Aetna Life Insurance Co. v. Kollmeyer (In re Heritage Southwest Medical Group PA)
- Summarized by Leslie Hyman , Pulman, Cappuccio, Pullen & Benson
- 12 years 10 months ago
- Citation:
- No. 11-10396 (5th Cir. Mar. 9 2012)
- Tag(s):
-
- Ruling:
- The Fifth Circuit affirmed the district court’s order affirming the bankruptcy court’s decision not to dismiss the plaintiffs’ case pursuant to Federal Rule of Civil Procedure 41(b), rejecting the defendants’ statute of limitations and prejudice arguments. The court held that statutes of limitations do not apply to bar claims that are initially timely filed when the case is subsequently stayed or administratively closed by the bankruptcy court or the district court. The court stated that “administrative closure does not have any effect on the rights of the parties and is simply a document-management device.” Regarding prejudice, the court held that because the defendants were on notice of the plaintiffs’ claims, it was their responsibility to retain documents, identify witnesses, and gather information regarding the claims to avoid any prejudice. In the absence of any proof of actual, unavoidable prejudice, as opposed to argument of counsel, the defendants’ prejudice allegation was properly rejected.
- Procedural context:
- The defendants sought dismissal of an adversary proceeding pursuant to Federal Rule of Civil Procedure 41(b) for failure to prosecute or failure to follow an order of the bankruptcy court.
- Facts:
- The opinion has few facts. For additional facts, see the district court's opinion in No. 3:10-CV-684, in the United States District Court for the Northern District of Texas. According to that opinion, in July 2003, the plaintiff medical providers sued the defendant insurance companies in state court to recover for unpaid services. The defendants removed to federal court based upon the bankruptcy filing of the third-party entity that the insurer had delegated to perform healthcare related administrative services on its behalf. The defendants also moved to dismiss because the plaintiffs had not exhausted administrative remedies under Medicare. In May 2004, the bankruptcy court declined to dismiss and instead administratively closed the adversary proceeding without prejudice to allow the plaintiffs to exhaust their administrative remedies. The bankruptcy court denied the plaintiffs' motion to remand or abstain subject to reurging. While the case was administratively closed, the Fifth Circuit and Texas Supreme Court both ruled that administrative exhaustion was not required under these facts.
In August 2009, the plaintiffs moved to reopen the case and renewed their motion for abstention and remand. The defendants opposed the motion on the grounds that the plaintiffs' failure to diligently pursue administrative review rendered their claims time-barred. The bankruptcy court rejected the defendants' arguments, reopened the case, and remanded it to state court. The district court affirmed.
- Judge(s):
- Judge Carolyn Dineen King, Judge Fortunato P. Benavides, and Judge W. Eugene Dennis
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