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HomeMy WebLinkAbout97-5701 CivilEAGLE MANAGED CARE CORPORATION, Plaintiff Vo KEYSTONE MERCY HEALTH PLAN, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 97-5701 CIVIL TERM IN RE: MOTION TO COORDINATE PROCEEDINGS BEFORE OLER, J, ORDER OF COURT AND NOW, this ~¢~ day of March, 1998, after careful consideration of (a) Plaintiff's Emergency Motion To Coordinate Proceedings and Transfer Action from Philadelphia County to Cumberland County, (b) Defendant's Answer in Opposition to Plaintiff's Emergency Motion To Coordinate Proceedings and Transfer Action from Philadelphia County to Cumberland County, (c) Defendant's Emergency Cross-Motion To Coordinate Proceedings and Transfer Action to the Court of Common Pleas of Philadelphia County, (d) Plaintiff's Amended Motion To Coordinate Proceedings and Transfer Action, and (e) Defendant's Supplemental Averments in Support of Defendant's Emergency Cross-Motion To Coordinate Proceedings, following a hearing held on February 2, 1998, and for the reasons stated in the accompanying opinion, it is ordered and directed as follows: 1. Plaintiff's above-captioned action against Defendant and Defendant's actions in the Court of Common Pleas of Philadelphia County at No. 1606 November Term, 1997, and at No. 2970 December Term, 1997, against Plaintiff are hereby coordinated pursuant to Pennsylvania Rule of Civil Procedure 213.1. 2. The said actions in the Court of Common Pleas of Philadelphia County shall be transferred to Cumberland County. 3. Plaintiff in the above-captioned action shall bear the costs of transfer. 4. The Cumberland County Prothonotary shall forward certified copies of this order to the Court of Common Pleas of Philadelphia County. Barry E. UnHar, Esq. Marc J. Zucker, Esq. 1719 Spruce Street Philadelphia, PA 19103 BY THE COURT, J ~esley O~~r. ,~~ Flower, MorHentha!, Flower & Lindsay 11 East HiHh Street Carlisle, PA 17013 Attorneys for Plaintiff J. Clayton Undercofler, Esq. Joseph F. O'Dea, Jr., Esq. J. Brent Hooker, Esq. Saul, EwinH, Remick & Saul LLP Centre Square West 38th Fl., 1500 Market Street Philadelphia, PA 19102-2186 Attorneys for Defendant : rc EAGLE MANAGED CARE CORPORATION, Plaintiff Vo KEYSTONE MERCY HEALTH PLAN, Defendant IN THE COURT OF COMMON PLEAS OF CUMBE~ COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 97-5701 CIVIL TERM IN RE: MOTION TO COORDINATE PROCEEDINGS BEFORE OLER. J. OPINION and ORDER OF COURT Oler, J., March , 1998. For disposition in this civil case are motions filed by both parties pursuant to Pennsylvania Rule of Civil Procedure 213.1 (coordination of actions in different counties). Actions between the parties, arising out of a disputed contract, have been brought in both Cumberland and Philadelphia counties; Plaintiff seeks to coordinate the actions in Cumberland County, and Defendant seeks to coordinate them in Philadelphia County. A hearing was held on the matter on February 2, 1998. For the reasons stated in this opinion, Plaintiff's request will be granted and the actions will be coordinated in Cumberland County. PROCEDURAL HISTORY: STATEMENT OF FACTS The present action in the Court of Common Pleas of Cumberland County was commenced on October 16, 1997, by Eagle Managed Care Corporation (Plaintiff) by the filing of a complaint for a declaratory judgment. The complaint sought a declaration that a relationship between Plaintiff and Keystone Mercy Health Plan (Defendant) whereby Plaintiff supplied prescription drug benefit services for the benefit of Plaintiff's insureds was terminable at NO. 97-5701 CIVIL TERM will by either party. The complaint indicated that it was Defendant's position that the relationship was not terminable at will, but rather was binding upon the parties for a three-year period from its inception. On November 14, 1997, Defendant commenced an equity action at No. 1606 November Term, 1997, in the Court of Common Pleas of Philadelphia County, seeking an injunction against Plaintiff to prohibit it from unilaterally terminating its relationship with Defendant. On December 18, 1997, Defendant commenced an action at law in the Court of Common Pleas of Philadelphia County at No. 2970 December Term, 1997, for damages arising out of Plaintiff's failure or anticipated failure to continue the relationship. Motions to coordinate the Cumberland County and Philadelphia County actions pursuant to Pennsylvania Rule of Civil Procedure 213.1 have been filed by the parties. Both parties are in agreement that the actions should be coordinated. Plaintiff contends that Cumberland County is the more appropriate forum for coordination, because the first action was commenced in Cumberland County; Cumberland County would be a more convenient forum than Philadelphia County for the litigation, and the litigation would proceed more quickly in Cumberland County than it would in Philadelphia County. Defendant argues that Philadelphia County is the more appropriate forum for coordination, because Plaintiff's action for declaratory judgment in Cumberland 2 NO. 97-5701 CIVIL TERM County is an inappropriate vehicle for resolution of a dispute of the present type, Plaintiff's procedural strategies in filing and withholding service of the complaint in the declaratory judgment action constitute an impermissible use of the action for forum shopping,~ the issue of Plaintiff's declaratory judgment action has been mooted by a settlement of Defendant's Philadelphia equity action, and Philadelphia County would be a more convenient forum than Cumberland county for this litigation. Evidence at the hearing conducted on these motions, or otherwise appearing of record, indicates that Plaintiff filed the present action in Cumberland County after notifying Defendant of its intention to terminate the relationship between the parties but at a time when the parties were attempting to negotiate mutually acceptable new terms for a continuation of the relationship. Plaintiff's general counsel caused service of the complaint, and consequently notification of its existence, to be withheld initially, because he did not want to jeopardize the negotiations which were in progress by manifesting an escalation of the dispute. The complaint was subsequently served upon Defendant on November 13, 1997; Defendant filed its equity action in Philadelphia County on November 14, 1997. ~ These two grounds for relief are also preliminary objections to the complaint which Defendant on December 22, 1997. the bases for were filed by NO. 97-5701 CIVIL TERM Defendant secured ex parte injunctive relief from the Honorable Mary D. Colins of the Philadelphia County Court of Common Pleas on the date of its equity filing, and a hearing was scheduled by Judge Colins on the issue of the continuation of the preliminary injunction for November 20, 1997. On November 20, 1997, the parties resolved the equity action pursuant to a settlement whereby the relationship between the parties would terminate as of February 28, 1998, without prejudice to the right of Defendant to bring an action for damages against Plaintiff resulting from the termination. That action was brought by Defendant, as noted above, on December 18, 1997, in Philadelphia County. From the evidence admitted at the hearing or otherwise appearing of record, the court concludes that a common question of fact or law - namely, whether the arrangement between the parties was terminable at will by either or binding upon both for a period of~ three years - is predominating and significant to the litigation; it also concludes that the actions in question arise from the same transaction or occurrence -- the events culminating in the parties' business relationship. The court further concludes that coordination of the actions would not prejudice either party, would have the salutary effect of avoiding duplicative and inconsistent results, and would promote the efficient utilization of judicial facilities and personnel and the just and efficient 4 NO. 97-5701 CIVIL TERM conduct of the actions.2 For these reasons, the court is in agreement with the parties that coordination is appropriate. The evidence admitted at the hearing or otherwise appearing of record does not lead the court to a conclusion that one forum or the other would be preferable in terms of the convenience of the parties, witnesses and counsel. Nor is the court able to conclude that undue delay would result from the selection of either forum.3 Based upon the testimony of Plaintiff's corporate counsel, the court does not believe that Plaintiff's action for declaratory judgment was filed in bad faith for the purpose of depriving Defendant of a choice of forum. Statement of law. Pennsylvania Rule of Civil Procedure 213.1 (coordination of actions in different counties) provides, in pertinent part, as follows: (a) In actions pending in different counties which involve a common question of law or fact or which arise from the same 2 Coordination would not, however, in the court's view either enhance or diminish the prospects of settlement between the parties. 3 Although Plaintiff, following the evidentiary phase of the hearing and during argument, requested that this court take judicial notice of a document said to contain statistics regarding the course of civil litigation in the Court of Common Pleas of Philadelphia County, the court was not in a position to forecast the relative disposition dates of litigation between the parties in Philadelphia County and Cumberland County and continues to decline to do so. NO. 97-5701 CIVIL TERM transaction or occurrence, any party, with notice to all other parties, may file a motion requesting the court in which a complaint was first filed to order coordination .of the actions. Any party may file an answer to the motion and the court may hold a hearing. (b) The court in which the complaint was first filed may stay the proceedings in any action which is the subject of the motion. (c) In determining whether to order coordination and which location is appropriate for the coordinated proceedings, the court shall consider, among other matters: (1) whether the common question of fact or law is predominating and significant to the litigation; (2) the convenience of the parties, witnesses and counsel; (3) whether coordination will result in unreasonable delay or expense to a party or otherwise prejudice a party in an action which would be subject to coordination; (4) the efficient utilization of judicial facilities and personnel and the just and efficient conduct of the actions; (5) The disadvantages of duplicative and inconsistent rulings, orders or judgments; (6) the likelihood of settlement of the actions without further litigation should coordination be denied. (d) If the court orders that actions shall be coordinated, it may (1) stay any or all of the proceedings in any action subject to the order, or (2) transfer any or all further proceedings in the actions to the court or NO. 97-5701 CIVIL TERM courts in which any of the actions is pending, or (3) make any other appropriate order. (e) In the order of coordination, the court shall include the manner of giving notice of the order to all parties in all actions subject thereto and direct that specified parties pay the costs, if any, of coordination. The court shall also order that a certified copy of the order of coordination be sent to the courts in which the actions subject to the order are pending, whereupon those courts shall take such action as may be appropriate to carry out the coordination order. Under the Declaratory Judg~nents Act, a court of common pleas may provide relief under certain circumstances in the form of a declaratory judgment. Section 7532 of the Judicial Code sets forth the general authority for such relief: Courts of record, within their respective jurisdictions, shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect, and such declarations shall have the force and effect of a final judgment or decree. Act of July 9, 1976, P.L. 586, §2, 42 Pa. C.S. §7532. Declaratory judgments are expressly available for purposes of construction of documents and determination of rights of fiduciaries. Id., §§7534, 7535. However, this enumeration of appropriate cases "does not limit or restrict the exercise of the 7 NO. 97-5701 CIVIL TERM general powers, conferred in Section 7532 [of the Judicial Code] (relating to general scope of declaratory remedy), in any proceeding, where declaratory relief is sought, in which a judgment or decree will terminate the controversy or remove an uncertainty. Id. §7536. Traditionally, relief in the form of a declaratory judgment or decree has been available "where an actual controversy exists ... or where ... antagonistic claims are present ... which indicate imminent and inevitable litigation ... or where ... a party asserts a legal relation, status, right, or privilege in which he has a concrete interest and that ... there is a challenge or denial of such asserted relation, status, right or privilege by an adversary party who also has or asserts a concrete interest therein...." Liberty Mutual Ins. Co. v. S.G.S. Co., 456 Pa. 94, 100, 318 A.2d 906, 909 (1974) (prior statute) (alteration in original). Declaratory judgment actions should not be employed to determine rights in anticipation of events which may never occur, or for consideration of moot cases, or as a medium for the rendition of advisory opinions which may prove to be Purely academic. Brown v. Commonwealth of Pennsylvania, Liquor Control Board, Pa. Commw. , 673 A.2d 21 (1996), appeal denied, 546 Pa. 648, 683 A.2d 886 (1996). NO. 97-5701 CIVIL TERM A declaratory judgment action is not precluded merely because the purpose or effect of the proceeding is to resolve or determine a question of fact. Act of JUly 9, 1976, P.L. 586, §2, 42 Pa. C.S. §7539(a). An action for a declaratory judgment which seeks relief of a legal, as opposed to an equitable, nature will not have the effect of depriving a litigant of a right to a jury's determination of a factual issue which would otherwise exist. Cf. Geisinger Clinic v. Di Cuccio, 414 Pa. Super. 85, 606 A.2d 509 (1992), appeal denied, 536 Pa. 625, 637 A.2d 285 (1993), cert. denied, 513 U.S. 1112, 115 S. Ct. 904, 130 L. Ed. 2d 788 (1995). However, an action for a declaratory judgment which seeks relief in the form of an equitable, as opposed to a legal, nature will effectively foreclose the possibility of a jury trial for the litigants, including a jury trial on any counterclaim which the defendant chooses to bring in that action. See id. In the present case, Plaintiff has stated on the record that, following coordination, it will not oppose a timely demand by Defendant for a jury trial in connection with Defendant's claim for damages; this commitment tends to diminish the importance of the effect of coordination upon Defendant's right to a jury trial as a factor in the court's decision herein. All things being equal, it would seem that litigation on the same subject between parties should proceed in the county where it NO. 97-5701 CIVIL TERM was first commenced. Cf. Richardson Brands, Inc. v. Pennsylvania Dutch Co., 405 Pa. Super. 202, 592 A.2d 77 (1991). On the other hand, an action for declaratory judgment brought in anticipation of the other party's litigation in order to foreclose that party's choice of forum should not be permitted to have that effect. American Nuclear Ins. v. Metropolitan Edison Co., 399 Pa. Super. 375, 582 A.2d 390 (1990), appeal denied, 527 Pa. 627, 592 A.2d 1295 (1991). Application of law to facts. In this case, the parties are in agreement that the actions in Cumberland County and Philadelphia County should be coordinated. Plaintiff's action in Cumberland County was commenced first, and in the absence of countervailing circumstances the actions should be coordinated in this county. Defendant argues that countervailing circumstances do exist. Defendant maintains, first, that Plaintiff's declaratory judgment action is not an appropriate vehicle for resolution of a dispute of the present type. However, based upon the principles discussed above as they relate to the permissible types of declaratory judgment actions, the court is unable to agree that Plaintiff's action to determine its legal obligations to Defendant to continue to provide services is not the proper subject of a declaratory judgment action. 10 NO. 97-5701 CIVIL TERM Defendant argues further that Plaintiff's action was brought in anticipation of Defendant's litigation and for the purpose of foreclosing Defendant's choice of a forum. This contention, for the court, presents the most difficult aspect of the present dispute. However, as Judge Olszewski observed in American Nuclear Ins. v. Metropolitan Edison Co., 399 Pa. Super. 375, 380, 582 A.2d 390, 392 (1990), appeal denied, 527 Pa. 627, 592 A.2d 1295 (1991), in the last analysis this "is a factual determination." In this regard, the court was impressed with the testimony of Plaintiff's corporate counsel on the subject of motivation for its actions, and it has given the benefit of the doubt to Plaintiff in declining to find that Plaintiff's litigation was brought in anticipgtion of Defendant's action, for the purpose of foreclosing Defendant's choice of forum. In addition, Defendant maintains that Plaintiff's declaratory judgment action has been mooted by the settlement of Defendant's equity action. However, the issue in the declaratory judgment action - whether Plaintiff was legally obligated to provide services for the benefit of Defendant's insureds for a three-year period -- remains outstanding in Defendant's action for damages. Consequently, the court is unable to agree with Defendant that settlement of the equity action is dispositive of whether further 11 NO. 97-5701 CIVIL TERM proceedings should transpire in this county or in Philadelphia County. Finally, Defendant contends that Philadelphia County is a more convenient forum for the parties, witnesses and counsel. As noted previously, however, the evidence does not favor either parties' position on the issue of forum non conveniens. For the foregoing reasons, pursuant to its authority under Pennsylvania Rule of Civil Procedure 213.1, the court will enter the following order coordinating the litigation between the parties in the Court of Common Pleas'of Cumberland County: ORDER OF COURT AND NOW, this ~ ~ day of March, 1998, after careful consideration of (a) Plaintiff's Emergency Motion To Coordinate Proceedings and Transfer Action from Philadelphia County to Cumberland County, (b) Defendant's Answer in Opposition to Plaintiff's Emergency Motion To Coordinate Proceedings and Transfer Action from Philadelphia County to Cumberland County, (c) Defendant's Emergency Cross-Motion To Coordinate Proceedings and Transfer Action.to the Court of Common Pleas of Philadelphia County, (d) Plaintiff's Amended Motion To Coordinate Proceedings and Transfer Action, and (e) Defendant's Supplemental Averments in Support of Defendant's Emergency Cross-Motion To Coordinate Proceedings, following a hearing held on February 2, 1998, and for 12 NO. 97-5701 CIVIL TERM the reasons stated in the accompanying opinion, it is ordered and directed as follows: 1. Plaintiff's above-captioned action against Defendant and Defendant's actions in the Court of Common Pleas of Philadelphia County at No. 1606 November Term, 1997, and at No. 2970 December Term, 1997, against Plaintiff are hereby coordinated pursuant to Pennsylvania Rule of Civil Procedure 213.1. 2. The said actions in the Court of Common Pleas of Philadelphia County shall be transferred to Cumberland County. 3. Plaintiff in the above-captioned action shall bear the costs of transfer. 4. The Cumberland County Prothonotary shall forward certified copies of this order to the Court of Common Pleas of Philadelphia County. BY THE COURT, Barry E. Ungar, Esq. Marc J. Zucker, Esq. 1719 Spruce Street Philadelphia, PA 19103 Flower, Morgenthal, Flower & Lindsay 11 East High Street Carlisle, PA 17013 Attorneys for Plaintiff J. Clayton Undercofler, Esq. Joseph F. O'Dea, Jr., Esq. /s/ J. Wesley Oler. Jr, J. Wesley Oler, Jr., J. 13 NO. 97-5701 CIVIL TERM J. Brent Hooker, Esq. Saul, Ewing, Remick & Saul LLP Centre Square West 38th Fl., 1500 Market Street Philadelphia, PA 19102-2186 Attorneys for Defendant : rc 14