United States District Court, E.D. Tennessee, Greeneville
MEMORANDUM OPINION AND ORDER
RONNIE GREER UNITED STATES DISTRICT JUDGE
matter is before the Court to consider Bristol Anesthesia
Services, P.C.'s (“Bristol Anesthesia” or
“plaintiff”) motion to amend the judgment to
award prejudgment interest, [Doc. 148], and motion for
attorneys' fees, [Doc. 149]. The defendant, Carilion
Clinic Medicare Resources, LLC, d/b/a MajestaCare
(“MajestaCare” or “defendant”) filed
one document to respond to both motions, [Doc. 152]. Bristol
Anesthesia replied. [Docs. 153, 154]. Both motions are now
ripe for disposition, and will be considered in turn below.
a bench trial in this matter, the Court found that Bristol
Anesthesia was entitled to the amount MajestaCare allowed for
payment between the dates of July 9, 2012 and August 26, 2013
under an implied-in-fact contract theory. [Doc. 144 at 12].
After claims readjudication, for the time period of August
27, 2013 through November 26, 2014, the Court found that
Bristol Anesthesia was entitled to the DMAS fee schedule rate
of $12.84 per unit of anesthesia services billed under a
theory of quantum meruit. [Id. at 22]. The
parties submitted their calculations for the amount owed for
quantum meruit damages. [Doc. 142]. The Court's
final judgment entered on March 30, 2018, finding that
Bristol Anesthesia is entitled to $115, 385.51, which was the
amount approved for payment by MajestaCare between July 9,
2012 and August 26, 2013. [Doc. 146]. All but $847.15 of that
amount was paid to Bristol Anesthesia during that time
period. [Defendant's Trial Exhibit 62]. The
judgment also found that because MajestaCare wrongfully
recouped and withheld payments from Bristol Anesthesia
following its readjudication of claims, Bristol Anesthesia is
entitled to $34, 834.92 in quantum meruit damages.
[Doc. 146]. Bristol Anesthesia now seeks prejudgment
interest, [Doc. 148], and attorneys' fees. [Doc. 149].
initial matter, Bristol Anesthesia argued in both motions
that because MajestaCare's contract with Virginia
Department of Medical Assistance Services
(“DMAS”) was governed by Virginia law, such law
also governs in the award of prejudgment interest and
attorneys' fees. [Docs. 148, 149]. In its response,
MajestaCare argues that Bristol Anesthesia “previously
expressly disclaimed that the Virginia statutory
authority it now cites post-judgment had any
applicability in this case. …'” [Doc. 152,
quoting Doc. 61 at 10]. Therefore, MajestaCare argues,
Bristol Anesthesia is estopped from raising its claims under
Anesthesia, as MajestaCare points out, previously argued the
following: “… Tennessee law - not Virginia law -
governs this dispute, which involved services provided solely
in Tennessee by a provider based in Tennessee and payments
directed to that provider in Tennessee.” [Doc. 61 at
10]. Now, however, Bristol Anesthesia argues that because
MajestaCare was a regulated MCO in Virginia, Virginia
statutory law applies to MajestaCare's behavior, ensuring
“certain basic fair business practices required by
[its] regulator.” [Doc. 154 at 1]. Bristol Anesthesia
provides citations to Virginia statutes and cases which
provide for the awarding of prejudgment interest and
attorneys' fees in certain situations. These statutes,
however, cannot aid the Court in making its decision, as
Tennessee law is the proper choice of law for these motions.
undisputed that in diversity cases, a district court's
decision to award attorneys' fees and prejudgment
interest is governed by state law. See AT&T Corp. v.
CA Jones Management Group, LLC, 2015 WL 12532129 at *3
(W.D. Tenn. Oct. 5, 2015) (citing Eggert v. Meritain
Health, Inc., 428 Fed. App'x 558, 568 (6th Cir.
2011), and Williamson v. Aetna Life Ins. Co., 481
F.3d 39, 377 (6th Cir. 2007)). It is further undisputed that
all arguments raised to and claims decided by the Court
throughout its analysis of dispositive motions, trial
proceedings, and the final memorandum opinion and order, were
pursuant to Tennessee law. MajestaCare was found to have
entered into an implied-in-fact contract with Bristol
Anesthesia under Tennessee law, and is liable for damages
under Tennessee law's quantum meruit theory.
cases, courts may apply the laws of another state if they are
deemed substantive, rather than procedural in nature.
State ex rel. Smith v. Early, 934 S.W.2d 655, 658
(Tenn. Ct. App. 1996). While Tennessee courts have not
definitively spoken on the issue of whether the award of
attorneys' fees or prejudgment interest are substantive
or procedural in nature, Tennessee law would govern each
category in this case. See Boswell v. RFT-TV the Theater,
LLC, 489 S.W.3d 550, 557 (Tenn. Ct. App. 2016)
(“Tennessee appellate courts have not explicitly
addressed whether attorney's fees are a substantive or
procedural matter for purposes of conflicts of law.”).
If the award of such remedies is determined to be
substantive, or, “that which creates duties, rights,
and obligations, ” it would properly be awarded under
Tennessee law, under which an implied-in-fact contract was
found, and quantum meruit recovery awarded.
Boswell, 489 S.W.3d at 556. If such award is deemed
a matter of procedure, Tennessee law would apply even if
another state's laws did govern the substantive issues.
Beach Cmty. Bank v. Labry, WL 2196174 at *3 n.6
(Tenn. Ct. App. June 15, 2012).
as MajestaCare notes, the parties previously agreed that
Tennessee law governs this dispute. Bristol Anesthesia never
sought to recover under a third-party liability theory from
MajestaCare's contract with DMAS, but now uses that
contract, to which it is not a party, to claim that Virginia
law applies to its post-judgment claims. This is improper.
Boswell, 498 S.W.3d at 556 (applying the same
substantive law post-judgment that the parties chose while
contracting, and agreed during litigation, was the proper
choice of law.). For these reasons, Tennessee law continues
to guide the Court in determining whether the award of
prejudgment interest or attorneys' fees are proper in
this matter. Each of Bristol Anesthesia's motions will be
discussed in turn below.
Motion to Amend the Judgment to Add Prejudgment
Anesthesia attempts to argue that because the Virginia
contract between MajestaCare and DMAS “governed the
operations of the Defendant's health plan, ” that
contract is where the Court should look in determining
whether to award prejudgment interest. [Doc. 148].Bristol,
relying on the contractual language in the DMAS contract and
Virginia statutory authority, argues:
[P]rejudgment interest should be awarded from that last date
of presentment [of proof of loss], December 16, 2014. The
legal rate of interest applicable under the cited law is six
(6) percent, Va. Code section 6.2-301(A), and that rate
should be applied to the full amount of the judgment, $150,
220.43, from December 16, 2014 through the date judgment was
entered by the Court, March 30, 2018.
[Doc. 148 at 2-3]. MajestaCare argues that Bristol Anesthesia
is not entitled to prejudgment interest because Bristol
Anesthesia “never asserted any claim under the Virginia
Code” and “never prayed for prejudgment ...