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Rolan v. New West Health Services

Supreme Court of Montana

November 7, 2017

DANA ROLAN, own her own behalf and on behalf of the class she represents, Plaintiffs and Appellants,
v.
NEW WEST HEALTH SERVICES, Defendant and Appellee.

          Submitted on Briefs: August 2, 2017

         APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. CDV 2010-91 Honorable Kathy Seeley, Presiding Judge

          For Appellants: Erik B. Thueson, Thueson Law Office, Helena, Montana

          For Appellee: Robert C. Lukes, Emma L. Mediak, Garlington, Lohn & Robinson PLLP, Missoula, Montana

          OPINION

          Michael E Wheat, Justice

         ¶1 Dana Rolan and the class she represents appeal from the order of the First Judicial District Court, Lewis and Clark County, granting New West Health Service's (New West) motion for summary judgment. Finding the issue stated below dispositive we decline to address the additional issues raised by the parties. We reverse and remand for further proceedings.

         ¶2 We restate the issue on appeal as follows:

         Whether the District Court abused its discretion by granting New West leave to amend its answer to assert ERISA preemption.

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶3 Dana Rolan (Rolan) was injured in a vehicular collision on November 16, 2007, and sustained serious injury, resulting in medical expenses totaling approximately $120, 000. Rolan carried health insurance through New West. The tortfeasor who caused the accident carried liability insurance through Unitrin Services Group (Unitrin). Unitrin accepted legal responsibility and paid approximately $100, 000 of Rolan's medical bills.

         ¶4 On January 26, 2010, Rolan filed a complaint against New West alleging individual and class claims for breach of contract, violation of made-whole rights, and unfair claims settlement practices under §§ 33-18-201, MCA, et seq. Rolan sought compensatory and punitive damages. During a deposition, New West's representative affirmatively stated that Rolan's plan was "not a properly constituted ERISA plan." Relying on such representation, Rolan proceeded with her claims and class claims based solely on state law.

         ¶5 Rolan sought to certify a class under M. R. Civ. P. 23(b)(2) for declaratory and injunctive relief arising from the claims for breach of contract and violation of made-whole rights. Rolan's class certification was based on the systematic practices by New West to avoid paying medical bills for an insured when a liability carrier was available to pay medical bills as part of tort damages. On April 25, 2012, the District Court granted class certification. Maintaining that Rolan's claims were based solely on state law claims, New West proceeded to appeal to this Court Rolan's class certification. We upheld the class certification in Rolan v. New West Health Servs., 2013 MT 220, 371 Mont. 228, 307 P.3d 291.

         ¶6 On October 24, 2013, New West moved to amend its answer alleging the policy was an Employee Retirement Income Security Act (ERISA) policy and that all state law claims were preempted by federal law. Rolan opposed New West's motion to amend. The District Court allowed New West to amend its answer to include the affirmative defense of ERISA preemption. The District Court reasoned, "[i]f federal law does in fact preempt state law resolution of this case, the ends of justice would not be served by denying the motion to amend." The District Court granted Rolan attorney fees for time spent addressing New West's abandoned defenses. Following the District Court's order allowing New West to amend, New West moved for summary judgment.

         ¶7 On May 6, 2015, the District Court granted New West's motion for summary judgment holding that Rolan's policy was subject to ERISA and thus her original state law claims were preempted. However, the District Court allowed Rolan to amend her complaint to include ERISA claims. On June 1, 2015, Rolan amended her complaint ...


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