Hartford Fire Ins. Co. v. Ala. Pain Ctr., LLC

• Decision Date: 28 December 2020
• Docket Number: Case No. 5:17-cv-02132-HNJ
• Parties: HARTFORD FIRE INSURANCE COMPANY, Plaintiff v. ALABAMA PAIN CENTER, LLC, et al., Defendants
• Court: U.S. District Court — Northern District of Alabama

HARTFORD FIRE INSURANCE COMPANY, Plaintiff v. ALABAMA PAIN CENTER, LLC, et al., Defendants

Case No. 5:17-cv-02132-HNJ

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ALABAMA NORTHEASTERN DIVISION

December 28, 2020

MEMORANDUM OPINION AND ORDER

This diversity action proceeds before the court on Defendants' Motion for Judgment on the Pleadings on their Second and Fourth Defenses for lack of standing and lack of subject matter jurisdiction. (Doc. 113). In this civil action, Hartford claims Defendants misrepresented the amount of medication it dispensed to certain patients, resulting in Hartford's overpayment on reimbursements it tendered on workers' compensation insurance claims. The record reveals the existence of disputed issues of fact as to whether Hartford constituted the payor on the reimbursements, which incites concerns whether Hartford suffered an injury pursuant to the constitutional standing doctrine, and whether it possesses legal rights and interests as to the prudential standing doctrine. Therefore, based on the analyses herein, the court DENIES Defendants' motion.

PROCEDURAL POSTURE

A party may move for judgment on the pleadings only after the pleadings have closed. See Fed. R. Civ. P. 12(c). Under the typical scenario, "[j]udgment on the pleadings is proper when no issues of material fact exist, and the moving party is entitled to judgment as a matter of law based on the substance of the pleadings and any judicially noticed facts." Interline Brands, Inc. v. Chartis Specialty Ins. Co., 749 F.3d 962, 965 (11^th Cir. 2014) (internal citation omitted). In determining whether a defendant is entitled to judgment on the pleadings, courts must "accept all the facts in the complaint as true and view them in the light most favorable to the non-moving party." Id. If comparison of the averments in the pleadings reveals a material dispute of fact, the court must deny judgment on the pleadings. Perez v. Wells Fargo N.A., 774 F.3d 1329, 1335 (11^th Cir. 2014).

However, Rule 12(c) also may serve as a vehicle for asserting a Rule 12(b) motion to dismiss after pleadings have closed. See Jiles v. United Parcel Serv., Inc., No. 308CV01192J25MCR, 2010 WL 11519465, at *2 (M.D. Fla. May 12, 2010), aff'd, 413 F. App'x 173 (11^th Cir. 2011) ("Rule 12(c) is also a vehicle by which litigants may, after the pleadings are closed, assert a 12(b)(6) motion for their opponent's failure to state a claim upon which relief can be granted.") (citation omitted); Gold v. Markham, No. 98-7036-CIV, 1998 WL 1118629, at *1 (S.D. Fla. Dec. 2, 1998) ("Although Markam styles his motion as one for judgment on the pleadings, the crux of his arguments is that the TaxInjunction Act, 29 U.S.C. § 1341, and principles of comity bar federal subject matter jurisdiction over this controversy. Therefore, the Court considers Markam's motion to be brought pursuant to Federal Rule of Civil Procedure 12(b)(1) rather than 12(c)."); 5C Charles Alan Wright, Arthur R. Miller & May Kay Kane, Federal Practice and Procedure § 1367 (3d ed. 1995) (Rule 12(c) may serve "as an auxiliary device that enables a party to assert certain procedural defenses after the close of the pleadings"); see also Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.").

When a party raises subject matter jurisdiction challenges pursuant to Rule 12(c), the court will apply the same standards that govern a motion to dismiss for lack of jurisdiction pursuant to Rule 12(b)(1). U.S. ex rel. Powell v. Am. InterContinental Univ., Inc., No. 1:08-CV-2277-RWS, 2012 WL 2885356, at *3 (N.D. Ga. July 12, 2012) (citing Dorsey v. Georgia Dep't of State Rd. & Tollway Auth. SRTA, No. CIV.A. 1:09-CV-1182, 2009 WL 2477565, at *3 n. 1 (N.D. Ga. Aug. 10, 2009) (in turn citing 5C Charles Alan Wright, Arthur R. Miller & May Kay Kane, Federal Practice and Procedure § 1367 (3d ed. 1995))) ("While the Court will operate under Rule 12(c), the Rule 12(b)(1) standards apply to this construed 12(c) motion.").

"Federal courts are courts of limited jurisdiction" and, as such, possess the power to hear cases only as authorized by the Constitution or United States' laws. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). "[B]ecause a federal court ispowerless to act beyond its statutory grant of subject matter jurisdiction, a court must zealously insure that jurisdiction exists over a case." Smith v. GTE Corp., 236 F.3d 1292, 1299 (11^th Cir. 2001).

Federal Rule of Civil Procedure 12(b)(1) permits a district court to dismiss a case for "lack of subject-matter jurisdiction." Fed. R. Civ. P. 12(b)(1). Plaintiff bears the burden of persuasion on establishing the court's subject matter jurisdiction. OSI, Inc. v. United States, 285 F.3d 947, 951 (11^th Cir. 2002) (citing Thomson v. Gaskill, 315 U.S. 442, 446 (1942); Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5^th Cir. 1980)).

BACKGROUND

Plaintiff, Hartford Fire Insurance Company (Hartford), filed suit against Alabama Pain Center, LLC (APC), and Covenant Pain Therapies Center, LLC (Covenant), asserting causes of action for fraud, unjust enrichment, money paid by mistake, rescission, and successor liability. Hartford's Amended Complaint alleges Hartford issued worker's compensation policies covering patients who received pain management treatment from APC and Covenant. After providing treatment to a covered patient, APC and Covenant would submit an HCFA 1500 form to Hartford requesting reimbursement for covered expenses. Each form contained representations regarding the volume of medication dispensed to the patient, and Hartford determined the amount of reimbursement due based upon those representations.

Hartford claims that APC misrepresented the amounts of medication it dispensed to three patients between July 8, 2012, and February 8, 2016, resulting in Hartford overpaying APC a total of $503,006.56. Hartford also claims that Covenant rendered similar misrepresentations regarding the same three patients between May 18, 2017, and October 8, 2017, resulting in an overpayment of $14,788.99. APC and Covenant deny fostering any misrepresentations, and they refuse to reimburse Hartford for the alleged overpayments. Hartford claims that Covenant, as APC's successor-in-interest, bears liability for all amounts APC owes. (See Doc. 21).

APC and Covenant both answered Hartford's Amended Complaint, and both Defendants asserted affirmative defenses for lack of standing and lack of subject matter jurisdiction. (Doc. 22, at 18; Doc. 29, at 12-13). Defendants' motion requests the court enter judgment on the pleadings in their favor on those affirmative defenses.

Because the court applies the standards of Rule 12(b)(1) to Defendants' motion for judgment on the pleadings regarding the constitutional standing issue, and because the motion raises a factual challenge to this court's subject matter jurisdiction, Defendants presented evidence to support their arguments. On August 19, 2020, Thomas Leonard Snow, III, provided deposition testimony as Hartford's Rule 30(b)(6) corporate representative. (Docs. 113-1, at 113-2). See Fed. R. Civ. P. 30(b)(6) ("In its notice or subpoena, a party may name as the deponent a public or private corporation, a partnership, an association, a governmental agency, or other entity and must describewith reasonable particularity the matters for examination. The named organization must designate one or more officers, directors, or managing agents, or designate other persons who consent to testify on its behalf; and it may set out the matters on which each person designated will testify."). The notice of Snow's deposition specified the following topics for examination:

1. Hartford's relationship with Qmedworx Services, QmedTrix Services, Inc.[,] Mitchell International, Inc., Express Scripts Workers Compensation, Conduent, and/or any other third party administrator or third party in any way related to the claims in the Amended Complaint.

2. The negotiations for final payment on services rendered to the patients at issue in Hartford's Amended Complaint.

3. Hartford's financial books, corporate structure, records, statements, reports, and/or payments that in any way evidence Hartford overpaying for medications administered by APC or Covenant to the patients at issue in the Amended Complaint.

4. Communications with APC or Covenant regarding the patients at issue in the Amended Complaint.

5. The $503,006.56 in alleged overpayments made to APC from 2012 to present as alleged in the Amended Complaint.

6. The $14,788.99 in alleged overpayments made to Covenant from 2017 to present as alleged in the Amended Complaint.

7. Communications between Hartford and any third party related to the claims in the Amended Complaint.

8. The worker's compensation benefits provided to the individuals at issue in the Amended Complaint.

9. Hartford's policies and procedures for administering payment for worker's compensation benefits.¹

10. The audits, whether performed by [a] third party or Hartford, referenced in the Amended Complaint.

. . . .²

12. Hartford's communications regarding this litigation to individuals other than Hartford's counsel of record.

13. Hartford's relationship with APC and/or Covenant.

14. Any and all damages Hartford contends it is entitled to in this lawsuit.

15. The allegations contained in Hartford's Amended Complaint against APC and/or Covenant.³

16. Hartford's responses to Covenant's and APC's Interrogatories and Requests for Production of Documents.

(Doc. 113-3, at 3-4).

Snow acknowledged that Hartford designated him to testify regarding "policies and procedures and relationships to third parties" concerning reimbursements tomedical providers, but he deferred testimony regarding the details of processing HCFA 1500 forms to another Hartford employee. (Doc. 113-1, at 30). He offered information regarding Hartford's claims against Defendants in this case from "a financial...