Med. Mut. of Ohio v. Air Evac Ems, Inc.
Med. Mut. of Ohio v. Air Evac Ems, Inc.
Opinion of the Court
SOLOMON OLIVER, JR., UNITED STATES DISTRICT COURT
Currently pending before the court in the within case is Defendant Air Evac *774EMS, Inc.'s ("Air Evac" or "Defendant") Motion for Partial Summary Judgment (ECF No. 47), and Plaintiff Medical Mutual of Ohio's ("MMO" or "Plaintiff") Motion for Partial Summary Judgment (ECF No. 45). Also pending is Air Evac's Motion to Strike MMO's Belatedly Disclosed Evidence ("Motion to Strike") (ECF No. 53). For the following reasons, the court grants Air Evac's Motion for Partial Summary Judgment as to the following: MMO's ERISA preemption claim (Count II); MMO's claim of ADA preemption regarding Air Evac's breach of contract claim (Count I); and MMO's claim of unjust enrichment (Count III). The court denies Air Evac's Motion for Partial Summary Judgment as to the following: Air Evac's breach of contract counterclaim (Counterclaim Count I); and MMO's claim of ADA preemption regarding Air Evac's quantum merit claim (Count I). The court denies MMO's Motion for Partial Summary Judgment, and also denies Air Evac's Motion to Strike as moot.
I. FACTS AND PROCEDURAL HISTORY
MMO is an Ohio-based health insurer. (Compl. at ¶ 1, ECF No. 1.) Air Evac is an air ambulance service provider which operates in several states, including Ohio. (Decl. of Seth Myers ("Myers Decl.") at ¶ 4, ECF No. 47-3.) Though MMO has express contracts with other air ambulance service providers setting the rates for services provided to MMO-insured patients, it does not have a contract with Air Evac. (Decl. of David Quiring ("Quiring Decl.") at ¶ 3.) In the fall of 2014, MMO offered to contract with Air Evac at specified rates, but Air Evac rejected the offer. (Dep. of Angela Richmond ("Richmond Dep.") at Ex. 230, ECF No. 55-8.) Air Evac countered with an offer which would require MMO to pay 97 percent of Air Evac's billed charges, which MMO did not accept. (Id. ; Dep. of Michael Preissler ("Preissler Dep.") at 129-31, ECF No. 55-1.) Nonetheless, Air Evac or its affiliates have provided air ambulatory services to MMO-insured patients and submitted invoices for reimbursement to MMO. (Decl. of Eric Thomas ("Thomas Decl.") at ¶ 4.)
In some instances between 2009 and 2016, MMO paid the charges billed by Air Evac, either in part or in full. (Id. at ¶¶ 6, 9.) However, Air Evac claims that MMO paid $5,031,751 less than the billed charges on 314 MMO-insured patient transports between 2009 and 2016. (Def.'s Mot. for Partial Summ. J. 4-6.) MMO alleges that Air Evac's fees are as much as three times the rates which it authorizes for its contracted partners. (Pl.'s Opp'n to Def.'s Mot. for Partial Summ. J. 3, ECF No. 55.) Furthermore, MMO contends that it has no obligation to pay Air Evac any amount without an express contract between the two entities. (Compl. at ¶ 33.) In response, Air Evac filed suit on November 25, 2015, in the Cuyahoga County Court of Common Pleas for breach of implied contract and quantum meruit.
On January 13, 2016, MMO filed a Complaint in this court against Air Evac, alleging three counts: (1) a declaratory judgment that the Airline Deregulation Act ("ADA") preempts Air Evac's state law claims; (2) a declaratory judgment that the Employee Retirement Income Security Act ("ERISA") preempts Air Evac's state law claims; and (3) a claim for unjust enrichment to recover MMO's previous payments to Air Evac. On March 18, 2016, Air Evac filed an Answer to Complaint and *775Counterclaim (ECF No. 7), alleging claims for (1) breach of implied contract, and (2) a declaratory judgment that the provisions of the Patient Protection and Affordable Care Act ("ACA"), when read with the ADA, preempts challenges to prices set by air carriers in a competitive market. The state court has stayed its action while the present case is pending. (Id. at 2 n.3.)
On February 28, 2017, the court denied Air Evac's Motion for Judgment on the Pleadings. (Order of Feb. 28, 2017, ECF No. 33.) On November 27, 2017, Air Evac filed its Motion for Partial Summary Judgment, in response to which MMO filed its Opposition (ECF No. 54) on January 17, 2018. Air Evac then filed its Reply (ECF No. 57) on February 7, 2018. MMO also filed a Motion for Partial Summary Judgment on November 27, 2018, in response to which Air Evac filed an Opposition (ECF No. 52) on January 17, 2018. MMO filed its Reply (ECF No. 58) on February 7, 2018. Additionally, on January 17, 2018, Air Evac filed its Motion to Strike. MMO filed an Opposition (ECF No. 59) to the Motion to Strike on February 7, 2018, and Air Evac filed its Reply (ECF No. 61) on February 14, 2018.
II. LEGAL STANDARD
The Federal Rule of Civil Procedure 56(a) governs summary judgment motions and provides:
The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. The court should state on the record the reasons for granting or denying the motion.
A party asserting there is no genuine dispute as to any material fact or that a fact is genuinely disputed must support the assertion by:
(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or
(B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.
Fed. R. Civ. P. 56(c)(1)
In reviewing summary judgment motions, this court must view the evidence in a light most favorable to the non-moving party to determine whether a genuine issue of material fact exists. Adickes v. S.H. Kress & Co. ,
The moving party has the burden of production to make a prima facie showing that it is entitled to summary judgment. Celotex Corp. v. Catrett ,
If the moving party meets its burden of production, then the non-moving party is under an affirmative duty to point out specific facts in the record which create a genuine issue of material fact. Zinn v. United States ,
III. LAW AND ANALYSIS
Both parties move the court for partial summary judgment. Air Evac asks the court to enter summary judgment dismissing all of MMO's claims. Air Evac also asks the court to enter summary judgment granting Air Evac's breach of contract counterclaim and ordering MMO to pay Air Evac's charges as billed. On the other hand, MMO asks the court to enter summary judgment in its favor on Air Evac's breach of contract claim to the extent that it challenges MMO's coverage determinations on ERISA-governed health plans. The court addresses each matter below.
A. ERISA Preemption and Motion to Strike
Air Evac moves for summary judgment on MMO's claim, in Count II, seeking declaratory judgment establishing that ERISA preempts Air Evac from recovering fees for services provided to MMO-insured patients covered by plans governed by ERISA. Air Evac argues that discovery has shown that its claims do not relate to any term of an ERISA plan and thus, its claims are not subject to ERISA preemption. Specifically, Air Evac contends that MMO's corporate witness admitted that in paying-or declining to pay-Air Evac's billed charges, MMO makes no reference to the terms of the underlying health plan. It adds that it could not have relied on the terms of any ERISA plan in bringing its claim because such plans have not been provided to Air Evac by MMO.
On the other hand, MMO moves for summary judgment on Air Evac's breach of contract counterclaim to the extent that it challenges services to MMO-insured patients covered by ERISA plans. MMO states that it denied coverage, under ERISA plans, for Air Evac services on twelve occasions during the period at issue. MMO indicates that it cited "lack of medical necessity" in eleven of those instances. It argues that ERISA plans provide the standard for determining medical necessity. In support of its argument, MMO presents the Declaration of David Quiring, Executive Vice President and Chief Experience Officer for MMO, as well as a summary chart which lists the twelve claims and states that basis for denial as lack of medical necessity or lack of eligibility. In response, Air Evac argues that MMO has not demonstrated that the twelve plans identified by MMO were subject to ERISA, nor that the resolution of those twelve claims required reference to the ERISA plan. Challenging MMO's evidence as merely conclusory, Air Evac presents its own evidence-including declarations and payment notices sent by MMO-in support of its argument that the twelve denials of coverage identified by *777MMO were subject to contradicting assertions or are subject to challenge. For example, it presents evidence indicating that in two of the twelve instances identified by MMO, MMO stated that services were in fact medically necessary. (Declaration of Melissa Gilbreath at ¶¶ 5, 9, ECF No. 52-1.) Additionally, it argues that the definition of medical necessity in the context of emergency care is provided by a different federal statute, not by ERISA.
Previously, the court denied Air Evac's Motion for Judgment on the Pleadings as to MMO's claim of ERISA preemption. After a detailed analysis of ERISA preemption,
As to ERISA preemption of Air Evac's breach of contract claim, the court explained the following framework, which will also govern the present matter:
In the case before the court, Air Evac's breach of contract claim is predicated on the existence of a contract implied in fact. This means that Air Evac relies on the conduct of the parties to make its claim, such as MMO's previous payments to Air Evac and MMO's representations to its insured members. If in establishing MMO's representations, Air Evac relies on terms within an ERISA plan, the court may need to interpret the terms of the plan to decide the issue. In this scenario, Air Evac would arguably be seeking to obtain plan benefits. However, if Air Evac does not rely on the terms of an ERISA plan in making its argument, the claim need not be classified as seeking plan benefits; the fact-finder would simply analyze whether an independent contract between MMO and Air Evac exists.
(Order of Feb. 28, 2017, 17.) Applying this framework to Air Evac's Motion for Judgment on the Pleadings, the court concluded: "Since Air Evac broadly referenced MMO's representations to its insured members in support of its contract claim, the court cannot determine at this stage if these representations include statements contained within an ERISA plan." (Id. )
With respect to the present Motions for Partial Summary Judgment regarding ERISA preemption of Air Evac's contract claim, the court finds that MMO has failed to establish that the remedy sought by Air Evac is primarily ERISA plan related. The Sixth Circuit instructs that, "[i[n deciding whether state-law claims are preempted by ERISA, we have focused on the remedy sought by plaintiffs." Marks v. Newcourt Credit Grp., Inc. ,
Curiously, MMO itself states the following in support of its assertion that it was not required to disclose the ERISA plans to Air Evac: "These twelve ERISA plans are not relevant to the dispute. Indeed, Air Evac, has not brought claims for payment under terms of any member's specific plans, and instead alleges that a distinct contract exists between it and Medical Mutual." (Pl.'s Opp'n to Def.'s Mot. to Strike 3- 4.) The court agrees with MMO on this point, and it must follow that the ERISA plan is not primarily related to Air Evac's claim. As in Hospice of Metro Denver, Inc. v. Grp. Health Ins. of Oklahoma, Inc. ,
This outcome is consistent with this court's observation that "courts generally find that preemption does not exist when a state law contract claim is based upon a relationship that does not involve the ERISA plan itself." (Order of Feb. 28, 2017, 15) (citing Marks ,
Ultimately, the court "will not conclude that state-law claims are preempted where their 'effect on employee benefits plans is merely tenuous, remote or peripheral.' "
*779Marks ,
Having granted Air Evac's Motion for Partial Summary Judgment as to ERISA preemption, the court denies Air Evac's Motion to Strike as moot. Air Evac asks the court to strike paragraphs six through eight of Quiring's Declaration regarding member ERISA plans due to MMO's failure to produce and identify said plans during discovery. While Air Evac's argument is well-taken, even when considering Quiring's Declaration in its entirety, MMO's ERISA preemption claim still fails.
B. Air Evac's Breach of Contract Counterclaim
Air Evac seeks summary judgment on its breach of implied-in-fact contract counterclaim. It contends that it is reasonably certain that an agreement that MMO would pay Air Evac's billed charges for services to MMO's insureds was intended. Specifically, Air Evac points to the following factual assertions to demonstrate a reasonably certain agreement: MMO understood that it had an obligation to pay for air ambulance services, based on deposition testimony; MMO previously paid for Air Evac services at the full billed rate; and MMO routinely paid the full billed charges of other air ambulance providers in the past. Furthermore, Air Evac asks the court to order MMO to pay for its past services at Air Evac's normal billing rate because, it contends, the parties impliedly agreed to such rate. Alternatively, Air Evac argues that the court should determine that its full billed rate constitutes a reasonable price term, asserting that the ADA contemplates that air carriers will set their own rates in response to market forces.
In response, MMO argues that Air Evac has failed to prove the basic elements of its contract claim, including offer, acceptance, consideration, and a meeting of the minds. With respect to these elements, MMO emphasizes the failed negotiations between MMO and Air Evac in September and November 2014, as evidence that there was no offer, nor acceptance. It argues that consideration was not provided by Air Evac and that MMO cannot be required to pay whatever price Air Evac chooses. It also notes the lack of clarity regarding the terms, among other factors, as evidence that there was no meeting of the minds. As to the rate of payment, MMO contends that the court typically may not supply the price term under Ohio law absent evidence of any agreement on the price. It adds that supplying a price term would bring the court within the ambit of ADA preemption, which precludes enforcement of any state law related to the price of an air carrier.
Under Ohio law, the "existence of an implied-in-fact contract, as with an express contract, 'hinge[s] upon proof of all the elements of a contract.' " GEM Indus., Inc. v. Sun Trust Bank ,
The court finds that Air Evac has failed to satisfy its burden as the moving party with respect to its breach of contract counterclaim. The record does not establish the absence of a genuine dispute of material fact as to whether an implied-in-fact contract existed between the parties. On one hand, Air Evac provided air ambulance services to MMO-insured patients. Air Evac billed MMO for its price of providing such services, which Air Evac's alleges to constitute the price term of the implied contract. It is undisputed that MMO has previously paid Air Evac in response to billing for its services, in part and in full. This conduct could demonstrate a course of dealing between the parties to prove a meeting of the minds. See Heaton v. Rohl ,
On the other hand, there is evidence on the record indicating that it was not reasonably certain that an agreement was intended. Most notably, MMO has presented evidence showing that efforts between the parties to enter into an express contract failed on two occasions in 2014: first, when Air Evac rejected MMO's offer to enter into an express contract at MMO's pre-determined rates; and second, when MMO did not accept Air Evac's offer to enter into an express contract at 97 percent of Air Evac's normal billing rates. See Conglomerated Hosts, Ltd. v. Jepco, Inc. ,
C. ADA Preemption
Air Evac moves for summary judgment on MMO's claim, alleged in Count I of the Complaint, that the ADA precludes Air Evac from recovering fees for air transportation absent an express agreement for such transportation. First, Air Evac argues that the ADA does not require air carriers to have an express contract in order to collect for their services. Rather, Air Evac asserts an implied contract may be enforced consistent with the ADA because it is not dictated by the state, but is a voluntary undertaking of the air carrier. Air Evac adds that MMO's assertion that air ambulance services may not collect payment under an implied contract contradicts the ACA because, it contends, the ACA protects patients from the financial consequences of medical treatment beyond their control.
MMO counters that Air Evac has made no argument as to why MMO's request for a declaration of ADA preemption as to Air Evac's underlying state claim for quantum merit is subject to summary judgment. As to Air Evac's underlying implied contract claim, MMO briefly argues that the ADA preempts such claim because Air Evac cannot establish its claim without relying upon an implied obligation to pay the reasonable value for services under Ohio law. This is so because, MMO argues, there was no meeting of the minds on the price for Air Evac's services.
1. ADA Preemption of Contract Claim
The court examined ADA preemption in its Order denying Air Evac's Motion for Judgment on the Pleadings, and does not repeat its background or determinations in their entirety here. (Order of Feb. 28, 2017, 4-12.) With respect to ADA preemption of Air Evac's contract claim, the court explained that "a contract implied in law will be preempted by the ADA and a contract implied in fact will not be." (Id. at 7.) The court held that:
Whether MMO's representations to its members or MMO's previous payments to Air Evac qualify as conduct sufficient to establish a contract implied in fact is a question of fact which the court cannot determine from the state of the record currently before it. Since the court cannot determine if a contract implied in fact exists, the court cannot decide as a matter of law whether the ADA will preempt Air Evac's contract claim.
(Id. at 8.) In keeping with this holding, it follows that the court, at this stage, must again seek to determine whether Air Evac has alleged conduct sufficient to establish a contract implied in fact. See Hickcox-Huffman v. US Airways, Inc. ,
Air Evac has alleged conduct sufficient to assert a claim of breach of implied-in-fact contract. See Hickcox-Huffman ,
Contrary to MMO's contention, the possibility that a reasonable price term may be supplied for the contract implied-in-fact-if it is found to exist-does not effect whether the ADA preempts the breach of contract claim.
*783Keeva J. Kekst Architects, Inc. v. George , No. 70835,
In contrast to the present case, Scarlett v. Air Methods Corporation , No. 16-cv-2723,
2. ADA Preemption of Quantum Merit Claim
The court's prior findings with respect to ADA preemption of Air Evac's claim in state court for quantum merit remain unchanged by Air Evac's Motion for Partial Summary Judgment. Air Evac does not specifically discuss ADA preemption as to its underlying quantum merit claim. Rather, its arguments focus on preemption of its implied contract claim. As to preemption of Air Evac's quantum merit claim, the court stated in its Order denying Air Evac's Motion for Judgment on the Pleadings: "In determining whether an unjust enrichment or quantum meruit claim is preempted by the ADA, courts apply a similar analysis as above: whether the obligation is self-imposed or state-imposed." (Order of Feb. 28, 2017, 9) (citing Overka v. Am. Airlines, Inc. ,
However, an unjust enrichment / quantum meruit or other claim predicated on federal law, to the extent that such a claim might exist, would avoid ADA and *784ERISA preemption. Because the court cannot determine from the record whether any claim based in federal law exists, the court cannot grant Air Evac's Motion in regard to a federal unjust enrichment, quantum meruit or other claim.
(Id. at 18.)
Air Evac makes no attempt to clarify the record regarding whether its underlying quantum merit claim is predicated on federal law. Likewise, MMO does not attempt to clarify the record, nor move for summary judgment, as to Air Evac's quantum merit claim. Therefore, the court's findings in its Order of February 28, 2017 remain applicable. As it is still unclear whether Air Evac's underlying quantum merit claim is predicated on federal law, Air Evac's Motion for Partial Summary Judgment on MMO's claim of ADA preemption as to Air Evac's underlying state quantum merit claim is denied.
D. MMO's Unjust Enrichment Claim
Air Evac argues that, because MMO's ADA preemption claims fails, MMO's unjust enrichment claim in Count III must also fail because the claim is premised on MMO's ADA preemption theory. In response, MMO concedes that its claim in Count III, which was pleaded in the alternative, "is undoubtedly based upon state law and would appear to fall within the class of claims deemed preempted by the ADA under the Court's prior Order." (Pl.'s Opp'n to Mot. for Partial Summ. J. 24.) MMO adds that it will withdraw the claim if the court determines that the parties' unjust enrichment and quantum merit claims are preempted.
The court grants Air Evac's Motion for Partial Summary Judgment as to MMO's unjust enrichment claim. As MMO has conceded, and clarified for the record, its claim for unjust enrichment falls within the class of claims preempted by the ADA pursuant to the court's Order. (Order of Feb. 28, 2017, 18.)
IV. CONCLUSION
For the foregoing reasons, the court grants in part and denies in part Air Evac's Motion for Partial Summary Judgment (ECF No. 47). Air Evac's Motion for Partial Summary Judgment is granted as to the following: MMO's ERISA preemption claim (Count II); MMO's claim of ADA preemption as to Air Evac's breach of contract claim (Count I); and MMO's claim of unjust enrichment (Count III). Air Evac's Motion for Partial Summary Judgment is denied as to the following: Air Evac's breach of contract counterclaim (Counterclaim Count I); and MMO's claim of ADA preemption as to Air Evac's quantum merit claim (Count I). The court denies MMO's Motion for Partial Summary Judgment (ECF No. 45). The court also denies Air Evac's Motion to Strike (ECF No. 53) as moot.
IT IS SO ORDERED.
Air Evac EMS, Inc. v. Medical Mutual of Ohio , No. CV-15-854950 (Cuyahoga Cty. Ct. Com. Pl. filed Nov. 25, 2015).
The court does not repeat such analysis (Order of Feb. 28, 2017, 12-16), in its entirety, in the present Order.
Air Evac challenges the consideration of this evidence in its Motion to Strike. However, as discussed below, the court denies the Motion to Strike as moot due to the fact that MMO's claim fails even when the challenged evidence is considered.
The court addresses this issue in Section C, below.
In its breach of contract claim, Air Evac primarily argues that MMO impliedly agreed to pay Air Evac's full billed charges. However, it argues, in the alternative, that if the court finds ambiguity regarding the price term, it should supply a reasonable rate of reimbursement. The law appears to indicate that under some circumstances the court would have the authority to find the existence of a contract and supply the reasonable price term. See Mantia v. House ,
Reference
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- MEDICAL MUTUAL OF OHIO v. AIR EVAC EMS, INC.
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- Published