Montefiore Medical Center v. Teamsters Local, 272

13-4221-cv
Montefiore Medical Center v. Teamsters Local, 272, et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order
filed on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 21st day of January, two thousand fifteen.
PRESENT: RALPH K. WINTER,
JOSÉ A. CABRANES,
REENA RAGGI,
Circuit Judges.
MONTEFIORE MEDICAL CENTER,
Plaintiff-Appellant,
No. 13-4221-cv
v.
TEAMSTERS LOCAL, 272, ET AL.,
Defendants-Appellees.
FOR PLAINTIFF-APPELLANT: JOHN GREGORY MARTIN, (Courtney A.
Rogers, on the brief), Garfunkel Wild, P.C.,
Great Neck, NY.
FOR DEFENDANTS-APPELLEES: JANE LAUER BARKER, (Danya Ahmed, on the
brief), Pitta & Giblin LLP, New York, NY.
Appeal from a judgment of the United States District Court for the Southern District of
New York (Harold Baer, Jr., Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of the District Court is VACATED and the cause is
REMANDED for further proceedings.
Plaintiff-appellant Montefiore Medical Center (“Montefiore”) appeals from the District
Court’s June 28, 2013 judgment. We assume the parties’ familiarity with the underlying facts, the
procedural history of the case, and the issues on appeal.
BACKGROUND
Defendant-appellee Teamsters Local, 272 Welfare Fund (“the Fund”) is a self-funded
employee benefit plan, which provides health care coverage for the employees covered by the
Fund—primarily parking garage attendants and cashiers. Plaintiff-appellant Montefiore is a hospital
located in the Bronx, New York. In March 2009, Montefiore filed a lawsuit in the Supreme Court of
New York, Bronx County, which alleged, inter alia, that the Fund had failed to pay over $1.1 million
in outstanding bills for healthcare services that Montefiore had provided to the Fund’s employees.
The Fund removed the lawsuit to the U.S. District Court for the Southern District of New York. In
September 2012, the District Court held a two-day bench trial. On June 25, 2013, the District Court
issued an Opinion & Order containing its findings of fact and conclusions of law.
Relevant to this appeal, the District Court limited its Opinion & Order to “those claims that
[had] not settled since the bench trial’s conclusion.” SPA 1 (emphasis supplied). Specifically, the
District Court found that the Fund had “paid all claims listed in Plaintiffs’ Exhibit 172, comprised of
claims for services rendered after August 13, 2008,” as well as “all of the claims for services rendered
during the period prior to . . . August 13, 2008, except for those claims that were denied for lack of
pre-certification under the Terms of the Fund’s plan of benefits.” Id. (alteration in original) (internal
quotation marks omitted). The District Court therefore limited its consideration to: (1) ten claims
arising during the period that the Fund contracted with Horizon Healthcare of New York, Inc.1; and
(2) two claims that were denied for lack of precertification during the time when the Fund
contracted with MagnaCare Administrative Services LLC.2 Of these claims, Montefiore prevailed as
to five of the ten “Horizon claims” and, accordingly, on June 28, 2013, the District Court entered
judgment in favor of Montefiore for a total of $42,698.03.
On June 28, 2013, Montefiore filed a motion in the District Court to amend the Opinion &
Order and judgment under Federal Rules of Civil Procedure 52(b) and 59(a)(2) and (e). Montefiore’s
1 Horizon Healthcare of New York, Inc. (“Horizon”) is a Preferred Provider Organization (“PPO”). Prior to
January 1, 2007, Montefiore had a contract with Horizon, under which Montefiore agreed to provide hospital services to
any entity, such as the Fund, with whom Horizon had an agreement. Therefore, before January 1, 2007, Montefiore
provided health care services to the Fund’s members through the Horizon PPO.
2 After Horizon ceased services, Montefiore contracted with a new PPO, MagnaCare Administrative Services
LLC (“MagnaCare”). Therefore, beginning on January 1, 2007, Montefiore provided health care services to the Fund’s
members through the MagnaCare PPO.
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principal argument was that the District Court had incorrectly found that the majority of
Montefiore’s claims were settled by the parties and that, therefore, the District Court erred in
declining to resolve those claims in its Opinion & Order. As Montefiore put the point:
Based on [the District Court’s] conclusion that the parties had settled the two
largest groups of claims in the case, the claims arising out of the Fund’s breach of the
MagnaCare contracts, and the “post-termination claims,” the Court did not consider
these claims.
However, there has been no agreed upon resolution of these claims. In fact,
although the Fund has made some partial payments on the MagnaCare contract
claims and the post-termination claims, the parties remain in disagreement on over
$2 million dollars [sic] in unpaid claims.
J.A. 407 (emphasis in original) (citation omitted). On October 4, 2013, the District Court denied
Montefiore’s motion to amend the Opinion & Order and judgment. Montefiore filed this timely
appeal arguing that the District Court both (1) erred by not considering unresolved claims in
entering judgment, and (2) abused its discretion by not considering the claims after Montefiore
moved to amend the judgment. While both arguments have merit, we need only address the first to
decide this appeal.
DISCUSSION
When reviewing a judgment following a bench trial, we review a district court’s findings of
fact for clear error and its conclusions of law de novo. Merck Eprova AG v. Gnosis S.p.A., 760 F.3d 247,
255 (2d Cir. 2014). Under the clearly erroneous standard, “there is a strong presumption in favor of
a trial court’s findings of fact if supported by substantial evidence. We will not upset a factual
finding unless we are left with the definite and firm conviction that a mistake has been committed.”
White v. White Rose Food, a Div. of DiGiorgio Corp., 237 F.3d 174, 178 (2d Cir. 2001) (internal quotation
marks omitted).
A.
Based upon our review of the record, we conclude that the District Court committed clear
error in declining to resolve the majority of Montefiore’s claims in its Opinion & Order. The District
Court appears to have based its factual finding that the parties had “settled” these claims on two
letters submitted by the Fund alone. The first letter, dated December 14, 2012, stated that the Fund
had “paid all claims listed in plaintiff’s Exhibit 172, comprised of claims for services rendered after
August 13, 2008 when the Fund was terminated from the MagnaCare network (the ‘post-termination
claims’), as well as the claims which were billed directly to the participants by Montefiore.” This
assertion that these claims were fully paid was specifically refuted by Montefiore in a letter submitted
to the District Court on December 20, 2012—according to Montefiore, the Fund had paid only
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$185,682 towards claims that were purportedly worth over $1.4 million. The second letter from the
Fund, dated February 7, 2013, stated that the Fund had “paid all of the claims listed in plaintiff’s
Exhibit 6,” and that “all of the claims for services rendered during the period prior to . . . August 13,
2008 when the Fund was terminated from the MagnaCare network (the ‘pre-termination claims’),
except for those claims that were denied for lack of pre-certification under the terms of the Fund’s
plan of benefits[,] have been paid.” For whatever reason, Montefiore failed to respond to the Fund’s
second letter.
The District Court decision to credit one party’s assertion that certain claims had been
“settled” was clearly erroneous. Although the Fund asserts that it was within the District Court’s
discretion to determine that the claims had been paid and thus were not “live claims,” the Fund
provides no authority for its novel argument that one side can moot claims after a bench trial by
paying an amount of its own choosing. Here, Montefiore has steadfastly maintained that the amount
paid by the Fund was not sufficient to satisfy the claims at issue—therefore, a live controversy clearly
existed, which the District Court was obligated to resolve. To be sure, if the District Court had made
a specific factual finding that the amount due and owing on the “post-termination” and “pre-
termination” claims was identical to the amount the Fund had already paid to Montefiore, then
perhaps the District Court could have concluded that these claims were no longer “live.” However,
because no such finding of fact was made, and because the District Court simply found that the
claims were “settled” based on the Fund’s one-sided representation, we conclude that the District
Court committed clear error.
Accordingly, the June 28, 2013 judgment in this case must be vacated and the cause
remanded. In light of Judge Baer’s untimely death, the remand will be handled by District Judge
Ronnie Abrams, to whom the case has now been reassigned. Our remand order does not
contemplate reopening of the record for the introduction of any new evidence or reconsideration of
issues already decided. Nevertheless, to the extent that the parties dispute which evidence was
properly admitted into the record and which issues were decided, resolution of any such disputes, as
well as the decision whether to reinstate aspects of Judge Baer’s Opinion & Order, is committed to
the sound discretion of Judge Abrams.
B.
Finally, Montefiore asserts that the District Court erred in declining to incorporate into its
final judgment the 9% in pre-judgment interest required under New York State law. In response, the
Fund asserts that pre-judgment interest is not warranted because—contrary to a separate ruling by
the District Court—Montefiore’s New York State law claims were preempted by the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001 et seq. However, because we
have vacated the judgment in its entirety, we need not resolve this issue. Upon remand, Judge
Abrams will, at the appropriate time, determine whether pre-judgment interest is required on any
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recovery received by Montefiore and, if so, the amount that should be awarded, including with
respect to claims previously decided in Montefiore’s favor by Judge Baer.
CONCLUSION
For the reasons stated above, we VACATE the District Court’s June 28, 2013 judgment and
REMAND the cause for further proceedings consistent with this Order.
FOR THE COURT,
Catherine O’Hagan Wolfe, Clerk of Court
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