831 A.2d 1091 (Md.App. 2003), 2218, Moreland v. Aetna U.S. Healthcare, Inc.

Docket Nº:2218
Citation:831 A.2d 1091, 152 Md.App. 288
Opinion Judge:[7] The opinion of the court was delivered by: Eyler, Deborah S., J.
Party Name:Thomas W. MORELAND, et ux. v. AETNA U.S. HEALTHCARE, INC. Aetna U.S. Healthcare, Inc. v. Leonard L. Lucchi, Esq.
Case Date:September 08, 2003
Court:Court of Special Appeals of Maryland
 
FREE EXCERPT

Page 1091

831 A.2d 1091 (Md.App. 2003)

152 Md.App. 288

Thomas W. MORELAND, et ux.

v.

AETNA U.S. HEALTHCARE, INC.

Aetna U.S. Healthcare, Inc.

v.

Leonard L. Lucchi, Esq.

No. 2218

Court of Special Appeals of Maryland.

September 8, 2003.

Page 1092

[152 Md.App. 290] Maureen Quinn (Law Office of Maureen Quinn, on brief), Annapolis, Phillip R. Zuber (Sasscer, Clagett & Bucher, on brief), Upper Marlboro, for appellants.

Daly D. E. Temchine (Kathy Potter, Epstein, Becker & Green, P.C., on brief), Washington, DC, for appellee.

Argued before DAVIS, SALMON, DEBORAH S. EYLER, JJ.

[152 Md.App. 291] DEBORAH S. EYLER, J.

The Circuit Court for Prince George's County dismissed the claims of Thomas W. Moreland and Julie Moreland, the appellants, against Aetna U.S. HealthCare, Inc. ("Aetna"), the appellee and cross-appellant, on the ground that they were time-barred. The court also dismissed Aetna's third-party claim against Leonard L. Lucchi, Esquire, the cross-appellee.

On appeal, the appellants pose four questions, which we have combined and reworded as follows:

I. Did the circuit court err in dismissing the appellants' claims on the ground of limitations because (a) the court incorrectly concluded that the appellants' causes of action accrued on October 3, 1991, as a matter of law; and (b) the court incorrectly concluded that the issues of inquiry notice and fraudulent concealment of causes of action were not for a trier-of-fact to resolve? 1

Page 1093

On cross-appeal, Aetna poses one question, which we have rephrased:

II. Did the circuit court err in dismissing all of Aetna's third-party claims against Lucchi when it dismissed the appellants' claims against Aetna?

For the following reasons, we shall affirm the judgment of the circuit court.

FACTS AND PROCEEDINGS

On August 16, 1990, Thomas L. Moreland ("Moreland") suffered severe burns and other injuries in a well explosion [152 Md.App. 292] accident. He was hospitalized and received extensive medical treatment for his injuries.

When the accident happened, Moreland was a member, through his employer, of the Healthplus health maintenance organization plan (the "HMO Plan"). The HMO Plan is subject to a Group Membership Service Agreement/Certificate of Coverage (the "Agreement"), which includes a subrogation clause. Aetna is the successor corporation to Healthplus.

Aetna paid the bills for Moreland's medical and hospital treatments for his injuries (except for co-payments he was required to pay). The sum paid by Aetna on Moreland's behalf totaled $254,859.70.

Moreland retained Lucchi to represent him in an action for damages against the tortfeasor responsible for the accident (the "tort action"). The subrogation clause of the Agreement purported to subrogate Aetna to Moreland's rights of recovery against the tortfeasor and entitle it to reimbursement from the tortfeasor of the medical and hospital expenses it had paid for Moreland, plus the cost of suit and attorneys' fees. For that reason, when settlement discussions ensued between Moreland (through Lucchi) and the tortfeasor's insurance carrier, Lucchi contacted Aetna.

In response to a request by Lucchi, Aetna agreed to reduce its subrogation lien to $203,887.76, to have Lucchi communicate the reduction to the tortfeasor's insurance carrier, and to pay Lucchi a fee equal to a pro rata share of the entire sum recovered in settlement.

Ultimately, negotiations resulted in a settlement of the tort action for $400,000. On October 3, 1991, pursuant to their agreement, Lucchi forwarded Aetna a check for $152,915.82, which represented Aetna's subrogation recovery of $203,887.76 minus Lucchi's $50,971.94 fee.

More than eight years later, on March 10, 2000, the Maryland Court of Appeals held in Riemer v. Columbia Med. Plan, 358 Md. 222, 233, 747 A.2d 677 (2000), that "pursuant to sections 190-701(f) and 19-710(b) and (o) of the Health General [152 Md.App. 293] Article, and the general statutory scheme of Maryland's Health Maintenance Organization Act, an HMO may not pursue its members for restitution, reimbursement, or subrogation after the members have received a financial settlement from a third-party tortfeasor, any contract to the contrary notwithstanding." Within days of the decision, the General Assembly enacted Senate Bill 903, Ch. 569, 2000 Md. Laws, effective June 1, 2000, authorizing contracts between HMOs and their subscribers to contain provisions "allowing the

Page 1094

health maintenance organization to be subrogated to a cause of action that a subscriber has against another person." 2

On May 7, 2001, in the Circuit Court for Prince George's County, the appellants sued Aetna, seeking to recover the $152,915.82 Aetna had received in the 1991 settlement of the tort action. Lucchi represented the appellants in their suit against Aetna.

Aetna filed a motion to dismiss and a third-party complaint against Lucchi for two counts of indemnification and one count each of legal malpractice, breach of fiduciary duty, breach of contract, constructive fraud, negligent misrepresentation, and intentional misrepresentation.

The appellants retained new counsel and filed an amended complaint. Their amended complaint stated claims for unjust enrichment; negligent misrepresentation; intentional misrepresentation; and violation of the Maryland Consumer Protection Act. They alleged that Aetna had improperly asserted a subrogation lien against their recovery in the tort action because, under Riemer, Aetna was without authority to include a subrogation clause in the Agreement and to exercise a right of subrogation.

[152 Md.App. 294] Aetna renewed its motion to dismiss, arguing, inter alia, that the appellants' claims were time-barred under Md.Code (1957, 1998 Repl.Vol.) section 5-101, of the Courts and Judicial Proceedings Article ("CJ"), because their causes of action accrued on October 3, 1991, but they did not file suit until more than three years later. In their opposition, the appellants argued that their causes of action did not accrue until March 10, 2000, when the Court of Appeals issued its decision in Riemer; in the alternative, Aetna fraudulently concealed the appellants' causes of action from them until March 10, 2000; there was a confidential relationship between Aetna and the appellants that meant the appellants were "under no duty to have discovered ... [their] cause of action prior to issuance of the Riemer decision"; and the issue of when the appellants were on inquiry notice of their causes of action was a factual question.

Lucchi moved to dismiss Aetna's third-party complaint on the grounds that Aetna had failed to allege any legal harm and did not allege facts to support its claim for punitive damages.

On November 9, 2001, the court held a hearing on the pending motions. It granted Aetna's motion to dismiss the appellants' claims on the ground of limitations. Lucchi argued that the court's dismissal of the appellants' claims meant it should dismiss Aetna's third-party claims. Aetna argued to the contrary, asserting that its third-party complaint included claims that were not for indemnification and therefore were independent of the appellants' claims. The court granted Lucchi's motion.

The appellants noted a timely appeal; Aetna noted a timely cross-appeal.

DISCUSSION

I

The appellants contend the circuit court erred in ruling that their claims against Aetna were time barred as a matter of law, and in dismissing the claims on that basis. They maintain [152 Md.App. 295] that under the " discovery

Page 1095

rule," as explained in Poffenberger v. Risser, 290 Md. 631, 634-35, 431 A.2d...

To continue reading

FREE SIGN UP