NEW ORLEANS — In a ruling made on March 21, the state Court of Appeal, Fourth Circuit reversed the trial court’s decision and dismissed a lawsuit brought by St. Charles Surgical Hospital LLC and Center for Restorative Breast Surgery LLC.

The plaintiffs filed the lawsuit against Louisiana Health Service & Indemnity Company, dba Blue Cross & Blue Shield of Louisiana Inc., and HMO Louisiana Inc.

The plaintiffs, who describe themselves as out-of-network healthcare providers for the defendants, alleged that they contacted the defendants by phone and through the defendants’ website to verify patients’ insurance benefits, the appeals court said.

“Plaintiffs-Respondents further alleged that Defendants-Relators made representations about payment amounts for services rendered, but actually paid Plaintiffs-Respondents less after the services were provided and claims were submitted,” the appeals court said.

After the plaintiffs filed a lawsuit in 2010 in Orleans Parish Civil District Court, alleging causes of action for breach of contract, negligent misrepresentation, detrimental reliance, unjust enrichment and fraud, the case was moved to district court. The federal court dismissed the claims, but the plaintiffs filed an appeal, according to the court.

While the lawsuit was pending, the plaintiffs filed a second lawsuit in Orleans Parish Civil District Court, alleging breach of contract, detrimental reliance, negligent misrepresentation and fraud, the appeals court said.

The defendants then filed a response in federal court to stop the plaintiffs from pursuing claims that were already litigated, the appeals court’s opinion stated.

The plaintiffs filed an amended petition to remove the claims for breach of contract, detrimental reliance and negligent misrepresentation, but asserted claims of abuse of process and fraud, the panel said.

“Defendants-Relators then filed, in Orleans Parish Civil District Court, exceptions of res judicata and no cause of action,” the appeals court said.

Res judicata is the legal principle that a cause of action may not be relitigated once it has been judged on the merits.

After the trial court denied the defendants' exceptions, the defendants requested a review of the trial court’s ruling.

The defendants argued that the trial court erred in denying their exceptions of res judicata and no cause of action because the plaintiffs “are attempting to relitigate claims in Orleans Parish Civil District Court that the federal district court has already disposed of in a final judgment, as well as permanently enjoined," court documents state. 

The appeals court said the plaintiffs' claims for fraud and abuse of process are barred by the doctrine of res judicata because the claims arose from the same set of facts and circumstances litigated in the federal court. 

The defendants also argued that the trial court made a mistake in denying their exception of no cause of action to their for abuse of process.

Because the plaintiffs alleged that they had been harmed by the defendants' failure to pay the amounts anticipated based on the verification of insurance benefits, the appeals court said the trial court correctly denied the defendants' exception of no cause of action. 

Still, the appeals court added that the plaintiffs' claims are precluded by the doctrine of res judicata.

“Although we find that the trial court correctly denied Defendants-Relators’ Exception of No Cause of Action, we find that that trial court erred in denying Defendants-Relators’ Exception of Res Judicata,” the panel wrote.

The appeals court, therefore, reversed the trial court’s ruling about the Exception of Res Judicata and dismissed the plaintiffs’ action with prejudice.  

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Blue Cross and Blue Shield of Louisiana Louisiana Fourth Circuit Court of Appeal

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