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Allianz Life Insurance Company of North America v. Muse

United States District Court, W.D. Oklahoma

November 21, 2019

GENE L. MUSE, M.D., Defendant/Counterclaimant; and PATIA PEARSON, Defendant.


          CHARLES B. GOODWIN, United States District Judge.

         Now 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).

         I. Background

         In 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.

         Defendant 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.

         In 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.

         Defendant 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.

         Defendant 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.

         On 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. ¶ 33.[1]

         On or 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.

         On or 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. ¶ 40.

         In 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).

         II. Standard of Review

         Rule 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 ...

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