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Martin v. Health Care Service Corp.

United States District Court, W.D. Oklahoma

August 17, 2017

HEALTH CARE SERVICE CORPORATION, a mutual legal reserve company, d/b/a BLUE CROSS AND BLUE SHIELD OF OKLAHOMA, and ROCKY MOUNTAIN HOLDINGS, L.L.C., a Delaware limited liability company, Defendants.


          ROBIN J. CAUTHRON, United States District Judge

         Now before the Court is Defendant Rocky Mountain Holdings, L.L.C.'s (“RMH”) Motion for Summary Judgment (Dkt. No. 28); Plaintiff's Motion to Amend the Complaint (Dkt. No. 29); and Plaintiff's Motion to Amend the Scheduling Order (Dkt. No. 30). Each Motion was fully briefed and is now at issue. Due to the nature of the facts, the Court will dispose of all three motions herein.

         I. Background

         On October 4, 2014, Plaintiff Brittany Martin went into early labor and her doctor in Enid, Oklahoma ordered an emergency air transfer for Plaintiff to go to another care center with neonatal intensive care availability. RMH provided the emergency air transfer for Plaintiff to Integris Baptist Medical Center in Oklahoma City, Oklahoma. RMH billed Plaintiff $42, 604.56 for the air transfer. Plaintiff's insurer, Defendant Health Care Service Corporation d/b/a Blue Cross and Blue Shield of Oklahoma (“BCBS”) paid $6, 902.51, leaving a balance of $35, 702.05. RMH initially sought the balance from Plaintiff, who then filed the present suit, seeking declaratory judgment against RMH that she was not liable for the billed amount and that BCBS's insurance contract violated applicable law. Plaintiff also brought claims of breach of contract, bad faith, and fraud and misrepresentation against BCBS.

         Nearly two years after Plaintiff's air transfer, RMH and BCBS entered into a new rate agreement and decided to apply the agreement retroactively to Plaintiff's bill, leaving the current balance at zero. RMH represents it no longer seeks payment from Plaintiff or BCBS. Plaintiff states she has not received a release of balance nor has BCBS provided an explanation of benefits. RMH filed a Motion for Summary Judgment, arguing Plaintiff's claim for declaratory judgment is moot. Plaintiff argues the claim is not moot and seeks leave to amend the Complaint and Scheduling Order to add class certification and make two other factual changes.

         II. RMH's Motion for Summary Judgment

         The standard for summary judgment is well established. Summary judgment may only be granted if the evidence of record shows “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The movant bears the initial burden of demonstrating the absence of material fact requiring judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). A fact is material if it is essential to the proper disposition of the claim. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). If the movant carries this initial burden, the nonmovant must then set forth specific facts outside the pleadings and admissible into evidence which would convince a rational trier of fact to find for the nonmovant. Fed.R.Civ.P. 56(c). All facts and reasonable inferences therefrom are construed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         Plaintiff seeks a declaratory judgment against RMH, but the Court only has jurisdiction over the claim if a “case of actual controversy” is present. 28 U.S.C. § 2201(a). An actual controversy is “definite and concrete, touching the legal relations of parties having adverse legal interests.” Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 240-41 (1937) (citations omitted). There is no actual controversy if a claim is moot. To determine mootness in a declaratory judgment case, a court must “look[] to whether the requested relief will actually alter the future conduct of the named parties.” Schell v. OXY USA Inc., 814 F.3d 1107, 1114 (10th Cir. 2016), cert. Denied, __ U.S.__, 137 S.Ct. 376 (2016), and cert. denied, __U.S.__, 137 S.Ct. 446 (2016) (citations omitted). “[A] federal court [must] refrain from deciding [the claim] if events have so transpired that the decision will neither presently affect the parties' rights nor have a more-than-speculative chance of affecting them in the future.” Id. (citations and internal quotation marks omitted).

         RMH's Motion for Summary Judgment argues the declaratory judgment claim is moot and the Court has no jurisdiction over it. As the issue stands today, Plaintiff owes nothing to RMH for the emergency air transfer services it rendered in 2014.

         Plaintiff claims there are conflicting dates regarding when Defendants actually told her there was no balance. Even taking this as true, the fact remains that Plaintiff owes nothing; there is no controversy. Plaintiff's arguments regarding public policy and her demands for an official release of the balance or judicial determination as a matter of law that she owes nothing are not persuasive. Rather than an intentional mooting of Plaintiff's claim to manipulate the Court's jurisdiction, the Court views the outcome of Defendants' decision to apply the new rates retroactively as a public benefit. This is an outcome similar to bargains struck during settlement negotiations, but in this case, Plaintiff received the benefit of a zero-balance bill without participating in settlement negotiations.

         Plaintiff argues that if the Court finds the declaratory judgment claim is moot, judicial estoppel requires a determination that Plaintiff is the prevailing party. As defined by Plaintiff, a prevailing party is the litigant that succeeds upon its merits. Hanrahan v. Hampton, 446 U.S. 754, 758 (1980) (per curiam) (interpreting availability of attorney fees in civil rights case). Here, Plaintiff's moot claim has not reached a decision on its merits, nor does judicial estoppel fit the facts of this case. The doctrine focuses on parties employing inconsistent positions in separate legal actions to gain an unfair advantage and seek conflicting rulings. See generally 18B Wright & A. Miller Fed. Prac. & Proc. Juris. § 4477 (2d ed.). Even if this case were eligible for judicial estoppel, Plaintiff cannot meet the second estoppel factor set out by the Tenth Circuit. Neither Defendant has persuaded the Court to accept an earlier position that is different from the current position- i.e., Defendants agreed to apply the fee arrangement retroactively to Plaintiff's bill. See BancInsure, Inc. v. F.D.I.C., 796 F.3d 1226, 1240 (10th Cir. 2015) (citation and internal quotation marks omitted) (listing factors and noting judicial estoppel should be applied narrowly and cautiously). While Defendants asserted a different position regarding the bill in the pleadings- i.e., the Plaintiff owed a balance, the present Motion submits the first dispositive issues considered by the Court in this case.

         Therefore, judicial estoppel does not declare Plaintiff the prevailing party. The Court was also unable to locate authority for naming a prevailing party when there is a moot declaratory action. See Schell, 814 F.3d at 1127-28 (finding no independent basis within the Federal Declaratory Judgment Act to award attorney fees). The Court has reviewed Plaintiff's cross motion for summary judgment on this issue and has determined it raises no issue not addressed or precluded by this decision. Accordingly, Rocky Mountain Holding's Motion for Summary Judgment (Dkt. No. 53) is granted and Plaintiff's Motion for Summary Judgment against RMH (Dkt. No. 46) is stricken as moot. Because the only claim against RMH is moot, RMH is terminated as a party to this action.

         III. Plaintiff's Motion to Amend Complaint

          Plaintiff filed her request for leave to amend the Complaint on July 14th when the deadline for motions to amend pleadings was February 1st and discovery was scheduled to end August 1st. She states the reason for this request is new information, that is, the fact that RMH was no longer seeking payment from her came to light in RMH's Motion for Summary Judgment. Plaintiff argues the “second and undisclosed payment on Plaintiff's account with RMH after commencement of this suit” was in direct contradiction to BCBS's expert witness report. ...

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