United States District Court, N.D. California
ORDER ON DEFENDANT'S MOTION TO DISMISS RE: DKT.
M. RYU, UNITED STATES MAGISTRATE JUDGE
Equinox Management Group, Inc. (“Equinox”) moves
to dismiss Plaintiff Advanced Risk Managers, LLC's
(“ARM”) complaint. [Docket No. 15.] This motion
is suitable for determination without oral argument. Civil
L.R. 7-1(b). The December 19, 2019 hearing is vacated. Having
considered the parties' submissions, Defendant's
motion is denied for the following reasons.
makes the following allegations in the complaint, all of
which are taken as true for purposes of this
motion. ARM is an insurance consulting firm based
in San Francisco. It “reviews and evaluates insurance
companies' business processes and audits their claims
handling to identify cost savings for those companies.”
ARM's member is Mimi Choi, a California citizen. Equinox
is an insurance company based in New Jersey. Compl.
¶¶ 4, 5, 8, 9.
September 2015, ARM and Equinox entered into an agreement by
which ARM agreed to provide certain consulting services for
Equinox (the “agreement”). Id. at ¶
10, Ex. A (Agreement). These services included
“manag[ing] certain catastrophic claims notifications,
provid[ing] ongoing claims reserves evaluation, and
perform[ing] large claims integrity review and negotiation,
including identifying overbilling and potential billing
errors, to maximize claims saving and cost
utilization.” Id. at ¶ 11. Under the
agreement, Equinox agreed to pay ARM “28% of net claims
savings when the review was used to facilitate post-payment
adjudication, settlement or resolution of a claim.” The
parties agreed that ARM would bill Equinox for other services
at $195 per hour. Id.
performed the services under the agreement, including
auditing 37 claims to identify overbilling and potential
billing errors. ARM alleges that its audit “created
savings in the amount of $8, 812, 123.71 for Equinox”;
accordingly, “the potential net saving fees that
Equinox owes to ARM is $2, 467, 394.64, which is 28% of the
validated savings created by ARM's audit.”
Id. at ¶ 13. In November 2018, after completing
its services under the agreement, “ARM contacted
Equinox and requested that it provide the amount of net
savings it achieved from using the audit of claims performed
by ARM, ” in order for ARM calculate its fee rate of
28% of net savings and invoice Equinox. However, despite
repeated requests, Equinox has refused to provide that
information, thereby preventing ARM from calculating the
amount it is owed. Id. at ¶¶ 14, 15.
January 23, 2019, Equinox's attorney sent a letter to
ARM's attorney noting Equinox's receipt of ARM's
request for information “regarding the ‘final
outcome' for claims for which ARM provided its consulting
services” under the parties' agreement in order for
ARM to invoice Equinox. In the letter, counsel for Equinox
states its position that ARM released Equinox from all claims
that existed as of October 17, 2018, the effective date of a
release agreement between Equinox, ARM, and third party
Renaissance Reinsurance U.S. Inc.
(“Renaissance”). Id. at ¶¶
16-17, Ex. B (Jan. 23, 2019 Letter). Counsel for Equinox
[t]he Release Agreement between Equinox, Renaissance, ARM and
Mimi Choi, which was effective October 17, 2018, released
Equinox from all of ARM's claims that existed as of that
date, including any claims of which ARM was unaware. . . .
All of the claims on your client's spreadsheet pre-date
the Release Agreement, and, thus, they were released and
discharged by it. Those claims could not provide a basis for
any additional invoices from ARM to Equinox, and ARM has no
need for the information it has requested.
Accordingly, Equinox will not provide any information that it
Jan. 23, 2019 Letter.
disagrees with this assessment. It alleges that the release
agreement that counsel cited in the January 23, 2019 letter
involved a lawsuit by ARM against Renaissance for breach of
an agreement between ARM and Renaissance “and had
nothing to do with the Agreement between ARM and Equinox that
is the subject of the present lawsuit.” Id. at
¶ 18. According to ARM, its “present claims did
not exist as of the effective date of the Release Agreement,
and the parties did not intend for the Release Agreement to
release and discharge any future claims that may arise out of
the separate Agreement between ARM and Equinox that is the
subject of this lawsuit.” Id. at ¶ 18.
filed the complaint on June 19, 2019, alleging four claims
for relief against Equinox: 1) breach of the agreement
between ARM and Equinox; 2) anticipatory breach of contract;
3) breach of the implied covenant of good faith and fair
dealing; and 4) declaratory relief.
now moves to dismiss. It asks the court to consider certain
materials outside the complaint, including the release
agreement between Equinox, ARM, and Renaissance, and argues,
among other things, that the materials show that ARM's
claims in this lawsuit “fall squarely within the broad
terms of the” release. Mot. 1.
REQUESTS FOR JUDICIAL NOTICE AND ...