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Heldt v. Guardian Life Insurance Co. of America

United States District Court, S.D. California

November 8, 2017

JAMES HELDT, Plaintiff,
v.
THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA, Defendant.

          ORDER DENYING DEFENDANT'S MOTION TO DISMISS [ECF NO. 33]

          HON. CYNTHIA BASHANT UNITED STATES DISTRICT JUDGE

         Plaintiff James Heldt filed his First Amended Complaint (“FAC”) alleging (1) a violation of California's Confidentiality of Medical Information Act (“CMIA”), Cal. Civ. Code §§ 56-56.37; (2) negligence; and (3) invasion of privacy. (FAC ¶¶ 22-49, ECF No. 25.) In response, Defendant The Guardian Life Insurance Company of America filed a motion to dismiss. (Mot., ECF No. 33.) Plaintiff opposes the Motion. (Opp'n, ECF No. 34.)

         The Court finds Defendant's Motion suitable for determination on the papers submitted and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1). For the following reasons, the Court DENIES Defendant's Motion to Dismiss. ///

         I. BACKGROUND [1]

         “Plaintiff obtained health care services through Defendant's health care service plan from on or about 2008.” (FAC ¶ 24.) As part of a disability claim, Plaintiff alleges he submitted confidential information to Defendant, “including his name, personal information, social security number, age, address, and health information.” (Id. ¶ 13.) Plaintiff claims he did not authorize Defendant to disclose his private medical information. (Id.)

         “Defendant hired a private investigator to conduct a 1-2 day surveillance of Plaintiff.” (FAC ¶ 16.) Defendant's file allegedly “contains a surveillance report and surveillance video purportedly of Plaintiff prepared in April 2015 by the private investigator hired by [Defendant].” (Id.) This report allegedly contains a description of Plaintiff's medical diagnosis and other medical information. (Id.)

         Plaintiff alleges Shaunte W. Austin, a Disability Management Coordinator with Select Medical Corporation, contacted him. (FAC ¶¶ 8, 17.) Ms. Austin allegedly informed Plaintiff that Defendant had requested Select Medical perform a functional capacity evaluation on Plaintiff. (Id. ¶ 17.) Select Physical Therapy, a division of Select Medical Corporation located in San Diego, California, was to conduct the evaluation. (Id. ¶¶ 8, 17.) During the telephone call, Plaintiff claims Ms. Austin asked him “personal medical questions that [Ms. Austin] represented” were part of a questionnaire for the functional capacity evaluation. (Id. ¶ 17.) Additionally, he alleges Ms. Austin requested he “send confidential medical documentation as to his condition” to Select Medical. (Id.) Plaintiff alleges he requested an accommodation for the evaluation on account of his disability, and Ms. Austin represented that she was working with Defendant and had the authority to facilitate Plaintiff's request. (Id.) Plaintiff alleges he “had an expectation he was working with [Defendant] and was not revealing private information to a party with no duty to protect such information.” (Id.)

         Thereafter, Ms. Austin allegedly forwarded two emails from Plaintiff to one of Defendant's employees, Kimberly Stauder, “a Vocational Rehabilitation Specialist on the Professional Resources Team in the Group Life, Absence, and Disability Management Solutions Department for Defendant.” (FAC ¶¶ 7, 18.) Ms. Stauder allegedly forwarded the emails to two employees, Michael Corcoran and Chad Heffelfinger. (Id. ¶ 18.) Plaintiff asserts the emails “contain[ed] medical information and a discussion of a phone call from Ms. Austin to Plaintiff during which medical information was requested.” (Id.)

         In addition, Plaintiff alleges one of Defendant's employees sent Select Physical Therapy the aforementioned surveillance report on Plaintiff. (FAC ¶ 19.) The report “contain[ed] a diagnosis description and other medical information.” (Id.) Plaintiff also alleges he is not the “individual in the surveillance video.” (Id.)

         Plaintiff alleges he “reported to Defendant the unauthorized release of Plaintiff's confidential medical and personal information to [Ms. Austin] and Select Physical Therapy.” (FAC ¶ 20.) Plaintiff contends “Defendant did nothing” in response to Plaintiff's report. (Id.) Following Plaintiff's report of the unauthorized release, Plaintiff alleges “Defendant wrongfully terminated Plaintiff's policy” instead of conducting an investigation. (Id. ¶ 21.)

         Based on the foregoing, Plaintiff brings claims against Defendant for (1) violation of the CMIA; (2) negligence; and (3) invasion of privacy. (FAC ¶¶ 22-49.)

         Defendant moves to dismiss Plaintiff's first and second causes of action for violation of the CMIA and negligence. (Mot. 1:2-5.) First, Defendant argues Plaintiff's CMIA claim is defective because the CMIA does not apply to insurance companies. (Id. 3-6.) Second, Defendant argues Plaintiff's negligence claim fails because Defendant does not owe Plaintiff a duty of care and this claim is conflict preempted by ERISA. (Id. 7.)

         II. LEGAL STANDARD

         A motion to dismiss pursuant to 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed.R.Civ.P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The court must accept all factual allegations pleaded in the complaint as true and must construe them and draw all reasonable inferences from them in favor of the non-moving party. Cahill, 80 F.3d at 337-38. To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations; rather, it must plead “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). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). “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 Twombly, 550 U.S. at 557).

         “[A] plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (alteration in original) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). A court need not accept “legal conclusions” as true. Iqbal, 556 U.S. at 678. Despite the deference the court must pay to the plaintiff's allegations, it is not proper for the court to assume that “the [plaintiff] can prove facts that it has not alleged or that the defendants ...


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