Logan v. Healthcare International et al

Filing 87

OPINION AND ORDER by Magistrate Judge Kimberly E. West: Motion to Dismiss Claims Against Defendant Multinational Life Insurance Company (f/k/a National Life Insurance Company) (Docket Entry No. 38 ) is GRANTED. Defendant's Alternative [Moti on] to Transfer This Action to the United States District Court for Puerto Rico contained in the same filing (Docket Entry No. 38 is DENIED. Further ordering that the stay of discovery in this case is VACATED. A further telephonic Scheduling Conference with the remaining parties shall be conducted on April 30, 2014 at 2:15 pm. (neh, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF OKLAHOMA
SAMUEL HOWARD LOGAN, JR.,

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Plaintiff,
v.
HEALTHCARE INTERNATIONAL
GLOBAL NETWORKS, LTD.;
HEALTHCARE INTERNATIONAL
GLOBAL NETWORKS, INC.; and
NATIONAL LIFE INSURANCE
COMPANY,
Defendants.

Case No. CIV-13-144-KEW

OPINION AND ORDER

This matter comes before the Court on the Motion to Dismiss
Claims Against Defendant Multinational Life Insurance Company
(f/k/a National Life Insurance Company) or, in the Alternative, to
Transfer This Action to the United States District Court for Puerto
Rico (Docket Entry #38).

Defendant Multinational Life Insurance

Company (“MLIC”)1 contends this Court lacks both specific and
general personal jurisdiction over it such that this action cannot
be maintained in this District.

Additionally, in a late developed

issue, MLIC and the HealthCare Defendants argue in supplemental
briefing that the insurance plan offered to Plaintiff Samuel Howard
Logan, Jr. (“Logan”) represents an Employee Retirement Income
Security Act (“ERISA”) qualified plan which would preempt the state

1

Although MLIC is not named directly in this action as a successor
to National Life Insurance Company, this Court will refer to this
Defendant as MLIC to maintain continuity with the briefing.

court claims asserted by Logan in this case.
Logan initiated this action on February 20, 2013 in the
District Court in and for Pittsburg County, Oklahoma. The case was
removed by Defendants to this Court on April 2, 2013.

An Amended

Complaint was subsequently filed on May 13, 2013.
This Court previously related the facts as alleged in the
Amended Complaint but will do so again for clarity.

Logan states

he is a resident of McAlester, Oklahoma. While working in Nigeria,
Logan contends he sought health insurance coverage through an
Internet search and discovered the website of Defendant HealthCare
International (“HealthCare”) with a posted address in London,
England.
online

Logan asserts that on April 6, 2011, he completed an
application

for

health

insurance

and

purchased

a

comprehensive medical and hospitalization coverage for he and his
family from HealthCare with an effective date of June 1, 2011.
Logan further alleges that on April 26, 2012, he became ill while
on assignment in Nigeria and sought medical care.

When he was

unable to obtain medical care and a diagnosis of his condition in
Nigeria, Logan alleges he requested that Healthcare authorize his
travel to Houston, Texas so that he could receive adequate medical
care and treatment.

Logan contends Healthcare failed to timely

authorize his travel to Houston.

He ultimately paid for the

airline tickets himself and traveled to Houston to receive medical
care and treatment.
2

After arriving in Houston, Logan was attended by a physician
who immediately admitted him to Methodist West Hospital (the
“Hospital”).

Logan obtained authorization from Healthcare for

admission to the Hospital.

Logan was diagnosed with endocarditis

which he alleges was contracted from an infection after the
insurance

policy

was

issued.

Logan

alleges

his

physicians

determined that the infection had begun to destroy the mitral valve
of his heart and that he would have to undergo surgery to save his
life.
Logan contends he and the Hospital sought authorization from
Healthcare for the surgery. In response, on May 16, 2012, Olympus
Managed Health Care, Inc. (“Olympus”) informed the Hospital and
Logan’s physician on behalf of Defendants, that the “diagnosis [of
endocarditis] can either be attributed to either [sic] congenital
or a history of heart defects; this condition and the claims
relating to this condition are not eligible for cover.”

Logan

alleges the determination was unsupported by any evidence and was
contrary

to

the

medical

opinions

and

evidence

provided

to

Healthcare by Logan’s physicians which indicated the condition was
not congenital.

Logan states that he was informed of HealthCare’s

decision of no coverage while he was in the Intensive Care Unit of
the

Hospital

awaiting

surgery,

which

caused

him

“significant

physical and emotional distress and harm.”
On May 17, 2012, Logan alleges Olympus informed HealthCare
3

that Logan intended to appeal the decision finding no coverage.
Additionally, Olympus allegedly continued to provide information
concerning Logan’s medical condition and history from the Hospital
and Logan’s treating physicians.
that

HealthCare

diagnosed

and

provide

treated

The Hospital allegedly requested

information

Logan’s

prior

as

to

the

condition

physician
but

who

HealthCare

declined the request.
Logan ultimately received the surgery which replaced his
destroyed mitral valve.

Logan asserts he suffers from the effects

of the delay in the surgery and the denial of coverage.
Logan filed this action alleging (1) unspecified Defendants
breached the insurance contract in failing to provide coverage for
his endocarditis; (2) Defendants breached the covenant of good
faith and fair dealing under Oklahoma law in the manner in which
they handled the insurance claim, made the coverage decision,
failed to conduct an adequate investigation, and adequately or
properly considered the evidence; (3) HealthCare owed Plaintiff a
duty of care to act reasonably and prudently in determining
coverage and negligently failed to fulfill its duty in finding no
coverage; and (4) Defendants’ conduct warrants the imposition of
punitive damages.
Specific Personal Jurisdiction
MLIC files the subject request for dismissal contending this
Court lacks in personam jurisdiction over it.
4

Specifically, MLIC

asserts that it has not had the requisite continuous and systematic
minimum contacts with the State of Oklahoma to establish both
specific and general jurisdiction.
Initially, Logan bears the burden of establishing personal
jurisdiction over Defendants.

American Land Program, Inc. v.

Bonaventura Uitgevers Maatschappij, N.V., 710 F.2d 1449, 1454 (10th
Cir. 1983).

However, when a request for dismissal premised upon a

lack of jurisdiction is decided on the basis of affidavits and
other written material alone, Logan need only make a prima facie
showing. Id.; Behagen v. Amateur Basketball Association of U.S.A.,
744 F.2d 731, 733 (10th Cir. 1984).
The laws governing jurisdiction of the forum state determine
the appropriate standard for establishing jurisdiction over a nonresident defendant in a case based in diversity so long as that
exercise does not offend the due process clause of the Fourteenth
Amendment of the United States Constitution.

Rambo v. American

Southern Ins. Co., 839 F.2d 1415, 1416 (10th Cir. 1988).

In

Oklahoma, the long-arm jurisdictional statute provides that "[a]
court

of

consistent

this
with

state
the

may

exercise

Constitution

jurisdiction
of

this

state

on

any

and

basis

of

the

Constitution of the United States." Okla. Stat. tit. 12 § 2004(F).
This language has been interpreted to authorize jurisdiction over
non-resident defendants when such an exercise is consistent with
the Due Process Clause of the United States Constitution. Williams
5

v. Bowman Livestock Equipment Co., 927 F.2d 1128, 1131 (10th Cir.
1991).

Due

process

and

the

protections

afforded

under

the

Constitutions of both Oklahoma and the United States are satisfied
only

if

the

non-resident

defendant

has

sufficient

"minimum

contacts" with the forum state and the exercise of jurisdiction
would not offend "traditional notions of fair play and substantial
justice." International Shoe Co. v. Washington, 326 U.S. 310, 316,
66 S.Ct. 339, 342, 90 L.Ed. 95, 102 (1945). This "minimum contact"
standard requires that the court determine that the non-resident
defendant "purposefully directed" his activities toward the forum
state, thereby deriving a benefit. Burger King Corp. v. Rudzewicz,
471 U.S. 462, 473 (1985).

This determination concentrates on the

"defendant's conduct and connection with the forum state as such
that he should reasonably anticipate being haled into court there."
Id. at 474 citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 297 (1980). A non-resident defendant will not be brought into
a jurisdiction solely as a result of "random," "fortuitous" or
"attenuated" contacts or the "unilateral activity of another party
or a third person."

Id. at 475.

This variety of personal

jurisdiction is frequently referred to as “specific jurisdiction.”
Kuenzle v. HTM Sport-Und Freizeitgerate AG, 102 F.3d 453, 455-57
(10th Cir. 1996).
Logan states at multiple points in the extensive briefing done
in this case that MLIC “allowed” or “authorized” HealthCare to
6

deliver an insurance policy in which MLIC was the insurer to
Logan’s

address

in

activity to Oklahoma.

Oklahoma,

thereby

purposefully

directing

Logan also cites to the fact that MLIC

provided coverage to an Oklahoma resident when it could have
declined to do so to avoid specific personal jurisdiction.

Logan

also asserts that the maintaining of a website which markets
coverage to the world weighs in favor of finding the existence of
specific in personam jurisdiction in Oklahoma. Logan also contends
that an agency relationship between HealthCare and MLIC exists such
that the actions taken by HealthCare to contact Logan are imputable
to the insurer, MLIC.
MLIC provides the affidavit of its president, Carlos Iguina
Oharriz to establish (1) MLIC possesses a single certificate of
authority from Puerto Rico to transact life and health insurance
and is only authorized to transact insurance in that jurisdiction;
(2) MLIC never intended to do any insurance business in Oklahoma;
(3) MLIC has never conducted any insurance business in Oklahoma;
(4) MLIC has never even applied to do the business of insurance in
Oklahoma; (5) MLIC does not and has never paid premium tax in
Oklahoma; (6) MLIC does not and has never belonged to the Oklahoma
Life and Health Insurance Guaranty Association or the Oklahoma
Property and Casualty Insurance Guaranty Association; (7) MLIC has
no authority and holds the licenses from the Oklahoma Department of
Insurance and has never done so; (8) MLIC does not and has never
7

maintained

a

mailing

address

or

telephone

number

listing

in

Oklahoma; (9) MLIC does not maintain bank accounts or other
financial accounts in Oklahoma; (10) MLIC does not and has never
hired any insurance agents in Oklahoma; (11) MLIC is not and has
never been registered with the Secretary of State or the Oklahoma
Insurance Department to business in Oklahoma; (12) MLIC does not
have and has never had an agent for the service of process in
Oklahoma; (13) MLIC has never targeted any direct mail advertising
to residents of Oklahoma; (14) MLIC has never targeted any national
advertisements to Oklahoma residents; and (15) MLIC has never
targeted

its

website

or

online

services

to

Oklahoma

or

its

residents.
Additional evidence has also come to light which bears on the
issue of the extent and quality of MLIC’s contacts with Oklahoma.
HealthCare produced Logan’s application for insurance which he
completed on the Internet.

On that Individual Application Form,

Logan set forth his “Principal Residence,” which the form defines
as “(where you are living or intend to live)” as Le Meridine Ibom
Hotel Golf Resort in Uyo Akwa Ibom, Nigeria. Beside this reference
is a place for “Other Residence” with a notation (“if applicable”)
wherein Logan completed PO Box 765, McAlester, Oklahoma.

The form

also contains the question, “Where would you like your policy
documents sent?” in response to which Logan checked the box beside
“Other residence.”

HealthCare’s Response to Nat’l Life Ins. Co.’s
8

Supplemental Brief in Support of Dismissal or Transfer of Venue,
Docket Entry No. 77, Exh. C., p. HCI 00013-00014.
Evidence also came to light that the payment of the premiums
for the MLIC insurance policy were included in the offered benefits
package to Logan by IMG/Jardin.

Logan was retained by IMG/Jardin

to act as IMG Consultant in a General Manager position for Le
Meridien Ibom Hotel & Golf Resort Ibom Golf Course.

HealthCare’s

Supplemental Brief, Docket Entry No. 68, Exh. 4, p. Logan 000073.
MLIC also contends it has developed information to indicate
that Logan possibly sued the wrong defendant which it named the
HealthCare

Defendants

in

this

action.

appropriate party may be HCI UK.

MLIC

identifies

that

MLIC asserts this entity had no

contractual relationship with MLIC so no agency relationship could
exist to impute jurisdictional minimum contacts to MLIC.
Without doubt, the policy which was provided to Logan does not
offer clarity as far as the entity from which it originates and the
entity which is offering the insurance.

The policy is entitled

“HealthCare International Medical Insurance Policy.”

However, its

terms provide in the finest of print that the Insurer is National
Life Insurance Company.

The policy administrator is identified as

HealthCare International, UK Administration Office located in
London, UK.

The policy also provides for that it will be subject

to the laws of Puerto Rico.

Under the “Complaints Procedure”

section of the policy, insureds are urged to contact the Compliance
9

Officer with HealthCare International in the event of a problem.
Secondarily, insureds are referred to the Compliance Officer, c/o
National Life Insurance Company, London, UK.
insureds

who

compliance

remain

officers

unhappy
are

after

referred

Service, also in London, UK.

contacting

to

the

Finally, unhappy
the

Financial

first

two

Ombudsman

HealthCare’s Response to Nation Life

Ins. Co.’s Supplemental Brief in Support of Dismissal or Transfer
of Venue, Docket Entry No. 77, Exh. C, pp. HCI 00001-00002, HCI
00012.

A “Member Certificate” issued specifically to Logan is

entitled “HealthCare International Medical Expenses Plan.”

The

Certificate notes Logan’s mailing address as the post office box in
McAlester, Oklahoma and extends coverage “Worldwide Including USA.”
Id. at Exh. C, second unnumbered page.
At the very essence of the facts alleged, Logan has failed to
demonstrate sufficient minimum contacts to satisfy the requirements
for

specific

personal

jurisdiction.

Logan’s

inclusion

of

a

secondary mailing address on the application for insurance did
little to clue MLIC or HealthCare into the fact that Logan was
claiming to be an Oklahoma resident.

Logan cites to the cases of

McGee v. Int’l Life Ins. Co., 355 U.S. 220 (1957) and Willbros USA,
Inc. v. Certain Underwriters at Lloyds of London, 220 P.3d 1166
(Okla. Civ. App. 2009) to support its assertion that the delivery
of the policy and providing coverage to an Oklahoma resident was
sufficient to establish specific personal jurisdiction.
10

In McGee, the United States Supreme Court found that the Due
Process Clause was not offended when California was the situs where
the contract was delivered, the premiums were mailed from there,
and the insured was a resident of the state when he died.

McGee,

355 U.S. at 223. Here, the contract was delivered to Oklahoma, the
premiums were paid by the party for which Logan worked in Nigeria,
and Logan was residing in Nigeria at the time both he applied for
and obtained the insurance and when he attempted to claim its
benefits. McGee is factually distinguishable from the case at bar.
In the Willbros case, the Oklahoma Court of Civil Appeals
found sufficient minimum contacts to exercise personal jurisdiction
over a foreign British defendant.
defendant

(1)

knowingly

The court found the foreign

transacted

business

with

an

Oklahoma

corporation; (2) representatives of the foreign defendant made
several trips to Oklahoma over a five year period; and (3) the
foreign defendant maintained a “stream of communication” with the
Oklahoma business from London to Tulsa.

Id. at 1173-74.

MLIC’s

contacts with Oklahoma do not approach the Willbros level of
interaction with the state.

It is not even clear MLIC knew Logan

was an Oklahoma resident at the time the policy was formulated and
transacted.

As discussed, the application for insurance certainly

did not clarify Logan’s residency.

No other contact between MLIC

and the State of Oklahoma has been proved through the evidence.
With regard to the use of the Internet, Logan has made no
11

showing that MLIC has sold policies to other residents of the State
of Oklahoma.

Indeed, Logan, at the time of his application, was

admittedly a resident of Nigeria and it was not apparent he was a
resident of Oklahoma. See e.g. Origins Natural Res. v. Kotler, 133
F.Supp.2d 1232, 1236-37 (D.N.M. 2001).

It must also be noted that

the evidence indicates MLIC does not maintain the website and its
name does not appear on the site.

MLIC’s level of knowledge of the

residency of the insurance applicants applying on HealthCare’s
website is in some doubt. Given the totality of the sparse contact
with Oklahoma, this Court concludes that Logan has failed to
demonstrate sufficient minimum contacts by MLIC for this Court to
exercise specific personal jurisdiction over it.
The

other

jurisdiction.

type

of

personal

jurisdiction

is

General jurisdiction requires a showing that

has sufficient contacts with the State of Oklahoma to
.

.

.

Kuenzle,

continuous
102

general

F.3d

and
at

systematic
457

citing

general

"constitute

business

Helicopteros

Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984).

MLIC

contacts."

Nacionales

de

In assessing

contacts with a forum, courts have considered such factors as: (1)
whether the defendant solicits business in the state through a
local office or agents;

(2) whether the defendant sends agents

into the state on a regular basis to solicit business;

(3) the

extent to which the defendant holds itself out as doing business in
the forum state, through advertisements, listings or bank accounts;
12

and (4) the volume of business conducted in the state by the
defendant.

Id. citing Trierweiler v. Croxton & Trench Holding

Corp., 90 F.3d 1523, 1533 (10th Cir. 1996).
In short, the record is striking in the lack of evidence to
support general jurisdiction.

Other than sending a policy to a

post office box in Oklahoma which Logan designated as an “Other
Residence,”
non-existent.

MLIC’s contact with the State of Oklahoma has been
Accordingly,

this

Court

concludes

general

jurisdiction is also lacking over MLIC.
Transfer of the Action to Puerto Rico
MLIC suggests that this action should be transferred to the
United States District Court for Puerto Rico rather than dismissed
as to MLIC.

Logan does not support a transfer and has not

suggested that relief even in the alternative.

Recognizing Logan

remains the master of his lawsuit, this Court will dismiss MLIC
from this action due to the lack of in personam jurisdiction.
Applicability of ERISA
Both HealthCare and MLIC urge this Court to determine that the
plan at issue in this case represents an ERISA qualified plan.

In

order to so qualify, Defendants must demonstrate that there exists
(1) a plan, fund or program; (2) established or maintained; (3) by
an employer; (4) for the purpose of providing benefits; (5) to
participants or their beneficiaries. Gaylor v. John Hancock Mutual
Life Ins. Co., 112 F.3d 460, 464 (10th Cir. 1997).
13

The Tenth

Circuit has found the determination of the ERISA status of a policy
is a mixed question of law and fact with the question involving
conclusions drawn from undisputed facts making it primarily a
question of law.

Peckham v. Gem State Mut. of Utah, 964 F.2d 1043,

1047 n.5 (10th Cir. 1992).

Additionally, the Tenth Circuit has

held that the determination of whether an individual is an employee
is a question of fact.

Roth v. American Hosp. Supply Corp., 965

F.2d 862, 865 (10th Cir. 1992).
multitude

of

facts

in

This Court must conclude that the

dispute

in

this

case

precludes

a

determination of whether ERISA governs the issues in this case at
this dismissal stage of the proceedings. Should it become apparent
after adequate discovery has occurred that the policy is governed
by ERISA and Logan is an “employee” as that term is defined by the
ERISA statutes, this Court is confident that HealthCare will file
an

appropriate

dispositive

motion.

The

facts

are

simply

underdeveloped and require too many assumptions for this Court to
make the determination of the applicability of ERISA at this point.
IT IS THEREFORE ORDERED that Motion to Dismiss Claims Against
Defendant Multinational Life Insurance Company (f/k/a National Life
Insurance

Company)

(Docket

Entry

#38)

is

hereby

GRANTED.

Accordingly, Defendant Multinational Life Insurance Company (f/k/a
National Life Insurance Company) is hereby DISMISSED from this
action due to a lack of in personam jurisdiction.

Defendant’s

Alternative [Motion] to Transfer This Action to the United States
14

District Court for Puerto Rico contained in the same filing is
hereby DENIED.
IT IS FURTHER ORDERED that the stay of discovery in this case
is VACATED.

A further telephonic Scheduling Conference with the

remaining parties shall be conducted on APRIL 30, 2014 AT 2:15 P.M.
IT IS SO ORDERED this 31st day of March, 2014.

______________________________
KIMBERLY E. WEST
UNITED STATES MAGISTRATE JUDGE

15