Walter v. Blue Cross Blue Shield Wisconsin, 97-5926

• Decision Date: 10 June 1999
• Docket Number: No. 97-5926,97-5926
• Citation: 181 F.3d 1198
• Parties: (11th Cir. 1999) Alvera WALTER, Individually and as Trustee of the Estate of Charles Walter, deceased, Plaintiff-Appellant, v. BLUE CROSS & BLUE SHIELD UNITED OF WISCONSIN, a corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1198

181 F.3d 1198 (11th Cir. 1999)

Alvera WALTER, Individually and as Trustee of the Estate of Charles Walter, deceased, Plaintiff-Appellant, v. BLUE CROSS & BLUE SHIELD UNITED OF WISCONSIN, a corporation, Defendant-Appellee.

No. 97-5926.

United States Court of Appeals, Eleventh Circuit.

June 10, 1999.

No. 97-846-CV-JAL, Joan A. Lenard, Judge.

Appeal from the United States District Court for the Southern District of Florida.

Before BIRCH and CARNES, Circuit Judges, and MILLS¹, Senior District Judge.

CARNES, Circuit Judge:

Plaintiff Alvera Walter sued defendant Blue Cross & Blue Shield United of Wisconsin (herein "Blue Cross" or "Blue Cross of Wisconsin") in Florida state court for breach of contract. Blue Cross removed the case to federal district court and filed a motion to dismiss for lack of personal jurisdiction. Walter failed to respond to that motion in a timely manner. Solely because of that failure, the district court granted the motion to dismiss without reaching the underlying jurisdictional question. Walter then moved to set aside the dismissal and filed a belated opposition to the motion to dismiss on jurisdictional grounds. The court denied Walter's motion to set aside its order of dismissal.

For the reasons set forth below, we hold that the district court abused its discretion by denying Walter's motion to set aside its dismissal order based upon the untimeliness of her response. Nevertheless, we also hold that the action is due to be dismissed on other grounds, because Walter has failed to establish that the district court had personal jurisdiction over Blue Cross.

I. BACKGROUND

In 1975, Charles Walter, a Wisconsin state employee, and his wife, Alvera, began to receive health insurance coverage from the State of Wisconsin's self-funded group health insurance policy. Blue Cross of Wisconsin acted as thirdparty administrator of this health plan. Sometime during the 1970s, the Walters moved from Wisconsin to Florida but retained their health insurance coverage through the State of Wisconsin's plan. The Walters sent their premium payments from Florida to Blue Cross of Wisconsin, which, for its part, paid claims made by Florida health care providers. Under the terms of the Third Party Administrator Agreement, Blue Cross could not terminate the Walters' policy because they had moved to Florida.

On May 15, 1997, Alvera Walter, both individually and as trustee of the estate of her deceased husband, sued Blue Cross of Wisconsin in the state courts of Florida, alleging that the company had breached its health insurance policy with the Walters by denying payment on some claims. On June 25, 1997, Blue Cross removed the case to federal court. Walter subsequently filed a motion to remand.

On July 2, 1997, Blue Cross of Wisconsin filed a motion to dismiss the complaint for lack of personal jurisdiction, arguing that it had no contacts with the state of Florida. Walter's response to the motion to dismiss was due on July 18. On July 14, Walter moved for a 20-day extension of time to file her response, and on August 19, the district court granted the requested extension.

One month after that, on September 22, 1997, the district court denied Walter's motion to remand the case. Sometime after Walter's attorney received the order denying the motion to remand, she realized that Blue Cross of Wisconsin's motion to dismiss was still pending, but she did not file her response immediately. On October 6, having received no response from Walter, the district court entered an order granting Blue Cross's motion to dismiss. The order stated:

A party opposing a motion must serve a response on the moving party within ten days of being served with the motion, and must file a copy of its response with the Court within three days of serving the response. See S.D. Fla. L.R. 7.1C; S.D. Fla. L.R. 5.1B. Failure to do so is a basis for granting the motion. S.D. Fla. 7.1C. Defendant filed its motion to dismiss on June 2, 1997. On August 19, 1997, this Court granted Plaintiff a twenty day extension of time to respond. To date, Plaintiff has not filed a response to that motion with this Court. Accordingly, it is hereby ... ORDERED AND ADJUDGED that Defendant's motion to dismiss be GRANTED. The Clerk of Court is directed to close this case.

On October 8, which was two days after the dismissal, Walter filed her response to Blue Cross of Wisconsin's motion to dismiss. A week later, on October 16, Walter moved the court, under Federal Rule of Civil Procedure 60(b), to set aside its order granting the motion to dismiss, explaining that her counsel had received a copy of the court's order on October 8 and that "during the period of time when the Court granted the Plaintiff's ... extension to respond to the Defendant's Motion to Dismiss, the undersigned counsel's former secretary had just terminated her position with this office and through some inadvertence in filing, never diaried and docketed for a timely response to be filed to the Motion to Dismiss." Although Walter admitted that her counsel "learned" of the pending motion to dismiss when the court denied her motion to remand in late September, she stated: "This motion has been brought in good faith and the undersigned asserts that there is no prejudice that will arise to the Defendant by setting aside the Order Granting Defendant's Motion to Dismiss." On November 14, the district court denied Walter's motion to set aside its order. Walter then filed this appeal.

On January 26, 1999, while this appeal was still pending, Walter sued Blue Cross of Wisconsin in Wisconsin state court, alleging the same breach of contract claims. In her Wisconsin complaint, Walter stated that she was a Wisconsin resident.² On March 2, 1999, Blue Cross filed a motion to dismiss the Wisconsin complaint. Walter subsequently moved to stay her Wisconsin lawsuit, pending resolution of this case.

II. STANDARD OF REVIEW

We review the district court's denial of a motion to set aside a final judgment for an abuse of discretion. See Cheney v. Anchor Glass Container Corp., 71 F.3d 848, 849 n. 2 (11th Cir.1996).

III. DISCUSSION

A. DID THE DISTRICT COURT ABUSE ITS DISCRETION IN DENYING WALTER'S MOTION TO SET ASIDE ITS ORDER OF DISMISSAL?

Walter argues that the district court abused its discretion in denying her motion to set aside its order of dismissal, because her lawyer engaged in excusable neglect that did not prejudice Blue Cross of Wisconsin. Blue Cross, on the other hand, emphasizes the length of the delay and the fact that Walter's counsel received a reminder of the pending motion to dismiss two weeks before she filed her response. We conclude that the district court did abuse its discretion, because Walter's counsel engaged in excusable neglect.

The Supreme Court and this Court have recently clarified the test for "excusable neglect." In Pioneer Investment Services Co. v. Brunswick Associates Limited Partnership, 507 U.S. 380, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993), the Court held that a creditor's filing of a proof of claim 20 days late constituted excusable neglect under Federal Rule of Bankruptcy Procedure 9006(b)(1). Looking to other rules for guidance, the Court stated that, "at least for purposes of Rule 60(b), 'excusable neglect' is understood to encompass situations in which the failure to comply with a filing deadline is attributable to negligence." Id. at 394, 113 S.Ct. at 1497. The Court explained that the determination of excusable neglect "is at bottom an equitable one, taking account of all relevant circumstances surrounding the party's omission," and identified four factors to guide courts in making that determination: "the danger of prejudice to the [other party], the length of the delay and its potential impact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith." Id. at 395, 113 S.Ct. at 1498. The Court found that in the case before it the creditor had engaged in excusable neglect, because "the lack of any prejudice to the debtor or to the interests of efficient judicial administration, combined with the good faith of respondents and their counsel, weigh[ed] strongly in favor of permitting the tardy claim." Id. at 398, 113 S.Ct. at 1499.

Three years later, this Court applied the Pioneer factors in Cheney v. Anchor Glass Container Corp., 71 F.3d 848 (11th Cir.1996). In Cheney, the plaintiff exercised his right to demand a trial de novo following an arbitration award, but filed his request six days after the deadline had passed and three days after the district court had entered judgment against him. See id. at 849. We held that the district court had abused its discretion by refusing to set aside its judgment, because the Pioneer factors weighed in Cheney's favor. See id. at 850. Noting that the Supreme Court had "accorded primary importance to the absence of prejudice to the nonmoving party and to the interest of efficient judicial administration in determining whether the district court had abused its discretion," we relied on the fact that Anchor Glass could not show it had suffered any prejudice and we found the six-day delay had no adverse impact on the district court. Id. In addition, we explained that the delay was caused by a miscommunication between two attorneys, which constituted "negligence" and "simply an innocent oversight by counsel." Id. Finally, we emphasized that there was no evidence Cheney had acted in bad faith. See id.

Pioneer and Cheney directly control the outcome of this case, and all four factors weigh in favor of Walter's position. First, in its memorandum opposing Walter's motion to set aside the dismissal, Blue Cross of Wisconsin admitted that it had not suffered any prejudice from Walter's delay. Second, although the delay of one month in this case³ is longer than the delay in Cheney, there is no reason to believe allowing...