From Casetext: Smarter Legal Research

Advanzeon Sols. v. State ex. rel. Fla. Dep't of Fin. Servs.

FIRST DISTRICT COURT OF APPEAL STATE OF FLORIDA
Jun 1, 2021
321 So. 3d 911 (Fla. Dist. Ct. App. 2021)

Opinion

No. 1D18-3087

06-01-2021

ADVANZEON SOLUTIONS, INC. f/k/a Comprehensive Behavioral Care, Inc., Appellant, v. STATE of Florida EX REL. FLORIDA DEPARTMENT OF FINANCIAL SERVICES, as the receiver of Universal Health Care Insurance Company, Inc. and Universal Health Care, Inc., Appellee.

Thomas Burns of Burns, P.A., Tampa, for Appellant. Gigi Rollini and Kelly A. O'Keefe of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., Tallahassee; Miriam Victorian, Assistant General Counsel, and Jamila G. Gooden, Assistant General Counsel, Department of Financial Services, Tallahassee, for Appellee.


Thomas Burns of Burns, P.A., Tampa, for Appellant.

Gigi Rollini and Kelly A. O'Keefe of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., Tallahassee; Miriam Victorian, Assistant General Counsel, and Jamila G. Gooden, Assistant General Counsel, Department of Financial Services, Tallahassee, for Appellee.

Kelsey, J.

This is a contract interpretation dispute in an insurance receivership case. The issue is whether the contract between a health plan and its network provider/claims processor required the health plan to keep paying the processor contractual administrative fees after the health plan terminated the contract. We affirm the trial court's holding that the contract did not require such payments.

Facts

Universal Health Care Insurance Company and Universal Health Care, Inc. (together, Universal), contracted with Appellant Advanzeon Solutions, Inc. (which originally had a different name). Universal had health plan members who might need certain health care services, and Advanzeon had a network of providers who could render those services. Under the contract, Advanzeon provided a variety of services to Universal's eligible members, including billing, claims payment, and quality management. Advanzeon paid the providers in its network, and Universal reimbursed Advanzeon for those payments.

The contract required Universal to pay Advanzeon an administrative fee each month. The most important point for this analysis is that the contractual monthly administrative fee due to Advanzeon was calculated by multiplying the number of Universal's "eligible members" for that month, times a contractually specified rate. The number of members fluctuated and therefore so did the administrative fee. The administrative fee payment was not dependent on the number of claims processed or the dollar amount of claims.

The contract allowed termination upon 90 days’ advance notice. Universal gave the required termination notice 90 days before the contract was set to end. Upon termination, Universal no longer had access to Advanzeon's provider network. Evidence presented later established that there were no pending or unpaid claims involving Advanzeon's providers when the contract ended.

Within months after Universal terminated its contract with Advanzeon, the Florida Department of Financial Services initiated receivership proceedings over Universal. In quick succession, Universal filed a Chapter 11 bankruptcy petition, the Department was appointed receiver of Universal, and the circuit court ordered Universal into liquidation.

Advanzeon asserted various claims against Universal that ultimately came down to its seeking over $820,000 in unpaid administrative fees allegedly due after the contract ended. Advanzeon called these "tail and extended tail" fees, and argued that they were customarily paid in the industry even though, as Advanzeon conceded, the contract did not expressly authorize them. Advanzeon's witnesses disagreed about how long those tail periods could extend, but argued it was at least three months and as long as five months after contract termination. To overcome the problem of there being no Universal "eligible members" on which to base the contractual administrative fee calculation once the contract ended, Advanzeon argued its ongoing fees should be calculated based on the number of eligible members there were in the last month under the contract.

Apparently the theory behind tail fees would be that claims would continue to require processing after contract termination. Apparently on the same reasoning, Advanzeon also argued that the new company contracted to take its place was not yet up to speed and so Advanzeon continued to be entitled to the administrative fee even past the 90-day "tail" period, into an "extended tail" period. However, Advanzeon provided no evidence that it continued to process claims during the tail or extended-tail periods. In a nutshell, Advanzeon argued that its entitlement to administrative fees, in the amount due in the final month of the contract, should continue for up to five months after termination despite its providing Universal no further services—and that this was industry custom to be imposed even in the absence of any contractual provision.

The Department disputed that tail and extended-tail payments were customary, and it argued that in any event, the contract did not authorize continued payment of administrative fees after termination of the contract itself. The Department demonstrated that no claims remained pending for Advanzeon's network providers after the contract was terminated. Further, Universal began paying administrative fees to Advanzeon's successor the day after the Advanzeon contract ended, and therefore there was not only no authority, but also no need, to keep paying Advanzeon.

The trial court rejected Advanzeon's arguments, finding that the contract did not provide for tail payments and no such requirement could be added to the contract. The court particularly rejected the concept that alleged industry practice could be imposed on the parties to a written contract after the fact. The trial court's judgment reflected the court's credibility determinations about both parties’ witnesses.

Legal Analysis

Our standard of review in interpreting a contract is de novo. Imagine Ins. Co., Ltd. v. State ex rel. Dep't of Fin. Servs. , 999 So. 2d 693, 696 (Fla. 1st DCA 2008). Advanzeon raises only one issue on appeal, arguing broadly that the trial court both erred and abused its discretion in denying Advanzeon's claim for tail-period fees. The primary argument is that the trial court erred by refusing to apply "trade custom and usage" to expand the payment terms of the parties’ written contract to include a tail and extended tail. Advanzeon also takes issue with several aspects of the trial court's reasoning. None of these arguments has merit.

Advanzeon admits the parties’ contract did not expressly authorize any tail payments, but argues the trial court should have interpreted the word "terminate" to include tail payments in light of trade custom and usage. The contract included a section entitled "Duration of the Agreement" that established a one-year term with automatic renewals unless terminated earlier. It provided that "either party may terminate this Agreement without cause by giving the other party written notice of termination at any time at least ninety (90) days prior to the effective date of termination." The contract also addressed termination for cause and termination of providers. The contract never mentioned tail payments, directly or indirectly. Further, the contract included an "Entire Agreement" clause providing that the contract "constitute[s] the Entire Agreement between Health Plan [Universal] and Provider [Advanzeon] with respect to the subject matter hereof ...." The contract set the administrative fee at a specified per-member, per-month rate. Nothing in the contract or its incorporated attachments expressly or impliedly addressed post-termination tail payments.

Before addressing Advanzeon's argument that this contract should be interpreted as containing an omitted but implied term, we accept the trial court's conclusion that Advanzeon failed to establish the very existence of the claimed trade custom. This was for the trial court as factfinder to decide. See Fred S. Conrad Constr. Co. v. Exch. Bank of St. Augustine , 178 So. 2d 217, 221 (Fla. 1st DCA 1965) (explaining the "responsibility of deciding facts presented as to such custom or trade usage" is for the factfinder). Only Advanzeon's own officers testified that tail payments are customary in health industry contractual relationships such as this one, while other evidence refuted that testimony. This dispute raised issues of witness credibility, potential bias, and weight of evidence, which are exclusively for the trier of fact to resolve. We do not re-weigh the evidence. See Fla. Detroit Diesel v. Nathai , 28 So. 3d 182, 185 (Fla. 1st DCA 2010) ("It makes no difference that there may have been some evidence in the record to support the appellants’ position. The pertinent question is whether the evidence supports the order under review."). This would be true even if there were no evidence to refute the testimony of Advanzeon's officers, because the trial court as trier of fact is entitled to reject even uncontradicted testimony. See Fox v. Dep't of Health , 994 So. 2d 416, 418 (Fla. 1st DCA 2008) (citing this rule as "well-established"); see also Durousseau v. State , 55 So. 3d 543, 562 (Fla. 2010) ("Where expert testimony is admitted, it is still the sole province of the jury or court as trier of facts to accept or reject such testimony, even if it is uncontroverted."). Advanzeon's failure to establish the existence of the claimed tail-payment custom, or its status as a universally-accepted implied contract term, is fatal to its entire argument.

Even if there were a trade custom and usage that tail payments are always expected even if not expressed in contracts, Advanzeon's argument ignores the first rule of contract interpretation: courts do not construe a contract that "is clear, complete, and unambiguous." Imagine Ins. , 999 So. 2d at 696 (quoting Jenkins v. Eckerd Corp. , 913 So. 2d 43, 49 (Fla. 1st DCA 2005) ). This contract meets these standards. It clearly and unambiguously addresses the parties’ respective rights and obligations and, in pertinent part, the payment arrangement and its governing time frames. Yet nothing expressly or impliedly addresses tail payments. A court cannot apply generic, conceptual "custom" to vary express terms of a contract. See Cox v. CSX Intermodal, Inc. , 732 So. 2d 1092, 1096–97 (Fla. 1st DCA 1999) (refusing to apply alleged first-come, first-served "course of dealings" to defeat express contractual terms giving party complete discretion).

Further, even if contracts such as this are typically expected to encompass tail payments, Advanzeon's argument would have the trial court impose such a term unilaterally on the other unwilling contracting party absent any evidence that Universal agreed to it or even contemplated it. This argument is especially egregious in light of the undisputed evidence that there were no post-termination claims for Advanzeon to process. The absence of any actual work for Advanzeon to do to earn ongoing fees makes its claim a search for a windfall, and all the more inappropriate to impose forcibly on Universal absent Universal's express agreement. To do so in the face of contractual silence, and without any parole evidence that the other party had agreed to it, is entirely improper. "[A]s to a particular matter, courts should not, under the guise of construction, impose on the parties contractual rights and duties which they themselves omitted." S. Crane Rentals, Inc. v. City of Gainesville , 429 So. 2d 771, 774 (Fla. 1st DCA 1983). This would impermissibly write a new contract that the parties themselves could have, but did not, write. We affirm the trial court's refusal to do so, and we likewise decline to do so.

Finally, Advanzeon attempts to avoid the constraints of contract interpretation rules by arguing (somewhat circularly), that tail payments are an inherent part of the clear terms actually used in this contract that do not otherwise mean that. But again, this is invalid reasoning. Contractual terms carry their ordinary meanings unless the parties expressly agree on different meanings and say so in the contract itself. "The cardinal rule of contractual interpretation is that when the language of a contract is clear and unambiguous, the contract must be interpreted and enforced in accordance with the plain meaning." Cleveland v. Crown Fin., LLC , 183 So. 3d 1206, 1209 (Fla. 1st DCA 2016). Contracting parties have the right, the opportunity, and the obligation to memorialize the terms of their agreement, and they omit terms at their peril. See S. Crane Rentals , 429 So. 2d at 773–74 ("[I]f a party desires a provision as important as the right to unilaterally cancel a contract, such a provision must be expressly provided for in the contract."). The trial court was entirely right to reject these arguments.

AFFIRMED .

Makar and Jay, JJ., concur.


Summaries of

Advanzeon Sols. v. State ex. rel. Fla. Dep't of Fin. Servs.

FIRST DISTRICT COURT OF APPEAL STATE OF FLORIDA
Jun 1, 2021
321 So. 3d 911 (Fla. Dist. Ct. App. 2021)
Case details for

Advanzeon Sols. v. State ex. rel. Fla. Dep't of Fin. Servs.

Case Details

Full title:ADVANZEON SOLUTIONS, INC. f/k/a Comprehensive Behavioral Care, Inc.…

Court:FIRST DISTRICT COURT OF APPEAL STATE OF FLORIDA

Date published: Jun 1, 2021

Citations

321 So. 3d 911 (Fla. Dist. Ct. App. 2021)

Citing Cases

Seaside Town Council, Inc. v. Seaside Cmty. Dev. Corp.

But the expressio unius maxim is a rule of construction, and rules of construction are to be used only if…

Frazetta v. Vanguard Prods.

Under Florida law, “[t]he cardinal rule of contractual interpretation is that when the language of a contract…