McConocha v. Blue Cross and Blue Shield Mut. of Ohio

• Decision Date: 14 June 1996
• Docket Number: No. 3:93CV7534.,3:93CV7534.
• Court: U.S. District Court — Northern District of West Virginia
• Parties: Jeffrey McCONOCHA, et al., Plaintiffs, v. BLUE CROSS AND BLUE SHIELD MUTUAL OF OHIO, Defendant.

930 F. Supp. 1182

Jeffrey McCONOCHA, et al., Plaintiffs, v. BLUE CROSS AND BLUE SHIELD MUTUAL OF OHIO, Defendant.

No. 3:93CV7534.

United States District Court, N.D. Ohio, Western Division.

June 14, 1996.

Steven D. Bell, Ulmer & Berne, Cleveland, OH, Dennis E. Murray, Sr., Kirk J. Delli Bovi, Murray & Murray, Sandusky, OH, for Joseph F. Kreidler.

Marvin L. Karp, Ulmer & Berne, Cleveland, OH, for Jeffrey McConocha, Lawrence C. Engel, Isdn Technologies, Inc., Mathews Ford Sandusky, Inc.

Paul S. Lefkowitz, Cornelius J. O'Sullivan, Jr., Daina B. VanDervort, Climaco, Climaco, Seminatore, Lefkowitz & Garofoli, Cleveland, OH, David M. Schnorf, Schnorf, Schnorf & Ballard, Toledo, OH, Fritz Byers, Toledo, OH, Troy L. Moore, Scott, Ballinger & Moore, Toledo, OH, for Blue Cross & Blue Shield of Ohio.

ORDER

CARR, District Judge.

This is a case under the Employee Retirement Income Security Act of 1974, as amended (ERISA). In a previous decision, McConocha v. Blue Cross and Blue Shield, 898 F.Supp. 545 (N.D.Ohio 1995), I entered summary judgment for the plaintiffs. The gravamen of that decision was that the defendant had, and had breached, an obligation to the plaintiffs to inform them about a material fact: namely, that, whereas the plaintiffs paid twenty percent of the amount billed by a hospital for its services, the defendant Blue Cross and Blue Shield of Ohio (BCBSO) paid less than eighty percent of that amount.

More than seven months after that decision was entered, BCBSO filed a motion for reconsideration (Doc. 162). For the reasons that follow, that motion shall be overruled.

Although "motions to reconsider are not ill-founded step-children of the federal court's procedural arsenal," they are "extraordinary in nature and, because they run contrary to notions of finality and repose, should be discouraged." In re August, 1993 Regular Grand Jury, 854 F.Supp. 1403, 1406 (S.D.Ind.1994). To be sure, "a court can always take a second look" at a prior decision; but "it need not and should not do so in the vast majority of instances," especially where such motions "merely restyle or rehash the initial issues." Id. at 1407. It is not the function of a motion to reconsider either to renew arguments already considered and rejected by a court or "to proffer a new legal theory or new evidence to support a prior argument when the legal theory or argument could, with due diligence, have been discovered and offered during the initial consideration of the issue." Id. at 1408. Where, as is the case with much of the instant motion, "defendant views the law in a light contrary to that of this Court," its "proper recourse" is not by way of a motion for reconsideration "but appeal to the Sixth Circuit." Dana Corp. v. United States, 764 F.Supp. 482, 489 (N.D.Ohio 1991).

1. Timeliness

As an initial matter, I am confident that the motion for reconsideration should be overruled on the basis of simple untimeliness. "Motions for reconsideration of a judgment are construed as motions to alter or amend the judgment" under Rule 59(e). Moody v. Pepsi-Cola Metropolitan Bottling Co., 915 F.2d 201, 206 (6th Cir.1990). Consequently, such motions must be filed within ten days after the judgment. Fed.R.Civ.P. 59(e); Parker v. Board of Public Utilities of Kansas City, 77 F.3d 1289, 1290 (10th Cir.1996) (motion for reconsideration filed thirteen days after grant of summary judgment was untimely). In any event, even if Rule 59(e) were not applicable here, I conclude that a motion to reconsider must be submitted in a reasonably timely manner. An unexplained delay of more than seven months does not, in my view, meet that requirement. The defendant's motion is, accordingly overruled because it was filed after a long and unexplained delay.

In any event, I conclude that, if the motion were properly before me, it is without merit.

2. Factual Disputes

BCBSO first attacks some of the factual determinations and inferences in my Order. In doing so, BCBSO relies on evidence about when the plaintiffs learned of BCBSO's discounting scheme. There has been no showing, however, of why that evidence was not presented to me before I reached my original decision. Because a motion to reconsider should not be used to proffer new evidence to support a prior argument when it could have been offered initially, this new evidence should be disregarded. When it is, the motion can be, and hereby is overruled.

Nonetheless, I conclude that, even on consideration of that evidence, no cause has been shown to change the result that I originally reached.

Turning first to undisputed facts: it is clear that none of the pertinent documents clearly and expressly tells the plaintiffs that their portion of the total amount of cash received by the hospital may be greater than the twenty percent specified as their copayment. As a result, they were unaware when the insurance was purchased, and until sometime after they were presented with their bills, that the BCBSO cash contribution would be less than eighty percent.

For purposes of adjudicating the pending motion for reconsideration, I am willing to conclude that, sometime after receiving the Marymount bill, the plaintiffs became aware that BCBSO would be contributing less than eighty percent in cash to satisfy that remaining percentage. That fact, even if deemed undisputed, does not matter. BCBSO owed the duty of disclosure, in my view, from the outset. It could not rely on the vagaries of either its advertisements, random statements by hospital personnel, or general word-of-mouth to communicate basic information about its discount scheme. A beneficiary of an insurance contract is entitled to notice of all material facts at the time of the contract's formation. See Blon v. Bank One, Akron, N.A., 35 Ohio St.3d 98, 101, 519 N.E.2d 363, 367-68 (1988) (although there is no duty in ordinary business transactions to disclose material facts, there is a duty to speak when there is a fiduciary relationship between the parties or a special trust or confidence has been reposed in the other party); Restatement (Second) of Contracts §§ 161(d), 164 (1979) (nondisclosure of a material fact makes a contract voidable when the other person is entitled to know the fact because of a relation of trust and confidence between the parties).

In sum, I find that none of the methods by which the discount scheme may have become known to members of the public, including some BCBSO beneficiaries, constitutes in form or substance the notice that should and could have been given directly, and from the outset, in the pertinent plan documents. I reconfirm, therefore, my earlier determination that BCBSO operated a discount scheme that was, with regard to its obligations under ERISA, undisclosed to the beneficiaries of its hospitalization policies.

BCBSO complains about the statement, in my original decision, that "in most instances, ..., an employer pays most or all of the premium, so that the individual employee benefits not at all, or only to a very modest extent, from any premium reduction" that may result from the operation of the discount program. 898 F.Supp. at 547.¹ There was no evidentiary basis, according to BCBSO, for that statement.

On further consideration in light of the pending motion, I will agree that there may have been no basis for me to state that in "most instances" the employer pays the premium, and...