Aurzadniczek v. Humana Health Plan, Inc.

• Decision Date: 23 February 2016
• Docket Number: Civil Action No. 15-cv-00146-RM-KMT
• Parties: PIOTR AURZADNICZEK aka PETE AURZADNICZEK, and JAMIE BEARD, Plaintiffs, v. HUMANA HEALTH PLAN, INC., HUMANA INSURANCE COMPANY, and EHEALTHINSURANCE SERVICES, INC. dba EHEALTH, Defendants.
• Court: U.S. District Court — District of Colorado

PIOTR AURZADNICZEK aka PETE AURZADNICZEK,and JAMIE BEARD, Plaintiffs, v. HUMANA HEALTH PLAN, INC.,

HUMANA INSURANCE COMPANY, and

EHEALTHINSURANCE SERVICES, INC. dba EHEALTH, Defendants.

Civil Action No. 15-cv-00146-RM-KMT

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

February 23, 2016

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

Magistrate Judge Kathleen M. Tafoya

This case comes before the court on "Defendants Humana Health Plan, Inc. and Humana Health Insurance Company's Motion to Dismiss Plaintiffs' Amended Complaint (Doc. 27)." (Doc. No. 41 ["Humana Mot."], filed March 16, 2015). Plaintiffs filed a "Brief in Response to Defendants Humana Health Plan, Inc. and Humana Health Insurance Company's Motion to Dismiss Amended Complaint (Dkt # 41)" (Doc. No. 45 ["Resp. Hum."], filed March 20, 2015) and Humana filed "Humana Defendants' Reply in Support of Their Motion to Dismiss Plaintiffs' Amended Complaint." (Doc. No. 55 ["Hum. Reply"], filed on April 2, 2015.) Plaintiffs filed an unauthorized surreply on April 27, 2015. (Doc. No. 62.)

Also before the court is eHealthinsurance Services, Inc. d/b/a eHealth's ("eHealth") "Motion to Dismiss Plaintiffs' Amended Complaint." (Doc. No. 42 ["eHealth Mot."], filed March 16, 2015.) Plaintiffs filed their "Brief in Response to Defendant eHealth's Motion to Dismiss Plaintiffs' Amended Complaint (Dkt # 42)" (Doc. No. 46 ["Resp. eHealth"], filed on March 20, 2015), to which eHealth replied. (Doc. No. 58 ["Reply eHealth"], filed on April 3, 2015.) Plaintiffs filed an unauthorized surreply on April 27, 2015. (Doc. No. 63.)

The Local Rules of this district do not contemplate surreplies, no matter how entitled by the submitting party, see LCvR 7.1(d), and Plaintiffs neither sought nor obtained leave to file surreplies in this matter. However, this court allowed oral argument on both motions on June 9, 2015 and took the motions under advisement. The surreplies were not stricken by the court at the time of oral argument and there is no compelling reason to strike them now. Therefore, the court will consider the arguments therein.

The issues are now ripe for recommendation to the District Court. Both Defendants request dismissal of all claims against them alleging Plaintiffs' failure to state a claim, pursuant to Fed. R. Civ. P. 12(b)(6).

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may move to dismiss a claim for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted." Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir. 2003) (citations and quotation marks omitted).

"A court reviewing the sufficiency of a complaint presumes all of plaintiff's factual allegations are true and construes them in the light most favorable to the plaintiff." Hall v.Bellmon, 935 F.2d 1106, 1198 (10th Cir. 1991). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility, in the context of a motion to dismiss, means that the plaintiff pleaded facts which allow "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. The Iqbal evaluation requires two prongs of analysis. First, the court identifies "the allegations in the complaint that are not entitled to the assumption of truth," that is, those allegations which are legal conclusion, bare assertions, or merely conclusory. Id. at 679-81. Second, the Court considers the factual allegations "to determine if they plausibly suggest an entitlement to relief." Id. at 681. If the allegations state a plausible claim for relief, such claim survives the motion to dismiss. Id. at 679.

Notwithstanding, the court need not accept conclusory allegations without supporting factual averments. Southern Disposal, Inc., v. Texas Waste, 161 F.3d 1259, 1262 (10th Cir. 1998). "[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S at 678. Moreover, "[a] pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.' Nor does the complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (citation omitted). "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of 'entitlement to relief.'" Id. (citation omitted).

In evaluating a Rule 12(b)(6) motion to dismiss, courts may consider not only the complaint itself, but also attached exhibits and documents incorporated into the complaint by reference. Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009) (citations omitted) ("the district court may consider documents referred to in the complaint if the documents are central to the plaintiff's claim and the parties do not dispute the documents' authenticity.")

FACTUAL BACKGROUND

The following facts are taken from Plaintiffs' Amended Complaint [Doc. No. 27] ("Am.Compl.") and relevant attached or referenced documents¹ unless otherwise noted. On December 9, 2013, Ms. Beard saw advertising on eHealth's website for a health insurance policy offered by Humana. (Am.Compl. ¶ 7.) Ms. Beard applied for insurance and completed the payment authorization form on Defendant eHealth's website, which advised Applicant Beard that the monthly premium would be $363.49 per month. (Id. ¶ 9; Resp. Hum., Ex. 1, Humana Individual Insurance Application [Doc. No. 45-1] ("Application") and Ex. 2, Payment Authorization & Association Enrollment [Doc. No. 45-2] ("Beard Payment Authorization") (bank information redacted.)) Ms. Beard applied for health insurance coverage for herself, Mr. Aurzadniczek, and their son. (Am.Compl. ¶ 7.) On page five, the Application explained, "If this application for coverage is accepted, coverage will be effective on the date specified by Humana on the policy. Unless Humana agrees to an earlier date, the effective date for sickness begins onthe 15th day after the approved effective date of the policy." (Id. ¶ 8; Application at 5.) The clause appeared under the bold-typed heading, "True and Complete Acknowledgment," within a paragraph containing other information and was not itself highlighted, nor was the language displayed in bold typeface, and its text size was the same as surrounding text. Id.

On December 10, 2013, eHealth sent two emails to Ms. Beard advising that her application for insurance had been approved. (Id. ¶ 10.) The first email said in part, "Congratulations! Humana has approved your health insurance application. Your coverage will be effective as of 12-10-2013." (Id.; Resp. Hum., Ex. 8 [Doc. No. 45-8] ("eHealth email #1").) The second email stated "You've been approved!" and also stated, "Your coverage will be effective as of 12-10-2013." (Id.; Resp. Hum., Ex. 3 [Doc. No. 45-3] ("eHealth email #2).)

On December 14, 2013, Humana sent two confirming letters to Ms. Beard informing her that her policy was effective December 10, 2013. (Am.Compl. at ¶ 12; Resp. Hum., Ex. 4 [Doc. No. 45-4] ("Messer letter") and Ex. 5 [Doc. No. 45-5] ("DeRaleau letter".)) Neither letter specifically mentioned a bodily injury effective date nor a sickness effective date. Both letters discussed the regular monthly premium of $363.49. The Messer letter primarily concerned the payment of premium and the source of the electronic payments and stated that the monthly premium for December would be a "[p]ro-rated Payment from 12/10/2013 to 12/31/13" of $257.96. The DeRaleau letter advised that "Health Insurance Policy No. 5328B4, Personal Insurance Identification Cards [and] An explanation of your payment"² were attached and furtheradvised Ms. Beard, "Please log on to Humana.com to view your certificate/policy and log on to info.humana-one.com to view all other plan documents." (Id. (emphasis in original).)

The insurance policy issued by Humana to Plaintiffs is attached to the Amended Complaint collectively at Doc. Nos. 27-2, 27-3, 27-4, 27-5, 27-6 and 27-7. The face page of the Policy clearly states on page 1:

  Policy holder:  BEARD JAMIE L  Policy number:  5328B4  Effective date:   Bodily injury:  12/10/2013  Sickness:  12/25/2013  Initial Premium amount  $363.49 Monthly 

(Doc. No. 27-2 at 2.) The Policy number referenced in the DeRaleau letter matches the number on the Policy itself.

At an unspecified time, Plaintiff Aurzadniczek felt a lump on his left testicle. On December 19, 2013, he went to see Dr. John Logan. (Am.Compl. ¶ 13.) That same day, the doctor sent Mr. Aurzadniczek for imaging. (Id. ¶ 14.) The imaging revealed that Mr. Aurzadniczek had a mass on his scrotum that was "concerning for malignancy." (Id.) Mr. Aurzadniczek was scheduled for surgery on December 20, 2013 but the surgery was thereafter"rescheduled for after December 25, 2013 due to the provider's unwillingness to perform the surgery earlier because of the said policy's purported December 25, 2013 sickness effective date." (Id.)

Plaintiff Aurzadniczek was ultimately diagnosed as having embryonal carcinoma of the left testicle. (Id.) Between December 26, 2013 and March 14, 2014, Mr. Aurzadniczek received supplemental care related to his condition and submitted 93 claims to Humana totaling $206,530.82. (Id. ¶¶ 15-16.) Humana denied the claims for services rendered on December 19, 2013, determining that these were "[s]...