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Southern Baptist Hospital of Florida, Inc. v. Celtic Insurance Co.

United States District Court, M.D. Florida, Jacksonville Division

June 1, 2018




         THIS CAUSE is before the Court on Defendant's Motion to Dismiss, Alternative Motion to Strike Demand for Attorneys' Fees (Counts III & IV) (“Motion”) (Doc. 9) and Plaintiff's Response thereto (Doc. 18). The Motion was referred to the undersigned for a report and recommendation regarding an appropriate resolution. (Doc. 22.) For the reasons stated herein, the undersigned respectfully RECOMMENDS that the Motion be GRANTED in part and DENIED in part. Specifically, the undersigned recommends that Counts I, II, and V of the Complaint (Doc. 2) be DISMISSED without prejudice, the demand for attorneys' fees in Counts III and IV be STRICKEN, and that Plaintiff be given twenty days from the Court's order on this Report and Recommendation to file an amended complaint in accordance herewith.

         I. Background

         Plaintiff, which operates a group of Florida not-for-profit hospitals, brings this action against Defendant, a health insurance company, to recover reimbursement for emergency services that Plaintiff provided to individuals who subscribe to Defendant's health insurance policies (“Subscribers”). (Doc. 2 at 2.) Plaintiff alleges that it is a non-network provider for the Subscribers. (Id. at 3.) Plaintiff further alleges that the services it provided to the Subscribers were covered under the Subscribers' policies with Defendant, but that Defendant either refused to pay or underpaid for the services Plaintiff provided. (Id. at 3.) Plaintiff does not have a copy of each Subscriber's policy, but Plaintiff attached a representative policy (“the Policy”) (Doc. 2-2) to the Complaint. (See Doc. 2 at 3.) The Complaint, which was filed in state court, sets forth five state law causes of action: (I) breach of contract based on an assignment of benefits; (II) breach of contract as a third party beneficiary; (III) unjust enrichment; (IV) violation of section 627.64194, Florida Statutes; and (V) a claim for declaratory relief.[2]

         II. Standard

         Under Federal Rule of Civil Procedure 12(b)(6), the Court must determine whether the Complaint sets forth sufficient factual allegations to state a claim upon which relief can be granted. In evaluating whether Plaintiff has stated a claim, the Court must determine whether the Complaint satisfies Federal Rule of Civil Procedure 8(a)(2), which requires that a pleading contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). To satisfy this standard, a complaint must contain sufficient factual allegations to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). “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 misconduct alleged.” Iqbal, 556 U.S. at 678. Indeed, the complaint should “‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” Twombly, 550 U.S. at 555.

         In ruling on a motion to dismiss under Rule 12(b)(6), a court must construe the complaint in the light most favorable to the plaintiff and accept all well-pled factual allegations as true. Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1260 (11th Cir. 2009). Although the Court must accept well-pled facts as true, it is not required to accept Plaintiff's legal conclusions. Iqbal, 556 U.S. at 678 (noting “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions”). “Similarly, unwarranted deductions of fact in a complaint are not admitted as true for the purpose of testing the sufficiency of plaintiff's allegations.” Sinaltrainal, 578 F.3d at 1260 (stating that in evaluating the sufficiency of a plaintiff's pleadings, a court is “not required to draw plaintiff's inference”) (internal citation and quotations omitted); see also Iqbal, 556 U.S. at 681 (stating conclusory allegations are “not entitled to be assumed true”).

         III. Analysis

         A. Counts I, II, & V (Breach of Contract, Declaratory Relief)

         In Count I, Plaintiff sets forth a breach of contract claim based on the Subscribers' assignment of benefits under the Policy, which allowed Plaintiff to bill Defendant directly for the services Plaintiff provided to the Subscribers. (Doc. 2 at 4.) In Count II, Plaintiff sets forth a breach of contract claim as an intended third-party beneficiary of the Policy. (Id. at 5.) In both counts, Plaintiff alleges that Defendant breached the Policy by failing to pay Plaintiff what Plaintiff calls the “Appropriate Amount, ” which is not a defined term in the Policy. (Id. at 4-6.) Similarly, in Count V, Plaintiff seeks, in part, a determination that “[Defendant] failed to pay [Plaintiff] the Appropriate Amount.” (Id. at 8.)

         Defendant contends that any count relying on the term “Appropriate Amount” should be dismissed. (See Doc. 9 at 3-7, 12-13.) Defendant argues that this term as used by Plaintiff contradicts the Policy, because the term does not account for exclusions and limitations contained therein. (Id. at 6-9.) The undersigned agrees that the use of this term is confusing and unnecessary, and therefore Plaintiff should replead these counts.

         The Complaint implies that the term “Appropriate Amount” is a definition set forth in the Policy. However, it is not. Instead, it is a term used by Plaintiff apparently based on the Policy's definition of “Eligible Service Expense.” (See Doc. 2-1 at 13-14.) However, any definition in the Policy of course must be read in the context in which it is used in the Policy. Thus, to substitute the term “Appropriate Amount” for the term “Eligible Service Expense” is confusing and misleading. As Defendant points out, Plaintiff fails to account for the schedule of benefits attached to each policy, which includes adjustments to the amounts Defendant must ultimately pay to a provider, based on, for example, deductibles, cost-sharing percentages, and co-payments. (See Id. at 30.) In its Response, Plaintiff acknowledges that individual claims for reimbursement may be subject to reduction based on the exact policy at issue and whether the Subscriber in question has met his or her deductible amount. (See Doc. 18 at 4.)

         Notably, there is no reason to address the details of the Policy at the pleading stage. Plaintiff can simply allege that Defendant failed to pay Plaintiff the amount due under the Policy. See Beck v. Lazard Freres & Co., LLC, 175 F.3d 913, 914 (11th Cir. 1999) (“The elements of a breach of contract action are (1) a valid contract; (2) a material breach; and (3) damages.” (applying Florida law)). In short, Plaintiff's “Appropriate Amount” term in Counts I, II, and V is unnecessary, confusing, and inconsistent with the Policy attached to the Complaint. Accordingly, the undersigned recommends that the Motion be granted in part on this basis, and that Plaintiff be required to replead Counts I, II, and V in accordance herewith.

         B. Count III ...

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