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IJKG Opco LLC v. General Trading Co.

United States District Court, D. New Jersey

September 5, 2018



          Kevin McNulty, United States District Judge.

         The plaintiff, IJKG Opco LLC, doing business as CarePoint Health-Bayonne Medical Center ("BMC"), brings suit to recover the costs of medical care it provided to "Patient 1," who experienced severe renal complications and was hospitalized for about three weeks. The defendants named in the Amended Complaint[1] are General Trading Company ("General Trading"), which provided the patient's employee welfare benefits plan; Cigna Corporation Inc. ("Cigna");[2]Consolidated Health Plans, Inc. ("CHP"), which was a third-party administrator for the plan; Zelis Healthcare, Inc. ("Zelis"), also known as Premier Health Exchange, Inc. or PHX, which was the claims contract negotiator; and Standard Security Life Insurance Company of New York ("SS Life"), which provided General Trading with a stop-loss policy that insured losses in excess of a deductible arising from specific plan beneficiaries.

         I have already granted a motion to dismiss the Amended Complaint filed by defendant SS Life, and denied motions to dismiss or for judgment on the pleadings filed by General Trading and Zelis. (See Opinion ("Op."), ECF no. 122, as amended by Order, ECF no. 133.) Now before the court are motions for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c), brought by CHP (ECF no. 104)[3] and Cigna (ECF no. 105). For the reasons stated herein, CHP's motion is denied, and Cigna's motion is granted.

         I. Summary of Facts

         I will incorporate by reference the summary of the allegations of the Amended Complaint from my prior Opinion. (ECF no. 122) I state only a few of the most pertinent allegations here.

         In November 2013, Patient 1 received treatment for a kidney ailment at BMC. The bill was $771, 191.58. General Trading, whose self-funded employee welfare benefits plan provides coverage to Patient 1, reimbursed BMC for only $175, 358.05 of that total.

         CHP, General Trading's claim processor, issued an explanation of benefits on January 29, 2014, which provided reasons for disallowed charges. (Id. ¶ 28.) The majority of disallowances were labeled as "discount . . . negotiated through Premier Healthcare Exchange" or "[e]xceeds reasonable and customary charge." (Id.) On November 28, 2014, BMC filed an appeal with CHP. (Id. ¶ 30.) CHP denied the appeal in its entirety and directed BMC to balance-bill for the outstanding amount. (Id.)

         On January 13, 2015, BMC filed a second-level appeal with CHP. (Id. ¶ 31.) By letter dated February 23, 2015, that appeal was denied. (Id. ¶ 32.)

         BMC sues to recover the unreimbursed balance of its bill, in the amount of $595, 833.53. Count One of the Amended Complaint claims that defendants General Trading and Cigna violated § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B), et seq., by underpaying the claim. (AC HI 47-61) Count Two is a claim under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), that defendants General Trading, Cigna, CHP, and Zelis (PHX) breached their fiduciary duties to Patient 1. (AC ¶¶ 62-73) Count Three is a claim under ERISA § 502(a)(3) that the same four defendants denied BMC full and fair review of the claim, in violation of ERISA § 503. (AC ¶¶ 74-79)[4]

         II. Discussion

         a. Standard of Review

         Rule 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if it fails to state a claim upon which relief can be granted. The defendants, as the moving parties, bear the burden of showing that no claim has been stated. Animal Science Prods., Inc. v. China Minmetals Corp., 654 F.3d 462, 469 n.9 (3d Cir. 2011). For the purposes of a motion to dismiss, the facts alleged in the complaint are accepted as true and all reasonable inferences are drawn in favor of the plaintiff. N.J. Carpenters & the Trustees Thereof v. Tishman Const. Corp. of N.J., 760 F.3d 297, 302 (3d Cir. 2014).

         Fed. R. Civ. P. 8(a) does not require that a complaint contain detailed factual allegations. Nevertheless, "a plaintiffs obligation to provide the 'grounds' of his 'entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the complaint's factual allegations must be sufficient to raise a plaintiffs right to relief above a speculative level, so that a claim is "plausible on its face." Id. at 570; see also W. Run Student Housing Assocs., LLC v. Huntington Nat Bank, 712 F.3d 165, 169 (3d Cir. 2013). That facial-plausibility standard is met "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). While "[t]he plausibility standard is not akin to a 'probability requirement'. . . it asks for more than a sheer possibility." Iqbal, 556 U.S. at 678.

         A Rule 12(c) motion for judgment on the pleadings is often indistinguishable from a motion to dismiss, except that it is made after the filing of a responsive pleading. Fed.R.Civ.P. 12(h)(2) "provides that a defense of failure to state a claim upon which relief can be granted may also be made by a motion for judgment on the pleadings." Turbe v. Gov't of Virgin Islands, 938 F.2d 426, 428 (3d Cir. 1991). Accordingly, when a Rule 12(c) motion asserts that the complaint fails to state a claim, the familiar Rule 12(b)(6) standard applies, making due allowance, of course, for any factual allegations that are admitted in the responsive pleading. Thus, the moving party bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005).

         In general, review is confined to the allegations in the pleadings. I am permitted, however, to consider "extraneous documents that are referred to in the complaint or documents on which the claims in the complaint are based" without converting this motion into one for summary judgment. Morano v. BMW of N. Am., LLC, 928 F.Supp.2d 826, 830 (D.N.J. 2013) (citing In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997); Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1996 (3d Cir. 1993)).

         b. CHP's Motion

         CHP has filed a letter (ECF no. 104) joining General Trading's earlier-filed motion to dismiss the Amended Complaint. Specifically, CHP cites General Trading's arguments that the action was not timely filed and that plaintiff BMC lacks standing because of an invalid assignment from its patient. In my earlier Opinion (ECF no. 122) I denied General Trading's motion. Specifically, I held that the Amended Complaint adequately alleged a valid assignment (Op. 8-10) and that it adequately alleged that the action was timely under the terms of the plan. (Op. 10-12) For the reasons expressed in my earlier Opinion, then, CHP's motion for judgment on the pleadings (ECF no. 104) is denied, without prejudice to renewal of these contentions in the context of summary judgment.

         c. ...

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