govinfo:USCOURTS-flsd-1_24-cv-22324-0

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF FLORIDA 
 
CASE NO. 24-22324-CIV-ALTONAGA/Reid 
 
AMERICAN CHOICE  
HEALTHCARE, LLC, 
 
Plaintiff, 
v. 
 
COVERYS SPECIALTY  
INSURANCE COMPANY, 
 
Defendant. 
________________________/ 
 
ORDER 
 
THIS CAUSE came before the Court  on Defendant , Coverys Specialty Insurance 
Company’s Amended Motion to Dismiss  Count II of Plaintiff’s Amended Complaint  [ECF No. 
34], filed on November 11, 2024.  Plaintiff, American Choice Healthcare, LLC  filed a Response 
[ECF No. 38], to which Defendant, perhaps tellingly, failed to file a r eply.  The Court has 
considered the record , the parties’ written submissions, and applicable law.  For the following 
reasons, the Motion is denied. 
I.  BACKGROUND 
This action arises from Defendant’s alleged failure to reimburse Plaintiff in full under the 
insurance policy Plaintiff held with Defendant.  ( See Am. Compl. [ECF No. 31] ¶ 1).  In 2021, 
Plaintiff was selected by the Centers for Medicare & Medicaid Services (“CMS”) to participate in 
the Global and Professional Direct Contracting Model Program  (“GPDC Model Program”), a 
“value-based health care program[.]”  (Id. ¶ 7 (alteration added); see also id. ¶¶ 11, 19).  The GPDC 
Model Program was designed to “reduce participants/providers’ administrative burden, allowing 
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them greater flexibility in how they collaborate in delivering patient care, and further rewarding 
and incentivizing them to improve the quality of patient care.”  (Id. ¶ 12).   
The flip side of this, however, is that Plaintiff was exposed “to greater financial risk[,]” as 
it was “financially responsible for 100% of the cost of the beneficiary’s care relative to the CMS-
determined benchmark cost.”  (Id.).  The CMS benchmark “represents CMS’s calculated cost of 
care of a population of patients, taking into account the amount of risk per patient, based on 
comorbidities, patient zip code, cost of living in the area, the patient’s sex, race, and social 
determinants of health.”  ( Id. ¶ 13).  Whether Plaintiff “operate[d] at a surplus or deficit” was 
“determined by comparing and reconciling the actual performance year costs of providing health 
care to [Plaintiff’s] patients to the CMS-determined benchmark.”  (Id. (alterations added)). 
Plaintiff could mitigate their risk in two ways: “(1) by purchasing specific stop -loss 
insurance and/or (2) by purchasing aggregate stop-loss insurance[.]”  (Id. ¶ 14 (alteration added)).  
Specific stop-loss protection could be purchased thr ough CMS or commercially; each individual 
beneficiary is assigned a deductible , and once the beneficiary’s  costs exceed the deductible 
amount, the specific stop-loss carrier covers the rest of the cost.  (See id. ¶ 14(a); see also id. ¶ 15).  
This kind of protection is designed “to mitigate the risk of a large or potentially catastrophic claim 
amount of any one member skewing the overall financial performance” of an entity like Plaintiff.  
(Id. ¶ 15).  In contrast, aggregate stop-loss protection is only available commercially and covers 
the total losses for beneficiaries in excess of the CMS benchmark.  (See id. ¶¶ 14(b); 16).   
For the 2021 performance year, Plaintiff purchased both specific and aggregate stop- loss 
insurance policies using a broker, Risk Strategies.  ( See ¶¶ 21–22).  Plaintiff a lleges its broker 
“knew that some insurance companies reduce the aggregate payout . . . by any specific stop- loss 
payout received . . . whereas others do not.”  ( Id. ¶ 22 (alterations added)).  Further, “[i]n its 
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communications with Risk Strategies, [Defendant] represented that it would not reduce 
[Plaintiff]’s aggregate reimbursement if [Plaintiff] received recoveries based on a separate specific 
stop-loss insurance policy.”  (Id. ¶ 24 (alterations added)).  Plaintiff relied on this assurance when 
it decided to obtain an aggregate stop-loss policy from Defendant.  (See id. ¶ 25). 
Ultimately, Plaintiff purchased an aggregate stop-loss policy from Defendant and a specific 
stop-loss insurance policy with a non-party insurance company.  (See id. ¶¶ 26–27).  At the end of 
the 2021 performance year, Plaintiff reported “aggregate losses totaling $7,852,035.46, which had 
to be reimbursed to CMS[.]”  ( Id. ¶ 20 (alteration added)).  Plaintiff had an $1,800,000.00 
deductible with Defendant; after the deductible, Plaintiff a lleges Defendant should have paid it 
$6,052,035.46.  ( See id. ¶  33).  Instead, Defendant paid Plaintiff $4,506,712.06, as Defendant  
reduced Plaintiff’s recovery by the amount of specific stop-loss recovery Plaintiff received from 
its specific stop-loss insurer.  (See id. ¶¶ 34, 53). Plaintiff alleges this discrepancy caused it at least 
$1,545,323.40 in damages.  (See id. ¶ 34). 
Plaintiff now brings two claims against Defendant: breach of contract ( see id. ¶¶ 36–48); 
and, in the alternative, promissory estoppel ( see id. ¶¶ 49–56).  Defendant moves to dismiss 
Plaintiff’s promissory estoppel claim only.  (See generally Mot.). 
II.  LEGAL STANDARD 
 “To survive a motion to dismiss [under Federal  Rule of Civil Procedure 12(b)(6)], a 
complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is 
plausible on its face.’”  Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (alteration added; quoting Bell 
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).  A pleading withstands a motion to dismiss if it 
alleges “factual content that allows the court to draw the reasonable inference that the defendant 
is liable for the misconduct alleged.”  Id. (citing Twombly, 550 U.S. at 556).  This pleading standard 
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“does not require ‘detailed factual allegations,’  but it demands more than an unadorned, the -
defendant-unlawfully-harmed-me accusation.”  Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. 
at 555).  When considering a motion to dismiss, a court must construe the complaint in the light 
most favorable to the plaintiff and take the factual allegations as true.  See Brooks v. Blue Cross & 
Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997) (citation omitted).  
III.  DISCUSSION 
Plaintiff brings a claim of promissory estoppel in Count II.  ( See Am. Compl. ¶¶ 49–56).  
“Promissory estoppel is a quasi -contract claim that is generally considered an alternative to a 
breach of contract claim, allowing a party to enforce a promise not supported by consideration.”  
Martin v. Creative Mgmt. Grp., Inc., No. 10-cv-23159, 2013 WL 12061809, at *4 (S.D. Fla. July 
26, 2013) (citations omitted).  To sustain a cause of action for promissory estoppel, a plaintiff must 
plead three elements: “[(1)] that the plaintiff detrimentally relied on a promise made by the 
defendant, [(2)] that the defendant reasonably should have expected the promise to induce reliance 
in the form of action or forbearance on the part of the plaintiff . . . and [(3)] that injustice can be 
avoided only by enforcement of the promise[.]”  W.R. Townsend Contracting, Inc. v. Jensen Civ. 
Constr., Inc., 728 So. 2d 297, 302 (Fla. 1st DCA 1999) (alterations added; citation omitted). 
Again, Plaintiff alleges Defendant, through its agent, represented that recoveries under a 
separate specific stop-loss policy would not reduce any reimbursement owed under Defendant’s 
aggregate stop-loss policy.  (See Am. Compl. ¶¶ 50–53).  Relying on this representation, Plaintiff 
purchased Defendant’s aggregate stop-loss policy alongside a separate specific stop- loss policy, 
incurring substantial costs.  (See id. ¶ 54).  Plaintiff would not have procured both policies absent 
Defendant’s promise.  (See id. ¶ 55).  Defendant’s subsequent reduction of its reimbursement —  
contrary to its prior assurances — caused Plaintiff damages exceeding $1.5 million.  (See id. ¶ 56).   
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Defendant first argues that the promissory estoppel claim should be dismissed because 
“equitable estoppel is a defensive doctrine rather than a cause of action.”  (Mot. 8 (emphasis added; 
quoting Caruso v. Golden Rule Ins. Co., No. 13- 60405-Civ, 2013 WL 5596030, at *4 (S.D. Fla. 
Oct. 11, 2013); citation and quotation marks omitted)). 1  This argument wholly misses the mark, 
because “promissory estoppel and equitable estoppel are distinct concepts with distinct uses and 
effects.”  Humetrix, Inc. v. Gemplus S.C.A., 268 F.3d 910, 918 (9th Cir. 2001)  (citation omitted). 
Indeed, the key distinction is that promissory estoppel is used to create a cause of action, whereas 
equitable estoppel is used to defend against one.  See id.; accord Caruso, 2013 WL 5596030, at 
*4; State, Agency for Health Care Admin. v. MIED, Inc., 869 So. 2d 13, 20 (Fla. 1st DCA 2004). 
Defendant next contends that Plaintiff’s allegations fail to set out a promissory estoppel 
claim.  (See Mot. 10).  But Defendant does not identify what element Plaintiff purportedly fails to 
plead.  (See id.).  In any event, the Court finds Plaintiff’s allegations sufficient.  (See Am. Compl. 
¶¶ 50–56 ( alleging that Plaintiff relied on a written promise made during negotiations by 
Defendant’s authorized agent — a promise  Defendant should have known would induce  such 
reliance — only for  Defendant’s change in position to cause Plaintiff to serious financial harm)). 
Defendant further argues that the policy between  the parties is a valid and enforc eable 
contract —  a premise Plaintiff does not dispute (see Resp. 6) — “which negates a valid claim for 
promissory estoppel” (Mot. 10).  True, “[t]he doctrine of promissory estoppel is unavailable when 
there is a written contract between the parties covering the disputed promises.”  Hartel v. Unity 
Recovery Ctr., Inc. , No. 16- 80471-Civ, 2017 WL 1291952, at *4 (S.D. Fla. Jan. 26, 2017) 
(alteration added; quotation marks and citation omitted).  Th is is because “[p]romissory estoppel 
is not a doctrine designed to give a party to a negotiated commercial bargain a second bite at the 
 
1 The Court uses the pagination generated by the electronic CM/ECF database, which appears in the headers 
of all court filings. 
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apple in the event it fails to prove breach of contract.” Advanced Mkt g. Sys. Corp. v. ZK Yacht 
Sales, 830 So. 2d 924, 928 (Fla. 4th DCA 2002) (alteration added; citation omitted). 
“Nevertheless, in certain situations promissory estoppel may be pleaded in the alternative 
to contract claims.”  Richmond Manor Apts., Inc. v. Certain Underwriters at Lloyd’s London, No. 
09-60796-Civ, 2011 WL 13175618, at *5 (S.D. Fla. Feb. 28, 2011)  (citing Doe v. Univision 
Television Grp., Inc., 717 So. 2d 63, 65 (Fla. 3d DCA 1998) ).  Indeed, Federal Rule of Civil 
Procedure 8(e)(2) “permits  a party to plead alternative and inconsistent  claims and theories of 
recovery.”  Am. Casual Dining, L.P. v. Moe’s Sw. Grill, L.L.C., 426 F. Supp. 2d 1356, 1371 (N.D. 
Ga. 2006) (citing Fed. R. Civ. P. 8(e)(2)) .  That is , in fact, how Plaintiff’s Amended Complaint 
frames the promissory estoppel claim — it is “pleaded in the alternative[.]”  (Am. Compl. 12). 
While the parties agree that the insurance policy constitutes  an express  contract, they 
dispute whether Defendant’s agent’s representations are part of it.  (See Mot. 9; Resp. 6).  Should 
those representations fall outside the contract, Plaintiff may still be able to recover under a theory 
of promissory estoppel.  See Martin, 2013 WL 12061809, at *4.  Thus , Plaintiff is permitted to 
plead both promissory estoppel and breach-of-contract claims in the alternative.  See Am. Casual 
Dining, 426 F. Supp. 2d at 1371; see also Fed. R. Civ. P. 8(e)(2).2 
 
2 The parties also dispute whether Plaintiff’s reliance on Defendant’s agent’s representations can overcome 
the principle that ignorance of a contract’s terms is no defense.  ( See Mot. 10–11; Resp. 7–8; see also 
Trustees of Carpenters Health & Welfare Tr. Fund of S. Fla. v. Universal Const. Servs., 695 F. Supp. 554, 
558 n.1 (S.D. Fla. 1988)).  This debate is irrelevant to the issue of whether Plaintiff can plead promissory 
estoppel, a doctrine that operates independently of any existing contract.  See Martin, 2013 WL 12061809, 
at *4.  Moreover, the Court “has no obligation to consider the terms of the [policy] in ruling on the [Motion], 
and it declines to interpret or analyze the [policy’s] terms at this stage.”  SCCY Indus., LLC v. Jannuzzo, 
No. 17-cv-1495, 2018 WL 3657570, at *4 (M.D. Fla. Aug. 2, 2018) (alterations added). 
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IV.  CONCLUSION 
Accordingly, it is 
ORDERED AND ADJUDGED that Defendant, Coverys Specialty Insurance Company’s 
Amended Motion to Dismiss Count II of Plaintiff’s Amended Complaint [ECF No. 34]  is 
DENIED.   
DONE AND ORDERED in Miami, Florida, this 19th day of December, 2024. 
 
         ________________________________________ 
         CECILIA M. ALTONAGA 
         CHIEF UNITED STATES DISTRICT JUDGE 
 
cc: counsel of record 
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