Source: https://www.jeremywrichter.com/page/31/
Timestamp: 2019-04-19 03:23:55+00:00

Document:
ENT Associates of Alabama, P.A., et al. v. Lauryn Diane Hoke – Where a plaintiff has no bona fide intent to serve defendants at the time a complaint is filed or prior to the running of the statute of limitations, the action is not commenced and is time-barred.
On September 2, 2016, the Supreme Court of Alabama published its decision in ENT Associates of Alabama, P.A., et al. v. Lauryn Diane Hoke [Ms. 1141396] and Baptist ventures, Inc. d/b/a Montgomery Surgical Center, LLP v. Lauryn Diane Hoke [Ms. 1141401], — So.3d — (Ala. 2016), arising out of the medical malpractice claims made by Hoke against the Defendants.
On April 11, 2011, Hoke received medical treatment from the Defendants. On April 10, 2013, Hoke filed a medical malpractice suit against the Defendants in the Circuit Court of Montgomery County. Attorney John Loeschen signed the suit as counsel for plaintiff, but at the time of filing, Loeschen was not licensed to practice law in the State of Alabama. No attorney licensed to practice law in the State of Alabama was a signatory on the Complaint. The Complaint was electronically filed by Alabama attorney Benjamin Pool. Additionally, the Complaint did not included the addresses of the Defendants or contain any instruction for service of process.
Fifty-five (55) days after filing the Complaint, attorney Loeschen filed an application for admission to practice in Alabama, and identified attorney Pool as the local counsel of record in the Hoke matter. The Defendants were served with the Complain and Summons on June 18, 2013 (69 days after the Complaint was filed). Thereafter, the defendants moved to strike the complaint and dismiss the suit, arguing that the Complaint was a nullity under Rule VII of the Rules Governing Admission to the Alabama Bar because it had not been filed by an attorney licensed to practice law in Alabama. They further argued that because Hoke did not have an intent to serve the Defendants at the time her Complaint was filed and the two-year statute of limitations had run before the Defendants were served, Hoke’s medical malpractice claims were barred by the statute of limitations, under Alabama Code (1975) § 6-5-482.
Whether Hoke’s claims were barred by the applicable statute of limitations on the ground that Hoke did not have an intent to serve the Defendants at the time the Complaint was filed.
The Supreme Court of Alabama declined to address Question 1, concluding that the answer to Question 2 is dispositive of the appeals and pretermitted discussion of Question 1.
In answer to Question 2, the Alabama Supreme Court found no evidence to suggest that Hoke intended to serve process upon the Defendants at the time her complaint was filed. The Court noted that although “delay may not be evidence, in and of itself, of a lack of a bona fide intent to immediately serve the complaint at the time it is filed, delay in conjunction with the absence of evidence of any steps taken by the plaintiff to effectuate service at the time of filing the complaint is evidence of a lack of a bona fide intent to immediately serve the complaint.” See Precise v. Edwards, 60 So.3d 228 (Ala. 2010). The Supreme Court of Alabama held that the fact that the Defendants were in fact served within the timeframe set forth by Alabama Rule of Civil Procedure 4(b) has no bearing on the question or whether the action was timely commenced for the purposes of the statue of limitations.
The Court held that where there is no evidence that the plaintiff made any attempt to take any of the required steps to effectuate service upon the defendants at the time of the complaint was filed or any time thereafter, the plaintiff did not possess a bona fide intent to immediately serve the defendants at the time the complaint was filed, and the action was not commenced prior to the running of the statute of limitations, and is therefore time-barred pursuant to Alabama Code (1975) § 6-5-482.
Carrie Crews v. Grace Jackson: When a judgment creditor has failed to contest garnishment exemption claims, a court has no discretion to determine whether to dismiss a garnishment proceeding or to modify a writ of garnishment.
On August 26, 2016, the Alabama Court of Civil Appeals decided the matter of Carrie Crews v. Grace Jackson [Ms. 2150422], — So.3d — (Ala.Civ.App. 2016), holding that, pursuant to the compulsory language of Alabama Rule of Civil Procedure 64B, a trial court does not have any discretion to determine whether to dismiss a garnishment proceeding or to modify a writ of garnishment when the judgment creditor has failed to contest a declaration and claim of exemptions. In such instances, where the judgment holder has not timely contested claimed exemptions to a garnishment, the trial court must dismiss the garnishment proceeding or modify the writ of garnishment in order to give effect to the claimed exemptions filed by the debtor.
To allow any discretion, where the rule mandates that “after fifteen (15) calendar days from the filing of such claim, the process of garnishment and any writ of garnishment issued therein shall be dismissed,” would run counter to the language of Alabama Code § 6-10-24, which provides that property claimed as exempt is not subject to levy unless a waiver of exemption as to the kind of property on which the levy is sought to be made or the claim is contested exists. Alabama Rule of Civil Procedure 64B (emphasis added). Moreover, the Alabama Court of Civil Appeals has previously held that the failure to properly contest a declaration and claim of garnishment exemption requires that the claim of garnishment exemption be considered prima facie correct, and thus upheld. See Young v. Strong, 694 So.2d 27, 28 (Ala. Civ. App. 1997).
Photo by United States Mission Geneva.
Larry Magrinat v. Myra Maddox: When a third party purchases a debt owed to a medical provider, the proper measure of damages is the full amount owed by the plaintiff.
On August 26, 2016, the Alabama Court of Civil Appeals issued its opinion in Larry Magrinat v. Myra Maddox [Ms. 2150357], — So.3d — (Ala.Civ.App. 2016), a case arising out of a motor vehicle accident, for which Magrinat was awarded $42,000.00 in compensatory damages for his claim of negligence against Maddox. Magrinat appealed, challenging the damages award and alleging that the trial court used the wrong measure of damages in determining the award.
On May 15, 2012, in Lee County, Alabama, Maddox was operating a vehicle that rear-ended the vehicle occupied by Magrinat. As a result of the accident, Magrinat incurred injuries to his left ankle and left arm, for which he received treatment, including a surgery performed by Dr. Shane Buggay at St. Vincent’s Hospital. At his deposition, Dr. Buggay testified that the surgery was necessary to repair Magrinat’s arm. Magrinat incurred approximately $27,000.00 in medical expenses related to the surgery. Of Dr. Buggay’s charges of $9,281.00, he wrote off all but $3,200.00, which was sold to OrthoUSA (who expected to collect on the debt it had purchased).
Magrinat argued to the trial court that the proper measure of damages should include the amount of the charges for which he is responsible and not the amount that Dr. Buggay agreed to accept from OrthoUSA ($3,200.00). Maddox argued that the applicable measure of damages is the amount paid or to be paid to a medical provider. Following a bench trial on December 4, 2015, the trial court entered the judgment of $42,000.00. Upon a motion requesting an itemization of the damages it had awarded, the trial court indicated that the award included $3,200.00 for Dr. Buggay’s services.
The question before the Alabama Court of Civil Appeals, in a matter of first impression, was whether the trial court applied the proper measure of damages to determine the amount to be awarded to Magrinat; specifically, whether Magrinat is entitled to recover the amount of Dr. Buggay’s bill for which Magrinat was liable or the amount for which Dr. Buggay agreed to sell the debt to OrthoUSA. The appellate court determined that the proper measure of damages to be applied in a given case is a question of law, not a question of fact.
Maddox argued that Alabama’s collateral source rule provides that the proper measure of damages to be applied is the amount actually paid to the medical provider; therefore the trial court did not err in awarding to Magrinat $3,200.00 for the treatment provided by Dr. Buggay. The court disagreed with Maddox’s analysis, distinguishing the circumstance in this instance from that of a medical provider accepting a lower payment for his services from an insurance company or Medicare.
Rather Dr. Buggay had sold the debt to OrthoUSA in the hope of receiving some payment for treatment provided to an uninsured patient while allowing OrthoUSA to bear the risk of collecting the debt. The amount owed by Magrinat is not less; it is merely owed now to OrthoUSA, rather than Dr. Buggay. The Alabama Court of Civil Appeals found no cases on point in Alabama to answer the question of the proper measure of damages in such instances, so it looked to California for guidance.
In Alabama, the “general rule regarding the recovery of medical expenses, including hospital expenses resulting from personal injuries, is that a plaintiff may recover those medical expenses that are reasonable and necessary.” Ex parte Hicks, 537 So.2d 486, 489-90 (Ala. 1988); see also Hooks v. Pettaway, 142 So.3d 1151, 1158 (Ala.Civ.App. 2013). Therefore, the only way for Magrinat to be fully compensated for the loss he suffered as a result of the accident was for him to recover the amount for which he is liable and not limit the recovery to the amount for which the medical provider agreed to sell the debt. It is of no consequence whether the debt holder actually intends to collect the debt.
Latosha Hosford v. BRK Brands, Inc.: In making an AEMLD claim, a party cannot use a different product altogether to show a safer, practical, alternative design to the product in question.
On August 19, 2016, the Supreme Court of Alabama decided Latosha Hosford v. BRK Brands, Inc. [Ms. 1140899, 1140901], — So.3d — (Ala. 2016), arising out of a wrongful death action related to the death of Nevaeh Johnson, a minor, in a mobile home fire in May 2011. Latosha Hosford (Nevaeh’s mother), Chard Barley (Latosha’s husband), and Rhonda Hosford (Navaeh’s grandmother) brought suit against BRK Brands, Inc. (“BRK”), who manufactured two smoke alarms in the mobile home, in the Circuit Court of Conecuh County. Latosha appealed the trial court’s judgment as a matter of law against her as to their claims of failure to warn, negligence, and wantonness; Latosha also appealed the jury’s verdict against her products liability claim asserted under the Alabama Extended Manufacturer’s Liability Doctrine (“AEMLD”). Latosha and Rhonda, as co-administratrixes of Navaeh’s estate, appealed the judgment as a matter of law entered against their breach-of-warranty claim, seeking compensatory damages for Neveah’s pain-and-suffering and mental anguish, suffered before her death.
The Alabama Supreme Court found first that the various claims asserted by the plaintiffs (breach of warranty, failure to warn, negligence, wantonness, AEMLD) were variations of a single wrongful death claim, as previously held by the Court in Sledge v. IC Corp., 47 So.3d 243, 247 (Ala. 2010).
Nevaeh’s estate representatives sought reversal of the judgments as a matter of law entered in favor of BRK as to the claims for failure to warn, negligence, and wantonness; the verdict entered by the jury in favor of BRK on the AEMLD claims; and summary judgment entered in BRK’s favor on the breach of warranty claim. In considering the appeal, the Supreme Court of Alabama found that its determination of the AEMLD claim would obviate the need to consider the issues surrounding the other claims.
The plaintiffs’ theory behind the AEMLD claim was that the subject ionization smoke alarms are defective and unreasonably unsafe because they can fail to provide adequate warning time for an individual to escape from a fire that begins as a slow, smoldering fire. BRK also manufactures photoelectric smoke alarms that are generally more sensitive to smoke originating from smoldering fires, as well as dual-sensor smoke alarms that incorporate both of the above technologies.
BRK argues that the dual-sensor alarm should not be considered a safer, practical, alternative design to an ionization alarm, because the two are entirely different products. As such BRK should be entitled to a judgment as a matter of law on the AEMLD claim, since the Plaintiffs did not submit any evidence identifying a safer, practical, alternative design for an ionization smoke alarm. BRK relied on Hines v. Wyeth, to support its contention that a proposed alternative cannot be a different product. See Hines, No. CIV.A. 2:04-0690, May 23, 2011) (S.D.W.Va. 2011). The Alabama Supreme Court found the reasoning in Hines persuasive, and held that while generally the reasonableness of an alternative designs is a question for the jury, there are necessarily some circumstances that allow the court to appropriately hold as a matter of law that a proposed design is sufficiently different from the allegedly defective product that it is more properly viewed as a different product than an alternative design. Caterpillar, Inc. v. Shears, 911 S.W.2d 379, 385 (Tex. 1995). As a result of the court’s holding, the plaintiff’s AEMLD claim was due to be dismissed as a matter of law, and court affirmed the other judgments entered in favor of the defendants.
Humana Medical Plan, Inc. v. Western Heritage Ins. Co.: The Medicare Secondary Payer scheme applies to Medicare Advantage Organizations, who may sue for double damages when a primary payer fails to make payment or reimbursement.
On August 8, 2016, the Eleventh Circuit Court of Appeals issued its opinion in Humana Medical Plan, Inc. v. Western Heritage Ins. Co. [No. 15-11436], — F.3d — (11th Cir. 2016), wherein Western had appealed the district court’s order entering summary judgment in favor of Humana for double damages pursuant to the Medicare Secondary Payer Act private cause of action, 42 U.S.C. § 1395y(b)(3)(A), and declaratory judgment for reimbursement to Humana for Medicare benefits paid by Humana on behalf of its Medicare Advantage plan enrollee. The Eleventh Circuit decided as a matter of first impression whether the Medicare Secondary Payer private cause of action permits a Medicare Advantage Organization to sue a primary payer that refuses to reimburse the Medicare Advantage Organization for a secondary payment.
NOTE: The Third Circuit has previously ruled on the same issue and held that Medicare Advantage Organizations may sue a primary payer under the Medicare Secondary Payer Act private cause of action. See In re Avandia Mktg., Sales Practices & Prods. Liab. Lit., 685 F.3d 353, 367 (3d Cir. 2012).
How does a Medicare Advantage Organization fit within the Medicare Secondary Payer scheme?
The Eleventh Circuit’s primary consideration was how a Medicare Advantage Organization (“MAO”) fits within the Medicare Secondary Payer (“MSP”) scheme, under 42 U.S.C. § 1395y(b)(3)(A). Western proposed the idea that the MSP does not govern MAOs at all and that the MAO right-to-charge provision instead governs when and whether an MAO is a secondary payer; Western further argued that because an MAO derives secondary payer status from the MAO right-to-charge provision rather than the MSP, an MAO may not sue under the MSP private cause of action.
The MAO right-to-charge provision refers parenthetically to circumstances under which MAO payments are made secondary under 42 U.S.C. § 1395y(b)(2).
Therefore, the Eleventh Circuit determined that a plain reading of 42 U.S.C. § 1395y(b)(2)(A) and the MAO right-to-charge provision revealed that MAO payments are made secondary to primary payments pursuant to the MSP, and not (as Western argued) the MAO right-to-charge provision. Subsequently, under 42 U.S.C. § 1395y(b)(3)(A), an MAO is permitted to sue a primary plan that fails or refuses to reimburse an MAO’s secondary payment and is entitled to an award of double damages.
Summary judgment in favor of a plaintiff under the MSP private cause of action is appropriate when there is no genuine issue of material fact as to: (1) the defendant’s status as a primary plan; (2) the defendant’s failure to provide for primary payment or appropriate reimbursement; and (3) the amount of damages.
In the instant case, the Eleventh Circuit affirmed summary judgment against Western, holding that Humana was a Medicare Advantage Organization to whom the Medicare Secondary Payer scheme applied, and as such, Humana was entitled to sue for Western’s failure to provide payment, and Humana was due to recover double damages as required by 42 U.S.C. § 1395y(b)(3)(A).

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