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Peoples v. United Services Automobile Association

United States District Court, W.D. Washington, Seattle

May 7, 2019

KRISTA PEOPLES, Plaintiff,
v.
UNITED SERVICES AUTOMOBILE ASSOCIATION, et al., Defendants.

          ORDER GRANTING PLAINTIFF'S MOTION TO AMEND COMPLAINT

          Robert S. Lasnik, United States District Judge.

         This matter comes before the Court on “Plaintiff's Motion to Amend Complaint.” Dkt. #53. For the following reasons, plaintiff's motion is GRANTED.

         INTRODUCTION

         Plaintiff Krista Peoples is an insured of defendants United Services Automobile Association and USAA Casualty Insurance Company (collectively “USAA”). Dkt. #1-1 at ¶ 11. On September 26, 2015, plaintiff was involved in an automobile accident in Seattle, Washington. Id. at ¶ 7. Plaintiff sought medical treatment for injuries sustained during the accident and submitted a claim for reimbursement under the Personal Injury Protection (PIP) coverage of her policy. Id at ¶¶ 17, 22. USAA denied full payment of plaintiffs medical expenses. Id at ¶ 34.

         Under the Washington PIP statute, RCW 48.22.005(7), insurers are required to cover all “reasonable and necessary” medical expenses incurred by an insured as a result of injuries sustained in an automobile accident. Plaintiffs complaint alleges that USAA uses an automated, computerized program to determine whether submitted claims “exceed[] a reasonable amount for the service provided.” Id at ¶ 30. Plaintiff alleges that USAA does not independently investigate bills before denying coverage. Id at ¶¶ 28-30. Plaintiff alleges that this practice violates the Consumer Protection Act (CPA), RCW 19.86, and moved for class certification of the CPA claim under Fed.R.Civ.P. 23(a) and (b)(3). Id; Dkt. #23.

         On March 8, 2019, while the class certification motion was pending, plaintiff moved to amend her complaint. Dkt. #53. Plaintiff seeks to add an individual and a class claim for breach of contract. Id The proposed amendments include allegations that defendants' automated computer review relies on a sample of nationwide fees and does not distinguish reasonable charges within a specific geographic area. Id at 4-5. On April 26, 2019, the Court granted plaintiffs motion to certify the following class for purposes of the CPA claim. Dkt. #60.

All Washington insureds who from September 1, 2015 to July 5, 2018 (“Class period”) had their PIP claims for reimbursement of medical expenses reduced by Defendant USAA based solely on an Explanation of Reimbursement (“EOR”) form sent to the insured's provider stating that the bill exceeded a “reasonable amount for the service provided.”

Id at 8. Defendants do not oppose plaintiffs proposed addition of an individual breach of contract claim. Dkt. #57 at 2. Defendants object only to the addition of a class claim. Id

         DISCUSSION

         Courts “should freely give leave [to amend] when justice so requires.” Fed.R.Civ.P. 15(a)(2). The discretion in granting leave to amend is “to be applied with extreme liberality.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051-52 (9th Cir. 2003). Courts consider five factors in granting leave to amend: (1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether the pleading has previously been amended. Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990) (citing Foman v. Davis, 371 U.S. 178 (1962)). Courts must grant all inferences in favor of allowing amendment. Griggs v. Pace Am Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999). The party opposing amendment has the burden of showing that amendment is not warranted. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987).

         This motion is plaintiffs first motion to amend her complaint. Plaintiff argues that defendants will not be prejudiced by the amendment and that none of the other factors apply. Dkt. #53 at 6. Defendants argue that plaintiff unduly delayed filing her motion to amend and that they would be prejudiced by adding the proposed class contract claim. Dkt. #57 at 2.

         A. Undue Delay

         This Court has defined “undue delay” as a “delay that prejudices the nonmoving party or imposes unwarranted burdens on the court.” Mansfield v. Pfaff, No. C14- 0948JLR, 2014 WL 3810581, at *4 (W.D. Wash. Aug. 1, 2014). Defendants argue that plaintiff unduly delayed filing this motion because plaintiffs counsel has known about the information giving rise to the proposed contract claim since at least 2013. Id. at 6. Plaintiff asserts that she learned of the information after “recent discovery” in “litigation against USAA in another state” (Dkt. #53 at 1, 4), and the record is insufficient to determine whether plaintiff was aware of all of the facts at the time of her initial complaint. Even if plaintiff knew this information at the time of her original pleading, that fact alone does not constitute an adequate basis for denying leave to amend because defendant has not shown prejudice as a result of the alleged delay. Kische USA LLC v. Simsek, No. C16-0168JLR, 2017 WL 698790, at *4 (W.D. Wash. Feb. 22, 2017). Plaintiffs motion was filed before the deadline for amending pleadings, the close of discovery, and the dispositive motions deadline. See MidMoutain Contractors, Inc. v. Am Safety Indem Co., No. C10-1239JLR, 2013 WL 12116509, at *3 (W.D. Wash. May 7, 2013) (finding no undue delay where defendant knew about theory raised in its motion to amend at the time of the original pleading when no major litigation dates had passed). The Court does not find a basis for undue delay.

         B. ...


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