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Deoliveira v. Liberty Mutual Insurance Co.

Superior Court of Massachusetts, Suffolk, Business Litigation Session

May 10, 2018

Monica DEOLIVEIRA, on behalf of herself and all others similarly situated


          Mitchell H. Kaplan, Justice of the Superior Court

          In this action the plaintiff, Monica DeOliveira, seeks to recover Medical Payment (MedPay) benefits that she alleges are due her under the MedPay provision of an automobile insurance policy issued by the defendant, Liberty Mutual Insurance Company (Liberty and the Policy). In her Second Amended Complaint (the complaint), she asserts claims against Liberty for breach of contract, declaratory judgment, and violation of G.L.c. 93A. She has brought her complaint on behalf of herself and a putative class of similarly situated policyholders who she defines as follows:

All persons who purchased one of Defendant’s Massachusetts automobile insurance policies with MedPay coverage and/or were covered under one of Defendant’s Massachusetts automobile insurance policies with MedPay coverage who sustained personal injuries and incurred medical bills and expenses as a result of an automobile accident and reached the $2, 000 initial PIP exhaust level.

         Liberty previously moved to dismiss the plaintiff’s individual claims, under M.R.Civ.P 12(b)(6), on the ground that they failed to state a claim on which relief could be granted. In a written opinion dated September 29, 2017, which reviewed in detail the factual allegations of complaint and the rationale for the decision (Leibensperger J.), this court denied that motion (the Prior Decision). Liberty has now moved to strike the class action allegations from the complaint. For the reasons that follow, this motion is DENIED as well.


         The relevant provisions of the Policy and the facts relating to the individual plaintiff’s claim for entitlement to MedPay benefits are fully described in the Prior Decision and will not be repeated. It is sufficient to note that the plaintiff alleges that: (i) she was injured in an automobile accident; (ii) received $2, 000 of PIP benefits from Liberty; (iii) submitted further medical expenses incurred as a result of her accident to her health insurer which paid them; (iv) settled a claim against a third party who caused the accident; (v) from that settlement paid to her health insurer a lien asserted by it for recovery of the accident-related medical expenses it had previously paid on her behalf; and (vi) then requested that Liberty pay to her the amount of this lien under the MedPay provision of the Policy, but Liberty refused.


         Liberty asserts that this court’s recent decision in Alex Kantzelis v. The Commerce Ins. Co. (Suffolk Superior Court No. 16-3144-BLS1) (November 9, 2017) [34 Conn.L.Rptr. 534], which struck class action allegations, supports Liberty’s motion to strike the class claims in this case. As is apparent, Kantzelis does not support Liberty’s motion. First, in Kantzelis, this court pointed out that motions to strike class claims are disfavored by the courts and should rarely be granted. The normal course is for a court to determine whether a class may be certified when presented with a motion for class certification. A motion to strike should be granted only when "it is obvious from the pleadings that the proceeding cannot possibly move forward on a class-wide basis." See Manning v. Boston Medical Center Corp., 725 F.3d 34 (1st. Cir. 2013). Questions about the "appropriate contours of the putative class, including redefining the class during the certification process or creating subclasses" are not grounds to strike class action allegations. Id. In consequence, while the class defined in the complaint may well be too broad, class definitional issues are not properly addressed at this time.

          Liberty’s principal argument in support of its motion to strike is that under the MedPay provision of its insurance policies it is only required to pay "reasonable expenses for necessary medical ... services incurred as a result of an accident." In consequence, to decide whether any putative class member was entitled to relief individual fact finding would be necessary "to determine whether each claimed medical expense was (1) reasonable in amount, (2) medically necessary, and (3) causally related to the claimant’s accident." Liberty then cites to a number of decisions in which courts struck class action allegations or denied class certification, where the issue presented by those cases was whether the amount of the claims presented for MedPay or PIP reimbursement were reasonable.

         St Louis Chiropractic v. Federal Ins. Co., 2008 WL 4056225, an unpublished decision from the Federal District Court in New Jersey, is an apt example. In that case, the court actually dismissed the case in its entirety because, among other reasons, there were arbitration clauses in many of the policies at issue. However, it also considered the class allegations. The court reviewed a number of problems with the class claims in addition to the fact that some class members were required to arbitrate their claims. For example, the class consisted of claimants from many different states whose claims would be covered by differing PIP statutes. The court then briefly addressed the issue which Liberty argues supports its motion. The plaintiff was complaining of the defendant’s use of software in processing its claims "which compares the amount billed for a procedure to percentile benchmarks an insurer selects. If there is a portion of the charge that exceeds the benchmark, that portion of the claim is excluded from coverage." The court commented on the difficulty of addressing the reasonableness of the exclusions on a class-wide basis: "If the amount Plaintiff received from Defendants was ‘reasonable’ regardless of how the reimbursement was calculated, then there is no breach of the policy. Determining whether the reimbursement was ‘reasonable’ or ‘unreasonable, ’ in light of the states’ varying statutes, would be unmanageable as a class action ... Although some courts have held that medical review tools may be questioned, they cannot be addressed in a class-based proceeding because an individualized evaluation must be conducted in determining the reasonableness and necessity of medical bills."

         In the case presently before this court, reading the allegations of the complaint in the light most favorable to plaintiff, it appears that Liberty denied the plaintiff’s claim for MedPay benefits because, in its view, the Policy did not require payment of MedPay benefits when its insured is required to reimburse its health insurer for medical expenses previously advanced out of the proceeds of a tort recovery. There is certainly nothing in the complaint that suggests that Liberty denied the plaintiff coverage because the medical expenses (previously paid by the health insurer) were unreasonable in amount or not causally related to the accident. In consequence, to the extent there exist similarly situated individuals, no individualized fact finding would be required to determine who is in the class. Compare, Kantzelis (where the court concluded that individualized fact finding would be required to determine who was a member of the class because that would depend on individualized conduct by the putative class member that would not even have been reported to the insurer).

         At this point, the court cannot conclude that the plaintiff will be unable to demonstrate that there exists a class of plaintiffs who were treated in a manner similar to that which she alleges in her complaint. It may be that an insured whose claim for MedPay benefits was denied both because (i) the medical expenses had been paid by a health care insurer but later reimbursed to satisfy a lien, and (ii) Liberty had reviewed the claim and found that it was unreasonable in amount or for medical services unrelated to the accident, would have to be excluded from the class. However, that is not a basis for striking class allegations. Moreover, even this subclass of claimants might be benefitted by the declaratory relief requested in the complaint. Whether Liberty is entitled to revisit claims previously denied for reason (i) to determine if the claim could also have been denied for other reasons has not been adequately briefed by the parties and need not be resolved at this stage of this proceeding.


          For the foregoing reasons, Liberty’s motion to strike the class action allegations is DENIED. As discussed during the hearing on this motion and Liberty’s companion motion for a protective order prohibiting class discovery until its motion to strike was decided, the parties are directed to meet and confer on the appropriate scope of class discovery, ...

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