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Riemer v. Columbia Medical Plan3/10/2000
Appellants, Victor G. Riemer, Stephen Marx, and Janet Marx, are subscribers (or members) of Columbia Medical Plan, Inc. (CMP), appellee, a health maintenance organization (HMO). In their complaint, appellants allege that provisions in the contract between CMP and its members, which purport to give CMP the right to recover the cost of health care from third-party tortfeasors, are in direct violation of several provisions of the Maryland Health Maintenance Organization Act, Maryland Code (1982, 1996 Repl. Vol., 1999 Cum. Supp.), Title 19, subtitle 7, of the Health-General Article.
This cause of action began with members of CMP receiving health care benefits from CMP for injuries arising out of accidents due to negligent third parties. In the instances described, the members received medical benefits from CMP, then later received financial settlements arising out of their accident claims from the third parties. CMP then sought reimbursement and/or subrogation recovery from the subscribers' proceeds of their settlements for the health care benefits it had provided. On April 3, 1995, appellant Victor Riemer received a sum of $10,000.00 to resolve a claim arising from an automobile accident. CMP asserted a lien against this recovery, and Mr. Riemer paid $829.50 to CMP on June 20, 1995. Similarly, appellants Stephen and Janet Marx received $18,000.00 to settle their tort claims arising from a car accident involving their son, and CMP asserted a lien against this recovery in excess of $2,600.00.
On July 15, 1996, appellants, on their own behalf and on the behalf of a putative class of similarly situated persons, filed a complaint in the Circuit Court for Howard County against appellee. In their complaint, appellants allege that appellee's general policy of pursuing its members for subrogation whenever they recover funds from a third party in a tort action is illegal and improper under sections 19-701(f)(3) and 19-710(o) of the Health-General Article. They brought three causes of action: unjust enrichment/money had and received; negligent misrepresentation; and a request for a declaratory judgment that appellee breached its contractual, statutory, and common law obligations to appellants by claiming improperly a subrogation interest in and a lien against third-party settlement recoveries by appellants.
On August 15, 1996, appellee removed this case to the United States District Court for the District of Maryland. Appellee contended that appellants' state law challenges to the CMP plan provisions were preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. ยง 1001 et seq. (1994 & Supp. 1998), and that the provisions of the Maryland HMO Act were thus void and without effect. On December 24, 1997, the federal court held that the CMP plan provisions were preempted with respect to all persons who were members of CMP by virtue of employee benefit plans governed by the ERISA. However, the court also held that there was no federal jurisdiction over those class members who were not members of the CMP through an ERISA health plan, and remanded their claims to the Circuit Court for Howard County.
Upon remand, appellee moved for the circuit court to stay all proceedings pending the outcome of the federal appeal dealing with the ERISA preemption. The circuit court denied the motion. Both parties then moved for summary judgment. On March 24, 1999, the circuit court granted appellee's motion for summary judgment on all claims. Appellants appealed to the Court of Special Appeals. On our own initiative, we granted review prior to argument in the Court of Special Appeals. Appellant presents three issues to this Court: I. Did the circuit court err by holding tha
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