Complete Infusion Care, CIC Inc. v. Aetna Life Insurance Company et al

Filing 24

ORDER GRANTING DEFENDANTS MOTION TO DISMISS 20 by Judge Dean D. Pregerson:Defendants Motion to Dismiss is GRANTED. The SAC is DISMISSED, with leave to amend. Any amended complaint shall be filed within fourteen days of the date of this order. (SEE DOCUMENT FOR FURTHER DETAILS) (vv)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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COMPLETE INFUSION CARE, CIC,
INC.,

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Plaintiff,
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v.
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AETNA LIFE INSURANCE
COMPANY, AETNA HEALTH AND
LIFE INSURANCE COMPANY,

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Case No. CV 14-07479 DDP (Ex)
ORDER GRANTING DEFENDANT’S MOTION
TO DISMISS

[Dkt. No. 20]

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Defendants.
___________________________

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Presently before the court is Defendant Aetna Life Insurance
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Company (“Aetna”)’s Motion to Dismiss the Second Amended Complaint
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(“SAC”).

Having considered the submissions of the parties, the

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court grants the motion and adopts the following order.
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I.

Background

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Plaintiff Complete Infusion Care, CIC, Inc. (“CIC”) provides
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medical services, pharmaceuticals, nursing care, infusions, and
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other paramedical services and supplies.

(SAC ¶ 1.)

Aetna is “an

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insurer and/or health care service plan.”

(Id. ¶ 2.)

Plaintiff

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rendered medical services to an unspecified number of patients who
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were “subscribers, members, or insureds” of Aetna’s.

(Id. ¶ 7.)

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Before treating these patients, Plaintiff contacted Aetna to verify

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that the patient was insured through Aetna and to obtain

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authorization from Aetna for the treatment.

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treating the patients, Plaintiff billed Aetna “as a bona fide

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creditor of the Patients and based upon [Plaintiff’s] Assignment of

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Benefits received from each of the Patients.”

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paid Plaintiff a unilaterally-set amount for each of Plaintiff’s

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claims, and Plaintiff accepted the payments.

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(Id. ¶ 8.)

After

(Id. ¶ 9.)

Aetna

(Id. ¶¶ 11-12.)

Over a year later, Aetna requested that Plaintiff repay some

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of the amounts.

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determined that some of the payments were excessive and that some

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of the services for which payment had been made were not necessary,

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not medically appropriate, or were not covered by Aetna insurance

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polices.

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. by reducing the amounts paid on new claims . . . on the grounds

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that [Aetna was] offsetting overpayment amounts previously paid . .

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. .”

(SAC ¶ 14.)

(Id. ¶ 15.)

The requests explained that Aetna had

Aetna “retracted their previous payments . .

(Id. ¶ 18.)

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Plaintiff’s SAC alleges causes of action for (1) recovery of

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payment for services rendered, money due on account stated, money

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due on open book account, and money had and received; (2)

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conversion; (3) breach of implied contract; (4) estoppel; (5)

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“violations of statutes and regulations[;]” (6) declaratory relief;

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and (7) injunctive relief.

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II.

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Aetna now moves to dismiss all claims.

Legal Standard
A complaint will survive a motion to dismiss when it contains

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“sufficient factual matter, accepted as true, to state a claim to

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relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S.

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662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
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570 (2007)).

When considering a Rule 12(b)(6) motion, a court must

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“accept as true all allegations of material fact and must construe

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those facts in the light most favorable to the plaintiff.” Resnick

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v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000).

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need not include “detailed factual allegations,” it must offer

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“more than an unadorned, the-defendant-unlawfully-harmed-me

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accusation.”

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allegations that are no more than a statement of a legal conclusion

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“are not entitled to the assumption of truth.” Id. at 679.

Iqbal, 556 U.S. at 678.

Although a complaint

Conclusory allegations or

In

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other words, a pleading that merely offers “labels and

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conclusions,” a “formulaic recitation of the elements,” or “naked

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assertions” will not be sufficient to state a claim upon which

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relief can be granted.

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quotation marks omitted).

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Id. at 678 (citations and internal

“When there are well-pleaded factual allegations, a court should

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assume their veracity and then determine whether they plausibly

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give rise to an entitlement of relief.” Id. at 679.

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must allege “plausible grounds to infer” that their claims rise

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“above the speculative level.”

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“Determining whether a complaint states a plausible claim for

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relief” is a “context-specific task that requires the reviewing

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court to draw on its judicial experience and common sense.”

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556 U.S. at 679.

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Plaintiffs

Twombly, 550 U.S. at 555.

Iqbal,

District courts have diversity jurisdiction over all civil

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suits where the amount in controversy “exceeds the sum or value of

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$75,000, exclusive of interest and costs, and is between citizens

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of different States.”

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citizenship between the parties must be complete.

28 U.S.C. § 1332(a).

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Diversity of
Wisconsin Dept.

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of Corrections v. Schacht, 524 U.S. 381, 388 (1998).

The

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citizenship of fraudulently joined or sham defendants, however,

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including those who cannot be held individually liable, does not

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destroy diversity.

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F.3d 84, 826 (9th Cir. 2003).

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III. Discussion

See, e.g. Mercado v. Allstate Ins. Co., 340

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A.

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This court’s analysis begins with a recognition of the

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Contract Claims

elephant in the room: the potential preemption of Plaintiff’s

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claims by Section 502(a) of the Employee Retirement Income Security

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Act (“ERISA”), 29 U.S.C. 1132(a).

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preempted if (1) an individual, at some point in time, could have

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brought the claim under ERISA § 502(a)(1)(B) and (2) where there is

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no other independent legal duty that is implicated by a defendant’s

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actions.”

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F.3d 941, 946 (9th Cir. 2009) (citing Aetna Health Inc. v. Davila,

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542 U.S. 200, 210 (2004).

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participant or beneficiary to bring an action “to recover benefits

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due to him under the terms of his plan, to enforce his rights under

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the terms of the plan, or to clarify his rights to future benefits

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under the terms of the plan.”

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complaint is premised on claims related to self-funded plan

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benefits, it is subject to dismissal on preemption grounds.

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FMC Corp. v. Holliday, 498 U.S. 52, 61-65 (1990).

A state claim “is completely

Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581

Section 502(a)(1)(B) allows a plan

To the extent that Plaintiff’s

See

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It is well established that “ERISA preempts the state law

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claims of a provider suing as an assignee of a beneficiary’s rights

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to benefits under an ERISA plan.”

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Anesthesia Care Associates Medical Group, Inc., 187 F.3d 1045, 1051

Blue Cross of California v.

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(9th Cir. 1999) (citing The Meadows v. Employers Health Ins., 47

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F.3d 1006, 1008 (9th Cir. 1995) (internal quotation omitted).

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However, the fact that a medical provider has received an

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assignment and can potentially bring an ERISA suit “provides no

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basis to conclude that the mere fact of assignment converts the

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Providers’ [non-ERISA] claims into claims to recover benefits under

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the terms of an ERISA plan.”

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(internal quotation and alteration omitted).

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therefore, is to determine whether Plaintiff’s SAC implicates “some

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Marin Gen. Hosp., 581 F.3d at 949
The court’s task,

other legal duty beyond that imposed by an ERISA plan.” Id.
The Ninth Circuit has held that ERISA does not preempt claims

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founded upon a contractual relationship between an insurer and a

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medical provider. In Blue Cross, “in-network” medical providers who

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had entered into agreements directly with the insurer challenged

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the insurer’s changes to reimbursement rates.

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F.3d at 1049.

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providers’ claims because the providers’ right to payment were

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dependent on assignments of ERISA plan beneficiaries. Id. at 1050.

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The court disagreed, holding that the providers’ claims arose not

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from the ERISA plan, but from the providers’ independent

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contractual relationship with the insurer. Id. at 1051.

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holding, the court observed that “the bare fact that the [ERISA]

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Plan may be consulted in the course of litigating a state-law claim

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does not require that the claim be extinguished by ERISA’s

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enforcement provision.” Id.; See also Catholic Healthcare West-Bay

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Area v. Seafarers Health Benefit Plan, 321 Fed.Appx. 563, 564 (9th

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Cir. 2008) (“[W]here a third-party medical provider sues an ERISA

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plan based on contractual obligations arising directly between the

Blue Cross, 1087

The insurer argued that ERISA preempted the

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In so

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provider and the ERISA plan . . . , no ERISA-governed relationship

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is implicated and the claim is not preempted.”); Hoag Mem’l Hosp.

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v. Managed Care Administrators, 820 F.Supp. 1232 (C.D. Cal. 1993)

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(concluding that ERISA did not preempt provider’s negligent

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misrepresentation claim against an insurer); Doctors Med. Center of

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Modesto, Inc. v. The Guardian Life Ins. Co. of America, No. 08-cv-

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00903 OWW, 2009 WL 179681 at *6 (E.D. Cal. Jan. 26, 2009)

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(concluding ERISA did not preempt provider’s intentional

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interference with contractual relations claim against

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insurer).

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Here, Plaintiff argues that it “seeks to enforce its own

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independent rights, based upon the actions, transactions and

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communications that occurred directly between CIC and Aetna.

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(Opposition at 15:21-24.)

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the claims asserted in this complaint are based upon the individual

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and proper rights of [CIC] in its own individual and proper

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capacity and are not derivative of the contractual or other rights

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of [CIC]’s patients.

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right to payment based on any of its patients’ insurance contracts.

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(Id.)

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claims to Aetna “based upon [CIC]’s Assignment of Benefits received

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from each of the Patients.”

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appear inherently contradictory.

Indeed, the SAC alleges that “[a]ll of

(SAC ¶ 6.)

The SAC explicitly disclaims any

At the same time, however, the SAC alleges that it submitted

(SAC ¶ 9.)

These two allegations

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The confusion regarding the basis for Plaintiff’s claims is
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further exacerbated by its Fifth Cause of Action for “Violation of
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Statutes and Regulations.”

Putting aside the question whether such

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a cause of action exists under California law, the claim invokes
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California Health & Safety Code §§ 1371.1(a) and 1371.8, California

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Insurance Code § 796.04, and 28 California Code of Regulations §

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1300.71.

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provisions concern duties of health care insurers with respect to

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providers in the context of an insurance policy.

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reference to an ERISA plan does not necessarily mean a claim is

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preempted, Plaintiff makes no attempt to address Defendant’s

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argument or explain how CIC can bring claims based upon statutory

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violations of insurers’ duties in the context of insurance

(SAC ¶ 63-65.)

As Defendant argues, all of these

Although mere

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policies, yet at the same time allege that all of its claims are

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derived solely from CIC’s interactions with Aetna and have nothing

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to do with any insurance policy.1

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1049.

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See Blue Cross, 1087 F.3d at

To the extent the SAC alleges non-preempted, contract-based

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claims, those too are insufficiently pleaded.

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breach of contract claim are (1) the existence of a contract, (2)

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performance or excuse for nonperformance, (3) defendant’s breach,

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and (4) damages.

Oasis West Realty, LLC v. Goldman, 51 Cal.4th

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811, 821 (2011).

See Rockridge Trust v. Wells Fargo, N.A., 985

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F.Supp.2d 1110, 1141 (N.D. Cal. 2013).

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capable, consenting parties, a lawful object, and sufficient cause

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or consideration.

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1181, 1186 (E.D. Cal. 1998); Cal. Civ. Code § 1550.

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be either express or implied.

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action for breach of implied contract has the same elements as does

The elements of a

A valid contract requires

Janda v. Madera Community Hosp., 16 F.Supp.2d
A contract may

Cal. Civil Code § 1619.

“A cause of

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Nor does Plaintiff address Defendant’s argument that
Plaintiff fails to allege that it met its own obligations under
several of the statutes invoked.
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a cause of action for breach of contract, except that the promise

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is not expressed in words but is implied from the promisor’s

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conduct.”

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172, 182 (2008).

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Yari v. Producers Guild of Am., Inc., 161 Cal.App.4th

Defendant’s contention that the SAC fails to allege mutual

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assent is not particularly persuasive.

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any contract is the consent of the parties, or mutual assent.”

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Donovan v. RRL Corp., 26 Cal.4th 261, 270 (2001).

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that an allegation of assent requires facts identifying Defendant’s

“An essential element of

Defendant argues

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representatives, timing regarding the agreement, the specific rate

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agreed to, and, again, the manner of addressing overpayments.

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court is not persuaded that such details are required to adequately

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allege assent, particularly in the context of a claim for breach of

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an implied contract.

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treatment in advance and, more importantly, habitually paid

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Plaintiff for the treatment rendered, are sufficient indicia of

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Aetna’s assent.

The

The SAC’s allegations that Aetna authorized

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Nevertheless, the court’s analysis of Plaintiff’s contract19
related claims is hindered by the lack of clarity in both the SAC
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and Plaintiff’s opposition.

Plaintiff’s opposition refers to

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“claims for breach of contract and implied contract” and “oral
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contracts” between the parties.

“An oral contract claim is based

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on oral representations, while an implied contract claim is
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predicated on the promisor’s conduct.”

Davoodi v. Imani, No. C 11-

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0260 SBA, 2011 WL 250392 at *3 (N.D. Cal. Jan. 26, 2011).

Although

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the SAC only alleges a cause of action for breach of implied
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contract, not breach of an express, oral contract, it makes
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references to “oral contracts” and an unspecified “oral agreement.”

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There cannot, however, “be a valid, express contract and an implied

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contract, each embracing the same subject matter, existing at the

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same time.”

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Plaintiff’s contract-related claims are, therefore, dismissed.2

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B.

Wal-Noon Corp. v. Hill, 45 Cal.App.3d 605, 613 (1975).

Conversion

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Under California law, conversion requires (1) ownership or
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right to possession of property, (2) wrongful disposition of that
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property, and (3) damages.

G.S. Rasmussen & Assoc., Inc. v.

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Kalitta Flying Serv., Inc., 958 F.2d 896, 906 (9th Cir. 1992).

The

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SAC identifies money as the property at issue here.

“A cause of

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action for conversion of money can be stated only where defendant
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interferes with plaintiff’s possessory interest in a specific,
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identifiable sum . . . .”

Turner v. Ocwen Loan Servicing, LLC, No.

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14-CV-659-L, 2014 WL 6886054 at *7 (S.D. Cal. Dec. 23, 2014).

The

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SAC identifies no such sum.

Plaintiff’s conversion claim is

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therefore DISMISSED.
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C.

Unopposed Claims

Plaintiff does not address or oppose Defendant’s arguments

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that the First, Fifth, and Seventh Causes of Action must be

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dismissed because they are not independent causes of action in

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California.

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IV.

Those claims are DISMISSED.

Conclusion

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This includes, at this juncture, Plaintiff’s estoppel claim,
which is, somewhat confusingly, allegedly predicated on “a breach
of the agreements.” (SAC ¶ 56.)
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For the reasons stated above, Defendant’s Motion to Dismiss is

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GRANTED.

The SAC is DISMISSED, with leave to amend.

Any amended

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complaint shall be filed within fourteen days of the date of this

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order.

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IT IS SO ORDERED.

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Dated: February 4, 2016
DEAN D. PREGERSON
United States District Judge

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