DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

PAGES 1 - 56 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

BEFORE THE HONORABLE PHYLLIS J. HAMILTON, JUDGE

MOHAMMED AZAD, ET AL., ) 

 ) 

 PLAINTIFFS, ) NO. C-17-0618 PJH

 ) 

 VS. ) WEDNESDAY, JUNE 28, 2017 

 ) 

TOKIO MARINE HCC-MEDICAL ) OAKLAND, CALIFORNIA 

INSURANCE SERVICES GROUP, ) 

ET AL., ) 

) MOTION TO DISMISS 

 ) MOTION TO STRIKE 

 DEFENDANTS. ) 

____________________________) 

REPORTER'S TRANSCRIPT OF PROCEEDINGS

APPEARANCES:

FOR PLAINTIFFS: LIEFF CABRASER HEIMANN & BERNSTEIN 

 250 HUDSON STREET, 8TH FLOOR 

 NEW YORK, NEW YORK 10013 

 BY: RACHEL GEMAN, ESQUIRE 

 MEHRI & SKALET 

 1250 CONNECTICUT AVENUE NW, SUITE 300 

 WASHINGTON, DC 20036 

 BY: JAY ANGOFF, ESQUIRE 

 CUNEO, GILBERT & LADUCA, LLP 

 7733 FORSYTH BLVD., SUITE 1675 

 ST. LOUIS, MISSOURI 63105 

 BY: MICHAEL J. FLANNERY, ESQUIRE 

(APPEARANCES CONTINUED) 

REPORTED BY: DIANE E. SKILLMAN, CSR 4909, RPR, FCRR 

 OFFICIAL COURT REPORTER 

TRANSCRIPT PRODUCED BY COMPUTER-AIDED TRANSCRIPTION

Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 1 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

FOR PLAINTIFFS: CARNEY BATES & PULLIAM 

 519 WEST 7TH STREET 

 LITTLE ROCK, ARKANSAS 

 BY: DAVID SLADE, ESQUIRE 

FOR DEFENDANT NORTON ROSE FULBRIGHT 

TOKIO MARINE HCC: 1301 MCKINNEY, SUITE 5100 

 HOUSTON, TEXAS 77010 

 BY: GERARD G. PECHT, ESQUIRE 

 NORTON ROSE FULBRIGHT 

 98 SAN JACINTO BLVD., SUITE 1100 

 AUSTIN, TEXAS 78701 

 BY: M. SCOTT INCERTO, ESQUIRE 

FOR DEFENDANT GREENSPOON MARDER, P.A. 

HII: 2255 GLADES ROAD, SUITE 400-E 

 BOCA RATON, FLORIDA 33431 

 BY: GARRY W. O'DONNELL, ESQUIRE

 MINTZ, LEVIN, COHN, FERRIS,

 GLOVSKY AND POPEO 

 44 MONTGOMERY STREET, 36TH FLOOR 

 SAN FRANCISCO, CALIFORNIA 94104 

 BY: DANIEL J. HERLING, ESQUIRE 

FOR DEFENDANT HAIGHT, BROWN & BONESTEEL 

CONSUMER BENEFITS THREE EMBARCADERO CENTER, SUITE 200 

OF AMERICA: SAN FRANCISCO, CALIFORNIA 94111 

 BY: RENATA L. HODDINOTT, ESQUIRE 

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 2 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

WEDNESDAY, JUNE 28, 2017 9:03 A.M.

P R O C E E D I N G S 

THE CLERK: CALLING CIVIL CASE 17-00618 AZAD, ET AL.

VERSUS TOKIO MARINE HCC MEDICAL INSURANCE SERVICES GROUP, ET

AL.

COUNSEL, PLEASE STEP FORWARD AND STATE YOUR APPEARANCES.

THE CLERK: DEFENDANTS HERE AND PLAINTIFFS ON THIS

SIDE.

THE COURT: PLAINTIFFS CLOSEST TO THE JURY BOX.

DEFENSE ON THE OTHER SIDE.

AND WHOEVER IS GOING TO ARGUE, IF YOU WOULD COME FORWARD

PLEASE, STATE YOUR APPEARANCES, COME TO THE PODIUM.

ALL RIGHT. PLAINTIFFS' COUNSEL.

MS. GEMAN: GOOD MORNING, YOUR HONOR. RACHEL GEMAN

REPRESENTING PLAINTIFFS AZAD AND BUCKLEY.

I'LL BE ARGUING, WITH YOUR HONOR'S PERMISSION, IN RESPONSE

TO THE HCC DEFENDANT'S MOTIONS.

THE COURT: ALL RIGHT.

MR. FLANNERY: GOOD MORNING, YOUR HONOR. MICHAEL

FLANNERY WITH CUNEO GILBERT & LADUCA FOR THE PLAINTIFFS. AND

I WILL BE ARGUING ON THE HII MOTION.

THE COURT: ALL RIGHT. GOOD MORNING.

MR. SLADE: GOOD MORNING, YOUR HONOR. DAVID SLADE

FROM CARNEY, BATES & PULLIAM ON BEHALF OF AZAD AND BUCKLEY AND

I WILL BE ARGUING THE CBA MOTION.

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 3 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THE COURT: ALL RIGHT. GOOD MORNING.

DEFENSE?

MR. PECHT: GOOD MORNING, YOUR HONOR. GERRY PECHT

HERE ON BEHALF OF THE HCC DEFENDANTS. I'LL BE ARGUING THE HCC

MOTION TO DISMISS AND MOTION TO STRIKE. AND WITH ME IS MY

COLLEAGUE SCOTT INCERTO.

THE COURT: GOOD MORNING.

MR. INCERTO: GOOD MORNING, YOUR HONOR.

MS. HODDINOTT: GOOD MORNING, YOUR HONOR. RENATA

HODDINOTT APPEARING ON BEHALF OF CONSUMER BENEFITS OF AMERICA.

THE COURT: ALL RIGHT. GOOD MORNING.

MR. HERLING: GOOD MORNING, YOUR HONOR. DANIEL

HERLING ON BEHALF OF HEALTH INSURANCE INNOVATIONS, INC. 

I'D LIKE TO INTRODUCE YOU TO MY COLLEAGUE GARRY O'DONNELL

FROM BOCA RATON, FLORIDA, AND MR. O'DONNELL WILL BE ARGUING ON

BEHALF OF HII.

THE COURT: ALL RIGHT. I THINK THAT TAKES CARE OF

EVERYONE. YOU CAN BE SEATED.

WE ARE GOING TO START FIRST WITH HCC'S MOTIONS BECAUSE I

BELIEVE THEY FILED BOTH THE MOTION TO DISMISS AND MOTION TO

STRIKE, CORRECT?

MR. PECHT: YES, YOUR HONOR.

THE COURT: LET'S START FIRST WITH THE MOTION TO

DISMISS.

I'VE READ THE PAPERS. YOU MAY CERTAINLY ADD ANYTHING THAT

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 4 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

YOU THINK IS APPROPRIATE OR EMPHASIZE ANY PARTICULAR POINTS OR

DRAW ME A ROADMAP.

MR. PECHT: LET ME TRY TO DO THAT, YOUR HONOR.

OUR POSITION ON THIS IS SIMPLE. BASED ON THE ALLEGATIONS

AND THE DOCUMENTS THAT ARE REFERRED TO IN THE COMPLAINT, THERE

IS NO VIABLE CASE HERE AT ALL, LET ALONE A VIABLE FEDERAL

CLASS ACTION CASE.

THE COURT: OKAY. LET'S START WITH THAT ONE ISSUE,

THAT PRELIMINARY ISSUE ABOUT THE DOCUMENTS THAT YOU WISH THE

COURT TO CONSIDER.

YOU'VE CERTAINLY EXPANDED IT BEYOND WHAT I AM ACCUSTOMED

TO SEEING. WE HAVE ESSENTIALLY THREE CATEGORIES OF DOCUMENTS

OUTSIDE OF THE PLEADINGS THAT YOU REFER TO AND WANT THE COURT

TO CONSIDER BECAUSE THEY ARE INCORPORATED BY REFERENCE. I

THINK THAT'S YOUR POSITION, THEY ARE INCORPORATED BY REFERENCE

BY THE COMPLAINT.

NO PROBLEM WITH REGARD TO THE BROCHURE, THE POLICY, THE

APPLICATION FORM. THE CLAIM FILES ARE A LITTLE MORE

PROBLEMATIC. THERE SEEMS TO ME THERE MIGHT BE SOME DISPUTE OR

EXPLANATIONS NEEDED, ET CETERA, AND NOT I'M NOT CLEAR ABOUT

THE WEBSITE DISCLOSURES.

MR. PECHT: WELL, THEY REFERENCE THESE IN THE

COMPLAINT, YOUR HONOR. AND THEY SAY, FOR INSTANCE, FOR THE

WEBSITE DISCLOSURES, THE PLAINTIFFS SAY THAT THIS INFORMATION

WAS AVAILABLE ON THE WEBSITE, THAT THE BROCHURE WAS THERE.

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 5 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

NOW, AS IT TURNED OUT, AZAD AND BUCKLEY NEVER READ OR

REFERRED TO THE BROCHURE. SO THE WHOLE POINT ABOUT THE

BROCHURE IS REALLY A SIDE ISSUE. IN FACT, I THINK WHEN WE

KIND OF GO THROUGH THESE ISSUES, WE ARE GOING TO SEE THAT

THERE'S A VERY LIMITED ISSUE HERE, AND I'VE GOT A WAY TO, I

THINK, ADDRESS THAT VERY LIMITED ISSUE THAT WE HAVE IN THIS

CASE.

THE COURT: OKAY. WELL, I JUST WANT TO LET YOU KNOW

THAT YOUR MOTION READS MORE LIKE A MOTION FOR SUMMARY JUDGMENT

TO THE EXTENT THAT IT WANTS ME TO TAKE INTO ACCOUNT ALL THESE

VARIOUS DIFFERENT THINGS, ALBEIT THEY WERE REFERENCED IN THE

COMPLAINT, NONETHELESS I THINK YOU HAVE EXPANDED BEYOND THE

NOTION OF INCORPORATION BY REFERENCE OF MATTERS THAT ARE NOT

SUBJECT TO DISPUTE.

SO I WILL DETERMINE WHETHER OR NOT THERE REALLY IS ANY

DISPUTE ABOUT THE CONTENTS OF ANY OF THESE DOCUMENTS.

MR. PECHT: AND I APPRECIATE THAT.

I THINK YOU WILL SEE THAT THERE IS REALLY NO CONTEST ABOUT

THE RELIABILITY OF IT. AND IF YOU LOOK AT THE PLAINTIFFS'

BRIEF, THEY REALLY DON'T CHALLENGE THE INCORPORATED BY

REFERENCE ISSUES. THEY DON'T DISPUTE ANY OF THESE DOCUMENTS

AS BEING RELIABLE OR PART OF THE RECORD OR REFERENCED IN THE

COMPLAINT.

THE COURT: OKAY. WELL, I'LL DETERMINE WHICH ONES

ARE NECESSARY.

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 6 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

MR. PECHT: ALL RIGHT.

THE COURT: FOR THE COURT TO CONSIDER.

MR. PECHT: INITIALLY, YOUR HONOR, IF YOU LOOK AT THE

THRUST OF THE COMPLAINT INITIALLY, IT WAS REALLY THE THRUST OF

IT WAS WAS THAT THERE WAS CONFUSION WITH REGARD TO THE

PRE-EXISTING CONDITION EXCLUSION, AND THAT THAT CONFUSION

RESULTED FROM THIS BROCHURE THAT EXISTED AND FROM LOOKING --

COMPARING THE APPLICATION WITH THE INSURANCE POLICY.

AND WE, YOU KNOW, POINTED OUT AND ESTABLISHED BY THE

COMPLAINT THAT THESE TWO PLAINTIFFS -- AND WE ARE FOCUSED ON

THESE TWO PLAINTIFFS, AZAD AND BUCKLEY -- THEY DIDN'T READ OR

RELY UPON THE BROCHURE. THEY DON'T CLAIM THAT THEY DID. THEY

DON'T CLAIM THAT THEY SAW IT.

AND IF THEY DID ACCESS THE WEBSITE AND HAD ACCESS TO THIS

INFORMATION, THEY WOULD HAVE SEEN THAT ON THE WEBSITE IN MANY,

MANY PLACES THERE'S A REFERENCE TO THE PRE-EXISTING CONDITION

EXCLUSION AND IT'S IN THE APPLICATION THAT THEY SIGNED RIGHT

NEXT TO THEIR SIGNATURE THAT THERE IS A PRE-EXISTING CONDITION

EXCLUSION. AND IT'S IN THE INSURANCE POLICY, AND IT IS QUITE

CLEAR THAT IT APPLIES THAT THE INSURED HAD TREATMENT --

MEDICAL TREATMENT, DIAGNOSIS, CARE, OR ADVICE WITHIN THE LAST

SIX MONTHS PRIOR TO THE EFFECTIVE DATE OF THE POLICY.

AND THAT'S -- THERE'S NO AMBIGUITY ABOUT IT. THERE'S NO

DIFFICULTY REALLY IN UNDERSTANDING THAT BASIC CONCEPT.

IF YOU LOOK AT THE PLAINTIFFS' RESPONSE THEN TO OUR MOTION

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 7 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

TO DISMISS OUR OPPOSITION, THEY THEN PIVOT REALLY TO A

DIFFERENT ISSUE. AND THE ISSUE THAT THEY PIVOT TO IS ONE THAT

THERE IS UNREASONABLE AND IMPOSSIBLE TO FULFILL MEDICAL RECORD

REQUESTS.

AND -- BUT IF YOU LOOK AT THE ACTUAL REQUEST, THE ACTUAL

ISSUES BEFORE YOU, YOU WILL SEE WITH REGARD TO AZAD, THAT HE

WENT TO -- BY THE WAY, HE TAKES OUT A POLICY. AND IN HIS

POLICY APPLICATION HE SAYS HE HAD NO HISTORY OF CHEST PAINS,

AMONG OTHER THINGS. AND THEN SHORTLY AFTER HE TAKES OUT THE

POLICY, HE IMMEDIATELY GOES TO THE EMERGENCY HOSPITAL THREE

TIMES FOR CHEST PAIN ISSUES.

AND SO HE GOES TO THE EMERGENCY ROOM AT THIS FACILITY, AND

HE SEES A SINGLE DOCTOR, DR. BOTSWANI (PHONETIC). AND SO WHAT

HAPPENED IS THAT THERE WAS A RECORD REQUEST FOR THE EMERGENCY

ROOM RECORDS, WHICH WERE PROVIDED -- AND WE ARE NOT ASKING FOR

ANY MORE RECORDS FROM THE EMERGENCY ROOM -- AND THERE WAS A

REQUEST FOR DR. BOTSWANI'S RECORD, AND HE PRODUCED A RECORD

FOR THE DAY IN WHICH SHE CAME TO VISIT -- OR HE CAME TO VISIT

RATHER, BUT THERE WAS AN INDICATION THERE MIGHT BE ADDITIONAL

RECORDS, AND WE ASKED FOR THE ADDITIONAL RECORDS.

NOW, IT MAY BE WITH DR. BOTSWANI THAT THE RECORD THAT WE

ARE MISSING IS A SINGLE PIECE OF PAPER WITH A SINGLE SENTENCE

ON IT THAT SAYS, I HAVE NO OTHER DOCUMENTS, NO OTHER RECORDS

OTHER THAN THE RECORDS THAT I PROVIDED. SO THE RECORD

REQUEST, THE IDEA THAT IT'S UNLIMITED, UNREASONABLE,

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 8 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

IMPOSSIBLE TO FULFILL FOR MR. AZAD, COULD BE A SINGLE

DOCUMENT, A SINGLE PAGE, WITH A SINGLE SENTENCE.

WITH REGARD TO BUCKLEY, SAME THING. SHE WENT TO A

FACILITY. SHE HAD FACIAL SWELLING. THERE WAS AN INDICATION

IN THE RECORD THAT SHE HAD A HISTORY OF FACIAL SWELLING.

WE'VE ASKED FOR THE TREATMENT FACILITY THAT TREATED HER, THE

MEDICAL RECORDS, WHICH WERE PROVIDED, AND WE ARE NOT ASKING

FOR THOSE, HCC IS NOT ASKING FOR THESE.

SHE WENT TO A TREATING PHYSICIAN WHO THEY IN THEIR

COMPLAINT SAYS IS READY, WILLING, AND ABLE TO PROVIDE THE

DOCUMENTS. READY, WILLING AND ABLE -- THEY ALLEGE THAT IN THE

COMPLAINT. BUT HE HASN'T DONE IT YET. SO HE HASN'T DONE IT

YET.

SO WHAT HAPPENED IS, WAITING ON WHAT COULD BE A SINGLE

PIECE OF PAPER FROM AZAD, AND A DOCTOR WHO IS READY, WILLING,

AND ABLE TO PRODUCE THE MEDICAL RECORDS, HCC SAID WE CAN'T

FORCE THEM TO DO IT. WE CANNOT MAKE THE DOCTORS GIVE US THE

RECORDS. HCC CAN'T DO THAT, BUT THE PATIENT CAN. THE PATIENT

CAN.

THE PATIENT CAN GO TO DR. BOTSWANI AND SAY, IF YOU HAVE NO

OTHER RECORDS, JUST SEND THEM A LETTER SAYING YOU HAVE NO

OTHER RECORD. AND THEY CAN GO TO THE TREATING PHYSICIAN FOR

DR. BUCKLEY (SIC) AND SAY, YOU ARE READY, WILLING, AND ABLE TO

PRODUCE THEM, WOULD YOU PLEASE JUST PRODUCE THE DOCUMENTS TO

HCC, AT WHICH POINT IN TIME HCC CAN PROCESS THIS CLAIM, CAN

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 9 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

PROCESS THE CLAIM. AND IT CAN DETERMINE WHETHER OR NOT

THERE'S ANY -- WHETHER IT'S GOING TO PAY THE CLAIM OR NOT PAY

THE CLAIM.

YOU ASKED FOR A ROADMAP. OUR ROADMAP FOR THIS IS, LET'S

DO THAT. LET'S GET THIS, WHAT COULD BE A SINGLE PIECE OF

PAPER FROM DR. BOTSWANI AND THESE RECORDS THAT DOCTOR -- THAT

BUCKLEY SAYS IN HER COMPLAINT HER DOCTOR IS READY, WILLING,

AND ABLE TO PROVIDE. LET'S GET THOSE DOCUMENTS. LET'S ASSESS

THAT CLAIM. LET'S MAKE A DETERMINATION AS TO WHETHER IT IS

PAYABLE OR NOT PAYABLE. AND THEN WE WILL HAVE A CASE OR

CONTROVERSY TO DISCUSS. WE CAN THEN DISCUSS ALL THESE THINGS

ABOUT PRE-EXISTING CONDITIONS OR IF THE CLAIM WAS DENIED.

BUT THE CLAIM HASN'T BEEN DENIED. THE INFORMATION HAS

BEEN REQUESTED AND WE HAVEN'T GOTTEN THE INFORMATION YET. IT

IS NOT UNLIMITED. IT IS NOT MASSIVE. THESE ARE REALLY VERY

LIMITED REQUESTS FOR DOCUMENTS.

AND SO WHEN YOU ASKED FOR SORT OF A ROADMAP OR APPROACH OR

COMMON SENSE WAY OF DEALING WITH THIS, WE THINK THAT'S A WAY

TO DEAL WITH IT. WE CAN ABATE THIS CASE. WE CAN HAVE THIS

WHOLE CASE -- THE DETERMINATION MADE WITHIN A COUPLE OF WEEKS

ONCE WE GET THE RECORDS.

HCC COULD ASSESS THIS CLAIM WITHIN A WEEK AFTER GETTING

THE MEDICAL RECORDS THAT HAVE BEEN REQUESTED. SO WITHIN TWO

WEEKS FROM NOW, WE COULD HAVE A DETERMINATION, IF THEY GOT THE

RECORDS WITHIN A WEEK, A DETERMINATION ON TO WHETHER OR NOT

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 10 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THESE CLAIMS NEED TO BE PAID OR NOT. BUT WE HAVEN'T GOTTEN

THOSE RECORDS.

SO THAT'S, YOU KNOW, IF YOU DON'T DISMISS THESE CLAIMS,

WHICH WE THINK IS THE OTHER OPTION, DISMISSING THEM BECAUSE WE

DON'T BELIEVE THERE'S ANY CONFUSION WITH REGARD TO THE

PRE-EXISTING CONDITION AND WE DON'T BELIEVE THERE'S ANY --

THE COURT: SO WHAT'S -- THE FIRST OPTION IS?

MR. PECHT: FIRST OPTION IS LET'S ABATE IT AND HAVE

THEM PRODUCE THE DOCUMENTS. ABATE THE CLAIM AND HAVE THEM

PRODUCE THE DOCUMENTS, AND THEN HAVE HCC MAKE A DETERMINATION

AS TO THE COVERAGE UNDER THE POLICY.

IT'S NOT SORT OF A DIFFICULT THING TO DO, AND IT DOES SORT

OF RESOLVE THIS CASE. IT GETS US PASSED THIS PROBLEM THAT WE

HAVE WHICH IS THERE HAS BEEN NO DETERMINATION OF A

PRE-EXISTING CONDITION. THERE'S BEEN NO DETERMINATION OF A

LACK OF ELIGIBILITY. 

BECAUSE WE'VE REQUESTED DOCUMENTS AND THEY HAVEN'T BEEN

PROVIDED. AND THEY ARE LIMITED DOCUMENTS. THEY ARE NOT

UNREASONABLE. THERE'S NOT AN EVER INCREASING REQUEST FOR

DOCUMENTS FOR AZAD OR BUCKLEY.

SO THAT'S OUR SIMPLE APPROACH TO ALL OF THIS. AND WE

RESPECTFULLY SUBMIT THAT THAT'S ONE WAY OF ADDRESSING THESE

ISSUES.

YOU KNOW, A COUPLE OF OTHER POINTS.

THE COURT: BUT YOU'VE FILED A MOTION TO DISMISS THE

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 11 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

CLAIMS.

MR. PECHT: WE DID. WE DID FILE A MOTION TO DISMISS

BECAUSE WE THINK THEY ARE DISMISSIBLE CLAIMS --

THE COURT: FOR FAILURE TO STATE A CLAIM.

MR. PECHT: YEAH. WE THINK THEY HAVE FAILED TO STATE

A CLAIM BECAUSE THEY HAVE NOT DEMONSTRATED THAT THERE'S

ANYTHING THAT IS CONFUSING ABOUT THE PRE-EXISTING CLAIM (SIC)

EXCLUSION, AND THEY HAVE NOT DEMONSTRATED THAT THERE'S BEEN --

THE DOCUMENTS THAT ARE REFERENCED IN THE COMPLAINT DEMONSTRATE

IT'S NOT AN UNREASONABLE REQUEST FOR MEDICAL RECORDS. 

I'M JUST GIVING THE COURT ANOTHER OPTION. I AM

SUGGESTING, RESPECTFULLY, ANOTHER OPTION, A COMMON SENSE

APPROACH TO QUICKLY RESOLVING THIS ISSUE.

THE COURT COULD SAY, WELL, WE'LL LET THEM REPLEAD, GO

THROUGH ANOTHER ROUND OF MOTION PRACTICE. WE CAN DO THAT. I

MEAN THAT'S -- THAT COSTS A LOT OF MONEY, A LOT OF TIME AND

EFFORT, OR WE CAN HAVE A COMMON SENSE APPROACH IN WHICH THIS

THING CAN BE RESOLVED TWO WEEKS FROM NOW IF ONCE WE GOT THE

RECORDS, THEY CAN DECIDE THESE ARE VALID CLAIMS THAT SHOULD BE

PAID.

AND BY THE WAY, THAT COULD HAVE HAPPENED MONTHS AGO. THEY

COULD HAVE PROVIDED THESE LIMITED RECORDS. IT COULD HAVE

HAPPENED MONTHS -- BEFORE THE LAWSUIT WAS EVER FILED. IT

COULD HAVE HAPPENED. BUT THEY DIDN'T DO THAT. THEY CHOSE

INSTEAD TO BRING A -- YOU KNOW, THIS LARGE CLASS ACTION CASE

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 12 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

WHEN ALL WE WERE LOOKING FOR IS SOME VERY LIMITED RECORDS.

AND AZAD SAYS IN HIS OWN -- IN THE COMPLAINT, HIS OWN

ALLEGATION, THEY TOLD ME TO PROVIDE ADDITIONAL RECORDS. SO HE

IS NOT DISPUTING THIS. HE ALLEGES IT IN THE COMPLAINT.

SO THE OTHER THINGS, YOUR HONOR, IS WHEN YOU LOOK AT

BUCKLEY'S CLAIM, YOU KNOW, AS WE POINTED OUT IN THE COMPLAINT,

SHE ALSO FAILS TO MEET EVEN THE DEDUCTIBLE. SHE SAYS IN THE

COMPLAINT THAT HER CLAIM IS BELOW THE DEDUCTIBLE BY SEVERAL

THOUSAND DOLLARS.

SO -- AND SHE HAD THE POLICY UNTIL THE LAST DAY OF THE

POLICY AND THEN SHE SWITCHED OVER TO ANOTHER POLICY. SHE

CLOSED IT OUT RIGHT BEFORE THE LAST DAY OF THE POLICY. HER

CLAIM DOESN'T EVEN MEET THE DEDUCTIBLE. SO SHE'S NOT BEEN

DAMAGED. AND SHE DOESN'T CLAIM THAT SHE HAD ANY OTHER

INJURIES OR ANY OTHER PROBLEMS OR ANYTHING ELSE THAT WOULD

HAVE GOTTEN HER ABOVE THE DEDUCTIBLE. THAT'S NOT A PART OF

THE ALLEGATION. SO SHE DOESN'T EVEN HAVE A CLAIM THAT

SATISFIES THE DEDUCTIBLE.

SO -- AND THEN I'LL SAY THIS BECAUSE I THINK THIS IS

IMPORTANT. I SUSPECT YOU ARE GOING TO HEAR A LOT ABOUT THIS,

WHICH IS THAT THERE ARE THESE ANONYMOUS INTERNET POSTINGS.

AND MUCH OF THE COMPLAINT IN THIS CASE IS BASED ON ANONYMOUS

INTERNET POSTINGS.

WE HAVE CITED CASES, A NUMBER OF CASES WITH REGARD TO THE

LACK OF RELIABILITY OF ANONYMOUS INTERNET POSTINGS AND CASES

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 13 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THAT SAY THEY DON'T EVEN SATISFY THE MOST RUDIMENTARY ELEMENTS

OF RULE 11.

AND SO THAT IS WHAT THEY -- THEY CITE ALL THIS STUFF. YOU

CAN'T TELL WHO THE PERSON IS WHO POSTED IT. YOU DON'T KNOW

WHETHER THEY HAVE EVER HAD ANYTHING TO DO WITH HCC OR NOT,

WHETHER THEY WERE IN CALIFORNIA OR SOME OTHER STATE. YOU

CAN'T TELL ANYTHING BECAUSE THEY ARE ANONYMOUS.

AND, YOU KNOW, WE RESPECTFULLY SUBMIT THOSE SHOULD NOT BE

CONSIDERED, THESE ANONYMOUS INTERNET POSTINGS THAT THEY REFER

TO SO EXTENSIVELY IN THEIR COMPLAINT. THEY TRY TO FILL IN THE

GAPS IN A CASE THAT HAS, WE BELIEVE, NO MERIT. THEY TRY TO

FILL IN THESE GAPS WITH ALL OF THIS INTERNET STUFF THAT

DOESN'T AMOUNT TO -- AND, BY THE WAY, IS INCONSISTENT WITH THE

PLAINTIFFS' OWN EXPERIENCE AS DEMONSTRATED BY THE DOCUMENTS

REFERENCED IN THE COMPLAINT. INCONSISTENT WITH IT.

AND THEN WITH REGARD, YOUR HONOR, TO THE MOTION TO STRIKE,

YOU KNOW, THIS IS TO STRIKE THE CLASS ALLEGATIONS. AND THE

REASON WHY WE ARE ASKING TO STRIKE THE CLASS ALLEGATIONS IN

THIS PARTICULAR CASE AND WHY IN THIS CASE A MOTION TO STRIKE

IS APPROPRIATE IS BECAUSE NEITHER OF THESE PLAINTIFFS CAN

REPRESENT A CLASS THAT WAS ALLEGEDLY DECEIVED BY THIS

BROCHURE, TO THE EXTENT ANYONE COULD HAVE BEEN DECEIVED BY A

BROCHURE IN WHICH EVERYTHING ELSE ON THE WEB DEMONSTRATES

CONCLUSIVELY THAT THERE'S A PRE-EXISTING CONDITION EXCLUSION.

BUT TO THE EXTENT THAT'S WHAT THEY CLAIM, AND THAT IS WHAT

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15

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THEY CLAIM, THAT THIS BROCHURE SOMEHOW MISLED SOMEBODY

SOMEHOW, SOME WAY, OR THEY WERE CONFUSED, THEY CAN'T REPRESENT

A CLASS OF THOSE PEOPLE BECAUSE THEY DIDN'T READ OR RELY UPON

THE BROCHURE. THEY DON'T CLAIM THAT THEY DID. SO THEY ARE

NOT IN THE CLASS THAT THEY ARE PURPORTING TO REPRESENT HERE.

AND SIMILARLY, THEY CAN'T REPRESENT A CLASS OF INSUREDS ON

WHOM EVER INCREASING DEMANDS FOR MEDICAL RECORDS IMPOSSIBLE TO

FULFILL WERE MADE BECAUSE THERE WEREN'T EVER INCREASING

DEMANDS FOR MEDICAL RECORDS IMPOSSIBLE TO FULFILL ON EITHER

ONE OF THESE PLAINTIFFS. THE REQUEST FOR MEDICAL RECORDS ARE

VERY LIMITED. THEY ARE EASY TO FULFILL.

DR. BUCKLEY'S DOCTOR SAID HE'S READY WILLING AND ABLE TO

PROVIDE THE RECORDS, HE JUST HASN'T DONE IT.

AS I SAID, DOCTOR -- MR. AZAD'S DOCTOR COULD VERY WELL --

IT COULD BE SOME LIMITED RECORDS FROM HIM, BUT IT COULD ALSO

BE A SINGLE PIECE OF PAPER WITH A SINGLE SENTENCE ON IT THAT

SAYS I HAVE NO OTHER RECORDS BECAUSE I SAW HIM ONE TIME IN THE

HOSPITAL FOR THIS ONE TREATMENT, AND THAT'S ALL I DID.

AND NONE OF THE PROVIDERS OF THE MEDICAL SERVICES ARE --

HAVE A PROBLEM WITH THIS. THE TWO FACILITIES FOR WHOM THE

RECORDS WERE REQUEST (SIC) THEY PROVIDED THEM. SO THEY ARE

NOT SAYING THESE ARE UNREASONABLE OR UNLIMITED OR IMPOSSIBLE

TO SATISFY. AND HCC ISN'T CLAIMING THAT.

SO, IN CONCLUSION, YOUR HONOR, OUR MOTION TO DISMISS OR, I

WOULD SUBMIT, YOU KNOW, ANOTHER APPROACH, COMMON SENSE

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 15 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

APPROACH OF ABATEMENT UNTIL WE HAVE THIS AND THEN WE CAN HAVE

A CASE OR CONTROVERSY THAT'S NOT PREMATURE LIKE THIS ONE WE

BELIEVE IS BECAUSE WE HAVEN'T GOTTEN TO THE POINT YET OF

DETERMINING -- HCC HAS NOT GOTTEN TO THE POINT YET OF

DETERMINING WHETHER OR NOT THERE IS A VALID CLAIM HERE THAT

SHOULD BE PAID FOR EITHER OF THESE TWO BECAUSE WE ARE WAITING

ON THESE VERY LIMITED RECORDS THAT COULD BE VERY QUICKLY AND

EASILY PRODUCED.

AND I'M HERE TO ANSWER ANY MORE QUESTIONS, YOUR HONOR.

THE COURT: ALL RIGHT. THANK YOU. I DON'T HAVE ANY.

COUNSEL?

MS. GEMAN: THANK YOU, YOUR HONOR.

I THINK YOUR HONOR PUT YOUR FINGER ON IT WHEN YOU SAID

THAT THIS READS A BIT LIKE SUMMARY JUDGMENT. AND EVEN INDEED

MR. PECHT'S COMMENTS GO -- TALKING ABOUT SPECIFIC DOCTORS,

INTERACTIONS, PROVISIONS OF REQUEST, BUT NOWHERE HAS DEFENDANT

HCC ACTUALLY ACKNOWLEDGED OR SHOWN A BASIS TO DISMISS WHAT

THIS CASE IS ACTUALLY ABOUT.

THIS CASE IS NOT ABOUT THE EXISTENCE OF A -- WHAT HCC

ACKNOWLEDGES IS ONLY A SIX-MONTH PRE-EXISTING CARVE-OUT. WHAT

THIS CASE IS ABOUT IS THAT HCC SELLS INSURANCE UNDER FALSE

PRETENSES, AND THEIR FRAUDULENT SCHEME IS NOT A SIX-MONTH

INVESTIGATION, BUT AN UNLAWFUL FIVE YEAR LOOK-BACK WHICH

ITSELF SHOWS BOTH THE DELAY AND THE VIOLATION OF THE LAW AND

OF THE CONTRACT IN NOT USING A SIX-MONTH LOOK-BACK FOR

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 16 of 56
17

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

PRE-EXISTING CONDITIONS.

THE COURT: DOES THE CONTRACT LIMIT THEM TO A

SIX-MONTH LOOK-BACK?

MS. GEMAN: YES, MA'AM.

DEFENDANTS MOVED TO DISMISS THE CONTRACT CLAIMS SAYING WE

HAVEN'T CITED THE CONTRACT. AS YOUR HONOR NOTED, THERE'S NO

REAL QUESTION ABOUT THE POLICY. WE EVEN CITED SECTION 8 WHICH

IS THE CLAIMS PROCESSING SECTION. AND THE PREVIOUS SECTION --

THE TWO PREVIOUS EXPRESSLY TALKS ABOUT SIX MONTHS. AND

MR. PECHT HIMSELF MENTIONED SIX MONTHS IN HIS PRESENTATION.

BUT INDEED ALL THE RECORDS --

THE COURT: AND IS THAT PROVISION IN THE COMPLAINT?

YOU CITE PROVISION 8 BUT ONLY AS TO THE 30-DAY CLAIMS

PROCESSING LIMITATION. I DON'T RECALL SEEING ANYTHING ABOUT

THE SIX-MONTH PROVISION.

MS. GEMAN: NO, NO, YOU'RE RIGHT, YOUR HONOR. AND WE

DO CITE IN PARAGRAPH 41 HOW THERE IS A -- HOW THE PRE-EXISTING

LIMITATION PROVISION IS MISAPPLIED. WE DO ACKNOWLEDGE, OF

COURSE, THAT THERE IS A PRE-EXISTING CONDITION LIMITATION. WE

DON'T SAY THAT AMONG THE MANY WAYS IN WHICH IT'S ACTUALLY A

CABINED LIMITATION THAT DEFENDANTS DON'T HONOR IS THAT THEY GO

BACK FIVE YEARS VERSUS THE SIX MONTHS, BUT THEY THEMSELVES

HAVE SOUGHT TO INTRODUCE ALL THESE DOCUMENTS IN THE RECORD

THAT INDEED CORROBORATE WHAT WE ARE SAYING.

THE BASIC ALLEGATION IS THAT DEFENDANTS DON'T -- THEY SAY

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 17 of 56
18

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THEY ARE DOING ONE THING BUT THEY DO ANOTHER.

THE COURT: I'M NOT SURE I UNDERSTOOD.

MS. GEMAN: SURE.

THE COURT: DOES THE COMPLAINT REFERENCE SECTION 8

INSOFAR AS IT CONTAINS A SIX-MONTH AS OPPOSED TO A FIVE-YEAR

LOOK-BACK?

MS. GEMAN: YOUR HONOR, THE COMPLAINT DOES NOT

REFERENCE THE EXACT -- THAT SECTION. I CAN POINT YOUR HONOR

TO DOCUMENT 52 WHICH IS THE DECLARATION OF JOHN PADGETT AND

THAT IS SECTION 6 OF THE COMPLAINT. AS YOUR HONOR NOTED, WE

DID CITE EXPRESSLY SECTION 8 INCLUDING ITS PROMPT PAY

GUARANTEE.

BUT SECTION 6 DOES PROVIDE THAT PRE-EXISTING CONDITIONS

ARE THOSE RESULTING FROM CHARGES RESULTING DIRECTLY OR

INDIRECTLY FROM A CONDITION FOR WHICH A COVERED PERSON

RECEIVED MEDICAL TREATMENT, DIAGNOSIS, CARE, OR ADVICE WITHIN

THE SIX-MONTH PERIOD IMMEDIATELY PRECEDING SUCH PERSON'S

EFFECTIVE DATE, AND THAT THOSE ARE EXCLUDED FOR THE FIRST SIX

MONTHS.

THERE IS NO DISPUTE THAT THE PRE-EXISTING LIMITATION IS

SIX MONTHS. AND, IN FACT, THERE'S NO DISPUTE THAT DEFENDANTS,

CONTRARY TO THE CONTRACT, CONTRARY TO WHAT THEY COMMIT TO DO

HAVE THIS UNLAWFUL POLICY OF THIS FIVE-YEAR LOOK-BACK.

ALTHOUGH DEFENDANT MADE MUCH ABOUT THE FACT THAT THEIR RECORD

REQUESTS WERE REASONABLE --

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 18 of 56
19

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THE COURT: YOU SAY THE UNLAWFUL POLICY. DO YOU MEAN

THAT IT'S IN VIOLATION OF THE CONTRACTUAL PROVISION?

MS. GEMAN: I MEAN BOTH THAT IT IS IN VIOLATION OF

THE CONTRACT BECAUSE THE CONTRACT HAS A -- PARAMETERS ON THE

PRE-EXISTING LIMITATION AND THE CONTRACT ALSO PROVIDES FOR

ESSENTIALLY A PROMPT PAYMENT.

WE ALSO ALLEGE THAT THE POLICY OF USING THIS UNLAWFUL

LOOK-BACK AS A WAY TO --

THE COURT: WAIT. I'M STILL TRYING TO UNDERSTAND.

MS. GEMAN: SORRY.

THE COURT: WHAT MAKES IT UNLAWFUL?

MS. GEMAN: WHAT MAKES IT UNLAWFUL TO GO BACK FIVE

YEARS RATHER THAN SIX MONTHS WHICH IS I THINK YOUR HONOR'S

QUESTION --

THE COURT: YOU EXPLAINED THAT IT VIOLATES THE

CONTRACT BY DOING SO. BUT THAT DOESN'T IN AND OF ITSELF MAKE

IT UNLAWFUL.

MS. GEMAN: I UNDERSTAND, YOUR HONOR. 

OUR ALLEGATION IS IT IS UNLAWFUL IN THAT IT IS IN

VIOLATION OF THE UCL TO TELL PEOPLE THAT THERE'S ONE SET OF

POLICIES ONLY TO HAVE PEOPLE SUBMIT CLAIMS AND BE TOLD, LIKE

IN THE CASE OF MR. AZAD, GET ALL YOUR MEDICAL RECORDS FOR FIVE

YEARS.

THAT IS AN UNFAIR AND IN OUR VIEW UNLAWFUL PRACTICE.

DEFENDANTS THEMSELVES --

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 19 of 56
20

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THE COURT: UNLAWFUL AS USED IN THE UCL TYPICALLY

REFERS TO VIOLATION OF SOME STATUTORY OR REGULATORY PROVISION.

MS. GEMAN: CORRECT, YOUR HONOR.

AND WE DO CITE SECTION -- IN PARAGRAPHS 94 AND 95 -- I AM

SORRY, 93 AND 94, INSURANCE CODE 332 WHICH IS THAT AN INSURER

MUST COMMUNICATE FACTS MATERIAL TO A CONTRACT.

WE THINK THAT -- WE ALLEGE THAT THIS BYZANTINE PROBLEM OF

THIS UNDISCLOSED FIVE-YEAR LOOK-BACK WHICH IS A WAY TO

UNLAWFULLY EXPAND PRE-EXISTING CONDITIONS AND CREATE DELAY

VIOLATES 332.

WE ALSO NOTE, YOUR HONOR --

THE COURT: AND IS THE -- DOES THE CLASS DEFINITION

DEPEND UPON POLICY HOLDERS HAVING BEEN REQUESTED FOR FIVE

YEARS OF DOCUMENTS?

MS. GEMAN: THE CLASS -- NO. THE CLASS DEFINITION AS

WRITTEN -- IT'S AN OBJECTIVE DEFINITION. IT'S INDIVIDUALS WHO

HAVE -- I SHOULD SAY, YOUR HONOR, THAT OUR UNDERSTANDING IS

THAT THE FIVE YEARS IS REQUESTED AS A MATTER OF COURSE.

AND, INDEED, THE DOCUMENTS SUBMITTED IN THE COMPLAINT SHOW

THAT. SO IT'S NOT THE CASE THAT ONE PERSON WAS ASKED FOR FIVE

YEARS AND ONE PERSON WAS ASKED FOR SIX MONTHS. THEY GO BACK

FIVE YEARS. THAT'S WHAT THEY DO.

THE COURT: SO IS THE ALLEGATION THEN THAT CLASS

MEMBERS, TO THE EXTENT THAT A PARTICULAR CLASS MEMBER IS

CLAIMING A VIOLATION OF THE UCL UNLAWFUL PRONG, THAT PERSON

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 20 of 56
21

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

WOULD HAVE REQUESTED -- WOULD HAVE BEEN REQUESTED TO PROVIDE

FIVE YEARS OF MEDICAL RECORDS?

MS. GEMAN: I UNDERSTAND, YOUR HONOR.

THE WAY THE CLASS DEFINITION IS PHRASED IS NOT TIED TO A

PARTICULAR FIVE-YEAR REQUEST. IT'S A BROADER OR PERHAPS

SIMPLER DEFINITION THAT SAYS IT'S INDIVIDUALS WHO PURCHASED

THE POLICIES OR CALIFORNIA RESIDENTS FOR WHOM HCC DENIED THE

CLAIM.

THE COURT: ALL RIGHT. BUT THERE IS A DIFFERENCE

THOUGH, WOULDN'T YOU SAY, BETWEEN SOMEONE WHO WAS REQUESTED TO

PROVIDE ONLY SIX MONTHS' WORTH OF MEDICAL RECORDS AS OPPOSED

TO FIVE YEARS?

MS. GEMAN: BUT, YOUR HONOR, RESPECTFULLY, OUR

ALLEGATION IS THAT THEY DON'T ASK FOR SIX -- THAT'S -- YOUR

HONOR HAS EXACTLY PUT YOUR FINGER ON IT.

WHAT THEY TELL PEOPLE THEY ARE GOING TO DO IS THAT IT IS A

SIX-MONTH PRE-EXISTING PRE-X LIMITATION. WHAT THEY ACTUALLY

DO, AS ILLUSTRATED BY BOTH OUR PLAINTIFFS AND AS CORROBORATED

BY THE OTHER INFORMATION IN THE COMPLAINT IS SOMETHING TOTALLY

DIFFERENT BUT COMMON.

AND WHAT THEY DO THAT'S TOTALLY DIFFERENT FROM WHAT THEY

SAY THEY ARE GOING TO DO IS REQUEST FIVE YEARS OF RECORDS.

IT'S A DELAY TACTIC. IT WORKS. IT'S A WAY TO FIND

PRE-EXISTING CONDITIONS THAT ARE OUTSIDE THE PARAMETERS.

YOUR HONOR HAD ASKED A MINUTE AGO ABOUT THE UNLAWFUL PRONG

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 21 of 56
22

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

OF THE UCL, AND I HAD NOTED THAT WE PREDICATED THE COMPLAINT

ON INSURANCE CODE 332, THAT PORTION OF IT. YOUR HONOR ALSO

NOTICED FROM THE PAPERS THAT THE PARTIES BRIEFED THE -- AT

LEAST REFERENCED THE FACT THAT THE SORT OF WHAT'S CALLED

POST-CLAIMS UNDERWRITING THAT HCC IS DOING HERE IS NOT LAWFUL.

AND THE PAPERS DISCUSS INSURANCE CODE SECTION 10384.

IN OTHER WORDS, WE SAY THAT THE FIVE-YEAR LOOK-BACK, WHICH

IS JUST A VEHICLE TO DELAY AND DENY, WE SAY THAT IT NOT ONLY

VIOLATES THE CONTRACT AND NOT ONLY IS IT UNFAIR AND DECEPTIVE

BECAUSE THAT'S AN EXTREMELY ONEROUS REQUEST. SOMEBODY WOULD

WANT TO KNOW THEY ARE IN THIS SITUATION, NOT ONLY IS IT UNFAIR

AND DECEPTIVE, BUT IT IS UNLAWFUL NOT ONLY AS A VIOLATION OF

THE CODE THAT WE CITED IN THE COMPLAINT, BUT INDEED OTHER

STATUTORY PROVISIONS AS CITED IN THE PARTIES' PAPERS.

AND, YOU KNOW, THE DEFENDANTS DID NOT ADDRESS THIS ISSUE

AT ALL. WHAT THEY SAID IN THE BRIEFING ON THIS SUBJECT WAS,

WELL, YOU KNOW, WE HAVE TO BE IN COMPLIANCE BECAUSE IF WE

NEVER FORMALLY DENIED THE CLAIM, THEN, YOU KNOW, THEN THIS IS

NOT AN ISSUE.

BUT THAT'S JUST NOT CORRECT. THEY SAY WE DIDN'T CANCEL

THE INSURANCE POLICIES SO POST-CLAIMS UNDERWRITING DOES NOT

APPLY. WE SAY, NO, THAT IS NOT CORRECT. THIS IS EXACTLY --

AND THE CASES WE CITED DISCUSS THIS. THE PROBLEM WITH AN

INSURANCE COMPANY ACCEPTING PEOPLE'S PREMIUMS -- THESE ARE NOT

SO CHEAP DESPITE HOW MODEST THESE BENEFITS ARE -- MONTH AFTER

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 22 of 56
23

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

MONTH COLLECTING PAYMENTS, HAVING PEOPLE FACE THESE

CATASTROPHIC MEDICAL BILLS, AND IN THAT INSTANCE WHEN THERE IS

A MEDICAL EMERGENCY OR SITUATION WARRANTING PAYMENT, INSTEAD

OF PAYING THE BILLS OR ACTING PROMPTLY TO GO BACK TO THE SIX

MONTHS THAT THEY PROMISE, THEY TRY TO GO BACK FIVE YEARS.

IT'S ESSENTIALLY A WAY TO REDO THE WHOLE INSURANCE TO SAY,

WELL, MAYBE THERE IS SOMETHING FIVE YEARS AGO THAT WE CAN USE

AS AN EXCUSE. THAT IS NOT LAWFUL AND IT IS DECEPTIVE TO THE

EXTENT THEY DON'T TELL PEOPLE THAT IS GOING TO HAPPEN.

THE DEFENDANTS HAVE SAID, OH, WE CAN ESSENTIALLY MOOT THIS

CLASS ACTION BY ESSENTIALLY PAYING YOUR TWO CLIENTS IF THEY

GIVE US JUST ONE PIECE OF PAPER. BUT THAT'S NOT WHAT THE

RECORD REFLECTS. THE RECORD REFLECTS A LETTER TO MR. AZAD

SAYING WE WANT ALL YOUR MEDICAL RECORDS FOR FIVE YEARS.

THE RECORD REFLECTS, IN FACT, EVEN THE SCRIPT THAT THEY

CITE -- THERE'S A REAL QUESTION AS TO WHETHER ONE OF THE

PRESUMABLY MANY RECORDED DISCUSSIONS BETWEEN MR. AZAD AND THE

DEFENDANTS, THEY ONLY PUT IN ONE, BUT EVEN IN THAT ONE THERE'S

THIS CONFUSING LANGUAGE ABOUT FIVE YEARS. AND THEY DON'T

QUITE STAND BEHIND THAT BECAUSE THEN THE CONTRACT ITSELF IS

CLEAR ABOUT THE SIX MONTHS.

BUT I DON'T THINK THERE'S ANY DISPUTE IN THE PAPERS THAT

THEY SAY THEY GO BACK SIX MONTHS BUT THEY ACTUALLY GO BACK

FIVE YEARS.

THAT -- AND IT'S NOT JUST A TECHNICAL DIFFERENCE, SO WHAT,

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 23 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

SIX MONTHS, FIVE YEARS. OUR ALLEGATION IS THAT THIS IS A

FRAUDULENT SCHEME THAT THE GOING BACK OF FIVE YEARS IS ITSELF

A KIND OF UNLAWFUL SCHEME TO DELAY AND DENY.

THE COURT: YOU HAVEN'T PLED THAT CLEARLY --

MS. GEMAN: I APPRECIATE THAT, YOUR HONOR.

THE COURT: -- IN THE COMPLAINT. THIS IS THE FIRST

EXPLANATION THAT I'M GETTING ON THAT. THAT SEEMS TO ME TO BE

A VERY STRAIGHTFORWARD ALLEGATION. I DIDN'T SEE IT ANYWHERE.

MS. GEMAN: YOUR HONOR, I UNDERSTAND WHAT YOU'RE

SAYING. I WOULD -- LOOK, I AGREE WITH YOUR HONOR THAT THE

COMPLAINT SHOULD HAVE JUST SAID POINT BLANK SIX MONTHS, MAYBE

SIX MONTHS, FIVE YEARS, AND THAT'S A REALLY SHORT COMPLAINT.

WE DO HAVE A LOT OF INFORMATION IN THE COMPLAINT, AND I THINK

THE COMPLAINT AS PLEADED IS SUFFICIENT.

WE DO DISCUSS --

THE COURT: IS THAT THE MAIN ASPECT, THAT AND PUTTING

ASIDE THE CUSTOMER SERVICE ISSUES, IS IT CORRECT THAT THE

INITIAL THEORY, WHICH SEEMS TO BE MORE PROMINENT IN THE

COMPLAINT IS THE BROCHURE, IS THE ABSENCE OF CLEAR,

UNAMBIGUOUS STATEMENT OF THE PRE-EXISTING CONDITION EXCLUSION

IS NOT FOUND IN THE BROCHURE IS INDEED -- THE DEFENSE CORRECT

THAT THAT HAS BEEN CONCEDED BY PLAINTIFFS GIVEN THAT NEITHER

OF THE TWO NAMED PLAINTIFFS RELIED -- READ OR RELIED UPON THE

BROCHURE IN BUYING THE POLICY?

MS. GEMAN: WELL, YOUR HONOR, WE WOULD RESPECTFULLY

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 24 of 56
25

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

DISAGREE WITH THEIR CHARACTERIZATION OF OUR COMPLAINT.

YES, WE UNDERSTAND THAT WE QUOTE THE BROCHURE. THE IDEA

THAT WE'VE HIDDEN OR SOMEHOW PRETENDED NOT TO KNOW ABOUT

PRE-EXISTING CONDITIONS IS, OF COURSE, BELIED BY OUR COMPLAINT

WHICH TALKS A LOT ABOUT THEM.

OUR ALLEGATION, THOUGH, IS NOT THAT THE EXISTENCE OF

PRE-EXISTING LIMITATIONS WAS NOT DISCLOSED OR WAS SO

DIFFERENTIALLY DISCLOSED JUST TO CREATE AN ISSUE, ALTHOUGH

UNDER SOME CIRCUMSTANCES THAT, OF COURSE, COULD BE A CLAIM.

OUR ALLEGATION IS THAT THEY TAKE WHAT THEY SAY THEY ARE

DOING, WHICH IS A MORE SPECIFIC PRE-EXISTING CONDITIONS

LIMITATION AND DO EXACTLY THE OPPOSITE BY GOING MUCH BROADER

THAN THAT. SO I THINK --

THE COURT: IT JUST ISN'T CLEAR IN THE COMPLAINT AT

ALL.

MS. GEMAN: I GUESS I WOULD -- I APPRECIATE WHAT YOU

ARE SAYING, YOUR HONOR. I WOULD SUGGEST THAT PARAGRAPHS, YOU

KNOW, THE PARAGRAPHS DISCUSSING OUR PLAINTIFFS' CLAIMS AND

THEIR EXPERIENCES OF BEING TOLD TO GO GET FIVE YEARS OF

RECORDS, PARAGRAPHS 26 AND 33 TALK ABOUT THAT. I THINK YOU'RE

RIGHT, THAT WE PROBABLY SOMETIMES COULD HAVE USED SIMPLER

LANGUAGE AND LESS FLOURISHING LANGUAGE, BUT --

THE COURT: THIS COMPLAINT IS SIMPLY NOT A MODEL OF

CLARITY. THIS SEEMS TO ME TO BE A FAIRLY STRAIGHTFORWARD

ISSUE THAT YOU DESCRIBED HERE.

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 25 of 56
26

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

IF THIS IS THE MAIN ISSUE, THE MAIN THRUST OF THE

COMPLAINT IS THAT IT'S -- IT VIOLATES -- THEIR PRACTICE

VIOLATES THE UCL IN THREE DIFFERENT WAYS, ALL CENTERED AROUND

THE FACT THAT THEY ASKED FOR FIVE YEARS OF MEDICAL RECORDS

INSTEAD OF THE SIX THAT THE CONTRACT PERMITS. THAT IS SO

STRAIGHTFORWARD AND SO SIMPLE. 

AND I WOULD HAVE TO PUT TOGETHER ALL THESE VARIOUS

DIFFERENT FACTUAL ALLEGATIONS. AND YOU NEVER REFER TO SECTION

8, I BELIEVE IT'S SECTION 8 OF THE CONTRACT EXCEPT WITH REGARD

TO THE 30-DAY PROCESSING LIMITATION IN YOUR DISCUSSION OF THE

PRE-EXISTING CONDITION EXCLUSION. IT'S BURIED IN HERE, IF

IT'S HERE AT ALL, AND I SHOULDN'T HAVE TO TRY TO FIGURE THIS

OUT.

MS. GEMAN: I APPRECIATE THAT, YOUR HONOR. I THINK

THAT YOUR HONOR IS CORRECT THAT THIS -- IN YOUR

CHARACTERIZATION OF WHAT OUR ALLEGATIONS ARE. THEY SAY THEY

DO ONE THING, THEY DO ANOTHER. AND WHAT THEY DO IS UNLAWFUL

AND FRAUDULENT AND UNFAIR AND IN BAD FAITH.

I THINK THAT YOUR HONOR'S ALSO CORRECT THAT CERTAIN THINGS

ARE SORT OF ILLUSTRATED THROUGH THE NAMED PLAINTIFFS, AND SO

I'M NOT GOING TO, YOU KNOW, I'M NOT GOING TO DISAGREE WITH

YOUR HONOR THAT THERE'S CERTAIN THINGS THAT SHOULD BE IN THIS

COMPLAINT THAT JUST ARE -- THAT ARE INFERRED OR IMPLIED, BUT

THEY SHOULD JUST BE SAID SIMPLE.

THE COURT: THEY SHOULD BE SAID SIMPLY, AND YOU'VE

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 26 of 56
27

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

GOT A LOT OF STUFF IN HERE THAT DOESN'T NEED TO BE IN HERE, IN

MY VIEW. IT'S JUST SORT OF CONVOLUTED.

MS. GEMAN: YOUR HONOR --

THE COURT: IS IT CORRECT, THOUGH, THAT THE

ALLEGATION IS NOT AS IT APPEARED FROM MY FIRST READ OF THE

COMPLAINT THAT THE BROCHURE WAS DECEPTIVELY MISLEADING?

BECAUSE YOUR CLIENTS, AND COUNSEL IS ABSOLUTELY CORRECT,

IF THAT'S WHAT THIS IS BASED UPON AND YOUR CLIENTS DIDN'T READ

OR RELY UPON IT, THEY CERTAINLY WOULDN'T BE -- THEIR CLAIMS

ARE NOT TYPICAL OF THE REST OF THE CLASS AND I'M NOT SURE THEY

WOULD BE ADEQUATE CLASS REPRESENTATIVES. BUT THE PAPERS SEEM

TO ARGUE MORE THE FAILURE OF THE DEFENDANTS TO PROVIDE

INFORMATION --

MS. GEMAN: MATERIAL.

THE COURT: -- MORE SO THAN THE DECEPTION OF THE

ACTUAL BROCHURES. YOU SEEM TO BE WALKING BACK FROM THAT AND

TAKING THE POSITION THAT THE INFORMATION THAT WAS PROVIDED IS

SOMEHOW MISLEADING.

MS. GEMAN: IT'S -- YOUR HONOR, WE --

THE COURT: IT IS MORE OF AN OMISSIONS SORT OF

THEORY.

MS. GEMAN: WELL, YES. YOUR HONOR, WE DO ALLEGE

OMISSIONS IN OUR COMPLAINT IN MULTIPLE PLACES THAT, IN FACT,

THEY DON'T -- WE ALLEGE IT IN PARAGRAPH 53, PARAGRAPH 85,

PARAGRAPH 96.

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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

I WOULD -- BUT I DON'T WANT TO QUIBBLE WITH YOUR HONOR. I

WOULD SAY THIS: THAT IT'S NOT JUST ABOUT IS THE BROCHURE

DIFFERENT FROM THE OTHER DOCUMENTS.

THE COMMON -- WHETHER IT'S THROUGH THE BROCHURE OR ANY

OTHER CHANNEL, THE COMMON DECEPTION IS THAT IN NONE OF THE

MATERIALS THAT HCC PROVIDES TO ALL PROSPECTIVE INSUREDS IS

THEIR SCHEME DISCLOSED, IS THE MATERIAL INFORMATION THAT A

REASONABLE CONSUMER WOULD WANT TO KNOW DISCLOSED. AND WHAT

THEY DO SAY IS MISLEADING IN LIGHT OF THOSE OMISSIONS.

THE COURT: OKAY. WHAT, EXCEPT THE PRE-EXISTING

EXCLUSION THOUGH WOULD FALL INTO THAT CATEGORY?

MS. GEMAN: THE CATEGORY OF MISLEADING?

THE COURT: OR OF INFORMATION THEY DON'T PROVIDE.

MS. GEMAN: SO THEY DON'T -- RIGHT.

SO IN ADDITION TO WHAT WE THINK IS A HUGE ISSUE, THE

FIVE-YEAR LOOK-BACK BECAUSE IT'S UNLAWFUL AND DECEPTIVE.

THE COURT: WHAT, IN ADDITION TO THAT, IS AT ISSUE?

MS. GEMAN: THE SCOPE OF THE REQUEST AND THE FACT

THAT THEY DON'T -- THEY DON'T ENGAGE IN REASONABLE GOOD FAITH

CLAIMS PROCESSING. SOMEBODY WOULD WANT TO KNOW THAT.

NOW, MISREPRESENTATION OMISSION, I MEAN, OBVIOUSLY IT

WOULD BE A SURPRISE IF THEY PUT ON THEIR WEBSITE, YOU KNOW, WE

ENGAGE IN BAD FAITH DELAY. WE ARE NOT SAYING THAT THAT'S WHAT

WE WOULD HAVE EXPECTED TO SEE. BUT WHAT THE CLIENTS AND WHAT

ANY CUSTOMER WOULD EXPECT WOULD BE THAT THE DUTIES OF GOOD

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 28 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

FAITH WOULD BE APPLIED TO THEM.

WHEN THEY TAKE OUT AN INSURANCE POLICY AND PAY PREMIUMS,

KNOWING THAT THERE'S A SIX-MONTH PRE-EXISTING CONDITION

LIMITATION, THAT IN THE EVENT THAT SOMETHING CATASTROPHIC

HAPPENS, THEY'RE FACING A LOT OF MEDICAL PRESSURE -- I'M

SORRY, FINANCIAL AND MEDICAL PRESSURE, THAT WHAT THEY GET HIT

WITH IS, GET ALL YOUR MEDICAL RECORDS FOR FIVE YEARS, DELAY,

OBSTRUCTION, YOU KNOW, USE OF PRE-EXISTING CONDITIONS THAT ARE

BEYOND WHAT'S AGREED TO IN THE CONTRACT. THAT IS BAD FAITH.

AND SO IT'S NOT EVEN SO MUCH ABOUT THE -- WE DO CITE THE

BROCHURE, THAT'S CORRECT, BUT THERE'S NOTHING -- IT'S NOT

THAT, AGAIN, THAT THE BROCHURE SAYS ONE THING AND THERE'S

ANOTHER BROCHURE THAT SAYS ANOTHER THING. ALL OF THEIR

MATERIALS ARE CONSISTENTLY MISLEADING BASED ON THE OMISSIONS

THAT WE DISCUSSED, BASED ON THE REPRESENTATION OF THE

SIX-MONTH PRE-EXISTING CONDITION.

THE COURT: AND WHAT SPECIFICALLY MISLED THE TWO

NAMED PLAINTIFFS SINCE THEY DIDN'T READ OR RELY UPON THE

BROCHURE?

MS. GEMAN: WELL, I MEAN, THEY DID LEARN ABOUT THE

POLICY THROUGH SIMILAR CHANNELS. THEY, YOU KNOW, THERE'S AN

ENTIRE -- THERE'S AN ENTIRE TRANSCRIPT THAT DEFENDANTS

INTRODUCED THAT SHOWS MR. AZAD'S PRE-PURCHASE DISCUSSION WITH

THE COMPANY. WE ALLEGE THAT THEY BELIEVE -- CERTAINLY THEY

DIDN'T KNOW --

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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THE COURT: I'M JUST TRYING TO GET --

MS. GEMAN: A FLAVOR FOR WHAT WAS HAPPENING.

THE COURT: WHAT DID THEY RELY ON?

MS. GEMAN: THEY RELIED ON THE FACT THAT THIS WAS --

THAT THIS IS SHORT-TERM INSURANCE, IT'S SOMEWHAT LIMITED IN

COVERAGE, BUT THAT IT COVERS WHAT IT IS SUPPOSED TO COVER.

THE COURT: WHERE DID THEY LEARN THAT INFORMATION?

MS. GEMAN: SO IN THE CASE, YOUR HONOR, OF

MR. BUCKLEY, HE DID SOME RESEARCH. I JUST WANT TO LOOK FOR

THE COMPLAINT -- LOOK FOR THIS PARAGRAPH TO MAKE SURE I STATE

IT CORRECTLY.

YOUR HONOR, MR. AZAD CONDUCTED AN ONLINE SEARCH FOR HEALTH

INSURANCE, AND HE WAS DIRECTED TO THE WEBSITE FOR DEFENDANTS.

I'M LOOKING AT PARAGRAPHS 19 AND FOLLOWS IN THE COMPLAINT.

HE COMMUNICATED WITH THE BROKER AND RECEIVED, AGAIN,

CONSISTENT ORAL AND WRITTEN INFORMATION, AND THAT'S HOW HE

CAME TO HAVE THIS SHORT-TERM INSURANCE POLICY.

IN THE CASE OF --

THE COURT: HE WAS GIVEN INFORMATION BY A BROKER

VERBALLY?

MS. GEMAN: HE WAS. AND THAT INFORMATION IS IN THE

RECORD THAT DEFENDANTS INTRODUCED. AND IT'S -- AND, AGAIN,

NOWHERE --

THE COURT: WAS HE DIRECTED TO THE DEFENDANT'S

WEBSITE?

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 30 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

MS. GEMAN: HE WAS, I THINK, FREQUENTLY DIRECTED TO

THEIR WEBSITE. ESPECIALLY WHEN HE WAS TRYING TO GET HIS

CLAIMS FULFILLED AND THEY JUST KEPT PUTTING HIM IN THE CIRCLE

SAYING, GO TO THE WEBSITE, GO TO THE WEBSITE. 

WE'RE NOT SAYING THAT THE WEBSITE WAS SOMEHOW HIDDEN.

WE'RE SAYING IT'S FRAUDULENT BECAUSE THEY DON'T SAY WHAT THEY

ARE ACTUALLY DOING. AND ANYONE WHO LOOKS AT THE WEBSITE WOULD

THINK THERE'S A SIX-MONTH LIMITATION, OR WHAT HAVE YOU, AND

THEY WOULD THINK THIS IS INSURANCE. AND WHAT INSURANCE MEANS

IS THAT WHEN YOU HAVE AN EVENT THAT REQUIRES YOU TO NEED

INSURANCE, THAT THE CLAIM IS PAID. YOU DON'T THINK YOU GET

INSURANCE JUST TO GO INTO THIS CYCLE OF DELAY.

SO I DON'T, YOU KNOW -- I THINK THAT -- I THINK THAT THE

RELIANCE THAT I THINK YOUR HONOR IS ASKING ABOUT, WHICH IS OF

COURSE RELEVANT FOR SOME, NOT ALL OF THE CLAIMS, IS THAT

THEY -- YOU KNOW, HE UNDERSTOOD THAT THIS WAS SORT OF LIMITED

SHORT-TERM INSURANCE. HE DIDN'T UNDERSTAND AND COULDN'T

THROUGH REASONABLE DILIGENCE HAVE UNDERSTOOD THAT INSTEAD OF

GOING BACK SIX MONTHS THEY GO BACK FIVE YEARS.

THE COURT: THAT'S THE ONLY REAL CONCRETE THING THAT

I CAN REALLY SORT OF PUT MY HANDS AROUND IN THIS CASE. I

MEAN, YOU'VE EXPLAINED IT TODAY. I DIDN'T UNDERSTAND IT

BEFORE I CAME OUT HERE. AND THAT SEEMS TO ME TO STATE A

PLAUSIBLE CAUSE OF ACTION BECAUSE IT'S CONCRETE.

A LOT OF WHAT YOU'VE ASSERTED ARE SUBJECTIVE BELIEFS ABOUT

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 31 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

HOW COMPANIES SHOULD DO THEIR BUSINESS. MOST CONSUMERS ARE

NOT TERRIBLY HAPPY WITH THE WAY BUSINESS DOES -- HANDLES ITS

CUSTOMER SERVICE. THAT'S THE HARDEST ASPECT I THINK OF THE

INTERFACE BETWEEN BUSINESS AND CONSUMERS. 

BUT THAT ONE THING IS BURIED IN HERE AND EVERYTHING ELSE

SEEMS TO BE TOTALLY SUBJECTIVE. MOST OF THE CUSTOMER SERVICE

ASPECTS OF THE, IF I'M UNDERSTANDING IT, THERE ARE ESSENTIALLY

THESE TWO CATEGORIES OF COMPLAINTS. ONE HAVING TO DO WITH THE

PRE-EXISTING CONDITIONS AND HOW THAT'S CONVEYED AND HOW IT'S

PROCESSED, AND THEN THE OTHER WITH THE ACTUAL CLAIMS HANDLING

PROCEDURES.

I'M VERY INCLINED, BASED UPON WHAT I HAVE HEARD SO FAR, TO

DISMISS THE CLAIMS, ALL OF THEM, WITH LEAVE TO AMEND SO YOU

CAN STATE IT FAR MORE CLEARLY.

BUT -- WELL, I MEAN THAT'S ESSENTIALLY --

MS. GEMAN: I UNDERSTAND.

THE COURT: -- WHERE I AM.

MS. GEMAN: I UNDERSTAND, YOUR HONOR. IF I COULD SAY

A COUPLE OF THINGS.

THE -- AND, YOU KNOW, OBVIOUSLY IF WE ARE DIRECTED TO

AMEND, WE CAN EXPLAIN HOW THE SCHEME WE ARE TALKING ABOUT

REALLY HAS THE -- YOUR HONOR TALKED ABOUT IT AS SORT OF TWO

PRONGS, PERHAPS TWO FLAVORS, BUT IT'S REALLY THE SAME THING;

YOU'RE GOING BACK FIVE YEARS TO LOOK FOR ANYTHING THAT -- THAT

IS WRONG.

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 32 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

I DO THINK YOU'RE RIGHT, YOUR HONOR. AMONG THE THINGS

THAT I DO IS CONSUMER CLASS ACTION LAW, AND WE GET A LOT OF

COMPLAINTS OF PEOPLE, YOU KNOW, SAY THINGS THAT IT'S LIKE,

COME ON, JUST DO ANOTHER PHONE CALL, READ A LITTLE MORE

CAREFULLY. OBVIOUSLY THERE IS A COMMON SENSE COMPONENT TO

THIS.

WE SUBMIT THAT THE GENERAL FRUSTRATION WITH CUSTOMER

SERVICE IS A DIFFERENT ANIMAL THAN WHAT WE ARE TALKING ABOUT

HERE. WE EVALUATE A LOT OF CASES. AND IN THIS CASE, BASED ON

OUR INVESTIGATION, THERE IS A REALLY EGREGIOUS ABNEGATION OF

BASIC GOOD FAITH IN HANDLING INSURANCE CLAIMS. THERE HAVE

BEEN OTHER CASES OUT THERE THAT HAVE TREATED INSURANCE CLAIMS

NOT ONLY ALLOWING DISCOVERY TO GO FORWARD, BUT EVEN CERTIFYING

CLASSES WHERE APPROPRIATE. AND WE THINK THIS IS SUCH A CASE.

WE APOLOGIZE THAT THE COMPLAINT IS, WE UNDERSTAND, NOT AS

CLEAR AS IT COULD BE, BUT THIS ISN'T A CASE OF SOMEBODY, YOU

KNOW, BEING SORT OF LAZY AND OVERWHELMED AND NOT DOING THE

MINIMUM OF WHAT THEY ARE SUPPOSED TO. THIS IS A CASE OF A

SCHEME TO DELAY AND DENY.

AND, YOU KNOW, WE WOULD BE HAPPY TO CLARIFY SOME OF THIS

IN AN AMENDED PLEADING. WE SUBMIT THAT SOME OF THIS IS HERE,

BUT YOU'RE RIGHT, YOUR HONOR SHOULD NOT HAVE TO SORT OF

CONNECT THE DOTS.

SO THAT WOULD BE OUR -- WE DO WANT TO STRESS, WE ARE WELL

AWARE OF THE DIFFERENCE BETWEEN SORT OF GRUMBLING AND FRAUD,

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 33 of 56
34

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

AND WE THINK THIS IS ON THE SIDE OF THE FRAUD, IF THAT MAKES

SENSE, YOUR HONOR.

THE COURT: AND THAT IS ANOTHER POINT. I MEAN,

BECAUSE ALL OF YOUR ALLEGATIONS -- WELL, MOST OF THEM SOUND IN

FRAUD, RULE 9 REQUIRES PLEADING WITH PARTICULARITY, AND YOU

JUST HAVEN'T MET THAT STANDARD.

MS. GEMAN: YOUR HONOR, CERTAINLY WE AGREE THAT

FRAUD-BASED CLAIMS ARE PLEADED WITH PARTICULARITY. THERE IS

SOME --

THE COURT: YOU PROBABLY DISAGREE THAT YOU MET THE

STANDARD, BUT YOU HAVE NOT MET IT IN MY BOOK.

MS. GEMAN: I UNDERSTAND, YOUR HONOR.

AND THEN, YOUR HONOR, WITH RESPECT TO THE MOTION TO STRIKE

ALLEGATIONS, YOUR HONOR'S OWN JURISPRUDENCE ON THIS MAKES

PRETTY CLEAR THAT IT'S NOT -- IT'S PREMATURE, IT'S NOT

APPROPRIATE AT A MOTION TO DISMISS PHASE.

THERE ARE SOME EXAMPLES. THOSE EXAMPLES ARE IN NO WAY

SATISFIED HERE. DEFENDANTS SORT OF CITED A COUPLE OF CASES,

OF COURSE, WHERE MOTIONS TO STRIKE WERE GRANTED ON THE

PLEADINGS. THOSE ARE DISTINGUISHABLE, AND WE THINK HAVE NO

BEARING HERE.

WE THINK WE HAVE ALLEGED OR DESCRIBED THE SORT OF

COMMONALITIES THAT WILL BE APPROPRIATE FOR CLASS CERT, BUT WE

THINK IT'S -- YOU KNOW, IN THE SAME WAY THAT IT'S SORT OF

PERHAPS INAPPROPRIATE TO COMB THROUGH SELECTED PORTIONS OF THE

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 34 of 56
35

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

RECORD THAT DEFENDANTS HAVEN'T INTRODUCED ON MOTION TO

DISMISS, WE THINK IT WOULD BE EXTREMELY PREMATURE FOR US TO

HAVE TO SATISFY RULE 23 AT THIS STAGE PREDISCOVERY.

THE COURT: THANK YOU.

MS. GEMAN: THANK YOU, YOUR HONOR.

THE COURT: BRIEF RESPONSE?

MR. PECHT: YES, YOUR HONOR. VERY BRIEFLY. 

THERE'S NO CONTRACTUAL PROVISION THAT'S BEEN CITED OR THAT

EXISTS THAT SAYS THAT WE WILL NOT LOOK FOR MEDICAL RECORDS

THAT GO BACK FOR A PERIOD OF TIME. IT IS NOT IN THE CONTRACT

THAT SAYS THAT.

SHE CONFLATES TWO THINGS, WHICH IS THE ELIGIBILITY. TO BE

ELIGIBLE FOR THIS POLICY, YOU HAVE TO FILL OUT AN APPLICATION

THAT SAYS THAT YOU DON'T HAVE ANY OF THESE CONDITIONS IN THE

LAST FIVE YEARS. THAT'S PART OF THE ELIGIBILITY. AND THEN --

YOU DON'T GET THE POLICY AT ALL IF YOU ARE NOT ELIGIBLE FOR

IT. THEN WITHIN THE POLICY THERE'S PRE-EXISTING CONDITION

EXCLUSIONS.

SO THOSE ARE TWO VERY DIFFERENT THINGS. THE PRE-EXISTING

CONDITION EXCLUSION APPLIES FOR SIX MONTHS PRIOR TO THE

EFFECTIVE DATE OF THE POLICY. YOU HAVE A PRE-EXISTING

CONDITION IN THAT SIX-MONTH PERIOD OF TIME PRIOR TO THE

POLICY, THEN YOU ARE EXCLUDED. AND SO THERE'S NO CONTRACTUAL

PROVISION THAT PROVIDES FOR ANY OF THIS.

AS A PRACTICAL --

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 35 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THE COURT: SECTION 8 DOESN'T?

MR. PECHT: SECTION 8 DOES NOT LIMIT THE -- DOES NOT

LIMIT THE REQUEST FOR MEDICAL RECORDS HERE TO DETERMINE

WHETHER OR NOT THERE IS ANY FRAUD IN CONNECTION WITH THE

APPLICATION OR THE PROCESSING, OR THE CLAIM, THE APPLICATION

OF THE CLAIM. SO --

THE COURT: SO YOU SAY THERE'S A DISCONNECT THEN

BETWEEN THE REQUEST FOR RECORDS GOING BACK FIVE YEARS AND THE

SIX-MONTH PRE-EXISTING CONDITIONS --

MR. PECHT: THEY ARE NOT -- THEY CAN BE RELATED

BECAUSE IN SOME INSTANCES -- LET'S SAY YOU HAD A PRE-EXISTING

CONDITION IN THE PAST SIX MONTHS. YOU MAY WANT TO HAVE MORE

OF A HISTORY OF THAT PARTICULAR PATIENT IN ORDER TO UNDERSTAND

WHETHER IT REALLY IS A PRE-EXISTING CONDITION OR NOT. WHAT'S

THE NATURE OF THAT CONDITION? SO YOU MIGHT WANT TO HAVE

RECORDS THAT GO BACK FOR A FURTHER PERIOD OF TIME. 

BUT AS A PRACTICAL MATTER, IN THIS CASE, WE DON'T REALLY

HAVE ANY DOCTORS THAT ARE SAYING OR ANYBODY THAT'S SAYING THAT

THERE IS -- THAT THE RECORDS ARE, YOU KNOW, UNREASONABLE OR

INAPPROPRIATE WITH REGARD TO EITHER OF THESE TWO PLAINTIFFS.

WE HAVE ONE SET OF DOCTORS WHO ARE SAYING, I AM READY,

WILLING, AND ABLE TO PRODUCE THEM.

THE COURT: SO IS THERE, INDEED, A GENERAL ROUTINE

PRACTICE OF GETTING MEDICAL RECORDS FOR FIVE YEARS?

MR. PECHT: I THINK ALL THE INSURANCE COMPANIES DO

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 36 of 56
37

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THAT FOR FIVE YEARS.

SO IT'S -- NOW, WE DON'T ALWAYS ASK FOR FIVE YEARS OF

MEDICAL RECORDS. IN SOME INSTANCES -- LET'S SAY YOU HAVE A

BROKEN ARM, OR CERTAIN KIND OF SURGERIES, OR YOU'RE NOT GOING

TO HAVE FIVE YEARS OF MEDICAL RECORDS BECAUSE YOU ARE YOUNG,

OR REALLY YOUNG, THERE'S A LOT OF REASONS WHY YOU MIGHT NOT

ASK FOR -- OR YOU MIGHT NOT ASK FOR ANY MEDICAL RECORDS UNDER

CERTAIN -- EXCEPT FOR THOSE THAT RELATE TO THE EXACT -- SO

THERE'S A LOT -- THERE CAN BE A LOT OF VARIABILITY WITH REGARD

TO IT.

BUT IF YOU'RE LOOKING AT -- WHEN PEOPLE GO BACK AND LOOK

AT, YOU KNOW, ELIGIBILITY ISSUES, TO DETERMINE WHETHER OR NOT

THERE'S FRAUD IN CONNECTION WITH THE APPLICATION PROCESS, YOU

MIGHT LOOK BACK FOR A PERIOD OF TIME. FIVE YEARS IS ONE THAT

IS USED OFTEN IN THE INDUSTRY.

BY THE WAY, THE APPLICATIONS, THESE -- THIS POLICY HAS

BEEN IN EFFECT SINCE 1997 IN CALIFORNIA. SO THIS IS PART OF

THE PRACTICE, AND THE CALIFORNIA INSURANCE COMMISSION'S

LOOKING AT THESE, LOOKS AT THE APPLICATION, LOOKS AT THE

POLICIES. 

AND THEN TO TALK ABOUT POST-CLAIMS UNDERWRITING, WHICH WAS

THE OTHER POINT THAT SHE MADE, THAT, UNDER THE STATUTE, IT

SAYS, HAVE YOU CANCELED, RESCINDED, OR LIMITED THE POLICY,

THERE'S BEEN NO DETERMINATION HERE YET.

THAT'S WHAT I COME BACK TO, WE ARE PUTTING THE CART BEFORE

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 37 of 56
38

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THE HORSE. LET'S FIRST DETERMINE WHETHER OR NOT THERE HAS

BEEN A DENIAL OF THE CLAIM. LET'S GET THESE LIMITED RECORDS

THAT ARE SO LIMITED THAT THEY CAN BE PRODUCED SO QUICKLY AND

ARE READY TO BE PRODUCED, LET'S GET THAT DONE, AND THEN -- AND

THEN DETERMINE WHETHER WE HAVE A CASE OR A CONTROVERSY TO

PURSUE, RATHER THAN GO THROUGH WHAT, A WHOLE 'NOTHER ROUND OF

PLEADING, ANOTHER ROUND OF MOTIONS, AND ANOTHER ROUND OF ALL

THIS STUFF THAT DOESN'T APPLY TO THESE NAMED PLAINTIFFS.

AND ONE OF THE THINGS SHE MENTIONED --

THE COURT: NOW, I GUESS I SHOULD CLARIFY WITH

PLAINTIFFS' COUNSEL, IT DOESN'T APPEAR TO ME THAT THEIR CLAIM

IS AS TO THE WRONGFUL DENIAL OF CLAIMS SO MUCH AS THE

MISHANDLING OF CLAIMS THAT ARE FILED.

AM I INCORRECT ABOUT THAT? IS WRONGFUL DENIAL AN ISSUE?

MS. GEMAN: YOUR HONOR, OUR CLIENTS -- THEIR FILES

WERE CLOSED AND THEY ULTIMATELY HAD TO EITHER PAY OR DETERMINE

NOT TO PAY THE CLAIMS. 

SO YOUR HONOR IS CORRECT THAT IT IS LARGELY ABOUT WRONGFUL

PROCESSING, BUT EFFECTIVELY THIS IS WHY PROMPT PAY LAWS EXIST.

IF YOU DELAY, DELAY, DELAY, AT SOME POINT THAT IS ESSENTIALLY

A DENIAL. AND THAT'S ESSENTIALLY WHAT'S HAPPENED HERE.

THAT'S WHAT HAPPENS TO PEOPLE, THEY GO THROUGH MONTHS AND

MONTHS AND MONTHS, AND ULTIMATELY THEY PAY THEMSELVES.

THE COURT: SO IT'S SORT OF A CONSTRUCTIVE DENIAL

SITUATION?

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 38 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

MS. GEMAN: I GUESS YOU COULD SAY THAT, YOUR HONOR.

THE COURT: OKAY. ALL RIGHT.

MR. PECHT: THERE HASN'T BEEN ANY CONSTRUCTIVE

DENIAL. WE ARE WAITING FOR VERY LIMITED DOCUMENTS THAT

EVERYBODY KNOWS WE ARE WAITING FOR. AND WE CAN'T FORCE THE

PHYSICIANS TO PRODUCE THEM. IF THEY PRODUCE THEM, THEN WE CAN

RESOLVE THIS ISSUE. AND TO SAY THAT WE ARE ASKING THEM FOR

ALL OF THE MEDICAL RECORDS --

THE COURT: OKAY. YOU ARE REPEATING YOURSELF NOW.

MR. PECHT: ALL RIGHT. BUT I JUST WANT TO MAKE THIS

POINT. 

WHAT HAPPENS IS, THE REQUEST FOR MEDICAL RECORDS GOES TO

THE TWO INSTITUTIONS. IN THIS CASE, IT WAS ST. ROSE AND

BOTSWANI FOR AZAD, AND IT WAS THE URGENT CARE AND THE TREATING

PHYSICIAN FOR BUCKLEY, AND COPIES OF THOSE REQUESTS GO TO THE

INSURED TO SHOW THAT THEY WERE BEING REQUESTED FROM THOSE

FACILITIES. WE ARE NOT ASKING THE INSURED TO PRODUCE THOSE

DOCUMENTS. THAT'S NOT WHAT'S HAPPENING AT ALL.

THE COURT: OKAY.

MR. PECHT: THANK YOU, YOUR HONOR.

THE COURT: ALL RIGHT. HII HAS ALSO FILED A MOTION

TO DISMISS.

MR. O'DONNELL: WE HAVE, YOUR HONOR. GOOD MORNING.

THE COURT: GOOD MORNING.

MR. O'DONNELL: SO IF WE DISTILL DOWN THE COMPLAINT,

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 39 of 56
40

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THE PLAINTIFFS ARE FOCUSING ON POLICY LANGUAGE AND CLAIMS

PROCESSING. HII IS NOT AN INSURER, AND SO IT'S DOUBTFUL THAT

ANY AMENDMENT COULD CURE COUNT ONE UNDER THE UCL BECAUSE THE

PLAINTIFFS ARE RELYING ON THE INSURANCE CODE SECTION332, WHICH

APPLIES TO INSURERS. AND BECAUSE WE ARE NOT A PARTY TO THE

CONTRACTS AT ISSUE IN THE CASE, THE OTHER COUNTS FOR BREACH OF

CONTRACT AND QUASI CONTRACTUAL RELIEF MUST FAIL ALSO. THOSE

FACTS ARE NEVER GOING TO CHANGE NO MATTER HOW THE PLEADING IS

AMENDED.

NOW, WITH RESPECT TO THE PLAINTIFFS AND THE LACK OF

SUBSTANTIVE ALLEGATIONS TO SATISFY THE PLAUSIBILITY STANDARD,

MR. AZAD, HIS SOLE REFERENCE TO HII IS A POST-PURCHASE EMAIL

THAT HE SUGGESTS HE RECEIVED FROM HII WITHOUT REALLY ANYTHING

MORE ABOUT IT. AS FAR AS MS. BUCKLEY, HER HUSBAND PURCHASED

THE POLICY AND THERE ARE NO ALLEGATIONS AT ALL DIRECTED TO

HII.

AND HII IS NOT INVOLVED IN THE CLAIMS PROCESSING, AND

THAT'S THE SECOND PRONG OF WHAT THE COMPLAINT FOCUSES IN ON.

WE ALSO MOVED TO STRIKE THE MONTANA ACTION, STATE

REGULATORY ACTIONS LIKE FDA WARNING LETTERS AREN'T FINAL.

THEY DON'T REALLY HAVE ANY RELIABILITY, AND IT'S IMMATERIAL

ALLEGATIONS THAT REALLY CONFUSE WHATEVER OPERATIVE CLAIMS AND

ALLEGATIONS THERE MAY BE IN AN AMENDED COMPLAINT.

AND AS FAR AS THE LUMPING IN, I'LL CALL IT, OF HII AND THE

OTHER DEFENDANTS, THEY CITE A PRESS RELEASE THAT WE ARE

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 40 of 56
41

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

PARTNERS WITH HCC IN AN INSURANCE PRODUCT. WE CITED REFERENCE

TO THE ABA WEBSITE THAT ANNOUNCES ITS VENDOR PARTNERSHIPS WITH

VARIOUS COMPANIES, AND RELYING ON A PRESS RELEASE IS NOT A

SHORTCUT TO SATISFYING THE TWOMBLY, IQBAL PLAUSIBILITY

STANDARD.

THERE SIMPLY AREN'T ANY ALLEGATIONS TO SUPPORT SOME TYPE

OF ENTERPRISE OR PARTNERSHIP THEORY AGAINST HII IN THE

COMPLAINT, AND SO WE ARE ASKING THE COURT TO STRIKE THE

REFERENCES WITH RESPECT TO STATE AGENCY ACTIONS AND THE PRESS

RELEASE THAT WAS PUT OUT.

UNLESS THE COURT HAS ANY OTHER QUESTIONS OF ME, THE

ALLEGATIONS ARE VERY FEW IN THE COMPLAINT DIRECTED TO HII, SO

MY PRESENTATION IS VERY BRIEF.

THE COURT: THANK YOU. 

RESPONSE?

MR. FLANNERY: GOOD MORNING, YOUR HONOR. MICHAEL

FLANNERY, CUNEO GILBERT & LADUCA FOR THE PLAINTIFFS.

I GUESS I'LL JUST START WITH THAT LAST POINT FIRST ABOUT

THE MOTION TO STRIKE AND THE PRESS RELEASE.

I THINK WHAT I WOULD SUGGEST TO YOUR HONOR IS THAT THE

ACTUAL LOOKING AT THE DETAILS OF WHAT'S SAID IN THE PRESS

RELEASE CLEARLY SHOWS THAT IT WOULDN'T BE A DOCUMENT THAT

WOULD BE EXCLUDED AS A -- HAVING A -- BEING STRICKEN FOR NO

POSSIBLE BEARING ON THE SUBJECT MATTER OF THE LITIGATION.

THE PRESS RELEASE AT ISSUE LITERALLY HAS A STATEMENT FROM

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 41 of 56
42

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THE HII CEO, PRESIDENT AND CEO, AND SAYS, HII'S NEW SHORT-TERM

MEDICAL PLAN WITH HCC HAS BEEN LAUNCHED IN 45 STATES. IT SAYS

THAT HEALTH INNOVATION -- HEALTH INSURANCE INNOVATIONS, HII,

CREATES CUSTOMIZABLE AND AFFORDABLE HIGH QUALITY HEALTH

INSURANCE PRODUCTS AND SUPPLEMENTAL SERVICES THROUGH

PARTNERSHIPS WITH BEST IN CLASS CARRIERS. INDEED, THE VERY

TITLE OF THE PRESS RELEASE SAYS THAT HII IS PARTNERED WITH HCC

LIFE INSURANCE. SO THE NOTION THAT SOMEHOW THIS IS A GENERIC

MILK TOAST PRESS RELEASE IS NOT THE CASE.

WHAT I WOULD SUGGEST TO YOUR HONOR IS THAT WE THINK

ACTUALLY WE HAVE PLED SUFFICIENT DETAIL IN THE COMPLAINT TO

LINK HII TO THE CONDUCT AT ISSUE. I WON'T GO THROUGH THE --

ALL OF THE PARAGRAPHS, BUT WHAT I WOULD ASK YOUR HONOR TO LOOK

AT IS PARAGRAPH 17, 22, 51 THROUGH 57. THESE ARE -- ALL THESE

PARAGRAPHS HAVE VERY SPECIFIC, VERY POINTED ALLEGATIONS ABOUT

WHAT HII'S RELATIONSHIP IS TO HCC, MAKES IT VERY CLEAR, IN OUR

VIEW, THAT THESE TWO ENTITIES ARE JOINT VENTURERS AND

PARTNERS. SO WHAT I WOULD SUGGEST ON THE --

THE COURT: JOINT VENTURES AND PARTNERSHIPS AREN'T

NECESSARILY THE SAME.

MR. FLANNERY: CORRECT, YOUR HONOR. I THINK --

THE COURT: WHAT IS THE ALLEGATION? THE COMPLAINT

ISN'T CLEAR.

MR. FLANNERY: THE ALLEGATION IS THAT HII AND HCC ARE

WORKING TOGETHER AS PARTNERS TO PROVIDE THESE INSURANCE

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 42 of 56
43

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

PRODUCTS TO THE CONSUMERS, AND THAT TOGETHER THEY ARE LIABLE

FOR THE MISCONDUCT THAT WE'VE TALKED ABOUT.

SO WE'RE SAYING THAT THEY SHOULD BE HELD LIABLE IN THE

SAME WAY THAT HCC SHOULD BE HELD LIABLE AS HAVING PARTNERED TO

PROVIDE THESE PRODUCTS AND TO HAVE COMMITTED THE MISCONDUCT

THAT WE ALLEGE THEY HAVE DONE IN TERMS OF THE DENIAL OF CLAIMS

AND CONSTRUCTIVE DENIAL AND THE DELAY IN THE PROCESSING.

THE COURT: IS HII RESPONSIBLE FOR PROCESSING THE

CLAIMS?

MR. FLANNERY: I DON'T BELIEVE THAT HII ITSELF IS

RESPONSIBLE FOR ACTUALLY DOING THE PROCESSING ITSELF, BUT --

THE COURT: HOW COULD THEY BE LIABLE?

MR. FLANNERY: WE BELIEVE THAT THERE ARE ACTUAL

PROVISIONS IN CALIFORNIA LAW THAT SAY THAT THEY COULD BE

LIABLE FOR THE BAD CONDUCT OF THE OTHER JOINT VENTURERS OR

PARTNERS. WE CITED THOSE TO YOUR HONOR IN THE BRIEFS.

I WOULD ALSO POINT OUT, BECAUSE YOU SAID AT THE START OF

THIS HEARING, DRAW ME A ROADMAP. I WOULD POINT YOUR HONOR TO

THE MONTANA NOTICE OF PUBLIC AGENCY ACTION.

AGAIN, IT'S FAR FROM SAYING THAT THIS DOCUMENT ITSELF HAS

NO RELATION TO THE CONDUCT AT ISSUE. THE PRESS RELEASE ITSELF

POINTS TO HAVING SOLD THESE PRODUCTS IN 45 STATES. MONTANA

LITERALLY HAS A MAP -- LITERALLY HAS A DRAWING SHOWING WHAT

THE SCHEME LOOKS LIKE FROM THE HII PERSPECTIVE.

AND SO WHAT WE WOULD SUGGEST IS THAT THESE ALLEGATIONS

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 43 of 56
44

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

ALONG WITH THE OTHER ALLEGATIONS ABOUT HII CLEARLY SHOW THAT

THEY ARE INVOLVED IN THE SCHEME, AND THAT WE HAVE MET THE

PLEADING STANDARDS UNDER 9(B) AND 8(A).

THE COURT: THERE IS NO ALLEGATION OF ANY SORT OF

CONTRACTUAL RELATIONSHIP BETWEEN HII AND THE PLAINTIFFS. SO

HOW DOES THE BREACH OF CONTRACT CAUSE OF ACTION SURVIVE?

MR. FLANNERY: YOUR HONOR, I THINK THAT THE -- WE

HAVE, IN THE SORT OF CONTINUUM OF THE STRENGTH OF OUR CLAIMS,

I WOULD ADMIT TO YOUR HONOR THAT THE BREACH OF CONTRACT IS A

MORE UPHILL FIGHT FOR US. BUT WHAT I WOULD SAY TO YOUR HONOR

IS THAT THERE ARE CONCEPTS, AND WE'VE CITED THIS IN THE BRIEF,

FOR EXAMPLE, AS TO ESTOPPEL, BASIC CONTRACT PRINCIPLES, AND WE

SAY THAT WHAT SHOULD HAPPEN HERE IS THAT THERE SHOULD BE AN

EQUITABLE ESTOPPEL ARGUMENT BROUGHT IN CONJUNCTION WITH HII ON

THE BREACH OF CONTRACT CLAIM. 

BUT AS YOU SAY, THESE -- THERE IS NO ALLEGATION THAT THEY

ARE LITERALLY A SIGNATORY TO THE CONTRACT, BUT WE BELIEVE THAT

THERE ARE SUFFICIENT FACTS THAT SHOW THAT THEY SHOULD BE

EQUITABLY ESTOPPED FROM DENYING THAT CLAIM. WE THINK THAT

THAT IS SUFFICIENTLY PLED AT THIS STAGE.

THE COURT: OKAY. I'M NOT PERSUADED ON THE CONTRACT

CLAIMS ANYWAY.

MR. FLANNERY: THANK YOU, YOUR HONOR.

THE COURT: ALL RIGHT. THANK YOU. IS THERE ANY --

DO YOU WANT TO RESPOND AT ALL?

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 44 of 56
45

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

MR. O'DONNELL: JUST BRIEFLY, YOUR HONOR.

AS FAR AS THE MONTANA REGULATORY PROCEEDING, THIS CASE

RIGHT NOW IS ABOUT TWO CALIFORNIA PLAINTIFFS. AND EVEN THE

PUTATIVE CLASS IS DIRECTED TOWARD CALIFORNIA POLICY OWNERS AND

NOT WHAT HAS HAPPENED IN SOME OTHER STATE.

AND IF THERE IS SOME TYPE OF A PARTNERSHIP OR JOINT

VENTURE THAT THE PLAINTIFFS THINK CAN PROPERLY BE ALLEGED,

THEN THERE'S A PLEADING STANDARD THAT THEY MUST SATISFY TO GET

THAT FAR. AND SIMPLY REFERRING TO A BUSINESS COLLOQUIALISM OF

A PARTNER IN DISTRIBUTING A PRODUCT, IT'S VERY COMMON FOR

PEOPLE TO USE THAT WORD, AND THAT DOESN'T GET YOU WHERE YOU

NEED TO BE AT THE PLEADING STAGE FOR SOME TYPE OF LIABILITY ON

A PARTNERSHIP THEORY.

THE COURT: ALL RIGHT. THANK YOU.

ALL RIGHT. CBA?

MS. HODDINOTT: GOOD MORNING, YOUR HONOR.

THE COURT: GOOD MORNING.

MS. HODDINOTT: CBA'S POSITION, AS SET FORTH IN ITS

MOTION TO DISMISS, IS RELATIVELY SIMPLE HERE.

CBA IS A MEMBERSHIP ORGANIZATION WHERE AN EXCHANGE FOR A

MINIMAL MONTHLY FEE $5 A MONTH CONSUMERS ARE GIVEN ACCESS TO

BENEFITS OR DISCOUNTS IN THE MARKETPLACE, SUCH AS DISCOUNTED

MOVIE TICKETS, ACCESS TO RESTAURANTS AT A DISCOUNTED RATE, AND

IN CERTAIN STATES, SUCH AS CALIFORNIA, ACCESS TO CERTAIN GROUP

POLICIES SUCH AS THE ONE AT ISSUE IN THIS LITIGATION.

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 45 of 56
46

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

CBA IS NOT AN INSURANCE COMPANY. IT DOES NOT ADMINISTER

OR HANDLE ANY INSURANCE CLAIMS. IT'S NOT A PARTY TO ANY OF

THE INSURANCE CONTRACTS, AND THERE ARE NO ALLEGATIONS THAT IT

DOES.

CBA DOES NOT ENGAGE IN ANY ADVERTISING, THEREFORE, IT

CAN'T BE LIABLE FOR ANY FALSE ADVERTISING, SUCH AS IS ALLEGED

IN THE COMPLAINT HERE. THERE ARE NO ALLEGATIONS REALLY IN THE

COMPLAINT AT ALL. 

CBA IS MENTIONED, I BELIEVE, A TOTAL OF THREE TIMES, WHICH

I BELIEVE WE SET FORTH IN THE MOTION TO DISMISS SPECIFICALLY.

AND IN NONE OF THOSE SPECIFIC ALLEGATIONS ARE THERE ANY

REFERENCES OF WRONGDOING. THEY'RE REFERENCED, IN MANY WAYS,

CBA IS LUMPED IN, FOR LACK OF A BETTER WORD, WITH THE OTHER

DEFENDANTS BUT THERE'S NO ALLEGATIONS AS TO ANY SPECIFIC ACT

OR OMISSION ON THE PART OF CBA IN PLAINTIFFS' OPPOSITION.

THEY REFERENCE THE FACT THAT CBA IS MENTIONED IN HCC'S

BROCHURE, BUT, AGAIN, THAT IS NOT A REFERENCE TO ANY

ADVERTISING OR ANY AFFIRMATIVE ACT ON THE PART OF CBA. THAT'S

SIMPLY THEY'RE MENTIONED IN HCC'S BROCHURE AS AN ABILITY FOR

HOW CONSUMERS CAN GET THIS POLICY IS BY BECOMING A MEMBER OF

CBA.

AND BASED ON THE LACK OF CBA'S INVOLVEMENT IN ANY OF THE

CLAIMS, WE WOULD SUBMIT THAT THE MOTION TO DISMISS SHOULD BE

GRANTED AND PLAINTIFFS HAVE NOT STATED ANY CLAIMS AGAINST CBA

SPECIFICALLY.

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 46 of 56
47

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THE COURT: ALL RIGHT. RESPONSE?

MR. SLADE: GOOD MORNING, YOUR HONOR. DAVID SLADE

FOR THE PLAINTIFFS.

YOUR HONOR, I THINK WHAT IS HELPFUL TO ESTABLISH AT THE

OUTSIDE IS THE FACT THAT CBA IS A PARTY TO THE HEALTH

INSURANCE POLICY THAT'S AT ISSUE HERE. AS WE SET FORTH IN OUR

MOVING PAPERS AND AS WE'VE TALKED ABOUT IN THE COMPLAINT, THE

SHORT-TERM HEALTH POLICIES, THE STM'S, THESE ARE THE CONTRACTS

THAT FORM THE CORE OF THE LITIGATION. AND THESE ARE CONTRACTS

TO WHICH CBA AND HCC ARE INDISPUTABLY PARTIES.

YOUR HONOR, IN THE PADGETT DECLARATION THERE ARE THREE

SEPARATE INSTANCES IN WHICH THE POLICIES ARE REFERENCED.

THERE'S EXHIBIT 7, WHICH IS THE SPECIMEN CALIFORNIA STM

CERTIFICATE. THERE'S EXHIBIT 13 WHICH IS PLAINTIFF AZAD'S

CONTRACT, AND THEN EXHIBIT 15 WHICH IS PLAINTIFF BUCKLEY'S.

IN EACH OF THOSE, YOU KNOW, ON THE FRONT PAGE IT STATES

THAT CBA IS A PARTY TO THIS CONTRACT, AS IS HCC. CBA IS THE

POLICYHOLDER, HCC IS THE INSURER.

NOW, WITH REGARD TO THE PLAINTIFFS AND THE PUTATIVE CLASS

MEMBERS BECOMING A PART OF THAT CONTRACT, YOU KNOW, THE

APPLICATION PROCESS THEN BRINGS THEM IN AS A PARTY TO THE

CONTRACT. AND THIS IS DEMONSTRATED, I THINK, YOU KNOW, JUST

UNDER GENERAL CONTRACT PRINCIPLES, THE APPLICATION, YOU KNOW,

COVERAGE UNDER HEALTH INSURANCE IS BEING OFFERED, THE PAYMENT

OF PREMIUMS IS THE CONSIDERATION, THE CLASS MEMBER OR THE

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 47 of 56
48

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

PUTATIVE INSURED ACCEPTS THAT, AND THEN THEY BECOME A PART OF

THE CONTRACT. BUT IT'S ALSO BORNE OUT IN THE RECORD THAT HCC

HAS PUT INTO EVIDENCE.

YOUR HONOR, I DON'T KNOW IF IT'S HELPFUL, I HAVE COPIES OF

THE PADGETT DECLARATION. DO YOU CARE TO SEE THOSE?

THE COURT: YES. I DON'T HAVE IT IN FRONT OF ME.

MR. SLADE: MAY I PROVIDE YOU WITH ONE?

(DOCUMENT HANDED TO COURT.) 

MR. SLADE: SO, YOU KNOW, JUST TO KIND OF BEAR OUT

WHAT I WAS JUST ARTICULATING, EXHIBIT 7, THE SAMPLE POLICY,

THAT'S PAGE 20 OF 166. AND PAGE 21 IS GOING TO BE THE FRONT

COVER. 

SO THIS IS THE SAMPLE ANY CALIFORNIA INSURED WOULD SEE.

ARE YOU THERE, YOUR HONOR?

THE COURT: YES.

MR. SLADE: SO IF YOU LOOK ON THE FRONT PAGE, YOU

WILL SEE THE GROUP POLICY NUMBER STN600-1, THE POLICY HAS BEEN

ISSUED TO CONSUMER BENEFITS OF AMERICA, WHICH WE WILL REFER TO

AS THE POLICYHOLDER. WE WILL REFER TO HCC LIFE INSURANCE AS

THE COMPANY. AND THEN -- 

THE COURT: WHAT PAGE ARE YOU ON?

MR. SLADE: I'M SORRY, 21 OF 166.

THE COURT: 21 IS JUST THE -- IT'S MARKED "SPECIMEN"?

MR. SLADE: YES, MA'AM. YES, YOUR HONOR.

THE COURT: OKAY.

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 48 of 56
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

MR. SLADE: THIS IS THE SAMPLE CONTRACT THAT I THINK

ANY PUTATIVE CLASS MEMBER WOULD SEE.

SO THE VERY FIRST PARAGRAPH STATES THAT CBA IS THE

POLICYHOLDER AND HCC INSURANCE COMPANY IS THE COMPANY. 

DOES YOUR HONOR SEE THAT?

THE COURT: NOT ON PAGE 21.

ARE YOU LOOKING AT THIS PAGE (INDICATING).

MR. SLADE: NO, YOUR HONOR, I AM SORRY. AT THE TOP.

I'M SORRY, PAGE 21 OF 166. I APOLOGIZE.

THE COURT: OKAY.

MR. SLADE: SO IT IDENTIFIES -- IT STATES THAT THE

POLICY HAS BEEN ISSUED TO CONSUMER BENEFITS OF AMERICA AND

IT'S BEING PROVIDED BY HCC LIFE INSURANCE.

AND THEN AT THE BOTTOM OF THE PAGE IT STATES IN ALL CAPS,

YOUR HONOR, "THIS CERTIFICATE IS EVIDENCE OF A CONTRACT

BETWEEN THE POLICYHOLDER AND THE COMPANY." HERE THE

POLICYHOLDER BEING CBA AND THE COMPANY BEING HCC.

DOES YOUR HONOR SEE THAT?

THE COURT: UH-HUH.

MR. SLADE: AND THEN I THINK IT'S WORTH CONFIRMING

THAT THE SAME IS TRUE FOR EACH OF THE NAMED PLAINTIFFS.

EXHIBIT 13, WHICH IS PAGE 73 OF 166, IT BEGINS ON PAGE 73.

74 IS THE FIRST PAGE OF PLAINTIFF AZAD'S SPECIMEN.

THE COURT: UH-HUH.

MR. SLADE: IT'S THAT SAME LANGUAGE, THAT THE POLICY

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 49 of 56
50

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

HAS BEEN ISSUED TO CONSUMER BENEFITS OF AMERICA BY HCC LIFE

INSURANCE. IT IS EVIDENCE OF A CONTRACT BETWEEN THE

POLICYHOLDER AND THE COMPANY. SO THAT'S TRUE AS TO PLAINTIFF

AZAD. 

AND THEN EXHIBIT 15 IS THE BUCKLEY FAMILY CONTRACT. AND

THAT BEGINS ON PAGE 107.

AND THIS IS A LARGER PART OF A FULFILLMENT PACKAGE. SO

THE ACTUAL CONTRACT IS ON PAGE 117.

DOES YOUR HONOR SEE THAT?

THE COURT: YES.

MR. SLADE: OKAY. SAME THING.

SO, AGAIN, WE'VE ESTABLISHED THERE IS A CONTRACT AT LEAST

WITH REGARD TO CBA AND HCC AS TO PLAINTIFFS BUCKLEY, AZAD AND

GENERIC CALIFORNIA SPECIMEN.

THEN GOING BACK TO PAGE 108 OF 166, I THINK IT'S HELPFUL

TO LOOK AT SOME OF THE LANGUAGE IN THE WELCOMING PACKAGE THAT

HCC PROVIDED TO THE BUCKLEY FAMILY. IT'S A LITTLE HARDER TO

SEE. BUT IF YOU GO -- IS YOUR HONOR AT PAGE 108?

THE COURT: YES.

MR. SLADE: OKAY.

SO THERE'S THE FIRST PARAGRAPH THAT SAYS "THANK YOU" IN

ALL CAPS. AND THEN THE SECOND PARAGRAPH AT THE BOTTOM, THE

PENULTIMATE SENTENCE SAYS: 

"HCC LIFE INSURANCE COMPANY AND NO EVENT WILL PROVIDE 

BENEFITS IN EXCESS OF THOSE SPECIFIED IN THE 

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 50 of 56
51

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

INSURANCE CONTRACT." 

THE COURT: UH-HUH.

MR. SLADE: AND THEN IF YOUR HONOR LOOKS DOWN A

LITTLE FURTHER IN THE FREE LOOK PROVISION IT STATES: 

"YOUR INSURANCE CONTRACT CREATES A FREE LOOK 

PROVISION WHICH ALLOWS YOU TO CANCEL THE CONTRACT FOR 

ANY REASON." 

YOUR HONOR, I THINK THAT THE DOCUMENTS PROVIDED BY

DEFENDANTS MAKE IT INDISPUTABLE THAT THESE POLICIES ARE A

CONTRACT TO WHICH THE FOLLOWING ENTITIES ARE PARTY. CBA, HCC

AND ANY INSURED, WHICH IN THIS INSTANCE INCLUDES PLAINTIFFS

AZAD AND BUCKLEY AS WELL AS ANY PUTATIVE CLASS MEMBERS.

AND I THINK FROM THAT IT BECOMES, YOU KNOW, WITH THAT

FOUNDATION, I THINK THAT THE SCOPE OF CBA'S INVOLVEMENT, AND I

WOULD SUBMIT CULPABILITY, BECOMES MORE CLEAR WITH REGARD TO

PLAINTIFFS' CLAIMS.

CBA'S OVERARCHING CLAIM IS IT HAS NOTHING TO DO WITH THE

INSURANCE POLICIES AT THE HEART OF THE COMPLAINT, BUT I

BELIEVE THAT IS DEMONSTRABLY FALSE.

MOREOVER, IT IS AN INDISPENSABLE PARTY TO THE CONTRACT.

CBA IS THE CONDUIT THROUGH WHICH ANY OF THE CALIFORNIA

INSUREDS MAY ACQUIRE THIS. THEY CANNOT GET THESE POLICIES

WITHOUT FIRST BECOMING MEMBERS OF THE CBA ORGANIZATION. AND,

IN FACT, WHAT THEY ARE BUYING, WHEN THEY PAY FOR THESE

POLICIES, WHEN THEY PAY THEIR PREMIUMS AND THEY PAY CBA'S

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 51 of 56
52

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

MONTHLY DUES, IS ACCESS TO CBA'S POLICY. AND THAT IS THE

BASIS OF THE CONTRACT.

NOW, I THINK FOR THE REASONS THAT MY COLLEAGUES HAVE

DISCUSSED, THE PLAINTIFFS AND THE PROSPECTIVE CLASS MEMBERS

ARE BEING INJURED WHEN THEY PURCHASE THIS PRODUCT, BUT I THINK

THAT IT IS ALSO IMPORTANT WHEN ONE CONTEMPLATES OUR MARKETING

CLAIM, FOR INSTANCE, THAT REGARDLESS OF THE STRENGTHS OF THE

CLAIM, CBA HAS A CERTAIN AMOUNT OF CULPABILITY IN THIS BECAUSE

IT IS CBA'S PRODUCTS AND SERVICES THAT ARE BEING MARKETED IN

CONJUNCTION WITH DEFENDANT HCC'S.

WHEN HCC OR HII IS MARKETING THESE STM POLICIES, THEY ARE

ALSO IMPLICITLY, BECAUSE THIS IS PART OF WHAT AN INSURED WOULD

PURCHASE, MARKETING MEMBERSHIP INTO CBA. SO IN THIS REGARD,

ANYBODY MARKETING THESE POLICIES IS ACTING, AT LEAST IN PART,

AS CBA'S AGENT.

AND NO MATTER WHAT, ONE OF TWO THINGS HAPPENS TO GET TO

THE POINT WHERE CBA IS PROVIDING -- OR WHERE CBA, HCC, OR HII

IS PROVIDING THESE POLICIES TO INSUREDS IN CALIFORNIA. EITHER

CBA APPROACHED HCC AND SAID WE WILL BE AN ORGANIZATIONAL

ENTITY THROUGH WHICH YOU CAN FUNNEL THESE PRODUCTS TO

CALIFORNIA INSURERS, OR HCC CAME TO CBA AND SAID WE NEED AN

ORGANIZATIONAL ENTITY THROUGH WHICH TO FUNNEL THESE POLICIES

TO CALIFORNIA INSUREDS.

SO THERE IS AN INDISPUTABLE BUSINESS RELATIONSHIP THAT HAS

BEEN CREATED BETWEEN THESE TWO ENTRIES IN ORDER TO PROVIDE

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 52 of 56
53

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THESE PRODUCTS, WHICH WE CONTEND, WE ALLEGE ARE JUNK INSURANCE

WITH INCREDIBLY DAMAGING LIMITATIONS THAT INJURE THE PARTIES

THAT PURCHASE THEM.

BUT WE CERTAINLY BELIEVE THAT THERE IS EVIDENCE, NOT ONLY

IN THE COMPLAINT WHERE WE SAY IN PARAGRAPH 57 THAT CBA'S

COLLUDING WITH HCC TO PROVIDE THESE POLICIES, BUT ALSO IN THE

RECORD THE DEFENDANTS HAVE INTRODUCED.

THE COURT: SO WHAT OCCURS -- THIS ESTABLISHES --

THESE SAMPLES ESTABLISHES A RELATIONSHIP BETWEEN CBA AND HCC.

WHERE DOES THE ACTUAL INSURED COME INTO PLAY?

THIS -- THESE DOCUMENTS THAT YOU HAVE BEEN REFERRING TO

REFER TO THE CBA AS THE POLICYHOLDER BECAUSE THEY ARE BUYING

THESE PRODUCTS FROM HCC. AT SOME POINT IT'S SOLD TO AN

INDIVIDUAL.

MR. SLADE: CORRECT.

THE COURT: WHERE IS THAT CONNECTION?

MR. SLADE: SO THE PRIVITY IS ACTUALLY THROUGH HCC.

I THINK THERE'S A -- I'M SORRY, NOT HCC, THROUGH CBA. THERE'S

A, I THINK THREE-PART PRIVITY HERE.

ON ITS FACE -- AND ALSO AS REPRESENTED, I BELIEVE, IN THE

LANGUAGE -- IN THE WELCOME PACKAGE THAT WE WERE DISCUSSING

EARLIER. WHEN THEY PROVIDE THIS INSURANCE POLICY, WHICH IS,

YOU KNOW, WHICH HAS ALREADY BEEN CREATED BETWEEN CBA AND HCC,

THEY ARE CREATING A FURTHER CONTRACT WHICH IS REFERRED TO IN

THE WELCOME POLICY BETWEEN THE INSURED, AND IT SEEMS BOTH

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 53 of 56
54

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

PARTIES BECAUSE HCC IS CERTAINLY REFERRING TO IT AS A

CONTRACT, BUT NO MATTER WHAT, THE INSURED IS CONTRACTING WITH

CBA FOR ACCESS TO THE POLICY. THEY HAVE TO BECOME A MEMBER,

IT SAYS SO IN THE APPLICATION AS WELL, IN ORDER TO BECOME

INSURED UNDER THIS GROUP POLICY THAT CBA HAS.

SO AT THAT POINT I THINK ALL THREE PARTIES ARE IN PRIVITY,

BUT IT'S INDISPUTABLE THAT CBA AND PLAINTIFFS AZAD AND BUCKLEY

AND ANY PUTATIVE CLASS MEMBER WOULD BE IN PRIVITY. THEY WOULD

HAVE BEEN CONTRACTED FOR ACCESS TO THE POLICY.

AND I DON'T THINK ANYBODY OTHER THAN CBA --

THE COURT: IS THAT IN THIS PACKET AS WELL?

MR. SLADE: WHICH IS THAT?

THE COURT: THE INSURED'S CONTRACT WITH THE CBA FOR

THE POLICY.

MR. SLADE: SO, YOUR HONOR, I THINK THAT THE CONTRACT

ENDS UP -- THE POLICY IS THE CONTRACT. AND WHEN YOU LOOK AT

THE WELCOME PACKAGE IT STATES IT AS SUCH. IT SAYS, YOU KNOW,

YOUR -- IT REFERS TO YOUR HEALTH INSURANCE CONTRACT. AND THE

ONLY THING THAT IT CAN BE REFERRING TO THERE IS THE POLICY

ITSELF.

BUT ALSO, IF ONE LOOKS TO THE ENROLLMENT FORM FOR HCC

LIFE, I'M JUST LOOKING AT A SAMPLE ONE. THIS IS MR. AZAD'S.

YOUR HONOR, IT IS AT PAGE 68 OF 166.

THE COURT: OKAY.

MR. SLADE: IF YOU LOOK TO THE NEXT PAGE AT 69, UNDER

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 54 of 56
55

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THE AUTHORIZATIONS, WHAT'S BEING ASKED FOR -- IT SAYS: 

"I HEREBY REQUEST COVERAGE UNDER THE INSURANCE ISSUED 

TO THE CONSUMER BENEFITS OF AMERICA ASSOCIATION AND

UNDERWRITTEN BY HCC LIFE INSURANCE COMPANY." 

THIS IS, I BELIEVE, THE FORMATION OF THE CONTRACT; THAT IN

GOING THROUGH THIS APPLICATION FORM AND PAYING THE PREMIUMS,

AND PAYING DUES TO HCC, WHICH MUST BE PAID ALSO AS A CONDITION

PRECEDENT, OR IN CONSIDERATION FOR THE FORMATION OF THE

CONTRACT, AT THAT POINT INSUREDS, SUCH AS MR. AZAD OR SUCH AS

PLAINTIFF BUCKLEY AND HER FAMILY, THEN BECOME PARTIES TO THIS

INSURANCE CONTRACT.

THE COURT: ALL RIGHT.

AND THE VERY NEXT SENTENCE IS, "I UNDERSTAND THE INSURANCE

CONTAINS A PRE-EXISTING CONDITION EXCLUSION."

MR. SLADE: YES, YOUR HONOR. AND, AGAIN, I DON'T

THINK THAT, YOU KNOW, ANYBODY IS DISPUTING THAT PRE-EXISTING

CONDITION -- EXCLUSION CONDITIONS ARE WITHIN THE AMBIT OF THE

POLICY OR ARE IN AND OF THEMSELVES, JUST AS AN INTELLECTUAL

CONCEPT, LEGITIMATE TERMS WITHIN AN INSURANCE CONTRACT.

HOWEVER, OUR CONTENTION IS THAT THERE IS AN IMPERMISSIBLE,

AN UNLAWFUL LOOK-BACK PERIOD THAT ATTEMPTS TO -- SORRY, YOUR

HONOR.

THANK YOU VERY MUCH.

THE COURT: ALL RIGHT. ANY RESPONSE?

MS. HODDINOTT: VERY BRIEFLY, YOUR HONOR.

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 55 of 56
56

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

I WOULD SIMPLY REITERATE THE POINT THAT YOUR HONOR RAISED

WHICH WAS THAT THE CERTIFICATE OF INSURANCE THAT WE HAVE GONE

THROUGH WITH PLAINTIFFS' COUNSEL SET FORTH THE CONTRACTUAL

RELATIONSHIP BETWEEN HCC AND CBA. THERE DOES NOT SEEM TO BE

AND DEFINITELY NOT AT LEAST AS PLED IN THE COMPLAINT ANY

CONTRACTUAL RELATIONSHIP SPECIFICALLY DELINEATED BETWEEN THE

PLAINTIFFS AND CBA, AND NO ALLEGATIONS AGAIN OF ANY WRONGDOING

BY CBA WITH REGARD TO THE HANDLING AND ADJUSTMENT OF THE

SPECIFIC CLAIM SET FORTH IN THE COMPLAINT.

THE COURT: ALL RIGHT. THANK YOU.

ALL RIGHT. I THINK THAT TAKES CARE OF ALL MATTERS. I

HAVE OTHER MATTERS ON THIS MORNING. IT IS SUBMITTED. I WILL

ISSUE A WRITTEN OPINION.

MR. PECHT: THANK YOU, YOUR HONOR.

MS. GEMAN: THANK YOU, YOUR HONOR.

(PROCEEDINGS CONCLUDED AT 10:23 A.M.) 

CERTIFICATE OF REPORTER

 I, DIANE E. SKILLMAN, OFFICIAL REPORTER FOR THE 

UNITED STATES COURT, NORTHERN DISTRICT OF CALIFORNIA, HEREBY 

CERTIFY THAT THE FOREGOING IS A CORRECT TRANSCRIPT FROM THE 

RECORD OF PROCEEDINGS IN THE ABOVE-ENTITLED MATTER.

_____________________________ 

DIANE E. SKILLMAN, CSR 4909, RPR, FCRR 

THURSDAY, JULY 6, 2017 

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Case 4:17-cv-00618-PJH Document 85 Filed 07/07/17 Page 56 of 56