LIFEBRITE HOSPITAL GROUP OF STOKES, LLC v. BLUE CROSS AND BLUE SHIELD OF NORTH CAROLINA

Filing 58

MEMORANDUM OPINION AND ORDER signed by JUDGE WILLIAM L. OSTEEN, JR on 3/16/2022; that LifeBrite's Motion to Dismiss, (Doc. 50 ), is GRANTED IN PART AND DENIED IN PART. The motion is GRANTED as to BCBSNC's c ounterclaims for breach of contract accompanied by fraudulent act (Count IV) and unjust enrichment (Count X). The motion is DENIED as to BCBSNC's counterclaims for fraudulent misrepresentation (Count I), negligent misrepresentation (Count II), b reach of contract (Count III), tortious interference with contract (Count V), unfair and deceptive trade practices (Count VI), restitution (Count VII), declaratory and injunctive relief (Count VIII), and constructive trust and equitable liens (Count IX). (Sheets, Jamie)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

LIFEBRITE HOSPITAL GROUP OF
STOKES, LLC,
Plaintiff,
v.
BLUE CROSS AND BLUE SHIELD OF
NORTH CAROLINA,
Defendant.

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1:18CV293

MEMORANDUM OPINION AND ORDER
OSTEEN, JR., District Judge
Before this court is a Motion to Dismiss First Amended
Counterclaims pursuant to Rule 12(b)(6) filed by Plaintiff
LifeBrite Hospital Group of Stokes, LLC (“LifeBrite”).
(Doc. 50.) For the reasons stated herein, this court finds that
the motion should be granted in part and denied in part.
I.

FACTUAL AND PROCEDURAL BACKGROUND
A.

Factual Background

On a motion to dismiss, a court must “accept as true all of
the factual allegations contained in the complaint.” Ray v.
Roane, 948 F.3d 222, 226 (4th Cir. 2020) (internal quotation
marks omitted) (quoting King v. Rubenstein, 825 F.3d 206, 212
(4th Cir. 2016)). The court may also consider documents

“attached to the complaint as exhibits.” Goines v. Valley Cmty.
Servs. Bd., 822 F.3d 159, 166 (4th Cir. 2016); see also Fed. R.
Civ. P. 10(c) (“A copy of a written instrument that is an
exhibit to a pleading is a part of the pleading for all
purposes.”). The following facts are taken from the First
Amended Counterclaim and its attachments as true.
1.

The Parties

LifeBrite operates a critical access hospital in Danbury,
North Carolina, a town of 189 residents. (First Am. Countercls.
(Doc. 20) ¶ 12.)1 Prior to January 31, 2017, Pioneer Health
Services of Stokes County, Inc. (“Pioneer”) operated the
hospital. (Id. ¶ 13.) In December 2016, Pioneer went bankrupt,
and LifeBrite’s parent company purchased Pioneer. (Id.)
LifeBrite assumed all rights and obligations relating to the
operation of the hospital beginning on January 31, 2017. ( Id.)
LifeBrite Laboratories, LLC (“LifeBrite Labs”) is in Atlanta,
Georgia and is an affiliated company of LifeBrite. (Id. ¶¶ 2,
4.)
Defendant Blue Cross and Blue Shield of North Carolina
(“BCBSNC”) is a hospital and medical services corporation. ( Id.

1

All citations in this Memorandum Opinion and Order to
documents filed with the court refer to the page numbers located
at the bottom right-hand corner of the documents as they appear
on CM/ECF.
-2-

¶ 32.) BCBSNC is an independent licensee of the Blue Cross and
Blue Shield Association (“BCBS Association”). (Id. ¶ 34.) BCBS
Association has a “BlueCard program, which allows members of one
BCBS Association licensee’s health plans to obtain healthcare
services in another BCBS Association licensee’s service
area . . . . (Id. ¶ 35.) Under the BlueCard program, if a BCBS
member from another BCBS Association licensee receives care from
a participating provider in North Carolina, “services performed
and billed by that provider . . . are billed to [BCBSNC].” (Id.
¶ 36.) BCBSNC pays the claim and then reconciles with the other
Association licensee. (Id. ¶ 37.)
2.

Managed Care and BCBSNC

BCBSNC insures group health plans directly and also
provides administrative services to self-funded group plans
pursuant to an administrative services agreement between BCBSNC
and the health plan’s sponsor, typically an employer. (Id.
¶¶ 40–41.) “Many of the health plans sponsored by private
employers are governed by ERISA, 29 U.S.C. § 100 et seq.” (Id.
¶ 41.)
BCBSNC also “administers the Service Benefit Plan, an
insurance plan for federal employees . . . sometimes known as
the ‘Federal Employee Program.’ Similarly, [BCBSNC] is

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authorized to administer Medicare Advantage plans by the Centers
for Medicare and Medicaid Services.” (Id. ¶ 48.)
3.

BCBSNC’s Network of Participating Providers

BCBSNC has a network of participating (or “in-network”)
healthcare providers who contract with BCBSNC to accept a
negotiated rate for their services in exchange for increased
access to BCBSNC members and increased certainty in payment from
BCBSNC. (Id. ¶ 51.) Non-participating (or “out-of-network”)
providers may receive less money from BCBSNC than participating
providers, and BCBSNC members usually must pay a larger share of
the cost of services from non-participating providers. (Id.
¶ 52.) LifeBrite is a participating provider. (Id. ¶ 53.)
LifeBrite Labs is a non-participating provider. (Id. ¶ 54.)
4.

The Contracts

As an in-network provider of BCBSNC, LifeBrite was bound by
several contracts with BCBSNC, including a Network Participation
Agreement (“NPA”) and a Medicare Provider Agreement (“MPA”)
(together, “the Contracts”). (Ex. A, Network Participation
Agreement (“NPA”) (Doc. 20-1); Ex. B, Medicare Provider
Agreement (“MPA”) (Doc. 20-2).) The Contracts governed
reimbursement BCBSNC would pay to LifeBrite for services
LifeBrite provided to its patients who were members of BCBSNC or

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another BCBS Association plan. (First Am. Countercls. (Doc. 20)
¶ 15.)
Under the terms of the Contracts, LifeBrite agreed to
“render Medically Necessary Covered Services to Members . . .
according to the terms of this Agreement.” (NPA (Doc. 20 -1)
§ 2.1.1.) LifeBrite also agreed to “provide Covered Services to
Members so as to provide health or medical care in conformity
with accepted and prevailing practices applicable to acute care
hospitals.” (Id. § 2.1.2.1.) LifeBrite further agreed “to accept
and treat BCBSNC Members and to provide Medically Necessary
Covered Services . . . in accordance with the terms of this
Agreement.” (MPA (Doc. 20-2) § 2.1.) LifeBrite was guaranteed
payment under the Contracts “[f]or Covered Services provided to
Members at the sites listed in the Site of Service Exhibit.”
(NPA (Doc. 20-1) § 4.1.) The NPA Site of Service Exhibit
included one facility: Pioneer Community Hospital of Stokes.
(Id. at 17.) The MPA listed several facility providers,
including Pioneer Community Hospital of Stokes. (MPA (Doc. 20-2)
at 21.)2

2

Pioneer Community Hospital of Stokes is marked through in
the chart of group and/or facility providers on the MPA, (MPA
(Doc. 20-2) at 21), but it is then written in pen below the
chart of providers.
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Additionally, LifeBrite agreed not to bill or seek
reimbursement from any BCBSNC member for services BCBSNC
determined were not “Medically Necessary.” (NPA (Doc. 20-1)
§ 4.5.5.) Section 1.12 of the NPA defines “Medically Necessary”
as services that are:






Provided for the diagnosis, treatment, cure, or
relief of a health condition, illness, injury, or
disease; and, except as allowed under NCGS 58-3-255,
not for experimental, investigational, or cosmetic
purposes;
Necessary for and appropriate to the diagnosis,
treatment, cure, or relief of a health condition,
illness, injury, disease, or its symptoms;
Within generally accepted standards of medical care
in the community;
Not solely for the convenience of the insured, the
insured's family, or the provider.

(Id. § 1.12.) Furthermore, LifeBrite agreed to comply will all
applicable laws, regulations, and industry standards, ( id.
§ 2.3.2.), as well as comply with BCBSNC’s programs, policies,
and procedures, (id. § 2.3.1; MPA (Doc. 20-2) § 2.1). LifeBrite
further agreed not to assign, delegate, or transfer any part of
its obligations under the Contracts without BCBSNC’s consent.
(NPA (Doc. 20-1) § 6.4.1; MPA (Doc. 20-2) § 6.4.)
5.

Overview of Laboratory Testing

One of the services for which LifeBrite sought
reimbursement from BCBSNC was laboratory drug testing. (First
Am. Countercls. (Doc. 20) ¶ 81.) “Drug tests are laboratory

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analyses used to aid in the detection of prescription,
recreational, or illicit substances . . . .” (Id. ¶ 64.) The
most common method of drug testing is a urine test. (Id. ¶ 65.)
There are two categories of urine testing: presumptive testing
and definitive testing. (Id. ¶ 66.) “Presumptive testing is used
. . . to determine the presence or absence of one or more drugs
or drug classes. . . . Presumptive testing is also referred to
as ‘screening’ or ‘qualitative’ testing.” (Id. ¶ 67.) On the
other hand, “[d]efinitive testing is a follow-up test performed
. . . to validate the identity and quantity of a specific drug
. . . . Definitive testing is also referred to as ‘confirmation’
or ‘quantitative’ testing.” (Id. ¶ 68.) Definitive testing is
necessary only in limited circumstances. (Id. ¶ 69.) BCBSNC
covers drug testing “when it meets (1) all the terms and
conditions of the member’s benefit plan; (2) when it meets all
the requirements of [BCBSNC’s] Corporate Medical and other
applicable policies; and (3) when it meets all the terms and
conditions of the rendering provider’s contract.” ( Id. ¶ 70.)
6.

The Alleged Fraudulent Scheme

BCBSNC alleges that after LifeBrite assumed Pioneer’s
duties under the Contracts, it “repeatedly made material
misrepresentations to [BCBSNC] in order to get paid for services
it did not provide, on specimens it knew had been illegally
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procured, and that it knew did not meet the applicable medical
necessity requirements.” (Id. ¶ 81.) BCBSNC relied on
LifeBrite’s misrepresentations and paid $11 million to LifeBrite
based on those misrepresentations. (Id.)
The scheme is alleged to have occurred as follows.
LifeBrite sales representatives approached providers to use
LifeBrite for their laboratory testing, representing that
LifeBrite Labs was in-network with BCBSNC when it in fact was
not. (Id. ¶ 82.) LifeBrite sales representatives further
“represented that the providers’ patients would not be required
to pay their cost-sharing obligations.” (Id.) LifeBrite sales
representatives did not tell the providers that LifeBrite Labs
would be performing the services, but the services would be
billed through LifeBrite. (Id.) LifeBrite sales representatives
also persuaded providers to request a standard definitive
testing panel, rather than first requesting a presumptive test,
which was in violation of BCBSNC’s policies. (Id. ¶¶ 83–85.)
BCBSNC alleges that LifeBrite “paid kickbacks to some of these
providers” to persuade the providers to use LifeBrite. ( Id.
¶ 87.)
The laboratory tests were not performed by LifeBrite;
rather, LifeBrite Labs, a non-participating provider located in
Atlanta, Georgia, performed the tests. (Id. ¶¶ 88, 100.) In
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fact, “LifeBrite Hospital did not have the capability to perform
definitive testing at the facility in Stokes County.” ( Id.
¶ 90.) But when LifeBrite submitted claim forms to BCBSNC, the
claim forms indicated LifeBrite was the entity rendering
services. (Id. ¶ 99.)3 LifeBrite Labs was not mentioned on the
claim forms. (Id.)
Additionally, LifeBrite represented on the claim forms that
the services were performed on patients of the Stokes County
hospital rather than non-patients, (id. ¶¶ 91, 102–03), failed
to refer in-network for laboratory testing services, (id. ¶ 92),
and represented that the tests were medically necessary, (id.
¶¶ 104–05).
“To conceal its scheme, LifeBrite Hospital consciously
ignored its obligation to collect member payment obligations.”
(Id. ¶ 94.) Had LifeBrite collected such payment, this would
likely have alerted BCBSNC members that they were being charged
for services at a hospital they had never visited. (Id.) BCBSNC
lost approximately $1.7 million in unpaid member obligations due
to LifeBrite’s failure to collect member payment. ( Id. ¶ 95.)

3

BCBSNC included two sample claims in its counterclaims as
further evidence of LifeBrite’s misrepresentations. ( First Am.
Countercls. (Doc. 20) ¶¶ 109-17; Ex. C (“Sample Claim 1”)
(Doc. 20-3); Ex. D (“Sample Claim 2”) (Doc. 20-4).)
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In November 2017, BCBSNC placed LifeBrite on prepayment
review because of the noticeable increase in claims. (Id.
¶ 119.) Prepayment review required LifeBrite to submit medical
record documentation sufficient to establish the medical
necessity of the services before BCBSNC would pay. (Id.) Even
while on prepayment review, LifeBrite submitted claims for
laboratory testing done at LifeBrite Labs but omitted LifeBrite
Labs from the claim forms. (See Sample Claim 1 (Doc. 20-3);
Sample Claim 2 (Doc. 20-4).)4 Only LifeBrite was listed as the
provider. (See Sample Claim 1 (Doc. 20-3); Sample Claim 2
(Doc. 20-4).)
BCBSNC paid $11 million of LifeBrite’s claims before it
realized LifeBrite had engaged in fraud. (Id. ¶¶ 5, 81.) On
November 14, 2017, BCBSNC began to deny LifeBrite’s claims.
(Compl. (Doc. 5) ¶ 11.)
B. Procedural Background
LifeBrite sued BCBSNC for breach of contract and unjust
enrichment. (Id. ¶¶ 13–18.) BCBSNC answered and responded with
ten counterclaims for fraudulent and negligent misrepresentation
(Counts I-II), breach of contract (Count III), breach of

4

Sample Claim 1 has a date of “11/15/2017” as the “Date of
Service Start” and “Date of Service End,” but the “Received
Date,” is “12/26/2017,” (Sample Claim 1 (Doc. 20-3) at 4), which
indicates LifeBrite was on prepayment review when it submitted
the claim to BCBSNC.
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contract accompanied by fraudulent act (Count IV), tortious
interference with contract (Count V), unfair or deceptive trade
practices (Count VI), restitution under ERISA § 502(a)(3) (Count
VII), declaratory and injunctive relief under ERISA § 502(a)(3)
and 28 U.S.C. §§ 2201 and 2202 (Count VIII), constructive trust
and equitable liens (Count IX), and unjust enrichment (Count X).
(First Am. Countercls. (Doc. 20) ¶¶ 121–221.) LifeBrite moved to
dismiss BCBSNC’s First Amended Counterclaims, (Pl.’s Mot. to
Dismiss First Am. Countercls. (“Pl.’s Mot.”) (Doc. 50)), and
filed a brief in support, (Mem. of Law in Supp. of Pl.’s Mot. to
Dismiss First Am. Countercls. (“Pl.’s Br.”) (Doc. 51)). BCBSNC
responded, (Def.’s Br. in Opp’n to Pl.’s Mot. to Dismiss First
Am. Countercls. (“Def.’s Resp.”) (Doc. 55)), and LifeBrite
replied, (Reply Mem. of Law in Supp. of Pl.’s Mot. to Dismiss
First Am. Countercls. (“Pl.’s Reply”) (Doc. 57)). This matter is
ripe for adjudication.
II.

STANDARD OF REVIEW
To survive a Rule 12(b)(6) motion, “a complaint must

contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible on its
face if “the plaintiff pleads factual content that allows the
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court to draw the reasonable inference that the defendant is
liable” and demonstrates “more than a sheer possibility that a
defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S.
at 556–57). When ruling on a motion to dismiss, this court
accepts the complaint’s factual allegations as true. Id.
Further, this court liberally construes “the complaint,
including all reasonable inferences therefrom, . . . in the
plaintiff’s favor.” Estate of Williams-Moore v. All. One
Receivables Mgmt., Inc., 335 F. Supp. 2d 636, 646 (M.D.N.C.
2004). This court does not, however, accept legal conclusions as
true, and “[t]hreadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not
suffice.” Iqbal, 556 U.S. at 678.
III. ANALYSIS
A.

Fraudulent and Negligent Misrepresentation (Counts III)

LifeBrite moves to dismiss BCBSNC’s claims for fraudulent
and negligent misrepresentation. (Pl.’s Mot. (Doc. 50).) This
court will first address LifeBrite’s argument that North
Carolina’s economic loss rule bars BCBSNC’s claims for
fraudulent and negligent misrepresentation. (Id. at 26–28.)
Ordinarily, under North Carolina’s economic loss rule, a
contractual breach does not give rise to a tort action. Kelly v.
Ga.-Pac. LLC, 671 F. Supp. 2d 785, 791 (E.D.N.C. 2009) (citing
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N.C. State Ports Auth. v. Lloyd A. Fry Roofing Co., 294 N.C. 73,
81, 240 S.E.2d 345, 350 (1978), rejected in part on other
grounds by Trs. of Rowan Tech. Coll. v. J. Hyatt Hammond
Assocs., Inc., 313 N.C. 230, 328 S.E.2d 274 (1985)). However,
the economic loss doctrine does not apply “to claims for fraud
brought contemporaneously with claims for breach of contract .”
Bradley Woodcraft, Inc. v. Bodden, 251 N.C. App. 27, 34, 795
S.E.2d 253, 259 (2016) (“[W]hile claims for negligence are
barred by the economic loss rule where a valid contract exists
between the litigants, claims for fraud are not so barred
. . . .”). Because a fraud claim may be brought in addition to a
breach of contract claim, the question becomes whether BCBSNC
sufficiently alleged fraud.
To state a claim for fraudulent misrepresentation under
North Carolina law, a party must show that the other party made
“(1) a false representation or concealment of a material fact
which is (2) reasonably calculated to deceived, (3) made with
intent to deceive, (4) which does in fact deceive, and (5)
results in damage to the injured party.” Jones v. Marsh, CIVIL
ACTION NO. 3:20-CV-00614-GCM, 2021 WL 3130876, at *4 (W.D.N.C.
July 23, 2021) (internal quotation marks omitted) (quoting
Showell v. U.S. Airways, Inc., No. 3:06cv384, 2007 WL 3275131,

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at *5 (W.D.N.C. Nov. 2, 2007)).5 LifeBrite does not argue that
BCBSNC failed to sufficiently plead any specific element of
fraudulent or negligent misrepresentation. Instead, LifeBrite
makes several general arguments in support of dismissing the
misrepresentation claims. This court will address each argument
in turn.
1.

The Sample Claims

First, LifeBrite argues that because the sample claims show
that LifeBrite Labs performed the laboratory testing services,
the sample claims refute BCBSNC’s allegation that LifeBrite
concealed the involvement of LifeBrite Labs. (Pl.’s Br.
(Doc. 51) at 18–19.) In general, BCBSNC alleges that LifeBrite
fraudulently misrepresented its laboratory testing services to
BCBSNC because LifeBrite represented it was performing the

5

Similarly, “negligent misrepresentation occurs when (1) a
party justifiably relies, (2) to his detriment, (3) on
information prepared without reasonable care, (4) by one who
owed the relying party a duty of care.” Brinkman v. Barrett Kays
& Assocs., 155 N.C. App. 738, 742, 575 S.E.2d 40, 43–44 (2003)
(internal quotation marks omitted) (quoting Simms v. Prudential
Life Ins. Co. of. Am., 140 N.C. App. 529, 532, 537 S.E.2d 237,
240 (2000)). “[T]he elements of fraud and negligent
misrepresentation are similar under North Carolina law. A
principal difference is that a claim for negligent
misrepresentation does not require the intent to deceive, but
may rest on the failure to use reasonable care in making
representations or omissions.” Silicon Knights, Inc. v. Epic
Games, Inc., No. 5:07-CV-275-D, 2011 WL 1134453, at *13
(E.D.N.C. Jan. 25, 2011), mem. and recommendation adopted, 2011
WL 1134447 (E.D.N.C. Mar. 24, 2011).
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testing services when, in fact, LifeBrite Labs—a nonparticipating provider—was performing the testing. (First Am.
Countercls. (Doc. 20) ¶¶ 2, 54.)
Taking the allegations in the First Amended Counterclaims
in the light most favorable to BCBSNC, the non-moving party,
this court finds that the sample claims do not mean that all
claims LifeBrite submitted included documentation of LifeBrite
Labs’ involvement and therefore put BCBSNC on notice that a nonparticipating provider was involved in the laboratory testing
services. This court, after careful review of the sample claims
in the First Amended Counterclaims, notes that it is far from
clear that the sample claims show that LifeBrite Labs performed
the testing.6 More importantly, as of the date of both sample
claims, BCBSNC had placed LifeBrite on prepayment review. (Id.
¶ 119.) Prior to being placed on prepayment review, LifeBrite
did not have to provide supporting documentation, (see id.), and
in accordance with the Contracts, BCBSNC could rely on

6

After review of the sample claims, this court has found no
mention of LifeBrite Labs in the sample claims. There is an
Atlanta, Georgia address listed in the top left-hand corner of
documentation LifeBrite submitted to BCBSNC, (see Sample Claim 1
(Doc. 20-3) at 5; Sample Claim 2 (Doc. 20-4) at 4), and
LifeBrite Labs is based in Atlanta, (First Am. Countercls.
(Doc. 20) ¶ 4). This court declines to find at this stage in the
proceedings that is sufficient to have put BCBSNC on notice that
LifeBrite Labs, not LifeBrite, was performing the laboratory
testing.
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LifeBrite’s representations on the claim forms, including that
the services were rendered by LifeBrite and that the billing
information was “true, accurate, and complete,” (id. ¶ 99
(internal quotation marks omitted)). Thus, prior to November
2017, BCBSNC could rely on the claim forms without further
documentation, and after November 2017 LifeBrite was subject to
stricter conditions for claim reimbursement. Because the sample
claims were subject to different, stricter conditions, this
court does not find that these sample claims make BCBSNC’s
claims implausible. The alleged scheme began on January 31, 2017
when the Contracts were assigned to LifeBrite. (Id. ¶¶ 1, 55.)
BCBSNC’s allegations indicate that LifeBrite intentionally
omitted LifeBrite Labs from the claim forms and instead listed
only LifeBrite as the entity rendering the testing services.
(Id. ¶¶ 99–100.) Moreover, this court notes that even when
LifeBrite was placed on prepayment review, it continued to omit
LifeBrite Labs from the claim form. The sample claim forms
indicate the claim is “FROM” LifeBrite. (See, e.g., Sample Claim
1 (Doc. 20-3) at 2–5.) As alleged by BCBSNC, “after [BCBSNC]
caught on to LifeBrite Hospital’s scheme, LifeBrite Hospital
continued to misrepresent who performed the testing. After
[BCBSNC] flagged LifeBrite Hospital for prepayment review,
LifeBrite Hospital began re-submitting claims for reimbursement.
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Those resubmissions were submitted with LifeBrite Hospital’s
address even though LifeBrite Hospital did not perform the
testing.” (First Am. Countercls. (Doc. 20) ¶ 101 (emphasis
added).) And tellingly, both sample claims were denied. (Sample
Claim 1 (Doc. 20-3) at 3; Sample Claim 2 (Doc. 20-4) at 3.) If
anything, BCBSNC’s denial of the sample claims indicates that
with the supporting documentation, BCBSNC realized the testing
occurred at LifeBrite Labs and not LifeBrite. In short, even on
the sample claims for which LifeBrite relies in support of
dismissing the misrepresentation claims, LifeBrite omitted
LifeBrite Labs as a provider. Accordingly, this court will
decline to dismiss BCBSNC’s misrepresentation claims because the
sample claims included supporting documentation from LifeBrite
Labs.
Second, LifeBrite argues that because the sample claims
indicate the tests were done for non-patients of LifeBrite, “the
sample claims belie the [First Amended Counterclaims’]
conclusory assertions of fraud.” (Pl.’s Br. (Doc. 51) at 19.)
This court disagrees with LifeBrite. Although the
supporting documentation attached to the sample claims shows the
tests were performed for non-LifeBrite patients and ordered by
non-LifeBrite providers, (Sample Claim 1 (Doc. 20-3) at 5–7;
Sample Claim 2 (Doc. 20-4) at 4–7), the actual claim forms do
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not provide that information to BCBSNC. On the contrary, the
claim forms list the claims as “FROM” LifeBrite and list the
provider as “LifeBrite Community Hospital of Stokes.” (Sample
Claim 1 (Doc. 20-3) at 2–3; Sample Claim 2 (Doc. 20-4) at 2–3.)
As discussed already, these sample claims were filed after
LifeBrite was placed on prepayment review, which required it to
submit supporting documentation, and these claims were denied.
This court cannot glean from denied sample claims that BCBSNC’s
allegations should be disregarded. BCBSNC alleges that “each
claim submitted by LifeBrite Hospital misrepresented that the
tests were for patients of LifeBrite Hospital, ordered by
LifeBrite Hospital providers, and were ordered to be performed
by LifeBrite Hospital.” (First Am. Countercls. (Doc. 20) ¶ 102.)
The sample claims do not “belie” these assertions, (Pl.’s Br.
(Doc. 51) at 19); rather, the sample claims bolster BCBSNC’s
allegations because the sample claims indicate LifeBrite claimed
the tests were done at LifeBrite, by LifeBrite providers, when
that was not the case, (Sample Claim 1 (Doc. 20-3) at 2–3;
Sample Claim 2 (Doc. 20-4) at 2–3). Accordingly, this court will
decline to dismiss BCBSNC’s misrepresentation claims because the
sample claims included supporting documentation showing the
tests were requested by non-LifeBrite providers for nonLifeBrite patients.
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Third, LifeBrite argues that the sample claims contradict
BCBSNC’s allegation that LifeBrite performed tests that were not
medically necessary because the sample claims show different
tests were ordered for different patients. (Pl.’s Br. (Doc. 51)
at 20–21.) BCBSNC alleges that LifeBrite did not have the
capability to perform “definitive tests,” so every claim for
definitive testing from LifeBrite was improper because LifeBrite
could not have performed those tests. (First Am. Countercls.
(Doc. 20) ¶¶ 68, 90.) The sample claims sought reimbursement for
definitive tests performed, according to the claim form, by
LifeBrite. (Id. ¶¶ 109–17.) Moreover, the sample claims reflect
that LifeBrite did not follow BCBSNC’s policies of first running
an initial screening test before a definitive test. The initial
screenings in the sample claims were negative, so a definitive
screening should never have been performed. (Id. ¶¶ 69, 85, 105,
112, 115–16.)
Again, these sample claims do not contradict BCBSNC’s
allegations, especially given that these claims were denied and
that at the time the sample claims were submitted LifeBrite was
under different rules regarding supporting documentation. For
these reasons, this court will decline to dismiss BCBSNC’s
misrepresentation claims based on LifeBrite’s argument that the
sample claims show the tests were medically necessary.
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2.

LifeBrite’s Marketing Practices

Finally, LifeBrite argues that BCBSNC fails to allege a
fraudulent scheme with respect to LifeBrite’s marketing
practices. (Pl.’s Br. (Doc. 51) at 21–23.) LifeBrite argues that
BCBSNC’s allegations describing communications between LifeBrite
marketers and healthcare providers do not meet the heightened
pleading standard for fraud claims. (Id. at 21.) LifeBrite
relies on the sample claims to refute BCBSNC’s allegations. (Id.
at 22.) LifeBrite also argues that BCBSNC’s allegations based
upon “information and belief” do not meet the heightened
pleading standard. (Id. at 22–23.)
This court finds that the sample claims do not refute
BCBSNC’s allegations concerning communications from LifeBrite
marketers to healthcare providers. BCBSNC alleges that
“LifeBrite Labs paid sales representatives to solicit physician
practices and detox facilities for urine specimens. Their sales
pitch made no mention that a tiny rural hospital in a town of
fewer than 200, would be involved in any way in the testing or
billing.” (First Am. Countercls. (Doc. 20) ¶ 7.) LifeBrite
argues that “the sample claims proffered by BCBSNC show that the
physicians signed forms identifying both [LifeBrite] and
LifeBrite Labs.” (Pl.’s Br. (Doc. 51) at 22.) As discussed
supra, this court declines to make a finding on what, if any,
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notice, the claim forms gave BCBSNC or healthcare providers.
Accordingly, LifeBrite’s argument is not persuasive.
LifeBrite’s argument that BCBSNC’s allegations based upon
“information and belief” do not meet the heightened pleading
standard is similarly without merit. Under Federal Rule of Civil
Procedure 9(b), “[i]n alleging fraud or mistake, a party must
state with particularity the circumstances constituting fraud or
mistake.” However,
[a] court should hesitate to dismiss a complaint under
Rule 9(b) if the court is satisfied (1) that the
defendant has been made aware of the particular
circumstances for which [it] will have to prepare a
defense at trial, and (2) that plaintiff has
substantial prediscovery evidence of those facts.
Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784
(4th Cir. 1999). Furthermore, “Allegations of fraud may be made
‘upon information and belief’ only when the matters are
particularly within the defendants’ knowledge, and facts are
stated upon which the belief is founded.” Breeden v. Richmond
Cmty. Coll., 171 F.R.D. 189, 197 (M.D.N.C. 1997).
BCBSNC’s counterclaims contain one allegation made “[u]pon
information and belief.” (First Am. Countercls. (Doc. 20) ¶ 87.)
BCBSNC alleges that “[u]pon information and belief, to ensure
that these healthcare providers and laboratories participated in
LifeBrite Hospital’s scheme, LifeBrite Hospital paid kickbacks
to some of these providers by, for example, promising the
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referring providers a portion of the reimbursement that
LifeBrite Hospital received for each test or providing other
benefits.” (Id.) BCBSNC also alleges that it
has undertaken significant investigation of the scheme
alleged . . . including provider interviews and review
of claims data. Nonetheless, the nature of LifeBrite
Hospital’s scheme, which included disguising the
source of samples and failing to submit records to
demonstrate medical necessity, has concealed some of
the details of LifeBrite Hospital’s scheme from Blue
Cross NC. Blue Cross NC anticipates that additional
member interviews will uncover significant evidence
that LifeBrite Hospital routinely did not collect
member payment obligations, and discovery will reveal
kickbacks or other incentives LifeBrite Hospital gave
to providers to encourage referrals.
(Id. ¶ 81 n.4.)
This court finds that BCBSNC’s allegation made “upon
information and belief” does not warrant dismissing BCBSNC’s
misrepresentation claims. Whether LifeBrite paid kickbacks to
healthcare providers for using LifeBrite Labs is a matter
“particularly within [LifeBrite’s] knowledge,” Breeden, 171
F.R.D. at 197, especially since LifeBrite “conceal[ed] its
scheme,” (First Am. Countercls. (Doc. 20) ¶ 94), so it is
reasonable that BCBSNC would not have uncovered evidence from
its internal investigation. Further, BCBSNC has provided “facts
. . . upon which the belief is founded,” Breeden, 171 F.R.D. at
197: BCBSNC’s internal investigation uncovered the alleged
fraudulent billing scheme and evidence that LifeBrite took steps
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to conceal its scheme from others, (First Am. Countercls.
(Doc. 20) ¶¶ 10, 28, 81, 94). Moreover, this court notes that
the only allegation made “upon information and belief” is an
allegation concerning LifeBrite paying kickbacks to providers
who referred their testing to LifeBrite Labs. (See id. ¶ 87.)
Even if this court were to ignore that allegation, LifeBrite has
not shown that BCBSNC otherwise failed to adequately plead its
misrepresentation claims, even under the heightened pleading
standard under Federal Rule of Civil Procedure 9(b).
LifeBrite has not argued that BCBSNC failed to allege facts
supporting an element of fraudulent or negligent
misrepresentation. This court finds that BCBSNC’s claims for
fraudulent and negligent misrepresentation satisfy Rule 9(b).
LifeBrite has notice of the time, place, contents of the
misrepresentations, identity of persons making the
misrepresentations, and what LifeBrite obtained thereby.
Harrison, 176 F.3d at 784. Specifically, this court finds that
LifeBrite has notice of the time period of the alleged
fraudulent activities—namely, the time period that LifeBrite and
BCBSNC were contractually bound beginning in January 2017 until
BCBSNC stopped paying LifeBrite’s claims in late 2017 . LifeBrite
has notice of the place—LifeBrite and LifeBrite Labs. They have
notice of the persons—employees of LifeBrite and LifeBrite Labs.
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And they have notice of what was obtained thereby—payment of
claims submitted by LifeBrite to BCBSNC. Because this court
finds that LifeBrite’s arguments regarding the relevance of the
sample claims and BCBSNC’s allegation made “upon information and
belief” do not require dismissal of the misrepresentation
claims, this court will decline to dismiss Counts I and II.

B.

Breach of Contract (Count III)

LifeBrite moves to dismiss BCBSNC’s claim for breach of
contract, arguing that BCBSNC does not sufficiently plead facts
plausibly constituting a breach. (Pl.’s Br. (Doc. 51) at 23–25.)
“A party needs to prove only two elements to establish a breach
of contract claim in North Carolina. First, it must show that a
valid contract existed. Second, it must demonstrate that the
opposing party breached one or more of the terms of the
contract.” Quorum Health Res., LLC v. Hugh Chatham Mem’l Hosp.,
Inc., 552 F. Supp. 2d 527, 530 (M.D.N.C. 2007) (citing Johnson
v. Colonial Life & Accident Ins. Co., 173 N.C. App. 365, 369,
618 S.E.2d 867, 870 (2005)). The parties do not dispute the
validity of the Contracts. Therefore, only the second elem ent of
BCBSNC’s counterclaim is at issue.
First, LifeBrite argues that “Medicare expressly permits
rural hospitals, like [LifeBrite], to bill Medicare for such
laboratory services for such non-patients.” (Pl.’s Br. (Doc. 51)
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at 23–24.) However, whether Medicare allows LifeBrite to bill
Medicare for providing laboratory services to non-patients has
no bearing on whether the Contracts—the instruments binding
LifeBrite and BCBSNC—allow LifeBrite to bill BCBSNC for nonpatient laboratory services. BCBSNC alleges that LifeBrite
impermissibly billed BCBSNC for testing on non-patients of
LifeBrite. (See First Am. Countercls. (Doc. 20) ¶¶ 93, 102–03.)
“The contracts contain a number of provisions making clear that
Blue Cross NC contracted to reimburse LifeBrite Hospital only
for services provided at and by LifeBrite Hospital.” (Id. ¶ 57
(emphasis added).) LifeBrite’s reliance on Medicare’s policy of
allowing rural hospitals to bill Medicare for providing
laboratory services to non-patients is not relevant to
determining whether LifeBrite was allowed to bill BCBSNC for
providing laboratory services to non-patients.
Second, LifeBrite argues that the Contracts allowed
LifeBrite’s conduct as alleged in the counterclaims. (Pl.’s Br.
(Doc. 51) at 24.) Section 2.1.1 of the NPA required LifeBrite
“to render Medically Necessary Covered Services to Members
according to our Policies and Procedures and according to the
terms of this Agreement.” (NPA (Doc. 20-1) § 2.1.1.) Section 4.1
of the NPA provides that LifeBrite was entitled to payment for
“Covered Services provided to Members at the sites listed in the
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Site of Service Exhibit.” (Id. § 4.1 (emphasis added).)
Additionally, LifeBrite agreed “not to bill . . . for health
care services . . . which are determined by [BCBSNC] not to be
Medically Necessary.” (Id. § 4.5.5.) LifeBrite agreed to
“collect from Members applicable Deductibles, Coinsurance, and
Copayments.” (Id. § 4.4.) LifeBrite also agreed not to assign,
delegate, or transfer any part of its obligations under the
Contract without prior consent from BCBSNC. (Id. § 6.4.1.)
This court finds that BCBSNC has alleged facts that, taken
in the light most favorable to BCBSNC, plausibly constitute a
breach of contract. BCBSNC has pled facts tending to show
LifeBrite breached its requirement “to render Medically
Necessary Covered Services” (id. § 2.1.1), because LifeBrite
ordered definitive tests often before the results of the
screening tests were available, which is not medically necessary
according to BCBSNC’s medical policy, (First Am. Countercls.
(Doc. 20) ¶¶ 83–85). Additionally, in violation of Section 4.1
of the NPA, LifeBrite billed BCBSNC for services that were n ot
rendered at the sites listed in the Site of Service Exhibit.
Although LifeBrite is identified in the Site of Service Exhibit,
LifeBrite Labs is not. (NPA (Doc. 20-1) at 17 (listing “Pioneer
Community Hospital of Stokes” in the Site of Service Exhibit) .)
LifeBrite was also required to collect coinsurance payments,
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(id. § 4.4), which it did not do, (First Am. Countercls.
(Doc. 20) ¶ 94). Finally, in violation of Section 6.4.1,
LifeBrite assigned its obligations under the Contracts to
LifeBrite Labs because LifeBrite Labs was the entity conducting
the laboratory testing, not LifeBrite. (See id. ¶ 88.) LifeBrite
did not have the capability to perform some of the tests for
which reimbursement was sought. (Id. ¶ 90.) In sum, BCBSNC has
sufficiently alleged facts plausibly constituting a breach of
contract claim. Accordingly, this court will decline to dismiss
Count III.

C.

Breach of Contract Accompanied by a Fraudulent Act
(Count IV)

LifeBrite argues that BCBSNC’s claim for breach of contract
accompanied by fraudulent act should be dismissed because such a
claim is not recognized by North Carolina. (Pl.’s Br. (Doc. 51)
at 29.) This court agrees with LifeBrite. “North Carolina does
not recognize a cause of action for breach of contract
accompanied by fraudulent acts.” Curtis v. Café Enters., Inc.,
CIVIL ACTION NO. 5:15-CV-00032-RLV-DSC, 2016 WL 6916786, at *10
(W.D.N.C. Nov. 21, 2016) (citing Spillman v. Am. Homes of
Mocksville, Inc., 108 N.C. App. 63, 65, 422 S.E.2d 740, 741-42
(1992)); see also FDIC v. Mingo Tribal Pres. Tr., Civil Action
No. 5:13-CV-113, 2015 WL 1646751, at *5 (W.D.N.C. Apr. 15, 2015)

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(dismissing independent cause of action for aggravated breach of
contract).
BCBSNC argues that because it has pled a claim for contract
as well as a claim for fraud, “its claim for breach accompanied
by fraudulent acts should survive as a basis for additional
damages.” (Def.’s Resp. (Doc. 55) at 21.) Although punitive
damages are recoverable where a breach of contract is
accompanied by identifiable aggravated tortious, Richardson v.
Bank of Am., N.A., 182 N.C. App. 531, 558–59, 643 S.E.2d 410,
427–28 (2007), BCBSNC does not point to any authority, and this
court has found none, establishing that North Carolina
recognizes an independent claim for breach of contract
accompanied by fraudulent act. Accordingly, this court will
grant LifeBrite’s Motion to Dismiss Count IV.

D.

Tortious Interference with Contract (Count V)

LifeBrite moves to dismiss BCBSNC’s tortious interference
with contract claim. (Pl.’s Br. (Doc. 51) at 29–30.)
The elements of a claim for tortious interference with
a contract are: “(1) a valid contract between the
plaintiff and a third person which confers upon the
plaintiff a contractual right against a third person;
(2) the defendant knows of the contract; (3) the
defendant intentionally induces the third person not
to perform the contract; (4) and in doing so acts
without justification; (5) resulting in actual damage
to the plaintiff.”

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Beverage Sys. of the Carolinas, LLC v. Associated Beverage
Repair, LLC, 368 N.C. 693, 700, 784 S.E.2d 457, 462 (2016)
(quoting United Lab’ys Inc. v. Kuykendall, 322 N.C. 643, 661,
370 S.E.2d 375, 387 (1988)). LifeBrite primarily disputes that
BCBSNC has alleged facts regarding LifeBrite’s inducement.
LifeBrite argues that BCBSNC “fails to allege facts plausibly
suggesting that LifeBrite waived member cost-sharing
obligations” despite BCBSNC’s investigation. (Pl.’s Br.
(Doc. 51) at 30.)
Contrary to LifeBrite’s argument, this court finds that
BCBSNC has alleged facts plausibly suggesting a claim for
tortious interference with a contract. BCBSNC alleges that “[t]o
conceal its scheme, LifeBrite Hospital consciously ignored its
obligation to collect member payment obligations.” (First Am.
Countercls. (Doc. 20) ¶ 94.) LifeBrite was required to collect
these cost-sharing obligations, (NPA (Doc. 20-1) § 4.4), but
failed to do so, (First Am. Countercls. (Doc. 20) ¶ 94). Taking
the facts in the light most favorable to BCBSNC, BCBSNC has
sufficiently pled facts plausibly suggesting a claim for
tortious interference with contract. Therefore, this court will
decline to dismiss Count V.

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E.

Unfair or Deceptive Trade Practices (Count VI)

LifeBrite moves to dismiss BCBSNC’s claim under North
Carolina’s Unfair or Deceptive Trade Practices Act (“UDTPA”).
(Pl.’s Br. (Doc. 51) at 28–29.) LifeBrite argues the UDTPA claim
fails because the allegations related to unfair and deceptive
trade practices arise from the same allegations supporting
BCBSNC’s breach of contract claim, and a breach of contract is
not sufficiently unfair or deceptive to establish a UDTPA claim.
(Id. at 28.) On the other hand, BCBSNC argues that fraud is
evidence that unfair or deceptive trade practices have occurred.
(Def.’s Resp. (Doc. 55) at 21.)
“[I]t is well-settled that ‘a plaintiff who proves fraud
thereby establishes that unfair or deceptive acts have
occurred.’” Jones v. Harrelson & Smith Contractors, LLC, 194
N.C. App. 203, 217, 670 S.E.2d 242, 252 (2008) (quoting Bhatti
v. Buckland, 328 N.C. 240, 243, 400 S.E.2d 440, 442 (1991)).
Thus, if BCBSNC has adequately pled fraud, BCBSNC has also
established its claim under UDTPA.
As discussed supra Section III.A., BCBSNC has adequately
pled fraudulent and negligent misrepresentation. Therefore,
BCBSNC has also adequately pled a claim under UDTPA. See Mingo
Tribal Pres. Tr., 2015 WL 1646751, at *6 (“This Court has
already allowed the fraud cause of action to survive.
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Accordingly, it is unnecessary to elaborate further in order to
deny Plaintiff’s motion to dismiss with regard to UDTP. A
corollary of the Court’s finding that Plaintiff has sufficiently
alleged an independent tort means that Plaintiff has alleged
more than an intentional breach of contract . . . .”).
Similarly, because BCBSNC’s allegations were sufficient to plead
fraud, application of the economic loss rule to BCBSNC’s UDTPA
claim is precluded at the dismissal stage. See Wheeler v. BMW of
N. Am. LLC, 534 F. Supp. 3d 527, 534 (W.D.N.C. 2021) (finding
UDTPA claim not barred by North Carolina’s economic loss rule
where the plaintiff had pleaded fraudulent concealment).
Accordingly, this court will decline to dismiss Count VI.

F.

Restitution under ERISA § 502(a)(3), Declaratory
and Injunctive Relief under ERISA § 502(a)(3) and
28 U.S.C. §§ 2201 & 2202, and Constructive Trust
and Equitable Liens (Counts VII-IX)

LifeBrite argues that BCBSNC is not entitled to the
remedies sought in Counts VII through IX. (Pl.’s Br. (Doc. 51)
at 30–32.) LifeBrite first argues that “[b]ecause BCBSNC has not
stated any violation of law or contract . . . it is not entitled
to any of the remedies set forth in [Counts VII-IX].” (Id. at
30.) However, BCBSNC has sufficiently stated claims for, inter
alia, misrepresentation and breach of contract. See supra
Sections III.A & III.B. Therefore, LifeBrite’s argument fails.

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LifeBrite further argues that BCBSNC is not entitled to
restitution under ERISA § 502(a)(3), constructive trust, or
equitable liens because LifeBrite does not hold funds belonging
to BCBSNC. (Pl.’s Br. (Doc. 51) at 31.) “Section 502(a)(3) is
the civil enforcement mechanism available to ERISA fiduciaries
seeking to recover benefits paid under an ERISA plan.” Mid Atl.
Med. Servs., LLC v. Sereboff, 407 F.3d 212, 217 (4th Cir. 2005).
Section 502(a)(3) “authorizes the pursuit of a civil action by
an ERISA fiduciary to enjoin any act which violates the terms of
a plan, or to ‘obtain other appropriate equitable relief’ to
enforce a plan’s provisions.” Id. (emphasis in original)
(quoting 29 U.S.C. § 1132(a)(3)).
In Great-West Life & Annuity Insurance Co. v. Knudson, the
Supreme Court denied the “equitable” relief sought by the
fiduciaries because the fiduciaries were not claiming
“particular funds that, in good conscience, belong[ed] to
[them].” 534 U.S. 204, 214, 218 (2002). Instead, the fiduciaries
sought “to impose personal liability on [the Knudsons] for a
contractual obligation to pay money—relief that was not
typically available in equity.” Id. at 210. The Supreme Court
explained that an ERISA plan fiduciary may seek equitable
restitution “where money or property identified as belonging in
good conscience to the [fiduciary] could clearly be traced to
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particular funds or property in the [beneficiary’s] possession.”
Id. at 213.
Unlike the fiduciary in Knudson, in Sereboff, the Fourth
Circuit affirmed the district court’s grant of equitable relief
“because [the fiduciary] s[ought] to recover funds that are
specifically identifiable, belong in good conscience to [the
fiduciary], and are within the possession and control of the
Sereboffs.” 407 F.3d at 218. The Fourth Circuit noted that
unlike in Knudson, where the funds were placed outside the
possession or control of the beneficiary, in Sereboff, the funds
were in accounts controlled by the Sereboffs. Id. at 218–19.
This court finds that BCBSNC’s action seeks equitable
restitution because BCBSNC “seeks to recover funds that are
specifically identifiable, belong in good conscience to
[BCBSNC], and are within the possession and control of
[LifeBrite].” Id. at 218. BCBSNC alleges that because of
LifeBrite’s fraudulent scheme, it “has paid millions of dollars
in benefits to LifeBrite Hospital.” (First Am. Countercls.
(Doc. 20) ¶ 179.) BCBSNC further alleges that “Blue Cross NC
paid these amounts into certain financial accounts under
LifeBrite Hospital’s control.” (Id. ¶ 180.) LifeBrite argues
that BCBSNC’s “assertion that LifeBrite continues to hold
discrete, identifiable funds . . . is a ‘formulaic recitation ’
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of an element of its claim . . . .” (Pl.’s Reply (Doc. 57) at 18
(some internal quotation marks omitted) (quoting Twombly, 550
U.S. at 555).) This court disagrees. BCBSNC does more than
recite the elements its claim for equitable restitution. In
fact, BCBSNC alleges a specific bank account in which the funds
are alleged to be held. (See First Am. Countercls. (Doc. 20)
¶ 180.) Thus, LifeBrite’s second argument also fails.
Finally, LifeBrite argues that BCBSNC is not entitled to a
constructive trust because there is no fiduciary relationship
between LifeBrite and BCBCNC. (Pl.’s Br. (Doc. 51) at 31 –32.)
BCBSNC argues that a fiduciary relationship is not required to
impose a constructive trust. (Def.’s Resp. (Doc. 55) at 23 –24.)
Under North Carolina law,
[a] constructive trust . . . “prevent[s] the unjust
enrichment of the holder of title to, or of an
interest in, property which such holder acquired
through fraud . . . or some other circumstance making
it inequitable for him to retain it against the claim
of the beneficiary of the constructive trust.”
Roper v. Edwards, 323 N.C. 461, 465, 373 S.E.2d 423, 425 (1988)
(quoting Wilson v. Dev. Co., 276 N.C. 198, 211-12, 171 S.E.2d
873, 882 (1970)). The North Carolina Court of Appeals has
recognized that a constructive trust may be imposed
even in the absence of fraud or a breach of fiduciary
duty, upon the showing of either (1) some other
circumstance making it inequitable for the defendant
to retain the funds against the claim of the
beneficiary of the constructive trust, or (2) that the
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defendant acquired the funds in an unconscientious
manner.
Houston v. Tillman, 234 N.C. App. 691, 697, 760 S.E.2d 18, 21
(2014). Thus, contrary to LifeBrite’s argument, a fiduciary
relationship is not required for a court to impose a
constructive trust. See Variety Wholesalers, Inc. v. Salem
Logistics Traffic Servs., LLC, 365 N.C. 520, 530, 723, S.E.2d
744, 752 (2012) (noting a trial court can impose a constructive
trust even in the absence of a breach of fiduciary duty); see
also Poulos v. Poulos, 841 S.E.2d 282, 289 (N.C. Ct. App. 2020)
(reasoning that the trial court’s finding that the plaintiff
“could not prove claims for . . . breach of fiduciary duty . . .
is irrelevant to the question of whether [the] [p]laintiff is
entitled to a constructive trust”).
Because a constructive trust may be imposed by a court in
the absence of a fiduciary relationship, this court finds
BCBSNC’s claim for a constructive trust, as well as the other
equitable remedies sought by BCBSNC—restitution, declaratory
judgment, and injunctive relief—will not be dismissed at this
stage in the proceedings.

G.

Unjust Enrichment (Count X)

LifeBrite moves to dismiss BCBSNC’s claim for unjust
enrichment. (Pl.’s Br. (Doc. 51) at 32.) LifeBrite argues that
BCBSNC is not entitled to recover the money paid for laboratory
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services because BCBSNC does not allege that the laboratory
services were not provided. (Id.) On the other hand, BCBSNC
argues its claim for unjust enrichment should not be dismissed
because had LifeBrite submitted truthful claims, BCBSNC would
have paid a lesser amount. (Def.’s Resp. (Doc. 55) at 24.)
A claim for unjust enrichment “is neither in tort nor
contract but is described as a claim in quasi contract or a
contract implied in law.” Booe v. Shadrick, 322 N.C. 567, 570,
369 S.E.2d 554, 556 (1988). “The general rule of unjust
enrichment is that where services are rendered and expenditures
made by one party to or for the benefit of another, without an
express contract to pay, the law will imply a promise to pay a
fair compensation therefor.” Atl. Coast Line R.R. Co. v. State
Highway Comm’n, 268 N.C. 92, 95–96, 150 S.E.2d 70, 73 (1966).
To establish a claim for unjust enrichment, a party must
allege that it conferred a benefit on the other party, the other
party consciously accepted the benefit, and the benefit was not
conferred officiously or gratuitously. Se. Shelter Corp. v. BTU,
Inc., 154 N.C. App. 321, 330, 572 S.E.2d 200, 206 (2002 ).
“Furthermore, ‘[t]he mere fact that one party was enriched, even
at the expense of the other, does not bring the doctrine of
unjust enrichment into play. There must be some added
ingredients to invoke the unjust enrichment doctrine.’” Peace
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River Elec. Coop., Inc. v. Ward Transformer Co., 116 N.C. App.
493, 509, 449 S.E.2d 202, 213 (1994) (some internal quotation
marks omitted) (quoting Williams v. Williams, 72 N.C. App. 184,
187, 323 S.E.2d 463, 465 (1984)); see also Collins v. Davis, 68
N.C. App. 588, 591, 315 S.E.2d 759, 761 (1984)(stating recovery
under unjust enrichment based is appropriate in circumstances
where it would be “unfair for the recipient to retain” the
benefit of the claimant’s services, but that “more must be shown
than that one party voluntarily benefitted another” ).
Here, BCBSNC seeks to pursue a claim against LifeBrite to
recoup alleged overpayments based on application of the measure
of damages for unjust enrichment. “This argument misconstrues
the claim of unjust enrichment in North Carolina and . . . is
unsupported in the law.” Sullivan v. Lab’y Corp. of Am.
Holdings, No. 1:17cv193, 2018 WL 1586471, at *7 (M.D.N.C. Mar.
28, 2018). BCBSNC did not provide a service or benefit to
LifeBrite. Rather, it is BCBSNC who received the service —
laboratory testing. “Generally, there is no claim for unjust
enrichment where a [party] received the service she paid for and
the [other party] did not solicit or induce her into accepting
it.” Id. at *7–8 (granting motion to dismiss unjust enrichment
claim where the plaintiffs received laboratory services from the
defendant but alleged that they overpaid for the services).
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Moreover, BCBSNC does not allege that LifeBrite failed to
conduct the laboratory tests. In UBS Financial Services, Inc. v.
Zimmerman, Zimmerman brought an unjust enrichment claim against
UBS. No. 5:16-CV-155-FL, 2016 WL 7017278, at *4 (E.D.N.C. Dec.
1, 2016). The district court dismissed the unjust enrichment
claim, noting that although Zimmerman paid monthly fees to UBS
as compensation for managing Zimmerman’s securities , Zimmerman
was not alleging that UBS failed to manage his securities but
rather alleging that UBS failed to make certain disclosures to
Zimmerman prior to Zimmerman’s investment purchases. Id.
Similarly, in this case BCBSNC does not allege LifeBrite failed
to conduct the laboratory tests. Rather, BCBSNC alleges that
LifeBrite failed to make truthful, accurate, and complete
disclosures on its claim forms. (First Am. Countercls. (Doc. 20)
¶¶ 98–120.) Consequently, BCBSNC’s claim for unjust enrichment
fails, and LifeBrite’s motion to dismiss Count X will be
granted.
IV.

CONCLUSION
For the foregoing reasons, this court finds that

LifeBrite’s Motion to Dismiss, (Doc. 50), will be granted in
part and denied in part.
IT IS THEREFORE ORDERED that LifeBrite’s Motion to Dismiss,
(Doc. 50), is GRANTED IN PART AND DENIED IN PART. The motion is
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GRANTED as to BCBSNC’s counterclaims for breach of contract
accompanied by fraudulent act (Count IV) and unjust enrichment
(Count X). The motion is DENIED as to BCBSNC’s counterclaims for
fraudulent misrepresentation (Count I), negligent
misrepresentation (Count II), breach of contract (Count III),
tortious interference with contract (Count V), unfair and
deceptive trade practices (Count VI), restitution (Count VII),
declaratory and injunctive relief (Count VIII), and constructive
trust and equitable liens (Count IX).
This the 16th day of March, 2022.

__________________________________
United States District Judge

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