Court Opinion

ID: 2659123
Source: CourtListenerOpinion
Date Created: 2014-04-01 15:26:50.003359+00
Date Added: 2024-06-11T09:14:48.274907
License: Public Domain

Case: 13-13849    Date Filed: 04/01/2014   Page: 1 of 11

                                                              [DO NOT PUBLISH]

                IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT
                           ________________________

                                 No. 13-13849
                             Non-Argument Calendar
                           ________________________

                    D.C. Docket No. 6:12-cv-00100-ACC-DAB

MEDICOMP, INC.,
a foreign profit corporation,

                                                                Plaintiff-Appellant,

                                      versus

UNITED HEALTHCARE INSURANCE CO.,
a foreign corporation,
UNITED HEALTHCARE OF NEW YORK,
a foreign profit corporation,
UNITED HEALTHCARE SERVICE, LLC,
a foreign profit corporation,
UNITED HEALTHCARE SERVICES, INC.,
a foreign profit corporation,

                                                             Defendants-Appellees.

                           ________________________

                    Appeal from the United States District Court
                        for the Middle District of Florida
                          ________________________

                                  (April 1, 2014)
              Case: 13-13849     Date Filed: 04/01/2014    Page: 2 of 11

Before HULL, MARCUS, and FAY, Circuit Judges.

PER CURIAM:

      The summary judgment entered in favor of the appellees is affirmed for the

reasons set forth in the Order of the district court, dated July 22, 2013.

      AFFIRMED.

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                            UNITED STATES DISTRICT COURT
                               MIDDLE DISTRICT OF FLORIDA
                                       ORLANDO DIVISION

MEDICOMP, INC.,

                       Plaintiff,

v.                                                             Case No: 6:12-cv-100-Orl-22DAB

UNITEDHEALTHCARE INSURANCE
COMPANY, UNITED HEALTHCARE OF
NEW YORK, UNITED HEALTHCARE
SERVICE, LLC, UNITED HEALTHCARE
SERVICES, INC.,

                       Defendants.

                                             ORDER

       This cause comes before the Court on the Motion of the Defendants, various entities of

United Healthcare Insurance Company (collectively, “Defendants”), for Judgment on the

Pleadings, or, alternatively, for Summary Judgment (Doc. No. 73). Plaintiff Medicomp, Inc.,

(“Plaintiff”) filed a Memorandum in Opposition (Doc. No. 77), to which Defendants replied

(Doc. No. 80). This is the third time the Court has been asked to address the sufficiency of

Plaintiff’s Complaint, (see Doc. Nos. 42, 53), but it is the Court’s first opportunity to consider

the merits of Plaintiff’s claim. The Court will grant summary judgment because Plaintiff has

failed to submit any evidence to meet its statutory burden of establishing its standing to sue.

                                       I. BACKGROUND

       For purposes of the Motion for judgment on the pleadings, the Court continues to accept

as true the facts as alleged in Plaintiff’s Amended Complaint, as discussed in this Court’s prior

Order (Doc. No. 42). Plaintiff originally brought five claims, but only one remains viable:
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Defendants’ alleged failure to reimburse Plaintiff for its wireless monitoring device in violation

of the federal Employee Retirement Income Security Act (ERISA). See 29 U.S.C. § 1132(a). In

the dismissal Order, the Court assumed, based on the liberal pleading standard and Defendant’s

failure to raise the issue, that “Plaintiff ha[d] derivative standing to sue under ERISA’s civil

enforcement provision, 29 U.S.C. § 1132(a) (2006), as an apparent third-party assignee of

ERISA plan beneficiaries (here, presumably the patients who received the Wireless Device),”

and cited Cagle v. Bruner, 112 F.3d 1510, 1515 (11th Cir. 1997) (per curiam), for support. (Doc.

No. 42 at 3.) Defendants now assert that the Complaint fails to allege that Plaintiff had any such

assignments, and they seek judgment on the pleadings as a remedy.

       Alternatively, Defendants argue that they are entitled to summary judgment because

Plaintiff has failed to produce evidence of any valid assignments of benefits. The parties

conducted discovery on this and other issues for approximately six months, the discovery period

has ended, and the deadline for filing dispositive motions has passed. Defendants filed the

deposition of one of Plaintiff’s executives, Dr. Daniel Balda, in support of their Motion for

Summary Judgment; in response, Plaintiff submitted numerous examples of identical, redacted

forms, purportedly signed by beneficiaries of Defendants’ plans, authorizing Plaintiff to appeal

Defendants’ denial of benefits for the wireless monitoring device at issue in this litigation.

                                    II. LEGAL STANDARDS

A. Judgment on the Pleadings

       Rule 12(c) permits a motion for judgment on the pleadings “[a]fter the pleadings are

closed[,] but early enough not to delay trial.” Fed. R. Civ. P. 12(c). “Judgment on the pleadings

is appropriate when there are no material facts in dispute, and judgment may be rendered by

considering the substance of the pleadings and any judicially noticed facts.” Hawthorne v. Mac

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Adjustment, Inc., 140 F.3d 1367, 1370 (11th Cir. 1998). As with a motion to dismiss, the Court

accepts all of the allegations in the complaint as true and construes them in the light most

favorable to the nonmoving party. In re Northlake Foods, Inc., 715 F.3d 1251, 1255 (11th Cir.

2013) (per curiam).

B. Summary Judgment

       Summary judgment is appropriate when the moving party demonstrates “that 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 must satisfy this initial burden by “identifying those

portions of the pleadings, depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue

of material fact.” Norfolk S. Ry. v. Groves, 586 F.3d 1273, 1277 (11th Cir. 2009) (quoting

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). However, the movant is entitled to summary

judgment where “the nonmoving party has failed to make a sufficient showing on an essential

element of her case with respect to which she has the burden of proof.” Celotex, 477 U.S. at 323.

When it conflicts, the court presumes the nonmoving party’s evidence to be true and will draw

all reasonable inferences in its favor. Shotz v. City of Plantation, 344 F.3d 1161, 1164 (11th Cir.

2003). In Anderson v. Liberty Lobby, the Supreme Court explained that the standard for

summary judgment is “whether reasonable jurors could find by a preponderance of the evidence

that the plaintiff is entitled to a verdict.” 477 U.S. 242, 252 (1986). However, “[c]redibility

determinations, the weighing of the evidence, and the drawing of legitimate inferences from the

facts are jury functions, not those of a judge.” Id. at 255.

                                          III. ANALYSIS

A. ERISA Standing

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       The civil enforcement provision of ERISA permits a participant or beneficiary to bring

suit “to recover benefits due to him under the terms of his plan.” 29 U.S.C. § 1132(a)(1). The

standing issue presented in this case is not of the “subject-matter-jurisdictional doctrine of

justiciability which considers injury, traceability to the defendant, and redressability.” Physicians

Multispecialty Grp. v. Health Care Plan of Horton Homes, Inc., 371 F.3d 1291, 1293 (11th Cir.

2004) (citation omitted). Instead, § 1132 functions as a statutory standing provision that “sets

forth those parties who may bring civil actions under ERISA and specifies the types of actions

each of those parties may pursue.” Gulf Life Ins. Co. v. Arnold, 809 F.2d 1520, 1524 (11th Cir.

1987). The language in the statute is clear: the only “parties who have independent standing to

sue an ERISA plan” are participants, beneficiaries, fiduciaries, or the Secretary of Labor. Cagle,

112 F.3d at 1514. However, the Eleventh Circuit has ruled that Congress “did not intend to alter

the general rule that an assignee of a right has the same standing to sue as the assignor,” so a

party may obtain “derivative standing based upon an assignment of rights from an entity listed

in” § 1132(a).1 Id. at 1515.

       1
         The Eleventh Circuit also provided a policy rationale for its decision that primarily
focused on the typical ERISA assignment, from a plan beneficiary to his or her physician:

       If provider-assignees cannot sue the ERISA plan for payment, they will bill the
       participant or beneficiary directly for the insured medical bills, and the participant
       or beneficiary will be required to bring suit against the benefit plan when claims
       go unpaid. On the other hand, if provider-assignees can sue for payment of
       benefits, an assignment will transfer the burden of bringing suit from plan
       participants and beneficiaries to providers[, who] are better situated and financed
       to pursue an action for benefits owed for their services. For these reasons, the
       interests of ERISA plan participants and beneficiaries are better served by
       allowing provider-assignees to sue ERISA plans.

Cagle, 112 F.3d at 1515 (internal citations and quotation marks omitted).

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       The Cagle panel did not “decide what constitutes a valid assignment of medical benefits

covered by ERISA,” id. at 1516 n.3, but a subsequent panel has shed at least some light on that

question. In Hobbs v. Blue Cross Blue Shield of Alabama, two physician assistants sued an

ERISA plan for its alleged failure to “include a provision in its health insurance policies for the

payment of medical or surgical services provided by licensed physician assistants in violation of”

a certain provision of Alabama law. 276 F.3d 1236, 1239 (11th Cir. 2001). In order to decide

whether that claim was completely preempted and thus removable to federal court, the court had

to determine that the physician assistants had standing to sue under ERISA; otherwise, their

claim could not have arisen under federal law. Id. at 1240. The physician assistants were

obviously not beneficiaries, participants, or fiduciaries under § 1132(a), so the only way they

could have had standing to sue under ERISA was if they received a valid assignment of that right

from an individual enumerated in the statute. Id. at 1241 (citing Cagle, 112 F.3d at 1512–16.)

The Hobbs panel thus affirmed the Cagle holding, but clarified that derivative standing was

available only “when the healthcare provider had obtained a written assignment of claims from a

patient who had standing to sue under ERISA as a ‘beneficiary’ or ‘participant.’” Id. (citations

omitted). Because the ERISA plan administrator in Hobbs “failed to present proof of an

assignment, its reliance on Cagle . . . [was] misplaced.” Id. at 1242.

       Subsequent Eleventh Circuit cases have confirmed the Hobbs panel’s reliance on written

assignments from patients with standing to sue. In Connecticut State Dental Association v.

Anthem Health Plans, Inc., the plaintiff-dentists were found to have standing where the

defendant-insurer seeking removal cited the claim forms that the plaintiffs submitted for

reimbursement for medical services rendered to the defendants’ beneficiaries. 591 F.3d 1337,

1351 (11th Cir. 2009). Each claim form included the following sentence: “I hereby authorize

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payment of the dental benefits otherwise payable to me directly to the below named dental

entity.” Id. Although the forms did not contain the names and signatures of the patients, the

plaintiffs represented that the signatures were on file in their offices and the forms matched the

assigning patients with the relevant ERISA plans from which the plaintiffs sought benefits. Id. at

1351 n.11.

       Numerous district courts have applied the doctrine laid out in Cagle and Hobbs, including

this one. In Adventist Health System/Sunbelt Inc. v. Blue Cross & Blue Shield of Florida, Inc.,

the undersigned approved a magistrate judge’s report and recommendation determining that the

plaintiff-provider lacked standing to sue, despite having “submitted copies of some . . . claim

forms,” because the provider failed to “submit copies of any written assignment of benefits

signed by [the relevant plan’s] subscribers.” No. 6:08-cv-1706-Orl-22KRS, 2009 WL 722303, at

*7 (M.D. Fla. Mar. 18, 2009). This Court’s approach to derivative standing via assignment is

consistent with that of other judges in this district. See, e.g., C.N. Guerriere, M.D., P.A. v. Aetna

Health, Inc., No. 8:07-cv-1441-T-27MAP, 2007 WL 3521369, at *2–3 (M.D. Fla. Nov. 15,

2007) (refusing to find standing without “a written assignment of claims from a patient with

standing,” despite submission of “electronic claim form” stating that patient “authorized payment

of member benefits by having a ‘Signature on file’ stamp indicated on the claim form”); Current

Wave Med. Sys., Inc. v. Cigna Corp., No. 8:07-cv-1102-T-26EAJ, 2007 WL 5389120, at *2

(M.D. Fla. Aug. 3, 2007) (finding standing only where the plaintiff provided a sample of its

assignment of benefits form and stated in the complaint that its subscribers executed such

assignments with their patient data forms).

B. Judgment on the Pleadings

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       Although the Complaint does not specifically allege that Plaintiff received written

assignments from the beneficiaries of Defendants’ plans, this issue is better resolved on summary

judgment. Defendants’ failure to raise this issue until now allowed the Court to infer, despite the

inartful pleading, that Plaintiff had met the requirements for standing.2 In any event, the issue is

moot. The litigation has reached the close of discovery, (see Doc. Nos. 66, 72), and the Court

finds that Plaintiff has failed to demonstrate an issue of material fact that would preclude

summary judgment on the question of standing.

C. Summary Judgment

       Under clear Eleventh Circuit precedent and consistent district court interpretation,

Plaintiff must have received written assignments of benefits from ERISA plan beneficiaries in

order to have derivative standing to sue. Plaintiff does not submit, nor claim to have received,

such assignments from any actual beneficiaries. Instead, Plaintiff asserts that it is entitled to

standing because plan beneficiaries assigned their rights to their physicians, who then

“transfer[red]” those assignments to Plaintiff. (Pl.’s Mem. Opp’n (Doc. No. 77) 8 (quoting Balda

Dep. (Doc. No. 74-2) 56:2–7).) Plaintiff does not submit any legal authority for this proposition,

but misconstrues Connecticut State Dental to suggest that “the possibility of direct payment” for

medical services, regardless of the existence of an actual assignment, is sufficient to establish

standing to sue. As previously discussed, the plaintiffs in Connecticut State Dental possessed

written assignments of benefits from their patients; where that case discussed the “possibility of

       2
           The Amended Complaint states the following: “Plaintiff is a third party beneficiary to
such insurance policy benefits as the contracts between Defendants and their insureds evince a
clear and manifest intent to primarily and directly benefit medical service providers such as the
Plaintiff.” (Am. Compl. ¶ 17.) Although Plaintiff obviously did not claim an assignment, the
pleading error was not so substantial that the Court felt compelled to dismiss on its own
initiative.

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direct payment,” it was referring to the merit of the underlying claims for benefits, not the

plaintiffs’ standing. 591 F.3d at 1351, 1353.

       Alternatively, Plaintiff asserts that it has standing because it received authorization from

some beneficiaries to appeal unfavorable benefits determinations on their behalf. (See Pl.’s Mem.

Opp’n Ex. A (Doc. No. 77-1).) After carefully considering these forms, it is clear to the Court

that the beneficiaries did not assign their rights to reimbursement or to sue. The only obvious

agreement is to allow Plaintiff to pursue an appeal and to communicate with Defendants in

conjunction therewith. These forms do not create a material issue of fact with respect to

Plaintiff’s receipt of written assignments of benefits, especially when Plaintiff has admitted that

it never received an actual assignment from the beneficiaries.

       Defendants point, convincingly, to the deposition of Plaintiff’s executive, Dr. Daniel

Balda. Plaintiff’s business model does not emphasize contact with the patient, and it appears that

in most cases, the physician’s office fills out the paperwork to enroll the patient in Plaintiff’s

cardiac monitoring service. (Balda Dep. 51:5–16.) The patient does not have to sign the

enrollment form. (Id. at 52:15–17.) The form does not require the patient to make any

representations or warranties. (Id. at 54:18–22.) When asked if patients ever sign a document that

“[s]pecifically names Medicomp and assigns Medicomp the benefits of that patient’s insurance

policy,” Dr. Balda answered, “No.” (Id. at 60:15–20.) Finally, Dr. Balda admitted that Plaintiff

never received permission from the patients to bill on their behalf, only from their physicians.

(Id. at 68:17–24.) Based on this uncontradicted evidence, the Court concludes that there are no

facts supporting Plaintiff’s assertion that it possessed valid assignments of benefits from ERISA

plan participants or beneficiaries. As a result, Defendants are entitled to summary judgment.

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       The Court expresses no opinion on the merits of Plaintiff’s claim – it may well be that

Defendants are obligated to pay for Plaintiff’s cardiac monitoring service under the various

ERISA plans. The Court is mindful of the policy considerations underlying the

Eleventh Circuit’s decision to extend derivative standing to medical providers, but the

controlling precedent on the subject only allows a narrow extension of standing where there is

evidence of a valid assignment from a plan participant or beneficiary. Absent such evidence,

Defendants are entitled to summary judgment.

                                           IV.
                                       CONCLUSION

       Based on the foregoing, it is ordered as follows:

       1.          Defendants’ Motion for Judgment on the Pleadings or, alternatively, for

Summary Judgment (Doc. No. 73), filed April 1, 2013, is GRANTED IN PART AND

DENIED IN PART.

       2.     The Motion for Judgment on the Pleadings is DENIED; however, the Motion
       for

Summary Judgment is GRANTED.

       3.     The Clerk is directed to CLOSE the case.

       DONE and ORDERED in Chambers, in Orlando, Florida on July 22, 2013.

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