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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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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AVIATION WEST CHARTERS, LLC
d/b/a ANGEL MEDFLIGHT,
Plaintiff,

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v.

CIV. NO. 2:16-436 WBS AC
MEMORANDUM AND ORDER RE: MOTION
FOR SUMMARY JUDGMENT AND MOTION
TO STRIKE

UNITEDHEALTHCARE INSURANCE
COMPANY,

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Defendant.

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Plaintiff Aviation West Charters, LLC (“Aviation West”)

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brought this action against defendant UnitedHealthcare Insurance

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Company (“United”), alleging that defendant violated ERISA when

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it failed to pay plaintiff for ambulatory services provided to a

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beneficiary of a medical plan provided by defendant.

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court is defendant’s Motion for summary judgment and Motion to

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strike.

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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
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to a Mexican hospital.

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(“the Plan”), for which United is the insurer and claims

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administrator.

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24-1).)

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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

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On January 10, 2014, Aviation West, an air ambulance

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service, requested pre-authorization for air and ground ambulance

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service to transport M.M. from Mexico to Seattle Children’s

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Hospital in Seattle, Washington.

(Stalinski Decl., Ex. B at 1

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(Docket No. 24-1).)

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Aviation West flew M.M. from Mexico to Seattle, at a cost of

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$495,925.

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203 (Docket No. 24-2).)

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claim for emergency transportation, which United denied.

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(Stalinski Decl., Ex. C at 1-2 (Docket No. 24-1).)

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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

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denial of this claim as M.M.’s authorized representative, which

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United denied.

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a request for external review as M.M.’s authorized

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representative, which United also denied.

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1, 2016, Aviation West initiated this action against United,

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seeking to recover benefits due under the Plan and ERISA, 29

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U.S.C. § 1132(a), as M.M.’s purported assignee.

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Compl. (Docket No. 13).)

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(See PX15; PX16; PX21.)

Aviation West then filed

(See PX41.)

On March

(See First Am.

Defendant moves for summary judgment on the basis,

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among others, that Aviation West lacks standing to bring this

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action.

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action may be brought only by a plan participant, beneficiary,

Under 29 U.S.C. § 1132(a), a civil ERISA enforcement

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fiduciary, or the Secretary of labor.

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cannot bring claims on its own behalf, but may do so if a

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beneficiary assigned its benefits claims to the healthcare

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provider.

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1272, 1277 (6th Cir. 1991); Misic v. Building Serv. Emps. Health

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& Welfare Trust, 789 F.2d 1374, 1377 (9th Cir. 1986) (per

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curiam).

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rights under the Plan to Aviation West.

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Form at 208.)

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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

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the plan if the plan contains a non-assignment clause.

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Davidowitz v. Delta Dental Plan of Cal., Inc., 946 F.2d 1476,

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1481 (9th Cir. 1991); Quaresma v. BC Life & Health Ins. Co., 623

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F. Supp. 2d 1110, 1128-29 (E.D. Cal. 2007) (Wanger, J.)

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(dismissing causes of action against insurer by assignee because

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non-assignment clause prevented the purported assignee from

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having standing to recover under the ERISA plan).

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undisputed that the Plan contains a non-assignment clause that

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prevents a beneficiary from assigning “Benefits under the Policy

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to a non-Network provider without [United’s] consent.”

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46.)

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assignment of M.M.’s benefits to Aviation West.

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See

Here, it is

(Plan at

Plaintiff cites no evidence that United consented to the

Aviation West nonetheless argues it has standing to

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bring this action because United waived the non-assignment clause

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when (1) it did not object to the assignment of benefits document

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and (2) it did not object to the assignment during the internal

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administrative process.

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First, M.M. and Aviation West signed an Assignment of
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Benefits document, which states that if the assignment is

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prohibited “by the terms of an anti-assignment provision . . . ,

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[United should] advise and disclose to [Aviation West] in writing

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. . . within ten (10) days upon receipt of [the] Assignment”;

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otherwise “any anti-assignment provision is waived.”

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Insurance Claim Form at 208.)

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United did not object to the assignment within ten days of

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receipt, United waived its non-assignment clause.

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United to affirmatively reject an assignment is contradictory to

(Health

Aviation West argues that because

Requiring

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the express terms of the Plan, which states that United must

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consent to an assignment.

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West submitted this document to United, United did not sign or

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otherwise acknowledge this agreement and Aviation West provides

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no authority suggesting that United can be bound by a contract it

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did not sign.

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assignment contract that it did not sign does not constitute a

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waiver of the Plan’s non-assignment clause.

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(Plan at 46.)

Further, while Aviation

Therefore, United’s failure to object to the

Second, the Ninth Circuit has held that an insurer is

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required to provide a reason for denying a claim when

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communicating the denial and an insurer waives the right to rely

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on “a known or reasonably knowable reason” not cited in the

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denial letter.

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Healthcare of Ariz., Inc., 770 F.3d 1282, 1296 (9th Cir. 2014);

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see Harlick v. Blue Shield of Cal., 686 F.3d 699, 719 (9th Cir.

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2012) (“A plan administrator may not fail to give a reason for a

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benefits denial during the administrative process and then raise

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that reason for the first time when the denial is challenged in

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federal court . . . .”); Aceves v. Allstate Ins. Co., 68 F.3d

Spinedex Physical Therapy USA Inc. v. United

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1160, 1163-64 (9th Cir. 1995) (“Waiver providers insurers with an

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incentive to investigate claims diligently.

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prevents insurers from denying claims for one reason, then coming

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forward with several other reasons after the insured defeats the

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first.”).

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the non-assignment clause to deny the claim for benefits.

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The doctrine

During the internal appeals, United never relied on

However, if an insurance provider was not aware that

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the healthcare provider was acting as an assignee in the

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administrative appeal, there is no waiver of a non-assignment

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clause.

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at 1297, the Ninth Circuit held that there was no evidence that

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the insurance provider was aware, or should have been aware, of

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the fact that the healthcare provider was acting as the

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beneficiaries’ assignee during the internal administrative

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process claim.

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healthcare provider was acting as the insured’s authorized

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representative charged with filing, collecting, or appealing a

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claim on behalf of the patient.

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provider did not waive the plan’s non-assignment clause when it

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objected to the assignment for the first time in the district

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court.

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Welfare Plan, CASE NO. CV 14-01480 MMM (AGRx), 2014 WL 12573014,

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at *17 (C.D. Cal. Dec. 26, 2014) (finding anti-assignment clause

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was not waived because there were “[n]o allegations . . . that

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defendants knew that [plaintiff] was acting as [the

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beneficiaries’] assignee, rather than as their authorized

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representative”).

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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
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that Aviation West was acting as M.M.’s assignee, as opposed to

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M.M.’s authorized representative, during the administrative

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process.

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information from United as the authorized representative of the

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insured.

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internal administrative appeals and the request for external

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appeal “in its capacity as the authorized representative of

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[M.M.]”

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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.)

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review does Aviation West indicate it is acting as M.M.’s

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assignee.

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authorized representative form.

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West was acting as M.M.’s authorized representative, and had no

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reason to believe Aviation West was an assignee.

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is no evidence that United knew Aviation West was acting as

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M.M.’s assignee, United did not waive the non-assignment clause

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by failing to rely on the non-assignment clause in its benefits

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denial.1

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With each appeal, Aviation West submitted an
United believed that Aviation

Because there

IT IS THEREFORE ORDERED that defendant’s Motion for

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summary judgment as to plaintiff Aviation West (Docket No. 23)

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be, and the same hereby is, GRANTED.

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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.
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IT IS FURTHER ORDERED that any renewed Motion for

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summary judgment based upon grounds not addressed in this Order

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shall be filed by September 18, 2017.

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motion shall be filed by October 2, 2017.

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opposition shall be filed by October 16, 2017.

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such motion shall take place on October 30, 2017, at 1:30 p.m.

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Dated:

August 23, 2017

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Any opposition to such
Any reply to such
Any hearing on