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Shirley M. Berry v. Time Insurance Company and John Hancock Life Insurance Company (Usa

June 28, 2011

SHIRLEY M. BERRY,
PLAINTIFF,
v.
TIME INSURANCE COMPANY AND JOHN HANCOCK LIFE INSURANCE COMPANY (USA), DEFENDANTS.



The opinion of the court was delivered by: Karen E. Schreier Chief Judge

ORDER DENYING DEFENDANTS' MOTION TO DISMISS

Plaintiff, Shirley M. Berry, asserts breach of contract and bad faith claims against defendants, Time Insurance Company (Time) and John Hancock Life Insurance Company (Hancock), and seeks punitive damages and attorney's fees. Time and Hancock jointly move to dismiss Berry's claims. Berry resists the motion. The motion is denied.

BACKGROUND

In the light most favorable to Berry, the nonmoving party, the pertinent facts to this order are as follows:

Berry purchased a Nursing Home Insurance Policy (the policy) from Time on or about November 1, 1996. Hancock administers the policy. Berry continues to pay premiums and Time continues to provide insurance under this policy. The policy provides for alternate care in lieu of care in a residential nursing home if both parties agree to an alternative care plan.

Since Berry fell in September of 2008, she has required home healthcare assistance to remain in her home. Berry's daughter, Lisa Paulson, contacted Hancock shortly after the fall. Hancock informed her that, with no exceptions, alternate care could only be covered by the policy if it were provided by a licensed home healthcare provider. After this discussion, Berry discovered South Dakota does not license home healthcare providers. Therefore, Berry believed Hancock would not provide alternate care coverage and obtained independently funded home healthcare, services, and equipment so she could remain in her home.

Eighteen months later, Berry's son, Dr. Spencer Berry, M.D., contacted Hancock and, for the first time, Berry was informed of a list of steps that were required before she could receive alternative care benefits. After Berry was evaluated by a registered nurse, she received an insurance-sanctioned plan and a recommended home healthcare provider, who is neither licensed nor certified by the State of South Dakota. Dr. Berry called Hancock to request coverage of Berry's treatment plan, which had been in effect prior to the evaluation, and he provided Hancock with information on Berry's healthcare providers. Hancock refused to cover this care because the home healthcare provider did not meet minimum licensing criteria. The policy does not state that a home health provider must be licensed or certified.

Subsequently, Hancock offered to pay for some equipment and approved some home healthcare expenses.*fn1 Berry rejected this offer because she desires full coverage of the expenses associated with her chosen home healthcare provider. The policy states that alternative care plans are to be negotiated between the parties, but the parties were unable to reach a final agreement. Berry then brought this suit.

STANDARD OF REVIEW

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) challenges the legal sufficiency of the complaint. Neitzke v. Williams, 490 U.S. 319, 326-27 (1989) ("[I]f as a matter of law 'it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations' . . . a claim must be dismissed," (quoting Hishon v. King & Spalding, 467 U.S. 69, 73 (1984))); see also Carton v. Gen. Motor Acceptance Corp., 611 F.3d 451, 454 (8th Cir. 2010) (same). To survive a motion to dismiss, the complaint must include "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). To meet the plausibility standard, the complaint must contain "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009).

Under Rule 12(b)(6), the facts alleged in the complaint must be considered true and all inferences must be viewed in favor of the nonmoving party. Strand v. Diversified Collection Serv., Inc., 380 F.3d 316, 317 (8th Cir. 2004) (citing Stone Motor Co. v. Gen. Motors Corp., 293 F.3d 456, 465 (8th Cir. 2002)). Twombly and Iqbal have not changed the "fundamental tenet of Rule 12(b)(6) practice" that "inferences are to be drawn in favor of the non-moving party." Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 595 (8th Cir. 2009) (citations omitted).

The court must liberally construe the complaint in the light most favorable to the plaintiff. Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th Cir. 2008). A court must also accept the facts alleged as true, even if they are doubtful. Twombly, 550 U.S. at 555. Thus, a well-pleaded complaint may proceed even if it appears that recovery is remote or unlikely. Id.; Young v. City of St. Charles, Mo., 244 F.3d 623, 627 (8th Cir. 2001) (same). In ruling on a motion to dismiss, "[t]he court may consider, in addition to the pleadings, materials embraced by the pleadings and materials that are part of the public record." K-Tel Int'l Sec. Litig. v. K-Tel Int'l (in Re K-Tel Int'l Sec. Litig.), 300 F.3d 881, 889 (8th Cir. 2002) (internal quotation omitted).

DISCUSSION

I. Breach of ...


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