ALAN C. KAY, Senior District Judge.
On May 20, 2009, Plaintiff Painsolvers, Inc. ("Plaintiff" or "Painsolvers"), a professional corporation authorized to provide personal injury protection ("PIP") benefits to claimants in the state of Hawai'i, filed a complaint against Defendant, State Farm Mutual Automobile Insurance Company ("State Farm" or "Defendant") in the Circuit Court of the First Circuit in Hawai'i alleging that State Farm had failed to pay two claims for PIP benefits. On July 14, 2009, State Farm filed a motion to dismiss Painsolvers' Complaint in state court. On September 4, 2009, Plaintiff filed a First Amended Complaint alleging that State Farm had refused to pay twelve (12) PIP benefit claims and added claims for trade libel or disparagement and slander, as well as an additional prayer for general, special, and punitive damages.
On September 11, 2009, Defendant State Farm removed the case to this Court pursuant to 28 U.S.C. §§ 1441 and 1446. The Court has original jurisdiction over this case pursuant to 28 U.S.C. § 1332 (diversity of citizenship). On September 18, 2009, Defendant moved to dismiss Counts One through Six and Count Nine of Plaintiff's First Amended Complaint for failure to state a claim. On November 30, 2009, Plaintiff opposed Defendant's Motion to Dismiss and filed a Counter Motion for Summary Judgment and Adjudication or Preliminary Injunction. On January 22, 2010, 685 F.Supp.2d 1123 (D.Hawai'i), this Court Granted in Part and Denied in Part Defendant's Motion to Dismiss Counts One through Six and Count Nine of the First Amended Complaint and denied Plaintiff's Counter Motion for Summary Judgment
On April 28, 2010, Plaintiff filed a Motion for Summary Judgment and FRCP 56(d) Determination ("Plaintiff's MSJ" or "Plaintiff's Motion"). Doc. No. 38. Plaintiff also filed a concise statement of facts in support of its motion ("Plaintiff's CSF"). Doc. No. 39. On July 12, 2010, Defendant filed a Counter Motion For Partial Summary Judgment as to Plaintiff's Second and Third Claims for Trade Libel and Slander ("Defendant's MSJ"). Doc. No. 44. In support of its counter motion for summary judgment and in opposition to Plaintiff's MSJ, Defendant submitted a combined memorandum of law ("Defendant's Combined Mem."). Doc. No. 42. Defendant also submitted a concise statement of facts in opposition to Plaintiff's CSF ("Defendant's Opposition CSF") and a concise statement of facts in support of its counter motion ("Defendant's Counter Motion CSF"). Doc. Nos. 43 & 45.
Although Plaintiff's reply in support of its motion for summary judgment and its opposition to the counter motion was due on July 19, 2010, on July 22, 2010, the Court approved a Stipulation Enlarging the Time for Plaintiff to File its Reply to July 22, 2010 (and for Defendant to file its reply in support of its counter motion to July 29, 2010). Doc. No. 49. Accordingly, on July 22, 2010, Plaintiff filed its combined reply in support of its motion for summary judgment and opposition to Defendant's counter motion for summary judgment ("Plaintiff's Reply"). Doc. No. 50. Plaintiff also filed a Separate Concise Statement in Reply to State Farm Mutual Automobile Insurance Company's Separate Concise Statement in Opposition to Plaintiff's Motion for Summary Judgment and FRCP 56(d) Determination ("Plaintiff's Reply CSF"). Doc. No. 52. In addition, Plaintiff filed a Separate Concise Statement in Opposition to State Farm Mutual Automobile Insurance Company's Counter Motion for Partial Summary Judgment as to Plaintiff's Second and Third Claims, for Trade Libel and Slander ("Plaintiff's Counter Motion Opposition CSF"). On July 29, 2010, Defendant filed a reply in support of its counter motion for summary judgment. Doc. No. 53.
A hearing on these motions was held on August 2, 2010. Subsequent to the hearing on these motions, with both parties' consent, Plaintiff submitted a supplemental production of documents that Defendant had made to Plaintiff after the close of business on July 30, 2010, for the Court's review in deciding these motions.
On August 5, 2010, Plaintiff filed a Motion for Leave to File Supplemental Declaration of Counsel [LR 56.1] In Opposition to Defendant's Counter Motion for Partial Summary Judgment ("Motion for Leave"). Doc. No. 55. In support of that motion, Plaintiff's Counsel filed a declaration as well as Exhibit F, the proposed Supplemental Declaration. Also on August 5, 2010, Defendant filed a memorandum in opposition to Plaintiff's Motion for Leave ("Defendant's Opposition to the Motion for Leave"). Doc. No. 56. On August 6, 2010, Plaintiff filed a Reply to Defendant's Opposition to the Motion for Leave. Doc. No. 57.
At relevant times, Plaintiff was a professional corporation authorized to provide personal injury protection ("PIP") benefits to claimants covered by motor vehicle insurance
Although Plaintiff's complaint alleges it submitted over twelve (12) PIP claims on forms approved by an agency of the United States government (CMS-1500, Health Insurance Claim Form)
Plaintiff alleges that the claims, interest, costs, and attorney's fees exceed $10,000.00. Compl. ¶ 8. State Farm alleges that it properly requested additional information from Painsolvers in order to process the claims and that Painsolvers has not provided the requested information, thus State Farm denied the claim. Defendant's Combined Mem. at 2 ("Plaintiff submitted claims, State Farm requested additional information, Plaintiff effectively ignored the requests and State Farm then denied the claims, as provided for in the statute."). Plaintiff, in contrast, alleges that "Defendants are ignoring information on the claim forms and attachments which is sufficient to pay the claims." Compl. ¶ 12.
Plaintiff's First Amended Complaint is divided into three "Claims:" (1) "First Claim—For Payment of Claims, Interest, Costs and Attorney's Fees" (Compl. at 3); (2) "Second Claim—Trade Libel or Disparagement" (Compl. at 7) and; (3) "Third Claim—Slander" (Compl. at 8.) Within the "First Claim," Plaintiff lists nine "counts." Plaintiff now moves for summary judgment on counts one through five, seven, and eight. Plaintiff's MSJ at 10.
The purpose of summary judgment is to identify and dispose of factually unsupported claims and defenses. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Summary judgment is therefore appropriate if the "pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). "A fact is `material' when, under the governing substantive law, it could affect the outcome of the case. A `genuine issue' of material fact arises if `the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Thrifty Oil Co. v. Bank of Am. Nat'l Trust & Sav. Ass'n, 322 F.3d 1039, 1046 (9th Cir.2003) (quoting Anderson v.
The moving party has the burden of persuading the court as to the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548; Miller v. Glenn Miller Prod., Inc., 454 F.3d 975, 987 (9th Cir.2006) The moving party may do so with affirmative evidence or by "`showing'—that is pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325, 106 S.Ct. 2548.
When evaluating a motion for summary judgment, the court must construe all evidence and reasonable inferences drawn therefrom in the light most favorable to the nonmoving party. See T.W. Elec. Serv., 809 F.2d at 630-31.
Plaintiff moves for summary judgment on Counts One through Five, Seven, and Eight of the First Claim of the First Amended Complaint. Plaintiff's MSJ at 10.
Preliminarily, as the Defendant notes, the Court has previously dismissed Count Five of the First Amended Complaint. See 1/22/10 Order at 34; Defendant's Combined Mem. at 18. Additionally, as explained
Hawai'i Revised Statutes § 431:10C-304 obligates insurers to pay personal injury protection benefits and the legislative history of H.R.S. § 431:10C-304, "evinces a clear legislative intent that insurers investigate and act on claims promptly." TIG Ins. Co. v. Kauhane, 101 Haw. 311, 325, 67 P.3d 810, 824 (App.2003). The title of Section 431:10C-304 is "Obligation to pay personal injury protection benefits." H.R.S. § 431:10C-304. Subsection one provides that "in the case of injury arising out of a motor vehicle accident, the insurer shall pay, without regard to fault, to the provider of services on behalf of the following persons who sustain accidental harm... an amount equal to the personal injury protection benefits as defined in section 431:10C-103.5(a)...." H.R.S. § 431:10C-304(1). Subsection three further establishes the mandatory requirement that "payment of personal injury protection benefits shall be made within thirty days after the insurer has received reasonable proof of the fact and amount of benefits accrued." H.R.S. § 431:10C-304(3)(A)(emphasis added).
"Reasonable proof" is not defined in Hawai'i Revised Statutes. As the Hawai'i Intermediate Court of Appeals ("ICA") explained:
TIG Ins. Co. v. Kauhane, 101 Haw. 311, 325, 67 P.3d 810, 824 (App.2003). The ICA further noted, during its examination of the legislative history of this statute:
TIG Ins., 101 Hawai'i at 325 n. 16, 67 P.3d at 824 n. 16.
Id. 117 Hawai'i at 489, 184 P.3d at 804 (citing Orthopedic Assoc. of Hawaii v. Hawaiian Ins. & Guar. Co., Ltd., 109 Haw. 185, 195, 124 P.3d 930, 940 (2005)). Thus, the ICA in Jou held that "in the first instance, [the provider] was required to submit nothing more than his billing statement showing the treatment services he performed, and the charges or costs of those services. [The provider] did so." Id. The ICA also specifically noted that "[a]lthough [the provider's] original invoices were not in the record before the agency, [the insurer did] not deny receiving the invoices, which it ultimately paid in full, or allege that [the provider] failed to submit bills showing the treatment and charges." Jou v. Schmidt, 117 Hawai'i at 489 n. 13, 184 P.3d at 804 n. 13.
Plaintiff asserts that based on admissions by State Farm, the exhibits attached to its concise statement and other materials, that it has satisfied "much more than its initial burden to show treatment services and the amount of the charges." See Plaintiff's MSJ at 12. Accordingly, Plaintiff argues that it is entitled to summary judgment because all it is required to show is that it provided "reasonable proof" to State Farm, which triggers State Farm's obligation to pay or deny benefits within 30 days. Thus, Plaintiff argues because State Farm did not pay or deny benefits within 30 days as required, it is entitled to summary judgment. Defendant asserts that Plaintiff's reading of the case law is incorrect and that there are material issues of fact regarding the reasonableness of State Farm's information requests. The Court agrees.
In asserting that all it must show is that State Farm received its bills showing the fact of treatment and the costs, Plaintiff places too much reliance on this Court's 1/22/10 Order, without considering the procedural posture of the case and the evidence that Plaintiff had submitted in support of its counter motion for summary judgment at that point. In the 1/22/10 Order, which granted in part and denied in part Defendant's motion to dismiss and denied Plaintiff's counter motion for summary judgment, this Court explained:
1/22/10 Order at 20-21. It is important to recall the differing burdens on a motion to dismiss and a motion for summary judgment.
On a Rule 12(b)(6) motion to dismiss, all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party. Fed'n of African Am. Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir.1996). At that point, "[t]he issue is not whether a plaintiff's success on the merits is likely but rather whether the claimant is entitled to proceed beyond the threshold in attempting to establish his claims." De La Cruz v. Tormey, 582 F.2d 45, 48 (9th Cir.), cert. denied, 441 U.S. 965, 99 S.Ct. 2416, 60 L.Ed.2d 1072 (1979). Thus, in light of the standard at a motion to dismiss stage and Plaintiff's pleadings, the Court found that Plaintiff had stated a claim.
In contrast, this case is now at the summary judgment stage. On a motion for summary judgment, the moving party has the burden of persuading the court as to the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548; Miller v. Glenn Miller Prod., Inc., 454 F.3d 975, 987 (9th Cir.2006). When evaluating a motion for summary judgment, the court must construe all evidence and reasonable inferences drawn therefrom in the light most favorable to the nonmoving party. See T.W. Elec. Serv., 809 F.2d at 630-31.
Plaintiff overly emphasizes the Court's statement that "[w]ithout copies of the bills, the Court cannot rule that Plaintiff has met its initial burden to show the treatment services and the amount of the charges." 1/22/10 Order at 29 (citing Jou v. Schmidt, 117 Haw. 477, 489, 184 P.3d 792, 804 (App.2008)). The Court, however, was not ruling that copies of the bills were all that was needed for the Court to grant summary judgment to the Plaintiff, but merely pointing out that, at that time, Plaintiff had not even presented a bare minimum of evidence that could possibly entitle it to summary judgment. Plaintiff, though, appears to have interpreted this language to mean that, to succeed on summary judgment, all it must show is that it submitted bills to State Farm and that State Farm did not pay or deny benefits within thirty days.
Plaintiff repeatedly cites to State Farm's admissions that it received billing statements to assert that State Farm received reasonable proof and thus was not allowed to request any additional information. See, e.g., Plaintiff's Reply at 8 (arguing that "[h]ere, State Farm admits both receiving reasonable proof and still needing additional information. The two are mutually exclusive") (emphasis in original, citation omitted).
As Defendant aptly argues:
Defendant's Combined Mem. at 11. The Court agrees. Plaintiff's interpretation would render § 431:10C-304(3)(C) superfluous. "It is a cardinal rule of statutory construction that courts are bound, if rational and practicable, to give effect to all parts of a statute, and that no clause, sentence, or word shall be construed as superfluous, void, or insignificant if a construction can be legitimately found which will give force to and preserve all the words of the statute." Camara v. Agsalud, 67 Haw. 212, 215-16, 685 P.2d 794, 797 (1984) (internal citation omitted).
Plaintiff focuses on H.R.S. § 431:10C-304(3)(A) which provides, in part, "[p]ayment of personal injury protection benefits shall be made within thirty days after the insurer has received reasonable proof of the fact and amount of benefits accrued, and demand for payment thereof." Defendant, in contrast, focuses on H.R.S. § 431:10C-304(3)(C), which provides:
H.R.S. § 431:10C-304(3)(C).
Plaintiff emphasizes the following language from Jou:
Jou, 117 Hawai'i at 489, 184 P.3d at 804. The Jou court also expressed skepticism regarding whether the insurer's request for "all applicable office notes and or documentation regarding the services rendered on the attached billing" and its request for the specific identity of the person who performed services and speciality of the provider count as "itemized lists" but did not rule on that issue. Id.
However, the decisions in both Jou and TIG Ins. were made under very different factual circumstances than those with which this Court is presented. In TIG Ins., the insurance company made more than one request for additional information, continued to request additional information even after receiving copies of medical records, requested information that was not in existence (i.e. TIG Insurance sent letters to doctors with questions that
Furthermore, the holding in TIG Insurance was limited to determining that "the Insurance Commissioner was authorized to order TIG to pay interest on an untimely paid claim or to assess civil penalties against TIG." Id. at 328, 67 P.3d at 827. The Intermediate Court of Appeals specifically held that the Insurance Commissioner could not "default" insurers for failure to timely determine or pay a claim.
In Jou, although the insurance company had challenged a number of bills, it eventually
Accordingly, in light of the foregoing, the Court finds that there are genuine issues of material fact here. State Farm admits that it received "billing statements from Plaintiff" and that as to all of those claims "there was information showing the fact, i.e., the treatment services and the amount of benefits, i.e., the charges or costs of treatment services." See Plaintiff's MSJ at 11. State Farm also admits that the claims all showed "treatment and charges." Id. State Farm, however, denies that it received "reasonable proof." See Plaintiff's CSF Ex. B. RFA No. 5 (denying that "as to all claims you received from Plaintiff for personal injury protection benefits, you have been provided `reasonable proof' as determined in Orthopedic Assoc. Etc v. HIG etc, supra, 109 Hawai'i at 195[, 124 P.3d 930]").
State Farm has persuasively argued that it is entitled under H.R.S. § 431:10C-304(3)(C) to request additional information or loss documentation, and Plaintiff's CSF establishes that State Farm did request additional information. See, e.g., Plaintiff's CSF Exhibit A.1, A.2, Shandu Decl. ¶¶ 10.1, 10.2. Plaintiff disputes whether the information State Farm requested was necessary and reasonable, but, as discussed infra, this is a vigorously disputed issue of material fact that cannot be decided at this point. As State Farm aptly argues, under Hawai'i law, there is no statutory presumption that medical treatments following a motor vehicle accident are the appropriate, reasonable, and necessary result of the accident as long as the treated injuries are the kind produced by motor vehicle accidents. See Defendant's Combined Mem. at 9; Hoffacker v. State Farm Mut. Auto. Ins. Co., 101 Haw. 21, 24, 61 P.3d 532, 535 (App.2002). Furthermore, a party contesting the denial of benefits bears the burden of showing the denial of benefits was improper. Hoffacker, 101 Hawai'i at 24, 61 P.3d at 535.
Plaintiff asserts that the information requested was unnecessary and that such requests were made in bad faith and were "vague excuses for payment withholding as a pretext to increase earnings at Plaintiff's expense."
State Farm is only obligated to pay personal injury protection benefits, which means:
H.R.S. § 431:10C-103.5(a) (emphasis added). Accordingly, the Court finds that State Farm is entitled to do some investigation to determine whether claimed benefits are appropriate and reasonable. This is precisely what is contemplated by H.R.S. § 431:10C-304(3)(C) which allows the insurer to request "additional information and loss documentation." State Farm argues, inter alia, that it sought to verify that Plaintiff was offering patients the option to obtain their prescription elsewhere as they are required to by law. Defendant's Combined Mem. at 4, 16. State Farm further argues that the prescription issue:
Id. State Farm also asserts that Haw.Rev. Stat. § 329-31.5 requires that controlled substances stocked at a clinic be dispensed only by treating practitioners for emergency and urgent care, when a written prescription would not be practical, but that it appears Painsolvers regularly and routinely dispensed controlled substances including, but not limited to, hydrocodone. Id. at 5.
The Court finds that there are genuine issues of material fact regarding whether these inquiries were permissible under H.R.S. § 431:10c-304(3)(C) to determine if treatment was appropriate and reasonable. While not ruling on these issues, it appears these inquiries may be reasonable. According to Defendant, Plaintiff is charging a substantially higher price for prescription drugs than local pharmacies. See Defendant's Combined Mem. at 3-4. Thus, it seems reasonable for State Farm to inquire whether Painsolvers is complying with Hawai'i law. As Defendant notes, if Plaintiff is charging prices that are ten-times those of local pharmacies, a claimant's PIP benefits would be exhausted substantially sooner by obtaining medicine from Painsolvers as opposed to a pharmacy. Furthermore, a very large proportion of the claims for which Plaintiff asserts it is entitled to payment, appear to be for prescription drugs that were dispensed through Plaintiff's clinic. The Court has counted at least forty-nine (49) CMS-1500 forms in Plaintiff's CSF that appear to include charges for prescription drugs.
The Court further observes that State Farm's inquiries regarding Plaintiff's distribution of controlled substances outside of emergency or urgent care visits may be reasonable. Plaintiff's concise statement shows at least two (and likely more) examples of Plaintiff distributing hydrocodone in connection with a consultation visit. Compare, e.g., Plaintiff's CSF Ex. A.1a (requesting payment for 120 units of "hydro") and Ex. A.1b (thanking Dr. Hilton for his "authorization for this consultation/evaluation" and for the opportunity to participate in the care of the patient as "secondary treating physician"). The Court is not ruling on whether this request is or is not reasonable (or whether it is or is not "urgent care") but simply remarks that a consultation visit in which a report is drafted and sent to another physician seems to be at odds with urgent care.
In addition to the aforementioned disputed material facts, the Court observes that there are many other issues of material fact. For example, Plaintiff's declaration itself appears to create issues of material fact. Dr. Shandu makes confusing statements in his declaration such as "there was no partial payment," which is immediately followed by the statement that "State Farm paid the claim, apparently back dating its cover sheet." See Plaintiff's CSF Shandu Decl. ¶ 13. Similarly, Dr. Shandu declares "Defendant State Farm failed and refused to pay this claim in full and instead requested unauthorized and irrelevant information to avoid payment" and then asserts "Payment was made at SF00244-245." See Id. ¶ 14.
First, the Court observes that Plaintiff's First Amended Complaint did not allege any partial payments, and, in its 1/22/10 Order, the Court specifically dismissed Count Five because Plaintiff had not plead that it had received any partial payment from Defendant. See 1/22/10 Order at 26-27. Furthermore, where there has been a partial payment, billing disputes are governed by H.R.S. § 431:10C-308.5, which requires the parties to negotiate in good faith. Although Plaintiff's CSF asserts that "Plaintiff made and documented numerous efforts to reach a negotiated resolution of the dispute," the Court is not persuaded that, even had Plaintiff pled a claim under H.R.S. § 431:10C-308.5, that Plaintiff has shown it attempted to negotiate in good faith. Plaintiff's CSF ¶ 11. Plaintiff's CSF cites to only one letter to State Farm in response to an information request (a letter from Plaintiff dated January 6, 2010) and one example of Plaintiff sending State Farm a letter indicating that another insurer had found its charges to be reasonable. Second, in its concise statement, Plaintiff has not included the document bates stamped SF00244-245, which allegedly shows a payment was made.
Finally, Plaintiff's CSF Exhibit A.11o is yet another example of Plaintiff creating genuine issues of material fact all on its own. This CMS-1500 form requests payment for 500 units of a drug for $1810.48. See Plaintiff's CSF Ex. A.11o. However, in his declaration Dr. Shandu states
Plaintiff's CSF Shandu Decl. ¶ 27. Given that State Farm's information request indicated "[d]ocumentation from [the patient] in the form of a copy of a bottle does not support this quantity of medication being provided to her" (Ex. A.11L) and that Plaintiff acknowledges there was a mistake, it seems to the Court State Farm's request is most likely reasonable. However, even for this claim, it appears Plaintiff refused to provide any additional information.
Plaintiff also appears to argue that State Farm routinely violates H.R.S. § 431:13-103(a)(11)(N). See Plaintiff's MSJ at 1-2. H.R.S. § 431:13-103 is "Unfair methods of competition and unfair or deceptive acts or practices defined" and section (a)(11) is "unfair claims settlement practices." To the extent Plaintiff intends this to be an independent claim, the Court rejects this argument. Plaintiff has not plead a claim under this statute and it appears Plaintiff is not entitled to maintain a private right of action based upon this statute. See Young v. Car Rental Claims, Inc., 255 F.Supp.2d 1149 (D.Haw.2003) ("plaintiff cannot bring a private cause of action under H.R.S. § 431:13-103 to effect private enforcement."). Plaintiff is, of course, free to argue at trial that the standards set forth in the unfair claims settlement practices statute provide evidence of the reasonableness or unreasonableness of State Farm's information requests.
Plaintiff also asserts "targeting health providers for different benefits treatment is discriminatory." Plaintiff's MSJ at 28. Plaintiff asserts that H.R.S. § 431:13-103(a)(7)(C) prohibits State Farm from discriminating against Plaintiff. H.R.S. § 431:13-103(a)(7)(C) is not applicable here (and in any event, a private right of action would also not exist under this statute, pursuant to Young, discussed supra). That statute prohibits "[m]aking or permitting any unfair discrimination between individuals or risks of the same class and of essentially the same hazards by refusing to issue, refusing to renew, canceling, or limiting the amount of insurance coverage on a property or casualty risk because of the geographic location of the risk." This is not applicable here because there is no allegation that State Farm is refusing to renew, cancel, or limit insurance coverage based upon the geographic location of the risk and there is no private right of action under this statute.
At this point there are many disputed issues of material fact and the Court cannot rule that Plaintiff is entitled to judgment on Counts One through Four, Seven, and Eight of the First Amended Complaint. There are genuine issues of material fact regarding the number and amount of claims at issue here, whether Defendant has partially paid claims, and the reasonableness of Defendant's information requests.
Plaintiff's Motion also requests a Federal Rule of Civil Procedure 56(d) ("Rule 56(d)") Determination. Rule 56(d)(1) provides:
Rule 56(d)(1). As discussed above, the Court is unable to grant summary judgment because there are many disputed issues of material fact. Also, as explained above, Plaintiff creates some of those issues by its own submissions. Accordingly, it is practicable at this point to determine only that the following facts are not in dispute:
Defendant filed a counter motion for partial summary judgment as to Plaintiff's second claim for trade libel or disparagement and Plaintiff's third claim for slander. Defendant's Combined Mem. at 20. Defendant argues that the factual allegations in Plaintiff's First Amended Complaint are very vague. Thus, Defendant propounded interrogatories regarding Plaintiff's defamation claim, which Plaintiff refused to answer.
Trade libel or disparagement entails "the publication of matter disparaging the quality of another's land, chattels or intangible things, that the publisher should recognize as likely to result in pecuniary
To prove defamation under Hawai'i law, Plaintiff must establish four elements: (1) a false and defamatory statement concerning another; (2) an unprivileged publication to a third party; (3) the publisher was negligent; and (4) either actionability of the statement irrespective of special harm, or the existence of special harm caused by the publication. Wilson v. Freitas, 121 Haw. 120, 128, 214 P.3d 1110 (App.2009). "A communication is defamatory when it tends to harm the reputation of another as to lower him in the estimation of the community or deter third persons from associating or dealing with him." Fernandes v. Tenbruggencate, 65 Haw. 226, 228, 649 P.2d 1144, 1147 (Haw.1982) (citing Restatement (Second) Torts § 559 (1977)). The Fernandes court further explained that "[w]hether a communication is defamatory `depends, among other factors, upon the temper of the times, the current of contemporary public opinion, with the result that words, harmless in one age, in one community, may be highly damaging to reputation at another time or in a different place.'" Id. A person who publishes a false defamatory communication is subject to liability only if he (a) knows that the statement is false and that it defames the other, (b) acts in reckless disregard of these matters, or (c) acts negligently in failing to ascertain them. Restatement (Second) Torts § 580B.
A party moving for summary judgment has the burden of persuading the court as to the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548; Miller v. Glenn Miller Prod., Inc., 454 F.3d 975, 987 (9th Cir.2006) The moving party may do so with affirmative evidence or by "`showing'—that is pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325, 106 S.Ct. 2548.
In opposition, Plaintiff does not put forth any disputed issues of material fact, but rather asserts that "it is too early to decide State Farm's counter motion." Plaintiff's Reply at 12. Plaintiff argues that certain material facts remain to be discovered by deposition that preclude summary judgment and that State Farm's document discovery has been incomplete. Plaintiff's Reply at 12-13. Plaintiff is making a Federal Rule of Civil Procedure 56(f) ("Rule 56(f)") argument.
Rule 56(f) provides, "if a party opposing the motion shows by affidavit that, for
A party requesting a continuance pursuant to Rule 56(f) must identify by affidavit the specific facts that further discovery would reveal, and explain why those facts would preclude summary judgment. Tatum v. City & County of S.F., 441 F.3d 1090, 1100 (9th Cir.2006). "Under Rule 56(f), an opposing party must make clear what information is sought and how it would preclude summary judgment." Garrett v. City & County of S.F., 818 F.2d 1515, 1518 (9th Cir.1987). "Failure to comply with the requirements of Rule 56(f) is a proper ground for denying discovery and proceeding to summary judgment." Brae Transp., Inc. v. Coopers & Lybrand, 790 F.2d 1439, 1443 (9th Cir. 1986) (further observing that "[r]eferences in memoranda and declarations to a need for discovery do not qualify as motions under Rule 56(f)"); In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 989 (9th Cir.1999) (finding that failing to file the required Rule 56(f) affidavit detailing with particularity the information sought was fatal to request for further discovery); see also Tatum, 441 F.3d at 1100 (finding that an attorney declaration was insufficient to support a Rule 56(f) continuance where declaration failed to specify specific facts to be discovered or explain how a continuance would allow the party to produce evidence precluding summary judgment). To prevail on a Rule 56(f) motion, the movant must also show diligence in previously pursuing discovery. Germaine Music v. Universal Songs of Polygram, 130 Fed.Appx. 153, 155 (9th Cir.2005) (citing Byrd v. Guess, 137 F.3d 1126, 1135 (9th Cir.1998)).
The Court finds that Plaintiff fails to meet his burden under Rule 56(f). Preliminarily, the Court observes that it is somewhat disingenuous for Plaintiff to move for Summary Judgement on part of the case, but to oppose Defendant's counter motion for summary judgment entirely by asserting that there has not yet been adequate discovery. Plaintiff filed his First Amended Complaint almost ten months ago and has had ample opportunity to conduct discovery or at the very least obtain declarations in support of its opposition. Furthermore, the Court observes that the dispositive motion deadline in this case is August 18, 2010, less than two weeks from now.
Plaintiff asserts that "the specific facts Plaintiff will elicit from discovery will be the specific dates and contents of all communications to Plaintiff's patients and third parties (other than State Farm) which are the subject of [Defendant's Counter Motion for Summary Judgment], together with the missing documents." 7/22/10 Shaw Decl. ¶ 8 (attached to Plaintiff's Counter Motion Opposition CSF). Plaintiff's counsel additionally declares that "[f]urther support exists for the existence of these essential facts and documents in that an attorney, who is also a patient of Painsolvers, has called [Plaintiff's counsel] about a fairly detailed series of contacts with State Farm regarding Painsolvers, some of which were intrusive and defamatory." Id. ¶ 11. The Court is not persuaded by these arguments.
As Defendant argues, Plaintiff's opposition amounts to a claim that Defendant is withholding documents that Plaintiff "imagines might support its defamation claim" and a fishing expedition in search of additional documents. Defendant's Reply at 7. Plaintiff, however, has not provided even a bare minimum of admissible evidence which might tend to support its
The Court is not persuaded by Plaintiff's argument that State Farm is purportedly withholding documents. Plaintiff argues that "State Farm admits contacting Plaintiff's patients by telephone, and in writing." Plaintiff's Counter Motion Opposition CSF ¶ 2. Plaintiff also asserts that "State Farm fraudulently concealed responsive documents." Plaintiff's Reply at 13. Yet, Plaintiff has not pursued such a contention by filing a motion to compel discovery.
The Court is also not persuaded by Plaintiff's argument that he forewent a scheduled 30(b)(6) deposition of Defendant before being aware there was a cross motion. Plaintiff asserts:
For the foregoing reasons, the Court finds that Plaintiff has failed to meet his burden of demonstrating what specific facts could be discovered with additional discovery, the Court denies Plaintiff's 56(f) motion.
The Court further finds that Plaintiff has failed to meet its burden to show that there are issues of material fact relating to its trade libel or disparagement and slander claims.
As discussed above, to prevail on a claim for trade libel or disparagement, a plaintiff must show at a minimum (1) a publication; (2) which induces others not to deal with the plaintiff; and (3) special damages. Hawaiian Ins. & Guar. Co. Ltd. v. Blair Ltd., 6 Haw.App. 447, 454-55, 726 P.2d 1310, 1315 (1986) (quoting Restatement (Second) of Torts § 626 (1977)). To prove defamation under Hawai'i law, Plaintiff must establish four elements: (1) a false and defamatory statement concerning another; (2) an unprivileged publication to a third party; (3) the publisher was negligent; and (4) either actionability of the statement irrespective of special harm, or the existence of special harm caused by the publication. Wilson v. Freitas, 121 Haw. 120, 128, 214 P.3d 1110 (App.2009).
The only "evidence" or facts that Plaintiff purports to rely on in support of Plaintiff's claim that there was any defamation is the statement that "an attorney, who is also a patient of Painsolvers, has called [Plaintiff's counsel] about a fairly detailed series of contacts with State Farm regarding Painsolvers, some of which were intrusive and defamatory." 7/22/10 Shaw Decl. ¶ 11 (attached to Plaintiff's Counter Motion Opposition CSF). Plaintiff has not, however, submitted a declaration from this person stating what was said, and thus the Court is left only with hearsay statements and bald legal conclusions that there were defamatory statements made about Painsolvers.
At the hearing on these motions, Plaintiff asserted there was additional evidence that raises an issue of material fact regarding Plaintiff's trade libel and slander claims. First, Plaintiff argued that the denial forms attached to Defendant's Opposition CSF demonstrated that State Farm has defamed and slandered Painsolvers by sending letters to its patients accusing it of violating the law. Tr. at 18-19. The Court is not persuaded by this argument for multiple reasons. Defense counsel indicated that the denial forms are a form prescribed by the state insurance commissioner. Tr. at 31. A review of the denial forms themselves does not lead to the interpretation Plaintiff wishes. With the exception of two denial forms that indicate benefits were denied because the PIP benefits limit had already been exhausted, each denial form indicates that benefits were being denied because "[t]he additional information or loss documentation requested to determine if the claim presented should be paid or denied has not been received, pursuant to HRS 431:10C-304(3) and HRS 431:10C-103.5." See Defendant's Opposition CSF Exs. 1-29 (Exhibits 19 and 23 are the claims that were denied because benefits were exhausted).
Second, Plaintiff argued that Defendant had supplemented its document production to Plaintiff on Friday, July 30, 2010, just prior to the hearing on these motions, which was on Monday, August 2, 2010. Plaintiff argued that the supplemental document production provided further evidence of State Farm making defamatory statements about Painsolvers and Dr. Shandu. Subsequent to the hearing and with the consent of the parties, the Court has reviewed that supplemental production, bates-stamped SF 00868-SF 01000, and finds that it does not raise any issues of material fact regarding the trade libel or disparagement and slander claims. The supplemental documents consist predominately
Plaintiff has failed to raise issues of material fact on the trade libel or disparagement or slander claims. Accordingly, in light of the dearth of factual support for Plaintiff's trade libel or disparagement and slander claims, the Court grants Defendant's counter motion for summary judgment on those claims.
For the foregoing reasons, the Court: (1) DENIES Plaintiff's motion for summary judgment on Counts One through Four, Seven, and Eight of the first claim, which are the only remaining viable counts in the first claim because Counts Five, Six, and Nine were dismissed in the Court's 1/22/10 Order; (2) MAKES a Rule 56(d) Determination as discussed supra; (3) DENIES Plaintiff's Motion for Leave to File a Supplemental Declaration; and (4) GRANTS Defendant's counter motion for partial summary judgment on Plaintiff's second claim for trade libel or disparagement and Plaintiff's third claim for slander. Counts One through Four, Seven, and Eight of Plaintiff's first claim are all that remain for trial.
IT IS SO ORDERED.
Plaintiff requests that the Court take judicial notice of the Insurance Commissioner's Order. See Plaintiff's CSF, Declaration of Counsel and Request For Judicial Notice (located in between Exhibits A and B). Pursuant to Fed.R.Evid. 201, a court may take notice of facts that are capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. Fed.R.Evid. 201(b).
Hardy v. County of El Dorado, No. S-07-0799 RRB EFB, 2008 WL 268966, at *5 n. 17 (E.D.Cal. Jan. 29, 2008) (some citations omitted); see also Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992) (holding that a court "may take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue."). Thus, as Defendant has not objected, and it is an order from an administrative agency, the Court can take judicial notice of the Insurance Commissioner's Order. However, that case involves entirely different claims and parties and the Commissioner did not make a ruling on the merits of the disputed claims in that case. Therefore, it does not aid Plaintiff here. See Defendant's Combined Mem. at 14.
Furthermore, at oral argument, Plaintiff's counsel asserted that in light of Jou v. Dai-Tokyo, the unpublished decision in Jou v. Schmidt upon which Defendant relies is no longer good law. Jou v. Schmidt, No. 27652, 117 Haw. 524, 2008 WL 2267179, 2008 Haw.App. LEXIS 289 (App. June 4, 2008); see Tr. at 37-38; Defendant's Combined Mem. at 18-19. In the Jou v. Schmidt decision, the ICA "rejected [the provider's] argument that he was entitled to payment from [the insurer] after the applicable policy limits were exhausted." 2008 WL 2267179 at *1.
At oral argument, Plaintiff's counsel argued that the Jou v. Schmidt case:
Tr. at 37-38. Plaintiff's counsel acknowledged that, in asking the Court to find that an insurer could be liable for PIP benefits beyond the contractual maximum, he was asking this Court to make new law. Tr. at 40. The Court declines to do so. The Court told Plaintiff's counsel if he wished to pursue that point he should do so before the legislature. Tr. at 40:9-10.
First, as Jou v. Dai-Tokyo was decided prior to Jou v. Schmidt, Jou v. Dai-Tokyo could not have eliminated the "whole underpinning" of Jou v. Schmidt. Second, the Court observes that in a later, different Jou v. Dai-Tokyo Royal Ins. Co. case the ICA again rejected the provider's "argument that he was entitled to payment from [the insurer] after the applicable policy limits were exhausted." See Jou v. Dai-Tokyo Royal Ins. Co., No. 28106, 2008 WL 3919856 at *1 (App. Aug. 27, 2008). Although both of these ICA decisions are unpublished and thus do not establish precedent for Hawai'i courts, the Court finds them instructive in interpreting this ambiguous statutory scheme. Furthermore, the Court agrees that limiting the insurer's payment to its contractual obligation comports with general contract principles. See Salviejo v. State Farm Fire & Cas. Co., 87 Haw. 430, 434-435, 958 P.2d 552, 556-57 (App. 1998) (explaining "[o]ur jurisdiction follows the principle that liability insurers have the same rights as individuals to limit their liability") (internal quotation and citation omitted).
Additionally, the Court notes that the legislature has encouraged timely payments by including a steep interest penalty for untimely payments. See H.R.S. 431:10C-304(4) ("amount of benefits which are unpaid thirty days after the insurer has received reasonable proof of the fact and the amount of benefits accrued, and demand for payment thereof, after the expiration of the thirty days, shall bear interest at the rate of one and one-half per cent per month.")
Pursuant to D. Haw. Local Rule 56.1(h), "[a]ffidavits or declarations setting forth facts and/or authenticating exhibits, as well as exhibits themselves, shall only be attached to the concise statement. Supplemental affidavits and declarations may only be submitted with leave of court."
The Court denies Plaintiff's Motion. The Court finds that Plaintiff has not established good cause for its failure to timely file this declaration. The only reason that Plaintiff's counsel sets forth in its Motion for Leave is that "Plaintiff's counsel finally received a return call from a witness with vital information supporting claims two and three" and that "on August 4, 2010, Mr. Honda returned the calls and apologized that he was out of the office last week and could not return the messages left by [Plaintiff's counsel]." Motion for Leave at 1, Declaration of Counsel at 1. However, Plaintiff counsel's declaration indicates only that this proposed witness was out of the office "last week," i.e., the business week of July 26-30, 2010. Defendant's counter motion, however, was filed two weeks prior to that on July 12, 2010. Additionally, Plaintiff has had ample opportunity to pursue discovery on his claims in the ten months since he has filed his complaint and should not have been waiting until forced to oppose a motion for summary judgment to obtain the discovery necessary to support his claims. Thus, in the absence of any showing of diligence, the Court does not find good cause to permit leave to file a supplemental declaration.
Moreover, even were the Court to consider the Supplemental Declaration, the Court would find that Plaintiff still fails to meet its Rule 56(f) burden for many of the same reasons discussed in this section. The Supplemental Declaration does little more than provide a name for the proposed witness with knowledge of State Farm's allegedly defamatory statements referenced in Plaintiff's Reply, and it merely reiterates the conclusory assertion that State Farm made such statements. It does not, however, set forth the facts that Plaintiff expects to discover to support its claim with adequate specificity.
