Court Opinion

ID: 4400918
Source: CourtListenerOpinion
Date Created: 2019-05-28 16:04:31.066332+00
Date Added: 2024-06-11T07:49:53.563377
License: Public Domain

FOURTH DIVISION
                                DOYLE, P. J.,
                          MCMILLIAN and COOMER, JJ.

                     NOTICE: Motions for reconsideration must be
                     physically received in our clerk’s office within ten
                     days of the date of decision to be deemed timely filed.
                                 http://www.gaappeals.us/rules

                                                                        May 28, 2019

In the Court of Appeals of Georgia
 A19A0227. BOYD et al. v. NEAL
 A19A0369. NEAL v. GEORGIA DEPT. OF COMMUNITY
 HEALTH et al.

      MCMILLIAN, Judge.

      Trecia Neal,1 a DeKalb County school system employee who enrolled in the

State Health Benefits Plan for the calendar year 2014, initially filed this putative class

action against the Georgia Department of Community Health (the “Department”) for

breach of contract and breach of the covenant of good faith and fair dealing after the

Department changed the benefits that she had elected and for which she had agreed

to pay premiums. Neal subsequently amended the complaint to assert a petition for

      1
          Two other individuals also asserted claims, but they are not parties to this
appeal.
writ of mandamus against the Board of Community Health (the “Board”) members2

to require them to perform what Neal alleges was their official duty to conduct an

actuarial analysis and recalculate premiums before changing the plan benefits. These

related appeals arise from the trial court’s order granting summary judgment to the

Department on sovereign immunity grounds (Case No. A19A0369) and denying the

Board’s motion to dismiss Neal’s alternative claim for a writ of mandamus (Case No.

A19A0227).3 For the reasons that follow, we affirm the trial court’s order granting

summary judgment in favor of the Department but reverse its denial of the Board’s

motion to dismiss.

                                Case No. A19A0369

      By statute, the Board is authorized to establish a health insurance plan for state

employees, public school teachers, and public school employees; this plan is called

the State Health Benefits Plan (“SHBP” or the “Plan”). See OCGA §§ 45-18-2; 20-2-

      2
       The individual Board members named as defendants are Norman Boyd, Russ
Childers, Russell Crutchfield, Allana Cummings, Roger Folsom, Donna Thomas
Moses, Mark Trail, and Anthony Williamson. We will refer to them collectively as
the Board or Board members.
      3
        Following our grant of the Board members’ application for interlocutory
review, Neal filed her notice of cross-appeal. Because the two cases arise from the
same set of facts and the same trial court order, we have consolidated them for
purposes of this appeal.

                                          2
881; 20-2-911, respectively. During the open enrollment period in 2013, the

Department offered Plan members three coverage options for the 2014 calendar year:

Gold, Silver, and Bronze. In exchange for higher premiums, Gold and Silver members

would receive more money for their Health Reimbursement Accounts, lower

deductibles, lower co-insurance rates, and lower out-of-pocket maximums than

Bronze members.

      Neal registered online for Gold coverage. By doing so, Neal accepted the

Plan’s “terms and conditions,” including her “responsibility to review any applicable

Plan documents.” The Plan documents included an “Active Decision Guide,” a

welcome letter from the Commissioner of the Department, and a “Summary Plan

Description,” which governed the terms of coverage. The Active Decision Guide

stated: “The material in this booklet is for information purposes only and is not a

contract. It is intended only to highlight the principal benefits of the SHBP plan

options.” The same page also clarified that “[a]vailability of SHBP options may

change based on federal or state law changes or as approved by the Board . . .” and

that “[p]remiums for SHBP options are established by the DCH Board and may be

changed at any time by the Board resolutions subject to advance notice.” Also, the

                                         3
2013 Board resolution establishing the premium rates for 2014 included a notice

that:

        The Board of Community Health sets all member premiums by
        resolution and in accordance with the law and applicable revenue and
        expense projections. Any subsidy policy adopted by the Board may be
        changed at any time by Board resolution, and does not constitute a
        contract or promise of any amount of subsidy.

        When the Department faced financial shortfalls in the Plan, it eliminated the

three tiers of co-insurance for most health care services and established a single tier

of co-payments, a change made on January 27, 2014 and retroactive to January 1,

2014. Following this change, Gold and Silver Plan members were required to

continue paying higher premiums despite the fact that they no longer had the benefit

of better co-insurance rates as compared to the Bronze Plan.

        In May 2014, Neal filed suit against the Department, seeking class certification

on behalf of Gold and Silver Plan members for breach of contract and breach of the

implied covenant of good faith and fair dealing. The Department moved to dismiss,

arguing that Neal was unable to prove a waiver of its sovereign immunity by written

contract. Neal then amended her complaint to attach the Active Decision Guide and

                                            4
Summary Plan Description. The Department again filed a motion to dismiss on

sovereign immunity grounds, which the trial court denied.

      On appeal, this Court reversed the trial court’s order, holding that even “[r]ead

as a whole, the documents at issue here do not show that the parties entered into a

signed, written contract.” Ga. Dept. of Community Health v. Neal, 334 Ga. App. 851,

855 (1) (780 SE2d 475) (2015) (“Neal I”). We further found that the relevant statutes

and regulations governing the Plan did not create a contract between Neal and the

Department and Neal was, therefore, unable to prove a waiver of sovereign

immunity. Id. at 856 (2). Following its grant of Neal’s petition for writ of certiorari,

our Supreme Court vacated this Court’s opinion and remanded the case for us to

reconsider our conclusion that we had jurisdiction over the Department’s direct

appeal in light of the Supreme Court’s intervening holding in Rivera v. Washington,

298 Ga. 770 (784 SE2d 775) (2016). After concluding on remand that we lacked

jurisdiction to hear the Department’s direct appeal under the collateral order

doctrine, we dismissed the appeal. Ga. Dept. of Community Health v. Neal, 340 Ga.

App. 94 (796 SE2d 482) (2017).

      Once the case was remitted back to the trial court, the Department filed a

motion to set aside the prior order and enter a new order granting its motion to

                                           5
dismiss. Neal opposed the motion and filed an amended complaint, adding an

alternative claim for mandamus against the individual members of the Board. The

Department then filed a motion for partial summary judgment related to the breach

of contract claims, and the Board filed a motion to dismiss the petition for mandamus.

Following a hearing, the trial court granted the Department’s motion on sovereign

immunity grounds, but denied the Board’s motion to dismiss. This appeal followed.

      1. In her first two enumerations of error, Neal asserts that the trial court erred

in finding that neither the Plan documents nor the implementing statutes constitute

a written contract with the State sufficient to waive sovereign immunity.

      We start our analysis by examining the doctrine of sovereign immunity as it

relates to contract actions. Generally, the Georgia Constitution provides broad

sovereign immunity for the State:

      Except as specifically provided in this Paragraph, sovereign immunity
      extends to the state and all of its departments and agencies. The
      sovereign immunity of the state and its departments and agencies can
      only be waived by an Act of the General Assembly which specifically
      provides that sovereign immunity is thereby waived and the extent of
      such waiver.

                                          6
Ga. Const. of 1983, Art. I, Sec. II, Par. IX (e). But sovereign immunity is waived in

limited circumstances, and specifically, for contract actions, sovereign immunity is

waived: “as to any action ex contractu for the breach of any written contract now

existing or hereafter entered into by the state or its departments and agencies.” Ga.

Const. Art. I, § II, ¶ IX (c). See also OCGA § 50-21-1 (a) (“The defense of sovereign

immunity is waived as to any action ex contractu for the breach of any written

contract . . . entered into by the state, department and agencies of the state, and state

authorities.”).

      Our Supreme Court has recently explained the relationship between common

law rules of contract and what constitutes a written contract sufficient to waive

sovereign immunity:

      General rules of contract law that might otherwise support a claim for
      breach of contract damages between private parties . . . will not support
      a claim against the state or one of its agencies if the contract is not in
      writing so as to trigger the waiver of sovereign immunity.

Ga. Dept. of Labor v. RTT Assoc., Inc., 299 Ga. 78, 82 (2) (786 SE2d 840) (2016).

Thus, a party may not recover for breach of contract against the State based on an

implied contract, on a theory of quantum meruit, or by the parties’ course of conduct

even if a document exists supplying the material terms of the alleged contract. Id. at

                                           7
82-83 (2). RTT Assoc. demonstrates that our Supreme Court means what it says when

it has cautioned that “[t]he doctrine of sovereign immunity requires that the

conditions and limitations of the statute that waives immunity must be strictly

followed.” (Citation and punctuation omitted.) Id. at 83 (2). “The burden of

demonstrating a waiver of sovereign immunity rests upon the party asserting it.” Id.

at 82 (1).

       The key question then is whether Neal has asserted the breach of a written

contract with the State sufficient to waive sovereign immunity. In her Third Amended

Complaint, Neal alleges that the Plan documents, including the Active Decision

Guide, welcome letter from the Commissioner, and Summary Plan Description

constitute a written contract between Neal and the State; that the Plan documents

expressly incorporate the duty as set out in statute and by regulation to perform an

actuarial analysis before changing Plan benefits and to recalculate premiums; and that

the Department breached this contract. Neal also alleges that “the contract” requires

rates to be based on actuarial costs of coverage without citing to any written

document. Notably, Neal does not challenge the Department’s right to change the

Plan’s benefit design according to the law but instead seeks “to enforce the

                                          8
contractual and statutory obligations of [the Department] to recalculate the premiums

after changing the benefit design.”

      On summary judgment, Neal cannot rely on mere allegations as she did in Neal

I, but must now point to evidence sufficient to create a genuine issue of material fact

that a written contract exists with the terms that Neal alleges have been breached in

order to support her burden that the State has waived its sovereign immunity. See SJN

Properties, LLC v. Fulton County Bd. of Assessors, 296 Ga. 793, 798 (2) (a) (770

SE2d 832) (2015) (once defendant on motion for summary judgment exposes an

absence of evidence to support plaintiff’s case, plaintiff must point to specific

evidence giving rise to triable issue). We, thus, turn to the evidence in the record of

a written contract.

      In the trial court and on appeal, Neal has failed to point to any language in the

Plan documents that expressly incorporates the statute or regulations. Instead, Neal

relies on the SHBP regulations, which provide that the Plan documents are created

“pursuant to the Health Insurance Acts;” that she was offered the Plan benefits

“pursuant to the Health Insurance Acts;” and that the SHBP regulations are therefore

evidence of a contract. Suffice it to say, just because the Plan was authorized by

                                          9
statute and created pursuant to statute does not mean that any particular statutory

duty is incorporated by reference into the Plan.

      Although not directly on point, we find our recent decision in Cobb County

School Dist. v. Learning Center Foundation of Central Cobb, Inc., 348 Ga. App. 66

(821 SE2d 127) (2018) (physical precedent only), to be instructive. In Learning

Center, our Court, in a divided opinion, found that the State had waived sovereign

immunity for a claim that the school district had violated the Charter Schools Act

because the district had entered into a written charter and OCGA § 20-2-2062 (1)

expressly provided that “[b]y entering into a charter, a charter petitioner and local

board shall be deemed to have agreed to be bound to all the provisions of [the Act]

as if such terms were set forth in the charter.” Id. at 68-69. Then-Judge Ellington

dissented, finding that the Code section did not incorporate the Charter Schools Act

into the charter as terms of the contract and, therefore, concluded that the plaintiff had

“failed to carry its burden of demonstrating the existence of a written contract the

terms of which the District allegedly breached.” Id. at 72.

      In contrast to the Charter Schools Act provision construed in Learning Center,

Neal has pointed to no language in the statute, regulations, or Plan documents

expressly incorporating any duty required by statute or regulation to perform an

                                           10
actuarial analysis or recalculate premiums prior to changing benefits. The lack of any

term in a written document expressly establishing or incorporating a duty to perform

an actuarial analysis or recalculate premiums is particularly significant in this

context where a written contract is required to waive sovereign immunity.4

Accordingly, we find that Neal has failed to support her burden of showing that there

is at least a genuine issue of material fact supporting her claim for a breach of a

written contract sufficient to waive the State’s sovereign immunity.5 See RTT Assoc.,
299 Ga. at 82 (2).

      We also reject Neal’s novel assertion that the SHBP statutes and regulations

themselves constitute a written contract.6 The Georgia Constitution makes it clear that

      4
        As described in Division 3, we also fail to find a statutory duty or duty
imposed by regulation to perform the actuarial analysis or recalculate premiums as
alleged by Neal.
      5
        Because Neal has failed to allege the breach of a written contract, we find it
unnecessary to determine whether the Plan documents may otherwise constitute a
written contract for sovereign immunity purposes. But see Neal I, 334 Ga. App. at
855 (1) (“Read as a whole, the documents at issue here do not show that the parties
entered into a signed, written contract.”).
      6
        Neal’s reliance on Fulton County v. Lord, 323 Ga. App. 384 (746 SE2d 188)
(2013), and Fulton County v. Andrews, 332 Ga. App. 473 (773 SE2d 432) (2015), is
misplaced. Those cases, which dealt with county employees’ claims for back pay
under the Civil Service Act, clearly have no relationship to Neal’s claims here under
the SHBP. See Neal I, 334 Ga. App. at 859 (2).

                                          11
only the General Assembly has the authority to waive sovereign immunity. Ga. Dept.

of Natural Resources v. Center for a Sustainable Coast, Inc., 294 Ga. 593, 599 (2)

(755 SE2d 184) (2014). And nothing in the text of the SHBP statutes supports that

the statutes or regulations constitute a written contract. Notably, the SHBP

regulations actually provide for the opposite: “[i]n creating the SHBP, neither the

Georgia General Assembly nor the Board of Community Health has waived its

sovereign immunity.” Ga. Comp. R. & Regs. r. 111-4-1-.10 (3). When the plain

language of the statute does not provide for a specific waiver of government

immunity nor the extent of such a waiver, courts cannot imply a waiver. Sustainable

Coast, 294 Ga. at 603 (2). Accordingly, the trial court did not err in granting the

Department’s motion for partial summary judgment.

      2. In her final enumeration of error, Neal asserts that the trial court erred in

dismissing her claim for breach of the covenant of good faith and fair dealing implied

in the parties’ contract. However, because we find that there is no contract as alleged

between Neal and the Department, this claim also fails. See U.S. Bank, N.A. v.

Phillips, 318 Ga. App. 819, 824 (2) (734 SE2d 799) (2012) (implied covenant of good

faith and fair dealing “cannot be breached apart from the contract provisions it

                                          12
modifies and therefore cannot provide an independent basis for liability”) (citation

and emphasis omitted).

                                Case No. A19A0227

      3. In this related case, the Board appeals after the trial court denied its motion

to dismiss Neal’s alternative claim for writ of mandamus. We review a trial court’s

ruling on a motion to dismiss de novo. RES-GA McDonough, LLC v. Taylor English

Duma LLP, 302 Ga. 444, 446 (807 SE2d 381) (2017).

      At the outset, we note that although sovereign immunity is a bar to Neal’s

claims for breach of contract, sovereign immunity does not bar mandamus relief.

Layer v. Barrow County, 297 Ga. 871, 872 (1) (778 SE2d 156) (2015). Mandamus is

an extraordinary remedy, and a “writ of mandamus may issue to compel a due

performance if there is no other specific legal remedy for the legal rights.” OCGA §

9-6-20. Thus, as our Supreme Court has explained, “[t]o be entitled to mandamus

relief, a claimant must establish that (1) no other adequate legal remedy is available

to effectuate the relief sought; and (2) the applicant has a clear legal right to such

relief.” (Citation and punctuation omitted.) Ga. Motor Trucking Assn. v. Ga. Dept.

                                          13
of Revenue, 301 Ga. 354, 364 (2) (B) (801 SE2d 9) (2017). The burden of proving a

clear legal right falls on the party seeking the writ of mandamus. Love v. Fulton

County Bd. of Tax Assessors, 348 Ga. App. 309, 317 (2) (821 SE2d 575) (2018).

      “A clear legal right to the relief sought may be found only where the claimant

seeks to compel the performance of a public duty that an official or agency is required

by law to perform.” (Citation and punctuation omitted.) Id. at 364-65 (2) (B). See also

Ga. Assn. of Professional Process Servers v. Jackson, 302 Ga. 309, 312 (2) (806

SE2d 550) (2017) (“For mandamus to issue, the law must not only authorize the act

to be done, but must require its performance.”) (citation and punctuation omitted).

This duty must be “clear and well defined.” Love, 348 Ga. App. at 317 (2). “The

determination of whether official action is required depends on the law governing the

subject matter in question.” (Citation omitted.) Jackson, 302 Ga. at 313 (2).

      We begin our analysis by examining what Neal claims were the Board’s clear

legal duties to perform. On remand from Neal I, Neal amended her complaint to add

a claim for writ of mandamus to compel the Board to recalculate the costs of coverage

to reflect the new actuarial value of the Gold and Silver levels and the increased

                                          14
subsidy for the Bronze level members following the Board’s changes to the Plan.7

Neal alleged that this recalculation would entitle class members to a refund of

premiums paid in excess of the difference between (1) the actuarial cost of coverage

for the revised benefits of the Gold or Silver option and (2) the subsidy provided to

members at the same level of coverage under the Bronze level.

      Turning to the relevant statutory and regulatory framework, our General

Assembly has authorized the Board to promulgate the SHBP under Chapter 18 of

Title 45 of the Official Code of Georgia Annotated. OCGA §§ 45-18-1 et seq.; 20-2-

880 et seq.; 20-2-910 et seq. Within Chapter 18 of Title 45, separate but similar

provisions govern the health benefit plan for state employees (OCGA § 45-18-2);

public school teachers (OCGA § 20-2-881); and public school employees (OCGA §

20-2-911), and permit the Board to adopt and promulgate rules and regulations for

the Plan’s administration, subject to delineated statutory limitations. See OCGA §§

45-18-2; 20-2-881; 20-2-911.

      7
        These changes included the addition of co-pays for pharmacy benefits and
certain medical visits for all Gold, Silver, and Bronze members instead of co-
insurance. No other changes, such as to HRA contributions, deductibles, or out-of-
pocket maximums, were made.

                                         15
      Neal relies on several statutes to support her claim that the Board failed to

comply with its statutory duty to recalculate the costs of coverage and premiums

before changing benefits. First, she points to OCGA § 45-18-5 (d), which provides

in relevant part:

      In administering this Code section, it shall be the responsibility of the
      board to develop rates for coverage based on the actual claims
      experience of the individuals covered by this Code section.

The individuals covered by this Code section are county officers and employees

whose employers elect to contract for SHBP coverage under OCGA § 45-18-5 (a), as

opposed to individual Plan members such as Neal. However, she maintains that she

is nonetheless exercising her public right to enforce this section because the Board

operates a single Plan for all eligible members. Pretermitting whether Neal has

standing to enforce a statute that does not apply to her particular coverage, this statute

does not establish a clear and well-defined legal duty to conduct an actuarial analysis

and recalculate costs of coverage and premiums each time that the Board changes

Plan member benefits and certainly does not address the situation here where co-

                                           16
insurance rates were converted to co-payments for certain services.8 See Jackson, 302
Ga. at 314 (2).

      Next, citing OCGA §§ 45-18-3, 20-2-883, and 20-2-913, Neal asserts that the

Board cannot charge two different rates for the same coverage. These statutes

provide:9

      The health insurance plan shall be designed by the board to:

      (1) Provide a reasonable relationship between the hospital, surgical, and
      medical benefits to be included and the expected distribution of
      expenses of each such type to be incurred by the covered employees and
      dependents; and

      8
        We also note that the governing regulations further provide what the Board
is to consider in establishing premium rates without limiting the Board’s discretion.
For example,

      The Board shall consider the actuarial estimate of the SHBP costs and
      funds appropriated to the various departments, boards, agencies, and
      school systems in establishing the Employee Deduction amount.

Ga. Comp. R. & Regs. r. 111-4-1-.02 (1) (c) (emphasis added).
      9
         The three statutes are virtually identical. OCGA § 45-18-3 (2), however,
refers to “reinsurance” rather than “coinsurance.”

                                         17
       (2) Include reasonable controls, which may include deductible and
       coinsurance provisions applicable to some or all of the benefits, to
       reduce unnecessary utilization of the various hospital, surgical, and
       medical services to be provided and to provide reasonable assurance of
       stability in future years of the plan.

OCGA §§ 45-18-3; 20-2-883; 20-2-913. The plain language of these statutes

prescribes no particular process by which the Board is to develop the health insurance

plan or what constitutes a “reasonable relationship” between benefits and expenses,

and to the contrary, supports that the Board has wide discretion in establishing

reasonable controls for the Plan to remain economically viable. Thus, these statutes

cannot provide a basis for mandamus relief. See, e.g., Bibb County v. Monroe County,

294 Ga. 730, 737-38 (2) (755 SE2d 760) (2014) (“mandamus is proper to compel the

undertaking of some official action to which the petitioner has a clear legal right, but

it is not proper either to prescribe how that action is taken or to preordain its result”).

       Finally, Neal relies on OCGA §§ 45-18-14 (a), 20-2-892 (b), and 20-2-920 (b)

to assert that because Plan members must receive the same employer contribution or

subsidy regardless of their Plan option, the premiums paid by the employee must

fluctuate according to the cost of coverage. However, these statutes authorize

premiums to be withheld from salary payments and govern contributions that

                                            18
employers are required to make to the health insurance fund, which were not affected

by the Board’s 2014 changes. They do not require the sort of actuarial analysis or

recalculation of premiums that Neal argues the Board had a duty to undertake. See

Cochran v. Kendrick, 297 Ga. 655, 657 (1) (778 SE2d 1) (2015) (mandamus claim

fails where claimant fails to show a “clear legal duty”).

      In sum, we agree with the Board that in seeking mandamus relief, Neal

attempts to impose requirements beyond the plain language of the statutes

themselves. And we find that, based on the facts of this case and the Board’s

statutorily granted discretion, that its actions were not arbitrary or capricious, such

that mandamus would lie. See Ga. DOT v. Peach Hill Props., Inc., 278 Ga. 198, 201

(2) (599 SE2d 167) (2004) (“mandamus is in order when a public officer grossly

abuses his or her discretion”). See Schrenko v. DeKalb County School Dist., 276 Ga.
786, 794 (3) (582 SE2d 109) (2003) (“In general, mandamus relief is not available to

compel officials to follow a general course of conduct, perform a discretionary act,

or undo a past act.”); Lansford v. Cook, 252 Ga. 414, 414 (314 SE2d 103) (1984)

(“Mandamus is a harsh remedy and ought not be granted unless a defect in legal

justice would ensure from failure to grant it.”). Accordingly, the trial court erred in

                                          19
denying the Board’s motion to dismiss Neal’s petition for mandamus, and we reverse

that portion of its order.10

       Judgment affirmed in Case No. A19A0369; judgment reversed in Case No.

A19A0227. Doyle, P. J., and Coomer, J., concur.

       10
          Because we find that Neal has failed to prove that she has a clear legal right
to the relief she seeks, we do not reach the Board’s remaining arguments that Neal
failed to make a formal demand; Neal improperly seeks to undo past acts; and Neal’s
claim is barred by laches.

                                          20