Crutchfield v. Transamerica Occidental Life Insurance Co.

Filing 40

MEMORANDUM OPINION AND ORDER by Judge John G. Heyburn, II on 3/22/12 sustaining 35 Motion to File a Third Amended and Supplemental Complaint; denying 30 Motion to Dismiss for Failure to State a Claimcc:counsel (DAK)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE
CIVIL ACTION NO. 3:10-00777-H

JEANNE F. CRUTCHFIELD,
by SARA ROGERS CRUTCHFIELD,
next friend and attorney-in-fact

PLAINTIFF

V.
TRANSAMERICA OCCIDENTAL
LIFE INSURANCE CO. n/k/a
TRANSAMERICA LIFE INSURANCE
CO.

DEFENDANT

MEMORANDUM OPINION AND ORDER
Simply stated, this case concerns whether Defendant’s medical insurance policy covers
Plaintiff’s medical treatment for Alzheimer’s disease. In her Second Amended Complaint,
Plaintiff asserts that it is and that Defendant’s failure to provide Plaintiff with benefits violates:
(1) the Kentucky Consumer Protection Act, KRS § 367.170; (2) the Kentucky Unfair Claims
Settlement Practices Act, KRS § 304.12-230; (3) the Kentucky Insurance Code, KRS § 304.12010 and KRS § 304.12-020; and (4) Defendant’s duty of good faith and fair dealing.
Defendant has moved to dismiss, arguing that Plaintiff’s Second Amended Complaint
presents inadequate facts in support of her claims. Plaintiff disagrees, and has moved to file a
Third Amended and Supplemental Complaint to clarify any existing ambiguity in her factual
allegations. For the reasons that follow, the Court will deny Defendant’s Motion to Dismiss for
Failure to State a Claim, and will sustain Plaintiff’s Motion to File a Third Amended and
Supplemental Complaint.
I.

“When reviewing a defendant’s motion to dismiss, the Court must construe the complaint
in a light most favorable to the plaintiff and accept all factual allegations, but not legal
conclusions, as true.” Harris v. Louisville-Jefferson Cnty. Metro Gov’t, 3:11-CV-338-H, 2012
WL 777263, at *1 (W.D. Ky. Mar. 8, 2012) (citation omitted). To survive the motion, “[a]
plaintiff must plead ‘enough facts to state a claim to relief that is plausible on its face.’” Id.
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plaintiff satisfies this standard
when it “pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937,
1949 (2009).
Defendant argues that the Second Amended Complaint lacks factual content allowing the
Court to reasonably infer liability upon Defendant. Defendant charges that Plaintiff’s allegations
amount “to no more than a formulaic recitation of statutory provisions.” To resolve this dispute,
the Court looks directly to the Second Amended Complaint (and, consequently, to the original
Complaint, which is incorporated by reference). It alleges that Plaintiff has purchased medical
insurance from Defendant under a Long-Term Care Insurance Policy (the “Policy”) since 1992.
In 2009, Plaintiff was diagnosed with Alzheimer’s disease and sought care at Barton House, a
senior care facility specializing in treating patients with Alzheimer’s disease. Based upon
Defendant’s representations, Plaintiff believed her care and treatment at Barton House to be
included within her Policy and the resulting charges would therefore be covered. Instead,
according to Plaintiff, Defendant abused its discretion and breached its duties of good faith and
fair dealing by denying coverage for Plaintiff’s treatment. As a result, Defendant violated
several state statutes designed to protect consumers from unfair business practices.

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The Second Amended Complaint appears to present sufficient facts showing that
Plaintiff, assuming her allegations are true, may be entitled to relief from Defendant. Although
Defendant argues that it merely recites legal standards and conclusions, this is not entirely the
case. It alleges that Defendant led Plaintiff to believe that the Policy covered treatment for
Alzheimer’s disease. According to Plaintiff, the Policy provided no such coverage, and
Defendant was aware of this all along. Accepting these facts as true, Plaintiff satisfies her
pleading requirements because it is reasonable to infer that Defendant may be liable for
Plaintiff’s damages.
II.
Plaintiff has also moved to file a Third Amended and Supplemental Complaint.
Defendant opposes the filing, arguing that Plaintiff’s request is untimely. Defendant asserts that
the new pleading presents no new allegations that were likely unknown to Plaintiff at the
inception of this case. The Court agrees, but emphasizes that the Third Amended Complaint
presents no new claims against Defendant. Thus, it simply provides additional factual support
for claims previously asserted in the Second Amended Complaint. Defendant should not be
surprised by any of these allegations and the Court finds that no advantage or disadvantage is
gained or endured by either party. The new pleading merely clarifies claims that Plaintiff
previously raised and specifies the factual allegations supporting them.
Being otherwise sufficiently advised,
IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss for Failure to State a
Claim is DENIED.
IT IS FURTHER ORDERED that Plaintiff’s Motion to File a Third Amended and

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Supplemental Complaint is SUSTAINED and the Third Amended and Supplemental Complaint
is ORDERED FILED.

March 22, 2012

cc:

Counsel of Record

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