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Clark v. Blue Cross & Blue Shield of Alabama
Citations: 738 So. 2d 864; 1999 Ala. LEXIS 178Docket: 1970816
Court: Supreme Court of Alabama; June 11, 1999; Alabama; State Supreme Court
Mae Clark has petitioned for a writ of mandamus to direct the Etowah Circuit Court to vacate its order compelling her to arbitrate claims against Blue Cross and Blue Shield (BCBS). Clark argues that arbitration should not be enforced because she did not agree to it and because Alabama law prohibits the trial court from enforcing the arbitration provision, which was added to her insurance policy by BCBS through an amendment. The petition was denied. Clark applied for a Medicare-supplement policy with BCBS on March 1, 1991, and coverage began that day. In July 1992, BCBS amended its C Plus contracts, introducing a mandatory arbitration provision and communicated this change in a newsletter, stating that continued premium payments would indicate acceptance of the arbitration clause. In November 1993, BCBS sent an updated contract with the arbitration clause to all C Plus insureds. The chronology of events is as follows: Clark filed her complaint against BCBS on February 26, 1997. BCBS moved to compel arbitration on March 28, 1997. The court granted BCBS's motion on January 28, 1998, and stayed the proceedings. Clark then filed a motion to alter or vacate the order compelling arbitration on February 4, 1998, and subsequently requested a jury trial on the arbitration agreement's validity. After BCBS responded, Clark petitioned for a writ of mandamus on February 11, 1998. She raised the McCarran-Ferguson Act issue in an amended motion on March 3, 1998, but BCBS contended that this issue was not timely presented to the trial court prior to its January 28 ruling. The trial judge postponed a ruling on Clark's amended motion until after this Court addressed her mandamus petition. The plaintiff is obligated to initiate a mandamus proceeding within a specified timeframe, which may be fourteen days. A hearing for reconsideration of a prior motion was scheduled, but due to the lack of a ruling on the mandamus, the court decided to hold the additional pleadings from the plaintiff in abeyance until the mandamus outcome is known. The plaintiff’s attorney expressed uncertainty about the fourteen-day deadline, suggesting that the mandamus petition may have been filed prematurely but was done to avoid missing any potential deadline. The attorney emphasized that a premature petition is typically held in abeyance until the local court resolves the issues. The attorney sought two things during the hearing: reconsideration of a previous ruling regarding an arbitration agreement and clarification on the right to a jury trial, arguing that factual issues remain unresolved. It was noted that the law under the Federal Arbitration Act (FAA) does not specify a timeline for requesting a jury trial, as this area of law is still evolving. The attorney submitted additional materials, including correspondence from the Alabama Insurance Department regarding arbitration agreements and a copy of the insurance contract, which states it is governed by Alabama law. The court acknowledged the submissions and indicated that no ruling had yet been made regarding the jury trial entitlement, opting to defer decisions pending the appellate court's ruling. The plaintiff had previously filed an amended mandamus petition, arguing the merits of a legal issue under the McCarran Act. The writ of mandamus requires the petitioner to demonstrate a clear legal right, an imperative duty of the respondent, the absence of an adequate alternative remedy, and proper jurisdiction. In this case, there was no evidence that the trial judge had refused to perform an imperative duty. Trial judges possess discretion in managing courtroom proceedings and litigation flow. After extensive litigation regarding arbitration, the trial judge opted to await this Court's ruling on Clark's mandamus petition before addressing her McCarran Act issue, recognizing that a favorable ruling for Clark may render the McCarran Act matter moot. The judge's decision to hold Clark's amended motion in abeyance was not an abuse of discretion, as the mandamus writ is not intended to overturn a trial judge’s ruling on an unraised issue. The trial judge affirmed that he would consider Clark's McCarran Act arguments only after this Court's decision on the mandamus petition. The central legal question is whether state or federal law governs the validity of the arbitration provision; if state law applies, the provision inserted by BCBS would be invalid. The Court should avoid creating poor procedural law to address constitutional questions that remain unresolved by the trial judge. The primary issue for this Court is whether the trial judge erred in determining that Clark had agreed to arbitrate claims against BCBS. BCBS supported its motion to compel arbitration with two affidavits from Melissa Brisendine, detailing that all C Plus contracts were amended to include an arbitration provision effective July 1, 1992, and that notifications were sent to subscribers, including Clark, indicating that continued premium payments indicated acceptance of the amended agreement. Both affidavits confirmed that correspondence was properly mailed to Clark's address and not returned. Clark is presumed to have received materials regarding an amendment to her contract, with no evidence to rebut this presumption. Despite her current dementia, Clark's past ability to manage her affairs is noted, including opening and reading her mail. However, the record lacks clarity on whether she received or read the relevant contract amendment documents. The court cannot conclude that Clark has a clear legal right to overturn the trial judge’s arbitration order based on the existing evidence. The court expresses concern about BCBS's method for waiving the right to a jury trial but states that if evidence had indicated Clark was not properly notified or unable to understand the arbitration provision, she could contest the arbitrability in court. The arbitration provision does not clearly assign the determination of arbitrability to an arbitrator. The court denies the writ, affirming that neither it nor the Alabama Legislature can invalidate arbitration agreements under state law that applies only to arbitration unless a specific law related to insurance is enacted. A broader state requirement for written consent for contract amendments via mail could be constitutional but is absent here. Clark can still present her McCarran Act defense against BCBS's arbitration motion in the trial court. BCBS may also argue that federal law preempts state law regarding arbitration provisions in Medicare Select policies. If the trial judge rules in favor of Clark, BCBS has the right to appeal. If the trial judge rules in favor of BCBS, confirming that federal law permits arbitration in Medicare Select policies in Alabama, Clark may pursue a mandamus review of that ruling. The petition for mandamus arises from Mae Clark's action in the Etowah Circuit Court, where she initially filed a complaint against BCBS for allegedly selling her a worthless Medicare-supplement policy, given her Medicaid eligibility. Clark later amended the complaint to include her nephew, Billy Shelton, who has power of attorney. The court examined a 1992 newsletter in relation to BCBS's claims about contract acceptance through premium payments, finding no support for BCBS's assertion. Clark's insurance contract explicitly states that changes require written notice and cannot be modified orally. The court determined that Clark did not waive her right to a jury trial regarding the arbitration clause by delaying her response to BCBS's motion to compel arbitration. Clark's initial response sought denial of the motion and an alternative request for a jury trial to assess the enforceability of the arbitration clause. The arbitration provision mandates that disputes be resolved through binding arbitration under the Federal Arbitration Act, prohibiting legal actions prior to arbitration. The contract stipulates that any arbitration award can be enforced in any court with jurisdiction, and such awards can only be overturned based on limited grounds defined in the Federal Arbitration Act. The document also clarifies that while BCBS facilitates arbitration, it bears no responsibility for the selection or quality of healthcare providers involved in the claims. The case cites Humana Inc. v. Forsyth, highlighting that the McCarran-Ferguson Act restricts the application of certain federal statutes that could undermine state insurance regulations.