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St. Charles Surgical Hospital, LLC v. Louisiana Health Service & Indemnity Co.

Court of Appeals of Louisiana, Fourth Circuit

March 22, 2018

ST. CHARLES SURGICAL HOSPITAL, LLC AND CENTER FOR RESTORATIVE BREAST SURGERY, LLC
v.
LOUISIANA HEALTH SERVICE & INDEMNITY COMPANY D/B/A BLUE CROSS AND BLUE SHIELD OF LOUISIANA, BLUE CROSS & BLUE SHIELD OF LOUISIANA, INC., AND HMO LOUISIANA, INC.

          APPLICATION FOR WRITS DIRECTED TO CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2017-01095, DIVISION "C" Honorable Sidney H. Cates, Judge

          JAMES M. WILLIAMS, DAVID R. SHERMAN, DANIEL E. BURAS, JR., MATTHEW A. SHERMAN PATRICK R. FOLLETTE, CHEHARDY, SHERMAN, WILLIAMS, MURRAY, RECILE, STAKELUM & HAYES, L.L.P. COUNSEL FOR PLAINTIFFS-RESPONDENTS

          RICHARD J. TYLER, COVERT J. GEARY, MICHAEL C. DREW, TYLER J. RENCH, Jones Walker LLP, GARY M. CARTER, JR. Gary M. Carter, Jr., LLC COUNSEL FOR DEFENDANTS-RELATORS

          Court composed of Judge Daniel L. Dysart, Judge Regina Bartholomew Woods, Judge Paula A. Brown.

          Regina Bartholomew Woods Judge

         Defendants-Relators, Louisiana Health Service & Indemnity Company D/B/A Blue Cross and Blue Shield of Louisiana, Blue Cross & Blue Shield of Louisiana, Inc., and HMO Louisiana, Inc., ("Defendants-Relators"), seek supervisory review of the trial court's December 19, 2017 judgment denying its exceptions of res judicata and no cause of action as to the second amended petition filed by Plaintiffs-Respondents, St. Charles Surgical Hospital, LLC and Center for Restorative Breast Surgery, LLC ("Plaintiffs-Respondents"). We find that the trial court erred; therefore, we grant the writ and reverse the trial court's December 19, 2017 ruling.

         FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         Plaintiffs-Respondents asserted that they are out-of-network healthcare providers for Defendants-Relators, an insurer. Plaintiffs-Respondents alleged that they contacted Defendants-Relators either, via telephone or Defendants-Relators' website to verify patients' insurance benefits. Plaintiffs-Respondents further alleged that Defendants-Relators made representations about payment amounts for services rendered, but actually paid Plaintiffs-Respondents less after the services were provided and claims were submitted. Moreover, Plaintiffs-Respondents argued that the verifications created an oral contract, which Defendants-Relators breached. On April 6, 2010, Plaintiffs-Respondents filed suit in Orleans Parish Civil District Court asserting causes of action for breach of contract, negligent misrepresentation, detrimental reliance, unjust enrichment, and fraud. On April 12, 2010, the suit was removed to federal district court.

         On March 31, 2017, the federal district court dismissed, with prejudice, Plaintiffs-Respondents' claims. Plaintiffs-Respondents filed an appeal on April 21, 2017. Thereafter, Plaintiffs-Respondents dismissed, with prejudice, their claim for fraud.[1]

         On February 3, 2017, while the above-referenced lawsuit was pending, Plaintiffs-Respondents filed suit in Orleans Parish Civil District Court and asserted claims for breach of contract, detrimental reliance, negligent misrepresentation, and fraud. In response, Defendants-Relators filed, in federal district court, a petition pursuant to the Anti-Injunction Act to enjoin Plaintiffs-Respondents from pursuing claims previously litigated. Thereafter, the federal district court enjoined Plaintiffs-Respondents from pursuing claims for breach of contract, detrimental reliance, and negligent misrepresentation. Plaintiffs-Respondents then filed an amended and supplemental petition to remove the claims for breach of contract, detrimental reliance, and negligent misrepresentation, and to assert claims of abuse of process and fraud. Defendants-Relators then filed, in Orleans Parish Civil District Court, exceptions of res judicata and no cause of action. The trial court held a hearing on December 15, 2017, and on December 19, 2017, rendered judgment denying Defendants-Relators' exceptions. On January 16, 2018, Defendant-Relators sought supervisory review of the trial court's ruling from this Court.

         DISCUSSION

         Defendants-Relators argued that the trial court erred in denying their exceptions of res judicata and no cause of action because Plaintiffs-Respondents are attempting to relitigate claims in Orleans Parish Civil District Court that the federal district court has already disposed of in a final judgment, as well as permanently enjoined.

         Res Judicata

         In a case similar to the instant one, the Louisiana Supreme Court, opined that "[w]hen a state court is required to determine the preclusive effects of a judgment rendered by a federal court exercising federal question jurisdiction, it is the federal law of res judicata that must be ...


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