTEM HAHNEMANN, LLC d/b/a HAHNEMANN UNIVERSITY HOSPITAL, Plaintiff, vs. GLOBAL EXCEL MANAGEMENT, INC.; IHC HEALTH SOLUTIONS; INNOVATIVE MEDICAL RISK MANAGEMENT, INC.; STANDARD SECURITY LIFE INSURANCE COMPANY OF NEW YORK; and IHC ADMINISTRATIVE SERVICES, INC., Defendants. : : : : : : Case No. 2:17-CV-00536-LDD : : : : : : : : : : : : : : : DEFENDANTS STANDARD SECURITY LIFE INSURANCE COMPANY OF NEW YORK, IHC HEALTH SOLUTIONS, INC. AND IHC ADMINISTRATIVE SERVICES, INC.’S MOTION TO DISMISS AMENDED COMPLAINT Defendants Standard Security Life Insurance Company of New York and IHC Health Solutions, Inc. (n/k/a Ebix Health Administration Exchange, Inc.), and IHC Administrative Services, Inc. (collectively referred to herein as “Defendants”), by their attorneys, Eckert Seamans Cherin & Mellott, LLC, hereby file this Motion to Dismiss Plaintiff's Amended Complaint pursuant to Federal Rules of Civil Procedure 8(a) and 12(b)(6), and in support of this Motion, moving Defendants provide the attached Memorandum in Support and incorporate it as if fully set-forth herein. 1 Case 2:17-cv-00536-LDD Document 21-1 Filed 04/03/17 Page 2 of 3 WHEREFORE, Defendants Standard Security Life Insurance Company of New York and IHC Health Solutions, Inc., and IHC Administrative Services, Inc. request that this Court grant this Motion to Dismiss and dismiss the Amended Complaint with prejudice. Dated: April 3, 2017. ECKERT SEAMANS CHERIN & MELLOTT, LLC By: /s/ Heather R. Olson Albert G. Bixler Heather R. Olson Two Liberty Place 50 South 16th Street, 22nd Floor Philadelphia, PA 19102 Tel: (215) 851-8400 Fax: (215) 851-8383 Of Counsel: Emily Feinstein QUARLES & BRADY LLP 33 East Main Street Suite 900 Madison, WI 53703-3095 Tel: (608) 283-2470 Attorneys for Defendants IHC Health Solutions, Standard Security Life Insurance Company of New York, and IHC Administrative Services, Inc. 2 Case 2:17-cv-00536-LDD Document 21-1 Filed 04/03/17 Page 3 of 3 M1626471 CERTIFICATE OF SERVICE I hereby certify that on April 3, 2017, a copy of the foregoing Motion to Dismiss Amended Complaint was served via CM/ECF upon all parties registered to receive electronic notices in this case. /s/ Heather R. Olson Heather R. Olson Case 2:17-cv-00536-LDD Document 21-2 Filed 04/03/17 Page 1 of 1