Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Cheatwood v. Christian Brothers Services

United States District Court, D. Arizona

April 6, 2017

AARON and BREANNE CHEATWOOD, individually and as Next Best Friend of D.C., a minor child, Plaintiffs,
v.
CHRISTIAN BROTHERS SERVICES, et al, Defendants.

          ORDER

          H. Russel Holland United States District Judge

         Motion to Dismiss

         Defendant Sentinel Air Alliance moves to dismiss plaintiffs' claim against it.[1]

         Defendants Christian Brother Services and Christian Brothers Employee Benefit Trust join in Sentinel's motion.[2] The motion to dismiss is opposed.[3] Oral argument was requested but is not deemed necessary.

         Background

         Plaintiffs are Aaron and Breanne Cheatwood, individually, and as next best friend of D.C., a minor child. Defendants are Christian Brothers Services ("CBS"); Christian Brothers Employee Benefit Trust ("the Trust"); and Sentinel Air Medical Alliance.

         Plaintiffs allege that "Christian Brothers Services... provides and/or administers health coverage and other benefits, including insurance."[4] Plaintiffs allege that CBS's website provides that "[o]ver time, the company has grown to administer and serve 7 trusts, which provide a variety of programs to congregations, organizations, and dioceses both in the United States and Canada."[5] Plaintiffs further allege that "CBS's website .. states Christian Brothers Services and these trusts are not insurance companies but are plans in which member organizations pool their financial contributions to realize greater financial strength and increased purchasing power, which translates to better coverages at significantly reduced rates."[6] However, plaintiffs allege that "[a]lthough CBS's website says its trusts are not insurance companies, because the trusts collect[] member premiums to pool their financial contributions and pool risk, it [the Trust] provides health insurance under any reasonable definition of that term."[7]

         Plaintiffs allege that "[b]enefits under the CBS health plan are funded by the Trust."[8]Plaintiffs further allege that "[t]hrough Aaron's employment with Yuma Catholic High School ..., plaintiffs were covered under the CBS medical plan and/or the Trust."[9]

         In April 2015, D.C. was transported from Yuma Regional Medical Center to Banner Cardon Children's Medical Center by helicopter after his doctors determined that emergency transport was necessary.[10] The cost of this emergency transport was allegedly $61, 566.00.[11] CBS and/or the Trust denied plaintiffs' claim for coverage of this emergency medical transport.[12] Plaintiffs allege that this decision was based "on an opinion obtained from Sentinel Air."[13] Plaintiffs allege that Sentinel's website provides that "Sentinel Air Medical Alliance is an alliance of healthcare payors established in response to the rapid escalation of air medical transport rates. Our goal is to provide solutions to effectively control rates and ensure proper utilization for air transport services."[14]

         In their amended complaint, plaintiffs allege breach of contract and breach of the duty of good faith and fair dealing claims against CBS and the Trust. In support of their bad faith claim, plaintiffs allege that CBS and/or the Trust 1) "ignored information in the file that supported payment of [p]laintiff s claim[, ]"[15] 2) "had no reasonable basis to deny payment of [p]laintiffs' claim[, ]"[16] 3) "failed to give [p]laintiffs' interests at least as much consideration as its own, and instead, elevated its interests above [p]laintiffs' [, ]"[17] 4) "deliberately conducted a biased, outcome-focused investigation in order to deny [p]laintiffs' claim[, ]"[18] 5) "acted unreasonably by relying on personnel who did not treat or examine D.C. ... to deny his claim[, ]"[19] 6) "acted unreasonably by disregarding the medically sound opinions of D.C.'s treating physicians[, ]"[20] and 7) "acted unreasonably by relying upon the opinion of Sentinel Air, an obviously biased and anti-claimant medical reviewer, to deny [p]laintiffs' claim."[21]

         Plaintiffs allege an aiding and abetting claim against Sentinel. Plaintiffs allege that Sentinel aided and abetted CBS's and the Trust's breach of the duty of good faith and fair dealing. More specifically, plaintiffs allege that "[i]n administering [p]laintiffs' claim, Sentinel Air ignored information in the file that supported payment and coverage of [p]laintiffs' claim."[22] Plaintiffs further allege that Sentinel "had no reasonable basis to find [that p]laintiffs' claim was not covered or payable."[23] Plaintiffs allege that in investigating or evaluating their claim, Sentinel 1) "failed to give [p]laintiffs' interests at least as much consideration as its own and instead, elevated its interests above [p]laintiffs'[, ]"[24] 2) "deliberately conducted a biased, outcome-focused investigation in order to deny [p]laintiffs' claim[, ]"[25] 3) "acted unreasonably by relying on personnel who did not treat or examine D.C.[, ]"[26] and 4) "acted unreasonably by disregarding the medically sound opinions of D.C.'s treating physicians despite having no reasonable basis for rejecting them[.]"[27]

         Pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure, Sentinel now moves to dismiss plaintiffs' aiding and abetting claim. CBS and the Trust join in this motion and request that plaintiffs' breach of the duty of good faith and fair dealing claim against them be dismissed.

         Discussion

         "To survive a [Rule 12(b)(6)] motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Zixiang Li v. Kerry, 710 F.3d 995, 999 (9th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). "A claim is facially plausible 'when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Id. (quoting Iqbal, 556 U.S. at 678). "The plausibility standard requires more than the sheer possibility or conceivability that a defendant has acted unlawfully." Id. '"Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief" Id. (quoting Iqbal, 556 U.S. at 678). "[T]he complaint must provide 'more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.'" In re Rigel Pharmaceuticals, Inc. Securities Litig., 697 F.3d 869, 875 (9th Cir. 2012) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "In evaluating a Rule 12(b)(6) motion, the court accepts the complaint's well-pleaded factual allegations as true and draws all reasonable inferences in the light most favorable to the plaintiff." Adams v. U.S. Forest Srvc, 671 F.3d 1138, 1142-43 (9th Cir. 2012). However, the court does not '"necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations.'" Coto Settlement v. Eisenberg, 593 F.3d 1031, 1034 (9th Cir. 2010) (quoting Paulsen v. CNF, Inc., 559 F.3d 1061, 1071 (9th Cir. 2009)).

         Sentinel moves to dismiss plaintiffs' aiding and abetting claim against it.

         Claims of aiding and abetting tortious conduct require proof of three elements:

"(1) the primary tortfeasor must commit a tort that causes injury to the plaintiff;
(2) the defendant must know that the primary tortfeasor's conduct constitutes a breach of duty; and
(3) the defendant must substantially assist or encourage the primary tortfeasor in the achievement of the breach."

Federico v. Marie, 226 P.3d 403, 405 (Ariz.Ct.App. 2010) (quoting Wells Fargo Bank v. Arizona Laborers, Teamsters and Cement Masons Local No. 395 Pension Trust Fund, 38 P.3d 12, 23 (Ariz. 2002)).

         Sentinel argues that plaintiffs' aiding and abetting claim is subject to dismissal because plaintiffs cannot, as a matter of law, state a bad faith claim against CBS and/or the Trust. CBS and the Trust join in this argument. If plaintiffs cannot state a bad faith claim against CBS and/or the Trust, then plaintiffs cannot establish the first element of an aiding and abetting claim.

         In Arizona, "tort recovery for breach of the implied covenant is well established in actions brought on insurance contracts...." Rawlings v. Apodaca, 726 P.2d 565, 574 (Ariz. 1986). But, Sentinel argues that this case does not involve an insurance contract because CBS and/or the Trust do not provide "insurance" as that term is defined under Arizona law. In Arizona, "insurance" is defined as "a contract by which one undertakes to indemnify another or to pay a specified amount upon determinable contingencies." A.R.S. §20-103(A). Arizona courts look to five factors to determine whether a contract is an "insurance contract." Those factors are:

1. An insurable interest
2. A risk of loss
3. An assumption of the risk by the insurer
4. A general scheme to distribute the loss among the larger group of persons ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.