Opinion of the Court
General John R. Green, Jr. for Respondent-Appellee North Carolina Department of Health and Human Services.
Alexander Ricks PLLC, by Rodney E. Alexander and Mary K. Mandeville, and Mayer Brown, LLP, by Rodger V. Abbot, Luke Levasseur, and Marcia G. Madesen, for Respondent-Intervenor-Appellee AmeriHealth Caritas of North Carolina, Inc.
Brooks, Pierce, McLendon, Humphry & Leonard, LLP, by Jennifer K. Van Zant, Jessica Thaller-Moran, and Eric F. Fletcher, for Respondent-Intervenor- Appellee Blue Cross and Blue Shield of North Carolina.
Wyrick Robbins Yates & Ponton, LLP, by Lee M. Whitman, Paul J. Puryear, Jr., for Respondent-Intervenor-Appellee Carolina Complete Health, Inc.
Alston & Bird LLP, by Jessica L. Sharron; and Tharrington Smith LLP, by F. Hill Allen and Colin Shive, for Respondent-Intervenor-Appellee UnitedHealthcare of North Carolina, Inc.
Morningstar Law Group, by Shannon R. Joseph; and Holland & Knight, by Karen D. Walker, for Respondent-Intervenor-Appellee Wellcare of North Carolina, Inc.
Parker Poe Adams & Bernstein LLP, by Matthew W. Wolfe, Robert A. Leandro, and Melanie Black Dubis, for Respondent-Intervenor-Appellee North Carolina Provider Owned Plans, Inc. d/b/a My Health by Health Providers.
TYSON, Judge.
¶1 Aetna Better Health of North Carolina, Inc. (“Aetna”) appeals from an order
entered dismissing their petition for lack of subject matter jurisdiction and denying
their motion for an extension of time for service of process. We affirm.
I. Background
¶2 The North Carolina Department of Health and Human Services (“DHHS”) is
responsible for overseeing and operating North Carolina’s Medicaid plan. DHHS is
transitioning North Carolina’s Medicaid delivery system from a fee-for-service model
to a managed care model operated by Prepaid Health Plans, pursuant to North
Carolina’s Medicaid Transformation Act. S.L. 2015-245; see N.C. Gen. Stat. § 122C-
115(e) (2019). This Act directed DHHS to develop a request for proposals to award
prepaid health contracts. S.L. 2015-245, § 4. In 2018, DHHS formed an evaluation
committee (“Committee”) to review and score proposals.
¶3 Aetna is a managed-care provider, one of eight entities who submitted
proposals for Medicaid managed-care services. The Committee issued its
recommendations on 24 January 2019, which identified four statewide contracts for
Medicaid managed care services to be awarded. On 4 February 2019, DHHS awarded
contracts to WellCare of North Carolina, Inc. (“Wellcare”), Blue Cross and Blue Shield
of North Carolina (“BCBS”), AmeriHealth Caritas of North Carolina (“AmeriHealth”),
and UnitedHealthcare of North Carolina, Inc. (“United Healthcare”). DHHS also
awarded a regional contract to Carolina Complete Health, Inc. (“CCH”) (collectively
“Intervenors”).
¶4 Aetna, along with the two other entities who were not awarded contracts,
protested DHHS’ contract and award decisions by filing contested case petitions in
the Office of Administrative Hearings (“OAH”). Aetna filed its contested case petition
and motion for preliminary injunction on 16 April 2019. The Administrative Law
Judge (“ALJ”) denied Aetna’s motion for preliminary injunction on 26 June 2019. The
ALJ consolidated all three petitions on 26 July 2019.
¶5 The ALJ entered an order on 9 September 2020 granting DHHS’ motion for
summary judgment of all claims. The decision included a “notice of appeal,”
paragraph which provides:
[u]nder the provisions of North Carolina General Statute § 150B-45, any party wishing to appeal the final decision of the Administrative Law Judge must file a Petition for Judicial Review in the Superior Court of the county where the person aggrieved by the administrative decision resides . . . . The appealing party must file the petition within 30 days after being served with a written copy of the Administrative Law Judge’s Final Decision. . . N.C. Gen. Stat. § 150B-46 describes the contents of the Petition and requires service of the Petition on all Parties.
¶6 Aetna timely filed its Petition for Judicial Review in superior court on 23
September 2020. The remaining companies not receiving an offer also filed a Petition
for Judicial Review. Aetna served its Petition on counsel of record in the proceedings.
Aetna filed a notice of Petition with the OAH, which transmitted notice to all counsel
of record.
¶7 Aetna failed to serve a copy of its Petition on DHHS’ designated service of
process agent, Lisa Granberry Corbett or any member of her office as required,
pursuant to N.C. Gen. Stat. § 1A-1, Rule 4(j)(4) (2019). On 8 October 2020,
Intervenors and DHHS filed motions to dismiss and served them on Aetna the same
day. On 12 October 2020 at 9:00 a.m., Aetna personally served Corbett. At 10:18
a.m. the same day, Aetna filed an amended Petition for Judicial Review and
personally served Corbett at 10:30 a.m.
¶8 On 13 October 2020, Aetna moved for an extension of time to serve its Petition
for Judicial Review and served the amended Petition for Judicial Review on
Intervenors’ counsel. The superior court heard the motions to dismiss on 9 November
2020, denied Aetna’s request for an extension of time for service of process, and
granted DHHS’ and Intervenors’ motions to dismiss for lack of jurisdiction by order
entered 23 November 2020. Aetna appeals.
II. Jurisdiction
¶9 Jurisdiction lies in this Court pursuant to N.C. Gen. Stat. § 7A-27(b) (2019).
III. Issues
¶ 10 Aetna raises four arguments in their brief. We consolidate and restructure
their arguments as follows, whether the superior court erred by: (1) granting DHHS’
and Intervenors’ motion to dismiss; and, (2) denying Aetna’s motion to extend the
time for service.
IV. Motion to Dismiss
¶ 11 Aetna argues the superior court erred by granting DHHS’ and Intervenors’
motion to dismiss.
A. Standard of Review
¶ 12 “This Court must conduct a de novo review of the pleadings to determine their
legal sufficiency and to determine whether the trial court’s ruling on the motion to
dismiss was correct.” Leary v. N.C. Forest Prods., Inc., 157 N.C. App. 396, 400, 580
S.E.2d 1, 4, aff’d per curiam, 357 N.C. 567, 597 S.E.2d 673 (2003).
B. Analysis
1. Controlling Statutes
¶ 13 Our Supreme Court has held: “No appeal lies from an order or decision of an
administrative agency of the State or from judgments of special statutory tribunals
whose proceedings are not according to the course of the common law, unless the right
is granted by statute.” Empire Power Co. v. N.C. Dep’t of Env’t, Health & Nat. Res.,
337 N.C. 569, 586, 447 S.E.2d 768, 778 (1994) (citations omitted).
¶ 14 “[B]ecause the right to appeal to an administrative agency is granted [only] by
statute, compliance with statutory provisions is necessary to sustain the appeal.”
Gummels v. N.C. Dep’t of Human Resources, 98 N.C. App. 675, 677, 392 S.E.2d 113,
114 (1990) (citation omitted). Aetna has the right to appeal pursuant to N.C. Gen.
Stat. § 150B-43 (2019).
¶ 15 N.C. Gen. Stat. § 150B-45(a) articulates the filing requirement for judicial
review in the superior court: “the person seeking review must file a petition within 30
days after the person is served with a written copy of the decision. . . in the county
where the contested case which resulted in the final decision was filed.” N.C. Gen.
Stat. § 150B-45(a) (2019) (emphasis supplied). N.C. Gen. Stat. § 150B-46 provides
the mandatory service requirement: “Within 10 days after the petition is filed with
the court, the party seeking the review shall serve copies of the petition by personal
service or by certified mail upon all who were parties of record to the administrative
proceedings.” N.C. Gen. Stat. § 150B-46 (2019) (emphasis supplied).
¶ 16 Here, Aetna failed to timely serve DHHS or any other party within the “10
days after the petition is filed” as is mandated by N.C. Gen. Stat. § 150B-46. Prior to
serving DHHS, Aetna amended its Petition on 12 October 2020 and served its
amended Petition the same day. Aetna argues “the relation-back provision of Rule
15(c) allows the service of an amended pleading where the original pleading was not
properly served.”
2. Rone v. Winston-Salem/Forsyth Cnty Bd. of Educ.
¶ 17 Aetna cites Rone v. Winston-Salem/Forsyth Cnty. Bd. of Educ., 207 N.C. App.
624, 701 S.E.2d 284, 289 (2010) for the proposition Rule 15 allows a petition to be
amended. Rone is not controlling as the pleading therein was amended after service
was timely completed pursuant to N.C. Gen. Stat. § 150B-46. Id.
¶ 18 To allow Rule 15 to control timeliness of service, when a party did not complete
service pursuant to N.C. Gen. § 150B-46, would contravene our prior precedents and
the legislative intent, and could lead to gamesmanship to overcome dilatory lapses.
N.C. Gen. Stat. § 150B-46; Gummels, 98 N.C. App. at 677, 392 S.E.2d at 114. Rule
15 applies “to all proceedings in superior court except when a differing procedure is
prescribed by statute.” N.C. Gen. Stat. §1A-1, Rule 1 (2019) (emphasis supplied).
3. Statutory Construction
¶ 19 In determining the application of N.C. Gen. Stat. § 150B-46 of the
Administrative Procedures Act and Rule 15 of the Rules of Civil Procedure, we are
guided by several principles of statutory construction. “The principal goal of
statutory construction is to accomplish the legislative intent.” Lenox, Inc. v. Tolson,
353 N.C. 659, 664, 548 S.E.2d 513, 517 (2001) (citation omitted). “The best indicia of
that intent are the [plain] language of the statute . . . , the spirit of the act and what
the act seeks to accomplish.” Coastal Ready-Mix Concrete Co. v. Bd. of Comm’rs, 299
N.C. 620, 629, 265 S.E.2d 379, 385 (1980) (citation omitted).
¶ 20 “When construing legislative provisions, this Court looks first to the plain
meaning of the words of the statute itself[.]” State v. Ward, 364 N.C. 157, 160, 694
S.E.2d 729, 731 (2010). “Interpretations that would create a conflict between two or
more statutes are to be avoided, and statutes should be reconciled with each other
whenever possible.” Taylor v. Robinson, 131 N.C. App. 337, 338, 508 S.E.2d 289, 291
(1998) (alteration, citation and internal quotation marks omitted). “Statutes in pari
materia must be read in context with each other.” Cedar Creek Enters. v. Dep’t of
Motor Vehicles, 290 N.C. 450, 454, 226 S.E.2d 336, 338 (1976).
¶ 21 Further, “where a literal interpretation of the language of a statute will lead
to absurd results, or contravene the manifest purpose of the Legislature, as otherwise
expressed, the reason and purpose of the law shall control[.]” State v. Beck, 359 N.C.
611, 614, 614 S.E.2d 274, 277 (2005) (citations omitted).
¶ 22 Aetna’s arguments would effectively nullify N.C. Gen. Stat. § 150B-46. Aetna’s
amended Petition for Judicial Review did not assert additional or amend any causes
of action. It was “amended” merely in an attempt to avoid the strict application of
N.C. Gen. Stat. § 150B-46. Aetna’s argument is overruled.
V. Motion for Extension of Time for Service
¶ 23 Aetna argues the trial court abused its discretion in denying its motion for an
extension to serve the petition.
A. Standard of Review
¶ 24 The determination of whether good cause exists to extend the time for service
rests within the sound discretion of the superior court. N.C. Dep’t of Pub. Safety v.
Owens, 245 N.C. App. 230, 232-233, 782 S.E.2d 337, 339 (2016). When we review for
an abuse of discretion, this Court cannot reverse the trial court’s decision unless the
appellant shows the decision was “manifestly unsupported by reason” or was “so
arbitrary that it could not have been the result of a reasoned decision.” Atkins v.
Mortenson, 183 N.C. App. 625, 628, 644 S.E.2d 625, 628 (2007) (citation omitted).
B. Analysis
¶ 25 “[U]nlike [N.C. Gen. Stat.] § 150B-45 which allows the superior court
[discretion] to grant additional time for the filing of the petition, there is no express
provision in G.S. 150B-46 which authorizes the superior court to extend the time for
serving the petition.” Owens, 245 N.C. App. at 233, 782 S.E.2d at 339 (emphasis
supplied). Nevertheless, to avoid a potential “harsh result” arising from the timely
filing but untimely service of a Petition, this Court has held “the superior court has
the authority to grant an extension in time, for good cause shown, to a party to serve
the petition beyond the ten days provided for under G.S. 150B-46.” Id. at 234, 782
S.E.2d at 340.
¶ 26 Here, the superior court’s good cause evaluation was supported by reason and
was not arbitrary. The trial court’s order contains a lengthy analysis of good cause.
Aetna argued the parties had an agreement to serve each other through counsel by
email, the opposing parties had misled Aetna and had “unclean hands,” and “sought
to engineer a situation in which Aetna’s petition would be dismissed for this minor
service defect.”
¶ 27 The superior court did not find these assertions credible. The superior court
acknowledged Aetna claimed, “it did not accomplish proper service because of an
alleged ‘agreement’ for all pleadings [to be served] upon counsel via email upon
filing.” The superior court explicitly rejected these assertions and found, “there was
no such agreement” and “with respect to this judicial review proceeding in particular,
there was no evidence or argument that the Department or any other party agreed to
waive the statutory service requirements necessary to vest jurisdiction in the
superior court for a petition for judicial review.”
¶ 28 The superior court clearly determined Aetna had accused the opposing parties
of procedural gamesmanship, rather than acknowledging a procedural mistake
during service and asking the court to excuse that mistake “for good cause shown.”
Id. at 232, 782 S.E.2d at 339. The court concluded, although little evidence showed
that the untimely service had caused any prejudice for the other parties, Aetna had
not demonstrated good cause for the court to extend the otherwise mandatory
deadline. Id.
¶ 29 When “the trial court acts within its discretion, this Court may not substitute
its own judgment for that of the trial court.” Gunter v. Maher, 264 N.C. App. 344,
347, 826 S.E.2d 557, 560 (2019). The trial court’s decision was not arbitrary. It was
a reasoned decision rendered after careful evaluation of the parties’ competing
positions. In particular, Aetna failed to simply “own up” to a critical mistake in
perfecting mandatory service of its Petition for Judicial Review on opposing parties.
Aetna has shown no abuse of discretion in the superior court’s good cause
determination. Id. Aetna’s argument is overruled.
VI. Conclusion
¶ 30 For seventy years, our Supreme Court has held: “There can be no appeal from
the decision of an administrative agency except pursuant to specific statutory
provision therefor. Obviously then, the appeal must conform to the statute granting
the right and regulating the procedure.” In re State ex. rel. Emp’t Sec. Comm’n, 234
N.C. 651, 653, 68 S.E.2d 311, 312 (1951) (citations and internal quotation marks
omitted) (emphasis supplied).
¶ 31 Our Supreme Court has further held: “The statutory requirements are
mandatory and not directory. They are conditions precedent to obtaining a review by
the courts and [which] must be observed. Noncompliance therewith requires
dismissal.” Id. (emphasis supplied) (citations and internal quotation marks omitted).
¶ 32 “[T]he service requirements are jurisdictional, and the superior court did not
err in dismissing the petition where [a party] . . . was not properly served.” Isenberg
v. N.C. DOC, 241 N.C. App. 68, 73, 772 S.E.2d 97, 100 (2015). The superior court did
not err in granting DHHS’ motion to dismiss nor abuse its discretion in denying
Aetna’s motion to extend the time for service of process “for good cause.” The superior
court’s order is affirmed. It is so ordered.
AFFIRMED.
Judges DIETZ and WOOD concur.