Mattson v. Aetna Life Ins. Co.

Decision Date31 August 2015
Docket NumberCivil Action No. 14–6809 (JEI/KMW).
Citation124 F.Supp.3d 381
Parties Joan MATTSON and Eric Mattson, individually and as a class representative on behalf of others similarly situated Plaintiffs, v. AETNA LIFE INSURANCE CO. d/b/a Aetna, Inc., the Rawlings Company, LLC d/b/a/ the Rawlings Group, S.N.J. Regional Employee Benefit Fun, Cooper University Health Care d/b/a Cooper University Hospital and d/b/a Cooper Hospital/University Medical Center and d/b/a Cooper University Physicians, and John Doe Individuals and Business 1–20, Defendants.
CourtU.S. District Court — District of New Jersey

Law Office of Lewis Adler by Lewis G. Adler, Esq., Woodbury, NJ, for Plaintiffs.

Lowey Dannenberg Cohen & Hart PC by Uriel Rabinovitz, Esq., White Plains, NY, Richard W. Cohen, (argued), Gerald Lawrence, Lowey, Dannenberg, Cohen & Hart, P.C., for Defendants Aetna Life Insurance Co. and The Rawlings Company.

Brown & Connery, LLP by Karen A. McGuinness, (argued), Esq., Westmont, NJ, for Defendant S.N.J. Regional Employee Benefit Fund.

Marshall, Dennehey, Warner, Coleman & Goggin, PC by Dante C. Rohr, Esq., Cherry Hill, NJ, for Defendant Cooper University Health Care.


IRENAS, Senior District Judge:

Plaintiffs Joan Mattson and her son, Eric Mattson, bring this putative class action against Defendants Aetna Life Insurance Co. ("Aetna"), The Rawlings Company, LLC ("Rawlings"), Southern New Jersey Regional Employee Benefit Fund (the "Fund"), and Cooper University Health Care ("Cooper"), based on the Fund, acting through Aetna and Rawlings, seeking allegedly impermissible subrogation for medical expenses paid as a result of injuries Eric Mattson sustained in a motor vehicle accident.

Pending before the Court are two Rule 12(b)(6) motions to dismiss filed by Aetna and Rawlings, and the Fund.

For the reasons stated herein, Defendants' motions will be GRANTED.


The Court recites the following relevant facts alleged in Plaintiffs' Amended Complaint:

Joan Mattson is a New Jersey resident and employee of the Gateway Regional High School ("Gateway"). (Amend. Compl. ¶¶ 5, 20) The Fund is a joint insurance fund formed pursuant to N.J.S.A. 40A:10–36 for the purpose of providing health care benefits to individuals enrolled with the Fund's members. (Id. at ¶ 8) Gateway is a member of the Fund and, being a Gateway Employee, Ms. Mattson participates in the health benefits plan offered through the Fund. (Id. at ¶¶ 18, 20) Eric Mattson, Ms. Mattson's son, is enrolled under the Fund's health benefits plan as his mother's dependent. (Id. at ¶ 21)

Defendant Aetna administers the Fund's health benefits pursuant to a contract with the Fund. (Id. at ¶ 7) Defendant Rawlings, pursuant to a contract with Aetna, provides Aetna with insurance claims recovery services. (Id. at ¶ 22)

On or about December 13, 2012, Eric Mattson was involved in a motor vehicle accident in New Jersey and suffered severe injuries. (Id. at ¶ 29) He received treatment at Cooper and Ms. Mattson submitted Eric's medical bills to Aetna for payment. (Id. at ¶¶ 30, 33)

Plaintiffs allege that Cooper, a participating provider with Aetna, improperly demanded payment from Plaintiffs of certain hospital bills when Cooper's agreement with Aetna explicitly provides that Cooper bill Aetna only for such charges. (Id. at ¶ 39) First, Cooper sent Plaintiffs a statement in June 2013 requesting $3,036.00. (Cooper Statement, Ex. 2 to Amend. Compl.) Then, in August 2013, a debt collector acting on Cooper's behalf sent Plaintiffs a letter stating that Eric owed Cooper over $70,000. (Cooper Demand Ltr., Ex. 6 to Amend. Compl.)

In addition to the demands from Cooper, Eric received a letter from Rawlings dated July 18, 2013, informing him that his health plan's claim would need to be paid "from any settlement or payment you may receive from another party and/or your own insurance company." (July 18, 2014, Rawlings Ltr., Ex. 3 to Amend. Compl.) The letter instructed Eric "to make sufficient allowances to satisfy the health plan's claim in any settlement" he might receive. (Id. )

Two weeks later, Rawlings sent another letter to Eric's personal injury attorney with "notice that [Aetna] has a claim/lien for medical benefits paid on behalf of" Eric. (Aug. 1, 2013, Rawlings Ltr., Ex. 4 to Amend. Compl.) The letter continued as follows:

This claim/lien applies to any amount now due or which may hereafter become payable out of a recovery collected or to be collected, whether by judgment, settlement, or compromise, from any party hereby notified. No settlement of any claim should be made prior to notifying our office of the potential settlement and reaching an agreement for satisfaction of [Aetna's] interest.

(Id. )

Plaintiffs then commenced this action in the Superior Court of New Jersey, Law Division, Gloucester County, in September 2014. In the Complaint, Plaintiffs alleged that the lien/claims asserted by Rawlings on behalf of Aetna and the Fund violated New Jersey laws that prohibit subrogation of health plan benefits, and brought counts under the New Jersey Civil Rights Act ("CRA"), New Jersey Consumer Fraud Act ("CFA"), and New Jersey Truth–in–Consumer Contract Warranty and Notice Act ("TCCWNA"). Specifically, the Complaint cited to (1) N.J.S.A. § 2A:15–97, the New Jersey Collateral Source Statute ("NJCSS"), and (2) N.J.S.A. § 39:6A–9.1, a provision of the Automobile Insurance Cost Reduction Act ("AICRA") governing recovery of personal injury protection benefits from a tortfeasor. (Compl.¶¶ 38–40) Plaintiffs also brought a number of claims resulting from Cooper's allegedly improper billing statement.

Defendants removed to this Court on October 30, 2014, and subsequently filed initial motions to dismiss the Complaint. In their motions, as one argument against the NJCSS's applicability, Defendants Aetna and Rawlings noted that Plaintiffs had not yet even instituted a separate civil tort action against the alleged tortfeasor involved in the motor vehicle accident.

On November 10, 2014, Eric filed a motor vehicle bodily injury complaint in the Gloucester County Superior Court. (Amend. Compl. ¶ 44) In that complaint, Eric brings a count for negligence against the alleged tortfeasor, and a count against his own automobile insurance company for allegedly withheld Personal Injury Protection ("PIP"), Uninsured Motorist ("UM"), and Underinsured Motorist ("UIM") benefits. (Motor Vehicle Complaint, Ex. 7 to Amend. Compl.) Plaintiffs thereafter sought leave to file an Amended Complaint in the instant case, which, with the Court's permission, they filed on December 31, 2014.

The lengthy Amended Complaint asserts the following counts: (1) violation of the TCCWNA against Rawlings and Aetna; (2) violation of the CRA, against the Fund; (3) breach of contract against Aetna and the Fund; (4) violation of the covenant of good faith and fair dealing, against Aetna and the Fund; (5) promissory estoppel, against Aetna and the Fund; (6) violation of the CFA, against Rawlings and Aetna; (7) breach of contract, against Cooper; (8) violation of the covenant of good faith and fair dealing, against Cooper; (9) promissory estoppel, against Cooper; (10) violation of the CFA, against Cooper; and (11) declaratory judgment against Aetna. Counts 3, 4, 5, 7, 8, 9, 10, and 11 all concern Cooper's allegedly improper collection of charges from Plaintiffs. Counts 1, 2, and 6 each concern the Fund's, Aetna's and Rawlings's allegedly improper subrogation activity. The Fund, Aetna, and Rawlings subsequently filed the instant motions to dismiss.

On March 26, 2015, Plaintiffs settled with and voluntarily dismissed their claims against Cooper. In their opposition papers, Plaintiffs concede that their only remaining causes of action concern subrogation activity, specifically (1) Aetna and Rawlings's alleged TCWWNA violation (Count 1), (2) the Fund's alleged CRA violation (Count 2), and (3) Aetna and Rawlings's alleged CFA violation (Count 6). During oral argument, which the Court held on August 25, 2015, Plaintiffs confirmed that all other counts in the Amended Complaint are moot.

II. Motion to Dismiss Standard

Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint "for failure to state a claim upon which relief can be granted." In order to survive a motion to dismiss, a complaint must allege facts that make a right to relief more than speculative. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; see also Fed.R.Civ.P. 8(a)(2). A court must accept all allegations in the plaintiff's complaint as true, viewing them in the light most favorable to the plaintiff, Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir.2008), but a court is not required to accept sweeping legal conclusions cast as factual allegations. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997). The pleadings must state facts sufficient to show that the legal allegations are not simply possible, but plausible. Phillips, 515 F.3d at 234. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

III. Discussion

At the outset, based on the voluntary dismissal of Defendant Cooper, the Court will dismiss Counts 3, 4, 5, 7, 8, 9, 10, and 11 from the Amended Complaint as moot. Remaining are Plaintiffs' CRA claim against the Fund, and Plaintiffs' CFA and TCCWNA claims against Aetna and Rawlings.

The relevant issues on Defendants' motions to dismiss can be distilled as follows: (1) was the Fund, acting through Aetna and Rawlings, prohibited from seeking subrogation for medical expenses paid as a result of Eric Mattson's motor vehicle accident from any judgment, settlement, or other award in Plaintiffs' pending action against the tortfeasor; (2) if yes, have Plaintiffs otherwise pled facts sufficient to support...

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