Justia Contracts Opinion Summaries

Health and Hospital Corporation of Marion County, Indiana is a municipal corporation that operates a major hospital and other facilities, including a health center operated in partnership with Citizens Health to serve the medically under-served population in Indianapolis. The health center was funded in part by a Section 330 Grant, awarded by the federal Health Resources and Services Administration, which is part of the Department of Health and Human Services. Section 330 grants fund qualifying health centers that provide primary health care services to medically under-served populations, 42 U.S.C. 254b. A In 2012, Health and Hospital decided to terminate the partnership with Citizens and relinquish the federal grant, which still had several years of funding remaining. Citizens sued Health and Hospital, HRS, and others in an effort to retain the grant funds. The district court granted defendants summary judgment, concluding that Citizens had no contractual, statutory, or constitutionally cognizable interest in the grant. The Seventh Circuit affirmed, finding that Health and Hospital was the grantee; Citizens had no constitutionally-protected entitlement to the grant; and the terms of the contract between Health and Hospital and Citizens clear; there was no obligation to renew. View "Citizens Health Corp. v. Sebelius" on Justia Law

Several hospitals (Hospitals) sued Aetna, Inc. and Aetna Health, Inc. (collectively Aetna) for allegedly violating the Prompt Pay Statute. Aetna provided a Medicare plan (Plan) through an HMO called NYLCare. It delegated the administration of its Plan to North American Medical Management of Texas (NAMM), a third-party administrator. IPA Management Services (Management Services) provided medical services to Plan enrollees. Management Services entered into contracts with the Hospitals to secure hospital services for the Plan employees. Aetna was not a party to these contracts. The Hospitals submitted hospital bills to NAMM for payment. After NAMM and Management Services became insolvent, Aetna de-delegated NAMM and assumed responsibility for processing and paying claims. However, Aetna instructed the Hospitals to continue submitting their bills to NAMM. The Hospitals argued that Aetna was liable for NAMM's failure to timely pay claims and was responsible for $13 million in outstanding bills. The trial court granted summary judgment for Aetna. The court of appeals affirmed, concluding that because the Hospitals entered into contracts with Management Services and not with Aetna directly, the Hospitals had no viable prompt-pay claim. The Supreme Court affirmed, holding that the lack of privity between the Hospitals and Aetna precluded the Hospitals' suit. View "Christus Health Gulf Coast v. Aetna, Inc." on Justia Law

Holline and William Parsons (Plaintiffs) were enrolled in Today's Option, a Medicare Advantage Plan sponsored by the Pyramid Life Insurance Company (Pyramid). After Plaintiffs were each disenrolled from their respective plans, they brought suit against Pyramid, asserting numerous state law claims. The circuit court granted Plaintiffs' motion for summary judgment in part declaring that the Medicare Act did not provide the exclusive remedy for Plaintiffs' claims in this case. Pyramid then moved for Ark. R. Civ. P. 54(b) certification and a stay pending appeal, requesting permission to file an interlocutory appeal on the issues of whether Plaintiffs' state-law claims arose under the Medicare Act and whether their claims, to the extent they did not arise under the Act, were expressly preempted by the Act. The circuit court certified this appeal pursuant to Rule 54(b). The Supreme Court dismissed the appeal without prejudice, holding that the finding supporting Rule 54(b) certification was in error. View "Pyramid Life Ins. Co. v. Parsons" on Justia Law

The State appealed the dismissal of its complaint against seventeen pharmaceutical companies, which the State alleged defrauded Utah's Medicaid program by reporting inflated drug prices. In its complaint, the State pursued two causes of action, violation of the Utah False Claims Act (UFCA) and fraudulent misrepresentation. The district court dismissed the claims based on three alternative grounds. The Supreme Court reversed in part and affirmed in part, holding (1) although the State's complaint was insufficiently particular under the appropriate Utah R. Civ. P. 9(b) standard for claims alleging a widespread scheme to commit fraud and submit false claims, it was in the interest of justice to grant the State leave to amend its complaint under the new standard; (2) the district court erred in dismissing the State's claims under Utah R. Civ. P. 12(b)(6) because the State alleged all the elements of its causes of action; and (3) the district court properly applied the one-year statute of limitations to the State's UFCA cause of action and its dismissal of those claims alleged to have arises before April 30, 2006. Remanded.

Plaintiff's son, Hayden, was involved in a near-drowning accident in which he suffered severe permanent injuries. Plaintiff subsequently sought coverage for the cost of his treatment from Wasatch Crest Mutual Insurance, under which Hayden was insured. Wasatch Crest was later declared insolvent, and Plaintiff filed a claim against the Wasatch Crest estate. The liquidator of the estate denied Plaintiff's claim, concluding that Wasatch Crest had properly terminated coverage under the language of the plan. The Supreme Court reversed, interpreting the plan in favor of coverage. Plaintiff resubmitted her claim for medical expenses to the liquidator for payment under the Utah Insurers Rehabilitation and Liquidation Act. One year later, Plaintiff filed a motion for summary judgment with the district court. The liquidator subsequently issued a second amended notice of determination denying Plaintiff's claim on the merits. The district court then denied Plaintiff's motion for summary judgment, as Plaintiff had not yet challenged the second amended notice of determination and could do so under the Liquidation Act. Plaintiff appealed the district court's order. The Supreme Court dismissed the appeal because Plaintiff did not appeal from a final judgment and had not satisfied any of the exceptions to the final judgment rule.

After an inspection revealed deplorable health conditions for its residents, an intermediate care facility for the developmentally disabled was decertified for Medicaid reimbursement. As a result, until the State appointed a receiver nine months later, the facility operated without receiving federal or state funds. This case was a common-law claim for expenses the facility laid out in the meantime for the individuals still residing there. The trial court denied the facility restitution for the unpaid months under a theory of quantum meruit, afforded relief under related breach of contract claims, but offset that judgment by the amount the State paid for its receiver. The Supreme Court affirmed the trial court's ultimate judgment, which resulted in neither party taking anything from the action, holding (1) the facility exhausted its administrative remedies; (2) the facility's quantum meruit claim failed; and (3) the state was entitled to set off the amount owed to the facility on the breach of contract claim against the amount the State paid in operating the receivership of the facility and which the facility then owed.

Plaintiffs brought a putative class action under the Employee Retirement Income Security Act, 29 U.S.C. 1001, to recover benefits under long-term disability benefit plans maintained by their former employers. The plans provide for reduction of benefits if the disabled employee also receives benefits under the Social Security Act, as both plaintiffs do. They dispute calculation of the reduction, claiming that the plans do not authorize inclusion in the offset of benefits paid to dependent children. Both plans require offsets for "loss of time disability" benefits. The district court dismissed. The Seventh Circuit affirmed, holding that children's Social Security disability benefits paid based on a parent's disability are "loss of time disability" benefits under the language of the plans.

Plaintiff contracted for satellite TV service. Equipment costs are amortized in monthly payments; a customer who discontinues service owes a fee to cover the unpaid portion of equipment cost. Plaintiff authorized a charge to her debit card should that occur. Plaintiff stopped paying the monthly charge. Defendant collected the termination fee via the debit card. Plaintiff argued that the Social Security Act, 42 U.S.C. 407(a), provides that benefits may not be assigned or subject to attachment or garnishment at the behest of creditors, and that, unbeknownst to defendant, all funds in her account came from Social Security benefits. The district court ruled in favor of defendant. The Seventh Circuit affirmed. Plaintiff's arrangement was consensual, unlike "legal process." The statute does not authorize private parties to sue for damages based on assignments of Social Security benefits.

The Maryland State Retirement System (System) filed a claim against Milliman, an actuary, asserting that Milliman had understated the contributions required to fund three of the State's ten retirement and pension systems because of Milliman's misinterpretation of a particular data code. The Retirement System Procurement Officer determined that Milliman had failed to comply with its contractual duties and awarded damages to the System. On appeal, the State Board of Contract Appeals determined that the actuary had substantially breached its contracts with the System and affirmed the damages. The circuit court affirmed the Board's findings that Milliman breached its contracts with the System and affirmed the award of lost investment earnings but reversed the Board's award of amounts equaling lost contributions. The Supreme Court granted certiorari, holding (1) Milliman was liable to the System for repeatedly misinterpreting a data code; (2) the System was not negligent in the development or transmission of data provided to Milliman and, therefore, contributory negligence did not bar the System's recovery; and (3) the circuit court erroneously reduced the Board's damage award representing lost contributions. The Court, therefore, vacated the judgment of the circuit court and affirmed the Board's decision.

Donovan Donald (Don) was incapacitated in an accident and received several treatment in Kalispell Regional Medical Center (KRMC). Later, a dispute arose between Don's estate and KRMC over KRMC's acceptance or rejection of Medicaid's payments for Don's care. KRMC filed liens against the Estate. The Estate, in turn, sued KRMC and MASH, a company that had provided Medicaid application forms to the Estate, under several theories of liability. The district court granted Defendants' motions for summary judgment. The Supreme Court affirmed, holding the district court (1) did not err in granting summary judgment to KRMC and MASH; (2) correctly interpreted and applied the Montana Medicaid Act; (3) correctly awarded KRMC prejudgment interest but incorrectly included interest KRMC received from its interest-bearing account; and (4) did not abuse its discretion by awarding KRMC attorney fees and costs. Remanded with instructions to offset the prejudgment interest award by the amount of interest KRMC received from the interest-bearing account.