Thomas D. Curtis v. Blue Cross Blue Shield of Louisiana

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

07-782

THOMAS D. CURTIS

VERSUS

BLUE CROSS BLUE SHIELD OF LOUISIANA, ET AL.

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. 20031416
HONORABLE PATRICK L. MICHOT, DISTRICT JUDGE

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MARC T. AMY
JUDGE

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Court composed of Sylvia R. Cooks, Marc T. Amy, and Elizabeth A. Pickett, Judges.

AFFIRMED.

Christopher A. Edwards
Edwards Law Firm
Post Office Box 2970
Lafayette, LA 70502-2970
(337) 237-6881
COUNSEL FOR PLAINTIFF/APPELLANT:
Thomas D. Curtis

Thomas R. Hightower, Jr.
Patrick Wade Kee
John Andrew Durrett
Post Office Drawer 51288
Lafayette, LA 70505
(337) 233-0555
COUNSEL FOR DEFENDANT/APPELLEE:
Louisiana Health Services and Indemnity Company, d/b/a
Blue Cross/Blue Shield of Louisiana

AMY, Judge.

The plaintiff filed suit against the defendant insurance company arguing that

it increased his premiums in violation of La.R.S. 22:228 and La.R.S. 22:229.1.

Additionally, he alleged that the defendant committed fraud by not disclosing that it

was utilizing a durational factor when determining the amount of his premiums. After

a partial summary judgment was granted in the plaintiff’s favor, the matter proceeded

to trial. At the close of the plaintiff’s case, the defendant moved for an involuntary

dismissal, arguing that the plaintiff did not meet his burden of proof. The trial court

granted the motion and dismissed the plaintiff’s case. It is from this ruling that the

plaintiff now appeals. For the following reasons, we affirm.

Factual and Procedural Background

In February 1999, the plaintiff, Thomas D. Curtis, and his wife obtained an

individual health insurance policy with the defendant, Louisiana Health Service and

Indemnity Company d/b/a Blue Cross Blue Shield of Louisiana (Blue Cross). The

policy had an initial deductible of $500.00 and a monthly premium of $391.48. In

January 2000, the monthly premium was increased to $432.21, and the deductible was

increased to $750.00. Mr. Curtis was diagnosed with multiple sclerosis in September

2000. According to Mr. Curtis, his policy premiums continued to periodically

increase, ultimately reaching $1,241.50 by March 2006. He filed suit against Blue

Cross, alleging that by continuing to increase his premiums, in violation of La.R.S.

22:228 and La.R.S. 22:229.1, it unilaterally cancelled his policy. By amended

petition, Mr. Curtis contended that Blue Cross committed fraud by failing to disclose

that it was utilizing a “durational factor” to increase his premiums over the length of

the policy.

On September 3, 2004, Mr. Curtis filed a motion for summary judgment,

arguing that: (1) Blue Cross could not increase his premiums after September 18,

2000, the day that he was diagnosed with multiple sclerosis; (2) Blue Cross violated

the law by charging him a “durational rating” that was never disclosed to him until

January 2003; and (3) as a result of its fraud in using a durational rating, Blue Cross

owed him attorney fees. Following a hearing, the trial court signed a judgment on

March 17, 2005, in which it found that:

(1) By increasing premiums on the policy issued to Thomas D.
Curtis, BlueCross has violated [La.R.S.] 22:228. Summary judgment on
this issue is granted and the defendant is prohibited from changing their
premiums on said policy above $432.21 per month with a deductible of
$750.00 without prior court approval;

(2) By increasing premiums on the policy issued to Thomas D.
Curtis, BlueCross has violated [La.R.S.] 22:229.1. Summary judgment
on this issue is also granted in favor of plaintiff and defendant is
prohibited from changing the premiums in said policy above $432.21
per month with a deductible of $750.00 without prior court approval;

(3) The Motion for Summary Judgment based upon fraud is
denied;

(4) Defendant is cast for all cost[s] of this motion; and

(5) This is not a final Judgment as additional issues remain for
determination by the Court.

Pursuant to a stipulation signed by the parties on March 24, 2005, they agreed

that the March 17, 2005 judgment was not a final judgment and that it was “subject

to revision at any time prior to submission as a final judgment[.]” On November 15,

2005, Mr. Curtis filed another motion for summary judgment concerning the

following issues: (1) “date of receipt or notice of a covered claim as referred to in

[La.R.S] 22:228 and 22:229.1”; (2) “specific amount of back-time overpaid premiums

reimbursement owed by BlueCross to THOMAS CURTIS”; (3) “specific amount of

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prescription co-payment reimbursement owed by BlueCross to THOMAS CURTIS”;

and (4) “attorney fees.” In response, Blue Cross filed its own motion for summary

judgment, alleging that Mr. Curtis could not prove that there is no genuine issue of

material fact and that he is entitled to judgment as a matter of law. Following a

hearing, the trial court denied both motions for summary judgment.

Trial of the matter was held on August 15, 2006. At the close of Mr. Curtis’

case, Blue Cross moved for an involuntary dismissal, arguing that Mr. Curtis did not

prove his fraud allegation or that the increase in premiums violated either La.R.S.

22:228.6 or La.R.S. 22:229.1. The trial court granted the motion. Mr. Curtis

subsequently filed a motion for new trial, which the trial court denied. Mr. Curtis

now appeals, raising the following issues:

(1) Was the trial judge manifestly erroneous in dismissing plaintiff’s
case at the end of plaintiff’s presentation of evidence?

(2) Did plaintiff’s case meet the requirements of La.R.S. 22:228?

(3) Did plaintiff’s case meet the requirements of La.R.S. 22:229.1?

(4) Did BlueCross BlueShield commit fraud upon Thomas Curtis by
applying a “durational factor” to increase his premiums and not
telling him about it during the years 2000, 2001, and 2002?

Discussion

Involuntary Dismissal

Mr. Curtis contends that the trial court erred in dismissing his case at the end

of his presentation of evidence.

Louisiana Code of Civil Procedure Article 1672(B) provides:

In an action tried by the court without a jury, after the plaintiff has
completed the presentation of his evidence, any party, without waiving
his right to offer evidence in the event the motion is not granted, may
move for a dismissal of the action as to him on the ground that upon the
facts and law, the plaintiff has shown no right to relief. The court may

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then determine the facts and render judgment against the plaintiff and in
favor of the moving party or may decline to render any judgment until
the close of all the evidence.

In Koonce v. Dousay, 06-1498, p. 3 (La.App. 3 Cir. 3/7/07), 952 So.2d 893,

895 (citations omitted), this court stated:

The trial court is granted much discretion in determining whether
to grant an involuntary dismissal. If after considering and weighing the
plaintiff’s evidence, the trial court determines that the plaintiff has not
met his burden of proof, it must dismiss the plaintiff’s case. The trial
court’s grant of an involuntary dismissal is subject to the well-settled
manifest error standard of review.

When moving for an involuntary dismissal, Blue Cross addressed Mr. Curtis’s

fraud allegation:

The Court had previously entered a preliminary ruling saying that no
fraud had occurred and there were no attorneys fees, et cetera, available.
We would re-urge that at this time. There was no evidence presented
that there was any intent to mislead or misrepresent on the part of Blue
Cross, and on top of that, there’s no statutory or regulatory requirement,
as has been addressed previously in the litigation that Blue Cross
disclose a durational factor.

Additionally, Blue Cross contended that Mr. Curtis did not prove a violation of

La.R.S. 22:228.6 or La.R.S. 22:229.1:

There was no evidence presented that it was not applied to the insureds
who had the same health plan or policy. There was nothing that was
presented to show that Mr. Curtis was singled out or handled differently
than others with his type of policy. There was no evidence whatsoever
supplied by the plaintiff that would even remotely suggest a violation of
22:229.1 of Louisiana Revised Statutes[.] The pertinent aspect, and in
support of our motion, we cite, particularly, the last sentence that
specifically says in pertinent part: This section shall not prohibit any
group health and accident insurer or any individual accident health
insurer from increasing its premium if the increase is applicable to all
insureds who have the same individual accident and health plan or
policy.

In this particular instance, the statute allows for premium increase.
There were premium increases assessed to Mr. Curtis, but there’s no
evidence whatsoever that they were assessed in any way, shape, or form
other than as to those with this plan or policy. And without that,

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plaintiff does not carry the burden to show a violation of 229.1 or 228.6,
and in turn, Regulation 51.

After hearing the arguments of counsel for Mr. Curtis, the trial court explained:

Looking at the evidence in the light most favorable to the non-
moving party, even doing that, I don’t see where the plaintiff has shown
any evidence that there has been a violation of law by the increase in
premiums the defendant raised against the plaintiff, and I will grant the
motion in favor of the defense.

In his brief, Mr. Curtis states that when granting the motion for involuntary

dismissal, the trial court apparently found that the increase in his premiums did not

violate the relevant statutes. He argues that this was contrary to the trial court’s

previous ruling on his motion for summary judgment, in which the trial court held

that “the premium increases applied to Mr. Curtis violated 22:229.1” and that

“BlueCross’ actions did in effect unilaterally cancel plaintiff’s policy in violation of

22:228.” According to Mr. Curtis, the law of the case doctrine prohibits the trial

court from reconsidering and reversing its prior rulings of law in the same case. Mr.

Curtis notes that although this doctrine is discretionary, it should be applied in this

case because the trial “judge was manifestly erroneous in changing his mind on these

issues.”

“Typically, the law of the case doctrine applies to previous decisions of an

appellate court on a particular issue, not to decisions of the trial court.” Firstar

Communications of La., L.L.P. v. Tele-Publishing, Inc., 00-2219, 00-2220, p. 5

(La.App. 4 Cir. 8/29/01), 798 So.2d 1032, 1035-36. However, the doctrine does

relate to “the binding force of trial court rulings during later stages of the trial[.]”

Petition of the Sewerage & Water Bd. of New Orleans, 278 So.2d 81, 83 (La.1973).

In Leger v. Weinstein, 03-1497, p. 6 (La.App. 3 Cir. 10/27/04), 885 So.2d 701, 705,

writ denied, 04-2899 (La. 2/4/05), 893 So.2d 882, writ denied, 04-2903 (La. 2/4/05),

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893 So.2d 873, this court held that the “law of the case doctrine essentially provides

that final judgments rendered during the course of litigation become the law of the

parties to that litigation.”

Louisiana Code of Civil Procedure Article 1915 provides in pertinent part:

B. (1) When a court renders a partial judgment or partial
summary judgment or sustains an exception in part, as to one or more
but less than all of the claims, demands, issues or theories . . . the
judgment shall not constitute a final judgment unless it is designated as
a final judgment by the court after an express determination that there
is no just reason for delay.

(2) In the absence of such a determination and designation, any
order or decision which adjudicates fewer than all claims or the rights
and liabilities of fewer than all the parties, shall not terminate the action
as to any of the claims or parties and shall not constitute a final
judgment for the purpose of an immediate appeal. Any such order or
decision issued may be revised at any time prior to rendition of the
judgment adjudicating all the claims and the rights and liabilities of all
the parties.

Here, the partial summary judgment did not obtain the force of a final judgment

as the trial court did not designate it as such. Rather, the trial court indicated that the

March 17, 2005 judgment was “not a final Judgment as additional issues remain for

determination by the Court.” Furthermore, the parties stipulated that this judgment

was not a final judgment and that pursuant to Article 1915(B)(2), it could be revised

at any time prior to submission as a final judgment. Because there was no final

judgment, the law of the case doctrine is inapplicable. Accordingly, this assignment

has no merit.

Louisiana Revised Statutes 22:228 and 22:229.1

Mr. Curtis asserts that the trial court erred in finding that he did not prove that

Blue Cross violated La.R.S. 22:228 and La.R.S. 22:229.1.

Louisiana Revised Statutes 22:228 provides in pertinent part:

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A. No group, individual, family group, or blanket health insurer
shall unilaterally cancel a policy after the insurer has received any
covered claim or notice of any covered claim for a terminal,
incapacitating, or debilitating condition if the insured continues to meet
all other eligibility criteria as provided under Part VI-C of this Chapter.

B. In this Section “terminal, incapacitating, or debilitating
condition” means . . . any other disease, illness, or condition which a
physician diagnoses as terminal, or any mental or physical handicap
which renders a person incapable of self-employment, provided that the
handicapped person is chiefly dependent upon the policyholder,
employee, or member for support and maintenance.

C. This Section shall not be construed to prohibit the insurer from
increasing the rate for the group, as provided in R.S. 22:228.1 through
228.6.

Louisiana Revised Statutes 22:229.1 provides:

No health and accident insurer may unilaterally cancel a policy of
insurance except for nonpayment of premiums, increase the premium for
such policy, or reduce the benefits provided by such insurance policy
after receipt or notice of any covered claim. The insurer may cancel the
policy, as otherwise provided by law, after the claimant has been
discharged from treatment for that condition and no further claims for
that condition are expected, provided there has been no other receipt or
notice of claim under that policy. This Section shall not prohibit any
group health and accident insurer or any individual accident and health
insurer from increasing its premium if the increase is applicable to all
members of the group insurance plan, or all insureds who have the same
individual accident and health plan or policy.

It is undisputed that Mr. Curtis had an individual health insurance policy with

Blue Cross. The source of contention is whether Blue Cross could increase Mr.

Curtis’s premiums once it had knowledge of his disabling condition, i.e., multiple

sclerosis. Mr. Curtis argues that “once a policyholder has been diagnosed with a

disabling disease then, as long as that claim is active, [the insurer] cannot increase the

policy premiums over and above what any other policy holder would have to pay.”

According to Mr. Curtis, the increased premiums and deductible “amount[ed] to a

prohibited cancellation of his policy, just as if the policy itself would have been

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cancelled by Blue Cross. It is obvious that Blue Cross is, in effect, canceling the

policy by making it unaffordable.”

Conversely, Blue Cross argues that the increase in premiums was valid under

the terms of its policy and La.R.S. 22:229.1. It further argues that the law does not

prohibit an increase in premiums after a diagnosis of a disabling condition as long as

the increase is applicable to “all insureds who have the same individual accident and

health plan or policy.” Blue Cross, however, explained that with regard to Mr.

Curtis’s policy, a durational factor was applied to increase his premiums over the

length of the policy. It argues that the utilization of a durational factor is entirely

within the purview of La.R.S. 22:228.6.1 Moreover, it notes that Mr. Curtis’s policy

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Louisiana Revised Statutes 22:288.6 provides in pertinent part:

B. (1) The Department of Insurance shall promulgate regulations no later than
January 1, 1994, that provide criteria for the community rating of premiums for any
hospital, health, or medical expense insurance policy, hospital or medical service
contract, health and accident policy or plan, or any other insurance contract of this
type, that is small group or individually written.

(2)(a) The regulations shall place limitations upon the following classification
factors used by any insurer or group in the rating of individuals and their dependents
for premiums:

(i) Medical underwriting and screening.

(ii) Experience and health history rating.

(iii) Tier rating.

(iv) Durational rating.

(b) The premiums charged shall not deviate according to the classification
factors in Subparagraph (a) of this Paragraph by more than plus or minus thirty-three
percent for individual health insurance policies or subscriber agreements. In no event
shall the increase in premiums for a small employer group policy vary from the index
rate by plus or minus thirty-three percent.

(3) The following classification factors may be used by any small group or
individual insurance carrier in the rating of individuals and their dependents for
premiums:

(a) Age.

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is still in effect insofar as he continues to pay his monthly premiums.

At the outset, we note that Mr. Curtis’s policy, which was entered into

evidence, specifically states that Blue Cross has the right to alter the fees associated

with the policy.2 The relevant provision states:

E. Cancellation of Contract or Change of Fees:

....

3. We reserve the right to change the benefits of the Contract
by giving thirty (30) days written notice to the Member at
his last address shown in the Company’s records. We also
reserve the right to change the fees for the Contract after
the first twelve (12) months of the Member’s coverage and
every six (6) months thereafter, and will give forty-five
(45) days written notice to the Member at his last address
shown in the Company’s records before any increase of
twenty percent (20%) or more in the policy rates.

The record indicates that Mr. Curtis received a letter dated January 6, 2000 in

which Blue Cross informed him that his monthly premiums would be increased,

(b) Gender.

(c) Industry.

(d) Geographic area.

(e) Family composition.

(f) Group size.

(g) Tobacco usage.

(h) Plan of benefits.

(i) Other factors approved by the Department of Insurance.
2
With regard to the modification of fees associated with a health insurance policy, La.R. S.
22:250.13 provides:

D. At the time of coverage renewal, a health insurance issuer may modify the
health insurance coverage for a policy form offered to individuals in the individual
market so long as such modification is consistent with state law and effective on a
uniform basis among all individuals with that policy form.

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effective March 1, 2000. He was given the option of increasing his deductible, which

meant that his premiums would not be greatly increased. Mr. Curtis exercised this

option. This evidence shows that Mr. Curtis’s premiums began increasing before he

was diagnosed with multiple sclerosis in September 2000. Furthermore, the above

provision puts Mr. Curtis on notice that the fees (his premium) may be changed every

six months following the first twelve months that the policy is in effect.

Moreover, while La.R.S. 22:229.1 states that an insurer may not increase the

premium for a health insurance policy after receipt or notice of any covered claim, it

does provide that an individual health insurer may increase its premium “if the

increase is applicable to . . . all insureds who have the same individual accident and

health plan or policy.” In an affidavit, Eric Harrington, Blue Cross’s Director of

Marketing Support, set forth the factors used to determine Mr. Curtis’s premium for

each new year.3 Mr. Harrington asserted that “[a]ll the rate increases applied to Mr.

Curtis’ policy . . . were increases applied in a monetarily identical manner to all

insureds with the same individual health insurance policy as Mr. Curtis, all factors

being equal.” (Emphasis added).

By affidavit, Julie Landry, Blue Cross’s Actuarial Analyst, stated that the

premium increases were “a result of: the durational factor applicable to all individual

major medical insurance policies; age bracket changes for Mr. Curtis; age bracket

changes for Ms. Curtis; and increases to the ‘selling rate’ applicable to all Blue Max

contracts.” She explained how the durational factor was determined and applied.

More importantly, she affirmed that “Mr. Curtis’ durational rate increase was not

determined by his own claims experience, the durational rate increase was not unique

3
We note that at trial, counsel for Mr. Curtis introduced the entire record into evidence.

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to his policy or even to Blue Max policies. It was applicable to all major medical

insurance policies offered by Blue Cross. Mr. Curtis was not singled out in any way.”

At trial Mr. Curtis did not show that the increase in premiums was due to his

medical condition and/or claims history. Furthermore, Blue Cross presented evidence

which demonstrated that it complied with the applicable statutes. The affidavits of

Mr. Harrington and Ms. Landry clearly indicated that the increase in premiums was

applied uniformly to those policyholders who had the same policy that Mr. Curtis

had. According to Ms. Landry, “all major medical insurance policies offered by Blue

Cross[,]” were subject to a durational rate increase. Moreover, La.R.S. 22:228.6

allows increases based on a durational factor. Given the foregoing evidence, we find

that the record supports the trial court’s determination that Blue Cross did not violate

La.R.S. 22:228 and La.R.S. 22:229.1 by increasing Mr. Curtis’s premiums.

Accordingly, this assignment is without merit.

Fraud

Mr. Curtis argues that “in neither the policy nor any of the advertising for

BlueCross nor even their letters of explanation of rate changes in the year 2000, 2001,

and 2002 did they ever mention a ‘durational factor’ being used . . . in the

[d]ermination of health insurance premiums.” Rather, Mr. Curtis alleges that it was

not until 2003 that Blue Cross revealed this information, and it was only disclosed

after counsel for Mr. Curtis inquired why his premiums were increasing. Mr. Curtis

contends that had he known that “Blue Cross was applying a durational factor to

increase his rate he could have obtained other insurance that did not have a durational

factor applied to it before he was diagnosed [with] multiple sclerosis in September

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of 2000.” According to Mr. Curtis, he cannot obtain another health insurance policy

because he now has a pre-existing condition.

Louisiana Civil Code Article 1953 defines fraud as “a misrepresentation or a

suppression of the truth made with the intention either to obtain an unjust advantage

for one party or to cause a loss or inconvenience to the other. Fraud may also result

from silence or inaction.” Therefore, in order to succeed on an action for fraud

against a party to a contract, three elements must be proven:

(1) a misrepresentation, suppression, or omission of true information;
(2) the intent to obtain an unjust advantage or to cause damage or
inconvenience to another; and (3) the error induced by a fraudulent act
must relate to a circumstance substantially influencing the victim’s
consent to (a cause of) the contract.

Shelton v. Standard/700 Assocs., 01-587, p. 5 (La. 10/16/01), 798 So.2d 60, 64.

At the outset, we note that when rendering its decision, the trial court did not

specifically address the fraud issue insofar as it only stated that “I don’t see where the

plaintiff has shown any evidence that there has been a violation of law by the increase

in premiums the defendant raised against the plaintiff.” However, in its judgment, the

trial court stated, “Plaintiff failed, as a matter of law, to sustain his burden of proof

by a preponderance of the evidence[.]” It then granted the involuntary dismissal and

dismissed all claims against Blue Cross.

After reviewing the record, we find that it does not support a determination that

Blue Cross committed fraud. The evidence shows that Blue Cross sent Mr. Curtis

letters in 2000, 2001, and 2002, informing him that there would be a premium

adjustment on his policy. Blue Cross stated: “Your premium is determined by the

level of health care costs, your age, your covered spouse’s age, if applicable, and your

geographic location. As these factors change, we must adjust your premium.”

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In a 2003 letter, however, Blue Cross explained: “Your premium is determined

by the overall level of health care cost, your age, your covered spouse’s age, if

applicable, your geographic location, and duration of coverage, which is the length

of time your policy has been in force.”

We find that Mr. Curtis has not proven that Blue Cross had the intent to obtain

an unjust advantage or to cause damage or inconvenience to him. Mr. Curtis’s

argument solely rests on when Blue Cross disclosed the use of a durational factor.

He does not cite any jurisprudence or statutory law to support his position. Therefore,

“we find that [Mr. Curtis’s] conjectural allegations of fraud are too speculative.”

Louisiana Pigment Co., L.P. v. Scott Constr. Co., Inc., 06-1026, p. 10 (La.App. 3 Cir.

12/20/06), 945 So.2d 980, 986. Given the circumstances, we find that the trial court

did not err in dismissing Mr. Curtis’s fraud claim.

This assignment has no merit.

DECREE

For the foregoing reasons, the judgment of the trial court is affirmed. All costs

of these proceedings are assessed against the plaintiff, Thomas D. Curtis.

AFFIRMED.

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