United States District Court, W.D. Oklahoma
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA, Plaintiff/Counterclaim Defendant,
GENE L. MUSE, M.D., Defendant/Counterclaimant; and PATIA PEARSON, Defendant.
CHARLES B. GOODWIN, United States District Judge.
before the Court is the Motion for Partial Judgment on the
Pleadings (Doc. No. 96) filed by Defendant/Counterclaimant
Gene L. Muse, MD (“Defendant Muse”).
Plaintiff/Counterclaim Defendant Allianz Life Insurance
Company of North America (“Plaintiff” or
“Allianz”) has filed a Response (Doc. No. 110),
to which Defendant Muse has replied (Doc. No. 119).
December 2017, Plaintiff filed its Complaint (Doc. No. 1)
alleging that a dispute has arisen in connection with a
long-term-care insurance policy (the “Policy”)
issued in 2000 by Plaintiff to Defendant Muse. See
Compl. ¶¶ 11-41; id. Ex. 1 (Doc. No. 1-1).
The Policy provides Home and Community Services benefits,
which include payment for Home Care (“HC”)
services provided in connection with specified activities of
daily living (“ADLs”). To be eligible for such HC
payments, the insured must be certified within the previous
12 months by a licensed health care practitioner as being
Chronically Ill-that is, (1) being unable to perform, without
Substantial Assistance, at least two ADLs for a period of at
least 90 days due to loss of functional capacity or (2)
having a severe “Cognitive Impairment.” Compl.
¶¶ 12-14; id. Ex. 1, at 11, 13.
Muse filed his first claim for HC payments on or about July
28, 2015, asserting that he had been paying for home care for
“all daily activities” from Adlife HomeCare LLC
(“Adlife”) since September 17, 2014. Compl.
¶ 17. In September 2015, a physician certified that
Defendant Muse needed continuous assistance with ADLs.
Id. ¶ 18. Defendant Muse shortly thereafter
submitted invoices stating that Defendant Patia Pearson with
Adlife had provided Defendant Muse with daily HC services
from July 1, 2015, through September 25, 2015. Id.
¶¶ 19-20. On or about November 2, 2015, Plaintiff
paid the claim for HC payments for July 1, 2015, to September
25, 2015. Id. ¶ 21.
September 2015 and again in November 2015, Plaintiff retained
an investigator to record video surveillance of Defendant
Muse, allowing Plaintiff “to compare [Defendant
Muse's] self-reported functional limitations with his
functional abilities exhibited on tape.” Id.
¶¶ 18, 22. Plaintiff alleges that on both occasions
the video reflected Defendant Muse “engaging in
activities inconsistent with his asserted limitations.”
Id. On or about January 15, 2016, Plaintiff informed
Defendant Muse that based upon its review of information
submitted and the surveillance video, Plaintiff was going to
pay the claims for HC payments through November 22, 2015, but
that Defendant Muse's claims for services rendered after
that date were denied. Id. ¶ 23.
Muse then appealed the claim denial. Id. ¶ 24.
Plaintiff arranged an in-home nursing assessment, which was
conducted on or about July 20, 2016. Id. ¶ 25.
On or about August 18, 2016, Plaintiff upheld the denial of
benefits for service dates after November 22, 2015.
Id. ¶ 26.
Muse appealed this decision through his attorney, submitting
additional materials for review. Included in these materials
was a letter from one of Defendant Muse's treating
physicians, which did not state an opinion regarding
Defendant Muse's ability to perform ADLs. Id. On
January 30, 2017, Plaintiff requested that this physician
“provide a Chronically Ill. Statement expressing his
opinion on Muse's ability to perform [ADLs].”
Id. On or about March 3, 2017, Plaintiff notified
Defendant Muse that it had reconsidered and would pay the
claims submitted for HC services rendered from November 23,
2015, through January 1, 2016. Id. ¶ 28.
March 18, 2017, an investigator hired by Plaintiff recorded
video surveillance of Defendant Muse engaging in physical
activities “inconsistent with his asserted
limitations.” Id. ¶ 29. Defendant Muse
continued to submit claims with invoices and documentation
logs showing HC services provided by Defendant Pearson during
2016 and 2017. Id. ¶¶ 30 (Jan. 2,
2016-Apr. 1, 2016), 31 (Apr. 2, 2016-July 31, 2016), 33 (Aug.
1, 2016-Feb. 3, 2017). On May 3, 2017, Plaintiff authorized
payment of claims for services provided from August 1, 2016,
through February 3, 2017. Id. ¶
about May 5, 2017, Defendant Muse's treating physician
issued the Chronically Ill. Statement that had been requested
by Plaintiff on January 30, 2017, opining that he found
Defendant Muse able to perform certain ADLs and that he did
not know whether Plaintiff could independently perform the
remaining identified ADLs. Id. ¶ 34. Thus, the
treating physician's Statement did not certify that
Defendant Muse was Chronically Ill.
about June 29, 2017, Plaintiff informed Defendant Muse it
would not approve benefits beyond April 22, 2017, based upon
the treating physician's Statement. After Defendant Muse
submitted invoices for payment of claims beyond that date,
Stephen K. Holland, MD, completed a review of medical records
and the video recordings. Id. ¶¶ 36-39.
Dr. Holland issued a report on November 10, 2017, stating
that he was not able to certify Defendant Muse as a
Chronically Ill. individual under the Policy. Dr. Holland
also opined that Defendant Muse had regained his ability to
perform ADLs no later than September 21, 2016. Id.
December 2017, Plaintiff filed this lawsuit, raising claims
of: (i) declaratory relief, seeking a judicial determination
that Defendant Muse is “not entitled to additional
Policy benefits for services provided from April 22, 2017 to
the present”; (ii) fraud and deceit against both
Defendants; and (iii) conspiracy to defraud and deceive
against both Defendants. Id. ¶¶ 42-57.
Defendant Muse has raised four counterclaims against
Plaintiff: (i) breach of contract; (ii) breach of the duty of
good faith and fair dealing; (iii)
fraud/misrepresentation/deceit; and (iv) intentional
infliction of emotional distress. Def. Muse Answer &
Countercls. ¶¶ 135-152 (Doc. No. 9).
Standard of Review
12(c) of the Federal Rules of Civil Procedure permits a party
to move for judgment on the pleadings “[a]fter the
pleadings are closed-but early enough not to delay
trial.” Fed.R.Civ.P. 12(c). The Court evaluates the
motion under the familiar standard applied to Rule 12(b)(6)
motions. See Atl. Richfield Co. v. Farm Credit Bank of
Wichita, 226 F.3d 1138, 1160 (10th Cir. 2000) (citing
Mock v. T.G. & Y. Stores Co., 971 F.2d 522, 528
(10th Cir. 1992)). Accordingly, the Court “accept[s]
all facts pleaded by the non-moving party as true and
grant[s] all reasonable inferences from the pleadings in
favor of the same.” Adams v. Jones, 577
Fed.Appx. 778, 782 (10th Cir. 2014) (internal quotation marks
omitted). “[T]o survive judgment on the pleadings, [the
plaintiff] must allege ‘a claim to relief that is
plausible on its face.'” Sanchez v. U.S.
Dep't of Energy, 870 F.3d 1185, 1199 (10th Cir.
2017) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009)). “To determine whether the claim to relief is
‘plausible on its face,' we examine the elements of
the particular claim and review ...