Centura Health Corp. v. Debra A. Agnew, Myr Grp., Inc.
| Decision Date | 18 July 2018 |
| Docket Number | Civil Action No. 18-cv-00569-RBJ |
| Parties | CENTURA HEALTH CORPORATION, PORTERCARE ADVENTIST HEALTH SYSTEM, d/b/a Littleton Adventist Hospital, Plaintiffs, v. DEBRA A. AGNEW, MYR GROUP, INC., MYR GROUP HEALTH PLAN, ELAP SERVICES, LLC, and PROFESSIONAL BENEFIT ADMINSTRATORS, INC., Defendants. |
| Court | U.S. District Court — District of Colorado |
This case was originally filed in the Arapahoe County District Court (Case No. 2017CV31173). Defendants MYR Group, Inc., MYR Group Health Plan, and ELAP Services, LLP removed the case to this Court based on federal question jurisdiction. ECF No. 3 at 3. Defendants argue that plaintiffs' state law claims are preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. Id. The case is before the Court on plaintiffs Centura Health Corporation's and Portercare Adventist Health System's (collectively, the "Hospital") motion to remand. ECF No. 27. For the reasons stated herein, the motion is GRANTED.
This case stems from a dispute over a patient's obligation to pay a medical bill. The patient, Debra Agnew, underwent a "bladder sling" surgery at the Littleton Adventist Hospital in 2012. ECF No. 3 at 5. Before undergoing surgery Ms. Agnew signed a "patient-hospital contract" in which she acknowledged full financial responsibility for, and agreed to pay, all of the charges from the Hospital that were not otherwise paid by her health insurance or other payor. Id. at 8. The hospital charged Ms. Agnew $21,166.70 for the surgery. Id. at 12. The Hospital determined this amount based on its "Chargemaster," a comprehensive listing of the hospital's prices for all of its billable services and supplies. Id. Ms. Agnew's insurance plan paid part of the bill, leaving an outstanding balance of $15,987.80. Id.
Ms. Agnew is insured by defendant MYR Group Health Plan ("the Plan"), which is an ERISA Group Welfare Plan. ECF No. 1-6 at 2. The Plan is established and maintained by Ms. Agnew's husband's employer, which is a subsidiary company of defendant MYR Group. Id. Defendant Professional Benefit Administrators Incorporation ("PBA") is a third-party administrator for the Plan. Id. at 3. Defendant ELAP is a named fiduciary to the Plan and serves as its designated decision maker. Id.
The Hospital asserts that ELAP "caused Ms. Agnew and many other patients not to pay the full amount of their hospital bills" despite the patients' being contractually obligated to pay those amounts. ECF No. 3 at 4. After Ms. Agnew failed to pay the outstanding balance on her bill, the Hospital alleges that ELAP "caused Ms. Agnew to file" a suit in Arapahoe District Court against the Hospital to avoid paying her outstanding bill. Id. The parties entered mediation and the case was dismissed without prejudice. Id. at 14. However, after Ms. Agnew continuedrefusing to pay her outstanding bill, the Hospital filed the present lawsuit in Arapahoe County District Court. Id.
In its initial complaint, the Hospital sued only Ms. Agnew. However, the Hospital added ELAP, MYR, the Plan, and PBA as defendants when it filed the First Amended Complaint on January 31, 2018. ECF No. 3. In this operative complaint, the Hospital raises two claims against Ms. Agnew alone: (1) breach of contract and (2) claim on account stated. Id. at 17-18. The Hospital's third claim for declaratory judgment applies to all defendants. Id. at 14.
After the Hospital filed its suit, defendants agreed to pay the full amount claimed under the patient-hospital contract, including the outstanding balance, prejudgment interest, and reasonable attorneys' fees and costs. Id. Nonetheless, the Hospital maintains that ELAP, PBA, MYR, and the Plan continue to (1) cause other patients with identical contracts to refuse to pay the amounts due; (2) assert that they are entitled to unilaterally dictate what is due under substantially identical contracts; (3) assert that contracts like Ms. Agnew's are invalid and unenforceable; and (4) force the Hospital to litigate the validity of its contracts while ultimately agreeing to pay the full amount due to avoid binding judicial determinations. Id. at 15.
As a result, the Hospital seeks a declaratory judgment against all defendants construing the validity of the patient-hospital contract and declaring that (1) the contracts incorporate Chargemaster rates; (2) a patient's promise to pay all charges refers to the hospital's prices as set forth in its Chargemaster; (3) the phrase, "all charges of the hospital" refers to the Chargemaster, not to an open or undefined term; and (4) the terms of Ms. Agnew's patient-hospital contract and all other substantially identical contracts require the patient to pay all charges not otherwise paid by health insurance or other payor. Id. at 15-17 (citing C.R.S. § 13-51-101, et seq.).
Defendants MYR, ELAP, and the Plan filed their Notice of Removal on March 9, 2018. ECF No. 1 at 1; ECF No. 1-5 at 2. In their Notice of Removal these defendants invoked federal question jurisdiction because "Plaintiffs' claims are completely preempted by the Employee Retirement Income Security Act of 1974 ('ERISA'), 29 U.S.C. §§ 1001, et seq." ECF No. 1 at 3. Defendants Agnew and PBA did not join in the Notice, nor did they file a consent to the removal. The Hospital responded with the pending motion to remand on April 9, 2018. ECF No. 27. The Hospital contends that defendants' Notice of Removal is procedurally defective because not all defendants consented to removal, and that the Court should remand because it does not have removal jurisdiction. Id. On April 26, 2018, the same day that defendants responded in opposition to the motion to remand, Ms. Agnew and PBA filed their consent to removing the case to federal court. ECF No. 33. at 6-7.
A civil action filed in a state court may be removed to federal court if the dispute "aris[es] under" federal law. See 28 U.S.C. §§ 1331, 1441(a). "Federal courts are courts of limited jurisdiction and, as such, must have a statutory basis to exercise jurisdiction." Montoya v. Chao, 296 F.3d 952, 955 (10th Cir. 2002). "[R]emoval statutes[] are to be narrowly construed in light of our constitutional role as limited tribunals." Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1095 (10th Cir. 2005). The removing party bears the burden of establishing federal jurisdiction. Martin v. Franklin Capital Corp., 251 F.3d 1284, 1290 (10th Cir. 2001).
The Hospital raises both a procedural and a substantive reason the case should be remanded to state court pursuant to 28 U.S.C. § 1447(c). It contends that (a) defendants did not unanimously consent to removal and (b) removal jurisdiction does not exist. ECF No. 27 at 1.The Hospital also seeks attorneys' fees and costs on the grounds that there was not an objectively reasonable basis for removal. Id.
28 U.S.C. § 1446 outlines the procedure for removing a civil action from state to federal court. In key part, this section provides that a "defendant or defendants desiring to remove any civil action from a State court" shall file notice of removal "within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading." 28 U.S.C. § 1446(a)-(b)(1). Additionally, "[w]hen a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action."1 Id. at § 1446(b)(2)(A). "Each defendant shall have 30 days after receipt by or service on that defendant of the initial pleading or summons . . . to file the notice of removal." Id. at § 1446(b)(2)(B). Finally, "[i]f defendants are served at different times, and a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal even though that earlier-served defendant did not previously initiate or consent to removal." Id. at § 1446(b)(2)(C).
A removal that does not comply with the express statutory requirements for removal "'can fairly be said to render the removal 'defective' and justify a remand.'" Huffman v. Saul Holdings Ltd. P'ship, 194 F.3d 1072, 1077 (10th Cir. 1999) (quoting Snapper, Inc. v. Redan, 171 F.3d 1249, 1253 (11th Cir. 1999)). Because removal is entirely a statutory right, the relevant procedures must be followed. Cohen v. Hoard, 696 F.Supp. 564, 565 (D.Kan.1988). "The failure of all defendants to consent to removal will result in remand." Padilla v. Am. Modern Home Ins. Co., 282 F. Supp. 3d 1234, 1254-55 (D.N.M. 2017).
In this case the Hospital first filed its state complaint only against defendant Ms. Agnew. The Hospital then filed an amended complaint on January 31, 2018 in which it added MYR, the Plan, ELAP, and PBA as defendants. ECF No. 3 at 2. MYR and PBA were served the amended complaint on February 7, 2018, and ELAP was served on February 8, 2018.2 ECF No. 34-1 at 2; ECF No. 34-2 at 2; ECF No. 34-3 at 2. Defendants MYR, the Plan, and ELAP filed their Notice of Removal on March 9, 2018. ECF No. 1 at 1; ECF No. 1-5 at 2. In their Notice of Removal they contended that the case was based upon federal question jurisdiction because "Plaintiffs' claims are completely preempted by the Employee Retirement Income Security Act of 1974 ('ERISA'), 29 U.S.C. §§ 1001, et seq." ECF No. 1 at 3. Defendants Agnew and PBA did not join in the Notice, nor did they file a consent to the removal.
The Hospital argues that the failure of the defendants to unanimously consent to the removal of this case merits remand. Defendants, however, argue that they cured this defect by filing a notice of consent for the two missing defendants concurrent with their response to the motion to remand on April 26, 2018. ECF No. 33 at 7. However, I do not agree that this filing remedied the procedural error.
Defendants point out that the statute does not provide a date...
To continue reading
Request your trial