Barron v. Vision Service Plan

575 F. Supp. 2d 825, 2008 U.S. Dist. LEXIS 103424, 2008 WL 2622940
CourtDistrict Court, N.D. Ohio
DecidedJune 30, 2008
Docket3:07CV3902
StatusPublished
Cited by4 cases

This text of 575 F. Supp. 2d 825 (Barron v. Vision Service Plan) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Barron v. Vision Service Plan, 575 F. Supp. 2d 825, 2008 U.S. Dist. LEXIS 103424, 2008 WL 2622940 (N.D. Ohio 2008).

Opinion

ORDER

JAMES G. CARR, Chief Judge.

This case involves the alleged breach of a contract. Plaintiff Mark Barron, an *828 Ohio-based optometrist, alleges that defendant Vision Service Plan [VSP], a California-based corporation that administers vision care insurance plans, breached a 1994 “grandfathering” letter [1994 Letter] allowing him to remain affiliated with VSP provided he did not violate its terms, and the Member Doctor-Agreement [Agreement] which incorporates the 1994 Letter. Barron also alleges a separate tort claim for violation of the implied duty of good faith and fair dealing. Jurisdiction is proper under 28 U.S.C. § 1332.

Pending is Barron’s motion for a preliminary injunction. [Doc. 2], For the reasons discussed below, Barron’s motion shall be granted.

Background

VSP contracts with corporations and government employers to provide optical coverage to their employees. VSP does not provide any of these services itself, but refers covered persons to select independent contractors who have contracted with VSP to provide such services.

Generally, VSP will only cover members’ visits to network optometrists. Members, however, may purchase additional coverage for visits to non-network optometrists. Benefits for visits to non-network optometrists are less than those for visits to network optometrists. Over ninety percent of VSP members visit network optometrists.

VSP requires that all network optometrists sign the Agreement and submit certification materials every three years. VSP alleges that it sends these materials to member optometrists approximately six months before the previous materials expire.

The Agreement attaches certain conditions and limitations to membership. If a member “fails to comply with the terms and conditions,” VSP can terminate the Agreement immediately. [Doc. 2, Ex. 2], Likewise, “any unapproved change of office address and/or material change in the ownership/operations/management of the practice ... render[s] the agreement immediately void.” [Id.]. The Agreement, furthermore, provides that either party can terminate it “by giving the other party ninety (90) days prior written notice.” [M]

The Agreement also includes an integration clause:

[A]ll of the points in this Agreement, including VSP’s Articles of Incorporation, By-laws, VSP Provider and Reference Manual, standards, protocols, rules, and Schedules of Compensation together with amendments and addenda thereto, shall constitute the entire Agreement between Member Doctor and VSP, and that none of these provisions therein can be waived verbally by any agent or officer of VSP.

[Id.].

Beginning in 1995, VSP began including an additional requirement that all optometrists have “majority ownership and complete control of all aspects of [their] practice^], including dispensaries [ie., their office premises].” [Id.]. The Agreement explained that “VSP was founded on the belief that patients’ interests are best served by the independent eye-care professional. This is the cornerstone of VSP’s operational philosophy. Member Doctor may not be affiliated, contractually or otherwise, with retail-commercial chain or franchise vision-care entities.” [Id.].

Recognizing this would be problematic for optometrists who did not own dispensaries, VSP’s Board of Directors, at their June, 1995 meeting, agreed to exempt Ohio and Michigan optometrists who were already VSP members. The optometrists, however, had to remain with their current employer, not change office locations, and *829 meet all other articles, by-laws, rules or schedules. VSP mailed each of the exempted optometrists the 1994 Letter explaining the change to the Agreement and the exemption.

Barron has worked as a VSP affiliated optometrist since 1993. He is self-employed, but does not own his own dispensary. Barron alleges that he received the 1994 Letter which, “upon information and belief,” he believes VSP sent to him. [Doc. 1]. He has continuously remained a VSP network optometrist.

Income from VSP and its members constitute Barron’s single largest source of revenue. VSP reimbursements and client co-payments make up approximately twenty-five percent of Barron’s annual income. In 2006, VSP reimbursements constituted twenty-three percent of his income. During 2007’s first eleven months, VSP paid Barron approximately $28,555 in reimbursements. During the same period, Barron also collected approximately $3,783 in co-payments.

Until 2007, Barron rented space from D.O.C. Optics Corporation [D.O.C.], a Michigan-based retailer of corrective ey-ewear. D.O.C. never employed Barron.

In early February, 2007, Luxottica U.S. Holdings Corp. [Luxottica], a New York-based designer and manufacturer of corrective eyeware, notified VSP that it would soon purchase D.O.C. and all of its assets. On February 20, Jim Lies, Chief Financial Officer for Luxottica sent Thomas Fessler, VSP’s general counsel, an e-mail confirming Luxottica would acquire D.O.C. Luxot-tica additionally included a list of VSP member optometrists whom D.O.C. employed or were its franchisees or licensees. Luxottica included Barron’s name on the fist. Lies and Fessler subsequently exchanged e-mails regarding the listed optometrists’ contractual status. Lies explained that Ohio optometrists, including Barron, were independent contractors.

On February 24, 2007, Luxottica acquired all of D.O.C.’s assets. As part of the acquisition, Luxottica acquired Barron’s lease.

On March 9, 2007, VSP mailed Barron a questionnaire to complete in light of Lux-ottica’s acquisition of D.O.C. On March 15, 2007, Barron mailed the completed questionnaire to VSP.

On April 16, 2007, VSP mailed Barron a letter informing him VSP would terminate his membership. The letter explained that VSP was terminating him “because the conditions which afforded [Barron’s] participation in VSP’s Doctor Network require that [Barron], among other things, remain employed by D.O.C., and comply with all other VSP requirements for participation. It is apparent from the information submitted that Barron is no longer employed by D.O.C.” [Doc. 2, Ex. 10].

Barron subsequently appealed the termination to the VSP Quality Management Committee [Committee], which held an informal telephone hearing on the matter. Barron testified that the 1994 Letter did not require that D.O.C. continue to employ him, but that the same employer continue to do so. As he was then and still remains self-employed, Barron explained that his employment status had not changed. The Committee upheld Barron’s termination explaining that D.O.C. no longer employed him “and/or [he failed] to meet all VSP rules and regulations.” [Doc. 2, Ex. 11].

Barron subsequently appealed the Committee’s decision. On September 26, 2007, VSP convened a formal hearing on Barron’s termination. At the hearing, the VSP appeals and hearing administrator read the charge:

This hearing concerns your change of employer in breach of VSP network doc

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Cite This Page — Counsel Stack

Bluebook (online)
575 F. Supp. 2d 825, 2008 U.S. Dist. LEXIS 103424, 2008 WL 2622940, Counsel Stack Legal Research, https://law.counselstack.com/opinion/barron-v-vision-service-plan-ohnd-2008.