COMPREHENSIVE SPINE CARE, P.A. v. UNITED HEALTHCARE/OXFORD et al

Filing 37

OPINION. Signed by Chief Judge Jose L. Linares on 2/26/2019. (dam, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT Of NEW JERSEY
COMPREHENSIVE SPINE CARE, P.A.,

Civil Action No.: 18-10036 (JLL)

Plaintiff,

OPINION

V.

OXFORD HEALTH INSURANCE, INC.,
UNITED HEALTHCARE SERVICES, INC.,
JOHN DOES 1-10, JANE DOES 1-10, and
ABC CORPORATIONS 1-10,
Defendants.

LINARES, Chief District Judge.
This matter comes before the Court by way of a motion for reconsideration filed by
Defendants Oxford Health Insurance, Inc. and United Healthcare Services, Inc. (ECF No. 28).
Defendants seek reconsideration of the Court’s December 10, 2018 Order and Opinion granting in
part and denying in part their motion to dismiss the Complaint. (See ECF Nos. 23—24). Plaintiff
Comprehensive Spine Care, P.A. has submitted an opposition to Defendants’ motion, (ECE No.
29), to which Defendants have replied, (ECF No. 35). The Court decides this matter without oral
argument pursuant to Rule 78 of the federal Rules of Civil Procedure. F or the reasons set forth
below, the Court denies Defendants’ motion for reconsideration.

I.

BACKGROUND

The facts underlying this dispute were described in this Court’s December 10, 2018
Opinion. (ECF No. 23 (“Op.”) at 1—3). Accordingly, and in the interests ofjudicial economy, the

Court includes an abbreviated statement of the factual and procedural history to the extent such
background is relevant to the instant motion.
This case arises from a dispute between a healthcare provider and an insurance company.
Plaintiff Comprehensive

Spine

Care. P.A.. a healthcare provider, filed this action against

Defendants Oxford Health Insurance, inc. and United Healthcare Services. inc. in state court on
April 24. 2018, alleging violations of New Jersey state law and seeking damages for Defendants’
alleged failtire to pay Plaintiff for its provision of medical services to an insured patient (“Patient”).
(ECf No. 1-i). Defendants removed the action to this Court, (ECF No. 1). and Plaintiff filed an
Amended Complaint. (ECF No. 6 (“Am. Compl.”)).
Plaintiff is a “non-participating or ocit-of-network provider” with respect to Defendants’
insurance plans. (Am. Compi.

13). On some date prior to November 7, 2012, representatives

from Plaintiffs office “contacted Defendants to reqciest prior authorization” for the provision of
medically necessary orthopedic surgery to Patient. (Am. Compl.

¶JJ

14—15). Plaintiff alleges that

it “received authorization from Defendants approving the rendering of surgical services to the
Patient under authorization number 97522373.” (Am. Compl.

¶

15). On November 7, 2012, a

physician employed and/or contracted by Plaintiff performed the necessary surgical procedure on
Patient. (Am. Compl.

¶

16—17). Plaintiff then billed Defendants in the amount of$145,032.00

for the surgery, which Plaintiff alleges “represents normal and reasonable charges for the complex
procedures performed by a Board-Certified Orthopedic Surgeon practicing in New Jersey.” (Am.

Compl.

¶

19).

Defendants ultimately paid Plaintiff a total of $1,474.37, leaving Patient to cover

the balance of$143,557.63. (Am. Compl.

¶ 20).

Plaintiff asserted claims for breach of contract, promissory estoppel, account stated, and
quantum ineruit,

arguing that. “[h]y authorizing the surgery. Defendants agreed to pay the fair and

reasonable rates for the medical services provided by Plaintiff.” (Am. Compl.
7

¶ 24). Defendants

moved to dismiss, arguing that all claims were preempted by the Employee Retirement Income
Sectirity Act, 29 U.S.C.

§ 1001, etseq. (“ERISA”), and, alternatively, that the Amended Complaint

failed to state a claim upon which relief could be granted. (ECF No. 10). This Court denied the
greater part of Defendants’ motion to dismiss, concluding that Plaintiffs’ claims were not
preempted by ERISA and that Plaintiff plausibly stated claims for breach of contract, promissory
estoppel, and account stated. (Op. at 4—12). The Court granted Defendants’ motion with respect
to Plaintiffs qttctntttm meuttit claim and dismissed that claim with prejudice. (Op. at 12—13).
Defendants now move for reconsideration of the Court’s decision.

The thrust of

Defendants’ motion is an October 5, 2012 letter (the “Letter”) that Defendants argue is the basis
for Plaintiffs claims that Defendants preauthorized Plaintiffs provision of services to Patient.
(ECF No. 28-3 (“Mov. Br.”) at 8—9). Attaching the Letter to a declaration in support of their
motion •for reconsideration, (see ECf No. 28-2), Defendants renew their argument that Plaintiffs
claims are preempted by ERISA, as the Letter states that Defendants’ payment of claims will be
determined based on, inter ct/ia, the terms of Patient’s ERISA benefits plan. (Mov. Br. at 9—12).
Defendants further argue that the Court “misapprehended or overlooked” certain arguments that
Defendants raised regarding the sufficiency of Plaintiffs allegations, and ask the Court to
reconsider its conclusion that the Amended Complaint plausibly stated claims for relief under
theories of implied contract, promissory estoppel, and account stated. (Mov. Br. at 5, 14—17).

II.

LEGAL STANDARD

Local Civil Rule 7.1(i) governs motions for reconsideration in this District. It requires a
movant to set forth “the matter or controlling decisions which the party believes the Judge or
Magistrate Judge has overlooked.” L. Civ. R. 7.1(i). To prevail on a motion for reconsideration,

the movant must show at least one of the following grounds: (1) an intervening change in

controlling law; (2) the availability of new evidence not previously available; or (3) the need to
correct a clear

C1TOf

of law or fact or to prevent manifest injustice. Wiest

1’.

Lynch. 710 F.3d 121,

128 (3d Cit. 2013). A motion for reconsideration of a district court’s previous decision is meant
to be an extremely limited procedural vehicle. See Tehctn v. Discthility Mgmt. Servs., Inc., 111 F.
Supp. 2d 542, 549 (D.N.J. 2000). District courts, which have the discretion to consider motions for
reconsideration, grant such motions sparingly. See Cataldo v. Moses, 361 F. Supp. 2d 420, 433
(D.N.J. 2004). Movants seeking reconsideration may not relitigate old matters, and may not raise
arguments or present evidence that could have been raised before the entry of the original
order. See Boretsky v. Governor ofN.J., 433 F. App’x 73, 78 (3d Cir. 2011); Dunkley v. Mellon
Inv’rServs., 37$ F. App’x 169, 172 (3d Cir. 2010).

Defendants do not argue that there has been an intervening change in controlling law.
Instead, Defendants argue that (1) the Letter is “newly discovered evidence” that, when
considered, requires dismissal of Plaintiffs claims, (Mov. Br. at 10). and (2) the Court should
reconsider its Opinion in order to address arguments that it “may have misapprehendeci or
overlooked” upon its initial consideration of Defendants’ motion to dismiss, (Mov. Br. at 9).

III.

ANALYSIS

A. ERISA Preemption
Defendants reassert their argument that Plaintiffs claims are preempted by ERISA

§

514

because they “relate to” a benefit plan governed by ERISA.’ (Mov. Br. at 10—12). A state law

In their motion for reconsideration, Defendants protest the Court’s determination in its previous Opinion
that Plaintifis claims were not preempted by ERISA § 502, claiming that Defendants “never argued” that
Plaintiffs claims were preempted by that provision, and raising a concern that the Court’s attention was
“divert[ed] ...from the real legal issues” underlying the motion to dismiss. (Mov. Br. at 10 n.2). But
Defendants’ motion to dismiss repeatedly cites to ERISA § 502 in support of their argument that Plaintiffs
claims are preempted. (ECF No. 10—I at 21 (arguing that claims seeking to enforce rights to benefits
under ERISA plans may only be brought pursuant to ERISA § 502(a)’ and that “state laws that interfere
4

cause of action is preempted by

§

514: (1) “if it has a ‘reference to’ ERISA plans,” or(2) ifit “has

an impermissible ‘connection with’ ERISA plans.” Gobeille v. Liberty Mitt. Ins.

Co., 136 S. Ct.

936, 943 (2016) (citations omitted). In considering Defendants’ motion to dismiss, this Court
rejected the argument that Plaintiffs claims were preempted by ERISA

§

514, concluding that

“Plaintiffs claims do not ‘relate to’ an ERISA-regulated plan because the Amended Complaint
does not seek damages pursuant to the terms of Patient’s benefit plan.

.

.

.

[and] nothing in the

Amended Complaint directs the Court to consider the terms of Patient’s benefit plan in any way.”
(Op. at 8). “Instead,” the Court noted. “the Amended Complaint seeks damages arising from an
independent relationship between Plaintiff and Defendants,

...

[and] at this stage in the

proceedings. the Court is concerned with the focir corners of the Amended Complaint.”

(Op. at 8).

In so reasoning, the Court analogized to a case from this District in which the Court rejected
an insurance company’s argument that a health care provider’s state law claims
by ERISA

§

were

preempted

514 where the complaint was similarly devoid of any indication that the Court would

be required to examine the terms of an ERISA plan in order to resolve the dispute. (Op. at 7—8
(citing

Gtastein v. Aetna, Inc., No. 18-9262, 2018 WL 4562467 (D.N.J. Sept. 24, 2018)). By

contrast, the Court distinguished cases from this District finding that ERISA

§

514 preempted

claims that arose from “preauthorization letters that expressly stated that preauthorization was
subject to the terms of an ERISA benefit plan, therefore requiring a court to interpret the plan in
order to resolve the dispute.” (Op. at 8—9 (citing G/astein v. Horizon B/tie Cross Bttie Shield of
Ani., No. 17-7983, 2018 WL 3849904, at * I (D.N.J. Aug. 13, 2018) andAt/. Shore Su;giccdAssocs.

with the ERISA civil enforcement scheme
are preempted by both ERISA § 514 cincl 502”) (emphasis
added)). While it is true that Defendants abandoned this line of argument in their reply to Plaintiffs
opposition to their motion, (ECF No. 22 at 14), the Court’s Opinion addressed the § 502 issue in the interest
of thoroughness, (Op. at 4—6). Since the Court then gave clue consideration to Defendants’ preemption
argument pursuant to ERISA § 514. (Op. at 6 -9), as well as to Defendants arguments concerning the
sufficiency of Plaintiffs allegations. (Op. at 9 13), Defendants’ concern that the § 502 issue “divert[ecl]”
the Courfs attention is misplaced.
...

5

v. Horizon B/tie Cross 3/tie Shield o/N]., No. 17-7534, 2018 WL 2441770, at *1 (D.N.J. May 31,
201 8)). No such letter was referenced either in the Amended Complaint or in Defendants’ motion
to dismiss briefing.
Defendants now alert the Cocu-t to the existence of an allegedly analogous preauthorization
letter, hoping it will prove to be the golden ticket that places Plaintiff’s claims squarely in the camp
with those that have been found preempted by

§ 514. Defendants’ Letter, sent to Patient, expressly

states that “[r]eimbursement is determined after services are rendered and a claim is submitted,”
and that “[t]herefore, this approval does not guarantee payment.” (ECF No. 28-2 at 1). The Letter
further explains that payment will be based on, inter alict, the “[t]erms, conditions, exclusions and
limitations of the Member’s [i.e., Patient’s] health benefits plan.” (EC’F No. 28-2 at 1). Defendants
therefore argue that the Letter is “dispositive” in that it “refutes Plaintiffs allegation that the
preauthorization resulted in any promise [or] agreement by the Defendant to pay Plaintiff at its
billed charges or at any rate other than what is required by the terms of the Patient’s governing
ERISA Plan,” which in turn requires a finding that Plaintiffs claims are preempted by ERISA

§ 514. (Mov. Br. at 5—6, 10—12).
Defendants colTectly note that a court reviewing a motion to dismiss may consider
“documents incorporated into the complaint by reference,” as well as any “document integral to
or explicit/v relied upon in the complaint.” Winer Fami/v Tr. v. Queen, 503 F.3d 319, 328 (3d Cir.
2007) (quoting Tellabs, Inc. 1’. Mctkor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007), then quoting
In re Burlington Coot fctctorv Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)). Defendants
therefore tirge the Court to consider the Letter on reconsideration because it is “referenced in

Plaintiffs Amended Complaint.” (Mov. Br. at Ii). According to Defendants, the Amended
Complaint’s inclusion of Patient’s reference number, 97522373, which matches the reference
number contained in the Letter, requires a finding that the Letter is “incorporated into the Amended
6

Complaint by reference.” (Mov. Br. at 9 n.l, 10—11). Plaintiff disputes this argument, asserting
that the Letter is neither “found within [the Amended Complaint] [n]or replied upon by Plaintiff”
(ECF No.29 C’Opp. Br’ at 8). As the Amended Complaint itself does not refer to any letter, and
as Plaintiffdisputes that its claims arise from the Letter, the Court cannot find that the Letter itself
is “explicitly relied upon” by the Amended Complaint. Winer Family Th, 503 F.3d at 328.
Plaintiff also disputes the authenticity of the Letter arguing that Defendants have not
certified the province of the Letter, “whether the [L]etter was sent to Plaintiff and whether
[Defendants] confirmed that the Plaintiff received the [L]etter (if it was indeed sent to Plaintiff).”
(Opp. Br. at 10). Defendants respond by attaching a second October 5, 2012 letter to their reply
in support of their motion for reconsideration, which Defendants claim was sent to Dr. Norman
Ashraf, and which includes similar language as the Letter that was sent to Patient (ECF No. 351 14; ECF No. 35-2). Plaintiff has not had an opportunity to respond to this second letter, as it
was submitted after Plaintiffs opposition to Defendants’ motion for reconsideration was filed. At
this stage in the proceedings, the Court may consider only “an undisputeda5’ authentic document”
attached to a defendant’s motion to dismiss. Pension Benqflt Guar. Corp. v. White Consot hidus.,
Inc., 998 F.2d 1192, 11% (3d Cir. 1993) (emphasis added). Because Plaintiff disputes the
authenticity of the Letter, and denies that its claims are based on the Letter, the Court is not able
to rely on the Letter in dismissing Plaintiffs claims.

Furthermore, the Letter is fr from “new evidence not available previously,” as is required
for the Court to reconsider its ruling on the motion to dismiss. Leja v. Schmidt Mfg, hic., 743 F.
Supp. 2d 444,456 (D.N.J. 2010). “‘[N]ew evidence,’ for reconsideration purposes, does not refer
to evidence that a party obtains or submits to the court after an adverse ruling. Rather, new
evidence in this context means evidence that a party could not earlier submit to the court because
that evidence was not previously available.” Howvrd Hess Dental Labs. Inc.
7

i

Dentsply Int’l,

inc., 602 F.3d 237, 252 (3d Cir. 2010) (affirming denial of motion for reconsideration where the

record did not suggest that the evidence newly presented to the court was unavailable to the
movants when they filed the underlying motion). Here, the Letter is dated October 5, 2012. (ECF
No. 28-2 at 1). Defendants provide no explanation for their failure to attach the Letter to their
motion to dismiss other than that it was “difficult[] for Defendant to locate all relevant records
fom so old a claim.” (ECF No. 35 at 8). Defendants explain that, “[u]pon receiving P1aint:iffs
Complaint” in June of 2018, Defendants “attempted to gather all of the relevant documentation,”
at which time Defendants “located but inadvertently did not forward the Preauthorization Letters
to [Defendants’] counsel prior to the filing of the original motion to dismiss.” (ECf No. 35 at 8).
Defendants’ own failure to communicate with their counsel regarding a document that was in their
possession as of 2012 and that they now claim is dispositive in their favor does not convince the
Court that the evidence was “unavailable” at the time the motion to dismiss was filed.2
Accordingly, Defendants have not demonstrated that the Letter is appropriate for the Court’s
consideration on a motion for reconsideration. See Coulter v. Linclsay, 622 F. App’x 187, 1 89 (3d
Cir. 2015) (motions for reconsideration “may not be used
been offered earlier”); OR. v.

Hunter,

...

to present evidence that could have

576 F. App’x 106, 110 (3d Cir. 2014) (affirming denial of

motion for reconsideration where “new” evidence offered in support of the reconsideration motion
“predate[d the movants’] underlying motions” that the district court was asked to reconsider).

Defendants counter that, “to the extent this Court finds the Preauthorization Letter is not
‘newly discovered’ evidence, refusing to consider the letter at this time would undermine judicial
economy because [Defendants] can and will immediately answer and then file a motion for

2

The Court further notes that neither I)efendants’ brief in support of their motion to dismiss, nor their brief
in reply to Plaintiffs opposition to the motion, contains a single reference to this or any letter. (See IiCF
Nos. 10-1, 22).
8

judgment on

the pleadings under [Federal Rule of Civil Procedure] 12(c)

...

based on the

Preauthorization Letter.” (ECF No. 35 at 5). Casting a specter of future motion practice. however,
does not overcome the fact that the Letter was not previously unavailable evidence. The Court
notes, as it did in its prior Opinion, that Defendants will have an opportunity after discovery to
argue that the evidence collectively militates in favor of a dismissal of the action. However, the
Court cannot allow Defendants to present only favorable evidence to the Court at this early stage
in

the proceedings before Plaintiff is afforded that same opportunity.

B. Sufficiency of the Allegations
1. Implied Contract

In its prior Opinion, this Court determined that the Amended Complaint plausibly stated a
claim that Defendants breached an implied-in-fact contract. (Op. at 10—11). Defendants maintain
that “the Court may have misapprehendeci or

did

not fully appreciate” their argument that

Plaintiffs implied contract claim fails because the Amended Complaint lacks allegations
“concerning what consideration Plaintiff provided to Defendant.” (Mov. Br. at 6). “[M]otions for
reconsideration are appropriate only to rectify plain errors of law

...

,

and they may not be used to

relitigate old matters.” Coulter, 622 F. App’x at 189. Defendants do not argue that reconsideration
is necessary to correct a clear error of law or to prevent manifest injustice. Flowever, to the extent
Defendants object to the Court’s treatment of their consideration argtiment in the December 10,
201$ Opinion, the Court examines that argument at length here, and rejects it.
Plaintiffs claiming a breach of contract must meet only a low threshold” for pleading
consideration. Giordcino v. Saxon Mortg. Sen’s., Inc., No. 12-7937, 2014 WL 4897190, at *7
(D.N.J. Sept. 30, 2014). Under New Jersey law, “[c]onsideration may take many forms and may
be based upon either ‘a detriment incurred by the promisee or a benefit received by the promisor.”
9

Secn’iew Orthopciedics excel. Fleming v. Net!’! Jiectlthcare 1?es., Inc., 366 N.J. Super. 501, 508-09
(App. Div. 2004) (quoting Cont’/ BankoiPct. v. BctrclcnRidingAcacL, 93 N.J. 153, 170 (1983)):
see also Oscctr v. Siniconidis. 352 N.J. Super. 476. 485 (App. Div. 2002) (“A very slight advantage

to one party, or a trifling inconvenience to the other, is a sufficient consideration to support a
contract.”) (quoting Joseph Lcmcle & Son v. Wefisco Rca/ti, 131 N.J.L. 191, 198 (1943)). Here.
Plaintiff claims that it agreed to provide medical services to Patient in exchange for Defendants’
promise to pay a “fair and reasonable” amount for those services. (Am. Compi.

¶J 24—25).

The

exchange of promises that Plaintiff alleges is plainly adequate consideration to support a contract.
See Oscar, 352 N.J. Super. at 485 (“[W]hatever consideration a prornisor assents to as the price of
Mutual promises are sufficient consideration

his promise is legally sufficient consideration

one for the other.”) (quoting Coast Nat’! Bank v. Bloom. 113 N.J.L. 597, 602 (1934)).
Defendants attempt to wedge their prevailing argument regarding Plaintiffs quanta/n
mcciii! claim—that insurance companies derive no benefit from services provided to an insured,
(see

Op. at 12—1 3)—into the breach of contract context.

(Mov. Br. at 14—1 5). However.

quantum

meruit is an entirely distinct cause of action from breach of contract, one that requires the conferral

of a benefit. See China Falcon Flying Ltd. v. Dassault Falcon Jet Corp., 329 F. Supp. 3d 56, 76
(D.N.J. 201 8). A valid contract does not require the conferral of benefits on any party in particular;
what it requires is “a bargained-for exchange of promises.” Commerce Bancoip, Inc. v. BK mt ‘1.

ins. Brokers, Ltd., 490 F. Supp. 2d 556, 561 (D.N.J. 2007). New Jersey courts also routinely
recognize consideration in the form of “a detriment incurred by the promisee”—where one party

promises to act or forbear, thereby incurring a detriment, as Plaintiff did here when it agreed to
provide medical services to Patient. Seavicii’ Orthopaedics, 366 N.J. Super. at 508 (quoting Cotit ‘1
Bcink ofPa.. 93 N.J. at 170). For these reasons, the Court concludes that Plaintiff has adequately
pleaded consideration to support its implied cotitract claim.
10

___________________________

______

2. Account Stated
Defendants argue that Plaintiffs account stated claim fails, and that reconsideration of it is
warranted, because the account stated claim is dependent on the viability of Plaintiffs implied
contract claim, which Defendants argue fails for lack of consideration. (Mov. Br. at 17). Because
the Court rejects Defendants’ consideration

argument,

the Court finds that Defendants have not

raised any clear error of law walTanting reconsideration of Plaintiffs account stated claim.

3. Promissory Estoppel
Defendants argue for reconsideration of Plaintiffs promissory estoppel claim because
Plaintiffs allegations of reliance “are completely refuted by the language” in the Letter, which
Defendants argue shows that they never promised to pay a “fair and reasonable” rate. (Mov. Br.
at 1 6). As Defendants’ argument depends entirely on the Letter, which the Court has already
declined to accept on reconsideration as it is neither new and previously unavailable, nor
undisputedly authentic, the Court rejects Defendants’ argciments for reconsideration of the
promissory estoppel claim.

IV.

CONCLUSION

For the foregoing reasons, Defendants’ motion for reconsideration is denied.
appropriate Order accompanies this Opinion.

DATED: February

2019
JOSE L. LINARES
Chief Judge, United States District Court

11

An