United States District Court, N.D. California, San Francisco Division
SECOND ORDER DENYING DEFENDANTS' MOTION TO DISMISS OR, ALTERNATIVELY, TO STAY THIS ACTION
LAUREL BEELER, Magistrate Judge.
In this action (the "Federal Action"), Plaintiff Transamerica Life Insurance Company sued Gregory Jurin and James McCrea, alleging that they engaged in fraud and conspiracy to commit fraud by claiming benefits under Mr. Jurin's policy with Transamerica for long term care insurance. Transamerica brings claims against Mr. Jurin and Mr. McCrea for fraud and conspiracy to defraud and asks the court to award them damages based on the benefits Mr. Jurin already allegedly fraudulently obtained. Transamerica also brings a claim against Mr. Jurin for declaratory judgment and asks the court to rule that Mr. Jurin is not entitled to additional benefits in the future. After being sued here, Mr. Jurin filed a second action in state court (the "State Action") against Transamerica and Dr. Mohinder Nijjar for claims arising out of the same insurance policy at issue in this earlier-filed Federal Action. Defendants now move the court to dismiss or, alternatively, stay the Federal Action in favor of the State Action. Upon consideration of the parties' briefing (both original and supplemental) and the applicable authority, the court denies Defendants' motion.
I. THE POLICY
In November 1996, Mr. Jurin applied for a comprehensive long-term care insurance policy from Transamerica. (Complaint, ECF No. 1, ¶¶ 2, 10.) Transamerica issued a policy to Mr. Jurin (the "Policy"), effective December 28, 1996, that provides "Home Care" benefits. ( Id. ¶ 12.) Such benefits include reimbursement for actual expenses of "Personal Care" services from a private caregiver for assistance with "Activities of Daily Living, " specifically "bathing, dressing, eating, toileting, transferring, continence, and ambulating." ( Id. ¶ 12.) Under the Policy, an insured is eligible for Home Care benefits for Personal Care services if he is unable to perform two or more Activities of Daily Living or has a Cognitive Impairment. ( Id. ¶ 13.)
An insured is unable to perform an "Activity of Daily Living" if he "cannot perform the activity without the actual, supervisory or directional assistance of another person" even with the aid of equipment. ( Id. ¶ 14.) "Cognitive Impairment" is defined as "confusion or disorientation resulting from a deterioration in or loss of [the insured's] intellectual capacity which results in [the insured's] inability to remain in [the insured's] environment without continual human assistance." ( Id. ¶ 15.) The Policy also allows Personal Care services to be provided for assistance with "instrumental activities of daily living, " "such as using the telephone, managing medications, and moving about outside." ( Id. ¶ 12.)
The Policy provides reimbursement for the insured's actual charges for Personal Care services up to the Maximum Monthly Benefit. ( Id . ¶ 16.) The Exclusions section states that the Policy does not cover care that is "normally provided at no charge to [the insured] if [the insured] did not have insurance." ( Id. ¶ 17.)
II. MR. JURIN'S CLAIM FOR BENEFITS
In January 2005, Mr. Jurin submitted a claim for Personal Care benefits under the Policy. ( Id. ¶ 18.) His claim form stated that he had a Cognitive Impairment, was unable to perform several Activities of Daily Living, and needed assistance with numerous instrumental activities of daily living. ( Id. ) He also submitted Private Caregiver Reports stating that Mr. McCrea provided him with Personal Care services from January 1, 2005, through May 28, 2005, and he provided similar reports for most days from May 29, 2005 to April 2014. ( Id. ¶¶ 19-20.)
III. TRANSAMERICA'S INVESTIGATION
At some point not specified in the Complaint, Transamerica began investigating whether Mr. Jurin was able to perform his Activities of Daily Living without assistance. ( Id. ¶ 22.) To this end, Transamerica retained an investigator to conduct video surveillance of Mr. Jurin between January 5, 2012, and February 5, 2012. ( Id. ) Transamerica alleges that this "investigator recorded Jurin engaging in activities inconsistent with his asserted limitations." ( Id. ) An investigator conducted additional surveillance in 2013 from September 27 through 29, on October 5, and from October 7 through 12. ( Id. ¶ 25.) Transamerica alleges that on these dates the investigator recorded Mr. Jurin performing various activities including walking uphill, walking while holding bags, entering and exiting a car without assistance, shopping, and doing yard work. ( Id. ¶ 25.)
On October 9, 2013, Dr. Mohinder Nijjar, a board-certified orthopedic surgeon performed an Independent Medical Exam ("IME") of Mr. Jurin and, based on Jurin's self-reporting and self-limiting behavior, opined in his IME report that Mr. Jurin was unable to perform Activities of Daily Living without assistance. ( Id. ¶ 23.) Transamerica then provided Dr. Nijjar with the investigator's video surveillance recordings and asked him whether the recordings changed his mind. ( Id. ¶ 26.) In December 2013, Dr. Nijjar issued a supplemental report in which he stated that, based on his observations in the videos, Mr. Jurin could engage in Activities of Daily Living without assistance, including washing, dressing, feeding ...