EAN Holdings, LLC v. Ishola et al

Filing 57

MEMORANDUM OPINION & ORDER denying without prejudice Diablo Brown's 46 MOTION for Summary Judgment; directing EAN to serve the Complaint attached to the 1 NOTICE OF REMOVAL on Ishola, Pace, and Washington within 30 days of the entry of thi s order; the remaining pretrial dates and deadlines fixed by the court's 22 Scheduling Order are continued indefinitely. Signed by Judge John T. Copenhaver, Jr. on 3/20/2015. (cc: counsel of record; the following parties (addresses set fort h herein), by certified mail, return receipt requested: Joyce Ishola, Jayron Washington, Associated Radiologists, Inc., Sedgwick Claims Management, James Lennon Pace, Charleston Physical Therapy Specialists, Inc., Vernon Clements, City of Charleston, NCEP of West Virginia) (tmh)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
EAN HOLDINGS, LLC
a limited liability company,
Plaintiff,
v.

Civil Action No. 2:13-26841

JOYCE ISHOLA,
JAMES LENNON PACE,
JAYRON WASHINGTON,
THOMAS CALDWELL,
VERNON CLEMENTS,
DIABLO BROWN,
CHARLESTON FIRE DEPARTMENT,
CHARLESTON AREA MEDICAL CENTER,
CITY OF CHARLESTON,
SEDGWICK CLAIMS MANAGEMENT,
ERIE INSURANCE COMPANY,
ASSOCIATED RADIOLOGISTS, INC.,
NCEP OF WEST VIRGINIA, INC.,
INTEGRATED HEALTH CARE PROVIDERS, INC.
d/b/a ORTHOPEDIC TRAUMA GROUP,
CHARLESTON PHYSICAL THERAPY SPECIALISTS, INC.,
and WEST VIRGINIA DEPARTMENT OF
HEALTH AND HUMAN RESOURCES,
Defendants.

MEMORANDUM OPINION & ORDER
Pending in this interpleader action is the motion “for
judgment on the pleadings or, in the alternative, . . . for
summary judgment,” filed on December 4, 2014 by the claimant,
Diablo Brown.

I. Background and Procedural History
On November 28, 2012, Joyce Ishola rented a Mazda
sedan (the “Rental Car”) owned by the plaintiff-stakeholder, EAN
Holdings, LLC (“EAN”).

Compl. ¶ 20.

A few days later, on

December 1, 2012, James Lennon Pace was driving the Rental Car
on Hunt Avenue in Charleston, West Virginia, when it collided
with a vehicle owned by the City of Charleston (the “City”).
Compl. ¶ 21.

At the time of the accident, Brown and Jayron

Washington were riding in the Rental Car, and Thomas Caldwell
and Vernon Clements were in the City’s car.

Id.

The complaint alleges that some, or perhaps all, of
the men were injured in the accident, Compl. ¶¶ 23-27; that the
Charleston Fire Department (“Fire Department”) transported some
of the men from “the scene of the accident to the hospital,”
Compl. ¶ 28; that several entities subsequently provided medical
care or pharmaceutical services to the injured parties, Compl.
¶¶ 29-33; and that some or all of the medical bills arising from
the accident “may have been paid by Medicaid,” Compl. ¶ 34.

As

relevant here, documents in the record suggest that Brown
received treatment for injuries arising from the accident valued
at $10,270.68, for which Medicaid, as administered by the West
Virginia Department of Health and Human Resources (“DHHR”), paid
$1,971.09.

See DHHR’s Response to Defendant Brown’s Motion for
2

Judgment on the Pleadings, or, in the Alternative, Motion for
Summary Judgment (“DHHR’s Resp.”), Exs. A, B.
“By operation of West Virginia law, [EAN] is selfinsured and provided a bodily injury liability limit of $20,000
for each person as to any liability claim, with a limit of
liability of $40,000 per accident.”

Compl. ¶ 22.

Realizing

that the accident was likely to give rise to a number of
competing claims upon those sums, EAN instituted this
interpleader action in the Circuit Court of Kanawha County on
August 15, 2013, naming as defendants all of the “persons or
entities to which [EAN]” was potentially “obligated to pay[.]”
Compl. ¶ 39.

EAN sought to deposit the $40,000 with the court

for distribution between the claimants if, and to whatever
extent, some or all of them were determined to be entitled to a
recovery.

Compl. at 38, 40, and Prayer for Relief.

In other

words, EAN wanted to resolve its liability to all potential
parties in one shot by placing the limits of its insurance
policy in the hands of the court, and allowing the claimants to
contest the appropriate distribution of the money.
Before any money was deposited with the state court,
the United States unilaterally removed the case to this court,
under 28 U.S.C. § 1442(a)(1), on October 25, 2013.

See Akin v.

Ashland Chem. Co., 156 F.3d 1030, 1034 (10th Cir. 1998) (holding
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that § 1442(a) “allows a federal officer independently to remove
a case to federal court even though that officer is only one of
several named defendants”).

But the United States ultimately

made no claim to the proceeds of EAN’s policy, and was
voluntarily dismissed from the case on December 10, 2013.
As for the other claimants, it appears that the
Charleston Area Medical Center (“CAMC”) answered in state court
on September 23, 2013, claimed that Washington was “indebted to
CAMC in the amount of $1,451.00 for hospital goods and services
delivered and rendered as a direct consequence” of the accident,
and sought to recover that amount from the available funds.
CAMC later informed this court that it “decided . . . not [to]
seek recovery [of] the $1,451.00 or any other sum arising out of
the . . . accident,” and was dismissed with prejudice on March
21, 2014.

Similarly, Integrated Health Care Providers, Inc.

filed a state-court answer on September 27, 2013, averring that
it was making no claim to the proceeds of EAN’s policy.

It too

was dismissed with prejudice by this court on March 21, 2014. 1
The City and the Fire Department also answered in
state court on September 26, 2013, jointly asserting that they
1

One additional claimant, Wal-Mart Stores, Inc., doing business
as Sam’s Club Pharmacy, does not appear to have answered the
interpleader complaint in state court, but later “waive[d] any
claim . . . to any portion of” EAN’s coverage, and was dismissed
with prejudice by this court on November 27, 2013.
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had not been reimbursed for $2,242.36 and $8,358.10 in workers
compensation claims paid to Clements and Caldwell, respectively,
and $869.94 “in emergency medical services and ambulance
transportation provided to [Pace] ($287.84 balance),
[Washington] ($287.84 balance), and [Brown] ($294.26 balance) by
the [Fire Department] in the immediate aftermath of the
accident.”

The City and Fire Department have not, however,

appeared by counsel in federal court to press their claim for
reimbursement.
NCEP of West Virginia, Inc. (“NCEP”), Clements, and
Caldwell each answered in state court (on September 16, 2013,
September 23, 2013, and October 1, 2013, respectively), but did
not specifically claim a recoverable amount.
appeared by counsel in this court.

NCEP has not

Counsel for Caldwell and

Clements participated in a Rule 26(f) planning conference on
March 11-12, 2014, but neither has moved to recover any amount.
According to EAN, three other claimants -- Sedgwick
Claims Management (“Sedgwick”), Associated Radiologists, Inc.
(“Associated”), and Charleston Physical Therapy Specialists,
Inc. (“Specialists”) -- “were served with process through the
West Virginia Office [of] the Secretary of State,” See Status
Report ¶ 7 (ECF No. 19, filed February 3, 2014), but from all
that appears in the record, they have not responded to the
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interpleader complaint in any manner, in any court.

Finally,

the record suggests that several additional named claimants -Ishola, Pace, and Washington -- were not served with process
either before or after removal, id. ¶ 11, and they have not
appeared.
Erie Insurance Company (“Erie”) is represented by
counsel in this court, answered the interpleader complaint on
November 7, 2013, but makes no claim to the proceeds of EAN’s
insurance.

Brown answered the interpleader complaint in state

court on October 24, 2013.

As noted, he filed the pending

motion for summary judgment on December 10, 2014, seeking to
recover $20,000.

See Defendant Diablo Brown’s Motion for

Judgment on the Pleadings, or, in the Alternative, Motion for
Summary Judgment (“Brown’s Mot.”) ¶¶ 7, 10-11, and Prayer for
Relief.

DHHR answered and counterclaimed in this court on

August 22, 2014; it also filed a response to Brown’s motion on
December 20, 2014.

Those filings assert that DHHR is entitled

to recover $1,960.34 2 as Brown’s subrogee for medical expenses
paid, through Medicaid, on Brown’s behalf.
however, oppose Brown’s requested recovery.

The agency does not,
In fact, Brown

subsequently filed a “Notice of Contingent Settlement” on
2

DHHR’s answer asserts that the agency paid $1,960.34 for
Brown’s care. Documents submitted in support of DHHR’s response
to Brown’s motion for summary judgment indicate that the figure
was $1,971.09.
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January 23, 2015, representing that he and DHHR had “reached an
agreement” “contingent upon [Brown] being paid” the $20,000 he
seeks.

II. Discussion

Generally speaking, “interpleader allows a third party
holding funds, which two [or more] parties claim the right to
distribution from, to bring the competing parties into court to
litigate their competing claims among themselves instead of
litigating it against the party holding the funds.”
C.J.S. Interpleader § 1 (footnote omitted).

See 48

The procedure is

rooted in equity, but may be specifically codified by rule or
statute.

Id. §§ 4-5.

Both West Virginia and federal statutes

and rules provide for interpleader.

See 28 U.S.C. § 1335; Fed.

R. Civ. P. 22; see also W. Va. Code § 56-10-1; W. Va. R. Civ. P.
22.
Here, the complaint invokes West Virginia’s statutory
interpleader provision, section 56-10-1, which provides as
follows:
A defendant in an action brought against him for the
recovery of money which he does not wish to defend,
but which money is claimed by some third person, or
for the recovery of the possession of personal
property to which he makes no claim, but which is
claimed by a third person, may file his affidavit
stating the facts in relation thereto, and that he
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does not collude with such third person but is ready
to pay the money claimed, or deliver the property, to
the owner thereof, as the court may direct, and the
court may thereupon make an order requiring such third
person to appear and state the nature of his claim,
and maintain or relinquish the same, and may in the
meantime stay the proceedings in such action. . . . .
If such third person, on being so served, shall
appear, the court shall allow him to make himself
defendant in the action and, either in such action or
otherwise, cause such issue or issues to be tried as
it may prescribe, and may direct which party shall be
considered the plaintiff in the issues; and shall give
judgment upon the verdict rendered or, if a jury be
waived by the parties interested, shall determine
their claims in a summary way. The court may also make
such order for the disposition of the money or
property which is the subject matter of the action,
pending the same, as to it may seem proper, and may
enter judgment as to costs as may be just and proper.
W. Va. Code § 56-10-1.

A. Brown’s Claim
In his motion for summary judgment, Brown states that
he was involved in the accident, Brown’s Mot. ¶ 8; that he
suffered a broken shoulder/collarbone, id. ¶ 9; that he incurred
medical costs and expenses totaling approximately $23,545.08,
id. ¶¶ 9-10; and that he is entitled to recover his incurred
costs and expenses “under the terms of the insurance policy
covering the accident,” id. ¶¶ 9, 11.

He seeks to recover

$20,000.00 -- “the maximum allowable per-person amount
available[.]”

Id. ¶ 11.

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Although this case arises under West Virginia’s
interpleader statute, the federal rules of civil procedure
govern Brown’s motion for summary judgment.

See Fed. R. Civ. P.

1; Rowland v. Patterson, 852 F.2d 108, 110 (4th Cir. 1988)
(“Federal courts apply federal rules of procedure, . . . unless
the Erie doctrine commands otherwise.”).

Under Rule 56, Brown

is entitled to summary judgment if he “shows that there is no
genuine dispute as to any material fact and [that he] is
entitled to judgment as a matter of law.”

Fed. R. Civ. P.

56(a).
“A fact is material if it ‘might affect the outcome of
the suit under the governing law.’”

Libertarian Party of Va. v.

Judd, 718 F.3d 308, 313 (4th Cir. 2013) (quoting Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

And a dispute

of fact is “genuine if ‘a reasonable jury could return a verdict
for the nonmoving party.’”

Libertarian Party, 718 F.3d at 313

(quoting Dulaney v. Packaging Corp. of Am., 673 F.3d 323, 330
(4th Cir. 2012)).

“A party asserting that a fact cannot be or

is genuinely disputed must support the assertion by[] citing to
particular parts of materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations . . . admissions,

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interrogatory answers, or other materials[.]”

Fed. R. Civ. P.

56(c)(1)(A).
Here, Brown alleges that he incurred approximately
$23,545.08 in medical costs arising from treatment for injuries
he suffered in the accident, Brown’s Mot. ¶ 10, but those
expenses are not itemized or described in any detail.

In

support of the total figure, he states that he “has submitted
documentation . . . [,s]pecifically, see Docket Nos. 30 & 41,
which are Certificates of Service for Mr. Brown’s disclosures .
. . under the discovery rules,” which disclosures apparently
“include the accident report for the subject accident as well as
medical records and expenses demonstrating the nature and extent
of Mr. Brown’s injuries.”

Id. ¶ 7.

The referenced docket

entries are indeed certificates of service for discovery
disclosures, but the discovery materials themselves -presumably the accident report and medical records -- are not
attached, nor are they separately attached to Brown’s motion.
See L.R. Civ. P. 7.1(a)(1) (“Copies of depositions (or pertinent
portions thereof), admissions, documents, affidavits, and other
such materials or exhibits upon which the motion relies shall be
attached to the motion[.]”).

As a result, Brown has not at this

time supported his assertion that he incurred $23,545.08 in
medical expenses.

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DHHR, on the other hand, has submitted documents
indicating that Brown did indeed receive some treatment in the
months following the accident, perhaps aggregating $10,270.68 -an amount considerably lower than the $23,545.08 that Brown
claims.

See DHHR’s Resp., Ex. A.

But DHHR’s response to

Brown’s motion casts serious doubt on whether even that lower
figure was actually incurred by Brown.

See id. at 5 (“The fact

that [d]efendant Brown was a Medicaid recipient at all times
relevant to the Interpleader Complaint indicates that he paid $0
in medical expenses. . . . .

As a WV Medicaid recipient, Brown

was not liable for any deductibles and co-pays.
is no ‘balance billing’ in Medicaid.

Moreover, there

The Medicaid provider is

obligated to accept the amount paid by Medicaid as payment in
full and may not bill the recipient for the excess charges
between the amount billed Medicaid and the contracted amount
paid by Medicaid.”); see also id., Ex. A ¶¶ 5, 14-16 (affidavit
of DHHR Senior Specialist Karen Burgess attesting that Brown was
enrolled in Medicaid at the time of accident; that WV Medicaid
was billed $10,270.68 for treatment provided to Brown; that
Medicaid paid $1,971.09 of that amount; that no deductible,
coinsurance or copayment applied; and that “the Medicaid
provider agreement” prohibits providers from billing “the
Medicaid recipient for any amount in excess of the amount paid
by DHHR”).
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Given that Brown bases his right to recover from EAN’s
insurance on medical expenses allegedly incurred by him as a
result of the accident, whether he actually incurred any
expenses and, if so, their aggregate amount, are material facts.
Brown has not properly supported his version of the facts
($23,545.08 in incurred expenses), and his unsupported assertion
is, in any event, drawn into dispute by DHHR’s evidence.
Accordingly, Brown’s motion for summary judgment is denied,
albeit without prejudice to Brown renewing his motion at a later
date to be fixed by the court.

See Fed. R. Civ. P. 56(e)(1)

(“If a party fails to properly support an assertion of fact . .
. the court may[] give an opportunity to properly support or
address the fact[.]”).

B. Other Issues
Even if Brown’s motion were properly supported,
equitable considerations would counsel against an award at this
time.

It appears that Ishola, Pace, and Washington were never

personally served with the interpleader complaint in this case,
and they have neither appeared nor participated in these
proceedings.

See Status Report ¶ 11.

Counsel for EAN has

attempted to locate and serve those three, but there is no
indication that those efforts were successful.

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Ordinarily, dismissal of those parties would be the
appropriate course.

See Fed. R. Civ. P. 4(m).

But, considering

that the purpose of interpleader proceedings is, at least in
part, to “protect the stakeholder from multiple claims, multiple
liability, or a multiplicity of suits or litigation and double
vexation,” 48 C.J.S. Interpleader § 2 (footnotes omitted), and
given that Pace and Washington were both directly involved in
the accident, proceeding without them would be at best
inefficient.

Either way, the status of the as-yet unserved

parties must be resolved.

Accordingly, EAN is ordered within

thirty days of the entry of this order to serve Ishola, Pace,
and Washington.
III. Conclusion

For the foregoing reasons, it is ORDERED that:
1.

Brown’s motion for summary judgment be, and it hereby

is, denied without prejudice;
2.

EAN be, and it hereby is, directed to serve Ishola,

Pace, and Washington within thirty days of the entry of this
order; and

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3.

The remaining pretrial dates and deadlines fixed by

the court’s scheduling order be, and they hereby are, continued
indefinitely.
The Clerk is directed to transmit copies of this
memorandum opinion and order to all counsel of record, and to
the following parties, return receipt requested, at the
addresses listed below.
DATED: March 20, 2015
John T. Copenhaver, Jr.
United States District Judge

Joyce Ishola
1424 3rd Avenue, Apartment 6
Huntington, W.V. 25701

Charleston Physical Therapy
Specialists, Inc.
c/o Hugh C. Murray301 RHL
Boulevard, Suite 202
Charleston, W.V. 25309

Jayron Washington
1804 McVeigh Avenue
Huntington, W.V. 25705

Vernon Clements
c/o Todd W. Reed, Esq.
406 Tennessee Avenue
Charleston, W.V. 25302

Associated Radiologists, Inc.
P.O. Box 11137
Charleston, W.V. 25339

City of Charleston
c/o Paul D. Ellis
Office of the City Attorney
P.O. Box 2749
Charleston, W.V. 25330

Sedgwick Claims Management
P.O. Box 94950
Cleveland, OH 44101
James Lennon Pace
No Address on File

NCEP of West Virginia, Inc.
c/o Emily Hess
332 Congress Park Dr.
Dayton, OH 45459

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