Advanced Benefit Concepts, Inc. v. Blue Cross & Blue Shield of Ala.

• Docket Number: 2022 CA 1193,2022 CW 1270
• Decision Date: 08 August 2023
• Parties: ADVANCED BENEFIT CONCEPTS, INC. v. BLUE CROSS AND BLUE SHIELD OF ALABAMA, ACCESS HEALTH, INC. & PREFERRED CARE SERVICES, INC.
• Court: Court of Appeal of Louisiana — District of US

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ADVANCED BENEFIT CONCEPTS, INC. v. BLUE CROSS AND BLUE SHIELD OF ALABAMA, ACCESS HEALTH, INC. & PREFERRED CARE SERVICES, INC.

Nos. 2022 CA 1193, 2022 CW 1270

Court of Appeals of Louisiana, First Circuit

August 8, 2023

ON REVIEW FROM THE NINETEENTH JUDICIAL DISTRICT COURT PARISH OF EAST BATON ROUGE, STATE OF LOUISIANANUMBER 709719, SECTION 27HONORABLE TRUDY WHITE, JUDGE

Alesia M. Ardoin R. Gray Sexton Baton Rouge, Louisiana Timothy Stephen Babcock Baton Rouge, Louisiana Tedrick K. Knightshead Baton Rouge, Louisiana Counsel for Plaintiff-AppellantAdvanced Benefits Concepts, Inc.

Renee C. Crasto J.E. Cullens, Jr. Andree M. Cullens S. Layne Lee Baton Rouge, Louisiana Carl S. BurkhalterMatthew J. BownessHarold William Bloom Birmingham, Alabama Counsel for Defendants-Appellees Blue Cross and Blue Shield of Alabama Access Health, Inc., and Preferred Care Services, Inc.

BEFORE: THERIOT, CHUTZ, AND HESTER, JJ.

CHUTZ J.

Plaintiff-appellantAdvanced Benefits Concepts, Inc.(ABC), appeals the district court's judgment, granting a motion for summary judgment asserted by defendants-appellees, Access Health, Inc.Preferred Care Services, Inc., and Blue Cross and Blue Shield of Alabama (collectively Access Health),^[1] and dismissing ABC's cause of action for breach of a lobbying contract based on a finding that the contract was a nullity.ABC also challenges, by writ and appeal, the district court's interlocutory judgments, overruling declinatory exceptions asserting objections of lack of subject matter jurisdiction.We reverse the interlocutory judgments and the grant of summary judgment and remand.

FACTUAL AND PROCEDURAL BACKGROUND

On July 16, 2021, ABC initiated this litigation in district court, seeking to enforce a fee agreement it had entered into with Access Health, a written version of which the parties executed on June 1, 2019.According to the allegations of the petition, in the written fee agreement ABC agreed to "represent Access Health and help Access Health identify, establish, and enter business relationships and contracts with various [employer groups]," and Access Health agreed "to pay [ABC] $1.25 per month per employee covered under Access Health's contract with [employer groups] that [ABC] helped establish."The agreement expressly stated that it "shall be evergreen and remain in full force until the termination of all [employer groups contracts]."Thus, ABC averred that Access Health "agreed to pay [ABC] the fees until the termination of the contract between Access Health and the [employer group][ABC] helped establish."

ABC further alleged that it helped Access Health establish and enter into a business relationship and contract with the State of Louisiana, Office of Group Benefits(OGB), through which Access Health agreed to provide the primary health care network and services to the OGB plan participants for a monthly capitation payment as evidenced by a contract between Access Health and OGB executed on May 9, 2019(the OGB contract).Based on an application of the ABC and Access Health fee agreement, for its role in securing the OGB contract, ABC calculated Access Health owed a total fee of $6,930,000.00^[2] Access Health initially tendered payments to ABC, but discontinued those payments on December 1, 2020.ABC claimed entitlement to the remainder of the fees owed it under the fee agreement as well as the expenses it incurred.

Access Health answered ABC's lawsuit with a general denial and asserted a reconventional demand,^[3] which sought an award for ABC's alleged unjust enrichment of fees Access Health paid that it averred were not owed to ABC under the written terms of the June 1, 2019 fee agreement because ABC had breached the contract.^[4] On February 4, 2022, Access Health filed a supplemental and amended pleading, modifying its allegations in support of its reconventional demand.Recognizing that ABC was the lobbyist who represented Access Health in the establishment of a business relationship and contract with OGB and claiming that neither ABC nor its principal, Charles Calvi, were registered as lobbyists with the State of Louisiana, Access Health asserted that ABC and Calvi engaged in a misrepresentation that rendered the fee agreement between ABC and Access Health void.Access Health asked that the district court enter a judgment declaring the fee agreement was void and awarding the total amount of payments Access Health had tendered to ABC under the fee agreement as an alternative basis for unjust enrichment damages.

On March 8, 2022, ABC filed a declinatory exception of lack of subject matter jurisdiction and, in the alternative, a peremptory exception of prescription, directed at Access Health's reconventional demand for declaratory relief ordering that the fee agreement was void because neither ABC nor Calvi registered as a lobbyist with the State of Louisiana.On March 26,2022, Access Health moved for summary judgment, seeking dismissal of ABC's cause of action for breach of contract on the grounds that the fee agreement was a nullity.

A hearing was held on April 27, 2022, after which the district court overruled ABC's exceptions of subject matter jurisdiction and prescription, and granted summary judgment in favor of Access Health, dismissing ABC's claim for breach of contract with prejudice.On May 20, 2022, the district court issued a written interlocutory judgment, overruling ABC's exceptions of lack of subject matter jurisdiction and prescription.It issued a second written judgment, granting summary judgment in favor of Access Health and dismissing ABC's cause of action for breach of contract expressly determining the judgment was final for the purpose of an immediate appeal.^[5]

ABC filed a motion for new trial, which was ultimately set for a hearing on August 24, 2022.The district court denied the motion in a judgment signed on September 12, 2022, and on September 21, 2022, ABC suspensively appealed.

Prior to the hearing on and denial of ABC's motion for new trial, on June 29, 2022, Access Health amended the allegations of its reconventional demand a second time to add Calvi as a defendant-in-reconvention.Access Health averred that ABC acted as Calvi's alter ego and, therefore, Calvi was personally liable for the return of all payments Access Health had tendered under the alleged null fee agreement.Alternatively, Access Health claimed that as ABC's alter ego, Calvi was personally liable for ABC's alleged unjust enrichment of fees Access Health had paid that it asserted were not owed to ABC under the terms of the fee agreement.In response to Access Health's second amended reconventional demand, ABC and Calvi filed a declinatory exception of lack of subject matter jurisdiction on July 22,2022.

During the pendency of suspensive appeal, on October 11, 2022, the district court held a hearing on ABC's exception of lack of subject matter jurisdiction.At the conclusion of the hearing, the district court overruled the exception from the bench.The district court issued a written judgment in conformity with its ruling on October 24, 2022.ABC subsequently filed a notice of intent to seek supervisory review, and ABC timely applied for a writ.^[6] The writ was referred to our panel for disposition.SeeAdvanced Benefits Concepts, Inc. v. Blue Cross and Blue Shield of Alabama,2022-1270 (La.App. 1st Cir.2/1/23)(unpublished writ action).Because the memorandum in support of the exception of lack of subject matter jurisdiction asserted by ABC on July 22, 2022 contains identical arguments to those ABC asserted in its March 8, 2022 pleading insofar as the lack of subject matter jurisdiction exception, our analysis and disposition of the appeal and the writ are the same.^[7] Thus, we turn to the merits of the propriety of the district court's judgments on the exception of lack of subject matter jurisdiction.

DISCUSSION

An objection to the lack of subject matter jurisdiction is raised by a declinatory exception.SeeLa.C.C.P art. 925(A)(6).The district court's determination of whether it has subject matter jurisdiction over a case is subject to de novo review.Louisiana Environmental Action Network, Inc. v. Louisiana Department of Environmental Quality, 2019-1551(La.App. 1st Cir.9/23/20), 314 So.3d 841, 848.

The Executive Branch Lobbying Act is set forth in La.R.S. 49:71-78.1.In La. R.S. 49:71, the legislature expressed the purpose of the Executive Branch Lobbying Act, declaring:

[T]he operation of open and responsible government requires that the fullest opportunity be afforded to the people to petition their government for the redress of grievances and to express freely their opinions on actions of the executive branch.To preserve and maintain the integrity of executive branch action and state government, the legislature also declares it is necessary that the identity of persons who attempt to influence actions of the executive branch and certain expenditures by those persons be publicly disclosed.

To this end, the Executive Branch Lobbying Act requires that each lobbyist register with the ethics board (the Board) as soon as possible after employment as a lobbyist or after the first action requiring his registration as a lobbyist.See La. R.S. 49:74(A).^[8] Importantly for purposes of this appeal, the Board "shall be responsible for the enforcement of provisions of [the Act]."See La. R.S. 49:78(A).

Although La. Const, art. V, sec. 1 provides that "[t]he judicial power is vested in a supreme court, courts of appealdistrict courts, and other courts authorized by this Article," pursuant to La. Const, art. V, sec. 16, "[e]xcept as otherwise authorized by this constitution ...,a district court shall have original jurisdiction of all civil and criminal...