United States District Court, M.D. North Carolina
CRYSTAL GRIMES, on behalf of Herself and others similarly Situated, Plaintiff,
GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant.
MEMORANDUM OPINION AND ORDER
D. SCHROEDER, CHIEF DISTRICT JUDGE.
Crystal Grimes, owner of a personal automobile insurance
policy issued by Defendant Government Employees Insurance
Company (“GEICO”), alleges that GEICO
systematically underpays claims for medical payments coverage
on North Carolina automobile insurance policies. (Doc. 1 at
1-2, 4.) Grimes seeks damages, for herself and others
similarly situated, based on breach of contract, breach of
the implied covenant of good faith and fair dealing,
violation of the North Carolina Unfair and Deceptive Trade
Practices Act, N.C. Gen. Stat. §§ 75-1.1, et
seq. (“UDTPA”), and aggravated bad
faith/tortious breach of contract in violation of Chapter 1D
of the North Carolina General Statutes. (Doc. 1.) Before the
court is GEICO's motion to dismiss the complaint and to
compel arbitration pursuant to Federal Rule of Civil
Procedure 12(b)(3), and alternatively to dismiss the
complaint pursuant to Federal Rule of Civil Procedure
12(b)(6). (Doc. 12.) The motion is fully briefed and ready
for decision. For the reasons set forth below, the motion to
dismiss and to compel arbitration pursuant to Rule 12(b)(3)
will be DENIED and the motion to dismiss pursuant to Rule
12(b)(6) will be GRANTED.
owns a personal automobile insurance policy issued by GEICO
that includes coverage for medical payments
(“MedPay”) up to $5, 000 per person per accident.
(Doc. 1 ¶¶ 10, 15.) Her policy was in effect when
she was injured in a car accident. (Id. ¶¶
11, 15, 27-28.) Grimes received medical treatment for her
injuries from several medical providers, including WakeMed,
Wake Emergency Physicians, PA, and EmergeOrtho. (Id.
¶ 29.) The gross total charge for her medical treatment
was $4, 436.97: WakeMed charged Grimes $1, 835.42, Wake
Emergency Physicians, PA charged her $570, and EmergeOrtho
charged her $2, 031.55. (Id. ¶¶ 31, 35.)
Grimes submitted claims to GEICO for $4, 436.97 in medical
expenses and sought reimbursement under the MedPay coverage
provision. (Id. ¶ 34.)
MedPay provision states, in relevant part:
We will pay reasonable expenses incurred for necessary
medical and funeral services because of bodily injury:
1. Caused by accident; and
2. Sustained by an insured.
We will pay only those expenses incurred for services
rendered within 3 years from the date of the accident.
. . .
Expenses are reasonable only if they are consistent with the
usual fees charged by the majority of similar medical
providers in the geographical area in which the expenses were
incurred for the specific medical service.
Services are necessary only if the services are rendered by a
licensed medical provider within the scope of the
provider's practice and license and are essential in
achieving maximum medical improvement for the bodily injury
sustained in the accident.
We have the right to make or obtain a utilization review of
the medical expenses and services to determine if they are
reasonable and necessary for the bodily injury sustained.
* * *
The amount due under this coverage shall be decided by
agreement between the insured and us. If there is no
agreement, the amount due shall be decided by arbitration
upon written request of the insured or us. Each party shall
select a competent and impartial arbitrator. These two shall
select a third one. If unable to agree on the third one
within 30 days, either party may request a judge of a court
of record in the county in which the arbitration is pending
to select a third one. The written decision of any two
arbitrators shall be binding on us, the insured, any assignee
of the insured and any person or organization with whom the
insured expressly or implied contracts for the rendition of
medical services. The arbitrators' decision shall be
limited to whether or not the medical expenses were
reasonable and the services were necessary, with the amount
due being equal only to the reasonable expenses for necessary
services. The arbitrators shall not award punitive damages or
other noncompensatory damages.
* * *
(Doc. 1-2 at 6-8.)
found that Grimes's injuries were caused by the car
accident, necessary, and not subject to any exclusions. (Doc.
1 ¶¶ 36-38.) GEICO also found that Grimes's
medical charges had been discounted by the providers in the
amount of $2, 461.70 because of “health insurance
contractual allowances, ” and GEICO reimbursed Grimes
for the difference - $1, 975.27. (Id. ¶¶
39, 45; see Docs. 1-4, 1-5, 1-6.)
alleges that GEICO has no right to reduce the medical
expenses she incurred “on account of any adjustment
made by any health insurer” and that by doing so
breached the MedPay coverage in her policy. (Doc. 1
¶¶ 44-46.) In response, GEICO timely requested
arbitration (Doc. 13-1), but Grimes refused (Doc. 13-2).
Motion to Dismiss for Improper Venue and to Compel
clauses are a subset of forum-selection clauses, which are
enforced in this circuit pursuant to a Rule 12(b)(3) motion
to dismiss for improper venue. Gold Mine Jewelry
Shoppes, Inc. v. Lise Aagaard Copenhagen, A/S,
240 F.Supp. 3D 391, 394 (E.D. N.C. 2017) (citing Aggarao
v. MOL Ship Mgmt. Co., Ltd., 675 F.3d 355, 365 n.9 (4th
Cir. 2012)). The court may examine evidence outside the
pleadings when considering the motion. Id. A
plaintiff need only make a prima facie showing of proper
venue, and in assessing whether there has been such a showing
the court draws all reasonable inferences in the light most
favorable to the plaintiff as the non-moving party.
argues that the MedPay provision contains a clear and
unequivocal arbitration clause that applies to Grimes's
claims. (Doc. 13 at 2.) Consequently, it contends, the court
should dismiss the case and compel arbitration pursuant to
Rule 12(b)(3). (Id.) It also argues that because the
arbitration provision does not authorize class arbitration,
only Grimes's individual claims are arbitrable.
(Id.) Grimes responds that GEICO's arbitration
provision is expressly limited to whether expenses are
“reasonable” and ...