Bonewitz v. Cigna Corp.
| Decision Date | 02 October 2015 |
| Docket Number | No. 3:14-cv-02281,3:14-cv-02281 |
| Parties | PETER BONEWITZ, PLAINTIFF, v. CIGNA CORPORATION, et. al., DEFENDANTS. |
| Court | U.S. District Court — Middle District of Tennessee |
Judge Trauger/Bryant
For the reasons stated below, the Magistrate Judge RECOMMENDS that Defendants' Motion to Dismiss (Docket Entry 35) be GRANTED.
Plaintiff's Complaint was originally filed in the Circuit Court for Davidson County, Tennessee on October 14, 2014. (Docket Entry 1-1). Defendants Cigna Corporation (Cigna), Connecticut General Life Insurance Company (Connecticut General), and Zotec Partners, LLC (Zotec) removed the action to this Court on November 20, 2014. (Docket Entry 1). The case was later referred to the Magistrate Judge. (Docket Entry 5 and 13).
On January 5, 2015, Defendant Zotec filed an Answer, and Defendants Cigna and Connecticut General filed a joint Motion to Dismiss. (Docket Entry 33 and 35). Plaintiff did not respond to the Motion to Dismiss.1 Subsequently, Plaintiff filed a Motion to Extend Deadlines and a Motion to Amend the Complaint. (Docket Entry 54 and 64). The Magistrate Judge deniedboth motions. (Docket Entry 67 and 68). Pending before the Court is Defendants' Motion to Dismiss. (Docket Entry 35).
A motion to dismiss based on lack of standing is appropriately brought under Fed. R. Civ. P. 12(b)(1) because standing is a jurisdictional matter, "and a plaintiff's lack of standing . . . deprive[s] a court of jurisdiction." Ward v. Alternative Health Delivery Sys., Inc., 261 F.3d 624, 626 (6th Cir. 2001) (citations omitted).
When analyzing a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the Court must construe the complaint in the light most favorable to the plaintiff and accept the plaintiff's factual allegations as true. Gunasekera v. Irwin, 551 F.3d 461, 466 (6th Cir. 2009). "Bare assertions of legal conclusions" are not enough to avoid dismissal. Tahfs v. Proctor, 316 F.3d 584, 590 (6th Cir. 2003) (citation omitted). To survive a motion to dismiss, the complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bridge v. Ocwen Fed. Bank, FSB, 681 F.3d 355, 358 (6th Cir. 2012) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The facts alleged by the plaintiff must "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). When presented with a pro se complaint, the court should liberally construe it and hold it "to less stringent standards than the formal pleadings prepared by attorneys." Bridge, 681 F.3d at 358.
The court may properly consider "exhibits attached to [the] defendant's motion to dismiss so long as they are referred to in the complaint and are central to the claims contained therein,without converting the motion [to dismiss] to one for summary judgment." Rondigo, L.L.C. v. Twp. of Richmond, 641 F.3d 673, 680-81 (6th Cir. 2011) (citation omitted).2
Plaintiff alleges that "Cigna, by colluding with Zotec . . . , has been able to manipulate the coding on tens of millions of records" in a scheme to "artificially influence member premiums through incentives, strategic claims acceptance, and exploiting weaknesses in the ICD-93 coding tool." (Docket Entry 1-1, p. 5-6, 10, 21). More specifically, Plaintiff alleges that Cigna is making health care premiums rise artificially by "[s]trategically accepting claims for Male Hypogonadism or 'Low-T' [testosterone treatments] based on known unstable testing and interpretation methods, and using a faulty and inadequate coding system." (Docket Entry 1-1, p. 25).
In 2011, Plaintiff worked for Zotec as a business intelligence analyst and data warehouse developer. (Docket Entry 1-1, p. 33). He believes that Zotec's business model is "based on a scheme to commit fraud." (Docket Entry 1-1, p. 33). In support of this allegation, Plaintiff states that while he was employed by Zotec, the company used improper coding practices, did not require phone representatives to take notes when discussing billing disputes, did not log or track billing disputes, concealed diagnosis codes in bills, used an automated phone system to discourage complaints, and used psychological tactics and hiring methods to prevent employeesfrom discovering fraud. (Docket Entry 1-1, p. 33-38). After Plaintiff confronted his manager about these concerns, Plaintiff's employment was terminated. (Docket Entry 1-1, p. 39).
Thereafter, Plaintiff worked for NewQuest, LLC (NewQuest)4 and participated in its welfare benefit plan (Plan) from March or April 2012 to October 2012. (Docket Entry 1-1, p. 26 and 31; 36, p. 3 and 16). Although "NewQuest did not sponsor its own medical plan, NewQuest participated in the HealthSpring, Inc. Group Welfare Plan, an employee welfare benefit plan under ERISA." (Docket Entry 36, p. 3; 37-1, p. 7). Connecticut General was a third-party administrator for the Plan. (Docket Entry 36, p. 4; 37-2, p. 6; 37-3).
Through the Plan, Plaintiff received testosterone treatments. (Docket Entry 1-1, p. 27). He did not have an "issue getting treatment or having the claim submitted for insurance coverage through CIGNA." (Docket Entry 1-1, p. 27). Plaintiff became concerned that Cigna covered the treatments as "medically necessary" even though the clinics Plaintiff had visited had not followed the appropriate protocols.5 (Docket Entry 1-1, p. 27). Plaintiff "believed, based on this experience and his previous experiences and knowledge, that CIGNA was accepting and paying the claims [for low testosterone treatment] not out of medical necessity or generosity, but in order to artificially increase risk and raise premiums for everyone." (Docket Entry 1-1, p. 28). Plaintiff alleges that he brought his concerns to Cigna, was terminated as a result, and filed a wrongful termination complaint. (Docket Entry 1-1, p. 28-31). The termination suit was later dismissed by this Court in Bonewitz v. NewQuest, LLC, No. 3:14-CV-00096, 2015 WL 1825375 (M.D. Tenn. Apr. 22, 2015).
Plaintiff sets forth the following causes of action: (1) consumer fraud; (2) wire fraud pursuant to 29 U.S.C. § 1105; (3) fraud in the inducement; (4) negligence; (5) breach of fiduciary duty; (6) breach of fiduciary duty to an ERISA plan; (7) breach of contract; and (8) breach of promises. (Docket Entry 1-1, p. 42-61).
As an initial matter, Plaintiff cannot maintain a claim for wire fraud. (Docket Entry 1-1, p. 47). Liberally construing the claim, the Magistrate Judge finds that Plaintiff attempts to state a claim under 18 U.S.C. §§ 1341 and 1343, which are federal mail and wire fraud statutes.6 "Violations of [18 U.S.C. §§ 1341 and 1343], however, do not give rise to private causes of action." Morganroth & Morganroth v. DeLorean, 123 F.3d 374, 386 (6th Cir. 1997) (citation omitted). For this reason, Plaintiff's claim of wire fraud should be dismissed.7
Liberally construing Plaintiff's Complaint, the Magistrate Judge finds that Plaintiff's claim for "Breach of Fiduciary Duty to an ERISA Plan" is brought under 29 U.S.C. § 1132(a)(3), which provides that:
[A] participant, beneficiary, or fiduciary [may bring a civil action] (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.
29 U.S.C. § 1132(a)(3).8 Again, liberally construing the Complaint, the Magistrate Judge finds that Plaintiff alleges violations under 29 U.S.C. §§ 1104 and 1105 for breach of fiduciary or co-fiduciary duties. Plaintiff alleges that Defendant Cigna "owed a fiduciary duty to Plaintiff to maintain transparency of its actions including contractual agreements and to diligently find fraud even if it meant premiums would go down." (Docket Entry 1-1, p. 57). Plaintiff argues that Cigna breached its fiduciary duty by failing to: (1) "ensur[e] that the medical billing industry is using coding processes following best practices and ensuring that members are able to effectively dispute claims"; (2) "upgrade its provider network to ICD-10"; (3) "disclose contract incentives that may exist"; (4) "handle internal fraud investigations"; (5) "properly address or respond to concerns of fraud brought by an employee"; and (6) "track medical billing companies in order to make fraud detection more efficient." (Docket Entry 1-1, p. 57).
Plaintiff also argues that he suffered economic injury, including "the amount of the difference between the price [Plaintiff] paid for Cigna's insurance premiums . . . and the diminished value reflecting premiums that were established as a result of unethical and unscrupulous practices." (Docket Entry 1-1, p. 57-58). Plaintiff seeks injunctive relief, restitution, punitive damages, costs, and attorneys' fees. (Docket Entry 1-1, p. 58).
It is well settled that the relief available under 29 U.S.C. § 1132(a)(3) is limited to remedies "traditionally viewed as 'equitable,' such as injunction or restitution." Allinder v. Inter-City Products Corp. (USA), 152 F.3d 544, 552 (6th Cir. 1998) (quoting Mertens v. Hewitt Associates, 508 U.S. 248, 255 (1993)) (internal quotation removed); see also Loren v. Blue Cross & Blue Shield of Mich., 505 F.3d 598, 609 (6th Cir. 2007). Legal restitution; i.e., monetary damages, is not available under § 1132(a)(3). Cent. States, Se. & Sw. Areas Health & Welfare Fund v. First Agency, Inc., 756 F.3d 954, 960 (6th Cir. 2014). Equitable restitution may be available under this section if the...
To continue reading
Request your trial