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ABC Home Care and Nursing Services, Inc. v. Molina Healthcare of Ohio, Inc.

Court of Appeals of Ohio, Tenth District

June 19, 2018

ABC Home Care and Nursing Services, Inc., Plaintiff-Appellant,
Molina Healthcare of Ohio, Inc., Defendant-Appellee.

          APPEAL from the Franklin County Court of Common Pleas C.P.C. No. 17CV-1593

         On brief:

          Torres Law LLC, and Dustin G. Torres, for appellant.

          Perez & Morris LLC, Juan Jose Perez and Kevin L. Murch, for appellee.


          Dustin G. Torres.

          Kevin L. Murch.


          TYACK, J.

         {¶ 1} Plaintiff-appellant, ABC Home Care and Nursing Services, Inc. ("ABC Home Care") appeals from the July 24, 2018 entry of the trial court finding that ABC Home Care's claims are subject to mandatory arbitration, and staying this lawsuit pending the arbitration. For the reasons that follow, we affirm in part and reverse in part the judgment of the trial court.


         {¶ 2} According to the complaint, ABC Home Care is a home care agency providing nursing care, physical therapy, occupational therapy, speech pathology, and home health aide services to patients in Ohio. Defendant-appellee, Molina Healthcare of Ohio, Inc. ("Molina") is a provider of health insurance plans in Ohio, and is a part of the Molina network of health plan providers serving approximately one million members in California, Michigan, New Mexico, Ohio, Texas, Utah, and Washington.

         {¶ 3} Molina and ABC Home Care entered into an Ancillary Services Agreement ("ASA") in 2008[1] that made ABC Home Care a participating provider for Molina's members in the categories of "Covered Families and Children, Aged, Blind and Disabled, and Medicare."

         {¶ 4} The ASA contained the following arbitration provision:

Arbitration. Any claim or controversy arising out of or in connection with this Agreement shall be resolved, to the extent possible, within forty-five (45) days through informal meetings and discussions between appropriate representatives of the parties. Any remaining claim or controversy shall be resolved through binding arbitration conducted in accordance with the American Arbitration Association (hereinafter "AAA") Commercial Arbitration Rules, then in effect, in Columbus, OH; provided, however, matters that primarily involve Provider's professional competence or conduct shall not be eligible for arbitration. If possible, the arbitrator shall be an attorney with at least fifteen (15) years' experience, including at least five (5) in managed health care. The parties shall conduct a mandatory settlement conference at the initiation of arbitration, to be administered by AAA. The arbitrator shall have no authority to award damages or provide a remedy that would not be available to such prevailing party in a court of law or award punitive damages. Each party shall bear its own costs and expenses, including its own attorneys' fees, and shall bear an equal share of the arbitrator's and administrative fees. The parties agree to accept any decision by the arbitrator as a final determination of the matter in dispute, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction. Arbitration must be initiated within one year of the earlier of the date the claim or controversy arose, was discovered, or should have been discovered with reasonable diligence; otherwise it shall be deemed waived. The use of binding arbitration shall not preclude a request for equitable and injunctive relief made to a court of appropriate jurisdiction.

(Compl., Ex. A at ¶ 5.8.) A dispute arose between the parties in 2015 over Molina's denial of a request for a large hospital bed and twice daily nursing care for a patient who weighed approximately 600 lbs. Eventually, ABC Home Care contacted the Ohio Department of Insurance and the Ohio Department of Medicaid regarding the situation, and Molina was ultimately reprimanded.

         {¶ 5} Shortly thereafter, Molina exercised Section 4.5(g) of the ASA and sent ABC Home Care a written notice of termination of ABC Home Care's participation in the Molina healthcare network for the stated reason that ABC Home Care "has provided poor quality of care and service to Molina members." (Compl., Ex. B at ¶ 23.)

         {¶ 6} ABC Home Care alleged that following the termination of the ASA, Molina made false statements and disparaged ABC Home Care's name, reputation, and goodwill to ABC Home Care's active clients and third parties in retaliation for ABC Home Care being a whistleblower.

         {¶ 7} ABC Home Care claimed that Molina "essentially blacklisted]" ABC Home Care from being able to provide care to any patient affiliated with Molina and refused to allow ABC Home Care to be a non-participating provider because Molina terminated the ASA under the allegedly false reason that ABC Home Care provided poor quality of care.

         {¶ 8} On February 13, 2017, ABC Home Care filed a complaint in the common pleas court setting forth claims for defamation, tortious interference with a contract and/or business relationship, and breach of contract. The defamation claim was based on allegations that Molina made false and defamatory statements to ABC Home Care clients and third parties after the termination of the ASA. The tortious interference claim had to do with Molina allegedly making those disparaging and false statements to clients of ABC Home Care to induce the clients to terminate their business relationships with ABC Home Care. The breach of contract claim involved underpayment for care that ABC Home Care provided as a non-participating provider after the termination of the ASA. ABC Home Care also included a claim for punitive damages.

         {¶ 9} On March 30, 2017, Molina filed a motion to stay the action pending arbitration on the grounds that all of ABC Home Care's claims relate to and arise out of the ASA which contains an arbitration provision. After briefing by the parties, the trial ...

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