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Jackson v. Ace American Insurance Co.

Court of Appeals of Louisiana, First Circuit

September 21, 2018

Joyce S. Jackson and Lylia F. Jackson
v.
Ace American Insurance Company, Cenikor Foundation, Inc., and Shawn Conner MedFinManager, L.L.C.
v.
Cenikor Foundation, Inc., Ace American Insurance Company and Shawn Conner

          Appealed from the 19th Judicial District Court In and for the Parish of East Baton Rouge, State of Louisiana Docket Nos. 628, 856 c/w 652, 228 | Sec. 22 The Honorable Timothy E. Kelley, Judge Presiding

          L. Lane Roy Timothy T. Roniger New Orleans, Louisiana Attorneys for Appellants Defendants-Ace American Insurance Company, Cenikor Foundation, Inc., and Shawn Conner

          Brodie G. Glenn Larry E. Mobley New Orleans, Louisiana Attorneys for Appellee Plaintiff -MedFin Manager, L.L.C.

          Before: Pettigrew, Welch, and Chutz, JJ.

          WELCH, J.

         The defendants-Cenikor Foundation, Inc. ("Cenikor"), Ace American Insurance Company ("Ace"), and Shawn Conner-appeal a judgment of the trial court that 1) granted a petition for declaratory judgment in favor of a financial services company (that purchases medical liens arising from treatment administered to plaintiffs in personal injury actions), declaring that the company's purchases of a patient's accounts from her health care providers were not the sales of litigious rights; 2) denied the defendants' exceptions to the petition for declaratory judgment; and 3) reversed a prior judgment granting the defendants' motion to redeem and extinguish a litigious right, to the extent that prior judgment conflicted with the declaratory judgment. For the following reasons, we convert the defendants' appeal to an application for supervisory writ, grant the writ application, vacate the judgment, and remand.[1]

         FACTS AND PROCEDURAL HISTORY

         The Damages Suit

         This matter arises out of an automobile accident that occurred on May 4, 2013, when a 2007 Honda Odyssey operated by Mr. Conner, owned by his employer Cenikor, and insured by Ace[2] collided with a 2003 Chevrolet Impala occupied by the plaintiffs, Joyce S. Jackson ("Ms. Jackson") and Lylia F. Jackson.

         The plaintiffs filed suit on March 7, 2014 against the defendants, seeking damages for injuries allegedly sustained as a result of the automobile accident.[3] See Joyce S. Jackson and Lylia F. Jackson v. Ace American Insurance Company, Cenikor Foundation, Inc., and Shawn Conner, Docket No. 628, 856, Sec. 22, 19th Judicial District Court ("JDC"), East Baton Rouge Parish, Louisiana ("the damages suit"). Ms. Jackson received medical care and services from her health care providers-Neuro-Technology Institute, LLC, Baton Rouge General Medical Center, The Bone & Joint Clinic of Baton Rouge, Inc., Strategic Medical Alliance, and Parish Anesthesia of Baton Rouge-who secured a statutory privilege against any recovery in her personal injury action. See La. R.S. 9;4752.[4]Ms. Jackson's health care providers subsequently assigned all of their rights and interest in her medical accounts to MedFin Manager, L.L.C. ("MedFin"), a financial services company that purchases medical liens/privileges arising from treatment administered to plaintiffs in personal injury actions.[5] MedFin paid Ms. Jackson's health care providers half of the face value of Ms. Jackson's accounts, a total of $94, 412.48 (with legal interest from the date of assignment added), in exchange for the privileges representing the entire billed amount of those accounts.

         Thereafter, the defendants filed a motion to redeem and extinguish a litigious right on May 3, 2016, wherein they sought leave to redeem and extinguish the right to recover Ms. Jackson's accounts assigned to MedFin, contending that the assignments of rights were actually the sales of litigious rights. Specifically, the defendants sought leave to extinguish the accounts Ms. Jackson and her health care providers assigned to MedFin by paying MedFin the discounted price that MedFin paid her health care providers for the assignments.

         Following a hearing, the trial court granted the defendants' motion to redeem and extinguish a litigious right in a judgment signed on September 15, 2016, which decreed as follows:

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendants' Motion to Redeem and Extinguish a Litigious Right is hereby granted, and Plaintiff is ordered to provide all documentation in [her] possession or which [she has] access to regarding to [sic] the purchase of any medical account by MedFinManager, LLC; and
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Plaintiff has thirty (30) days to comply with the Court's Order and all costs of Defendants' Motion are assessed against Plaintiff.

         After the deadlines for seeking review of the September 15, 2016 judgment expired, the defendants calculated the amounts paid to Ms. Jackson's health care providers by MedFin and sent a demand letter to MedFin on September 28, 2016, seeking verification of the amounts so that the defendants could render full and final payment to redeem the litigious rights and extinguish the debt.[6]

         The Declaratory Action

         Following receipt of the defendants' demand letter, MedFin-who was never a named party in the damages suit-instituted a separate action on October 18, 2016, by filing a petition for declaratory judgment. See MedFinManager, L.L.C. v. Cenikor Foundation, Inc., Ace American Insurance Company and Shawn Conner, Docket No. 652, 228, Sec. 27, 19th JDC, East Baton Rouge Parish, Louisiana ("the declaratory action"). Therein, MedFin asserted that its purchases of Ms. Jackson's accounts from her health care providers were not the sales of litigious rights; therefore, the defendants did not have the right to redeem and extinguish those accounts for the price paid by MedFin. MedFin sought a judgment declaring that the trial court's September 15, 2016 judgment granting the defendants' motion to redeem and extinguish a litigious right in the damages suit was not intended to hold that the purchases of Ms. Jackson's accounts by MedFin from her health care providers and still owed by Ms. Jackson were the purchases of litigious rights. MedFin further sought a judgment declaring that the trial court's September 15, 2016 judgment did not order that the debt owed to MedFin by Ms. Jackson in connection with the accounts be redeemed by the defendants or anyone else for less than the full balance and interest.

         Additionally, MedFin filed a motion to transfer and consolidate the declaratory action (Docket No. 652, 228 in Section 27) with the damages suit (Docket No. 628, 856 in Section 22).[7]

         The defendants filed exceptions of lis pendens, lack of subject matter jurisdiction, res judicata, no cause of action, and no right of action to MedFin's petition for declaratory judgment. The defendants ...


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