Deborah Johnson v. Catamaran Health Solutions, LLC

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 16-11735
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D.C. Docket No. 0:15-cv-61752-RNS
DEBORAH JOHNSON,
PAUL JOHNSON,
on behalf of themselves and all others similarly situated,
Plaintiffs-Appellants,
versus
CATAMARAN HEALTH SOLUTIONS, LLC,
f.k.a. Catalyst Health Solutions, Inc.,
f.k.a. HealthExtras, Inc.,
STONEBRIDGE LIFE INSURANCE COMPANY,
Defendants-Appellees.
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Appeal from the United States District Court
for the Southern District of Florida
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(May 2, 2017)
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Before HULL and MARTIN, Circuit Judges, and RESTANI, * Judge.
PER CURIAM:
This case arises from a dispute over a health insurance plan with premiums
plaintiffs allege to violate Florida law because they did not reasonably relate to the
benefits provided by the plan. Insureds under the plan sued the two companies that
jointly provided the insurance plan for declaratory relief and common-law
damages under a variety of claims. The district court dismissed the entire action
with prejudice, and the insureds appealed as to three of their claims. After careful
consideration, and with the benefit of oral argument, we affirm.
I. BACKGROUND AND PROCEDURAL HISTORY
Catamaran Health Solutions, LLC (“Catamaran”) is a limited liability
company organized under Delaware law. In 1997, Catamaran coordinated with
insurance companies to create the HealthExtras Benefit Program (“Benefit
Program”), which consisted of two health insurance products packaged together as
one group insurance policy. The two products were a disability benefit of
$1,000,000 in the event of a permanent disability (“Disability Policy”) and an
emergency benefit that covered up to $2,500 in medical expenses in the event of
accident or sickness (“Accident Policy”). The Accident Policy and the Disability
Policy were each underwritten by one of several insurance companies.
*
Honorable Jane A. Restani, Judge for the United States Court of International Trade,
sitting by designation.
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Florida residents Deborah and Paul Johnson purchased the Benefits Program
from Catamaran, and Stonebridge Life Insurance Company (“Stonebridge”)
underwrote their Disability Policy. The Johnsons allege the Benefit Program was
an “out-of-state group health insurance plan.” They also say Catamaran “acted as
an insurance broker” to them “with respect to the Benefit Program.”
The cost of the Benefit Program was about $2.30 per month per person, but
Catamaran and Stonebridge (collectively, “the defendants”) charged consumers
$9.99 per month for the first insured and $4.50 per month for each additional
person covered. In 2014, the defendants canceled the Benefit Program effective
December 31, 2014.
In July 2015, the Johnsons filed an action against the defendants in Florida
state court on behalf of a class of “individual Florida residents who owned,
purchased or paid premiums for the Benefit Program from July 1, 1999 through
[the present].” The Johnsons alleged that all class members had Disability Policies
underwritten by Stonebridge and argued that the defendants charged premiums that
were not reasonably related to the Benefit Program’s benefits, in violation of Fla.
Stat. § 627.6515. Based on the defendants’ premiums, the Johnsons asserted
claims for declaratory judgment, breach of contract, unjust enrichment, breach of
fiduciary duty, aiding and abetting the breach of fiduciary duty, conversion, and
civil conspiracy.
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After removing the case to federal court, the defendants moved to dismiss
the complaint. The district court granted this motion. In dismissing the case, the
district court observed that “[e]ach of the Plaintiffs’ theories of relief is premised
on the argument that the Defendants violated Florida Statue [sic] § 627.6515.” It
then ruled that § 627.6515 on its own does not require premiums to be reasonable
in relation to benefits. The Johnsons had argued alternatively to the district court
that if § 627.6515 didn’t require premiums to be reasonable in relation to benefits,
then §§ 627.410, 627.411, and 627.640 did. The district court rejected this
argument as well. Specifically, it found the Johnsons could not assert common law
claims based on violations of these statutory provisions because none of the
provisions contained either express or implied private rights of action. As a result,
the district court determined that it would be futile to allow the Johnsons to amend
their complaint to include §§ 627.410, 627.411, and 627.640, and dismissed the
action with prejudice.
The Johnsons appealed. During the pendency of the appeal, the Johnsons
reached a settlement with Catamaran. As a result, only the Johnsons and
Stonebridge filed appellate briefs.
II. STANDARD OF REVIEW
“We review de novo the district court's grant of a motion to dismiss under
12(b)(6) for failure to state a claim, accepting the allegations in the complaint as
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true and construing them in the light most favorable to the plaintiff.” Hill v.
White, 321 F.3d 1334, 1335 (11th Cir. 2003) (per curiam). We also review de
novo the district court’s interpretation of state law. Tampa Bay Water v. HDR
Eng’g, Inc., 731 F.3d 1171, 1177 (11th Cir. 2013). However, we may affirm the
district court on any ground supported by the record, regardless of whether that
ground was relied upon or even considered by the district court. Krutzig v. Pulte
Home Corp., 602 F.3d 1231, 1234 (11th Cir. 2010).
III. DISCUSSION
On appeal, the Johnsons argue the district court incorrectly dismissed with
prejudice their breach of contract, unjust enrichment, and aiding and abetting a
breach of fiduciary duty claims. We address each claim in turn.
A. BREACH OF CONTRACT
First, the Johnsons argue that certain statutory provisions can be
incorporated into insurance contracts under Florida law. They say Fla. Stat.
§§ 627.6515 and 627.410 require group health insurance products to have
premiums that are reasonable in relation to benefits and these statutory provisions
should be incorporated into their insurance contracts with Stonebridge. Thus, they
assert that Stonebridge breached these contracts by charging unreasonably high
premiums in violation of §§ 627.6515 and 627.410.
It is true that under Florida law, certain “statutory limitations and
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requirements surrounding traditional insurance contracts may be incorporated into
an insurance contract for purposes of determining the parties’ contractual rights.”
Found. Health v. Westside EKG Assocs., 944 So. 2d 188, 195 (Fla. 2006). And
contrary to the district court’s holding, even statutory provisions that contain
neither express nor implied private rights of action can “form the basis for a breach
of contract action by an insured.” Lutz v. Protective Life Ins. Co., 951 So. 2d 884,
887 (Fla. 4th DCA 2007); see Westside, 944 So. 2d at 194. Stonebridge argues
Westside and the statutory incorporation doctrine were abrogated by QBE Ins.
Corp. v. Chalfonte Condo. Apartment Ass’n, 94 So. 3d 541 (Fla. 2012). But
because Chalfonte did not address any statutory incorporation claims, we decline
to read it as a wholesale elimination of the statutory incorporation doctrine.
We recognize that in Westside, the Florida Supreme Court said the statutory
provision in question there (Fla. Stat. § 641.3155) could be incorporated into an
insurance contract because it “serves an integral role in providing substance or
structure to the rights of subscribers and the responsibilities of [insurers].” 944 So.
2d at 196. But even assuming the statutory provisions on which the Johnsons rely
here (§§ 627.6515, 627.410, 627.411, and 627.640) do apply to the defendants,
they do not play a similar “integral role” in the insured-insurer relationship. Id.
First, § 627.6515 does not require premiums to be reasonably related to benefits.
Rather, it requires health plans to either charge premiums reasonably related to
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benefits or comply with Part VII of Chapter 627 of the insurance code. See Fla.
Stat. § 627.6515(2). Second, §§ 627.410 and 627.640 require insurers to file
certain documents relating to their premiums with Florida’s Office of Insurance
Regulation (“OIR”), and § 627.410(7) requires insurers to “make an annual filling
with the [OIR] . . . demonstrating the reasonableness of benefits in relation to
premium rates.” On top of this, § 627.411(1)(f)(1) instructs the OIR to disapprove
or withdraw approval of a health insurer’s forms—thereby preventing the insurer
from selling insurance in Florida—if the insurer’s product “[p]rovides benefits that
are unreasonable in relation to the premium charged.” Thus, although §§ 627.410,
627.411, and 627.640 do seem to embody a requirement that insurance products
have premiums reasonably related to benefits, they explicitly entrust the
enforcement of that requirement to the OIR. This stands in stark contrast to the
statute in Westside. Instead of providing for administrative oversight and
enforcement, that statute (§ 641.3155) directly requires the insurer to promptly pay
claims to the provider.
Based on this comparison, it is clear that §§ 627.410, 627.411, and 627.640
do not serve the same direct “integral role in providing substance or structure” to
the insured-insurer relationship that § 641.3155 does. See Westside, 944 So. 2d at
196. Thus, we decline to incorporate §§ 627.410, 627.411, and 627.640 into the
insurance contracts at issue here. As a result, even if Stonebridge charged
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premiums that were unreasonable in relation to benefits, it did not breach any
implied or express terms of its insurance contracts with the Johnsons. We
therefore affirm the dismissal of the Johnsons’ breach of contract claim.
B. UNJUST ENRICHMENT
Second, the Johnsons argue that if Stonebridge was not a party to the
insurance contracts, then it was unjustly enriched from the premiums they paid
because their premiums were not reasonably related to benefits. They also assert
that, unlike their breach of contract claim, this unjust enrichment claim is not based
on any statutory violation.
Even assuming the Johnsons’ unjust enrichment theory is completely
independent of any statutory provision, we affirm the dismissal of their unjust
enrichment claim because they failed to sufficiently plead unjust enrichment under
Florida law. To bring an unjust enrichment claim, a plaintiff must allege that: (1)
plaintiff conferred a benefit on the defendant; (2) defendant voluntarily accepted
and retained the benefit; and (3) it would be inequitable for defendant to retain the
benefit without paying the value of the benefit to plaintiff. Fito v. Attorneys’ Title
Ins. Fund, Inc., 83 So. 3d 755, 758 (Fla. 3d DCA 2011). And as to the first
element, the benefit conferred on the defendant must be a direct benefit. See
Kopel v. Kopel, ___ So. 3d ___, 2017 WL 372074, at *5 (Fla. Jan. 26, 2017);
Peoples Nat’l Bank of Commerce v. First Union Nat’l Bank of Fla., N.A., 667 So.
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2d 876, 879 (Fla. 3d DCA 1996) (per curiam). For example, in Extraordinary Title
Services, LLC v. Florida Power & Light Co., 1 So. 3d 400 (Fla. 3d DCA 2009), the
Third District Court of Appeal held that a plaintiffs’ payments to a defendant’s
subsidiary company did not constitute a direct benefit to the defendant even though
the defendant ultimately retained at least a portion of the payments. Id. at 401,
404. As a result, those payments could not support an unjust enrichment claim
against the defendant. Id.; see also Kopel v. Kopel, 117 So. 3d 1147, 1152–53
(Fla. 3d DCA 2013), rev’d on other grounds, 2017 WL 372074 (Fla. Jan. 26, 2017)
(holding a plaintiff’s payment of approximately $1.8 million into two corporations
in which the defendant had two-thirds ownership stakes constituted an “indirect”
benefit to the defendant that could not support an unjust enrichment claim).
Under their unjust enrichment theory, the Johnsons say they conferred a
benefit on Stonebridge by paying membership fees to Catamaran, who in turn paid
premiums to Stonebridge. However, even if Stonebridge ultimately retained a
portion of the Johnsons’ membership payments, Extraordinary Title and Kopel
indicate that the Johnsons conferred (at best) an indirect benefit on Stonebridge.
As a result, they cannot satisfy the first element of an unjust enrichment case, and
we affirm the district court’s dismissal of this claim.
C. AIDING AND ABETTING A BREACH OF FIDUCIARY DUTY
The Johnsons’ final argument is that (1) Catamaran owed a fiduciary duty to
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them because it was their insurance broker; (2) Catamaran breached its fiduciary
duty when it “t[ook] advantage of the ‘inherent trust and confidence’ that an
insured (the princip[al]) places with an insurance broker” by “charging its
princip[als] $15.99 per month for a Benefit Program that costs at most $2.30”; and
(3) Stonebridge aided and abetted this breach of fiduciary duty.
We affirm the district court’s dismissal of the Johnsons’ aiding and abetting
claim for two reasons. First, the Johnsons did not plead sufficient facts to support
a plausible inference that they had a fiduciary relationship with Catamaran, without
which no aiding and abetting claim against Stonebridge can be maintained. Under
Florida law, “[f]iduciary relationships are either expressly or impliedly created.”
Capital Bank v. MVB, Inc., 644 So. 2d 515, 518 (Fla. 3d DCA 1994). Express
fiduciary relationships are created either by contract or through legal proceedings.
Id. In contrast, “[f]iduciary relationships implied in law are premised upon the
specific factual situation surrounding the transaction and the relationship of the
parties.” Id. Thus, in order to plead an implied fiduciary relationship, a plaintiff
“must allege some degree of dependency on [the defendant] and some degree of
undertaking [by the defendant] to advise, counsel, and protect the [plaintiff].”
Watkins v. NCNB Nat’l Bank of Fla., N.A., 622 So. 2d 1063, 1065 (Fla. 3d DCA
1993) (quotation omitted). Express fiduciary relationships can exist between
insurance brokers and insureds, Moss v. Appel, 718 So. 2d 199, 201 (Fla. 4th DCA
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1998), abrogated on other grounds, Wachovia Ins. Servs., Inc. v. Toomey, 944 So.
2d 980 (Fla. 2008), but only if they are created by contract or through legal
proceedings. See Capital Bank, 644 So. 2d at 518. Here, the Johnsons did not
allege that they contracted to receive brokerage services from Catamaran. They
alleged only that Catamaran acted as an insurance broker. As a result, they failed
to plead facts sufficient to show they had an express fiduciary relationship with
Catamaran. Further, the Johnsons never mentioned any “degree of dependency”
on Catamaran or any “degree of undertaking” by Catamaran to “advise, counsel,
and protect” them. See Watkins, 622 So. 2d at 1065 (quotation omitted). Instead,
they alleged only that Catamaran “solicited, marketed, collected premiums and
administered the Benefit Programs and the Disability Policy to the Plaintiffs.”
Under Florida law, these facts are not enough to plead an implied fiduciary
relationship with Catamaran. See id.Second, even assuming the Johnsons had a fiduciary relationship with
Catamaran, their claim still cannot survive the motion to dismiss. This is because
the Johnsons fail to cite (and we could not find) any cases suggesting that breach of
fiduciary duty claims in Florida can be premised on violations of statutes that
contain neither express nor implied private rights of action. The Johnsons say their
claim is not based on any statutory violation, but we are not persuaded. In order to
prevail on their argument that Catamaran took advantage of their “inherent trust
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and confidence” by charging disproportionately high premiums, the Johnsons must
show that Catamaran’s prices crossed some line separating exploitative premiums
from acceptable premiums. The Johnsons do not identify any common-law duty or
principle that draws such a line. Instead, they mention only one source of law that
comes even close: the set of statutory provisions requiring premiums to be
reasonably related to benefits—Fla. Stat. §§ 627.6515, 627.410, 627.411, and
627.640. Thus, the Johnsons’ breach of fiduciary duty claim must be based on
violations of those provisions. However, they do not argue §§ 627.6515, 627.410,
627.411, and 627.640 contain any private rights of action. They also do not argue
that a plaintiff can bring a breach of fiduciary duty claim based on violations of
statutes that lack private rights of action. Neither has our independent research
produced any Florida cases supporting that proposition. As a result, we affirm the
dismissal of the Johnsons’ aiding and abetting a breach of fiduciary duty claim
against Stonebridge.
IV. CONCLUSION
For these reasons, we affirm the district court’s dismissal of the Johnsons’
breach of contract, unjust enrichment, and aiding and abetting a breach of fiduciary
duty claims with prejudice.
AFFIRMED.
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