Mark Ibsen, Inc. v. Caring for Montanans, Inc.

• Citation: 2016 MT 111,371 P.3d 446,383 Mont. 346
• Decision Date: 11 May 2016
• Docket Number: No. DA 15–0205.,DA 15–0205.
• Parties: Mark IBSEN, INC., d/b/a Urgent Care Plus, on behalf of itself and all those similarly situated, Plaintiff and Appellant, v. CARING FOR MONTANANS, INC., f/k/a Blue Cross and Blue Shield of Montana, Inc., and Health Care Service Corp., and John Does I–X, Defendants and Appellees.
• Court: Montana Supreme Court

383 Mont. 346

371 P.3d 446

2016 MT 111

Mark IBSEN, INC., d/b/a Urgent Care Plus, on behalf of itself and all those similarly situated, Plaintiff and Appellant,

v.CARING FOR MONTANANS, INC., f/k/a Blue Cross and Blue Shield of Montana, Inc., and Health Care Service Corp., and John Does I–X, Defendants and Appellees.

No. DA 15–0205.

Supreme Court of Montana.

Argued and Submitted Feb. 24, 2016.

Decided May 11, 2016.

For Appellant: John M. Morrison (argued), Linda M. Deola, Morrison Sherwood Wilson & Deola, PLLP, Helena, Montana, John Heenan, Bishop & Heenan, Billings, Montana.

For Appellees: Michael F. McMahon (argued), Stefan T. Wall, McMahon, Wall & Hubley, PLLC, Helena, Montana, (Attorneys for Caring for Montanans, Inc.), Stan Kaleczyc (argued), Kimberly A. Beatty, Christy S. McCann, Browning, Kaleczyc, Berry & Hoven, P.C., Helena, Montana, (Attorneys for Health Care Service Corp.).

For Amici: Jesse Laslovich, Chief Legal Counsel, Lucas Hamilton, Legal Intern, Office of the Commissioner of Securities and Insurance, Montana State Auditor, Helena, Montana, (Attorney for Montana State Auditor), Lawrence A. Anderson, Attorney at Law, P.C., Great Falls, Montana, (Attorney for Montana Trial Lawyer Association's).

Justice PATRICIA COTTER

delivered the Opinion of the Court.

¶ 1 Mark Ibsen, Inc., doing business as Urgent Care Plus (hereinafter Ibsen), owned and operated the Urgent Care Plus medical clinic in Helena, Montana. The clinic employed numerous employees and was a small business member of the Montana Chamber of Commerce. Ibsen purchased health insurance coverage for its employees from Blue Cross and Blue Shield of Montana (BCBSMT) through the Chamber of Commerce's program known as “Chamber Choices.” In July 2013, Health Care Service Corporation (Health Care) acquired BCBSMT's existing health insurance business and BCBSMT changed its name to Caring for Montanans, Inc. (Caring). In April 2014, Ibsen filed a complaint and class action against Caring and Health Care alleging that they had violated the Unfair Trade Practices Act (UTPA or the Act) by charging Ibsen and other similarly situated employers, excessive premiums and using the excess collections to pay kickbacks to the Chamber of Commerce. Following removal to federal court and a remand back to the First Judicial District Court, Helena, Montana, in March 2015, the District Court granted Health Care's motion to dismiss and Caring's motion for summary judgment. The court determined that the UTPA did not provide private litigants such as Ibsen with a private right of action to seek enforcement of the Act. Ibsen appeals. We affirm.

ISSUE

¶ 2 The issue on appeal is whether Ibsen may maintain a private right of action for violation of §§ 33–18–208 and –212, MCA

, of the UTPA, or, in the alternative, whether Ibsen's claims can be sustained as common law claims.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 For several years and until December 2015, Ibsen owned and operated the Urgent Care Plus Clinic in Helena, Montana. Ibsen became a small business member of the Montana Chamber of Commerce and during 2011, 2012, and 2013, it elected to provide health insurance coverage for its employees through a Chamber program known as “Chamber Choices.” It chose BCBSMT, a “Chamber Choice” vendor, as its provider and paid monthly premiums to BCBSMT.

¶ 4 In accordance with applicable oversight statutes, the Montana Department of Insurance (MDOI) conducted a Market Conduct Examination of BCBSMT in which it reviewed the insurer's business practices between July 1, 2006, and December 31, 2010. In February 2014, the Montana State Auditor issued an Order fining BCBSMT $250,000 for numerous discrepancies, including improper medical premium billing in violation of Unfair Trade Practices §§ 33–18–208 and –212, MCA

. Caring did not challenge or appeal the fine and paid it within the required 30–day payment period.

¶ 5 In April 2014, Ibsen filed a “Complaint Putative Class Action” against Caring and Health Care. An amended complaint was filed shortly thereafter. Ibsen alleged that from 2007 through 2012, BCBSMT violated § 33–18–212, MCA

, by improperly charging consumers padded premiums that included undisclosed amounts exceeding the medical premium. It claimed that BCBSMT used the overcharges to provide kickbacks to the Chamber of Commerce, the organization that marketed BCBSMT's insurance plan to its members. It further argued that these kickbacks were given to ensure that BCBSMT remained as a “Chamber Choice” provider and thus were in violation of § 33–18–208, MCA.

¶ 6 In addition to asserting class allegations, the amended complaint set forth the following four counts:

Count I —Breach of Fiduciary Duty:

Ibsen claimed that Caring and Health Care owed it and the putative class fiduciary duties under the UTPA that it breached by “collecting excessive and/or improper medical premiums and by paying rebates in violation of the Montana Insurance Code [MIC].” Ibsen asserted that it and the class were injured by these breaches and were entitled to appropriate relief.

Count II —Unfair/Deceptive Trade Practices/Violation of Insurance Billing Statutes:

Ibsen maintained that BCBSMT violated §§ 33–18–208 and –212, MCA

, by charging and collecting improper and excessive medical premiums from it and the class and by paying kickbacks. It claimed that BCBSMT's conduct was an unfair and/or deceptive trade practice under Title 33. Ibsen sought appropriate relief, treble damages, and reasonable attorney's fees.

Count III —Breach of Contract:

Ibsen alleged that it and the class entered into written insurance contracts with BCBSMT and that these contracts “impliedly” contained all sections of the Montana Insurance Code, including §§ 33–18–208 and –212, MCA

. Ibsen asserted that under the contracts, BCBSMT “implied and covenanted that it would act in good faith and follow the law and the contracts with respect to its billing practices.”

Count IV —Unjust Enrichment:

Lastly, Ibsen declared that BCBSMT's collection of premiums and fees beyond those authorized by applicable law and the payment of rebates to secure business for itself were violations of the MIC and constituted unjust enrichment. It requested that BCBSMT be disgorged of all excessive premiums collected and that those funds be returned to the class members.

¶ 7 Caring promptly filed a Notice of Removal from the First Judicial District Court to the United States District Court for Montana. Caring asserted that Ibsen's claim fell within the scope of § 502(a) of the Employee Retirement Income Security Act of 1974 (ERISA) and consequently should be decided in federal court. Ibsen countered with a motion to remand to District Court arguing that its complaint raised state law claims similar to those adjudicated in the federal decision, Fossen v. Blue Cross & Blue Shield of Mont., 660 F.3d 1102 (9th Cir.2011)

, in which the court held that almost-identical state claims were not completely preempted by federal law. Without legal analysis or ruling on other pending motions, in June 2014, the federal court granted Ibsen's motion and remanded the case to the District Court.

¶ 8 In rendering its March 2015 ruling on the motions to dismiss and for summary judgment, the District Court held that the legislature did not provide private citizens with the right to bring a cause of action to enforce §§ 33–18–208 and –212, MCA

. The court noted that § 33–18–242, MCA, offers the sole statutory exception to the Commissioner's exclusive authority to enforce the UTPA by allowing “insureds” to assert claims involving “claims handling or settlement practices.” The District Court reasoned that because Ibsen was not an insured nor was it asserting a cause of action based upon claims handling or settlement practices, § 33–18–242, MCA

, has no application.

¶ 9 Ibsen asserted that three of its four claims were common law claims rather than statutory claims brought under the UTPA. The District Court disagreed. The court pointed out that “Count II clearly alleges a statutory violation and purports to allow [Ibsen] to enforce the two provisions of the insurance code ( [S]ections –208 and –212).” It therefore held that “Count II ... is strictly and explicitly a statutory claim [and] is not allowed to be brought by private claimants.” The District Court also invoked Ibsen's assertions in the federal court proceeding that its “several causes of action” were “all based on violations of the two insurance code sections.” Consequently, the District Court held that each remaining count set forth in the Complaint was not a common law claim. Citing § 33–1–311(1), MCA

, the “General powers and duties” section of the MIC, the court found that the clear intent of the legislature is that the insurance code is to be enforced by the insurance commissioner and not private litigants, with exceptions not applicable to this case.

¶ 10 Ibsen filed a timely appeal. The Montana Commissioner of Insurance (Commissioner) and the Montana Trial Lawyers Association (MTLA) have filed amicus briefs in support of Ibsen.

STANDARD OF REVIEW

¶ 11 We review a district court's summary judgment ruling de novo, applying the same rule, M. R. Civ. P. 56(c)(3)

, that a district court does when ruling on summary judgment. Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” M. R. Civ. P. 56(c)(3) ; Victory Ins. Co. v. Mont. State Fund, 2015 MT 82, ¶ 10, 378 Mont. 388, 344 P.3d 977 (internal citations omitted).

¶ 12 We review a district court's ruling on a motion to dismiss under the standards set forth in M. R. Civ. P. 12(b)(6)

. A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him to relief. A district court's determination that a complaint has failed to...