Murphy Med. Assocs. v. Cigna Health & Life Ins. Co.
| Decision Date | 12 May 2023 |
| Docket Number | CIVIL 3:20cv1675 (JBA) |
| Parties | MURPHY MEDICAL ASSOCIATES, LLC ET AL., Plaintiffs, v. CIGNA HEALTH AND LIFE INS. CO. ET AL. Defendants. |
| Court | U.S. District Court — District of Connecticut |
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' PARTIAL MOTION TO DISMISS
The Court assumes familiarity with the factual background of the case. The procedural history is as follows. Plaintiffs brought this action alleging violations of the Families First Coronavirus Response Act (“FFCRA”) and Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), the Employee Retirement Income Security Act of 1974 (“ERISA”), the Connecticut Unfair Trade Practices Act (“CUTPA”), as well as unjust enrichment, quantum meruit and tortious interference claims related to both ERISA and non-ERISA plans. .
Previously Defendants moved to dismiss all claims with prejudice. (Defs.' Mot. to Dismiss. Am. Compl. [Doc # 30] at 1.) Relevant here, they argued that Plaintiffs' CUTPA (Count Five) and unjust enrichment (Count Six) claims were preempted by ERISA. (Id. at 2629.) Plaintiffs' opposition broadly argued that ERISA preemption did not apply to the state law claims as a whole, stating that distinguishing between ERISA and non-ERISA plans was “irrelevant.” (Pls.' Opp'n [Doc. # 31] at 31-35.) The Court partially granted the motion to dismiss including dismissing Counts Five and Six with prejudice on ERISA preemption grounds. (Order Granting Mot. to Dismiss [Doc. # 48] at 18-23.)
Plaintiffs moved under Rule 59(e) for reconsideration of the Court's dismissal and for leave to file a Second Amended Complaint (Pls.' Mem. [Doc. # 50-1] at 1) which was granted. (Order Granting Mot. to Reconsider [Doc. # 71].) Following a pre-filing conference, Plaintiffs filed the operative Third Amended Complaint (TAC. [Doc. # 92]) which Defendants now move to dismiss with prejudice as to Counts Two (CUTPA) and Three (Unjust Enrichment), on the grounds that they fail to state a viable claim upon which relief can be granted. (Defs.' Partial Mot. to Dismiss [Doc. # 93].) At oral argument Plaintiffs withdrew Count Three, and so only Count Two is at issue.
The Court has previously set out the standards for deciding a motion to dismiss pursuant to Rule 12(b)(6). (Order Granting in Part Defs.' Mot. to Dismiss [Doc. # 48] at 3-4.)
Under CUTPA, Conn. Gen. Stat. § 42-110b(a), “[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” To assist courts in determining whether a practice violates CUTPA, the Connecticut Supreme Court has identified several relevant factors, only one of which needs to be satisfied:
(1) whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise . . .; (2) whether it is immoral, unethical, oppressive, or unscrupulous; [or] (3) whether it causes substantial injury to consumers.
Harris v. Bradley Mem'l Hosp. & Health Ctr., Inc., 296 Conn. 315, 350-51 (2010). “A practice may violate CUTPA without meeting all three criteria-i.e. a practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three.” Laura Laaman Assoc., LLC v. Davis, No. 3:16-cv-00594 (MPS), 2017 WL 5711393, at *9 (D. Conn. Nov. 27, 2017).
Defendants argue that “[a] claim under CUTPA must be pled with particularity,” see Keller v. Beckenstein, 117 Conn.App. 550, 569 n.7 (2009), cert. denied, 294 Conn. 913 (2009); Ferrari v. U.S. Equities Corp., No. 3:13-cv-00395, 2014 WL 5144736 at *3 (D. Conn. Oct. 14, 2014) (same), which Plaintiffs rebut with Connecticut Supreme Court precedent that there is no “special requirement of pleading particularity connected with a CUTPA claim, over and above any other claim.” Macomber v. Travelers Prop. & Cas. Corp., 261 Conn. 620, 644 (2002).
Plaintiffs assert a number of claims arising under CUTPA based on the Connecticut Unfair Insurance Practices Act (“CUIPA”), as well as claims based on alleged violations of other statutes. Plaintiffs maintain this Count applies to non-ERISA plans and thus is not preempted. (TAC, ¶ 127).
Plaintiffs allege that Cigna engaged in unfair claims settlement practices and failed to timely pay insurance claims in violation of CUIPA, Conn. Gen. Stat. §§ 38a-816(6)[1], on which the CUTPA claim is based. (TAC, ¶¶ 122-167) (the “CUIPA/CUTPA” claims.) See Pettengill v. Fireman's Funds Ins., Co., No. 3:13cv154 (WWE), 2013 WL 4054635 (D. Conn. Aug. 12, 2013); Nazami v. Patrons Mut. Ins. Co., 280 Conn. 619, 625 (2006); Traylor v. Awwa, 88 F.Supp.3d 102, 108 (D. Conn. 2015). However, “if a plaintiff brings a claim pursuant to CUIPA alleging an unfair insurance practice, and the plaintiff further claims that the CUIPA violation constituted a CUTPA violation, the failure of the CUIPA claim is fatal to the CUTPA claim.” State v. Acordia, Inc., 310 Conn. 1, 31(2013).
1. Have Plaintiffs Alleged Cigna's Actions Constitute a General Business Practice?
As a threshold matter, to prevail on a CUIPA claim under Section 816(6), a plaintiff must present “enough facts to permit [] the reasonable inference that the unfair insurance practice occurred with enough frequency for it to be deemed a general business practice.” Kim v. State Farm Fire & Cas. Co., No. 3:15-cv-00879(VLB), 2015 WL 6675532, at *5 (D. Conn. Oct. 30, 2015); see also Lees v. Middlesex Ins. Co., 229 Conn. 842, 850 (1994); Nationwide Mut. Fire Ins. Co. v. Hermann, No. CV126009631S, 2014 WL 4817899, at *4 (Conn. Super. Ct. Aug. 25, 2014) (collecting cases).
“The alleged mishandling of various elements of the same claim does not reach the level of a general business practice.” L.A. Limousine Inc. v. Liberty Mut. Ins. Co., 509 F.Supp.2d 176, 182 (D. Conn. 2007) (citing Starview Ventures v. Acadia Ins., No. cv-065003463S, 2006 WL 3069664 at *3 (Conn. Super. Ct. Oct. 17, 2006). Allegations sufficient to establish a general business practice are “[t]ypically” accomplished “by citing to other cases brought [by other insureds] against the defendant or its affiliates.” Connecticut Mun. Elec. Energy Coop. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, No. 3:19-cv-839 (JCH), 2020 WL 6888272, at *3 (D. Conn. Jan. 17, 2020) (citing Mazzarella v. Amica Mut. Ins. Co., 774 Fed.Appx. 14, 18 (2d Cir. 2019)).
Factors relevant to a court's determination of whether a practice is a ‘general business practice' include: the degree of similarity between the alleged unfair practices in other instances and the practice allegedly harming the plaintiff; the degree of similarity between the insurance policy held by the plaintiff and the policies held by other alleged victims of the defendant's practices; the degree of similarity between claims made under the plaintiff's policy and those made by other alleged victims under their respective policies; and the degree to which the defendant is related to other entities engaging in similar practices.
Hartford Roman Cath. Diocesan Corp. v. Interstate Fire & Cas. Co., 199 F.Supp.3d 559, 602-03 (D. Conn. 2016), aff'd, 905 F.3d 84 (2d Cir. 2018). While “general business practice” is not precisely defined in Connecticut law, . Hartford Roman Cath. Diocesan Corp., 905 F.3d 84 at 96 (quoting Lees v. Middlesex Ins. Co., 229 Conn. 842 at 849).
Defendants argue that Plaintiffs fail to allege facts demonstrating that Cigna has engaged in the same allegedly improper activity with other providers. Plaintiffs do not respond to this argument except to argue that to demonstrate a general business practice, a plaintiff “must demonstrate that the proscribed conduct occurred with sufficient frequency to indicate a general business practice as opposed to an isolated, improper handling of a single insurance claim.” (Pls.' Opp'n at 15.)
This issue comes down to whether sheer frequency of denial of Plaintiffs' claims is sufficient even without allegation that the practice goes beyond denial of claims from just one provider, the Plaintiffs. In Hartford Roman Cath. Diocesan, the Second Circuit found insufficient evidence of a general business practice even where plaintiffs “submitted 57 claims as a representative sample of [defendant's] response to [diocesan] sexual abuse claims across the country,” where “9-11 percent of the 57 claims reflected misconduct.” 905 F.3d at 96. The Second Circuit noted that there were “more than 1700 sexual abuse settlements nationwide” and so defendant's conduct in this limited sample of 57 claims was insufficient to demonstrate a general business practice. Id. Here Plaintiffs fail to allege that Defendants have violated CUIPA in their processing of claims submitted by any other providers. This Court's Memorandum of Decision in Hartford looked to factors including “the degree of similarity between claims made under the plaintiff's policy and those made by other alleged victims under their respective policies” in determining whether there was a general business practice. Hartford Roman Cath. Diocesan, 199 F.Supp.3d at 602 (emphasis added). This factor presumes the existence of “other alleged victims” when evaluating whether a general...
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