Justia California Court of Appeals Opinion SummariesArticles Posted in ERISA
Port Medical Wellness, Inc. v. Connecticut General Life Insurance Co.
State law causes of action seeking to recover unpaid benefits under a welfare benefit plan regulated under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., are generally conflict preempted. The Court of Appeal affirmed the trial court's grant of summary judgment for defendants in an action filed by Port Medical seeking payments for health care services provided to persons eligible for benefits under the Plan. The court held that Port Medical's claims for breach of implied-in-fact contract, intentional misrepresentation and quantum meruit—each of which sought payment for services covered under the Plan—were conflict preempted under section 514 of ERISA. The court held that Port Medical's two remaining claims for unfair competition and intentional interference with prospective economic advantage were not preempted because they were predicated on the theory that the Plan and Connecticut General conspired to force Port Medical out of business in order to benefit a competitor, rather than strictly on a claim for benefits under the Plan. The court held, nonetheless, that Port Medical failed to demonstrate there was a dispute of material fact with respect to those claims. View "Port Medical Wellness, Inc. v. Connecticut General Life Insurance Co." on Justia Law
Posted in: ERISA
Morris B. Silver M.D., Inc. v. Int’l Longshore & Warehouse Union
Plaintiff filed suit against the Plan to recover payment for health care services provided to Plan policyholders. The trial court dismissed plaintiff's suit because the state law causes of action were preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The court concluded that, notwithstanding procedural irregularies, plaintiff's due process rights were not violated where any error by the trial court was harmless; plaintiff's claims for breach of contract, quantum meruit, and promissory estoppel are not preempted by ERISA where these quasi-contract and contract causes of action do not address an area of exclusive federal concern; and plaintiff's claim for interference with contractual relations is preempted where this cause of action addresses an area of exclusive federal concern. View "Morris B. Silver M.D., Inc. v. Int'l Longshore & Warehouse Union" on Justia Law
UFCW & Employers Benefit Trust v. Sutter Health
UEBT is a healthcare employee benefits trust governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, and pays healthcare providers directly from its own funds for the services provided to enrollees in its health plans. UEBT contracted with a “network vendor,” Blue Shield, to obtain access to Blue Shield’s provider network at the rates Blue Shield had separately negotiated, and certain administrative services. One of Blue Shield’s preexisting provider contracts was with Sutter, a group of health care providers in Northern California. UEBT sued Sutter, on behalf of a putative class of all California self-funded payors, alleging that Sutter’s contracts with network vendors, such as Blue Shield, contain anticompetitive terms that insulate Sutter from competition and drive up the cost of healthcare. UEBT sought damages, restitution, and injunctive relief under the Cartwright Act (Bus. & Prof. Code 16720) and California’s unfair competition law (section 17200). Sutter moved to compel arbitration, relying on an arbitration clause in the provider contract signed by Sutter and Blue Shield. The trial court denied Sutter’s motion, concluding that UEBT was not bound to arbitrate its claims pursuant to an agreement it had not signed or even seen. The court of appeal affirmed. View "UFCW & Employers Benefit Trust v. Sutter Health" on Justia Law
Graciano v. Mercury General Corp.
Plaintiff Sonia Graciano was injured after she was hit by a car driven by Saul Ayala. Ayala was insured by defendant California Automobile Insurance Company (CAIC). Three weeks after Graciano's attorney first contacted CAIC regarding the accident, Graciano misidentified both the driver and the applicable insurance policy. CAIC investigated the accident, identified the applicable policy and the correct driver, and offered to settle Graciano's claim with a "full policy limits offer." Graciano did not accept CAIC's full policy limits offer and, in this suit, alleged CAIC and its parent and affiliated companies acted in bad faith, based on an alleged "wrongful failure to settle." Graciano argued CAIC could have and should have earlier discovered the facts, and should have made the full policy limits offer more quickly. The jury found in favor of Graciano and this appeal followed. CAIC argued that, as a matter of law, there was no evidence to support the verdict that CAIC acted in bad faith by unreasonably failing to settle Graciano's claim against Saul. The Court of Appeal agreed, and reversed the judgment.View "Graciano v. Mercury General Corp." on Justia Law