Smith v. Rogers Galvanizing Co., 96-5168

• Citation: 148 F.3d 1196
• Decision Date: 21 July 1998
• Docket Number: No. 96-5168,96-5168
• Parties: , 98 CJ C.A.R. 3922 Clarence Roy SMITH; Betty Smith, Plaintiffs-Appellees, v. ROGERS GALVANIZING CO., Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1196

148 F.3d 1196

67 USLW 1677, 98 CJ C.A.R. 3922

Clarence Roy SMITH; Betty Smith, Plaintiffs-Appellees, v. ROGERS GALVANIZING CO., Defendant-Appellant.

No. 96-5168.

United States Court of Appeals, Tenth Circuit.

July 21, 1998.

Stephen L. Andrew (D. Kevin Ikenberry with him on the brief), Stephen L. Andrew & Associates, Tulsa, Oklahoma, for the appellants.

Greggory T. Colpitts (Clifford R. Magee with him on the brief), Tulsa, Oklahoma, for the appellee.

Before SEYMOUR, Chief Judge, EBEL and BRISCOE, Circuit Judges.

BRISCOE, Circuit Judge.

After our opinion in this case was issued, Smith v. Rogers Galvanizing Co., 128 F.3d 1380 (10th Cir.1997), Rogers Galvanizing Company filed a petition for rehearing on three issues. We granted rehearing on two issues and allowed Rogers to supplement the record on appeal with additional materials from the district court file.

District court's decision to reopen evidence on issue of damages

Plaintiffs' claims under the Consolidated Omnibus Reconciliation Act (COBRA), 29 U.S.C. §§ 1161-1168, were tried to the court. At trial, "[p]laintiffs introduced evidence ... concerning the total amount of medical expenses incurred during the continuation coverage period, but did not introduce any evidence concerning the extent to which those bills would have been covered under defendant's self-funded plan." Smith, 128 F.3d at 1385. As reflected in their post-trial brief, plaintiffs' position was that any applicable premiums and deductibles were "recoupments" which would be deducted from the total amount of medical expenses only if affirmatively proved by Rogers. In response, Rogers argued it was plaintiffs' burden to demonstrate the net benefits to which they were entitled under the Guardian plan and plaintiffs' failure to present evidence concerning applicable premiums and deductibles was fatal to their claim for damages.

In its subsequent findings of fact and conclusions of law, the district court concluded Rogers failed to provide plaintiffs with adequate notice of their COBRA rights upon Clarence Smith's termination. Accordingly, the court concluded plaintiffs were "entitled to collect from Rogers Galvanizing the amount of any medical bills incurred during the continuation coverage period ..., less premium and applicable deductible (recoupment)." Appellant's App. at 37. However, because no evidence concerning plan coverage, monthly premiums, or applicable deductibles had been introduced at trial, the court issued the following directive to the parties:

On or before the 27th day of November, 1995, the parties are to submit a Judgment in keeping with the above Findings of Fact and Conclusions of Law for the Court's approval. Failing in which the Court will conduct an additional hearing on December 7, 1995, at 1:30 P.M., to determine Plaintiffs' damages, including costs and a reasonable attorneys fee. It is the Defendant's burden to present evidence regarding the June 1, 1993 new plan coverage, premium and deductible. It is the Plaintiffs' burden to establish which of Plaintiffs' medical expenses are covered thereunder and application of the Oklahoma Health Care Authority lien.

Id. at 38. In accordance with the directive, Rogers analyzed plaintiffs' medical bills and determined the benefits due plaintiffs under the policy at issue. Thereafter, the parties stipulated to the net damages recoverable by plaintiffs and, consistent with the stipulation, the district court entered judgment in favor of plaintiffs and against Rogers. ¹

Rogers contends the district court erred in reopening the case sua sponte to accept additional evidence on the issue of damages. According to Rogers, plaintiffs bore the burden of proof on the issue of damages and the court's decision "subvert[ed] the adversarial nature of the trial" by relieving plaintiffs from the consequences of their decision not to present any evidence concerning premiums, deductibles, and applicable benefits under the policy. Rogers argues the district court's judgment awarding benefits to plaintiffs should be reversed. ²

A district court has broad discretion to reopen a case to accept additional evidence and that decision will not be overturned on appeal absent an abuse of that discretion. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 331, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971); Morsey v. Chevron, USA, Inc., 94 F.3d 1470, 1477 (10th Cir.1996). In deciding whether to reopen, "[t]he court should consider the time the motion [if any] is made, the character of additional testimony and the potential prejudicial effect in granting or denying the motion." Joseph v. Terminix Int'l Co., 17 F.3d 1282, 1285 (10th Cir.1994). Ultimately, "fairness is the key criterion" in determining whether to reopen. Blinzler v. Marriott Int'l, Inc., 81 F.3d 1148, 1160 (1st Cir.1996).

Here, the district court's decision to reopen was made within one month of the bench trial, after the court had determined plaintiffs had not been given adequate notice of their COBRA rights. The decision was intended to effectuate COBRA's purpose of placing plaintiffs in the position they would have been in had there been no violation on the part of Rogers. The additional evidence was narrowly confined and largely uncontroverted. Indeed, the parties stipulated to the net benefits due plaintiffs under the post-June 1, 1993, policy. Under these circumstances, we fail to see how Rogers was unfairly prejudiced by the court's decision.

Nor are we persuaded the burden of proof issues in a COBRA case are so clearly established that the district court overstepped its bounds in deciding to accept additional evidence on the issue of damages. Although Rogers contends the law clearly placed the burden of proof of damages on plaintiffs, our research indicates there is almost no guidance on this issue. No circuit court has addressed the issue and only a handful of district courts have directly or indirectly touched on it. In Hamilton v. Mecca, Inc., 930 F.Supp. 1540, 1555 (S.D.Ga.1996), the district court held plaintiff bears the burden of proof as to damages in an action to recover COBRA benefits and therefore must present evidence concerning the amount of expenses covered under the policy at issue. The court did not cite any authority in support of its conclusion. Presumably, it based its holding on the fact that a plaintiff in a civil case typically carried the burden of demonstrating damages. But see Stanton v. Larry Fowler Trucking, Inc., 52 F.3d 723, 728 (8th Cir.1995) (concluding plan administrator bears burden at trial of proving COBRA notice was given).

In contrast, three district courts have handled the issue of damages in a manner similar to that used by the district court in this case. In Van Hoove v. Mid-America Bldg. Maint., Inc., 841 F.Supp. 1523 (D.Kan.1993), the district court concluded defendant failed to give plaintiff proper notice of her rights under COBRA upon termination of her husband's employment. Although evidence of incurred medical expenses had been introduced at trial,...