eQHealth AdviseWell, Inc. v. Homeland Insurance Company of New York

Filing 24

ORDER AND REASONS: IT IS ORDERED that 10 Motion to Dismiss is Granted as set forth in document and Denied in all other respects. Deadline is set in document. IT IS FURTHER ORDERED that 12 Motion for Summary Judgment is DENIED as premature. Signed by Judge Jay C. Zainey on 1/10/2022. (ajn)

Case 2:21-cv-01438-JCZ-KWR Document 24 Filed 01/11/22 Page 1 of 7

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
eQHEALTH ADVISEWELL, INC. f/k/a
eQHEALTH SOLUTIONS, INC.

CIVIL ACTION

VERSUS

NO: 21-1438

HOMELAND INSURANCE CO. OF
NEW YORK

SECTION: "A" (4)

ORDER AND REASONS
The following motions are before the Court: Motion to Dismiss (Rec. Doc. 10)
filed by the defendant, Homeland Insurance Co. (“Homeland”); Motion for Partial
Summary Judgment (Rec. Doc. 12) filed by the plaintiff, eQHealth AdviseWell, Inc.
(“eQHealth”). Both motions are opposed. The motions, submitted for consideration on
November 10, 2021, are before the Court on the briefs without oral argument.
The instant dispute concerns a claim for coverage under a Homeland Managed
Care Errors and Omissions Liability policy (“the Policy”) issued to the plaintiff, eQHealth.
eQHealth is in the business of providing a variety of medical management
services to numerous entities across the country, including federal, state, and
commercial clients. The present coverage dispute relates to eQHealth’s contract with
the state of Florida’s Agency for Health Care Administration (“AHCA”) to manage and
process claims for Florida’s Medicaid program. The eQHealth/AHCA contract includes
indemnity provisions which obligate eQHealth to indemnify AHCA from threatened or
actual proceedings arising out of eQHealth’s acts or omissions in performing under the
contract. As described by eQHealth, eQHealth committed an error in deciding that a
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Florida patient, B.N., was entitled to out-of-state care to be provided by Brookhaven
Hospital, an Oklahoma in-patient facility. The error led to demands that eQHealth bear
the cost of its mistake. eQHealth settled the underlying controversy without participation
by Homeland. Homeland has denied coverage on various grounds. Via this lawsuit,
eQHealth seeks to recover the cost of the settlement, its legal expenses, the costs of
prosecuting this matter, and statutory bad faith damages under Louisiana law.
eQHealth has demanded a jury. Homeland has not answered the lawsuit as yet.
No scheduling order is in place at this time.
Homeland’s motion to dismiss is grounded on the contention that the Eastern
District of Louisiana is an improper venue for this action. Homeland moves the Court to
either dismiss this action without prejudice or transfer it to the Northern District of
Florida, a district where according to Homeland, a substantial part of the events or
omissions giving rise to this case occurred. See 28 U.S.C. § 1406(a) (Cure or waiver of
defects). Even if the Court determines that venue is proper in this district, Homeland
contends that the Northern District of Florida is a more convenient forum and that
transfer pursuant to 28 U.S.C. § 1404(a) (change of venue) is appropriate.
The Court must determine whether this case falls within one of the three venue
categories set out in the general venue statute, 28 U.S.C. § 1391(b), recited below.
Atlantic Marine Const. Co. v. U.S. Dist. Court, 571 U.S. 49, 56 (2013). If it does, then
venue is proper. Id.
The general venue statute states: A civil action may be brought in (1) a judicial
district in which any defendant resides, if all defendants are residents of the State in
which the district is located; (2) a judicial district in which a substantial part of the events
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or omissions giving rise to the claim occurred, or a substantial part of property that is the
subject of the action is situated; or (3) if there is no district in which an action may
otherwise be brought as provided in this section, any judicial district in which any
defendant is subject to the court's personal jurisdiction with respect to such action. 28
U.S.C. § 1391(b)(1)-(3).
Homeland is a corporate defendant in this matter, thus “residency” is defined by
§ 1391(c)(2), as “any judicial district in which such defendant is subject to the court’s
personal jurisdiction with respect to the civil action in question . . . .” (emphasis
added). Section 1391(d), Residency of corporations in States with multiple districts,
states that “[f]or purposes of venue under this chapter, in a State which has more than
one judicial district and in which a defendant that is a corporation is subject to personal
jurisdiction at the time an action is commenced, such corporation shall be deemed to
reside in any district in that State within which its contacts would be sufficient to subject
it to personal jurisdiction if that district were a separate State, and, if there is no such
district, the corporation shall be deemed to reside in the district within which it has the
most significant contacts.”
The Court begins with the more familiar second venue category under §
1391(b)(2). No non-frivolous argument can be made that a substantial part of the events
or omissions giving rise to the coverage dispute at issue occurred in this district. In fact,
none of the events or omissions giving rise to the coverage dispute at issue occurred in
this district. None of the claims handling activities by either side occurred in this district.
eQHealth’s coverage demand and all of the prior notice of claim documents were sent
from Baton Rouge, Louisiana where eQHealth’s corporate office is located. Homeland’s
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analysis of the claim, decision to deny coverage, and issuance of correspondence
relating to the claim all occurred outside of this district (and state) and were directed to
eQHealth in Baton Rouge. The acts or omissions by eQHealth employees regarding
B.N.’s in patient care were committed either at eQHealth’s Tallahassee, Florida office or
in Baton Rouge. Baton Rouge is located in the Middle District of Louisiana and
Tallahassee is located in the Northern District of Florida. Thus, § 1391(b)(2) does not
place venue in this district although it would place venue in either the Middle District of
Louisiana or in the Northern District of Florida. Proper venue is not necessarily limited to
one forum.
Whether the first venue category under § 1391(b)(1) places venue in this district
depends on whether Homeland “resides” in the Eastern District of Louisiana. As
explained above, the venue statute defines “residency” for a corporate defendant like
Homeland; residency for purposes of the venue statue is not necessarily the same as
the corporation’s citizenship, which is used for purposes of subject matter jurisdiction.
Rather, the question whether Homeland “resides” in the Eastern District of Louisiana for
purposes of venue in this civil action depends on whether Homeland would be subject
to the court’s personal jurisdiction with respect to the civil action in question. In other
words, if the Eastern District of Louisiana were its own state, would Homeland be
subject to specific personal jurisdiction in this district based on its case-specific contacts
with this district.
The Court is at a loss to discern any contacts by Homeland with this district that
pertain to this case. The sole connection to this district that eQHealth has identified is
that the broker who obtained the Homeland policy for eQHealth is located in New
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Orleans. Clearly, Mr. Smith with Marsh, Inc., has contacts with this district but neither
Mr. Smith nor his company are defendants, their conduct is not at issue in this case,
and their contacts with this district are not imputable to Homeland. Homeland surely had
contacts with Mr. Smith when he brokered the transaction to obtain the Homeland policy
for eQHealth but those contacts with this district are not related to this matter.
eQHealth’s opposition is replete with non-case specific contacts that do nothing
to place venue in the Eastern District of Louisiana. The Louisiana Department of
Insurance is not located in this district so eQHealth’s at length discussion of Homeland’s
licensure with that agency misses the mark. The Louisiana Secretary of State,
Homeland’s agent for service of process, is likewise not located in this district.
eQHealth’s reads 28 U.S.C. § 1391(d) as conferring residency in any judicial district
located in a state where the corporation is subject to personal jurisdiction but this is not
a correct interpretation of § 1391(d). Rather than broaden venue options in the manner
urged by eQHealth, § 1391(d) narrows them by focusing on the corporation’s contacts
with a specific judicial district.
To be clear, Homeland does not argue, nor could it, that it is not subject to
personal jurisdiction in Louisiana for this coverage dispute. The question before the
Court is not whether Homeland is subject to personal jurisdiction in Louisiana for this
coverage dispute but rather whether venue in the Eastern District of Louisiana is proper.
Section 1391(b)(1) does not place venue in this district.
Finally, because either the Middle District of Louisiana or the Northern District of
Florida would be districts where venue is proper, the catchall provision of § 1391(b)(3)
does not place venue in this district.
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In sum, the Court is persuaded that venue in the Eastern District of Louisiana is
not proper and that this case must be either dismissed or transferred to a district where
venue is proper.
The Court is not persuaded, however, that that Northern District of Florida is the
more convenient forum. In urging the transfer to Florida—a transfer that eQHealth
vehemently opposes—Homeland focuses far too extensively on the events surrounding
B.N. in Florida and on the terms of the AHCA contract itself. This is a coverage dispute
and the denial letter in this case (Rec. Doc. 12-8) demonstrates that the focus in this
case will be on the terms and conditions of Homeland’s policy, whether coverage was
triggered under the Policy, and if so whether eQHealth complied with the Policy’s terms
and conditions. The Court will not transfer the case to the Northern District of Florida
over eQHealth’s objection. But the case likewise cannot remain in the Eastern District of
Louisiana over Homeland’s objection. Unless Homeland is willing to consent to venue in
this district, the Court will transfer the case to the Middle District of Louisiana rather than
dismiss it.
Finally, eQHealth has confirmed that it is not asserting any claims on behalf of
AHCA. Homeland’s concerns with that issue are unfounded.
Accordingly, and for the foregoing reasons;
IT IS ORDERED that the Motion to Dismiss (Rec. Doc. 10) filed by the
defendant, Homeland Insurance Co., is GRANTED as follows: Unless Homeland
consents to venue in the Eastern District of Louisiana by Friday, January 21, 2022, this
civil action will be transferred to the Middle District of Louisiana where venue is proper.
Homeland may indicate its consent to venue in this district by either filing its answer or
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filing into the record a notice advising the Court and the plaintiff that the objection to
venue has been withdrawn. The motion is DENIED in all other respects.
IT IS FURTHER ORDERED that the Motion for Partial Summary Judgment
(Rec. Doc. 12) filed by the plaintiff, eQHealth AdviseWell, Inc., is DENIED as
premature.
January 10, 2022
_______________________________
JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE

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