N.C. Baptist Hosps., Inc. v. Dula

Citation476 F.Supp.3d 279
Decision Date03 August 2020
Docket NumberCIVIL ACTION NO. 5:20-CV-00034-KDB-DSC
CourtUnited States District Courts. 4th Circuit. Western District of North Carolina
Parties NORTH CAROLINA BAPTIST HOSPITALS, INC. and Wake Forest University Health Sciences, Plaintiffs, v. Wayne Howard DULA and Hope M. Dula, Defendants.

Stephen Jennings White, Ott Cone & Redpath, P.A., Greensboro, NC, for Plaintiffs.

Akya Shanelle Rice, Ogletree Deakins, Charlotte, NC, Thomas M. Christina, Thomas M. Christina, Pro Hac Vice, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Greenville, SC, for Defendants Hope M. Dula, Wayne Howard Dula.

Stephen Jennings White, Ott Cone & Redpath, P.A., Greensboro, NC, for Defendants North Carolina Baptist Hospitals, Inc., Wake Forest University Health Sciences.


Kenneth D. Bell, District Judge

THIS MATTER is before the Court on the Motion to Remand to State Court by Plaintiffs North Carolina Baptist Hospitals, Inc. and Wake Forest University Health Sciences (the "Providers") (ECF Doc. No. 8) and the Memorandum and Recommendation of the Honorable Magistrate Judge David S. Cayer ("M&R") entered June 11, 2020 (ECF Doc. No. 17). Based on its de novo review of the M&R and careful consideration of Defendants Wayne Dula and Hope Dula's (together "the Dulas") Objection to the M&R (ECF Doc. No. 18), Plaintiffs’ Reply to Defendants’ Objection (ECF Doc. No. 19) and an examination of the full record of these proceedings, the Court concludes that the recommendation to grant the PlaintiffsMotion to Remand is correct and in accordance with law. For the reasons and to the extent stated below, the findings and conclusions of the Magistrate Judge will be ADOPTED and the PlaintiffsMotion to Remand will be GRANTED .


A district court may designate a magistrate judge to "submit to a judge of the court proposed findings of fact and recommendations for the disposition" of certain pretrial matters, including motions to remand. 28 U.S.C. § 636(b)(1). Any party may object to the magistrate judge's proposed findings and recommendations, and the court "shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made."1 28 U.S.C. § 636(b)(1). Objections to the magistrate's proposed findings and recommendations must be made "with sufficient specificity so as reasonably to alert the district court of the true ground for the objection." United States v. Midgette , 478 F.3d 616, 622 (4th Cir.), cert. denied , 551 U.S. 1157, 127 S.Ct. 3032, 168 L.Ed.2d 749 (2007). However, the Court does not perform a de novo review where a party makes only "general and conclusory objections that do not direct the court to a specific error in the magistrate's proposed findings and recommendations." Orpiano v. Johnson , 687 F.2d 44, 47 (4th Cir. 1982). After reviewing the record, the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge or recommit the matter with instructions. 28 U.S.C. § 636(b)(1).

Federal district courts are courts of limited jurisdiction but possess, inter alia , original jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States," or what is commonly referred to as federal question jurisdiction. 28 U.S.C. § 1331 (2018). A federal district court may exercise subject matter jurisdiction over a civil action filed in state court and subsequently removed by a defendant, but only if the federal district court would have had original jurisdiction over the action. 28 U.S.C. § 1441(a) (2018) ; Sonoco Prod. Co. v. Physicians Health Plan, Inc. , 338 F.3d 366, 370 (4th Cir. 2003). And, if a court finds itself without subject matter jurisdiction at any time before final judgment, the federal removal statute requires a district court to remand the removed case to state court. 28 U.S.C. § 1447(c) (2018). Also, federal courts "narrowly interpret removal jurisdiction" in deference to federalism, Sonoco , 338 F.3d at 370, and the burden of demonstrating removability rests on the removing party, Prince v. Sears Holdings Corp. , 848 F.3d 173, 176 (4th Cir. 2017). Indeed, consistent with this deferential view in support of state jurisdiction, federal district courts resolve any doubts in favor of remand. Elliott v. Am. States Ins. Co. , 883 F.3d 384, 390 (4th Cir. 2018).


At all times referred to in the Complaint, Defendant Wayne Dula ("Mr. Dula") was an employee of J.P. Steakhouse LLC and a participant in a group health plan sponsored by his employer known as the J.P. Steakhouse LLC Health Care Plan ("the Plan"). ECF Doc. No. 1 at ¶ 10. The Plan is an employee welfare benefit plan as defined in ERISA2 § 3(1) and an employee benefit plan as defined in ERISA § 3(3). Id. at ¶ 20(b). The Plan is subject to ERISA's substantive and procedural terms pursuant to ERISA § 4(a)(1) and does not fall within any exception to coverage by ERISA set forth in § 4(b)-(c).3 Id.

The parties agree that Mr. Dula received out-patient medical care beginning on or about November 12, 2017 from physicians affiliated with Plaintiff Wake Forest University Health Sciences ("WF Sciences"). ECF Doc. No. 1 at ¶ 11; see also ECF Doc. No. 1-1 at ¶ 7-13. The record suggests that the last date of the Patient's intermittent, out-patient treatment was April 24, 2018. ECF Doc. No. 1-1 at ¶ 18. The physicians treated Mr. Dula at facilities owned by Plaintiff North Carolina Baptist Hospital ("the Hospital") using the Hospital's equipment, medications, and supplies. Id. at ¶ 11. Mr. Dula alleges that he was asked for information about his health insurance and then presented the Plaintiffs’ employees with his health insurance membership card before any physicians treated him. ECF Doc. No. 1 at ¶ 12. To the best of Mr. Dula's recollection, at least one of the Plaintiffs’ employees made and retained a photocopy of the membership card before returning it to him. Id. He also recalls that he was asked for insurance information and presented his membership card to the Plaintiffs’ employees before at least some of his follow-up office visits or treatments. Id. Further, Mr. Dula alleges that he was required to execute various forms provided by Plaintiffs’ employees before receiving treatment, and he believes that one of these forms was an assignment of his rights to reimbursement from the Plan for medical services to one or more of the Plaintiffs. Id. at ¶ 15. Mr. Dula attached a copy of his hospital statements to his Notice of Removal, and each statement specifies that his insurance benefits were assigned to Wake Forest Baptist Health. See ECF Doc. No. 1-5.

WF Sciences and the Hospital allege that Mr. Dula has multiple outstanding balances – after deduction for the payments they received from his insurance plan – for the medical treatment that he received. See ECF Doc. No. 1-1 at 7-12, 15-21 (stating the alleged remaining balances on the Patient's accounts for his past medical treatment); see also ECF Doc. No. 1-5 (showing itemizations of charges for the Patient's treatment, including amounts paid for by the Plan). The total amount of Mr. Dula's alleged outstanding balance with the Hospital is $30,933.52, and the total alleged outstanding balance with WF Sciences is $7,164.27.

On February 6, 2020, the Providers filed the present action in Wilkes County District Court. See ECF Doc. No. 1-1. In addition to its claims against Mr. Dula, the Providers also named his wife, Hope Dula, as a defendant. Although the Providers contend in argument that they sued Ms. Dula based on North Carolina's common law doctrine of necessaries, see ECF Doc. No. 19 at 3, the Complaint gives no explanation for including Ms. Dula as a defendant (the only allegations involving her merely allege that she lives in Wilkes County, is neither an infant nor incompetent, and is married to Mr. Dula).

On March 12, 2020, Mr. Dula and his wife filed a Notice of Removal alleging federal question subject matter jurisdiction based on ERISA. ECF Doc. No. 1 at ¶ 6-9. The Providers filed this Motion to Remand for lack of subject matter jurisdiction on April 7, 2020. See ECF Doc. No. 8. On May 28, 2020, the Honorable Magistrate Judge David S. Cayer filed his M&R, recommending that the Providers’ Motion to Remand be granted. ECF Doc. No. 17 at 1. Defendants timely filed an Objection to the M&R on June 11, 2020. ECF Doc. No. 18. The Providers filed a Reply to the Defendants’ Objections on June 25, 2020. ECF Doc. No. 19. The matter is now ripe for the Court's review.


The Providers’ Motion to Remand for lack of subject matter jurisdiction argues that their claims arise purely out of state law, namely the "implied promise" on the part of a patient to compensate healthcare providers for medical treatment and the common law doctrine of necessaries. ECF Doc. No. 9 at 9; ECF Doc. 19 at 3. In response, the Dulas present two arguments in favor of removal under federal question jurisdiction via ERISA. See ECF Doc. No. 1. First, the Dulas argue that the Providers’ claims are completely preempted by ERISA, so even if the Providers have asserted state law claims, they are superseded by ERISA and must be adjudicated in federal court. ECF Doc. No. 1 at ¶ 21-37. Second, the Dulas argue that a court will have to interpret and apply the Plan's terms because the crux of the Providers’ claim is that they have a right to additional payment beyond what the Plan and Mr. Dula have already paid. Id. at ¶ 38-47. The Dulas state that interpreting and applying an ERISA-regulated health insurance plan's terms "is a matter of federal law," so the Providers have necessarily asserted a claim that "depends on federal law, and therefore this Court has federal question jurisdiction over this case." Id. at ¶ 46-47.

The Magistrate Judge did not find either of Mr. Dula's arguments persuasive. See ECF Doc. No. 17. This...

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