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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. 97) filed by Defendant/Counterclaimant Gene L. Muse, MD (“Muse”) and Defendant Patia Pearson (“Pearson”) (collectively, “Defendants”), seeking judgment on the fraud-and-deceit and conspiracy claims alleged by Plaintiff/Counterclaim Defendant Allianz Life Insurance Company of North America (“Allianz”). Allianz has filed a Response (Doc. No. 111), to which Defendants have replied (Doc. No. 120). For the reasons outlined below, Defendants' Motion is denied.

         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 is eligible. 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. ¶¶ 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 or about September 17, 2015, Donald Adams, MD, examined Muse and certified that Muse needed continuous assistance with ADLs. Defs.' Mot. Ex. 2 (Doc. No. 97-2); see also Compl. ¶ 18. On September 16-18, 2015, Allianz retained an investigator to record video surveillance of Muse. Wuensch Dep. 162:1-11 (Apr. 10, 2019) (Patty Wuensch testifying in role as Allianz Principal Claims Consultant) (Doc. No. 97-36); see also Compl. ¶ 18. The investigator recorded Muse ambulating without assistance and driving a vehicle and also walking with the use of crutches when going to an appointment. See Video of Sept. 16-18, 2015 (Doc. No. 98-14 (conventionally filed)); see also Compl. ¶ 18.

         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 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; see also Compl. ¶ 19 (“Muse submitted or caused the . . . Weekly Documentation Logs to be submitted to Allianz for the purpose of securing payment of the [Daily Benefits] from Allianz under the Policy.”); 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 based upon his Chronically Ill. certification-i.e., the report from Dr. Adams regarding Muse's ADLs-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 for $32, 728.53 to Muse for dates of service 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 rendered September 26, 2015, through November 22, 2015. Id. at 5-6.

         On November 23-25, 2015, Allianz again retained an investigator to record video surveillance of Muse. Wuensch Dep. 207:15-18 (Doc. No. 97-36); see also Compl. ¶ 22. This surveillance reflected Muse ambulating without assistance, opening and closing a vehicle door, entering and exiting a vehicle, driving to and from a local bank, and walking into and out of the bank without any visible use of braces or crutches. See Video of Nov. 23-25, 2015 (Doc. No. 98-15 (conventionally filed)). The investigator also observed Pearson leaving Muse's residence at 9:45 a.m. on November 25, 2015, and not returning before 4:00 p.m. when the surveillance ended. See id.

         On January 15, 2016, 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 then summarized the events recorded on the video of November 23-25, 2015, described above and 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. When Pearson attempted to show how she assists Muse with showering, she appeared unfamiliar with the process and did not open the correct door. Video of July 20, 2016 (Doc. No. 98-17 (conventionally filed)); Wuensch Dep. 70:25-71:18 (Doc. No. 97-32). 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 ...

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