Weiner v. Blue Cross of Maryland, Inc., Civ. No. PN-89-2256.

• Court: United States District Courts. 4th Circuit. United States District Court (Maryland)
• Writing for the Court: NIEMEYER
• Citation: 730 F. Supp. 674
• Parties: Robert WEINER, et al. v. BLUE CROSS OF MARYLAND, INC., et al.
• Docket Number: Civ. No. PN-89-2256.
• Decision Date: 05 February 1990

730 F. Supp. 674

Robert WEINER, et al.
v.
BLUE CROSS OF MARYLAND, INC., et al.

Civ. No. PN-89-2256.

United States District Court, D. Maryland.

February 5, 1990.

Larry S. Stewart, and James B. Tilghman, Jr., Miami, Fla., Clarence M. Thomas, Timonium, Md., William A. Hahn, Jr., Durkee, Thomas, and Hahn, Baltimore, Md., for plaintiffs.

Shale D. Stiller, Leonard E. Cohen, Alan P. Hillman, Peter H. Gunst, Frank, Bernstein, Conaway & Goldman, H. Russell Smouse, Whiteford, Taylor & Preston, Baltimore, Md., for defendants Blue Cross of Maryland, Inc., Blue Shield of Maryland, Inc., and Blue Cross and Blue Shield of Maryland, Inc.

730 F. Supp. 675

OPINION AND ORDER

NIEMEYER, District Judge.

Plaintiffs Robert Weiner and his family obtained a judgment in the amount of $6.9 million against Blue Cross and Blue Shield of Maryland and related companies (Blue Cross) in the state courts of Florida. The judgment arose out of Blue Cross' failure to pay timely under a health care policy. The judgment, which was entered in September 1986, has been accruing interest at the rate of 12% per annum and now approximates $9.3 million. When the Weiners filed the judgment in the Circuit Court for Baltimore County, Maryland, as part of the first steps toward enforcing it against Blue Cross, Blue Cross removed the action to this Court and filed a motion to vacate the judgment in a collateral attack, contending that the Florida state court had no authority to enter a judgment. It contends that the action was preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. The Weiners moved to remand the action to state court on the ground that a proceeding to enforce a judgment is not an action that is removable under 28 U.S.C. § 1441. Having considered the well-prepared memoranda of the parties and the arguments presented at the hearing on January 12, 1990, the Court will deny both the motion to remand and the motion to vacate.

I. BACKGROUND

In early 1982 Robert Weiner, Sr., the owner and operator of a gas station in Broward County, Florida, contacted the state association of gasoline retailers known as Allied Gasoline Retailers' Association of Florida (AGRA), which is affiliated with a national group known as Service Station Dealers of America (SSDA), to obtain group health insurance. After joining AGRA, Robert Weiner, Sr. obtained a family policy which covered his wife and two dependent children, Steven and Mark. His third son, Robert Weiner, Jr., who was an employee of the gas station and over the age of majority, obtained an individual policy. The group policy showed SSDA, the national organization, as employer and designated the members as "employees." That policy was never subscribed to by SSDA, but was signed by an insurance agency that marketed group plans for Blue Cross. Members qualified for coverage under the plan so long as they remained employees or until the age of 19 if they were dependents of employees.

In 1982 two sons of Robert Weiner, Sr. suffered tragedies. Steven was diagnosed with AIDS, and he died less than two years later. Mark was rendered a quadriplegic as a result of an automobile accident.

Blue Cross provided payments for medical care under Robert Weiner, Sr.'s policy until August 1983 when it concluded that Steven and Mark were no longer covered. Robert Weiner filed suit one month later to compel continuation of payments and approximately seven months later Blue Cross resumed payments under the policy and reimbursed Robert Weiner for past payments. The parties agree that since March 1984 Blue Cross has paid all contractual obligations under the policy.

The failure of Blue Cross to provide coverage apparently caused the Weiners substantial hardship, and they sued Blue Cross as well as Blue Cross/Blue Shield of Florida, a servicing agent, for state common law claims of fraud, negligence, and intentional infliction of emotional distress. The jury returned verdicts in favor of all plaintiffs and against all defendants on all counts. The plaintiffs were awarded $500,000 in compensatory damages and $5,000,000 in punitive damages against Blue Cross and $200,000 in compensatory and $1.5 million in punitive damages against Blue Cross/Blue Shield of Florida. The trial judge awarded $1.4 million in attorneys' fees which were calculated at three times the lodestar amount. Judgment was entered in September 1986, and under Florida law it bears 12% per annum interest until paid.

The judgment was appealed to the Florida Fourth District Court of Appeal, an intermediary appellate court, where Blue Cross and Blue Cross/Blue Shield of Florida raised for the first time the defense that the health care policy was part of a

730 F. Supp. 676

plan as defined by ERISA and that therefore the actions were preempted by federal law. They contended that the trial court had no power to enter judgment and that the judgment should be vacated. Alternatively, they requested that the case be remanded to the trial court for a further hearing on the preemption issue. The Florida appellate court rejected the arguments based on the record that had been developed, affirmed the judgment against Blue Cross, but reversed the judgment against Blue Cross/Blue Shield of Florida. Blue Cross/Blue Shield of Florida, Inc. v. Weiner, 543 So.2d 794 (Fla.Dist.Ct.App. 1989). The Florida Supreme Court denied a petition for review, and a petition for a writ of certiorari is now pending in the Supreme Court of the United States

Before the Florida appellate court rendered its decision, Blue Cross filed a suit in the United States District Court for the Southern District of Florida seeking an injunction on preemption grounds. The District Court denied the injunction, relying on the doctrine of abstention. Blue Cross and Blue Shield of Maryland, Inc. v. Weiner, No. 88-6290-Ryskamp (S.D.Fla. May 17, 1988). On appeal the Eleventh Circuit affirmed, 868 F.2d 1550, and the Supreme Court denied a petition for writ of certiorari. ___ U.S. ___, 110 S.Ct. 239, 107 L.Ed.2d 190 (1989).

The Weiners began enforcement of their judgment by filing it in the Circuit Court for Baltimore County, Maryland, under the Uniform Enforcement of Foreign Judgments Act, Md.Code Ann., Courts and Jud. Proc. Art., § 11-801 et seq. Blue Cross removed the action to this Court under 28 U.S.C. § 1441 and filed a motion to vacate the Florida judgment. Alternatively, Blue Cross seeks to have an evidentiary hearing on the issue whether the health care plan issued by Blue Cross was a plan regulated by ERISA, 29 U.S.C. § 1003(a).

After the Florida trial court entered judgment and before the Florida appellate court rendered its decision, the Supreme Court of the United States decided Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987) and Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). These cases articulated the scope and strength of the preemption of ERISA. Because Blue Cross did not have the benefit of those decisions before the trial, it contends that it has not had the opportunity to try to a fact-finder the issue whether the health care policy issued to the Weiners was regulated by ERISA.

II. REMOVAL

The Weiners have moved to remand this action to the Circuit Court for Baltimore County. They contend that their proceeding in the Circuit Court for Baltimore County to enforce a Florida judgment is not a "civil action" that is removable under 28 U.S.C. § 1441, but rather is an ancillary proceeding to the Florida action, and the time for removing the Florida action has long since passed. See, e.g., 14A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3721 (2d ed. 1985) at 202 & n. 54 (collecting cases). They also urge that the decisions in Barrow v. Hunton, 99 U.S. 80, 25 L.Ed. 407 (1878), and Eisenhardt v. Coastal Indus., Inc., 324 F.Supp. 550 (M.D.Pa.1971), which hold that a motion to vacate a judgment is ancillary to the judgment and therefore not removable, should be dispositive of the question whether proceedings to enforce a judgment are removable.

Under the common law, the procedure to enforce the judgment of one jurisdiction in another required the filing of a new suit in the second jurisdiction to enforce the judgment of the first. The suit on the judgment was an independent action, see, e.g., Indemnity Ins. Co. of N. Am. v. Smoot, 152 F.2d 667, 670 (D.C.Cir.1945), cert. denied, 328 U.S. 835-36, 66 S.Ct. 981, 90 L.Ed. 1611 (1946), and thus was removable under 28 U.S.C. § 1441. The Weiners point out, however, that rather than pursuing a common law action, they simply filed a copy of the Florida judgment in the Circuit Court for Baltimore County pursuant to the Uniform Enforcement of Foreign Judgments Act, Md.Code Ann., Courts and Jud. Proc. Art., § 11-801 et seq. They argue

730 F. Supp. 677

that the filing of the Florida judgment was not an independent action because the "filed foreign judgment has the same effect and is subject to the same procedures, defenses, and proceedings for reopening, vacating, staying, enforcing, or satisfying as a judgment of the court in which it is filed." Id., § 11-802(b). Thus, they argue that the Florida judgment filed in the Circuit Court for Baltimore County under the Uniform Enforcement Act is the same as if the judgment against Blue Cross had been originally entered in Baltimore County. Its enforcement, they contend, is an ancillary proceeding and not an independent action that is removable

Blue Cross contends that the Uniform Enforcement Act does not alter the traditional tests of removability of actions. The judgment was entered in Florida, and the Weiners could only enforce it in Maryland by suing on the judgment in Maryland. The Uniform Enforcement Act, it contends, merely streamlined the process for suing on the judgment.

When originally written, the Uniform Enforcement of Foreign Judgments Act was...