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LLC v. Allstate Insurance Co.

United States District Court, N.D. Illinois, Eastern Division

September 11, 2019

MSPA CLAIMS 1, LLC, Plaintiff,


          Andrea R. Wood, United States District Judge.

         Plaintiff MSPA Claims 1 LLC has filed this putative class action against Defendant Allstate Insurance Company (“Allstate”), claiming to be the assignee of legal claims held by numerous unidentified Medicare Advantage Organizations (“MAOs”). Plaintiff seeks double recovery under the Medicare Secondary Payer provisions of the Medicare Act, 42 U.S.C. § 1395y(b)(2)-(3) (“MSPA” or “MSPA provisions”) for reimbursement of medical expenses that the various MAOs paid on Allstate's behalf. This Court previously dismissed Plaintiff's First Amended Complaint for failure to plead facts showing that it is indeed the assignee of the rights at issue. See MAO-MSO Recovery II, LLC v. Allstate Ins. Co., No. 17-cv-01340, 2018 WL 1565583 (N.D. Ill. Mar. 30, 2018). Plaintiff then filed a Second Amended Complaint (“SAC”) (Dkt. No. 65). Now before the Court is Defendant's motion to dismiss the SAC, as well as Defendant's motion to dismiss or strike the class allegations contained in the SAC. (Dkt. Nos. 67, 68.) For the reasons explained below, both motions are denied.


         For the purposes of Defendant's motion to dismiss, the Court accepts as true the well-pleaded facts in the SAC and views them in the light most favorable to Plaintiff. See Firestone Fin. Corp. v. Meyer, 796 F.3d 822, 826-27 (7th Cir. 2015). For present purposes, the Court also assumes familiarity with its March 30, 2018 Memorandum Opinion and Order (“March 30, 2018 Order”).

         According to Plaintiff, Allstate agreed to serve as the primary insurer for certain enrollees in its no-fault automobile insurance policies. After the enrollees were involved in automobile accidents that caused them to incur expenses for medical treatment, the MAOs paid the enrollees' expenses instead of Allstate. The MAOs thus had the right under the MSPA provisions to institute private actions against Allstate for reimbursement and double damages. Plaintiff claims to have obtained the MAOs' rights through a series of assignments and now seeks to enforce those rights against Allstate. Plaintiff also asserts a claim for breach of contract via subrogation of the enrollees' contractual rights, alleging that Allstate breached its no-fault automobile insurance contracts with the enrollees by failing to pay their medical expenses.


         To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), “a complaint must contain sufficient factual allegations, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This pleading standard does not necessarily require a complaint to contain detailed factual allegations. Twombly, 550 U.S. at 555. Rather, “[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.” Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014) (quoting Iqbal, 556 U.S. at 678).

         I. Prudential Standing

         In its March 30, 2018 Order, the Court dismissed Plaintiff's claims after observing that Plaintiff had not included:

any pleaded facts regarding the identity of the MAOs that assigned the rights; which Plaintiff received assignments from the MAOs; the date, format, or any other characteristic of the assignment; the actual rights assigned; or whether those assignments include claims against the particular Defendants named in the complaint.

Allstate, 2018 WL 1565583, at *4. In the SAC, Plaintiff has added two “exemplar claims” and pleaded facts regarding the assignment of rights for those claims. For example, in the first exemplar claim-the “F.A. Claim”-Plaintiff alleges that enrollee F.A. had purchased a Medicare Advantage plan issued and administered by a Management Service Organization (“MSO”) called Interamerican Medical Center Group, LLC (“IMC”). (SAC ¶ 8.) On December 16, 2014, IMC irrevocably assigned all rights to recover conditional payments made on behalf of its enrollees, including F.A., to MSP Recovery. (Id. ¶ 15.) MSP Recovery, in turn, assigned its rights to Plaintiff. (Id. ¶ 16.) Similarly, in the second exemplar claim-the “N.M. Claim”- Plaintiff alleges that enrollee N.M. purchased a Medicare Advantage plan issued and administered by an MSO called Florida Health Care Plus (“FHCP”). (Id. ¶ 18.) On April 15, 2014, FHCP assigned its rights to La Ley Recovery Systems, Inc. (“La Ley”), which then assigned its rights to Plaintiff. (Id. ¶¶ 26-27.) Despite these new allegations, Allstate argues that Plaintiff nonetheless has not adequately pleaded an assignment of rights that establishes standing.

         To establish standing, Plaintiff must allege sufficient factual matter, accepted as true, to nudge its claim that they are assignees of the rights at issue “across the line from conceivable to plausible.” Twombly, 550 U.S. at 570; see also Llano Fin. Grp., LLC v. Lendzion, No. 15 C 7091, 2016 WL 930660, at *4 (N.D. Ill. Mar. 11, 2016) (requiring plaintiff to “plead with the clarity necessary to establish that it is actually the assignee of the claim it alleges”). “As a general rule, an assignment is a transfer of some identifiable property, claim or right from the assignor to the assignee. The assignment operates to transfer to the assignee all the right, title, or interest of the assignor in the thing assigned.” Owens v. McDermott, Will & Emery, 736 N.E.2d 145, 155 (Ill.App.Ct. 2000). “Generally, no particular form of assignment is required; any document which sufficiently evidences the intent of the assignor to vest ownership of the subject matter of the assignment in the assignee is sufficient to effect an assignment.” Stoller v. Exch. Nat'l Bank of Chi., 557 N.E.2d 438, 443 (Ill.App.Ct. 1990).

         As to the F.A. Claim, the Court finds that the agreement between IMC and MSP Recovery clearly contemplates an assignment. The agreement provides, “The parties agree that any rights conferred to [IMC] by Medicare Advantage plans either by statute, contract, and/or any other reason whatsoever will be administered by MSP Recovery . . . .” (SAC Ex. D at 3, Dkt. No. 65-4.) These terms sufficiently demonstrate IMC's intent to transfer its rights under the MSPA provisions to MSP Recovery. In the same way, the agreement between MSP Recovery and Plaintiff states:

Assignor [MSP Recovery] desires to assign and transfer to Assignee [Plaintiff], and Assignee desires to acquire from Assignor, the Assigned Claims pursuant to the provisions of this Assignment . . . . Assignor hereby irrevocably assigns, transfer, conveys, sets over, and delivers to Assignee or its assigns any or all of Assignor's right, title, ownership and interest in and to all rights and entitlements, that Assignor has, may have had, or has asserted against third parties arising from or relating to the Claims.

(SAC Ex. E at 2, Dkt. No. 65-5.) Again, these terms plainly demonstrate MSP Recovery's intent to transfer those same rights to Plaintiff. Based on the relevant contractual language, the Court finds that Plaintiff has adequately pleaded a series of assignments originating with IMC.

         The Court reaches the same conclusion as to the N.M. Claim. The agreement ...

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