Clothier v. Health Care Service Corporation

IN THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF OKLAHOMA

MURIEL COLLEEN CLOTHIER, )

)

Plaintiff, )

)

v. ) No. CIV-21-884-R

)

HEALTH CARE SERVICE )

CORPORATION, a foreign mutual legal )

reserve company, d/b/a BLUE CROSS )

AND BLUE SHIELD OF OKLAHOMA, )

)

Defendant. )

ORDER

Before the Court is the Motion to Dismiss (Doc. No. 12) filed by Defendant, Health

Care Service Corporation, d/b/a Blue Cross and Blue Shield of Oklahoma (“Blue

Cross/Blue Shield”) pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff

responded in opposition to the motion (Doc. No. 13) and Defendant filed a Reply (Doc.

No. 14) in support of its position. Upon consideration of the parties’ submissions, the Court

finds as follows.

A motion to dismiss should be granted when a complaint contains only a “formulaic

recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,

555 (2007). To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6),

Plaintiff's “complaint must contain sufficient factual matter, accepted as true, to ‘state a

claim for relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

(quoting Twombly, 550 U.S. at 570). A plaintiff's complaint must include “factual content

that allows the court to draw a reasonable inference that the defendant is liable for the

misconduct alleged.” Iqbal, 556 U.S. at 678. Mere conclusory allegations are not entitled

to an assumption of truth. Id. Rather, “[t]he allegations must be enough that, if assumed to

be true, the plaintiff plausibly (not just speculatively) has a claim for relief.” Robbins v.

Okla. Dep't of Human Servs., 519 F.3d 1242, 1247 (10th Cir. 2008). This requirement

“serves not only to weed out claims that do not (in the absence of additional allegations)

have a reasonable prospect of success, but also to inform the defendants of the actual

grounds of the claim against them.” Id. at 1248. “Threadbare recitals of the elements of a

cause of action, supported by mere conclusory statements, do not suffice.” Khalik v. United

Air Lines, 671 F.3d 1188, 1193 (10th Cir. 2012) (quoting Iqbal, 556 U.S. at 678).

Plaintiff filed this action following Defendant’s decision that microwave ablation

for treatment of her metastatic colon cancer, specifically recommended by her medical

provider for two lesions in her lungs, was not covered because it was investigational or

experimental. Plaintiff seeks to recover under theories of breach of contract, bad faith,

fraud, and intentional infliction of emotional distress. Defendant seeks dismissal of each of

Plaintiff’s claims, except her breach of contract claim.

Under Oklahoma law, “an insurer has an implied duty to deal fairly and act in good

faith with its insured and ... the violation of this duty gives rise to an action in tort....”

Christian v. American Home Assur. Co., 577 P.2d 899, 904 (Okla. 1977). Liability for

breach of the implied covenant of good faith and fair dealing requires “‘a clear showing

that the insurer unreasonably, and in bad faith, withholds payment of the claim of its

insured.’” Harris v. Progressive Direct Ins. Co., 740 F. App'x 900, 908 (10th Cir. 2018)

(quoting Christian, 577 P.2d at 905). To establish a cause of action against an insurance

company for bad faith under Oklahoma law, the plaintiff must show:

1) coverage under the insurance policy and that the insurer was required to

take reasonnable actions; 2) the actions of the insurer were unreasonable

under the circumstances; 3) the insurer failed to deal fairly and act in good

faith toward the insured in its handling of the claim; and 4) breach or

violation of the duty of good faith and fair dealing was the direct cause of

any damages that the insured sustained.

Id. at 908 (citing Badillo v. Mid Century Ins. Co., 121 P.3d 1080, 1093 (Okla. 2005)).

Although a complaint need not allege a basis for all the elements of a prima facie case,

consideration of the elements of a claim can be helpful in determining whether a complaint

satisfies the plausibility standard. Khalik v. United Air Lines, 671 F.3d 1188, 1192 (10th

Cir. 2012).

The Court concurs with Defendant that Plaintiff’s Amended Complaint fails to

allege sufficient facts to support her bad faith claim. Numbered paragraph 71 contains

lettered subparagraphs (a) through (q). Many of those subparagraphs are nearly identical

and none cites to any specific facts that support a finding of bad faith in this case. Rather,

the paragraphs contain mere formulaic recitals of various manners in which an insurer may

commit bad faith, without any specific factual allegations arising from this particular

relationship. In A.B. by & through Blaik v. Health Care Serv. Corp., No. CIV-19-968-D,

2020 WL 4041120, at *4 (W.D. Okla. July 17, 2020), the court dismissed nearly identical

allegations of bad faith, finding them conclusory and insufficient. See also Scheffler v. Am.

Republic Ins. Co., No. 11-cv-0760-CVE-TLW, 2012 WL 602187 (N.D. Okla. Feb. 23,

2012), A&B Stores, Inc. v. Employers Mut. Cas. Co., No. CIV-14-1228-HE, 2015 WL

1014808, at *2 (W.D. Okla. Mar. 9, 2015), and Daily v. USAA Casualty Insurance Co.,

No. CIV-14-550-HE, 2014 WL 12729172, *1 (W.D. Okla. Nov. 19, 2014). The Court

concludes the Amended Complaint does not contain sufficient factual allegations, as

opposed to conclusions, to “nudge[ ]” plaintiff's bad faith claim “across the line from

conceivable to plausible.” Twombly, 550 U.S at 570. Therefore, Defendant’s Motion to

Dismiss is granted as to Plaintiff’s bad faith claim.

Defendant seeks dismissal of Plaintiff’s fraud claim as well. Under Oklahoma law,

a fraud claim requires that Plaintiff establish: 1) a false material misrepresentation, 2) made

as a positive assertion which is either known to be false or is made recklessly without

knowledge of the truth, 3) with the intention that it be acted upon, and 4) which is relied

on by the other party to her detriment. Kunneman Props. LLC v. Marathon Oil Co., No.

17-cv-00456-GKF-JFJ, 2019 WL 4658362, at *4 (citing Bowman v. Presley, 212 P.3d

1210, 1218 (Okla. 2009)). Constructive fraud is the concealment of material facts which

one is bound under the circumstances to disclose and, unlike actual fraud or deceit,

constructive fraud does not require intent to deceive. Id. (citing Bankers Tr. Co. v. Brown,

107 P.3d 609, 613 (Okla. Civ. App. 2004). Additionally, Rule 9 of the Federal Rues of

Civil Procedure requires that fraud be pled with particularity. “The purpose of Rule 9(b) is

to afford defendant fair notice of plaintiff's claims and the factual ground upon which [they]

are based.” Schwartz v. Celestial Seasonings, Inc., 124 F.3d 1246, 1252 (10th Cir.1997)

(internal quotation marks and citation omitted). “[A] complaint must set forth the time,

place and contents of the false representation, the identity of the party making the false

statements and the consequences thereof.” Id. (internal quotation marks and citation

omitted).

Plaintiff contends Defendant engaged in fraud when it informed her that the

treatment ordered by her treating physician was “experimental or investigational.”

At the time BCBS disclosed the basis for its claim decision, it was aware that

the position was false, not supported by current medical standards,

contradicted by evidence of the effectiveness in the medical industry

supporting the treatment including the peer reviewed studies contained in the

Medical Policies-Microwave Tumor Ablation-SUR701.038 and was

otherwise misleading as to the treatment of Plaintiff’s cancer.

Amended Complaint, ¶ 83. Plaintiff alleges, in conclusory manner, that “BCBS made this

disclosure with the intention that Plaintiff would rely upon it, and Plaintiff did in fact rely

on the representations made by BCBS.” Id. ¶ 85. The Court finds these allegations too

conclusory to meet Plaintiff’s pleading burden. Fraud, deceit, and constructive fraud

“require detrimental reliance by the person complaining.” Howell v. Texaco Inc., 112 P.3d

1154, 1161 (Okla. 2004). Plaintiff’s conclusory allegations are not sufficient to state a

claim for fraud.

Defendant also seeks dismissal of Plaintiff’s intentional infliction of emotional

distress claim. Oklahoma recognizes a cause of action for intentional infliction of

emotional distress, also known as the tort of outrage. See, e.g., Gaylord Entertainment Co.

v. Thompson, 958 P.2d 128, 149 (Okla.1998). Such a claim is governed by the narrow

standards laid out in the Restatement Second of Torts, § 46. Id. To state an intentional

infliction of emotional distress claim, Plaintiff must allege that (1) defendant acted

intentionally or recklessly; (2) defendant's conduct was extreme and outrageous; (3) the

defendant's conduct caused the plaintiff emotional distress; and (4) the resulting emotional

distress was severe. Schovanec v. Archdiocese of Oklahoma City, 188 P.3d 158, 175

(Okla.2008) (citation omitted). Defendant’s conduct must have “been so outrageous in

character, and so extreme in degree, as to go beyond all possible bounds of decency, and

to be regarded as atrocious, and utterly intolerable in a civilized community.” Breeden v.

League Servs. Corp., 575 P.2d 1374, 1377–78 (Okla. 1978).

The Amended Complaint alleges the following:

BCBS’s actions in requiring Plaintiff to initiate multiple appeals without

providing reasonable and adequate consideration of the information

submitted by or on Plaintiff’s behalf as part of said appeals, improperly and

arbitrarily denying coverage for medical treatments, ignoring evidence that

the recommended treatment has been established as the medically

appropriate, supplanting BCBS’s own interest ahead of the interests of its

insureds, and otherwise implementing and executing a claims decision

process that fails to establish and follow adequate standards for claims

handling was so extreme and outrageous as to go beyond all possible bounds

of decency and would be considered atrocious and utterly intolerable in a

civilized society.

Doc. No. 10, ¶ 93. Even accepting the factual portion of this paragraph as true, as a matter

of law the conduct alleged therein simply does not rise to the level of conduct which is so

outrageous as to be “utterly intolerable in a civilized community.” Restatement, cmt. d.

See, e.g., Ishmael v. Andrew, 137 P.3d 1271 (Okla. Civ. App. 2006) (holding that

defendant's public accusation that plaintiff was a “liar” and had intentionally contaminated

another's drink was insufficiently atrocious); Warren v. United States Specialty Sports

Ass'n, 138 P.3d 580, 586 (Okla. Civ. App. 2006) (publicly calling plaintiffs “cheaters,” and

accusing them of misrepresentations of fact on an application was not extreme and

outrageous); Setzer v. Farmers Ins. Co., 185 Fed. Appx. 748, 755 (10th Cir. 2006)

(insurance company’s improper access to insured’s personal gynecological medical

records, was “simply not ‘outrageous.’”); Thompson v. State Farm Fire and Cas. Co., 34

F.3d 932, 942 (10 Cir. 1994)(agent’s refusal to help fill out proof of loss form, advisement

to not hire counsel, insurer’s repeated requests for more information and failure to keep

appointments, and policy cancellation, among other things, insufficient to support

intentional infliction of emotional distress claim). Accordingly, Defendant’s Motion to

Dismiss is granted as to Plaintiff’s intentional infliction of emotional distress claim.

For the reasons set forth herein, Defendant’s Motion to Dismiss (Doc. No. 12) is

GRANTED.

IT IS SO ORDERED this 27" day of October 2021.

UNITED STATES DISTRICT JUDGE