COUNTY OF ESSEX et al v. AETNA INC. et al

Filing 50

OPINION. Signed by Judge William H. Walls on 05/01/2019. (ek)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

COUNTY OF ESSEX and THE ESSEX COUNTY
BOARD Of CHOSEN FREEHOLDERS,
OPINION
Civ. No. 17-13663

Plaintiffs,
V.

AETNA [NC., AETNA LIFE INSURANCE
COMPANY, INC., ABC CORPS. 1-100, and JOHN
DOES 1-100,
Defendants.
Walls, Senior District Judge

Plaintiffs County of Essex and the Essex County Board of Chosen freeholders
(collectively, the “County”) move under Federal Rule of Civil Procedure 52(b) for amended and
additional factual findings, and under Federal Rule of Civil Procedure 59(e) for an amendment to
the Court’s Opinion and Order dated December 13, 201$, ECF Nos. 30-31. ECF No. 32.
Defendants Aetna Inc. and Aetna Life Insurance Company, Inc. (collectively, “Aetna”) oppose
the County’s motion, and cross-move for sanctions against the County and its counsel. ECf No.
40. Decided without oral argument under Federal Rule of Civil Procedure 7$, the County’s
motion is granted, and Aetna’s cross-motion for sanctions is denied.
BACKGROUND

The Court assumes the parties’ familiarity with the factual and procedural history’ of this
action. To summarize, the County contracted with Aetna to provide several health insurance
plans to County employees and retirees from 2010 through 2016. ECF No. 1-2 (Compl.)

¶ 6.

In

2010, Aetna charged the County $660.92 per person per month for a certain subset of retired
County employees (known as “Gauer retirees”), but the County alleges that the parties’ contract
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only allowed a $223.49 per person per month charge. Compi.

¶J 51,

57. Aetna claims that the

contract explicitly contemplates the $660.92 per person per month rate. Answ.

¶ 91, 94.

The

County alleges that Aetna similarly overcharged for Gaiter retirees in subsequent years, Compl.

¶ 94; Aetna disagrees, Answ. ¶ 94.
The County brought eight claims against Aetna in New Jersey Superior Court. See
Compl. After the action was removed to this Court, ECF No. 1, both parties moved for judgment
on the pleadings under Federal Rule of Civil Procedure 12(c). ECF Nos. 14, 20. The Court
denied the County’s motion in full and Aetna’s motion as to Count 1, and granted Aetna’s
motion as to Counts 2 to 7. ECF No. 31 (Order). All that remains is the County’s first count

—

Breach of Contract. Id. The County now moves for amended and additional factual findings
under Federal Rule of Civil Procedure 52(b), and for an amendment to the Court’s Opinion, ECF
No. 30, and Order, ECF No. 31, denying its motion for judgment on the pleadings as to Count 1.
ECF No. 32. In opposing the County’s motion, Aetna cross-moves for sanctions against the
County and its counsel for bringing, as Aetna sees it, a “bad faith” motion. ECF No. 40 at 17-19.
STANDARD OF REVIEW

Even though the County moves under Rules 52 and 59 of the Federal Rules of Civil
Procedure, Local Rule 7.1(i) “governs motions for reconsideration filed in New Jersey.” Byrne
v. Calastro, No. 05-cv-68, 2006 WL 2506722, at * 1 (D.N.J. Aug. 2$, 2006). See also Marshak
v. Treadwell, No. 95-cv-3794, 200$ WL 413312, at *4 n. 2 (D.N.J. Feb. 13, 2008) (“Although

the [movants] have moved for reconsideration under Rule 52, Rule 59, and Rule 60 of the
Federal Rules of Civil Procedure

.

.

.

in the District of New Jersey, motions for reconsideration

are governed by Local Civil Rule 7.1(i).”).
The Third Circuit has stated that the “purpose of a motion for reconsideration is to correct

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manifest errors of law or fact or to present newly discovered evidence.” Harsco Corp. v.
Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985). As a general matter, parties seeking reconsideration
must show “(1) an intervening change in the controlling law; (2) the availability of new evidence
that was not available when the court granted the motion.

.

.

or (3) the need to correct a clear

error of law or fact or to prevent manifest injustice.” Max’s Seafood Cafe v. Quinteros, 176 F.3d
669, 677 (3d Cir. 1999). Under Local Civil Rule 7.1(i), parties moving for reconsideration must
show “concisely the matter or controlling decisions which the parties believe the Judge

.

.

.

has

overlooked.” L. Civ. R. 7.1(i).
Reconsideration is justified only when “dispositive factual matters or controlling
decisions of law.

.

.

were presented to, but not considered by, the court in the course of making

the decision at issue.” Yttrecko v. Fort Auth. Trans—Hudson Corp., 279 f.Supp.2d 606, 609
(D.N.J. 2003). See also United States v. Compaction Sys. Corp., 88 F.Supp.2d 339, 345 (D.N.J.
1999) (“Only where the court has overlooked matters that, if considered by the court, might
reasonably have resulted in a different legal conclusion, will it entertain such a motion.”). As a
result, a motion for reconsideration is an “extremely limited procedural vehicle.” Resorts mt ‘1 v.
Greate Bay Hotel & Casino, 830 F.$upp. 826, 831 (D.N.J. 1992). See also?, SchoenfeldAsset
Mgmt. LLC v. Cendant Corp., 161 F.Supp.2d 349, 352-53 (D.N.J. 2001) (“Because
reconsideration of a judgment after its entry is an extraordinary remedy, requests pursuant to
these rules are to be granted sparingly.”) (internal quotation marks omitted). “Mere
disagreement with a court’s decision normally should be raised through the appellate process and
is inappropriate on a motion for [reconsideration].” Smith v. Manasquan Bank, No. CV 1814350, 2019 WL 168699, at *1 (D.N.J. Jan. 10, 2019) (quoting Compaction Sys. Corp., 8$
F.Supp.2d at 345).

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DISCUSSION
1. The County’s Motion Is Timely.

The County filed its present motion on January 9, 2019, 28 days after the Court’s
Opinion and Order. ECF Nos. 30-32. Aetna argues that this motion is untimely because motions
for reconsideration must be filed within 14 days. ECF No. 40 at 8; L. Civ. R. 7.1(1) (“a motion
for reconsideration shall be served and filed within 14 days after the entry of the order or
judgment on the original motion”). But Rules 52(b) and/or 59(e) each permit a motion within 28
days of entry of an order. See Fed. R. Civ. P. 52(b), 59(e). When, as here, courts in this District
treat a motion under Rules 52(b) and/or 59(e) as one for reconsideration, the 28-day limit
applies. See Venkataram v. Office ofInfo. Policy, No. CIV. 09-6520 JBS/AMD, 2013 WL
5674346, at *1 (D.N.J. Oct. 16, 2013) (“because L. Civ. R. 7.1(1) expressly defers to the Federal
Rules of Civil Procedure, Plaintiff is entitled to the 28-day filing period permitted under Rule
59(e)”), aff’d, 590 F. App’x 138 (3d Cir. 2014). The County’s motion was timely filed.
2. The County’s Motion for Reconsideration Is Granted.

The Court denied the County’s motion for judgment on the pleadings on its breach of
contract claim on two grounds: (1) it was unclear from the parties’ rate sheets, Compi. Ex. A,
what price Aetna agreed to charge for Gaiter retirees on Medicare and enrolled in Aetna’s
Traditional plan, Opinion at 9-10; and (2) it was unclear whether the parties’ rate charts, Compl.
Ex. C, were part of their contract, Opinion at 10. Regarding the Exhibit A rate sheets, the Court
explained that the key contract term—the price for Gaiter retirees on Medicare and enrolled in
Aetna’s Traditional plan—is missing from the 2010 rate sheet: “the box showing rates for the
Traditional plan lists a rate for retirees ‘w/o Medicare’ but includes no rate for those ‘w/

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Medicare’[.]” Opinion at 9 (emphasis in original). The Court illustrated its conclusion by
pointing to the following portion of the 2010 rate sheet:
A
COVERAGE

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Id. (citing Compi. Ex. A at 1).
The Court limited its analysis to the 2010 rate sheet because the parties limited their
arguments to that single year. See Compi.

¶J 51,

57, 58, 60, 66-70; Answ.

¶ 51, 57, 52, 60,

66-

70; ECF No. 14-3 (Aetna 12(c) Opening Br.) at 3 (“For calendar year 2010, Aetna quoted the
County a price of $223.49 per person, per month for the Medical Advantage plan versus $660.92
per person, per month for the traditional indemnity plan.”), 10-1 1 (displaying 2010 rate sheet);
ECF No. 20-I (County 12(c) Opposing Br.) at 12-16 (disagreeing with Aetna’s reading of the
2010 rate sheet), 17-18 (giving the County’s “more plausible reading of the 2010 rate sheet”);
ECF No. 24 (County 12(c) Reply Br.) at 7-8 (“nowhere in the 2010 rate sheet is there any
reference to ‘active’ rates and there is no other contract term in the 2010 rate sheet showing that
Gauer retirees on Medicare should nevertheless be charged non-Medicare rates or as ‘active’
employees”). In its motion the County raises for the first time a material difference between the
2010 rate sheet and those for 2011 through 2016.
The County now maintains that the missing term in the 2010 rate sheet is present in the
2011 through 2016 sheets. ECF No. 32-1 (County Reconsideration Br.) at 6. Whereas the 2010
sheet did not have a term for Gauer retirees—those “with Medicare yet on the Traditional plan”,

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Opinion at 9 (emphasis in original)—the County asserts that this key term is present in the 20112016 sheets, ECF. No. 32-1 at 6-7. The County is right:
2011 rate sheet
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The County moves the Court on this basis to reconsider whether the County is entitled to
judgment on the pleadings on its breach of contract claim. ECF No. 32-1 at 6-10. The Court
will do so. Reconsideration is justified only when “dispositive factual matters or controlling
decisions of law.

.

.

were presented to, but not considered by, the court in the course of making

the decision at issue.” Yitrecko, 279 F.$upp.2d at 609. The factual issue raised by the County is
dispositive in that “if considered by the court, [it] might reasonably have resulted in a different
legal conclusion[.]” Compaction Sys. Corp., $8 F.$upp.2d at 345.
Indeed, here it must. The Court’s Opinion was predicated on the parties’ contracts for the
relevant period missing the crucial term: retirees “with Medicare yet on the Traditional plan.”
Opinion at 9 (emphasis in original). That was true of the 2010 rate sheets. But the 2011 through
2016 rate sheets contain no such omission. That key term is supplied in all six sheets, as shown.
Consequently, the Court will reconsider its decision denying the County’s motion for judgment
on the pleadings as to its breach of contract claim (Count 1).
Aetna argues that the 2011-2016 rate sheets cannot be dispositive—at least not at the
Rule 12 stage—because Aetna disputes that those documents apply to the Gaiter retirees. In
both its original briefing and its opposition to the County’s present motion, Aetna has contended
that the rate sheets apply only to “Retirees (Billed and Pension),” not to Gaiter retirees. ECF No.
40 (Aetna Reconsideration Opp. Br.) at 12; see also ECF No. 21 (Aetna 12(c) Reply Br.) at 3-4;
ECF No. 45 (Aetna Reconsideration $ur-Reply Br.) at 3-4. But they admit in their opening brief
supporting their motion for judgment on the pleadings that the rate sheets apply to Gauer
retirees: “In sum, the Exhibit A rate sheets establish that Gauer Retirees enrolled in non
Medicare Advantage plans were not to be billed at a discounted premium rate associated with the
Medicare Advantage plan, but rather, at the rate associated with the plan in which the Gauer

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Retiree actually enrolled.” ECF No. 14-3 at 11-12 (emphasis added). Aetna plainly states that
the rates to be charged for Gauer retirees are contained in the rate sheets. Their denials
elsewhere cannot erase their admission. Nor, as Aetna recently asserted, ECF No. 45 at 4, is
there any reason to believe that Aetna was simply taking one of the County’s own statements as
true for the purposes of Aetna’s original motion. Cf ECF No. 14-3 at 10 (Aetna asserting,
“Nothing on these rate sheets specifies that Gauer Retirees would be charged at any different
premium than the rates explicitly shown (emphasis in original)).
Aetna also repeatedly claims that the rate charts (Compl. Ex. C) make any decision
regarding the rate sheets non-dispositive. Aetna is wrong. The Court previously found that
whether the rate charts were part of the parties’ contract was unclear from the record. Opinion at
10. Like the rate sheets, this finding regarding the rate charts involved only the 2010 documents.
Id. But unlike the rate sheets, the 2010 rate chart is the only one in the record. The 20 11-2016
rate charts were not part of the parties’ pleadings, nor are they judicially noticeable—so the
Court may not consider them in deciding a Rule 12(c) motion. Mete v. fed. Reserve Bank of
New York, 359 F.3d 251, 257 (3d Cir. 2004), as amended (Mar. 8,2004) (“In deciding a Rule
12(c) motion, the court does not consider matters outside the pleadings.”). The 2010 rate chart
does not bar reconsideration of the Court’s original ruling as to 2011 through 2016. And because
the 2011-2016 rate sheets, unlike the rate charts for those years, were attached to the pleadings,
see Cornpl. Ex. A at 2-7, the Court will consider them.
3. Upon Reconsideration, the County’s Motion for Judgment on the Pleadings Is
Granted in Part.

The County moved for judgment on the pleadings on its breach of contract claim against
Aetna. Compl.

¶J 78-97; ECF No. 20.

A breach of contract claim is sufficiently pled if a

claimant alleges “(1) a contract between the parties; (2) a breach of that contract; (3) damages
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flowing therefrom; and (4) that the party stating the claim performed its own contractual
obligations.” Frederico v. Home Depot, 507 F.3d 188, 203 (3d Cir. 2007). As discussed
previously, the only disputed element is Aetna’s purported breach of the parties’ agreements in
each year from 2010 through 2016. Opinion at 8. The County alleges that (1) Aetna contracted
to charge the lower rate for Gaiter retirees but (2) instead charged the County the higher rate.
Compl.

¶ 66-70, 90-96. Aetna denies these allegations in its Answer, see Answ. ¶ 66-70, 90-

96, but admits them elsewhere.
Aetna admits that it contracted to charge lower rates for Gaiter retirees—those “with
Medicare yet on the Traditional plan,” Opinion at 9 (emphasis in original)—than for others.
Aetna acknowledged that the Exhibit A rate sheets are part of the contract with the County and
that they apply to the Gaiter retirees. And, taking the 2012 contract year as an example, those
documents clearly differentiate between retirees with and without Medicare:

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Comp. Ex. A at 3. This rate sheet shows a “Total Rate” of $1,224.64 per month for single
retirees without Medicare, and of $555.68 per month for single retirees with Medicare. Id. The
latter are Gauer retirees, the former are not. By acknowledging that this document is part of the
parties’ contract and that it applies to Gaiter retirees, Aetna admits that it agreed to charge the
County a lower rate for Gauer retirees enrolled in the Traditional plan.

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Regarding the rates it charged, Aetna acknowledged that it charged the County the
higher, non-Medicare rates for Gauer retirees. Aetna stated in support of its original motion that
all retirees enrolled in the Traditional plan were charged the higher rate “regardless of whether
those retirees also received Medicare.” ECF No. 14-3. Aetna later admitted that it “charge[d]
premiums for ‘Gauer Retirees’ enrolled in non-Medicare plans at the same non-Medicare rates
reflected for ‘Active Employees,’ even if the Gauer Retiree were eligible for Medicare.” ECF
No. 21 at 1.
Aetna consequently breached its contract with the County. It promised to charge certain
rates for Gauer retirees during contract years 2011 through 2016, and instead charged higher
ones. The County has alleged all facts to make out this claim, and Aetna has admitted them.
The rate charts do not alter this conclusion. The parties attached only the 2010 rate chart
to their pleadings, so the Court’s earlier finding that the parties dispute whether the 2010 rate
charts form part of their contract, Opinion at 10, does not prevent judgment on the pleadings for
the County for the 2011 through 2016 contract years.
4. Aetna’s Cross-Motion for Sanctions Against the County and Its Counsel Is Denied.
Aetna cross-moves for sanctions against the County and its counsel under 2$ U.S.C.

§

1927. ECF No. 40 at 17-19. That provision permits courts to sanction anyone “who so
multiplies the proceedings in any case unreasonably and vexatiously[.]” 2$ U.S.C.

§

1927. A

court may impose sanctions on any attorney who “has (1) multiplied proceedings; (2) in an
unreasonable and vexatious manner; (3) thereby increasing the cost of the proceedings; and (4)
doing so in bad faith or by intentional misconduct.” Marino v. Usher, 673 F. App’x 125, 131 (3d
Cir. 2016) (quoting In re Schaefer Salt Recovery, Inc., 542 F.3d 90, 101 (3d Cir. 200$)). Aetna

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contends that the County filed its motion in bad faith because it “persisted in advancing stale
arguments on a non-dispositive issue.” ECF No. 40 at 18.
The Court disagrees. The County raised the 2011-2016 rate sheets for the first time in its
motion—Aetna did not raise them before, either—and these documents led the Court to
reconsider its original ruling. Far from multiplying the proceedings, the County’s motion and the
Court’s decision will streamline this case: the only remaining issue is whether Aetna breached its
2010 contract with the County. Any dispute over the parties’ agreements and performance in
2011 through 2016 has been resolved. Sanctions on the County or its counsel are unwarranted.
CONCLUSION
The County’s motion for reconsideration is granted. Upon reconsideration, the County’s
motion for judgment on the pleadings as to Count 1 of its Complaint is granted in part (for the
2011 through 2016 contract years) and denied in part (for the 2010 contract year). Aetna’s cross
motion for sanctions is denied. An appropriate order follows.

DATE:/

‘11
States District Court Judge

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