Envision HealthCare Corp. v. United HealthCare Ins. Co.
Envision HealthCare Corp. v. United HealthCare Ins. Co.
Opinion of the Court
THIS CAUSE is before the Court upon Defendant's Motion to Compel Arbitration and Stay the Action (D.E.24).
THE COURT has considered the pertinent portions of the record and is otherwise fully advised in the premises.
BACKGROUND
The facts recited here come from the Complaint, filed March 12, 2018. D.E. 1.
Plaintiffs, Envision HealthCare Corporation ("Envision") and Sheridan HealthCorp, Inc. ("Sheridan"), sue United HealthCare Insurance Company ("United") for damages stemming from alleged contractual breaches. Id. ¶¶ 1-4. The contract required Plaintiffs to pay for the medical expenses of patients insured by United, and United, in turn, would pay Plaintiffs according to pre-determined payment rates. Id. Ex. A
Plaintiffs allege that Defendant unilaterally changed the contractual payment rates in response to perceived overbilling by Plaintiffs. Id. ¶¶ 35, 55.
*1324The contract provides that in the event the Parties disagree as to the existence of overbilling, "the issue will be resolved through the dispute resolution process set forth in the Agreement." Id. ¶ 38. The dispute resolution provision requires that "any and all disputes" arising out the contract be referred to binding arbitration. Id. ¶ 39.
The Parties agree that this mandatory arbitration provision is enforceable as written, and that all of Plaintiffs' claims fall within its scope. Plaintiffs argue, however, that by unilaterally changing the payment rate, Defendants waived the arbitration provision, and therefore Plaintiffs are no longer bound by it.
ANALYSIS
1) Defendant Has Not Waived Its Arbitration Right
An agreement to arbitrate may be waived. Ivax Corp. v. B. Braun of Am., Inc. ,
Here, Plaintiffs attempt to do precisely that which Ivax prohibits: turn a breach of contract into a waiver of an arbitration clause. They argue that United waived the arbitration provision by unilaterally changing the payment rates, thereby engaging in "self-help" rather than obeying the procedures set forth in the dispute resolution provision. No case cited by Plaintiff or any in the Court's own review extends the waiver rule so far. Waiver has been found where a party litigated for three years before moving for arbitration. Garcia v. Wachovia Corp. ,
This case is different; the waiver is premised on a breach alone. To extend the waiver rule to a contractual breach alone would, as Ivax warns, render arbitration provisions meaningless. See Ivax Corp. ,
Additionally, Plaintiff has not identified any prejudice. Plaintiff asserts that Defendant's unilateral change to the payment rates has caused it harm, but this is harm from the alleged contractual breach, not prejudice flowing from conduct inconsistent with Defendant's right to arbitrate. See Citibank, N.A. v. Stok & Assocs., P.A. ,
The Eleventh Circuit has found prejudice where a party litigates for some time before invoking its arbitration right, thereby *1325forcing the other party to incur substantial time and expense. See, e.g., Morewitz ,
For these reasons, the Court finds that Defendant has not waived the arbitration provision. Because the Parties agree that the arbitration provision is otherwise enforceable and applicable to this dispute, the Motion must be granted.
2) The Case Should Be Dismissed, Not Stayed
When a case is subject to binding arbitration, it is within the district court's discretion whether to stay or dismiss a case. See, e.g., N-Tron Corp. v. Rockwell Automation, Inc. , No. CIV.A. 09-0733-WS-C,
Here, the Court concludes that dismissal without prejudice is appropriate. The case has been pending for less than two months. Additionally, the alleged breaches occurred within the last five years, and so the statute of limitations is not implicated. Accordingly it is hereby
ORDERED AND ADJUDGED that upon Defendant's Motion to Compel Arbitration and Stay the Action (D.E.24) is GRANTED. The case is DISMISSED WITHOUT PREJUDICE. It is further
ORDERED AND ADJUDGED that the case is CLOSED for administrative purposes. All hearings are CANCELLED and all other motions are DENIED AS MOOT.
DONE AND ORDERED in Chambers at Miami, Florida, this 26th day of April, 2018.
Plaintiffs allege other breaches as well, but because they are not relevant to this motion, the Court does not address them.
Reference
- Full Case Name
- ENVISION HEALTHCARE CORPORATION v. UNITED HEALTHCARE INSURANCE COMPANY
- Status
- Published