Envision HealthCare Corp. v. United HealthCare Ins. Co.

311 F. Supp. 3d 1322
CourtDistrict Court, S.D. Florida
DecidedApril 26, 2018
DocketCase No. 18–cv–60530–UU
StatusPublished

This text of 311 F. Supp. 3d 1322 (Envision HealthCare Corp. v. United HealthCare Ins. Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Envision HealthCare Corp. v. United HealthCare Ins. Co., 311 F. Supp. 3d 1322 (S.D. Fla. 2018).

Opinion

Ursula Ungaro, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court upon Defendant's Motion to Compel Arbitration and Stay the Action (D.E.24).

THE COURT has considered the pertinent portions of the record and is otherwise fully advised in the premises.

BACKGROUND

The facts recited here come from the Complaint, filed March 12, 2018. D.E. 1.

Plaintiffs, Envision HealthCare Corporation ("Envision") and Sheridan HealthCorp, Inc. ("Sheridan"), sue United HealthCare Insurance Company ("United") for damages stemming from alleged contractual breaches. Id. ¶¶ 1-4. The contract required Plaintiffs to pay for the medical expenses of patients insured by United, and United, in turn, would pay Plaintiffs according to pre-determined payment rates. Id. Ex. A

Plaintiffs allege that Defendant unilaterally changed the contractual payment rates in response to perceived overbilling by Plaintiffs. Id. ¶¶ 35, 55.1

*1324The contract provides that in the event the Parties disagree as to the existence of overbilling, "the issue will be resolved through the dispute resolution process set forth in the Agreement." Id. ¶ 38. The dispute resolution provision requires that "any and all disputes" arising out the contract be referred to binding arbitration. Id. ¶ 39.

The Parties agree that this mandatory arbitration provision is enforceable as written, and that all of Plaintiffs' claims fall within its scope. Plaintiffs argue, however, that by unilaterally changing the payment rate, Defendants waived the arbitration provision, and therefore Plaintiffs are no longer bound by it.

ANALYSIS

1) Defendant Has Not Waived Its Arbitration Right

An agreement to arbitrate may be waived. Ivax Corp. v. B. Braun of Am., Inc. , 286 F.3d 1309, 1315 (11th Cir. 2002). The Eleventh Circuit has established a two-part test to determine whether a party has waived its right to arbitrate. Id. First, the court must decide "if, under the totality of the circumstances, the party has acted inconsistently with the arbitration right." Id. (internal quotations omitted) (citing Ivax Corp. v. B. Braun of Am., Inc. , 286 F.3d 1309, 1315 (11th Cir. 2002) ). Second, the court must look to see "whether, by doing so, that party has in some way prejudiced the other party." Id. "A contractual breach alone, however, cannot rise to the level of waiver; otherwise, parties would never arbitrate contract disputes." Id. at 1319.

Here, Plaintiffs attempt to do precisely that which Ivax prohibits: turn a breach of contract into a waiver of an arbitration clause. They argue that United waived the arbitration provision by unilaterally changing the payment rates, thereby engaging in "self-help" rather than obeying the procedures set forth in the dispute resolution provision. No case cited by Plaintiff or any in the Court's own review extends the waiver rule so far. Waiver has been found where a party litigated for three years before moving for arbitration. Garcia v. Wachovia Corp. , 699 F.3d 1273 (11th Cir. 2012). And where a party waited five years to compel arbitration and colluded with its insured to injure the plaintiff. Morewitz v. W. of England Ship Owners Mut. Prot. & Indem. Ass'n (Luxembourg) , 62 F.3d 1356, 1366 (11th Cir. 1995). It has also been found where a party refused to participate in arbitration, and where an arbitration provision was so one-sided as to be unconscionable. See Cox v. Ocean View Hotel Corp. , 533 F.3d 1114, 1124 (9th Cir. 2008) ; Hooters of Am., Inc. v. Phillips , 173 F.3d 933, 938 (4th Cir. 1999).

This case is different; the waiver is premised on a breach alone. To extend the waiver rule to a contractual breach alone would, as Ivax warns, render arbitration provisions meaningless. See Ivax Corp. , 286 F.3d at 1319.

Additionally, Plaintiff has not identified any prejudice. Plaintiff asserts that Defendant's unilateral change to the payment rates has caused it harm, but this is harm from the alleged contractual breach, not prejudice flowing from conduct inconsistent with Defendant's right to arbitrate. See Citibank, N.A. v. Stok & Assocs., P.A. , 387 Fed.Appx. 921, 924 (11th Cir. 2010).

The Eleventh Circuit has found prejudice where a party litigates for some time before invoking its arbitration right, thereby *1325forcing the other party to incur substantial time and expense. See, e.g., Morewitz , 62 F.3d at 1366 (finding prejudice where the party asserting waiver demonstrated that its adversary allowed, at a minimum, five years to pass-the time between the liability action and the enforcement action-before invoking its right to arbitrate); S & H Contractors, Inc. v. A.J. Taft Coal Co. , 906 F.2d 1507, 1514 (11th Cir. 1990) (same after an eight-month delay); Stone v. E.F. Hutton & Co.

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311 F. Supp. 3d 1322, Counsel Stack Legal Research, https://law.counselstack.com/opinion/envision-healthcare-corp-v-united-healthcare-ins-co-flsd-2018.