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Stephanie L. Wasko v. Coventry Health and Life Insurance Company D/B/A Healthamerica

September 27, 2011


The opinion of the court was delivered by: Judge Munley


Before the court for disposition is Defendant Coventry Health and Life Insurance Company's ("Coventry") motion to dismiss the complaint, or, alternatively, for a more definite statement. (Doc. 2). The motion has been fully briefed and is ripe for disposition.


Plaintiff Stephanie Wasko ("Wasko") applied for health insurance with Coventry on August 17, 2008. (Compl. ¶ 3). Coventry then issued a health insurance policy to Wasko effective October 1, 2008 in return for a premium. (Id. ¶ 10).

On October 13, 2008, Wasko had back pain "more intensely than ever before. . . ." (Id. ¶ 13). Wasko's doctors determined after several months that Wasko suffered from spondylolisthesis and spondylolysis which surgery would alleviate. (Id. ¶ 14).

Wasko's doctor "faxed a pre-certification coverage request to [Coventry] for posterior lumbar interbody fusion surgery on or about January 20, 2009." (Id. ¶ 15). Coventry approved the procedure but rejected the benefits request for a "CAPSTONE Spinal System as not medically necessary or otherwise experimental and investigational." (Id. ¶ 16). Wasko had surgery on January 29, 2009. (Id. ¶ 17). Coventry paid for the surgery. (Id. ¶ 18).

According to Wasko, Coventry investigated Wasko's medical background after realizing the cost of Wasko's medical condition. (Id. ¶19). Coventry informed Wasko by letter on February 24, 2009 that her coverage was rescinded due to "a medical history of chronic back trouble including Spondylolisthesis and lumbar disc displacement at L5/S1 and herniated disc at L4-5" and citing "a history of MRI and x-rays diagnosing and monitoring the above back condition that were not disclosed on the Application." (Id. ¶¶ 20, 21). Coventry also explained that Wasko's application did not reveal that she took Vicodin and Flexeril. (Id. ¶ 22).

Wasko alleges that she answered all application questions truthfully and was never further questioned before being issued coverage. (Id. ¶¶ 6-9). Wasko alleges that her application accurately represented that she had back pain requiring Vicodin and that she had "consulted or sought treatment, had treatment recommended, received treatment, been surgically treated or been hospitalized for" "an X-ray, electrocardiogram, cardiac catheterization, or any laboratory test or study." (Id. ¶¶ 24-27).

Wasko alleges that she had no diagnosis for her back pain at the time of her application, and that her doctors told her in June 2007 and January 2008 that she did not have spondylolisthesis or spondylolysis. (Id.¶ 28-2009). Wasko alleges she was not prescribed Flexeril until after her application. (Id. ¶ 30).

In accordance with Coventry's letter of February 24, 2009, Wasko requested reconsideration of Coventry's recision on March 9, 2009. (Id. ¶¶ 32-33). On April 17, 2009, Coventry informed Wasko that its decision to rescind coverage stood. (Id. ¶ 34).

Wasko filed her complaint in the Court of Common Pleas of Monroe County, Pennsylvania. (Compl. (Doc. 1-2)). The complaint asserts a claim for bad faith under 42 PA. CONS. STAT. ANN. § 8371 (Count I) and a claim for breach of contract (Count II). (Id.) On April 1, 2011, Coventry removed the action to this court. (Notice of Removal (Doc. 1)). Coventry then filed this motion to dismiss on April 8, 2011. (Doc. 2). The parties have briefed the motion, bringing the case to its present posture.


Because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000.00, the court has removal jurisdiction over the case. See 28 U.S.C. § 1332 ("district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States[.]"); 28 U.S.C. § 1441 (A defendant can generally remove a state court civil action to federal court if the federal court would have had original jurisdiction to address the matter pursuant to the diversity jurisdiction statute).

As a federal court sitting in diversity, we must apply state law. Chamberlain v. Giampapa, 210 F.3d 154, 158 (3d Cir. 2000) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938)). In this case, the relevant state is Pennsylvania. If the state supreme court has not yet addressed an issue before us, we must predict how that court would rule if presented with that issue. Nationwide v. Mutual Ins. Co., 230 F.3d 634, 637 (3d Cir. 2000). In so doing, we must examine the opinions of the lower state ...

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