Conway v. Benefis Health System, Inc.

Conway v. Benefis Health System, Inc., 2013 MT 73 (March 19, 2013) (5-0) (Cotter, J.)

Issue: (1) Whether the district court properly converted Conway’s motion for judgment on the pleadings into a motion for summary judgment, and (2) whether the district court properly granted summary judgment to Conway.

Short Answer: (1) Yes, and (2) no.

Affirmed in part & reversed in part

Facts: After being injured in a car accident, Shannon Conway’s treatment at Benefis cost $2,073.65. Benefis billed Conway’s health and auto insurers, and accepted $662.74 from his health insurer, TRICARE, as full payment in accordance with the preferred provider agreement between BCBS, TRICARE’s subcontractor, and Benefis. A few weeks later, Benefis received $1,866.29 from Conway’s auto insurer, Kemper, and reimbursed TRICARE (a secondary payer) in full. Conway claims he is entitled to the $1,203.55 the Benefis received over and above the TRICARE reimbursement rate. Conway filed an individual and class action complaint against Benefis alleging breach of contract, breach of third party beneficiary contract, and intentional interference with contractual relations, as well as individual fraud and consumer claims.

Procedural Posture & Holding: Conway moved for class certification, and for judgment on the pleadings. The district court treated the motion as one for summary judgment after Benefis asked the court to consider the preferred provider agreement. The court granted summary judgment to Conway on his individual breach of contract claims, holding Benefis breached the contract by accepting more money than the maximum allowable charge. The district court then granted Conway’s motion for class certification, and entered final judgment. Benefis appeals, and the Supreme Court affirms and reverses without reaching the issue of class certification.

Reasoning: (1) Benefis attached the preferred provider agreement to its brief opposing Conway’s motion for judgment on the pleadings. It cannot encourage the district court to consider a document outside of the pleadings and then claim it was not fairly apprised that the lower court would have to convert the motion to a summary judgment motion in order to consider the document. (2) The district court found Conway was the intended beneficiary of the preferred provider agreement, and held that Benefis breached the agreement by accepting payment from Kemper in excess of TRICARE’s reimbursement. Nothing in the agreement prohibits Benefis from accepting a greater amount from the primary insurer, who is a stranger to the agreement. Conway does not owe Benefis any money. Allowing him to pocket the $1,203.55 difference between Kemper’s payment and TRICARE’s reimbursement would be a windfall. The Court reaches this conclusion regardless of whether Conway is an intended beneficiary of the agreement. Conway has not suffered a compensable injury from Benefis’s action. Summary judgment is reversed.