Pumphrey v. City of New Orleans
| Decision Date | 04 April 2006 |
| Docket Number | No. 2005-C-979.,2005-C-979. |
| Citation | 925 So.2d 1202 |
| Parties | Kathleen PUMPHREY v. The CITY OF NEW ORLEANS. Darlene Rizzuto v. The City of New Orleans. Fred Farve, Jr. v. The City of New Orleans. Michael Ricks and Vivian Ricks v. The City of New Orleans. Barbara Ellis v. The City of New Orleans. Herbert Craig v. The City of New Orleans. A. Ray Piattoly v. The City of New Orleans. Patrick Murphy v. The City of New Orleans. Ignatius James v. The City of New Orleans. |
| Court | Louisiana Supreme Court |
Penya Moses-Fields, City Attorney, Evelyn F. Pugh, Chief Deputy City Attorney, Thomas A. Robichaux, Heather M. Valliant, Franz L. Zibilich, Assistant City Attorneys, for applicant.
Silbert & Garson, Robert J. Garon, Tamica J. Cryer, New Orleans, William G. Merritt, for respondent.
This civil case addresses the legal question of whether La.Rev.Stat. 33:3062(B) exempts the City of New Orleans with regard to its self-funded employee health care insurance plan from the penalty provisions of La.Rev.Stat. 22:657(A). Plaintiffs filed individual suits seeking penalties and attorneys fees for non-payment and/or untimely payment of insurance benefits, which were due and payable to plaintiffs, under the City of New Orleans's self-funded employee health care plan. After consolidation of these suits, the City of New Orleans ("City") filed a petition for declaratory judgment in all of the consolidated cases seeking a declaration that La.Rev.Stat. 33:3062(B) exempted the City with regard to its self-funded health plan from the penalty provisions of La. Rev. Stat. 22:657(A). The district court entered judgment against the City holding La.Rev.Stat. 33:3062 does not exempt the City or its health plan from the provisions of La.Rev.Stat. 22:657. The court of appeal affirmed. We granted writ primarily to resolve the alleged conflict between La. Rev. Stats. 22:657(C) and 33:3062(B) to determine whether La.Rev. Stat. 33:3062(B) exempts the City's health plan from the penalty provisions of La. Rev.Stat. 22:657(A). Pumphrey v. City of New Orleans, 05-0979 (La.12/16/05), 917 So.2d 1085. For the following reasons, we find the provisions of La.Rev.Stat. 33:3062(B) clearly and explicitly exempt the City's health plan from the penalty provisions of La.Rev.Stat. 22:657(A) and render declaratory judgment in favor of the City.
On January 1, 1978, the City became self-insured as to health care coverage for its employees and contracted with various vendors for administrative services in connection with its health care and hospitalization plan. The City offered as a benefit to its employees, retirees, and their dependants, the option of participating in the City's self-funded health care plan or participating in its preferred provider organization (PPO) health care plan. In March 1991, the City entered into a contract with Total Benefits Services ("Total") to administer its health care plan, and then in November 1991, the City entered into a contract with Group Insurance Administration of Louisiana ("Group") to secure medical service discounts through the use of Group's preferred provider network and to manage the PPO health care program. At all times relevant herein, the City has maintained a self-funded health care plan for the benefit of its employees, retired employees, and their families.
This consolidated matter arises out of multiple Petitions for Damages brought on behalf of eligible participants in the City's self-funded health care plan.1 The plaintiffs, Kathleen Pumphrey, Darlene Rizzuto, Fred Farve, Jr., Michael and Vivian Ricks, Barbara Ellis, Herbert Craig, A. Ray Piattoly, Patrick Murphy, and Ignatius James, are seeking penalties and attorneys fees for non-payment and/or untimely payment of insurance benefits, which were due and payable to plaintiffs, under the plaintiffs' participation in the City's self-funded employee health care plan, in accordance with La.Rev.Stat. 22:657. Plaintiffs alleged more than thirty days had elapsed from the date upon which the plaintiffs submitted written notice and proof of claim on covered medical bills to the City's self-funded health care plan. Plaintiffs further contended the City had arbitrarily and capriciously delayed payment of benefits due or had arbitrarily and capriciously paid claims beyond thirty days after submission. Additionally, plaintiffs alleged the City breached its fiduciary duty of good faith and fair dealings and its contractual duties to the plaintiffs as a result of its arbitrary and capricious failure to pay claims. As a result of the City's actions, the plaintiffs alleged they suffered mental anguish and pain and suffering, all of which entitled them "to recover damages as are reasonable in the premises."
After filing her petition for damages, plaintiff, Darlene Rizzuto, filed a petition for declaratory judgment on March 26, 1993, to determine whether the penalty and attorney fees provision of La.Rev.Stat. 22:657 applies to the City and its self-funded health care plan. The Fourth Circuit in Rizzuto v. City of New Orleans, 94-1016 (La.App. 4 Cir. 1/19/95), 650 So.2d 341, affirmed the district court's declaratory judgment rendered in favor of plaintiff, which held that the provisions of La.Rev. Stat. 22:657 apply to the City, a political subdivision of the State of Louisiana, with regard to it self-funded health care plan.
The Rizzuto court found the broad based language of La.Rev.Stat. 22:657 mandates the imposition of penalties on any entity, including "corporation and other organization," which fails to timely pay health benefits with the only exclusion for "collectively bargained union welfare plans other than health and accident plans." 94-1016 at p. 4, 650 So.2d at 343. The court noted that although La.Rev.Stat. 22:657(C) sets forth an illustrative list of included entities within its provisions, the list is not exhaustive, and when the Legislature included the State of Louisiana as one of the entities within the provisions, the court found the broad-based language also included a self-funded health care plan run by a political subdivision of the State. Id., at pp. 4-5, 650 So.2d at 343. Relying on a definition of "organization" that includes "government or governmental subdivision or agency," the court concluded the State's political subdivisions are bound by La.Rev. Stat. 22:657 because political subdivisions were not specifically excluded and the State of Louisiana was specifically included. Id., at p. 5, 343-44.
Subsequently, the City and all the plaintiffs filed a joint motion to consolidate, which was granted on July 20, 1998, by order signed by the district court. After consolidation of the cases, the City filed the petition for declaratory judgment at issue in this case, seeking a declaration that La.Rev.Stat. 33:3062 exempts the City with regard to its health care plan from the penalty provisions of La.Rev.Stat. 22:657. The district court found in plaintiffs' favor, reasoning:
The Fourth Circuit upheld the applicability of La. R.S. 22:657 to the City's health plan in Rizzuto v. City of New Orleans, 94-[1016] (La.App. 4 Cir. 1/19/95), 650 So.2d 341. Rizzuto clearly held that La. R.S. 22:657 does apply to the City's health plan and that the City violated the statute. Consequently, the court in Rizzuto ordered the City to pay the proper penalties and attorney's fees.
The original text of La. R.S. 22:657 did not include the term "self-insurers." However, "self-insurers" was added to both the heading and subsection C in the 1979 amendment to the statute. This amendment reveals the legislature's intent that self-funded health insurance plans are to be controlled by La. R.S. 22:675. La. R.S. 22:657 has been amended twice since the enactment of La. R.S. 33:3062; neither amendment repealed subsection C. It is clear that the wording of the text in La. R.S. 22:657, the actions of the legislature, as well as the jurisprudence, contradict the position of the City. Accordingly, this Court finds that La. R.S. 33:3062 does not exempt the City from the provisions of La. R.S. 22:657.
The Court of Appeal affirmed the district court's decision in an unpublished opinion, finding the law of the case doctrine precluded its reconsideration of the appeal:
The City contends, as it did in Rizzuto, that the trial court erred when it held that the provisions of La. R.S. 22:657 apply to the City with regard to its self-funded health care plan. This Court has previously decided that issue [in] Rizzuto. In Rizzuto, this court affirmed the trial judge's holding that La. R.S. 22:657 applied to the City's self-funded health care plan.
In Kiefer v. Southern Freightways, Inc., 95-2037, p. 5 (La.App. 4 Cir. 12/27/96), 686 So.2d 1041, 1046, this Court dealt with the issue of whether a defendant should be barred by the "law of the case" doctrine from re-urging an argument in an appeal which was presented, and ultimately rejected, in a previous appeal even though not all parties were in the appeal at issue were parties in the prior appeal.
* * *
In the present appeal, the law of the case doctrine is being applied "against" the City and the City was, of course, a party at the time of our decision in the previous appeal. The City had a full opportunity to present its argument in the previous appeal. Thus, this court has already decided the exact issue in one of the consolidated cases; the same ruling applies and should be adopted to all of the cases concerning the instant appeal.
This Court granted the City's writ application to determine whether La.Rev.Stat. 33:3062 exempts the City with regard to its health plan from the penalty provision of La.Rev.Stat. 22:657(A) and to resolve the alleged conflict between the provisions of La.Rev.Stat. 33:3062(B) and La.Rev. Stat. 22:657(C).
Before we engage in any statutory interpretation, however, we examine first the law of the case doctrine and its applicability in...
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