Valentini v. Grp. Health Inc.

• Court: U.S. District Court — Southern District of New York
• Writing for the Court: JOHN P. CRONAN, United States District Judge
• Decision Date: 15 June 2021
• Docket Number: 20 Civ. 9526 (JPC)
• Citation: Valentini v. Grp. Health Inc., 20 Civ. 9526 (JPC) (S.D. N.Y. Jun 15, 2021)
• Parties: KATHLEEN VALENTINI et al., Plaintiffs, v. GROUP HEALTH INCORPORATED et al., Defendants

KATHLEEN VALENTINI et al., Plaintiffs, v. GROUP HEALTH INCORPORATED et al., Defendants

20 Civ. 9526 (JPC)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

June 15, 2021

OPINION AND ORDER

JOHN P. CRONAN, United States District Judge:

Defendant insurance company Group Health Incorporated ("GHI") contracts with Defendant CareCore National LLC d/b/a eviCore ("eviCore") to undergo a process called utilization review to determine if a requested health service is "medically necessary." If a service is deemed not medically necessary, GHI can decline to pre-authorize the service, i.e., decline to cover its cost. This case concerns the liability of Defendants GHI, GHI's parent company, Emblem Health ("Emblem"), and eviCore for declining to pre-authorize an MRI for Kathleen Valentini ("Kathleen") that her doctor had prescribed. Plaintiffs Valerio Valentini, Valerio Valentini on behalf of his minor son M.V., and Estate of Kathleen Valentini, with Valerio Valentini as Administrator,¹ bring this suit against GHI, Emblem, eviCore, and John Does 1 and 2, alleging various tort, fraud, and contract claims. Dkt. 1 at 9-30 ("Compl."). Defendants have moved to dismiss the Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For thefollowing reasons, the Court grants Defendants' motions to dismiss, but grants Plaintiffs leave to amend their Complaint with respect to their fraud, conspiracy, and derivative claims.

I. Background

A. Consideration of Materials Outside the Complaint

The Court first addresses, as a threshold issue, what materials it may consider at this stage. In considering a motion to dismiss under Rule 12(b)(6), a court may consider not only the facts alleged in the complaint, but also "any written instrument attached to the complaint, statements or documents incorporated into the complaint by reference, . . . and documents possessed by or known to the plaintiff upon which it relied in bringing the suit." Tongue v. Sanofi, 816 F.3d 199, 209 (2d Cir. 2016) (quoting ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007)). "Where a document is not incorporated by reference, the court may nevertheless consider it where the complaint 'relies heavily upon its terms and effect,' thereby rendering the document 'integral' to the complaint." DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010) (quoting Mangiafico v. Blumenthal, 471 F.3d 391, 398 (2d Cir. 2006)). "[M]ere notice or possession," however, "is not enough." Nicosia v. Amazon.com, Inc., 834 F.3d 220, 231 (2d Cir. 2016) (internal quotation marks omitted); accord Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) ("[W]e reiterate here that a plaintiff's reliance on the terms and effect of a document in drafting the complaint is a necessary prerequisite to the court's consideration of the document on a dismissal motion; mere notice or possession is not enough."). In addition, there cannot be any dispute "regarding the authenticity or accuracy," Nicosia, 834 F.3d at 231 (quoting DiFolco, 622 F.3d at 111), or "relevance of the document[s]" to be considered, Faulkner v. Beer, 463 F.3d 130, 134 (2d Cir. 2006).

Defendants ask the Court to consider two sets of documents. First, they ask the Court toconsider the GHI Comprehensive Benefits Plan, including the Certificate of Insurance that sets forth the terms of Kathleen's insurance coverage. Dkt. 31 ("Wohlforth Certification" or "Wohlforth Cert."), Exh. A ("Policy"). Defendants assert that "the GHI Certificate of Insurance is essential to the Complaint, as it sets forth the contractual obligations that Plaintiffs are seeking to enforce, including through a breach of contract claim," and it "is quoted, referenced, and extensively relied on in the Complaint." Dkt. 30 ("eviCore Motion") at 2 n.1 (citing Compl. ¶¶ 45-49).² The Court agrees. The Policy was both incorporated into and integral to the Complaint. See Sira v. Morton, 380 F.3d 57, 67 (2d Cir. 2004) (finding that the plaintiff's complaint incorporated by reference two documents that it "explicitly refer[ed] to and relie[d] upon" to establish the plaintiff's claim). In fact, "courts within this Circuit routinely consider copies of relevant policy documents in connection with insurance disputes." Pastor v. Woodmere Fire Dist., No. 16 Civ. 892 (ADS) (ARL), 2016 WL 6603189, at *4 (E.D.N.Y. Nov. 7, 2016) (collecting cases); Strom v. Goldman, Sachs & Co., 202 F.3d 138, 140 n.1 (2d Cir. 1999) ("The court below explicitly and correctly considered the group policy on the theory that it had been incorporated by reference in the complaint."), overruled on other grounds, Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002). The Complaint references the Policy numerous times, and the Policy forms the basis of Plaintiffs' contractual claims.

Second, Defendants ask the Court to consider "true and correct copies of written communications between eviCore, [Kathleen], and [Dr. Barry Oliver, Kathleen's treating physician], pertaining to the pre-authorization request, including the supporting documentation submitted by Dr. Oliver." eviCore Motion at 3 n.2. These purported written communications areattached as Exhibits to the Wohlforth Certification. See Wohlforth Cert., Exhs. B, C, D, E, F. Specifically, they request that the Court consider: Exhibit B, "a true and correct copy of the February 11, 2019 letter sent from eviCore to [Kathleen] and her treating physician;" Exhibit C, "a true and correct copy of the February 13, 2019 facsimile correspondence sent from the office of [Kathleen]'s treating physician to eviCore;" Exhibit D, "a true and correct copy of the February 16, 2019 letters sent from eviCore to [Kathleen] and her treating physician;" Exhibit E, "a true and correct copy of the February 20, 2019 facsimile correspondence sent from the office of [Kathleen]'s treating physician to eviCore;" and Exhibit F, "a true and correct copy of the March 7, 2019 letters sent from eviCore to [Kathleen]." Wohlforth Cert. ¶¶ 3-7. They contend that these documents are "integral to the Complaint, as they are extensively referenced, and include the primary factual basis for Plaintiffs' claims and theories." eviCore Motion at 3 n.2 (citing Compl. ¶¶ 1-2, 4-6, 8, 20, 24-30, 32-34, 67, 79-80, 114, 135).

The Complaint does not directly reference most of these communications, nor is it clear that Plaintiffs relied upon them in drafting the Complaint. The Complaint does not reference Exhibit B, which purports to be a communication from eviCore and Emblem to Kathleen and Dr. Oliver, dated February 11, 2019, or otherwise acknowledge its existence. Nor does the Complaint make reference to Exhibits C and E, which appear to be communications from Dr. Oliver's office to eviCore on February 13, 2019 and February 20, 2019, respectively. Although the Complaint alleges that "Dr. Oliver's office contacted GHI immediately after Kathleen's visit" on February 4, 2019, Compl. ¶¶ 28-29, and that Dr. Oliver "immediately appealed the [Defendants'] denial of the MRI," id. ¶ 8, it does not detail the form, type, or dates of those communications. Cf. DiFolco, 622 F.3d at 112 ("Because DiFolco referred in her complaint to her e-mails to Kaplan of August 23, 2005, and August 24, 2005, the District Court could deem them incorporated in the complaintand therefore subject to consideration in its review of the adequacy of the complaint."). In fact, it is not even clear that Plaintiffs had notice of the exact contents of these communications, given that they appear to have been drafted by Dr. Oliver. Similarly, the Complaint does not reference Exhibit F, which appears to consist of letters dated March 7, 2019 that eviCore sent to Kathleen. While Kathleen would have had notice of these letters, given that she was the recipient, there is no reference to these letters in the Complaint. The Court therefore cannot conclude that Plaintiffs "relied" on these documents while drafting the Complaint. See DeLuca v. AccessIT Grp., Inc., 695 F. Supp. 2d 54, 60 (S.D.N.Y. 2010) (finding that extraneous documents were not integral to the complaint because the complaint did not quote from them or rely heavily upon the documents' terms and effects); Tammaro v. City of New York, No. 13 Civ. 6190 (WHP), 2018 WL 1621535, at *4 (S.D.N.Y. Mar. 30, 2018) ("Because [the plaintiff] cannot be said to have 'rel[ied] on the terms and effect of [the voucher(s)] in drafting the complaint,' the mere fact that he may have had notice or possession of the vouchers or that he mentioned the vouchers in the complaint is insufficient." (second and third alterations in original) (quoting Chambers, 282 F.3d at 153)). Accordingly, the Court declines to consider Exhibits B, C, E, and F, attached to the Wohlforth Certification, at this stage.

The Complaint does, however, directly reference Exhibit D, the February 16, 2019 letter from eviCore to Kathleen and her physician, Dr. Oliver, which was on joint eviCore and Emblem letterhead. The Complaint alleges that "[o]n February 16, 2019, the GHI defendants overruled Dr. Oliver's recommendation and denied Kathleen this basic, medically appropriate diagnostic test." Compl. ¶ 4. The Complaint also quotes from that letter, asserting that "the GHI defendants informed Kathleen that eviCore had determined that the MRI was 'not medically necessary,'" id., and that "the GHI/eviCore denial included the statement, 'We have told your doctor about this,'"id. ¶ 5; see also id. ¶¶ 33, 67, 80. The Complaint further details the contents of the letter, including that "the GHI defendants stated that an MRI would be medically necessary only if Kathleen failed to improve after a six-week course of treatment such as 'ice', 'steroids', 'cross training', 'rest' or 'doctor prescribed treatment'." Id. ¶ 5. This letter was therefore both incorporated into and integral to the Complaint. Accordingly, the Court will consider Exhibit D in deciding the motions.

B. The...