United States District Court, D. Colorado
OPINION AND ORDER
Raymond P. Moore, Judge
On March 2, 2015, plaintiffs Piotr Aurzadniczek (“Aurzadniczek”) and Jamie Beard (“Beard, ” with Aurzadniczek, “plaintiffs”) filed an Amended Complaint against defendants Humana Health Plan, Inc., Humana Insurance Company (collectively, “defendants”) and eHealthInsurance Services, Inc. (“eHealth”), asserting the following ten claims for relief: (1) breach of contract against defendants and eHealth; (2 to 4) reformation, claim for benefits under reformed contract, and breach of a reformed contract against defendants; (5) negligent misrepresentation against defendants and eHealth; (6 to 7) common law and statutory bad faith against defendants; (8) willful and wanton breach of contract against defendants; (9) violation of the Colorado Consumer Protection Act (“the CCPA”) for multiple deceptive trade practices against defendants and eHealth; and (10) loss of consortium against defendants. (ECF No. 27.)
On March 16, 2015, defendants and eHealth each filed separate motions to dismiss the respective claims raised against them in the amended complaint, pursuant to Fed.R.Civ.P. 12(b)(6) (“Rule 12(b)(6)”). (ECF Nos. 41, 42.) Plaintiffs filed responses in opposition to both motions to dismiss (ECF Nos. 45, 46), and defendants and eHealth each filed replies (ECF Nos. 55, 58). After referral, U.S. Magistrate Judge Kathleen M. Tafoya entered a report and recommendation (“R&R”), recommending that (1) eHealth’s motion to dismiss be granted in full; and (2) defendants’ motion to dismiss be granted in part and denied in part. (ECF Nos. 51, 66.)
Shortly after entry of the R&R, plaintiffs and eHealth stipulated to the dismissal of all claims against eHealth, and eHealth was then terminated as a party to this action. (ECF Nos. 67, 68.) As a result, the Court finds eHealth’s motion to dismiss, as well as the Magistrate Judge’s recommendations with respect thereto, to now be moot. As such, the Court DENIES eHealth’s motion to dismiss as MOOT. The same is not the case for defendants. (See ECF No. 67.) As such, both defendants and plaintiffs filed objections to the R&R,  as well as responses to the objections. (ECF Nos. 70, 71, 78, 79.) Accordingly, defendants’ motion to dismiss and the R&R with respect thereto are now before the Court.
I. Legal Standard
In evaluating a motion to dismiss under Rule 12(b)(6), a court must accept as true all well-pleaded factual allegations in the complaint, view those allegations in the light most favorable to the non-moving party, and draw all reasonable inferences in the plaintiff’s favor. Brokers’ Choice of America, Inc. v. NBC Universal, Inc., 757 F.3d 1125, 1135-36 (10th Cir. 2014); Mink v. Knox, 613 F.3d 995, 1000 (10th Cir. 2010). In doing so, “a court may look both to the complaint itself and to any documents attached as exhibits to the complaint.” Oxendine v. Kaplan, 241 F.3d 1272, 1275 (10th Cir. 2001). In the complaint, the plaintiff must allege a “plausible” entitlement to relief. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-556, 127 S.Ct. 1955 (2007). A complaint warrants dismissal if it fails “in toto to render [plaintiff’s] entitlement to relief plausible.” Id. at 569 n.14.
II. Review of a Magistrate Judge’s Report and Recommendation
A district court may refer pending motions to a magistrate judge for entry of a report and recommendation. 28 U.S.C. §636(b)(1)(B); Fed.R.Civ.P. 72(b). The court is free to accept, reject, or modify, in whole or in part, the findings or recommendations of the magistrate judge. 28 U.S.C. §636(b)(1); Fed.R.Civ.P. 72(b)(3). A party is entitled to a de novo review of those portions of the report and recommendation to which specific objection is made. See Fed.R.Civ.P. 72(b)(2), (3). “[O]bjections to the magistrate judge’s report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review.” United States v. 2121 E. 30 St., 73 F.3d 1057, 1060 (10th Cir. 1996). Furthermore, arguments not raised before the magistrate judge need not be considered by this Court. Marshall v. Chater, 75 F.3d 1421, 1426 (10th Cir. 1996) (“Issues raised for the first time in objections to the magistrate judge’s recommendation are deemed waived.”).
III. Factual Background
Defendants do not challenge the Magistrate Judge’s recitation of the factual background, as gleaned from the amended complaint and the documents referenced therein or attached thereto. (ECF No. 71 at 2.) In their objections, neither do plaintiffs. In their objections, plaintiffs do set forth a statement of facts section. (ECF No. 70 at 2-6.) Nowhere in that section, though, do plaintiffs challenge any of the factual findings made in the R&R. (See id.) Instead, as well as asserting factual statements from the amended complaint, plaintiffs use it as an opportunity to make legal conclusions. (See, e.g., id. at 3 (“This title would not put a reasonable person of ordinary intelligence on notice and did not put Beard on notice the paragraph would contain a policy limitation.”)) Thus, in plaintiffs’ objections to the R&R, the Court does not discern any specific objection to the factual background set forth in the R&R. See Fed.R.Civ.P. 72(b)(2); 2121 E. 30 St., 73 F.3d at 1060.
As discussed supra, in an unauthorized reply to defendants’ response to plaintiffs’ objections, plaintiffs appear to raise an objection to the Magistrate Judge’s finding that plaintiffs received a copy of their insurance policy in a letter sent to plaintiffs on December 14, 2013. (See ECF No. 81 at 4-6.) Even if the Court were prepared, which it is not, to consider plaintiffs’ reply, this objection does not reply to anything in defendants’ response. Rather, it raises an objection to the R&R; something which should have been raised in plaintiffs’ objections to the R&R. Because they failed to do so, the Court declines to consider this argument. In any event, even if the Court assumed that plaintiffs did not receive a copy of their insurance policy through the mail before December 19, 2013, as they allege (see id. at 5), this would make no difference to the Court’s findings and conclusions herein.
As a result, the Court ADOPTS the Magistrate Judge’s factual background in full.
IV. The Magistrate Judge’s Recommendations
The Magistrate Judge recommended granting defendants’ motion to dismiss with respect to Claims Two, Three, Four, Five, Eight, and Nine of the amended complaint,  while denying the motion to dismiss with respect to Claims One, Six, Seven, and Ten.
A. Claim One-Breach of Contract
Both parties object to the Magistrate Judge’s reasoning and recommendation with respect to Claim One. Before reaching those objections, though, it is important to understand a few pertinent facts as alleged in the amended complaint. On December 10, 2013, plaintiffs were approved for health insurance through defendants, and, at the very least, some form of coverage began on that date. (See ECF No. 27 at ¶¶ 8, 10.) On December 19, 2013, Aurzadniczek visited a doctor because he felt a lump on his left testicle, and, on the same day, Aurzadniczek received a scrotal ultrasound, revealing a mass on his testicle. (Id. at ¶¶ 13, 14.) Aurzadniczek was scheduled for surgery on December 20, 2013, but, because his provider was “unwilling[ ]” to perform the surgery due to the “purported December 25, 2013 sickness effective date” in Aurzadniczek’s insurance policy, the surgery was rescheduled for after December 25, 2013. (Id. at ¶ 14.) Aurzadniczek received additional care for his condition from December 26, 2013 through March 14, 2014. (Id. at ¶ 15.) Aurzadniczek then submitted 93 claims to defendants related to the treatment and care he received from December 19, 2013 through March 14, 2014. (Id. at ¶ 16.) Defendants denied three claims for services rendered on December 19, 2013, because those services were performed prior to the sickness effective date. All of Aurzadniczek’s remaining claims were also denied, this time though because the services rendered were related to a pre-existing condition. (Id.)
In this light, with respect to the breach of contract claim, there are two issues: (1) whether defendants breached the insurance policy in denying Aurzadniczek’s three claims for services rendered on December 19, 2013 because they occurred prior to the sickness effective date of the policy; and (2) whether defendants breached the insurance policy in denying all of Aurzadniczek’s remaining claims because they related to services rendered for a pre-existing condition. Resolving these questions requires interpreting, respectively, the sickness effective date and then the preexisting condition provision of plaintiffs’ insurance policy.
With respect to the first issue, the Magistrate Judge found that the sickness effective date was truthfully set forth in an application (“the Application”) that plaintiffs submitted to apply for health insurance through defendants, and the date also “featured prominently” on the first page of plaintiffs’ insurance policy. (ECF No. 66 at 10, 12.) Thus, although it is not specifically stated in the R&R, it appears that the Magistrate Judge found that plaintiffs’ breach of contract claim with respect to services rendered before December 26, 2013 did not state a claim. (See id. at 24.)
With respect to the second issue, the Magistrate Judge did not find the insurance policy to be quite as clear. Specifically, in interpreting the insurance policy’s definitions of “pre-existing condition” and “effective date, ” the Magistrate Judge found that a reasonable interpretation of those terms was that the effective date, for purposes of pre-existing conditions, was December 10, 2013. (Id. at 22.) The Magistrate Judge rejected defendants’ interpretation of the terms, finding that they would require reading the word “sickness” in to the definition of pre-existing condition “where it does not actually appear.” (Id. at 23-24.) The Magistrate Judge found that, at the very least, the terms were ambiguous, and thus, construed them against defendants as the drafters of the insurance policy. (Id. at 24.)
The Court agrees with the Magistrate Judge as to both issues. First is the applicability of the “sickness effective date” language in the insurance policy. In their objections, plaintiffs fail to make any specific objection to the Magistrate Judge’s finding that the breach of contract claim was cognizable as to only services rendered after December 25, 2013. In this regard, the only statements that plaintiffs make are that: “the breach of contract claim should stand as to all claims [for benefits], ” and “[t]he Magistrate Judge failed to analyze the breach of contract claim as to the care prior to the sickness date.” (See ECF No. 70 at 6, 12.) These are not specific objections, and certainly give the Court no indication of how the Magistrate Judge may have erred. Thus, the Court could adopt the Magistrate Judge’s finding in this respect without further review. See Fed.R.Civ.P. 72(b)(2); 2121 E. 30 St., 73 F.3d at 1060. However, for the sake of completeness, the Court will explain why it agrees with the Magistrate Judge’s finding.
First, the sickness effective date is clearly set forth in the Application. At various moments, plaintiffs have argued that the sickness effective date was “buried from view in small print deep within the [A]pplication.” (See, e.g., ECF No. 70 at 9.) This is simply not the case. The Application is five pages in length. (ECF No. 45-1.) Thus, to say anything is buried “deep” within it is stretching the meaning of deep burial. This is especially the case here where four of the five pages of the Application are questions to be completed by the applicant. (See id. at 1-4.) The only page containing language that could be deemed contractual is on page five of the Application, and this language takes up two paragraphs immediately preceding the applicants’ signatures. (See id. at 5.) As for plaintiffs’ contention that this language is in “small print, ” the Court notes that the print size is, at worst, merely exactly the same as all of the other text in the Application, including the questions. (See generally id. at 1-5.) Thus, to suggest that the print is small is a stretch unless all of the text in the Application, including the questions that plaintiffs had no alleged problem reading and answering, is also considered “small print.” The core of plaintiffs’ argument, though is the implication that the language in question is part of the fine print; where contractual exclusions or limitations usually go to hide. (See ECF No. 70 at 9, 15, 17.) Again, that does not reflect reality. The paragraph containing the sickness effective date may be relatively long, contain numerous acknowledgments and agreements, and not look that much fun to read, but it is in no sense part of the “fine print.” See Black’s Law Dictionary 750 (10th ed. 2014) (defining “fine print” as “[t]he part of an agreement or document - usu. in small, light print that is not easily noticeable - referring to disclaimers, restrictions, or limitations.”). Rather, the paragraph is perfectly noticeable; it is at the top of the page, it immediately follows the heading “Agreement and Signature” and the sub-heading “True and Complete Acknowledgment, ” and, as stated supra, the text is neither small nor light, ...