Aetna Life Insurance v. Kollmeyer (In Re Heritage Southwest Medical Group PA)

Case: 11-10396 Document: 00511783541 Page: 1 Date Filed: 03/09/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 9, 2012
No. 11-10396 Lyle W. Cayce
Clerk
In the Matter of: HERITAGE SOUTHWEST MEDICAL GROUP PA,
Debtor
___________________________
AETNA LIFE INSURANCE COMPANY; AETNA U.S. HEALTHCARE
INCORPORATED,
Appellants
v.
KENNETH KOLLMEYER, M.D.; LAWRENCE ALTER, M.D.,
Appellees
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:10-CV-684
Before KING, BENAVIDES, and DENNIS, Circuit Judges.
PER CURIAM:*
This is an appeal from the district court’s affirmance of the bankruptcy
court’s decision not to dismiss under Federal Rule of Civil Procedure 41(b) an
action by medical service providers as time-barred or for failure to prosecute or
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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No. 11-10396
comply with a bankruptcy court order. The bankruptcy court order at issue, in
addition to deciding not to dismiss the case, remanded the case to state court.
The parties do not question our jurisdiction, but we confirm that we have
jurisdiction over the decision not to dismiss the case. See Adams v. Sidney
Schafer & Assocs. (In re Adams), 809 F.2d 1187, 1188-89 (5th Cir. 1987).
Aetna Life Insurance Company and its affiliate (collectively, “Aetna”)
argue that the district court should not have reopened the case because the
bankruptcy court should have instead dismissed the providers’ suit as time-
barred by the applicable statute of limitations. The bankruptcy court and the
district court correctly rejected Aetna’s limitations argument on the theory that
statutes of limitation and equitable tolling are not implicated where claims are
initially timely filed and, thereafter, the case is stayed or administratively closed
by the bankruptcy or district court, as the case may be. As we have said many
times, administrative closure does not have any effect on the rights of the parties
and is simply a docket-management device. See, e.g., Mire v. Full Spectrum
Lending Inc., 389 F.3d 163 (5th Cir. 2004).
Alternatively, Aetna argues that the lengthy time period that elapsed
while the providers waited for legal issues to be resolved in our court and in the
state court prejudiced them. The district court was particularly unpersuaded by
Aetna’s claim of prejudice. It held that Aetna was on notice of the claims, should
have retained the documents, should have obtained information regarding
witnesses that would be critical in asserting its defenses, and should have taken
other means to gather information regarding the validity of the claims. In its
words, “[p]reserving vital evidence is basic and fundamental to avoiding legal
prejudice. . . . [Aetna] offer[s] no proof that [it] will or [has] been prejudiced. The
record reflects only argument by counsel.” We are still in that situation, and we
are similarly unpersuaded. This court sets a high bar for a dismissal with
prejudice under Rule 41(b). We have said that dismissal “is appropriate only if
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Case: 11-10396 Document: 00511783541 Page: 3 Date Filed: 03/09/2012
No. 11-10396
the failure to comply with the court order was the result of purposeful delay or
contumaciousness and the record reflects that the district court employed lesser
sanctions before dismissing the action.” Long v. Simmons, 77 F.3d 878, 880 (5th
Cir. 1996) (emphases added). The bankruptcy court and the district court both
correctly held that there was no basis for dismissing the providers’ claims.
For these reasons and supported by excellent opinions by the bankruptcy
and district courts, we AFFIRM the bankruptcy and district courts’ respective
orders refusing to dismiss the providers’ case. Costs shall be borne by Aetna.
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