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Allianz Life Insurance Company of North America v. Muse

United States District Court, W.D. Oklahoma

December 18, 2019

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



         Now before the Court is the Motion for Partial Summary Judgment (Doc. No. 98) filed by Plaintiff/Counterclaim Defendant Allianz Life Insurance Company of North America (“Allianz”). Defendant/Counterclaimant Gene L. Muse, MD (“Muse”) has filed a Response (Doc. No. 112), to which Allianz has replied (Doc. No. 122). As outlined below, Allianz's Motion is granted in part and denied in part.

         I. Standard of Review

         Summary judgment is a means of testing in advance of trial whether the available evidence would permit a reasonable jury to find in favor of the party asserting a claim. The Court must grant summary judgment when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

         A party that moves for summary judgment has the burden of showing that the undisputed material facts require judgment as a matter of law in its favor. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). To defeat summary judgment, the nonmovant need not convince the Court that it will prevail at trial, but it must cite sufficient evidence admissible at trial to allow a reasonable jury to find in the nonmovant's favor-i.e., to show that there is a question of material fact that must be resolved by the jury. See Garrison v. Gambro, Inc., 428 F.3d 933, 935 (10th Cir. 2005). The Court must then determine “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

         Parties may establish the existence or nonexistence of a material disputed fact by:

• citing to “depositions, documents, electronically stored information, affidavits or declarations, stipulations . . ., admissions, interrogatory answers, or other materials” in the record; or
• demonstrating “that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.”

Fed. R. Civ. P. 56(c)(1)(A), (B). While the Court views the evidence and the inferences drawn from the record in the light most favorable to the nonmoving party, see Pepsi-Cola Bottling Co. of Pittsburg, Inc. v. PepsiCo, Inc., 431 F.3d 1241, 1255 (10th Cir. 2005), “[t]he mere existence of a scintilla of evidence in support of the [nonmovant's] position will be insufficient; there must be evidence on which the [trier of fact] could reasonably find for the [nonmovant].” Liberty Lobby, 477 U.S. at 252.

         II. Relevant Facts

         In December 2017, Allianz filed its Complaint (Doc. No. 1) alleging that a dispute had arisen in connection with a long-term-care insurance policy (“the “Policy”) issued in 2000 by Allianz to Muse. See Compl. ¶¶ 11-41; id. Ex. 1 (“Policy”) (Doc. No. 1-1). The Policy provides “Daily Benefits” for “Home and Community Services, ” which include payment for “Home Care” services provided in connection with the activities of daily living-or ADLs-of bathing, continence, dressing, eating, toileting, and transferring. Policy at 10. To be eligible for such Daily Benefits, the insured must be certified within the previous 12 months by a licensed health care practitioner as being “Chronically Ill”- i.e., (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.” Id. at 11, 13-14. “Substantial Assistance” means “hands-on or stand-by assistance of another person without which you would be unable to perform [ADLs].” Id. at 13.

         The Policy provides Muse with unlimited Daily Benefits for Home and Community Services for the period that Muse meets the Eligibility for Benefits. See Id. at 5, 13-14. If eligible for payment of benefits, Muse receives the full Daily Benefit for covered services, “regardless of actual charges incurred” by Muse. Id. at 8. The Policy provides, however, that “[n]o benefits will be paid for any . . . care . . . or [services]” “for which [Muse] ha[s] no financial liability or that [are] provided at no charge in the absence of insurance.” Id. at 16.

         Muse, who previously worked as an orthopedic surgeon, alleges that he suffers from chronic physical ailments, as well as impairments that arose when he fell from a ladder on June 28, 2014. Def. Muse Answer & Countercls. (Doc. No. 9) ¶¶ 69-70. Muse filed his first claim for Daily Benefits on July 28, 2015, asserting that he had been paying for home health-care services for “[a]ll daily activities” from Adlife HomeCare LLC (“Adlife, ” later known as “Alpha Private Services LLC”) since September 17, 2014. Defs.' Mot. Ex. 1 (Doc. No. 97-1); see also Compl. ¶ 17.

         On September 30, 2015, Muse submitted to Allianz: (1) a copy of Adlife's state license; (2) Adlife's care plan for Muse; and (3) itemized invoices and Weekly Documentation Logs from Adlife certifying under penalty of law that Defendant Patia Pearson (“Pearson”), who is a Home Health Aide with Adlife, had provided Muse with the identified home-health services every day from July 1, 2015, through September 25, 2015. Defs.' Mot. Ex. 12 (Doc. No. 97-12); Wuensch Dep. 35:5-36:1 (Aug. 27, 2019) (Patty Wuensch testifying in role as Allianz corporate representative) (Doc. No. 97-32); see also Compl. ¶ 19; Muse Answer & Countercls. ¶ 19.

         On October 26, 2015, a letter from Allianz's long-term-care benefits administrator, issued on Allianz letterhead, notified Muse that he was eligible for Daily Benefits and that Muse's “benefit eligibility period is approved through January 26, 2016 provided [Muse] continue[s] to satisfy the policy's benefit eligibility requirements.” Defs.' Mot. Ex. 3 (Doc. No. 97-3). On November 9, 2015, Allianz paid the claim for Daily Benefits of $32, 728.53 to Muse for services provided him from July 1, 2015, to September 25, 2015. Defs.' Mot. Ex. 26 (Doc. No. 97-26) at 2-4. On January 21, 2016, Allianz paid $22, 232.84 for Daily Benefits for services provided him from September 26, 2015, through November 22, 2015. Id. at 5-6.

         On January 15, 2016, however, Allianz sent a letter to Muse informing him that “because the level of impairment” claimed by Muse-i.e., daily assistance with his ADLs and numerous other tasks-“did not appear to be consistent with medical information, ” Allianz had conducted an “activities check, ” the results of which “conflict[ed] with the documented care needs described in the Weekly Documentation Logs.” Defs.' Mot. Ex. 4 (Doc. No. 97-4). The letter concluded, “The activities we have observed suggest that Dr. Muse is capable of performing the Activities of Daily Living without Substantial Assistance of another person. Consequently, we have concluded that he is not Chronically Ill. beginning on November 23, 2015, and no further benefits will be approved for services received on or after this date.” Id.

         Muse then appealed this claim denial, submitting a letter from Michael Winzenread, MD, asserting that Muse needed assistance with the ADLs of bathing, dressing, and toileting. Defs.' Mot. Ex. 5 (Doc. No. 97-5); see also Compl. ¶ 24. Allianz then advised Muse that it would be seeking medical records from Dr. Winzenread and requesting an in-home nursing assessment by a nurse care manager. Defs.' Mot. (Doc. No. 97-6). The in-home assessment was conducted on or about July 20, 2016. Comp. ¶ 25. Muse and Pearson both participated in the assessment and asserted that Muse required assistance from Pearson with bathing, continence, dressing, eating, toileting, and transferring. Id.; see also Muse Answer & Countercls. ¶ 25. On August 18, 2016, Allianz upheld the denial of benefits for service dates after November 22, 2015. Defs.' Mot. Ex. 8 (Doc. No. 97-8).

         Muse appealed this decision through his attorney, submitting additional materials for review on October 26, 2016. Defs.' Mot. Ex. 9 (Doc. No. 97-9). On March 3, 2017, Allianz notified Muse that it had reconsidered and would pay the claims submitted for Daily Benefits rendered from November 23, 2015, through January 1, 2016. Defs.' Mot. Ex. 10 (Doc. No. 97-10). On March 10, 2017, Allianz paid Daily Benefits of $15, 800.00 to Muse for services provided him during that period. Defs.' Mot. Ex. 26, at 26-27.

         Muse continued to submit claims with invoices and documentation logs showing home-health services provided by Pearson during 2016 and 2017. Defs.' Mot. Exs. 18 (Jan. 2, 2016-Apr. 1, 2016) (Doc. No. 97-18), 19 (Apr. 2, 2016-July 31, 2016) (Doc. No. 97-19), 20 (Aug. 1, 2016-Feb. 3, 2017) (Doc. No. 97-20). On April 19, 2017, Allianz paid Daily Benefits of $83, 740.00 to Muse for services provided him from January 2, 2016, through July 31, 2016. Defs.' Mot. Ex. 26, at 28-29. On May 5, 2017, Allianz paid $75, 741.25 of Daily Benefits to Muse for services provided him from August 1, 2016, through February 3, 2017. Id. at 30-31. On June 13, 2017, Allianz paid $31, 935.75 of Daily Benefits to Muse for services provided him from February 4, 2017, through April 21, 2017. Id. at 32-33.

         On June 29, 2017, Allianz informed Muse it would not approve benefits beyond April 21, 2017. Defs.' Mot. Ex. 25 (Doc. No. 97-25) (“Based on information on file, we are unable to determine Dr. Muse requires assistance with at least two ADLs at this time . . . .”). Muse then submitted more documentation and invoices for payment of claims beyond that date. Defs.' Mot. Ex. 22 (Doc. No. 97-22). On July 11, 2017, Muse requested reconsideration of Allianz's denial and submitted a Chronically Ill. Statement from a physician who certified that Muse needed stand-by assistance with two ADLs and hands- on assistance with five ADLs. Defs.' Mot. Exs. 27 (Doc. No. 97-27), 34 (Doc. No. 97-34). On September 5, 2017, Allianz received logs and invoices for services rendered through September 2, 2017. Defs.' Mot. Ex. 23 (Doc. No. 97-23).

         Allianz and Muse's attorney continued to correspond regarding Allianz's ongoing review of the claims for Daily Benefits. Defs.' Mot. Exs. 28 (Doc. No. 97-28), 29 (97-29), 30 (Doc. No. 97-30). In November 2017, Allianz provided the medical records submitted by Muse and gathered by Allianz, as well as video recordings taken by Allianz's investigator, to Stephen K. Holland, MD, for review. Compl. ¶ 39. Dr. Holland is the Medical Director and Chief Medical Officer of LTCG, a third-party administrator hired by Allianz to administer long-term-care-insurance claims. Defs.' Mot. Ex. 35 (Doc. No. 97-35). 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. Holland R. (Doc. No. 98-6).

         Pearson has been Muse's primary caregiver since 2014, although Muse has received some limited assistance from family members. Muse Dep. 93:12-96:11 (May 21, 2019) (Doc. No. 111-1). Pearson and Muse had a romantic relationship from 2001 through 2007 and intermittently after that for a couple of years. They considered themselves to be each other's significant other at various times. During 2008 through 2014, although Pearson dated other people, she still attended ...

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