In re Cigna Healthcare, Inc.

• Decision Date: 31 July 2001
• Docket Number: No. 2000–653.,2000–653.
• Citation: 146 N.H. 683,777 A.2d 884
• Court: New Hampshire Supreme Court
• Parties: Petition of CIGNA HEALTHCARE, INC. f/k/a Healthsource New Hampshire, Inc.

146 N.H. 683

777 A.2d 884

Petition of CIGNA HEALTHCARE, INC. f/k/a Healthsource New Hampshire, Inc.

No. 2000–653.

Supreme Court of New Hampshire.

July 31, 2001.

Nixon Peabody L.L.P., of Manchester, (Kevin M. Fitzgerald, on the brief, and Mr. Fitzgerald orally), for the petitioner.

Shaheen & Gordon, P.A., of Concord, (Arpiar G. Saunders, Jr. and Cinde Warmington, on the brief, and Mr. Saunders orally), for the respondents.

Philip T. McLaughlin, attorney general, (Walter L. Maroney, senior assistant attorney general), filed a statement of the State as amicus curiae, in support of Optima Healthcare, Inc.'s opposition to petition of CIGNA Healthcare, Inc.

NADEAU, J.

The petitioner, CIGNA Healthcare, Inc., formerly known as Healthsource New Hampshire Inc. (CIGNA), petitions for the issuance of writs of mandamus and prohibition to the Hillsborough County Probate Court (Cloutier , J.). We grant the petition for prohibition.

The following facts appear in the record. Elliot Hospital (Elliot) and Catholic Medical Center (CMC) are community hospitals in Manchester, organized as nonprofit charitable institutions. In 1994, the supporting organizations for Elliot and CMC merged to form respondent Optima Health, Inc., a new supporting organization for both hospitals. Respondent Optima Healthcare Corp. (referred to, collectively with Optima Health, Inc., as Optima) is a regional joint operating company that may be loosely described as the parent corporation of Optima Health, Inc. As such, it has exercised management authority over Elliot and CMC.

On March 10, 1998, the New Hampshire Attorney General, as the director of charitable trusts, issued a report addressing concerns over Optima's management of the hospitals, particularly its decision to consolidate all acute care services at the Elliot facility, thereby effectively terminating CMC's charitable mission to serve as an acute care Catholic hospital in Manchester. Thereafter, two special boards of trustees, appointed by agreement between the attorney general and Optima, decided that Elliot and CMC should disaffiliate and that each should separately serve as an acute care hospital.

On February 25, 1999, the attorney general and Optima jointly petitioned the probate court to oversee the disaffiliation process. CIGNA moved to intervene in the probate proceedings, alleging that it was a party to certain payor contracts with Optima, Elliot and CMC under which Optima and the hospitals owed CIGNA more than $1.8 million. The probate court allowed CIGNA limited participation subject to restrictions and conditions imposed by the court.

On April 27, 1999, the probate court appointed a special master pursuant to RSA 547:37 (1997) and issued its second interim order ruling, in part:

The Court finds that during the period in which this Court shall exercise jurisdiction over the charitable assets of Optima, Elliot Hospital, CMC and their subsidiaries, claims of creditors and other claimants against those assets are, or may be inextricably linked to the proper disposition of such assets. Therefore, the Court shall exercise its concurrent jurisdiction with the Superior Court over cases involving charitable uses and trusts to adjudicate any claim by a creditor or claimant as to which the Court may find, on motion by any party, or on petition by any creditor or claimant, is reasonably likely to affect the disposition of charitable assets under the supervision of this Court.

While the probate action was proceeding, Optima and CIGNA disputed the amounts due under the payor contracts and to which party they were owed. Optima contended that as of March 31, 1999, it was owed $15,114,897 under the contracts, and that CIGNA had failed to provide Optima with reconciliation data as required under the contracts. CIGNA maintained that it was owed more than $1.8 million, and purported to avail itself of contractual set-off rights by withholding periodic payments due to Optima under the contracts.

Optima sought relief in the probate court while CIGNA claimed that the parties were contractually bound to arbitrate their disputes.

On June 23, 2000, CIGNA attempted to commence arbitration proceedings before the American Health Lawyers Association (AHLA). CIGNA also petitioned the superior court to compel arbitration of disputes regarding contract years 1999 and 2000. Optima filed motions in both the probate court and the superior court seeking to compel CIGNA to withdraw its superior court petition and to dismiss or stay its request for arbitration with the AHLA. Optima also filed motions in probate court seeking a declaration of the parties' interests under the payor contracts, an award of damages to Optima and an order requiring CIGNA to resume periodic payments under the contracts.

The probate court granted Optima's motions to halt CIGNA's arbitration efforts and ordered CIGNA to cease and desist from withholding payments to Optima under the payor contracts. The court also approved a recommendation by the special master concluding that by participating in the probate court proceedings, CIGNA had consented to the probate court's jurisdiction and waived its right to compel compliance with the dispute resolution provisions of the payor contracts.

CIGNA filed a petition for original jurisdiction with this court, pursuant to Supreme Court Rule 11, alleging that the probate court erred by: (1) declining to rule on CIGNA's motions to dismiss for lack of subject matter jurisdiction; (2) enjoining CIGNA's exercise of its set-off rights under the payor contracts while conceding that none of the requirements for issuing an injunction had been met; (3) declining to rule on CIGNA's motions for the posting of an injunction bond; (4) declining to rule on CIGNA's motions to compel arbitration pursuant to the payor contracts of disputes concerning contract years 1999 and 2000; (5) ordering CIGNA to withdraw its motion to compel arbitration, pending in superior court, contrary to the procedure set forth in RSA 542:3 (1997); and (6) ruling that CIGNA had waived its contractual arbitration rights by intervening as a creditor.

CIGNA seeks: (1) a writ of mandamus to order that the injunction against further set-off be dissolved; (2) a writ of mandamus holding that the probate court lacks subject matter jurisdiction over the contractual dispute and ordering the probate court to dismiss the proceedings or refer them for arbitration; and (3) a writ of prohibition barring the probate court from further attempting to adjudicate claims between CIGNA and the hospitals. Optima argues that the requested writs should not issue because the legal standards for mandamus and prohibition have not been met and because the probate court's actions were both within its jurisdiction and proper.

Mandamus and prohibition are extraordinary writs. See, e.g., Rockhouse Mt. Property Owners Ass'n v. Town of Conway , 127 N.H. 593, 602, 503 A.2d 1385 (1986) ; Petition of Mone , 143 N.H. 128, 132, 719 A.2d 626 (1998). A writ of mandamus is used to compel a public official to perform a ministerial act that the official has refused to perform, or to vacate the result of a public official's act that was performed arbitrarily or in bad faith. See Guy J. v. Commissioner , 131 N.H. 742, 747, 565 A.2d 397 (1989). This court will, in its discretion, issue a writ of mandamus only where the petitioner has an apparent right to the requested relief and no other remedy will fully and adequately afford relief. See Guarracino v. Beaudry , 118 N.H. 435, 437, 387 A.2d 1163 (1978).

A writ of prohibition is used "to prevent subordinate courts or other tribunals, officers or persons from usurping or exercising jurisdiction with which they are not vested." Hillsborough v. Superior Court , 109 N.H. 333, 334, 251 A.2d 325 (1969). This court exercises its discretionary power to issue such writs "with caution and forbearance and then only when the right to relief is clear." Id .

Optima argues that "[w]hile pled as a request for Mandamus, [CIGNA actually] seeks a Writ of Prohibition relative to its jurisdictional claim." We agree that although CIGNA has petitioned for a writ of mandamus to compel the probate court to rule on the issue of its jurisdiction, a writ of prohibition is more suitable to CIGNA's claims. For the reasons set forth in this decision, we conclude that issuance of a writ of prohibition is proper in this case. Accordingly, CIGNA's petition for writ of mandamus is denied.

Optima argues that a writ of prohibition should not issue in this case because (1) CIGNA has an adequate appellate remedy; (2) the challenged "injunction" does nothing more than preserve the status quo; and (3) the probate court does not clearly and unambiguously lack jurisdiction. We will not "interfere by extraordinary action with the ordinary process of appeal unless there is a clear case of necessity." Id. at 334, 251 A.2d 325. Nevertheless, "we will exercise our original jurisdiction in circumstances where the parties desire, and public need requires, a speedy determination of the important issues in controversy." Petition of Mone , 143 N.H. at 132, 719 A.2d 626 (citation omitted).

Although the dispute before us has not prevented the disaffiliation of Elliot and CMC from going forward, the matter of the probate court's jurisdiction is an important public issue, as evidenced by the attorney general's amicus curiae filing. We conclude that resolution of that issue at this time is warranted.

Optima further contends that a writ of prohibition should not issue because the probate court's order barring CIGNA from taking further set-offs under the payor contracts served merely to maintain the status quo. The cases cited by Optima in support of this argument, however, are inapposite. In American Federation of Employees, Local 572 v. Dover , 115 N.H. 491, 492, 345 A.2d 912 (1975), and Hillsborough v. Superior Court, 109 N.H. at 334, 251 A.2d 325, we declined to issue writs of prohibition to stay lower co...