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.

Hasbrouck v. Starr Indemnity & Liability Company

United States District Court, D. Wyoming

October 17, 2014

MICHELLE HASBROUCK, Plaintiff,
v.
STARR INDEMNITY & LIABILITY COMPANY, a New York company, STARR COMPANIES, a New York corporation, MED-SENSE GUARANTEED ASSOCIATION, an Illinois corporation, and HEALTH INSURANCE INNOVATIONS INC., a Florida corporation, Defendants.

OPINION AND ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND OPINION AND ORDER GRANTING DEFENDANT MED-SENSE GUARANTEED ASSOCIATION'S MOTION FOR SUMMARY JUDGMENT AND OPINION AND ORDER GRANTING DEFENDANT HEALTH INSURANCE INNOVATION, INC.'S MOTION FOR SUMMARY JUDGMENT AND OPINION AND ORDER GRANTING PART AND DENYING IN PART DEFENDANTS STARR INDEMNITY & LIABILITY COMPANY AND STARR COMPANIES' MOTION FOR PARTIAL SUMMARY JUDGMENT AND OPINION AND ORDER DENYING DEFENDANT HEALTH INSURANCE INNOVATIONS, INC.'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND OPINION AND ORDER DENYING DEFENDANT MED-SENSE GUARANTEED ASSOCIATION'S MOTION FOR PARTIAL SUMMARY JUDGMENT

ALAN B. JOHNSON, District Judge.

The following have come before the Court for consideration: Plaintiff's "Motion for Partial Summary Judgment as Against Defendant Starr Indemnity and Liability Company/Starr Companies" (Doc. No. 61) and Defendants Starr Indemnity & Liability Company's and Starr Companies' response (Doc. No. 69); Defendant Med-Sense Guaranteed Association's "Motion for Summary Judgment" (Doc. No. 65), the Plaintiff's response (Doc. No. 70), and Defendant Med-Sense Guaranteed Association's reply (Doc. No. 72); Defendant Health Insurance Innovations, Inc.'s "Motion for Summary Judgment" (Doc. No. 67), the Plaintiff's response (Doc. No. 71), and Defendant Health Insurance Innovation's reply (Doc. No. 73); Defendants Starr Indemnity & Liability Company and Starr Companies' "Motion for Partial Summary Judgment" (Doc. No. 77), Plaintiff's response (Doc. No. 89), and Defendants Starr's reply (Doc. No. 95); Defendant Health Insurance Innovations, Inc.'s "Motion for Partial Summary Judgment" (Doc. No. 79), Plaintiff's response (Doc. No. 87), and Defendant Health Insurance Innovations, Inc.'s reply (Doc. No. 94); and Defendant Med-Sense Guaranteed Association's "Motion for Partial Summary Judgment" (Doc. No. 81), Plaintiff's response (Doc. No. 88), and Defendant Med-Sense Guaranteed Association's reply (Doc. No. 93).

After reviewing the parties' submissions, the applicable law, and being fully advised, the Court finds that Plaintiff's motion for summary judgment (Doc. No. 61) should be DENIED, Defendant Med-Sense Guaranteed Association's motion for summary judgment (Doc. No. 65) should be GRANTED, Defendant Health Insurance Innovations, Inc.'s motion for summary judgment (Doc. No. 67) should be GRANTED, Defendants Starr Indemnity & Liability Company and Starr Companies' partial motion for summary judgment (Doc. No. 77) should be GRANTED IN PART and DENIED IN PART for the reasons stated below. The Court further finds that Defendant Health Insurance Innovations, Inc.'s motion for partial summary judgment (Doc. No. 79) and Defendant Med-Sense Guaranteed Association's motion for partial summary judgment (Doc. No. 81) should be DENIED AS MOOT.

BACKGROUND

In May of 2012, Plaintiff Michelle Hasbrouck purchased a second six-month Short Term Medical Insurance ("STMI") plan. Defendants Starr Companies and Star Indemnity & Liability Company ("Defendants Starr") underwrite the STMI plan. Defendants Starr have an agreement with Defendant Health Insurance Innovations, Inc. ("Defendant HII") to market the STMI plan. In Wyoming, the STMI plan is available to members of Med-Sense Guaranteed Association. Defendant Med-Sense Guaranteed Association ("Defendant MSGA") contracts with Defendant HII to provide marketing and administrative services. On July 18, 2012, Plaintiff became ill and was admitted to Wyoming Medical Center for treatment. Subsequently, Plaintiff submitted her medical bills for payment.

On August 16, 2013, Plaintiff filed a Complaint alleging a breach of the implied duty of good faith and fair dealing in the handling of her insurance claim and a claim of fraud against each of the Defendants. Doc. No. 1. Plaintiff sought relief in the form of, among other damages, compensatory and consequential damages, damages for severe emotional distress, punitive damages, and reasonable attorney's fees. Id. On September 11, 2013, Defendants Starr approved payment of Plaintiff's claim in the amount of $11, 268.96. Doc. No. 62.

On September 12, 2013, Defendants Starr filed an Answer generally denying Plaintiff's claims and asserting numerous affirmative defenses. Doc. No. 10. On September 17, 2013, Defendant HII filed an Answer also generally denying Plaintiff's claims and alleging various affirmative defenses. Doc. No. 14. On September 19, 2013, Defendant MSGA filed its Answer to Plaintiff's Complaint, generally denying Plaintiff's claims and setting forth multiple affirmative defenses.

On May 15, 2014, Plaintiff filed a motion for partial summary judgment against Defendants Starr. Doc. No. 61. Defendants Starr responded to that motion on May 29, 2014. Doc. No. 69. Plaintiff did not file a reply or ask for oral argument. On May 23, 2013, Defendant MSGA filed a motion for summary judgment. Doc. No. 65. Plaintiff responded to that motion on June 6, 2014. Doc. No. 70. Defendant MSGA filed its reply on June 12, 2014. Doc. No. 72.

On May 28, 2014, Defendant HII filed a motion for summary judgment. Doc. No. 67. Plaintiff responded to that motion on June 10, 2014. Doc. No. 71. Defendant HII filed its reply on June 17, 2014. Doc. No. 73. On July 23, 2014, Defendants Starr filed a motion for partial summary judgment. Doc. No. 77. With leave of the Court, Plaintiff responded to that motion on August 19, 2014. Doc. No. 89. With leave of the Court, Defendants Starr filed their reply on September 2, 2014. Doc. No. 95.

On July 25, 2014, Defendant HII filed a motion for partial summary judgment. Doc. No. 79. Plaintiff responded that motion, with leave of the Court, on August 19, 2014. Doc. No. 88. Also with leave of the Court, Defendant HII filed its reply on September 2, 2014. Doc. No. 93.

On July 25, 2014, Defendant MSGA filed a motion for partial summary judgment. Doc. No. 81. Plaintiff responded to that motion with leave of the Court on August 19, 2014. Doc. No. 88. Also with leave of the Court, Defendant MSGA filed its reply on September 2, 2014. Doc. No. 94.

The Court finds that these matters are fully briefed and are ripe for disposition. First, the Court will address the question of jurisdiction. The Court will then analyze the questions related to the alleged breach of the implied duty of good faith and fair dealing. Next, the Court will consider the questions related to Plaintiff's claim of fraud. Finally, the Court will address Defendant HII's and Defendant MSGA's motions for partial summary judgment.

STANDARD OF REVIEW

Summary judgment is appropriate where "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 dispute of fact is genuine if a reasonable juror could resolve the disputed fact in favor of either side. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute of fact is material if under the substantive law it is essential to the proper disposition of the claim. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998). When the Court considers the evidence presented by the parties, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in the non-movant's favor." Anderson, 477 U.S. at 255.

The party moving for summary judgment has the burden of establishing the nonexistence of a genuine dispute of material fact. Lynch v. Barrett, 703 F.3d 1153, 1158 (10th Cir. 2013). The moving party can satisfy this burden by either (1) offering affirmative evidence that negates an essential element of the nonmoving party's claim, or (2) demonstrating that the nonmoving party's evidence is insufficient to establish an essential element of the non-moving party's claim. See Fed.R.Civ.P. 56(c)(1)(A)-(B).

Once the moving party satisfies this initial burden, the nonmoving party must support its contention that a genuine dispute of material fact exists either by (1) citing to particular materials in the record, or (2) showing that the materials cited by the moving party do not establish the absence of a genuine dispute. See id. The nonmoving party must "do more than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, to survive a summary judgment motion, the nonmoving party must "make a showing sufficient to establish the existence of [every] element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Further, when opposing summary judgment, the nonmoving party cannot rest on allegations or denials in the pleadings but must set forth specific facts showing that there is a genuine dispute of material fact for trial. See Travis v. Park City Mun. Corp., 565 F.3d 1252, 1258 (10th Cir. 2009).

When considering a motion for summary judgment, the court's role is not to weigh the evidence and decide the truth of the matter, but rather to determine whether a genuine dispute of material fact exists for trial. Anderson, 477 U.S. at 249. Credibility determinations are the province of the fact-finder, not the court. Id. at 255.

DISCUSSION

The Court will first address Defendant MSGA's contention that the Court lacks subject matter jurisdiction. The Court will then address the various issues raised with regard to Plaintiff's cause of action for the breach of the implied duty of good faith and fair dealing. Next, the Court will address Plaintiff's cause of action for fraud. Finally, the Court will address Defendant MSGA's and Defendant HII's partial motions for summary judgment on the issue of punitive damages.

I. Jurisdiction

The first question the Court must address is whether under 28 U.S.C. § 1332(a) it lacks jurisdiction over Defendant MSGA. In particular, Defendant MSGA contends that the amount in controversy does not exceed the sum or value of $75, 000. The Court has diversity jurisdiction "where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between citizens of different States." 28 U.S.C. § 1332(a)(2012). The Tenth Circuit Court of Appeals laid out the test to apply when determining whether the jurisdictional amount is satisfied: "When faced with a challenge to the amount in controversy, the party seeking to assert federal court jurisdiction... must demonstrate the potential to recover over $75, 000 on its claims." Marcus Food Co. v. DiPanfilo, 671 F.3d 1159, 1171 (10th Cir. 2011). Once the party seeking to assert federal court jurisdiction "has met its prima facie obligation to establish the amount in controversy, then the defendant has an opportunity to challenge that showing." Id. However,

this circuit has cautioned that "[t]he legal certainty standard is very strict.... [I]t is difficult for a dismissal to be premised on the basis that the requisite jurisdictional amount is not satisfied." Dismissal on amount-in-controversy grounds is generally "warranted only when a contract limits the possible recovery, when the law limits the amount recoverable, or when there is an obvious abuse of federal court jurisdiction."

Id. (quoting Woodman of World Life Ins. Soc. v. Manganaro, 342 F.3d 1213, 1217 (10th Cir. 2003)). In the end, "[t]here is a strong presumption favoring the amount alleged by the plaintiff." Woodman of World Life Ins. Soc., 342 F.3d at 1217.

Defendant MSGA challenged the jurisdictional amount at issue in this case by arguing that Mrs. Hasbrouck only paid $322.50 in membership dues, and therefore she would need to recover $74, 500 in punitive damages to meet the jurisdictional amount. Plaintiff asserts that the amount in controversy is satisfied because the possible compensatory damages awards for the torts of bad faith and fraud could include damages for emotional distress, the punitive damages ratio from compensatory damages including damages for emotional distress could exceed $75, 000, and attorney's fees may be awarded.

Under Wyoming law, compensatory damages for a breach of the implied duty of good faith and fair dealing include damages for emotional distress. State Farm Mut. Auto. Ins. Co. v. Shrader, 882 P.2d 813, 833 (Wyo. 1994). The Wyoming Supreme Court stated that "to recover damages for emotional distress, the insured must allege that as a result of the breach of the implied duty of good faith and fair dealing, the insured has suffered substantial other damages, such as economic loss, in addition to the emotional distress." Id. The court explained that "economic losses may include loss of earnings, inability to pay creditors, loss of business, costs of litigation brought against the insured as a result of the breach and medical expenses." Id. at 834.

Additionally, for the purposes of diversity jurisdiction, a reasonable estimate of attorney's fees may be used in calculating the amount in controversy requirement when a statute permits recovery for attorney's fees. Missouri State Life Ins. Co. v. Jones, 290 U.S. 199, 2002 (1933); Woodmen of World Life Ins. Society v. Manganaro, 342 F.3d 1213, 1218 (10th Cir. 2003) (citing Jones, 290 U.S. at 202); Miera v. Dairyland Ins. Co., 143 F.3d 1337, 1340 (10th Cir. 1998) (citing Jones, 290 U.S. at 202). Under § 26-15-124 of the Wyoming Statutes, in a cause of action for bad faith "if it is determined that the company refuses to pay the full amount of a loss covered by the policy and that the refusal is unreasonable or without cause, any court in which judgment is rendered for a claimant may also award a reasonable sum as an attorney's fee."

Here, Plaintiff alleged that because of Defendant MSGA's bad faith, she was unable to pay her medical expenses. Doc. No. 1. Plaintiff's inability to pay resulted in her medical expenses being referred to a collection agency. Id. Thus, Plaintiff could conceivably recover damages for emotional distress related to her bad faith claim. Plaintiff would only need to recover approximately $8, 400 in compensatory and emotional distress damages for the punitive damages single-digit ratio to exceed $75, 000. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003). If Plaintiff were to ultimately succeed on her bad faith claim against Defendant MSGA, she could also recover reasonable attorney's fees under the statute. Considering the strong presumption in favor of the amount alleged by the plaintiff and the fact that there is no law or ...


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.