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Plastic Surgery Center, LLC v. Oxford Health Insurance, Inc.

United States District Court, D. New Jersey

September 30, 2019

THE PLASTIC SURGERY CENTER, LLC,, Plaintiff,
v.
OXFORD HEALTH INSURANCE, INC., Defendant.

          MEMORANDUM OPINION

          ZAHID N. QURAISHI, UNITED STATES MAGISTRATE JUDGE

         This matter comes before the Court upon Cross-Motion to File an Amended Complaint by The Plastic Surgery Center, P.A., (Plaintiff). (See Pl.'s Notice of Cross Mot. 1, ECF No. 18.) Oxford Health Insurance, Inc., (Defendant) argues the motion should be denied because amending the complaint would be futile. (Def.'s Reply Mem. in Support of Its Mot. to Dismiss and in Opp'n to Pl.'s Cross-Mot. 2, ECF 23.) For the reasons detailed within this Opinion, the Court is convinced only that Plaintiff's proposed amendments to Count 3 are clearly futile. Accordingly, Plaintiff's Motion will be granted in part, and denied only as to Count 3, its unjust enrichment claim.

         I. Allegations and Procedural History

On October 30, 2017, Plaintiff filed a complaint against Defendant in the Superior Court of New Jersey. (Notice of Removal, Ex. A 4, ECF No. 1-1.) In that complaint, Plaintiff alleged Defendant "contracted with [Plaintiff] to provide [Defendant's insured] with abdominal wall reconstruction surgery and related medical services ... and to pay [Plaintiff] according to the usual and customary prevailing rates [Plaintiff] receives for those services." (Id. at 5, ¶ 7.) Plaintiff asserted Defendant refused to fully pay surgery costs incurred after the contract was made and refused to pay a consultation fee incurred before the alleged contract. (Id. at 5-6, ¶¶ 4-6, 8-10, 12-14.) Plaintiff submitted Defendant's actions constituted a breach of contract and unjust enrichment, (id. at 6, ¶¶ 16-22 (counts one and two)), and that Defendant was estopped from denying its promise, (id. at 7, ¶¶ 23-26 (count three) (improperly identifying Aetna)).

         Defendant removed the case from state court on February 23, 2018. (Notice of Removal 6, ECF No. 1.) And on May 7, 2018, Defendant moved pursuant to Fed.R.Civ.P. 12(b)(6) for an order dismissing Plaintiff's Complaint, submitting that the Complaint "fails to state a cause of action...." (Notice of Mot. 1, ECF No. 10.) Specifically, defendant argued (1) Plaintiff failed to plead facts sufficient to establish the existence of a valid contract, (Def.'s Mem. in Support of Its Mot. to Dismiss 6, ECF No. 10-3 (citing Hills v. Bank of Am., "No. 13-4960, 2014 U.S. Dist. LEXIS 89473, at *10-12 (D.NJ. June 30, 2014))); (2) Plaintiffs unjust enrichment claim fails to state a claim because Defendant's alleged obligation was contractual and the insured-not Defendant- received the benefit, (id. at 9 (citing Broad St. Surgical Ctr., LLC v. UnitedHealth Grp., Inc., No. 11-2775 (JBS)(JS), 2012 U.S. Dist. LEXIS 30466, *21-23 (D.NJ. Mar. 6, 2012))); (3) Plaintiff's promissory estoppel claim must fail because it is directed at Aetna and Plaintiff failed to plead sufficient facts to establish a clear and definite promise by Defendant, (id. at 13 (citing Capers v. FedEx Ground, No. 12-5352, 2012 U.S. Dist. LEXIS 78818, at *4-5 (D.NJ. June 6, 2012))); and (4), to the extent the claim for benefits is governed by the Employee Retirement Income Security Act (ERISA), Plaintiff's state law claims and claim for damages must be dismissed as preempted, (id. at 14-15 (citing Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47-48 (1987))).

         In response, Plaintiff moved to amend the pleadings. (Pl.'s Mem. in Support of Its Cross-Mot. to Amend, ECF 17.) Plaintiff's proposed Amended Complaint adds Oxford Health Plans (NY), Inc., ("OHP") as a defendant and the patient, K.S., as a plaintiff. (Pl.'s Am. Compl. ¶¶ 3-4.)

         II. Parties' Arguments

         Plaintiff argues it should be granted leave to amend under Fed.R.Civ.P. 15(a) because there is no unfair prejudice to Defendant. (Pl.'s Mem. in Support of Its Cross-Mot. to Amend 4.) Defendant responds that leave to amend must be "denied in all respects because the requested amendment would be futile as a matter of law." (Def.'s Reply Mem. in Support of Its Mot. to Dismiss and in Opp'n to Pl.'s Cross-Mot. 2) For the ease of readability, the substance of the parties' arguments will be detailed in section IV.

         III. Standard for Amending Pleadings

         Rule 15(a)(2) instructs courts to "freely give leave [to amend] when justice so requires." Fed.R.Civ.P. 15. Though within the discretion of the Court,

[i]n the absence of any apparent or declared reason-such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.-the leave sought should, as the rules require, be "freely given."

Foman v. Davis, 371 U.S. 178, 182 (1962). "[A]n amendment would be futile when 'the complaint, as amended, would fail to state a claim upon which relief could be granted'"; that is, it would be subject to dismissal. In re NAHC, Inc. Sec. Litig., 306 F.3d 1314, 1332 (3d Cir. 2002) (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1434 (3d Cir. 1997)). "For a complaint to survive dismissal, it 'must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face.'"" Rosenzweig v. Transworld Sys., Inc., No. CV 16-227 (JMV), 2016 WL 5106995, at *2 (D.NJ. Sept. 20, 2016) (quoting Ashcroft v. Iqbal, 556 U.S. 662 (2009)). "If a proposed amendment is not clearly futile, then denial of leave to amend is improper." Harrison Beverage Co. v. Dribeck Importers, Inc., 133 F.R.D. 463, 468-69 (D.NJ. 1990) (quoting 6 Wright, Miller & Kane, Federal Practice & Procedure § 1487 at 637-642 (2d ed. 1990)).

         Determining whether an amendment is futile "does not require the parties to engage in the equivalent of substantive motion practice upon the proposed new claim or defense; [it] does require, however, that the newly asserted [claim] appear to be sufficiently well-grounded in fact or law that it is not a frivolous pursuit." Id. at 469.

         IV. Only the Proposed Amendments ...


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