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

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

E.D. Pa.April 4, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA TENET HEALTHSYSTEM HAHNEMANN, LLC d/b/a HAHNEMANN UNIVERSITY HOSPITAL, Plaintiff, v. 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. Civil Action No. 17-0536-LDD ORDER AND NOW, this day of , 2017, upon consideration of Defendant Global Excel Management, Inc.’s (“Defendant”) Motion to Dismiss, Plaintiff’s Response thereto, and Defendant’s Reply, if any, it is hereby ORDERED and DECREED that Defendant's Motion is GRANTED. Plaintiff’s Amended Complaint is dismissed in its entirety with prejudice. BY THE COURT: Legrome D. Davis, U.S. District Judge Case 2:17-cv-00536-LDD Document 22 Filed 04/04/17 Page 1 of 11 TENET HEALTHSYSTEM HAHNEMANN, LLC d/b/a HAHNEMANN UNIVERSITY HOSPITAL, Plaintiff, v. 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. Civil Action No. 17-0536-LDD DEFENDANT GLOBAL EXCEL MANAGEMENT, INC.’S MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT Defendant Global Excel Management, Inc. (“Defendant”), by counsel, pursuant to Rules 8(a) and 12(b)(6) of the Federal Rules of Civil Procedure, respectfully moves for dismissal of Plaintiff’s Amended Complaint for the reasons set forth in the Brief in Support of its Motion to Dismiss filed contemporaneously herewith. Respectfully submitted, LECLAIRRYAN Dated: April 4, 2017 /s/ Brandon R. Sher Brandon R. Sher, Esq. (PA ID No. 314192) LECLAIRRYAN 1818 Market Street, Suite 2600 Philadelphia, Pennsylvania 19103 Tel: (215) 383-0913 Fax: (215) 383-0915 Attorneys for Defendant Global Excel Management, Inc. Case 2:17-cv-00536-LDD Document 22 Filed 04/04/17 Page 2 of 11 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNYLVANIA TENET HEALTHSYSTEM HAHNEMANN, LLC d/b/a HAHNEMANN UNIVERSITY HOSPITAL, Plaintiff, v. 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. Civil Action No. 17-0536-LDD DEFENDANT GLOBAL EXCEL MANAGEMENT, INC.’S BRIEF IN SUPPORT OF ITS MOTION FOR DISMISSAL OF THE AMENDED COMPLAINT Brandon R. Sher LECLAIRRYAN 1818 Market Street, Suite 2600 Philadelphia, PA 19103 Telephone: (215) 383-0913 Facsimile: (215) 383-0915 Email: Brandon.Sher@leclairryan.com Attorneys for Defendant Global Excel Management, Inc. Case 2:17-cv-00536-LDD Document 22 Filed 04/04/17 Page 3 of 11 2 Pursuant to Fed. R. Civ. P. 8(a) and 12(b)(6), Defendant Global Excel Management, Inc. (“GEM”) respectfully requests that the Court enter an Order dismissing Plaintiff Tenet Healthsystem Hahnemann, LLC d/b/a Hahnemann University Hospital’s (“Plaintiff” or “Tenet”) Amended Complaint (Doc. No. 17). In support thereof, GEM states as follows: PRELIMINARY STATEMENT Plaintiff amended its complaint after Defendants Standard Security Life Insurance Company of New York, IHC Health Solutions, Inc., IHC Administrative Services, Inc., and Innovative Medical Risk Management, Inc. filed their respective motions to dismiss. (See Doc. Nos. 11, 13.) Plaintiff now alleges three causes of action against five defendants. 1 Despite being given a second chance, Plaintiff again has failed to make any allegations specifying why each individual defendant is liable, instead relying upon vague generalities that all defendants refused to “underwrite, insure, pay, and duly administer claims the full amount owed for the medical expenses alleged herein.” (Doc. No. 17, ¶¶ 25-26.) Even if the Court condoned such a lack of specificity, Plaintiff’s claims for unjust enrichment and promissory estoppel cannot survive because Plaintiff fails to establish prima facie cases. Therefore, GEM respectfully requests the Court dismiss Plaintiff’s Amended Complaint for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6). BACKGROUND AND PROCEDURAL HISTORY On February 2, 2017, Plaintiff filed a complaint in the Court of Common Pleas, Philadelphia County, February Term, 2017, No. 4565. (See Doc. No. 1). The complaint named GEM, IHC Health Solutions, Innovative Medical Risk Management, Inc., Standard Security Life Insurance Company of New York, and IHC Administrative Services, Inc. as defendants 1 After filing the Amended Complaint, Plaintiff dismissed Defendant Innovative Risk Management, Inc. without prejudice. (See Doc. No. 19.) Case 2:17-cv-00536-LDD Document 22 Filed 04/04/17 Page 4 of 11 3 (collectively, “Defendants”). On February 6, 2017, GEM filed a Notice of Removal in this Court pursuant to 28 U.S.C. § 1441(a) and 28 U.S.C. § 1332(a). (Doc. No. 1.) In its original complaint, Plaintiff alleged causes of action against Defendants for failure to pay medical services under an insurance policy, and Plaintiff averred that all Defendants had some involvement in providing, underwriting, or administering the insurance policy, but failed to specify the roles of Defendants. Moreover, Plaintiff claimed Defendants were unjustly enriched by not paying for the medical services because one or more defendants represented to Plaintiff that all Defendants would be responsible for payment of the medical services; however, Plaintiff never specified who made such a promise. As a result, motions to dismiss were filed, resulting in Plaintiff filing its Amended Complaint on March 20, 2017. (See Doc. No. 17.) Plaintiff’s Amended Complaint is not materially different from the original complaint besides deleting a cause of action for a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, inserting Paragraphs 26 and 31, and adding language about underwriting throughout. APPLICABLE STANDARD A complaint will survive a motion to dismiss under Rule 12(b)(6) only if it states “sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)) (internal quotations omitted). The complaint must state a plausible claim for relief that permits the court to infer “more than a sheer possibility” of liability. Id. Although a plaintiff is not required to plead facts showing its claim is probable, factual allegations must be enough to raise a right to relief above the speculative level. See Twombly, 550 U.S. at 555. The Third Circuit has held that the complaint must show, through the facts alleged, that the plaintiff is entitled to relief. Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009). Case 2:17-cv-00536-LDD Document 22 Filed 04/04/17 Page 5 of 11 4 Although a court must accept all factual allegations as true and construe the complaint in the light most favorable to the plaintiff, the court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555; Fowler, 578 F.3d at 210-11; see also Iqbal, 556 U.S. at 679 (“[w]hile legal conclusions can provide the framework of a complaint, they must be supported by factual allegations”). ARGUMENT I. PLAINTIFF FAILS TO ALLEGE FACTS THAT SATISFY THE PLEADING STANDARDS. The allegations in the Amended Complaint regarding a purported breach of contract, quantum meruit/unjust enrichment, and promissory estoppel do not satisfy the pleading requirements as promulgated in Twombly and Iqbal. Indeed, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Iqbal, 556 U.S. at 678. In other words, “all civil complaints must contain more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Id. at 677. Furthermore, “labels and conclusions” or “formulaic recitation of the elements of a cause of action” need not be accepted. Fowler, 578 F.3d at 210. In its Amended Complaint, Plaintiff never satisfies the minimum pleading standard. Plaintiff alleges bald assertions and unsupported conclusions, and fails to provide support for its legal conclusions with factual statements sufficient to survive a motion to dismiss. For example, Plaintiff never alleges the specific role each individual defendant was responsible for in the underlying insurance policy. See Electron Energy Corp. v. Short, 597 A.2d 175, 178 (Pa. Super. 1991) (holding “it is fundamental contract law that one cannot be liable for a breach of contract unless one is a party to that contract”). Instead, in Paragraph 11 Plaintiff states Defendants contracted and agreed with one another to provide, underwrite, arrange, and/or administer Case 2:17-cv-00536-LDD Document 22 Filed 04/04/17 Page 6 of 11 5 medical insurance to their insureds and members, and to process claims by medical providers. (See Doc. 17 at ¶ 9.) Moreover, Plaintiff never states which of the Defendants made the representation on which it claims it relied on to its detriment (unjust enrichment/promissory estoppel claims). Instead, in Plaintiff’s Amended Complaint, Plaintiff vaguely claims it was harmed by all Defendants without explaining how each individual defendant was responsible for its alleged damages. Rule 8 requires Plaintiff to offer more factual information in its Amended Complaint explaining somehow the way each individual defendant caused it harm. Indeed, it defies logic for all Defendants to have been responsible for the same alleged violations. Plaintiff claims that all Defendants represented to it that the treatment rendered by Plaintiff was authorized and Defendants would be responsible for payment for the goods and services rendered. Assuming this allegation is true, as is required in deciding a motion to dismiss, Plaintiff must plead who said what. This requirement is so Defendants are on notice of the claims against it. Because Plaintiff fails to provide the appropriate notice for all of its claims, the Amended Complaint should be dismissed. II. PLAINTIFF FAILS TO ESTABLISH A PRIMA FACIE CASE OF UNJUST ENRICHMENT. In the Commonwealth of Pennsylvania, to establish a prima facie case of unjust enrichment, a plaintiff must allege: (1) it conferred benefits upon the defendant; (2) the defendant realized those benefits; and (3) the defendant accepted and retained the benefits under the circumstances in which it would be inequitable for it to retain them without payment of value. Bunnion v. Consolidated Rail Corp., 108 F. Suppp.2d 403, 427 (E.D. Pa. 1999) (citing Schenck v. K.E. David Ltd., 666 A.2d 327, 328 (Pa. Super. 1995)). Plaintiff’s claim for unjust Case 2:17-cv-00536-LDD Document 22 Filed 04/04/17 Page 7 of 11 6 enrichment fails because Plaintiff never alleges it conferred a benefit upon GEM. A party 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.) Furthermore, because Plaintiff alleges Defendants were unjustly enriched with respect to a contract Defendants purportedly had with W.D. and/or W.D.’s legal guardian, Plaintiff must allege Defendants misled Plaintiff. In Meehan v. Cheltenham Township, 189 A.2d 593, 594 (Pa. 1963), a subcontractor was unable to recover from Cheltenham Township for streets and sewers it installed in a development after the developer went bankrupt and failed to pay for the work. The Pennsylvania Supreme Court denied the plaintiff’s 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. In its inquiry, the court looked to Section 110 of the Restatement of Restitution to assess whether the enrichment was unjust in the situation where a third party benefits from a contract entered into between two other parties. Section 110 states that “in 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. Plaintiff indicates W.D. received a benefit in the form of medical services. Regarding Defendants, Plaintiff claims the medical services rendered to Plaintiff “directly benefited Defendants in light of Defendant’s contractual relationship and obligations in receiving insurance premiums and other valuable consideration from their insured/member, and also from Case 2:17-cv-00536-LDD Document 22 Filed 04/04/17 Page 8 of 11 7 one another.” (See Doc. 17 at ¶ 40.) Yet, unjust enrichment requires Defendants to receive the benefit, not merely benefit from W.D.’s benefit. Indeed, Defendants cannot receive the medical services rendered to W.D., and Plaintiff does not even allege all Defendants were carriers of the insurance policy at issue. Furthermore, Plaintiff does not allege GEM misled it into providing these services (which it did not). At best, Plaintiff alleges Defendants breached their contract, if any, with W.D. and/or W.D.’s guardian. As such, this Court should dismiss Plaintiff’s claim for unjust enrichment. III. PLAINTIFF FAILS TO ESTABLISH A PRIMA FACIE CASE OF PROMISSORY ESTOPPEL. Plaintiff also fails to establish a prima facie case of promissory estoppel. In the Commonwealth of Pennsylvania, to establish a cause of action for promissory estoppel, the plaintiff must allege that: (1) the promisor made a promise that would reasonably be expected to induce action or forbearance on the part of the promisee; (2) the promisee actually took action or refrained from taking action in reliance on the promise; and (3) injustice can be avoided only by enforcing the promise. In establishing the first element of promissory estoppel, a “broad or vague implied promise” will not pass muster. C&K Petroleum Prods., Inc. v. Equibank, 839 F.2d 188, 192 (3d Cir. 1988). Indeed, a plaintiff must plead facts to show the existence of an express promise made by a defendant. Rapids Circuits, Inc. v. Sun Nat’l Bank, Civ. A. No. 10-6401, 2011 WL 1666919, at *18 (E.D. Pa. May 3, 2011). Plaintiff alleges “Defendants individually, jointly, and/or severally, represented to Plaintiff that Defendants’ insured/member had insurance coverage, that the treatment rendered by Plaintiff was authorized, that Defendants would be responsible for payments of the charges for the goods and services rendered by Plaintiff, and that Plaintiff would be reimbursed for its Case 2:17-cv-00536-LDD Document 22 Filed 04/04/17 Page 9 of 11 8 services. (See Doc. 17 at ¶ 52.) Plaintiff further claims it was induced to rely upon Defendants’ prior representations, in part, by Defendants making of partial payments, and it reasonably relied on said representations and partial payments to its detriment. (See id. at ¶¶ 53-54.) These allegations evidence Plaintiff’s inability to articulate an express promise because it cannot even identify which of the Defendants made the representation much less the contents or mode of the representation. Based on its allegations in the Amended Complaint, Plaintiff must know the identity of the defendant that made the alleged promise and which defendant partially paid its bill. The lack of any information regarding the vague alleged express promise is dispositive to a claim for promissory estoppel. 2 CONCLUSION For the foregoing reasons, Defendant GEM respectfully requests that its motion be granted and that the Court enter an Order pursuant to Fed. R. Civ. P. 12(b)(6) dismissing Plaintiff’s Amended Complaint, with prejudice. Respectfully submitted, LECLAIRRYAN By: /s/ Brandon R. Sher Brandon R. Sher 1818 Market Street, Suite 2600 Philadelphia, PA 19103 Telephone: (215) 383-0913 Facsimile: (215) 383-0915 Email: Brandon.Sher@leclairryan.com Attorneys for Defendant Global Excel Management, Inc. 2 The Amended Complaint generally states “Defendants individually, jointly, and/or severally, represented to Plaintiff that Defendants’ insured/member had insurance coverage, that the treatment rendered by Plaintiff was authorized, that Defendants would be responsible for payment of the charges for the goods and services rendered by Plaintiff, and that Plaintiff would be reimbursed for its services.” (See Doc. 17, ¶ 52.) Case 2:17-cv-00536-LDD Document 22 Filed 04/04/17 Page 10 of 11 CERTIFICATE OF SERVICE I, Brandon R. Sher, Esq., do hereby certify that a true and correct copy of Defendant’s Motion to Dismiss was served upon the following counsel by electronic service through the Court's ECF system: Joshua J. Bovender, Esq. Thomas, Thomas & Hafer, LLP P.O. Box 999 Harrisburg, PA 17108-0999 Attorney for Plaintiff Heather R. Olson, Esq. Eckert Seamans Two Liberty Place 50 South 16 th Street, 22 nd Floor Philadelphia, PA 19102 Attorneys for Defendants IHC Health Solutions, Standard Security Life Insurance Company of New York and IHC Administrative Services, Inc. /s/ Brandon R. Sher Brandon R. Sher April 4, 2017 Case 2:17-cv-00536-LDD Document 22 Filed 04/04/17 Page 11 of 11