Court of Appeals of Ohio, Eighth District, Cuyahoga
Appeal from the Cuyahoga County Court of Common Pleas Case
ATTORNEYS FOR APPELLANT Brent S. Silverman Robert A. West
Ciano & Goldwasser, L.L.P. Donald T. Campbell Aalook K.
ATTORNEYS FOR APPELLEE FOR UNIVERSITY HOSPITALS RAINBOW
BABIES & CHILDREN'S HOSPITAL John F. Garswood Daniel
W. DreyfussFOR CARESOURCE Katrina M. English CareSource
Matthew C. O'Connell Sutter O'Connell Co.
BEFORE: Keough, J., E.A. Gallagher, A.J., and Boyle, J.
JOURNAL ENTRY AND OPINION
KATHLEEN ANN KEOUGH, J.
Third-party defendant-appellant, UnitedHealthcare Insurance
Company ("United") appeals from the trial
court's decision denying its motion to stay the
proceedings, compel arbitration, and dismiss with prejudice.
For the reasons that follow, we affirm.
In February 2014, mother-insured gave birth to multiple
children at Rainbow Babies & Children's Hospital, a
medical facility operated by University Hospitals
("UH"). At the time of the births, mother had
employer-sponsored health insurance provided by United. It is
undisputed that United provided medical coverage from the
children's birth until at least February 28, 2014. On
March 1, 2014, mother enrolled in Caresource, a
Medicaid-managed care plan, that continued to provide medical
coverage to the children until they were discharged from UH
in April 2014.
UH billed both United and Caresource for services rendered to
the children. Caresource initially paid the claim for one of
the children, but denied the other claim. However, about a
month later, Caresource reversed the payment and denied both
claims until it could verify coverage through mother's
coordination of benefits.
In August 2016, UH filed a breach of contract action against
Caresource for failure to pay the medical bills of its
insured. UH did not bring an action against United.
Caresource filed its answer, denying liability and asserting
that United is the sole responsible party for the payment of
the medical bills.
In March 2017, without objection, the trial court granted
Caresource leave to file a third-party complaint and a
counterclaim against UH. Count 1 of the third-party complaint
sought indemnification and contribution against United. Count
2 requested declaratory relief against United and UH,
requesting that the trial court declare that United is the
primary insurer and responsible party to UH, and that
Caresource is the secondary insurer and not responsible for
the medical bills.
In response, United admitted that a justiciable controversy
existed but asserted that Caresource is liable for the
payments to UH. Accordingly, United raised as an affirmative
defense that the trial court lacked jurisdiction over the
declaratory judgment action, claiming that the matter was
subject to arbitration because United's Facility
Participation Agreement ("FPA") with UH contains an
arbitration provision that requires the parties to arbitrate
"any and all disputes" covered under the FPA.
Subsequently, pursuant to R.C. 2701.01, United moved to stay
the proceedings, compel arbitration, and dismiss the case
with prejudice. United maintained that because Caresource was
seeking the benefit of United paying UH's claims, it was
subject to the arbitration agreement between United and UH.
Caresource opposed the motion to compel, contending that the
action is not subject to arbitration because (1) Caresource
is not a party or signatory to the FPA containing the
arbitration provision; (2) there is no dispute between United
and UH; rather the dispute is between United and Caresource,
and (3) the controlling contract is mother-insured's
certificate of coverage ("COC") issued by United.
In support, Caresource attached to its brief in opposition
mother's health insurance policy, which is titled,
"UnitedHealthcare Insurance Company; UnitedHealthcare
Choice Plus; Certificate of Coverage, Riders, Amendments, and
Notices for [mother's employer]." The lengthy
document identifies the eligible individuals under the
policy, when coverage begins, and when that coverage ends.
Caresource maintained that these provisions determine whether
the children were covered by United or Caresource during the
disputed time period. Caresource noted that the document does
not contain an arbitration clause.
Following a hearing, the trial court denied United's
motion to compel, finding:
The court is not persuaded that equity demands defendant
Caresource be compelled to arbitrate as a nonsignatory to the
agreement. In the case law cited by third party defendant
United, it is clear that the nonsignatory parties in those
cases benefitted from the contract that contained the
arbitration clause. In the case before the court, Caresource
has not benefitted in ...