United States District Court, N.D. Ohio, Eastern Division
KATHLEEN O'KEEFFE, as successor trustee of the O'Connell Family Trust, individually and as a class representative, PLAINTIFF,
CONTINENTAL CASUALTY COMPANY DEFENDANT.
HONORABLE SARA LIOI, UNITED STATES DISTRICT JUDGE.
the Court is the motion to dismiss under Fed.R.Civ.P.
12(b)(6) filed by defendant, Continental Casualty Company
(“CNA”). (Doc. No. 13 [“Mot.”].)
Plaintiff Kathleen O'Keeffe (“O'Keeffe”
or “plaintiff”) filed a memorandum in opposition
(Doc. No. 15 [“Opp'n”]) and CNA filed a reply
(Doc. No. 16 [“Reply”]). For the reasons set
forth herein, CNA's motion is granted.
STANDARD ON A MOTION TO DISMISS
complaint must contain “a short and plain statement of
the claim showing that the pleader is entitled to
relief[.]” Fed.R.Civ.P. 8(a)(2). Although this pleading
standard does not require great detail, the factual
allegations in the complaint “must be enough to raise a
right to relief above the speculative level.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct.
1955, 167 L.Ed.2d 929 (2007) (citing authorities). In other
words, “Rule 8(a)(2) still requires a
‘showing,' rather than a blanket assertion, of
entitlement to relief.” Id. at 555, n.3
(criticizing the Twombly dissent's assertion
that the pleading standard of Rule 8 “does not require,
or even invite, the pleading of facts”) (internal
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550
U.S. at 570). Rule 8 does not “unlock the doors of
discovery for a plaintiff armed with nothing more than
conclusions.” Id. at 678-79. “While
legal conclusions can provide the framework of a complaint,
they must be supported by factual allegations. When there are
well-pleaded factual allegations, a court should assume their
veracity and then determine whether they plausibly give rise
to an entitlement to relief.” Id. at 679.
“The court need not, however, accept unwarranted
factual inferences.” Total Benefits Planning
Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552
F.3d 430, 434 (6th Cir. 2008) (citing Morgan v.
Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir.
to her death in 2018, plaintiff's decedent, Vivian
O'Connell (“O'Connell”), a North Dakota
resident, was insured under a CNA long-term care policy,
effective September 2, 1992. (Doc. No. 1, Complaint
[“Compl.”] ¶¶ 8, 15, 22; Mot. at
225.) A copy of this policy is attached to the
complaint as Exhibit B. (Doc. No. 1-2, Vivian O'Connell
LTC Policy [the “Policy”].) CNA has allegedly
sold “tens of thousands” of these, or similar,
policies. (Compl. ¶ 1.) There are two types of benefit
covered by the policies: the long-term care facility benefit
(the “LTCF Benefit”) and the “Alternate
Plan of Care Benefit” (the “APC Benefit”).
(Id. ¶ 2; Mot. at 225; Policy at 130- 31.)
2007, a nationwide class of plaintiffs (which included
O'Connell) sued CNA. See Pavlov v. Cont'l Cas.
Co., N.D. Ohio Case No. 5:07-cv-2580. The
Pavlov litigation challenged CNA's practice of
denying LTCF Benefit claims on the basis that the facility
for which coverage was sought did not have a nurse
on-site 24 hours a day, seven days
a week. The plaintiffs in Pavlov argued that there
was no on-site requirement in the
2009, this Court approved a settlement agreement in
Pavlov, a copy of which is attached as Exhibit A to
the instant complaint. (Doc. No. 1-1 [“Pavlov
Settlement”].) Under the terms of the Pavlov
Settlement, as to Class II policyholders,  CNA agreed to
abandon the 24/7 on-site requirement for the policies at
issue and agreed to pay the full daily LTCF Benefit Amount as
long as the facility had a qualified nurse on-site for at
least five hours per day, seven days per week (“the
35-Hour Standard”). (Compl. ¶¶ 3, 37.) In
circumstances where a facility did not satisfy the new
35-Hour Standard, CNA was required by the settlement to offer
an APC Benefit equal to 25% of the greater of the daily LTCF
Benefit under the policy or the daily cost of the facility,
provided such benefit did not exceed the lesser of the daily
LTCF Benefit or the daily cost of the facility. (Id.
¶ 3 (citing Pavlov Settlement at 44, Section
V.B.2.ii.a); ¶¶ 4, 38.) Notably, the
Pavlov Settlement also provided: “The claims
handling changes discussed in this section [relating to the
policy's Nursing Services Requirement] shall not affect
any other term of the policy.” (Pavlov
Settlement at 45, Section V.B.4.)
about June 30, 2010, to be closer to her family,
O'Connell moved from a facility where she had been
receiving her full LTCF Benefit for approximately two (2)
years to the Edgewood Vista facility in Bismarck, North
Dakota. (Id. ¶ 42.) Because CNA determined that
Edgewood Vista did not provide the required level of nursing
coverage to qualify for the LTCF Benefit under the
Pavlov Settlement, O'Connell was offered
coverage under the APC Benefit, which she received for
approximately four (4) years. (Id. ¶¶
about September 16, 2014, CNA sent O'Connell a letter,
stating in relevant part:
This letter serves as notification that benefits under the
above Long Term Care policy have reached the policy's
Maximum Benefit Period of 2190 days. The Maximum Benefit
Period ended on August 29, 2014.
(Id. ¶ 45.)
instant putative class action complaint alleges, in Count
I, that CNA breached the Pavlov Settlement by
prematurely terminating the APC Benefit coverage allegedly
owed to O'Connell and to similarly situated
policyholders. (Id. ¶¶ 14, 15, 71.) Count
II raises a claim under an Illinois statute for recovery of
reasonable attorney fees and ...