In re: SILVERIO ARENAS, JR. and EMILDA NAVA

Case Type:
Consumer
Case Status:
Affirmed
Citation:
21-1056 (9th Circuit, Nov 19,2021) Not Published
Tag(s):
Ruling:
The Bankruptcy Appellate Panel of the Ninth Circuit (BAP) affirmed the grant of appellees' motion for summary judgment as to certain claims and the dismissal of any others by the U.S. Bankruptcy Court for the Western District of Washington (BC) against Dr. Silverio Arenas Jr. (DR), a chapter 13 debtor, due the DR's failure to provide evidence in support of his claims against appellees or to controvert the evidence they submitted in support of summary judgment,
Procedural context:
The United States District Court for the Western District of Washington (DC) referred a complaint filed by a DR against 22 individuals to the BC, where the DR's chapter 13 case was already pending. In this complaint, the DR alleged civil rights violations, criminal conspiracy, Title VIII discrimination, tortious interference, racial harassment, outrage, and wrongful discharge. The Defendants can be categorized into three groups: (1) public officials, including the governor and state attorney general (AGO); (2) the employees of the Washington State Department of Labor and Industries (L&I), the state's workers compensation program, for which he had been a contractor for years; and (3) individuals representing L&I in longstanding litigation with the DR. The root of every claim was the same 2014 audit by L&I, which had found the DR to have violated the program's billing guidelines, that the DR had been contesting for years as well as, to some unclear extent, purported HIPAA complaints. Vague references to medical evaluation reports and the AGO's complaint to the state licensing agency regarding his credentials were included in a complaint that demanded punitive and compensatory damages. Upon its referral, the BC issued a scheduling order. Defendants timely filed their motion for summary judgment and supporting declarations (MSJ). The DR filed a motion to extend time to file an opposition to the MSJ. Defendants opposed the request, arguing that the DR had made no efforts to litigate the case and should not be rewarded with a continuance. They noted that, since filing the complaint 16 months earlier, the DR had made no attempt to do any discovery. The BC nonetheless ordered the parties into mediation and gave the DR an extra 90 days to respond. The DR did not meet this deadline, but the BC nonetheless allowed him to argue against the MSJ at the scheduled hearing. Despite the DR's final dilatory attempt -- indeed, the DR, after the BC had taken the motion under consideration, sought a retroactive and further extension of time, claiming to possess documents and know witnesses to substantiate his allegations that his papers did not name -- the BC entered its oral ruling granting the MSJ and dismissing the DR's claims. As the BC explained, despite the difficulty caused by the complaint's failure to tie the asserted facts to the claims, summary judgment was compelled by the DR's failure to contest the evidence provided by the Defendants. The DR opted to file a motion for reconsideration and, even before the BC entered its final order, filed this appeal.
Facts:
During the relevant timeframe, the DR was a licensed psychologist practicing in Washington who specialized in treating injured Hispanic workers as a contracted health care provider through L&I. As a contracted provider, the DR was subject certain treatment standards set by L&I and was required to comply with L&I billing procedure. After an L&I manager noticed irregularities, L&I launched a full audit that revealed L&I had overpaid the DR by $188,351.92. Thereafter, L&I informed the DR of this overpayment and pointed to six specific errors. L&I granted the DR's request for reconsideration, and though the DR promised to correct the noted problems, the reconsideration did not change the sum due. Thus, a final order was issued. The DR proceeded to appeal this order to the Board of Industrial Insurance Appeals and, even as the appeal was pending, sent a letter to the assistant attorney general in charge of the matter a letter alleging that the audit violated his constitutional rights. It did so, he claimed, because, he being Hispanic and willing to challenge L&I on patient treatment issues for Hispanics, L&I's audit was intentionally unfair, oppressive, and baleful; he added an accusation that L&I had not provided proper procedural due process. L&I rejected these claims in a responsive missive, but also sent investigators to discuss his civil rights claims; attempted to address the DR's ongoing billing errors to ensure his future compliance by, for example, hosting billing workshops that the DR's wife attended; and held forums with the Hispanic community. Revealingly, at the last workshop, the DR's wife acknowledged that she understood the billing process, but would probably not comply with L&I's procedures. Ultimately, the parties struck an agreement over all claims, resulting in the overpayment being reduced from $188,351.92 to $9,000. Whatever hopes attended this deal, they soon perished. Despite the part of this accord requiring future compliance, the DR continued to violate L&I billing guidelines, , even as L&I kept meeting with him and even as the DR made comparable income for his work for L&I. In 2017, the DR submitted a tort claim to the AGO, which was ultimately dismissed. After dismissal, the DR faxed a variety of documents to the same state office, the governor, other state agencies, and the media in which he named other doctors who should be investigated for their billing practices. The fax included highly sensitive patient and treatment information, the disclosure of which the AGO believed was a potential HIPAA violation. Such complaints followed, but the cases were closed with a finding that HIPAA had not been contravened. It was only then that the suit which became the focus of this appeal was filed, not in the BC but in the district court.
Judge(s):
Julia W. Brand; Scott H. Gan; and Laura S. Taylor

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