Aviation West Charters, LLC v. UnitedHealthcare Insurance Company

Filing 47

MEMORANDUM AND ORDER signed by Senior Judge William B. Shubb on 4/23/2017 ORDERING 23 that any renewed Motion for summary judgment based upon grounds not addressed in this Order shall be filed by 9/18/2017. Any opposition to such motion shall be filed by 10/2/2017. Any reply to such opposition shall be filed by 10/16/2017. Any hearing on such motion shall take place on 10/30/2017, at 1:30 p.m. (Reader, L)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 13 AVIATION WEST CHARTERS, LLC d/b/a ANGEL MEDFLIGHT, Plaintiff, 14 15 16 v. CIV. NO. 2:16-436 WBS AC MEMORANDUM AND ORDER RE: MOTION FOR SUMMARY JUDGMENT AND MOTION TO STRIKE UNITEDHEALTHCARE INSURANCE COMPANY, 17 Defendant. 18 ----oo0oo---- 19 Plaintiff Aviation West Charters, LLC (“Aviation West”) 20 21 brought this action against defendant UnitedHealthcare Insurance 22 Company (“United”), alleging that defendant violated ERISA when 23 it failed to pay plaintiff for ambulatory services provided to a 24 beneficiary of a medical plan provided by defendant. 25 court is defendant’s Motion for summary judgment and Motion to 26 strike. 27 28 Before the (Docket Nos. 23, 36.) While on vacation in La Paz, Mexico, non-party minor M.M. sustained a fractured right leg, and was subsequently taken 1 1 to a Mexican hospital. 2 (“the Plan”), for which United is the insurer and claims 3 administrator. 4 24-1).) 5 services. M.M. is covered by a healthcare plan (See Stalinski Decl., Ex. A (“Plan”) (Docket No. The Plan offers emergency and non-emergency ambulatory 6 On January 10, 2014, Aviation West, an air ambulance 7 service, requested pre-authorization for air and ground ambulance 8 service to transport M.M. from Mexico to Seattle Children’s 9 Hospital in Seattle, Washington. (Stalinski Decl., Ex. B at 1 10 (Docket No. 24-1).) 11 Aviation West flew M.M. from Mexico to Seattle, at a cost of 12 $495,925. 13 203 (Docket No. 24-2).) 14 claim for emergency transportation, which United denied. 15 (Stalinski Decl., Ex. C at 1-2 (Docket No. 24-1).) 16 United did not respond, and on January 11, (Stalinski Decl., Ex. D (“Health Ins. Claims Form”) at Aviation West submitted a reimbursement Aviation West brought three internal appeals to the 17 denial of this claim as M.M.’s authorized representative, which 18 United denied. 19 a request for external review as M.M.’s authorized 20 representative, which United also denied. 21 1, 2016, Aviation West initiated this action against United, 22 seeking to recover benefits due under the Plan and ERISA, 29 23 U.S.C. § 1132(a), as M.M.’s purported assignee. 24 Compl. (Docket No. 13).) 25 (See PX15; PX16; PX21.) Aviation West then filed (See PX41.) On March (See First Am. Defendant moves for summary judgment on the basis, 26 among others, that Aviation West lacks standing to bring this 27 action. 28 action may be brought only by a plan participant, beneficiary, Under 29 U.S.C. § 1132(a), a civil ERISA enforcement 2 1 fiduciary, or the Secretary of labor. 2 cannot bring claims on its own behalf, but may do so if a 3 beneficiary assigned its benefits claims to the healthcare 4 provider. 5 1272, 1277 (6th Cir. 1991); Misic v. Building Serv. Emps. Health 6 & Welfare Trust, 789 F.2d 1374, 1377 (9th Cir. 1986) (per 7 curiam). 8 rights under the Plan to Aviation West. 9 Form at 208.) 10 A healthcare provider See Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d M.M., as the beneficiary to the Plan, assigned her (See Health Ins. Claim However, a beneficiary may not assign her rights under 11 the plan if the plan contains a non-assignment clause. 12 Davidowitz v. Delta Dental Plan of Cal., Inc., 946 F.2d 1476, 13 1481 (9th Cir. 1991); Quaresma v. BC Life & Health Ins. Co., 623 14 F. Supp. 2d 1110, 1128-29 (E.D. Cal. 2007) (Wanger, J.) 15 (dismissing causes of action against insurer by assignee because 16 non-assignment clause prevented the purported assignee from 17 having standing to recover under the ERISA plan). 18 undisputed that the Plan contains a non-assignment clause that 19 prevents a beneficiary from assigning “Benefits under the Policy 20 to a non-Network provider without [United’s] consent.” 21 46.) 22 assignment of M.M.’s benefits to Aviation West. 23 See Here, it is (Plan at Plaintiff cites no evidence that United consented to the Aviation West nonetheless argues it has standing to 24 bring this action because United waived the non-assignment clause 25 when (1) it did not object to the assignment of benefits document 26 and (2) it did not object to the assignment during the internal 27 administrative process. 28 First, M.M. and Aviation West signed an Assignment of 3 1 Benefits document, which states that if the assignment is 2 prohibited “by the terms of an anti-assignment provision . . . , 3 [United should] advise and disclose to [Aviation West] in writing 4 . . . within ten (10) days upon receipt of [the] Assignment”; 5 otherwise “any anti-assignment provision is waived.” 6 Insurance Claim Form at 208.) 7 United did not object to the assignment within ten days of 8 receipt, United waived its non-assignment clause. 9 United to affirmatively reject an assignment is contradictory to (Health Aviation West argues that because Requiring 10 the express terms of the Plan, which states that United must 11 consent to an assignment. 12 West submitted this document to United, United did not sign or 13 otherwise acknowledge this agreement and Aviation West provides 14 no authority suggesting that United can be bound by a contract it 15 did not sign. 16 assignment contract that it did not sign does not constitute a 17 waiver of the Plan’s non-assignment clause. 18 (Plan at 46.) Further, while Aviation Therefore, United’s failure to object to the Second, the Ninth Circuit has held that an insurer is 19 required to provide a reason for denying a claim when 20 communicating the denial and an insurer waives the right to rely 21 on “a known or reasonably knowable reason” not cited in the 22 denial letter. 23 Healthcare of Ariz., Inc., 770 F.3d 1282, 1296 (9th Cir. 2014); 24 see Harlick v. Blue Shield of Cal., 686 F.3d 699, 719 (9th Cir. 25 2012) (“A plan administrator may not fail to give a reason for a 26 benefits denial during the administrative process and then raise 27 that reason for the first time when the denial is challenged in 28 federal court . . . .”); Aceves v. Allstate Ins. Co., 68 F.3d Spinedex Physical Therapy USA Inc. v. United 4 1 1160, 1163-64 (9th Cir. 1995) (“Waiver providers insurers with an 2 incentive to investigate claims diligently. 3 prevents insurers from denying claims for one reason, then coming 4 forward with several other reasons after the insured defeats the 5 first.”). 6 the non-assignment clause to deny the claim for benefits. 7 The doctrine During the internal appeals, United never relied on However, if an insurance provider was not aware that 8 the healthcare provider was acting as an assignee in the 9 administrative appeal, there is no waiver of a non-assignment 10 clause. 11 at 1297, the Ninth Circuit held that there was no evidence that 12 the insurance provider was aware, or should have been aware, of 13 the fact that the healthcare provider was acting as the 14 beneficiaries’ assignee during the internal administrative 15 process claim. 16 healthcare provider was acting as the insured’s authorized 17 representative charged with filing, collecting, or appealing a 18 claim on behalf of the patient. 19 provider did not waive the plan’s non-assignment clause when it 20 objected to the assignment for the first time in the district 21 court. 22 Welfare Plan, CASE NO. CV 14-01480 MMM (AGRx), 2014 WL 12573014, 23 at *17 (C.D. Cal. Dec. 26, 2014) (finding anti-assignment clause 24 was not waived because there were “[n]o allegations . . . that 25 defendants knew that [plaintiff] was acting as [the 26 beneficiaries’] assignee, rather than as their authorized 27 representative”). 28 See Spinedex, 770 F.3d at 1296. In Spinedex, 770 F.3d Instead, the insurance provider believed that the Id. Therefore, the insurance Id.; see also Care First Surgical Ctr. v. ILWU-PMA Similar to Spinedex, United had no reason to believe 5 1 that Aviation West was acting as M.M.’s assignee, as opposed to 2 M.M.’s authorized representative, during the administrative 3 process. 4 information from United as the authorized representative of the 5 insured. 6 internal administrative appeals and the request for external 7 appeal “in its capacity as the authorized representative of 8 [M.M.]” 9 Nowhere in the internal appeals or the request for external Prior to any appeals, Aviation West requested (See PX01 at 1, 4.) Aviation West brought three (PX015 at 1; PX016 at 1; PX021 at 1; PX041 at 1.) 10 review does Aviation West indicate it is acting as M.M.’s 11 assignee. 12 authorized representative form. 13 West was acting as M.M.’s authorized representative, and had no 14 reason to believe Aviation West was an assignee. 15 is no evidence that United knew Aviation West was acting as 16 M.M.’s assignee, United did not waive the non-assignment clause 17 by failing to rely on the non-assignment clause in its benefits 18 denial.1 19 With each appeal, Aviation West submitted an United believed that Aviation Because there IT IS THEREFORE ORDERED that defendant’s Motion for 20 summary judgment as to plaintiff Aviation West (Docket No. 23) 21 be, and the same hereby is, GRANTED. 22 23 24 25 26 27 28 1 Defendant’s motion to strike the declaration of Dina Miller because it is not part of the administrative record and contains testimony that is inadmissible under the Federal Rules of Evidence (see Docket No. 36) is better captioned as objections to the court’s consideration of this evidence and not a motion to strike. Because the court will construe this motion as objections to the Miller Declaration and the court does not rely on the Miller Declaration in its Motion, the court denies this motion and overrules these objections as moot. 6 1 IT IS FURTHER ORDERED that any renewed Motion for 2 summary judgment based upon grounds not addressed in this Order 3 shall be filed by September 18, 2017. 4 motion shall be filed by October 2, 2017. 5 opposition shall be filed by October 16, 2017. 6 such motion shall take place on October 30, 2017, at 1:30 p.m. 7 Dated: August 23, 2017 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 Any opposition to such Any reply to such Any hearing on

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