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LLC v. American Family Insurance Co.

United States District Court, W.D. Missouri, Western Division

May 22, 2018

MARVIN'S MIDTOWN CHIROPRACTIC CLINIC, LLC, individually and on behalf of others similarly situated, Plaintiff,
v.
AMERICAN FAMILY INSURANCE COMPANY, Defendant.

          ORDER PARTIALLY GRANTING MOTION TO DISMISS

          GREG KAYS, CHIEF JUDGE

         This putative class action stems from Plaintiff Marvin's Midtown Chiropractic Clinic, LLC (“Marvin's”) allegation that Defendant American Family Insurance Company (“American Family”) negligently issued and delivered insurance payments made pursuant to an assignment of benefits. Marvin's contends that under Mo. Rev. Stat. § 376.427, American Family should have issued and delivered payments directly to it instead of its insureds.

         Now before the Court is American Family's Motion to Dismiss the Amended Complaint (Doc. 21) for lack of standing and failure to state a claim. Holding that American Family did not owe a duty to deliver payment directly to Marvin's, and that Marvin's negligence per se claim is not cognizable, Defendants' motion is GRANTED IN PART.

         Background

         The parties agree that Marvin's claims are grounded in the allegation that American Family violated Mo. Rev. Stat. § 376.427, which governs assignments of benefits made by insureds to medical providers. The parties agree that the primary purpose of the statute is to enable insured individuals who are injured in an automobile accident to seek immediate medical treatment without worrying about how to pay for that treatment up front.

         The provision at the heart of this dispute states:

Upon receipt of an assignment of benefits made by the insured to a provider, the insurer shall issue the instrument of payment for a claim for payment for health care services in the name of the provider. All claims shall be paid within thirty days of the receipt by the insurer of all documents reasonably needed to determine the claim.

Mo. Rev. Stat. § 376.427.2. The statute defines “Insured, ” in relevant part, as “any person entitled to benefits under a contract of accident and sickness insurance, or medical-payment insurance issued as a supplement to liability insurance[.]” Id. at 376.427.1(2). “Provider” is defined as “a physician, hospital, dentist, podiatrist, chiropractor, pharmacy, licensed ambulance service, or optometrist, licensed by this state.” Id. at § 376.427.1(4).

         The Amended Complaint (“the Complaint”) (Doc. 20) contends that, under this statute, American Family was required to send payment directly to Marvin's (or any other providers who obtained an assignment of benefits from an insured) once Marvin's provided the assignment form to American Family. The Complaint maintains this statutory language gives American Family “no discretion to send payment for benefits to any party except for the ‘Provider.'” Am. Compl. ¶ 8 (emphasis in original).

         The Complaint alleges American Family insured three individuals who received treatment from Marvin's and executed an assignment of benefits in favor of Marvin's. Marvin's subsequently provided these assignments to American Family along with supporting documentation and a bill. American Family then issued and delivered payment to the insured or their attorneys, not to Marvin's. The Complaint claims that by issuing and delivering payment to the insureds, American Family inflicted “significant financial losses to Marvin's and other class members” because of “[n]on-payment for services rendered pursuant to an assignment of benefits, ” and “[l]oss of time and expenses in attempting to collect for services rendered.” Id. ¶ 45.

         Count I alleges American Family acted negligently with respect to Plaintiff and the other class members by: (1) failing to issue payments in the provider's name pursuant to an assignment of benefits; and (2) delivering payments directly to the insured or their attorneys instead of the provider. Similarly, Count II alleges that American Family committed negligence per se by: (1) failing to issue payments in the provider's name pursuant to an assignment of benefits; and (2) delivering payments directly to the insured or their attorneys instead of the provider.

         Standard of Review

         Article III standing requires the plaintiff to have “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo v. Robins, 136 S.Ct. 1540, 1547 (2016) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). To establish an injury in fact, a plaintiff must have suffered “‘an invasion of a legally protected interest' that is ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical.'” Id. at 1548. “[A] concrete injury is required even in the context of a statutory violation.” Id. To be concrete, an “injury must be ‘de facto'; that is, it must actually exist.” Id. If a litigant lacks Article III standing, then a federal court lacks subject-matter jurisdiction over the lawsuit and dismissal is required. Iowa League of Cities v. EPA, 711 F.3d 844, 869 (8th Cir. 2013).

         A complaint may also be dismissed if it fails “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). To avoid dismissal, a complaint must include “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Plaintiff need not demonstrate the claim is probable, only that it is more than just possible. Id. In reviewing the ...


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