Ake v. Cent. United Life Ins. Co.
| Decision Date | 14 November 2018 |
| Docket Number | Case No. CIV-17-937-R |
| Parties | REBECCA L. AKE, Plaintiff, v. CENTRAL UNITED LIFE INSURANCE COMPANY Defendant. |
| Court | U.S. District Court — Western District of Oklahoma |
Before this Court is Defendant Central United Life Insurance Company's ("Defendant" or "Central United") Motion for Summary Judgment, Doc. 53. Plaintiff has responded, Doc. 57; Defendant has replied, Doc. 62; and the matter is fully briefed and at issue. For the reasons stated herein, the Court GRANTS IN PART and DENIES IN PART Defendant's Motion.
The following facts are undisputed.1 Plaintiff purchased a Cancer Treatment Benefits Policy ("Policy") from Defendant with an effective date of July 15, 1997. Doc.53, at 3; Doc. 53-1. In addition to covering Plaintiff, the Policy also covered her spouse, Larry Ake, through its "family coverage" provisions. Doc. 53, at 3. Mr. Ake was diagnosed with prostate cancer in late 2010. Id. at 4. During Mr. Ake's treatment for cancer, Defendant paid over $100,000 in benefits per the Policy's terms. Id. at 6. Mr. Ake died on March 5, 2016, and Plaintiff brought suit in November of that year,2 asserting causes of action for breach of contract and breach of Defendant's duty of good faith and fair dealing (otherwise known as the tort of "bad faith") relating to claims Defendant denied over the course of Mr. Ake's treatment. See Am. Compl., Doc. 28; Doc. 53, at 4-5; Doc. 57. Specifically, Plaintiff made claims for her husband's treatment with Provenge, an immunotherapy, and treatment relating to blood platelets. Doc. 53, at 4; Doc. 57; Doc. 62, at 4 n. 3. Defendant denied both claims as outside the Policy's coverage. Doc. 53.
Defendant argues that the Policy was "a limited-benefit policy" whose coverage was restricted to its specific terms. See id. at 3. As related to the denied claims, the Policy covered "actual charges for cancericidal chemical substances" and "actual charges made for blood and blood plasma." Doc. 53, at 3-5 (emphasis omitted). Defendant maintains that this Policy language does not encompass the immunotherapy and platelet treatments for which Plaintiff seeks reimbursement. Id. Moreover, Defendant argues that (1) Plaintiff's bad faith cause of action relating to Mr. Ake's Provenge treatment is time-barred; (2) all of Plaintiff's bad faith causes of action are unavailing because the parties have a "legitimatedispute" over the Policy's coverage; and (3) Plaintiff's maximum contract damages for Provenge treatments in 2013 are $18,986.64, pursuant to an amendment Plaintiff signed after the Policy issued. Id. at 7-11; Doc. 53-9.
Plaintiff disagrees. According to her Response brief, she "did not know [the Policy] was a limited benefits policy" and relied on marketing materials and sales agent representations in concluding that the Policy covered all bills in full. See Doc. 57, at 1-3. Based on these representations, Plaintiff asserts that the Policy in fact covers the immunotherapy and platelet treatments at issue, and that Defendant in bad faith denied these claims. Id. at 8-9. As well, Plaintiff argues that her causes of action are not time-barred because she "discovered" them well after the claims were denied, thereby tolling the statute of limitations. Id. at 6-7. Finally, Plaintiff challenges Defendant's maximum contract damages figure; while she seems to acknowledge that Defendant's 2013 calculations are correct, she asserts that she is also owed payments for 2016 and the years prior to 2013, in addition to any remaining benefits for 2013. See id. at 10-11.
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). "The movant bears the initial burden ofmaking a prima facie demonstration of the absence of a genuine issue of material fact and entitlement to judgment as a matter of law." Id. at 670-71 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). "If the movant carries this initial burden, the nonmovant that would bear the burden of persuasion at trial may not simply rest upon its pleadings; the burden shifts to the nonmovant to go beyond the pleadings and 'set forth specific facts' that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant." Id. at 671 (citing Fed. R. Civ. P. 56(e)). In short, the Court must inquire "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Liberty Lobby, 477 U.S. at 251-52.
While the Court construes all facts and reasonable inferences in the light most favorable to the non-moving party, Macon v. United Parcel Serv., Inc., 743 F.3d 708, 712-13 (10th Cir. 2014), "[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the [trier of fact] could reasonably find for the plaintiff." Liberty Lobby, 477 U.S. at 252. At the summary judgment stage, the Court's role is "not . . . to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. at 249.
Defendant moves for summary judgment on Plaintiff's breach of contract and bad faith theories pertaining to two claims denials: (1) Defendant's 2013 denial of Plaintiff'sProvenge claim and (2) Defendant's denial of Plaintiff's platelet therapy claims. The Court address each issue in turn.
Defendant argues that Plaintiff's bad faith cause of action relating to Mr. Ake's Provenge treatment is time-barred under the applicable two-year statute of limitations, 12 O.S. § 95(3).4 Doc. 53, at 7-8. Plaintiff does not seem to contest this statute's applicability, Doc. 57, at 6-7, and Oklahoma case law establishes that this statute covers the tort of bad faith. See Lewis v. Farmers Ins. Co., 1983 OK 100, ¶ 7, 681 P.2d 67, 70; see also Zewdie v. Safeco Ins. Co. of Am., 304 F. Supp. 3d 1101, 1111 (W.D. Okla. 2018). Therefore, the operative question is, "when did Plaintiff's bad faith cause of action accrue?"
Under Oklahoma law, a "statute of limitations 'begins to run when the cause of action accrues' and '[a] cause of action accrues when a litigant could first maintain an action to a successful conclusion.'" Zewdie, 304 F. Supp. 3d at 1112 (alterations original) (quoting Stephens v. Gen. Motors Corp., 905 P.2d 797, 799 (Okla. 1995)). Mr. Ake's Provenge treatment took place in February and March of 2013. See Doc. 53, at 4; Doc. 53-2, at 9. Plaintiff made a claim for this treatment on March 27, 2013, and Defendant denied the claim, asserting that it fell outside the Policy's coverage. See Doc. 53, at 4; Doc. 53-5. Plaintiff, in her deposition, states that she was aware of Defendant's denial by May 6, 2013. Doc. 53-2, at 10. Plaintiff subsequently sent a Request for Assistance to the Oklahoma Insurance Department on June 14, 2013, but the Department replied on July 19, 2013,finding no wrongdoing in Defendant's denial of the claim. Doc. 53-7-53-8. Based on this timeline, Plaintiff's bad faith tort likely accrued on May 6, 2013—the date Defendant denied the claim—but, regardless, the tort accrued no later than July 19, 2013, when the Oklahoma Insurance Department made its determination regarding Defendant's denial.
Plaintiff, however, proposes another accrual period—the months following March 2016, when Plaintiff alleges that a representative of Defendant advised Plaintiff to seek legal advice. See Doc. 57, at 3, 7; see also Doc. 57-10-57-12. Plaintiff asserts this is a straightforward application of the "discovery rule," which "provides that 'the limitations period does not begin to run until the date the plaintiff knew or should have known of the injury.'" Blue v. Universal Underwriters Life Ins. Co., 612 F. Supp. 2d 1201, 1203 (N.D. Okla. 2009) (quoting Samuel Roberts Noble Found., Inc. v. Vick, 840 P.2d 619, 624 (Okla. 1992)). Because she "did not know her rights until she . . . sought advice of counsel," Plaintiff argues that the discovery rule tolled the statute of limitations until this fateful legal meeting. See Doc. 57, at 7.
Quite simply, this is not how the discovery rule works. Such a rule as imagined by Plaintiff would vitiate the concept of statutes of limitations altogether. If these statutes did not run until potential plaintiffs were informed by lawyers that they may have a lawsuit on their hands, then causes of action would seldom, if ever, be time-barred, rendering limitations periods virtually superfluous. Ironically, Plaintiff's primary authority for this argument, Blue v. Universal Underwriters Life Insurance Co., reveals the argument's lack of merit. In Blue, the insured filed a claim for disability coverage with her insurer, on May 7, 2003. 612 F. Supp. 2d at 1202. The insurer denied the claim on December 31, 2003, butthe insured did not sue for bad faith and breach of contract until June 26, 2008. Id. The court found that the insured's bad faith tort was time-barred under 12 O.S. § 95(3), as she had failed to sue within two years of the tort's accrual date: December 31, 2003, the date the insurer denied the claim. Id. at 1203.
The court also rejected the insured's discovery rule argument, similar to the one offered here by Plaintiff. The court recognized that the "statute of limitations is not tolled simply because a plaintiff 'negligently...
To continue reading
Request your trial