George Raymond Williams, M.D., Orthopaedic Surgery, Apmllc v. Bestcomp, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

15-761 consolidated with 15-715

GEORGE RAYMOND WILLIAMS, M.D., ORTHOPAEDIC SURGERY,
APMLLC

VERSUS

BESTCOMP, INC., ET AL.

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APPEAL FROM THE
TWENTY-SEVENTH JUDICIAL DISTRICT COURT
PARISH OF ST. LANDRY, NO. 09-C-5242-A
HONORABLE JAMES PAUL DOHERTY, JR., DISTRICT JUDGE

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ULYSSES GENE THIBODEAUX
CHIEF JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Shannon J. Gremillion,
and Phyllis M. Keaty, Judges.

AFFIRMED.

Christine Lipsey
Jamie D. Seymour
McGlinchey, Stafford, PLLC
301 Main Street – 14th Floor
Baton Rouge, LA 70801
Telephone: (225) 383-3683
COUNSEL FOR:
Defendant/Appellee - Cigna Health Management, Inc.

John Stanton Bradford
Stockwell, Sievert, Viccellio, Clements & Shaddock, L.L.P.
P. O. Box 2900
Lake Charles, LA 70602
Telephone: (337) 436-9491
COUNSEL FOR:
Plaintiff/Appellee - George Raymond Williams, M.D.

Stephen Barnett Murray
Murray Law Firm
650 Poydras Street Suite 2150
New Orleans, LA 70130
Telephone: (504) 525-8100
COUNSEL FOR:
Plaintiff/Appellee - George Raymond Williams, M.D.

Maureen O’Connor Sullivan
Tabitha R. Durbin
Christie Noel
Lewis, Brisbois, Bisgaard
100 E. Vermilion - Suite 300
Lafayette, LA 70501
Telephone: (337) 326-5777
COUNSEL FOR:
Defendants/Appellants - Illinois National Insurance Company and
Westchester Surplus Lines Insurance Company

George Davidson Fagan
Margaret F. Swetman
Leake & Anderson, L.L.P.
1100 Poydras Street – Suite 1700
New Orleans, LA 70163
Telephone: (504) 585-7500
COUNSEL FOR:
Defendant/Appellant - Chartis Specialty Insurance Co.

Thomas Allen Filo
Cox, Cox, Filo, Camel & Wilson, L.L.C.
723 Broad Street
Lake Charles, LA 70601
Telephone: (337) 436-6611
COUNSEL FOR:
Plaintiff/Appellee - George Raymond Williams, M.D.

Marshall M. Redmon
Phelps, Dunbar
P. O. Box 4412
Baton Rouge, LA 70821-4412
Telephone: (225) 346-0285
COUNSEL FOR:
Defendant/Appellee - Indian Harbor Insurance Company

Alex J. Peragine
Peragine & Lorio, LLC
527 E. Boston Street - Suite 201
Covington, LA 70433
Telephone: (985) 292-3500
COUNSEL FOR:
Defendant/Appellee - Cannon Coichran Management Services, Inc.

James Monroe White, III
P. O. Box 3939
Covington, LA 70434
Telephone: (985) 778-7000
COUNSEL FOR:
Defendant/Appellee - CCMSI Holdings, Inc.

Mark Christopher Carver
Angella H. Myers
The Myers Law Group
1100 Poydras Street – Suite 2520
New Orleans, LA 70163
Telephone: (504) 252-9877
COUNSEL FOR:
Defendants/Appellees - Advantage Health Plans, Inc. and Joseph
Bonsignore

Gerald Anthony Melchiode
Melchiode Marks King, LLC
639 Loyola Avenue – Suite 2550
New Orleans, LA 70113
Telephone: (504) 336-2880
COUNSEL FOR:
Defendant/Appellee - Hammerman & Gainer, Inc.

Thomas Randolph Juneau
The Juneau Firm
P. O. Drawer 51268
Lafayette, LA 70505-1268
Telephone: (337) 269-0052
COUNSEL FOR:
Appellee - Special Master

Gabriel Joseph Veninata
Hailey McNamara
P. O. Box 8288
Metairie, LA 70011
Telephone: (504) 836-6500
COUNSEL FOR:
Defendant/Appellee - Stratacare, LLC

Carl Edward Hellmers
Frilot, LLC
1100 Poydras Street – Suite 3700
New Orleans, LA 70163
Telephone: (504) 599-8000
COUNSEL FOR:
Defendant/Appellant - Landmark American Insurance Company

Pablo Gonzalez
Phelps, Dunbar, LLP
365 Canal Street – Suite 2000
New Orleans, LA 70130-6534
Telephone: (504) 566-1311
COUNSEL FOR:
Defendant/Appellee - Beazley Insurance Company

Ryan M. Goudelocke
Durio, McGoffin, Stagg
P. O. Box 51308
Lafayette, LA 70505-1308
Telephone: (337) 233-0300
COUNSEL FOR:
Defendant/Appellee - Hammerman & Gainer, Inc.

Scott T. Winstead
Burleson, LLP
650 Poydras Street - Suite 2750
New Orleans, LA 70130
Telephone: (504) 526-4350
COUNSEL FOR:
Defendant/Appellee - Rehab Review, Inc.

Elizabeth A. Hunt
Preis & Roy
P. O. Drawer 94-C
Lafayette, LA 70509
Telephone: (337) 237-6062
COUNSEL FOR:
Defendant/Appellee - Bestcomp, Inc.

Joseph P. Landreneau
Gold, Weems
P. O. Box 6118
Alexandria, LA 71307-6118
Telephone: (318) 445-6471
COUNSEL FOR:
Defendants/Appellees - Dauterive, Women’s and Children’s Hospital
and LRPHO

David Charles Bach
4871 Abelia Drive
Baton Rouge, LA 70808-1903
Telephone: (225) 803-9661
COUNSEL FOR:
Defendant/Appellee - Stratacare, LLC

Michael A. Balascio
Barrasso Usdin Kupperman
909 Poydras Street – 24th Floor
New Orleans, LA 70112
Telephone: (504) 589-9700
COUNSEL FOR:
Defendant/Appellant - Darwin Select Insurance Company

THIBODEAUX, Chief Judge.

This appeal arises out of a settlement agreement in a class-action

lawsuit involving claims of improper medical billing practices in workers’

compensation cases. The settlement agreement purportedly released Defendant-

Appellee Stratacare, Inc. (“Stratacare”), in connection with some 45,000 claims

involving Defendant-Appellee Rehab Review, Inc. (“Rehab Review”). All parties

to that settlement agreement agree that the release of those claims was a mistake,

and the settling parties filed a motion to amend the judgment approving the

settlement agreement to remedy the error. Defendants Chartis Specialty Insurance,

Co., Darwin Select Insurance Company, Landmark American Insurance Company,

Illinois Union Insurance Company, and Westchester Surplus Lines Insurance

Company (collectively “Appellants”), who are insurers of Stratacare, opposed the

motion and filed exceptions of lack of subject matter jurisdiction, res judicata, and

no right of action. The trial court denied Appellants’ exceptions and approved the

amendment of the judgment.

Appellants now seek review of the trial court’s judgment. Appellees

ask this Court to dismiss the appeal for lack of subject matter jurisdiction or,

alternatively, to affirm the trial court’s judgment. For the following reasons, we

find that this Court has subject matter jurisdiction over this appeal and affirm the

judgment of the trial court.

I.

ISSUES

We are called upon to decide:

1. whether this Court has subject matter jurisdiction over this
appeal;

2. whether the trial court had subject matter jurisdiction to amend
the February 2014 Judgment; and

3. whether the trial court properly denied Appellants’ exceptions
of res judicata and no right of action.

II.

FACTS AND PROCEDURAL HISTORY

This lawsuit began with claims that Defendant Bestcomp, Inc.,

improperly discounted workers’ compensation medical bills filed by plaintiff

healthcare providers without providing the notice required by statute. The plaintiff

class’s suit was eventually expanded to include entities associated with Bestcomp,

Inc. and those entities’ insurers as defendants. On October 1, 2013, the plaintiff

class entered into a Class Settlement Agreement and General Release (“Settlement

Agreement” or “Agreement”) with Defendants Cannon Cochran Management

Services, Inc. (“Cannon Cochran”), CCMSI Holdings, Inc. (“Holdings”),

Advantage Health Plans, Inc., Indian Harbor Insurance Company, and Joseph

Bonsignore (collectively “Settling Defendants”), as well as third-party defendants

Rehab Review, Cigna Health Management, Inc. (“Cigna”), and Iron Shore

Insurance Company (collectively “Settling Third-Party Defendants”). In

Paragraph 7(B) of the Settlement Agreement, the plaintiffs, Settling Defendants,

and Settling Third-Party Defendants (collectively “Settling Parties”) agreed “to a

full and general release of each Settling Defendant and Settling Third Party

Defendant[.]” The Settlement Agreement went on to provide in Paragraph 7(C):

“Notwithstanding Paragraph 7(B), Plaintiffs and the Settlement Class specifically

reserve, do not settle, and do not release, any claims against Stratacare, Inc.,

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Stratacare Inc.’s insurers, or Bestcomp, Inc., in connection with bills or

transactions which did not or do not involve Holdings, Cannon Cochran, Cigna, or

Rehab Review.” (Emphasis added). The Settlement Agreement was approved by

a Final Order and Judgment on February 3, 2014 (“February 2014 Judgment”).

Prior to a hearing on plaintiffs’ motion for class certification on

March 30, 2015, Appellants claimed that Paragraph 7(C) of the Settlement

Agreement released some 45,000 claims involving Rehab Review. The Settling

Parties replied that the inclusion of Rehab Review in that paragraph was

inadvertent. None of the Settling Parties intended or understood the Settlement

Agreement to fully release claims involving Rehab Review. The Settling Parties,

therefore, filed a Joint Motion to Approve Correction to Class Settlement

Agreement to request that Paragraph 7(C) be amended to remove the reference to

Rehab Review. Appellants, in turn, filed exceptions of lack of subject matter

jurisdiction, res judicata, and no right of action. Appellants claimed that the

Settling Parties’ motion sought a substantive amendment of the February 2014

Judgment and that the trial court lacked the subject matter jurisdiction to make

such an amendment under La.Code Civ.P. art. 1951. Appellants also argued that

assertion of claims involving Rehab Review was barred by res judicata and that the

Settling Parties had no right of action against Appellants concerning those claims.

The trial court denied Appellants’ exceptions and approved the Joint

Motion to Approve Correction to Class Settlement Agreement in a judgment dated

June 23, 2015 (“June 2015 Judgment”). The trial court reasoned that since the

inclusion of Rehab Review in Paragraph 7(C) of the Settlement Agreement was an

undisputed mistake and inconsistent with all other documents in the record, it was

a “clerical error” under La.Code Civ.P. art. 1951, rather than a substantive one.

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The trial court, therefore, had jurisdiction to amend that error at any time. The trial

court went on to state that even if the amendment was substantive, parties to the

Settlement Agreement could consent to such an amendment, even after the delay

for appeal had lapsed. Furthermore, Appellants had no standing to object to such

an amendment on the basis of res judicata since they were not parties to the

Settlement Agreement. The court rejected Appellants’ contention that they had

standing as third-party beneficiaries since there was no manifestly clear intention

in the Settlement Agreement to benefit Appellants as third parties.

Appellants filed a timely appeal of the trial court’s judgment denying

their exceptions and amending the February 2014 Judgment. Appellees moved to

dismiss the appeal, 1 arguing that the June 2015 Judgment was an interlocutory

ruling over which this Court lacked subject matter jurisdiction. Alternatively,

Appellees asked this Court to affirm the judgment of the trial court.

III.

LAW AND DISCUSSION

Appellate Jurisdiction

As a threshold matter, this Court must determine whether it has

subject matter jurisdiction over this case. Appellees contend in their motion to

dismiss the appeal that the June 2015 Judgment did not decide any of the merits of

the case and is, therefore, an interlocutory judgment over which this Court has no

jurisdiction. While a final judgment is appealable “in all causes in which appeals

are given by law,” an interlocutory judgment is appealable only when expressly

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Appellees’ motion to dismiss is contained in a filing entitled “Plaintiffs-Appellees’
Opposition to Appellants’ Motion to Stay Any Class Certification or Other Proceedings Related
to Any Issues on Appeal and Motion to Dismiss Appeal.”

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provided for by law. La.Code Civ.P. art. 2083. Final judgments include those that

do not decide all issues but which “[d]ismiss[] the suit as to less than all of the

parties, defendants, third party plaintiffs, third party defendants, or intervenors.”

La.Code Civ.P. art. 1915. Moreover, the amendment of a final judgment creates a

new final and appealable judgment. Villaume v. Villaume, 363 So.2d 448

(La.1978); see also Tenneco, Inc. v. Harold Stream Inv. Trust, 394 So.2d 744

(La.App. 3 Cir. 1981) (holding that an amended judgment created a new delay for

appeal). In this case, the February 2014 Judgment was a final judgment since it

“dismisse[d] the suit as to less than all the parties,” specifically as to the Settling

Defendants and Settling Third Party Defendants. See La.Code Civ.P. art.

1915(A)(1); Jeansonne v. New York Life Ins. Co., 08-932 (La.App. 3 Cir. 5/20/09),

11 So.3d 1160. It was also designated a “final judgment and . . . immediately

appealable[.]” Since the June 2015 Judgment amended the February 2014

Judgment, the June 2015 Judgment is also final and appealable. Adverse

interlocutory judgments prejudicial to the appellant, such as judgments denying

exceptions, may normally be reviewed by an appellate court once a final judgment

has been rendered. Barnett v. Barnett, 45,721 (La.App. 2 Cir. 12/22/10), 56 So.3d

1044. Therefore, the question of whether the trial court properly denied

Appellants’ exceptions and granted Appellees’ Joint Motion to Approve Correction

to Class Settlement Agreement is properly before this Court.

Exception of Lack of Subject Matter Jurisdiction

Appellants argue in their first exception that the trial court lacked

jurisdiction to amend the February 2014 Judgment. At the outset, we note that

there is no question that the inclusion of Rehab Review in Paragraph 7(C) of the

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Settlement Agreement was an error. None of the Settling Parties intended to

release claims involving Rehab Review. Yet, Appellants still contend that the trial

court lacked subject matter jurisdiction to amend the Agreement to reflect the

Settling Parties’ intent or, at least, to do so after the delay for appeal had lapsed.

The issue of subject matter jurisdiction presents a question of law, which is

reviewed de novo. Winbery v. Louisiana College, 13-339 (La.App. 3 Cir. 11/6/13),

124 So.3d 1212, writs denied, 13-2844, 13-2859 (La. 4/11/14), 137 So.3d 1215

(citations omitted).

Appellants first claim that the amendment was substantive and,

therefore, in violation of La.Code Civ.P. art. 1951. Louisiana Code of Civil

Procedure Article 1951 provides: “On motion of the court or any party, a final

judgment may be amended at any time to alter the phraseology of the judgment,

but not its substance, or to correct errors of calculation.” A substantive amendment

to a judgment in violation of La.Code Civ.P. art. 1951 is an absolute nullity and

void as a matter of law. Webster v. Boh Bros. Const. Co., Inc., 603 So.2d 761

(La.App. 4 Cir. 1992). However, we do not find it necessary to reach the question

of whether the amendment to the February 2014 Judgment was substantive. The

Supreme Court ruled in Villaume that a court may make alterations to a judgment,

even substantive alterations, if the parties to that judgment consent. 363 So.2d

448; see also Methvin v. Ferguson, 35,138 (La.App. 2 Cir. 9/26/01), 796 So.2d 712

(finding it unnecessary to determine the nature of an amendment to a judgment

when the parties consented to the amendment). Here, the Settling Parties agreed

that Rehab Review was included in Paragraph 7(C) by mistake and asked the trial

court to amend the judgment to reflect the intentions of the parties. Since the

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amendment was made with the consent of the parties to the Settlement Agreement,

the trial court did not exceed its jurisdiction by making the amendment.

Appellants further argue that even if the trial court could substantively

amend the Settlement Agreement, it could only do so within the delay for appeal.

We find Appellants’ argument on this matter specious and unsupported by case

law. Despite Appellants assertions to the contrary, neither Villaume nor its

progeny explicitly states whether parties to a compromise may agree to amend that

compromise after the delay for appeal has expired. 363 So.2d 448; see also

LaBove v. Theriot, 597 So.2d 1007 (La.1992) (discussing amendment of a

judgment by consent of the parties). However, in some cases, judgments have

been amended after the delay for appeal. See McLemore v. Fox, 609 So.2d 1209

(La.App. 3 Cir. 1992) (finding the fact that the amendment in Villaume occurred

within the delay for appeal immaterial). Moreover, in this case, Paragraph 23 of

the February 2014 Judgment gives the trial court the power to decide “all matters

relating in any way to the [February 2014] Judgment” without reservation. We see

no reason to read a time limitation into the Settling Parties’ ability to amend the

February 2014 Judgment when the parties did not create one and no such limitation

is required by jurisprudence. Appellants’ exception of lack of subject matter

jurisdiction was properly denied.

Exceptions of Res Judicata and No Right of Action

Appellants assert in their exception of res judicata that the doctrine of

res judicata prohibited the trial court from “reinstating” claims in the June 2015

Judgment that were dismissed by the February 2014 Judgment. Similarly,

Appellants contend that since the February 2014 Judgment dismissed the claims

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against Appellants involving Rehab Review with prejudice, Appellees now have

no right of action against Appellants concerning those claims. Both the res

judicata effect of a prior judgment and a trial court’s denial of an exception of no

right of action are reviewed de novo. See Fogleman v. Meaux Surface Prot., Inc.,

10-1210 (La.App. 3 Cir. 3/9/11), 58 So.3d 1057, writ denied, 11-712 (La. 5/27/11),

63 So.3d 995 (citations omitted) (holding that the res judicata effect of a judgment

is reviewed de novo); State Farm Fire & Cas. Co. v. Bosley, 09-804 (La.App. 3

Cir. 2/3/10) (unpublished opinion) (holding that denial of an exception of no right

of action is reviewed de novo).

Having concluded that the trial court properly amended the February

2014 Judgment, we find that Appellants’ additional exceptions were also properly

denied. The amendment of the February 2014 Judgment by consent of the parties

“accomplished the same result as would have been obtained had the substantive

change been effected at a new trial[.]” Villaume, 363 So.2d at 451. A judgment

rendered as the result of a new trial supersedes and vacates the previously rendered

judgment. Khoobehi Properties, L.L.C. v. Baronne Dev. No. 2, L.L.C., 15-17

(La.App. 5 Cir. 11/19/15), 178 So.3d 647. Here, Paragraph I of the June 2015

Judgment states:

[P]aragraph 7(C) of the Original Settlement Agreement .
. . is amended to read as follows:

Notwithstanding Paragraph 7(B), Plaintiffs
and Settlement Class specifically reserve, do
not settle, and do not release, any claims
against Stratacare, Inc., Stratacare, Inc.’s
insurers, or Bestcomp, Inc., in connection
with bills or transactions which did not or do
not involve Holders, Cannon Cochran, or
Cigna.

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The June 2015 Judgment goes on to provide that “paragraph 7(C) is amended” and

that “[a]ny reference to Paragraph 7(C) in the [February 2014 Judgment] shall

mean and refer to Section 7(C) as restated and set forth . . . in paragraph I of this

Judgment.” The previous version of Paragraph 7(C) is, therefore, superseded and

vacated by the version provided in the June 2015 judgment and cannot provide a

basis for either an exception of res judicata or an exception of no right of action.

The trial court was correct in denying Appellants exceptions of res judicata and no

right of action.

IV.

CONCLUSION

The judgment of the trial court is affirmed. Costs of this appeal are

assessed to the appellants, Chartis Specialty Insurance, Co., Darwin Select

Insurance Company, Landmark American Insurance Company, Illinois Union

Insurance Company, and Westchester Surplus Lines Insurance Company.

AFFIRMED.

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