512 F.3d 177 (5th Cir. 2007), 07-30085, Guidry v. American Public Life Ins. Co.

Docket Nº:07-30085.
Citation:512 F.3d 177
Party Name:Darcy GUIDRY; Sally Guidry, Plaintiffs-Appellants, v. AMERICAN PUBLIC LIFE INSURANCE CO., Defendant-Appellee.
Case Date:December 21, 2007
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 177

512 F.3d 177 (5th Cir. 2007)

Darcy GUIDRY; Sally Guidry, Plaintiffs-Appellants,



No. 07-30085.

United States Court of Appeals, Fifth Circuit.

Dec. 21, 2007

Appeal from the United States District Court for the Western District of Louisiana.

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[Copyrighted Material Omitted]

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Thomas Allen Filo, Cox, Cox, Filo & Camel, Claude Pierson Devall, Lake Charles, LA, Stephen B. Murray (argued), Stephen B. Murray, Jr., Murray Law Firm, New Orleans, LA, for Plaintiffs-Appellants.

W. Wayne Drinkwater (argued), Bradley, Arant, Rose & White, Jackson, MS, John E. Goodman, Bradley, Arant, Rose & White, Birmingham, AL, Maria I. O'Bryne Stephenson, Catherine I. Chavarri, Kathleen Diane Lambert, Stephenson, Matthews, Chavarri & Lambert, New Orleans, LA, John M. Bolton, III, Sasser, Bolton, Stidham & Sefton, PC, Montgomery, AL, for Defendant-Appellee.

Markham R. Leventhal, Mitchell D. Sprengelmeyer, Jorden Burt, Miami, FL, for Amicus Curiae.

Before BENAVIDES, CLEMENT and PRADO, Circuit Judges.

BENAVIDES, Circuit Judge

Appellants Darcy and Sally Guidry seek a reversal of the district court's dismissal of their claims against Appellee American Public Life Insurance Company ("APL") pursuant to APL's Motion for Judgment on the Pleadings. For the following reasons, we reverse and remand.


On March 31, 1993, Darcy Guidry applied for an APLIC-3 Cancer and Specified Disease Policy (the "Policy"), which APL issued to him thereafter.1This Policy is a cash benefit policy that provides supplemental coverage to assist in offsetting costs arising out of the treatment of diagnosed cancer and other specified diseases. The Policy contractually obligates APL to pay a set percentage (ranging between 100% and 110%) of the "actual charges" incurred for various treatments.2 The term "actual charges" is not defined in the Policy.

Until August 2001, APL paid "actual charges" benefits based on the "billed amount"--i.e., the amount originally printed on the medical bill. In August 2001, unbeknownst to its insureds, APL changed its payment practices and paid insureds based on one of two methods: (1) paying "actual charges" benefits based on the "actual expenses" incurred by the insured--that is, the reduced amount of the medical bill after any contractual or statutory reductions ("the discounted bill"); or (2) paying the contractually established percentage (e.g. 110%) of 75% of the "billed amount."3

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According to APL, it changed its payment practices "[i]n response to the reality of negotiated discounts by medical providers to the insurers and other responsible third parties." Over the course of many years, a substantial gap developed between the "billed amount" and the actual prices that providers have agreed in advance to accept as payment in full for their medical services, resulting in few patients paying anything close to the "billed amount." According to America's Health Insurance Plans, Inc.'s amicus brief, this phenomenon is due to a combination of two factors: (1) the dramatic increase in the "billed amount" of hospitals and other healthcare providers, and (2) the fact that many insurance carriers have contracts with hospitals which allow their insured to pay a price that is significantly below the billed amount. Consequently, APL realized that it was "overpaying" claims by paying benefits based on the "billed amount," which no longer reflected the expenses incurred by their insureds, and changed its payment practices as described above.

Beginning in 2002, the Guidrys submitted claims to APL for Cancer Treatment Benefits under the Policy. APL's payments to the Guidrys were based on APL's post-August 2001 payment practices. On November 7, 2005, the Guidrys filed a class action petition against APL, asserting a claim for breach of contract and seeking injunctive relief and damages. The Guidrys asserted that APL failed to pay the contractually established percentage of the "actual charges" incurred for medical treatment. APL filed its answer on January 18, 2006. On March 24, 2006, APL filed its Motion for Judgment on the Pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, contending that it performed its contractual duty under the Policy because "actual charges" unambiguously means the amount of the "discounted bill." The district court agreed with APL and granted its motion on June 29, 2006. On July 10, 2006, the Guidrys filed a Motion to Reconsider, which was denied on January 3, 2007. The Guidrys now appeal.


We review a Rule 12(c) motion for judgment on the pleadings de novo. In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007), petition for cert. filed, (U.S. Nov. 26, 2007) (No. 07-713). The standard for deciding a Rule 12(c) motion is the same as a Rule 12(b)(6) motion to dismiss. Id. The court "accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff." Id. (internal quotations omitted). The plaintiff must plead "enough facts to state a claim to...

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