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Williams v. Trustmark Insurance Co.

United States District Court, E.D. Louisiana
Jun 29, 2004
Civil Action No. 03-1330, Section "L" (2) (E.D. La. Jun. 29, 2004)

Opinion

Civil Action No. 03-1330, Section "L" (2).

June 29, 2004


ORDER REASONS


Pending before the Court is the Plaintiff's Motion for New Trial, or in the alternative, to Alter or Amend Judgment. For the following reasons, the motion is DENIED.

BACKGROUND

Plaintiff Annie Mae Williams is a retiree of the Terrebonne Parish School Board and a citizen of Louisiana. She maintained health and medical insurance coverage through a policy issued by Defendant Trustmark Insurance Company, an Illinois Corporation that has its principal place of business operations in Illinois. Trustmark's coverage of eligible employees became effective on January 1, 1998. Prior to 1998, other insurers wrote policies to cover the school board's health insurance plan. Gilsbar, Inc. has continuously administered the Terrebonne Parish School Board's health insurance plan since January 1, 1990, and has served as the third party administrator for multiple insurers.

In May 2002, Gilsbar informed the Plaintiff that Trustmark had terminated her health insurance coverage and was declining additional payments of covered health care services. Gilsbar terminated future payments asserting that the Plaintiff had reached her "lifetime maximum benefit" of $1 million. Plaintiff objected and complained to the insurance commissioner. The insurance commissioner instructed Trustmark to submit an itemized accounting of their payments. Gilsbar, the administrator, had switched computer systems and was not able to itemize with specificity their payments. Thus Trustmark paid the contested amount but did so more than 30 days from demand

The Plaintiff contends that at no time did Defendant Trustmark's expenditures reach the lifetime maximum benefit and that Trustmark's refusal to pay for covered medical services was arbitrary, capricious, and without factual basis. In addition, the Plaintiff alleges that the policy required that Plaintiff's "lifetime maximum benefit" be increased during each year that the policy was in effect by adding back a certain sum of her lifetime maximum benefit — the "annual restoration benefit." That "annual restoration benefit" was never credited to the Plaintiff between 1990 and 2002. The Plaintiff claims $125,000.00 in medical expenses, punitive interest, and attorneys' fees.

Plaintiff brought suit against Defendant Trustmark for penalty interest and fees resulting from the original denial of benefits. The Plaintiff claims that Trustmark's conduct was arbitrary and capricious, and she seeks statutory penalties and attorneys fees pursuant to Louisiana Revised Statute § 22:657. The parties submitted the matter to the Court for trial on the parties' stipulations and briefs. (Rec. Doc. No. 20.) On March 12, 2004, the Court heard oral arguments from counsel and then took the matter under submission for trial on the parties' stipulations and briefs. On May 17, 2004, the Court issued its Findings of Fact and Conclusions of Law on this matter. The Court concluded that the Defendant's determination that the Plaintiff had reached her maximum medical benefit was not arbitrary and capricious. On May 27, 2004, the Plaintiff moved for a new trial pursuant to Rule 59(a), or in the alternative to alter or amend judgment, pursuant to Rule 59(e).

LAW AND ANALYSIS

Rule 59(a) gives the district court great discretion to grant a new trial "to all or any of the parties and on all or part of the issues . . . for any of the reasons for which rehearings have heretofore been granted in suits in equity in the courts of the United States." Fed.R.Civ.P. 59(a). A new trial should not be granted, "unless it is reasonably clear that prejudicial error has crept into the record or that substantial justice has not been done, and the burden of showing harmful error rests on the party seeking the new trial." Del Rio Distributing, Inc. v. Adolph Coors Co., 589 F.2d 176, 179 n. 3 (5th Cir. 1979) (quoting 11 CHARLES A. WRIGHT AND ARTHUR R. MILLER, Federal Practice Procedure § 2803, at 31-33 (3d ed. 1973)).

A Rule 59(e) motion to alter or amend judgment "calls into question the correctness of a judgment." In re Transtexas Gas Corp., 303 F.3d 571, 581 (5th Cir. 2002). Such a motion is properly used as a tool "to correct manifest errors of law or fact or to present newly discovered evidence." Id. (citations omitted). It is not a vehicle to rehash old legal arguments, theories, or evidence that could have been offered before the entry of judgment. Templet v. Hydrochem Inc., 367 F.3d 473, 479 (5th Cir. 2003). Reconsideration of a judgment after its entry is an extraordinary remedy that should be used sparingly. Clancy v. Employers Health Ins. Co., 101 F. Supp.2d 463, 465 (E.D. La. 2000), aff'd by 248 F.3d 1142 (5th Cir. 2001) (citing 11 CHARLES A. WRIGHT, ARTHUR R. MILLER MARY KAY KANE, Federal Practice Procedure § 2810.1, at 124 (2d ed. 1995)).

Courts have great discretion in exercising whether or not to grant a new trial or to amend a judgment. In deciding whether to grant a new nonjury trial or amend judgment under Rule 59(e) four factors typically guide the district court's discretion: "(1) whether the judgment was based upon a manifest error of fact or law; (2) whether the movant presents newly discovered or necessary to prevent manifest injustice; and (4) whether an intervening change in controlling law has occurred." Clancy, 101 F. Supp.2d at 464.

The Plaintiff urges the Court to reconsider its judgment entered May 17, 2004. First, the Plaintiff asserts that the Court erred in distinguishing between Gilsbar and Trustmark for the purposes of claims adjustment. Second, the Plaintiff asserts that the Court erred in holding that either Gilsbar or Trustmark ever had "just and reasonable grounds" to refuse the Plaintiff's claim. Third, the Plaintiff asserts that the Court erred in failing to find that Trustmark's failure to maintain adequate claims records constituted arbitrary and capricious claims behavior. Fourth, the Plaintiff asserts that even if the Defendants initially had just and reasonable grounds to refuse the claim, the conduct became arbitrary and capricious 30 days after July 2, 2002, the date on which a final printout proved that Trustmark had not substantiated $1 million in total payments. Fifth, the Plaintiff claims that Trustmark should not receive credit for Annual Restoration Benefits that it overpaid.

The Plaintiff's motion reiterates old arguments raised when the matter was first submitted to the Court. The Court examined the complete record and all briefing submitted by counsel. Based on that evidence, the Court made a factual determination that Trustmark's mistaken belief that it had already made $1 million in benefits payments was not arbitrary or capricious. Trustmark's accumulators had indicated that $1 million was paid, and based on this information, Trustmark denied additional payments. When it was unable later to itemize these payments to the extent demanded by the Insurance Commissioner, Trustmark reset the accumulators and allowed an additional $87,045 in payments to be made. The penalties sought by the plaintiff are punitive in nature and are recoverable only if the defendant's actions are clearly arbitrary and capricious. None of the Plaintiff's arguments suggest that Trustmark made improper claims decisions or was arbitrary and capricious in its denial of Ms. Williams's claims.

Ms. Williams's medical claims have been paid. This dispute centers on whether or not penalty interest is appropriate given the Defendant's initial denial of benefits. The record reflects that the Defendant insurer relied on the claims accumulator records provided by Gilsbar, Inc., a company that administered the Terrebonne Parish School Board insurance policy for years prior to the time that Trustmark assumed the contract. Gilsbar had switched computer systems prior to the time Trustmark issued the insurance policy, and was unable to itemize medical expenditures made on behalf of the Plaintiff prior to July 1997. Trustmark's reliance on Gilsbar's deficient records was a reasonable business practice given the circumstances. Its initial denial of benefits thus was not clearly arbitrary and capricious, and the Plaintiff is not entitled to statutory penalty interest.

CONCLUSION

For the foregoing reasons, the Plaintiff's Motion for New Trial, or alternatively Motion to Amend or Alter Judgment is DENIED.


Summaries of

Williams v. Trustmark Insurance Co.

United States District Court, E.D. Louisiana
Jun 29, 2004
Civil Action No. 03-1330, Section "L" (2) (E.D. La. Jun. 29, 2004)
Case details for

Williams v. Trustmark Insurance Co.

Case Details

Full title:ANNIE MAE WILLIAMS v. TRUSTMARK INSURANCE CO., ET AL

Court:United States District Court, E.D. Louisiana

Date published: Jun 29, 2004

Citations

Civil Action No. 03-1330, Section "L" (2) (E.D. La. Jun. 29, 2004)