Chiron Recovery Ctr., LLC v. United Healthcare Servs., Inc.

Decision Date07 February 2020
Docket NumberCASE NO. 9:19-CV-80766-ROSENBERG/REINHART
Citation438 F.Supp.3d 1346
Parties CHIRON RECOVERY CENTER, LLC, et al., Plaintiffs, v. UNITED HEALTHCARE SERVICES, INC. & United Healthcare Insurance Company, Defendants.
CourtU.S. District Court — Southern District of Florida

Eric Matthew Yesner, Irwin R. Gilbert, Jimmy Wayne Mintz, Conrad & Scherer, LLP, Fort Lauderdale, FL, for Plaintiffs Chiron Recovery Center, LLC

Irwin R. Gilbert, Conrad & Scherer, LLP, Fort Lauderdale, FL, for Plaintiff D.T.

Jimmy Wayne Mintz, Irwin R. Gilbert, Conrad & Scherer, LLP, Fort Lauderdale, FL, for Plaintiffs A.R.

Andrew Michael Loewenstein, David Ira Spector, Darcie Ahern-Sweet Thompson, Holland & Knight LLP, West Palm Beach, FL, Sandra Lynn Heller, Holland & Knight LLP, Fort Lauderdale, FL, for Defendant United Healthcare Services, Inc.

Sandra Lynn Heller, Holland & Knight LLP, Fort Lauderdale, FL, David Ira Spector, Holland & Knight LLP, West Palm Beach, FL, for Defendant United Healthcare Insurance Company.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

ROBIN L. ROSENBERG, UNITED STATES DISTRICT JUDGE

This cause is before the Court on Defendants' Motion to Dismiss [DE 61]. The Motion has been fully briefed. For the reasons set forth below, the Motion is granted and this case is dismissed with prejudice.

I. FACTUAL ALLEGATIONS & BACKGROUND

This matter originated in case 18-CV-81761, styled as Chiron Recovery Center, LLC v. United Health Group, Inc. ("Chiron I "). The plaintiff in Chiron I , Chiron Recovery Center, is a medical service provider. Chiron initiated that action because of a fee dispute with the defendant United Health Group. Stated succinctly, United initially paid certain benefits (on behalf of various insureds) to Chiron in connection with treatment that Chiron provided. Later, however, United determined that it had overpaid and, as a result, United applied certain offsets towards future payments to Chiron. As a result, Chiron filed Chiron I , alleging that United's offsets were improper and that United's conclusion that it had overpaid was in violation of the governing insurance plans. During Chiron I , it became apparent that Chiron did not possess all of the insurance plans at issue. After an adverse discovery ruling wherein discovery was stayed, Chiron initiated the instant lawsuit.1 This lawsuit seeks to obtain the insurance plans that were missing in Chiron I.

Chiron is not the only Plaintiff in this suit; utilizing a power of attorney, Chiron has also brought this suit on behalf of many insureds. United and a related company are both Defendants in this suit and in Chiron I. After Plaintiffs filed suit, Defendants filed a motion to dismiss. The Court referred the motion to the Honorable Magistrate Judge Bruce E. Reinhart for a Report and Recommendation. Judge Reinhart concluded that Plaintiffs' Complaint should be dismissed. Over objection, the Court adopted Judge Reinhart's Report and dismissed Plaintiffs' Complaint with leave to amend. Important to this case is the fact that while the Court permitted Plaintiffs to amend their Complaint, the Court ruled that Plaintiffs could not add new parties or new claims. After Plaintiffs filed their Amended Complaint, Defendants filed a new motion to dismiss. That motion to dismiss is the motion pending before the Court.

II. STANDARD OF REVIEW

When deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), this Court must accept all factual allegations in a complaint as true and take them in the light most favorable to the plaintiff; however, a plaintiff is still obligated to provide grounds of his or her entitlement to relief which requires more than labels, conclusions and a formulaic recitation of the elements of a cause of action. Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 561-563, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Unwarranted deductions of fact in a complaint cannot be admitted as true for the purposes of testing the sufficiency of the allegations. Aldana v. Del Monte Fresh Produce, N.A., Inc. , 416 F.3d 1242, 1248 (11th Cir. 2005). The facts as pled must state a claim for relief that is plausible on the face of the pleading. Ashcroft v. Iqbal , 556 U.S. 662, 678-79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

III. ANALYSIS

Defendants request that the Amended Complaint be dismissed with prejudice. In support of their request, Defendants make a variety of arguments including: (A) the Amended Complaint fails to comply with the Court's prior order of dismissal, (B) the Amended Complaint fails to correct the deficiencies identified in the court's prior order of dismissal, and (C) the Amended Complaint fails to state a claim as a matter of law. The Court discusses each of these issues in turn. Because the Court concludes that the Amended Complaint should be dismissed, the Court also discusses (D) whether the Amended Complaint should be dismissed with or without prejudice.

A. The Amended Complaint's Compliance with the Court's Prior Order of Dismissal

In the Court's Order Dismissing Plaintiffs' Complaint at docket entry 47, the Court granted Plaintiffs leave to amend. In permitting Plaintiffs leave to amend, however, the Court expressly stated, in bold: "Plaintiffs may not add additional plaintiffs or claims ." DE 47 at 2. Two days before Plaintiffs' amended complaint was due, Plaintiff filed an expedited motion for leave to file amended complaint and motion for clarification, attaching their proffered amended complaint. DE 48. At no point in Plaintiffs' motion did Plaintiffs request leave of the Court to add additional plaintiffs. The Court ruled on the relief requested by Plaintiffs as follows:

PAPERLESS ORDER denying 48 Plaintiffs' Motion for Leave to File Proposed Amended Complaint. The new defendants and claims that Plaintiffs seek to add will unnecessarily complicate this proceeding, the core issue of which is whether Defendant United Healthcare is required under ERISA to provide Plaintiffs with certain plan information. Thus, the Court exercises its discretion under Fed. R. Civ. P. 1, which requires courts to employ the Federal Rules of Civil Procedure to secure the just, speedy, and inexpensive resolution of actions, and declines to permit Plaintiffs to add the following: (1) seven employer defendants with ERISA claims against those defendants, and (2) three claims against United Healthcare for breach of fiduciary duty. Plaintiffs shall file an Amended Complaint, omitting the seven employer defendants and the three breach of fiduciary duty claims, by no later than December 12, 2019.

DE 55. When Plaintiffs filed their amended complaint, however, Plaintiffs added six new individual Plaintiffs. DE 61 at 3 (containing a list of the newly-added Plaintiffs). Plaintiffs also brought approximately sixteen new claims—claims seeking injunctive relief. Defendants argue that Plaintiffs' Amended Complaint should be dismissed because the Amended Complaint fails to comply with the Court's prior dismissal.

In response, Plaintiffs argue that the Court knew that they intended to add more parties and that the Court approved Plaintiffs' request. That is wrong for several reasons. First, the Court's ruling in no way granted Plaintiffs such permission. DE 55. Second, the Court's prior order of dismissal could not be clearer as it stated, in bold, that Plaintiffs were not to add any new parties or claims. DE 47. Third, Plaintiffs' motion for leave to amend and motion for clarification contained no discussion on this topic. Fourth, for authority that the Court granted Plaintiffs permission, Plaintiffs cite to a footnote in their reply. DE 50 at 2 n.1. But a party may not request new relief in a reply, Local Rule 7.1(c),2 and, furthermore, Plaintiffs' footnote did not contain a complete summary of the newly-added Plaintiffs and claims. In conclusion, (i) the Court's order of dismissal (prohibiting new parties or claims) was abundantly clear, (ii) Plaintiffs' motion for leave to amend and clarification did not seek leave to add new parties, (iii) the Court denied Plaintiffs' motion, (iv) the Court's denial did not affirmatively grant Plaintiffs leave to add additional parties or claims, (v) the Court was not on notice of Plaintiffs' unilateral understanding that it was seeking relief not specified in its motion, and, as a result, (vi) Plaintiffs' Amended Complaint violated the orders of this Court.

B. The Amended Complaint's Correction of Pleading Deficiencies

The Court's prior order of dismissal adopted the Report and Recommendation of Magistrate Judge Bruce. E. Reinhart. Pursuant to that adoption, the Court dismissed Plaintiffs' Complaint on the grounds that the Complaint did not plausibly allege that Chiron instituted this action, using a power of attorney, for the benefit of the individual Plaintiffs :

An attorney-in-fact may not act for its own benefit; it must only act for the benefit of its principal. See In re Estate of Bell , 573 So. 2d 57, 59 (Fla. Dist. Ct. App. 1990) (power of attorney did not authorize agent to use principal's funds for her own personal benefit); see also Martin v. Sealey , 1985 WL 1177602, at *2 (Terr. V.I. Feb. 7, 1985) ("Absent specific authority to do otherwise, an attorney in fact may act only for the benefit of the principal.") (citing Restatement (Second) of Agency § 39 ). So, the POA authorizes Chiron to bring this action under Section 1024(c) only if doing so is related to obtaining insurance payments for the benefit of the Individual Plaintiffs.
The existing Complaint does not contain sufficient facts to establish a plausible claim that obtaining the plan documents will benefit the Individual Plaintiffs, as opposed to benefiting Chiron. The sole factually relevant portion of the Complaint is Paragraph 61, which states:
These Plaintiffs have brought an eleven-count action against UHC, its parent company, and UBH for a number of claims under ERISA and state-law claims. See Case No. 9:18-cv-81761-RLR. The crux of the case against UHC is summed up by
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