Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

TOLEDO v. KAISER PERMANENTE MED. GROUP

February 12, 1997

LORNA R. TOLEDO AND RUDY L. TOLEDO, Plaintiffs,
v.
KAISER PERMANENTE MEDICAL GROUP, et al., Defendants.



The opinion of the court was delivered by: WILLIAMS

 Plaintiffs ask this Court to remand their case to state court, arguing that ERISA does not preempt their state law claims. For the reasons set forth below, this Court DENIES Plaintiffs' motion. In addition, Defendants ask this Court to compel arbitration and stay the proceeding pursuant to an arbitration clause in the health care agreement signed by Mr. Toledo. For the reasons set forth below, this Court GRANTS Defendants' motion to compel arbitration and STAYS this proceeding.

 BACKGROUND

 Plaintiffs Lorna and Rudy Toledo are members of Kaiser Foundation Health Plan, Inc. ("Health Plan"), a non-profit health maintenance organization licensed under the Knox-Keene Health Care Service Plan Act, Cal. Health & Safety Code § 1340 et seq., and federally qualified under the Health Maintenance Organization Act, 42 U.S.C. § 300e et seq. Plaintiffs have sued Health Plan and its contracting providers, the Permanente Medical Group, Inc. (provider of medical services), and Kaiser Foundation Hospitals (provider of hospital services), (collectively "Kaiser" or "Defendants") for breach of contract, breach of the implied covenant of good faith, fraud, and infliction of emotional distress. Plaintiffs' claims arise from Health Plan's denial of Ms. Toledo's request that Health Plan pay for surgical and hospital benefits at Stanford Medical Center.

 In the fall of 1994, Mr. Toledo was hired by Stanford Linear Accelerator Center ("SLAC"), and effective November 1, 1994, the Toledos, who had previously been insured under a Kaiser plan connected with Mr. Toledo's employment at a temporary agency, transferred their health care coverage to the Group Medical and Hospital Service Agreement entered into between Stanford (for its SLAC bargaining unit) and Health Plan (the "Stanford Agreement" or "Service Agreement"). Health Plan is the named fiduciary under the Service Agreement for deciding benefits claims.

 Section 8 of the Agreement is an arbitration provision requiring that any and all claims against Health Plan arising out of or incident to the Service Agreement be resolved through final and binding arbitration. Mr. Toledo signed his name under a declaration recognizing the validity of the arbitration clause. Health Plan also provided Stanford with employee brochures discussing the arbitration provision.

 From November 1, 1994 to late 1995, the SLAC group paid the premiums for the Toledos. The Toledos themselves nor Mr. Toledo's previous employer, the temporary agency, paid any premiums from November 1, 1994 onwards, premiums which would have sustained a "conversion account" with the temporary agency's Kaiser health plan.

 A few months after Mr. Toledo began working at SLAC, Mrs. Toledo needed surgery to correct a digestive problem. On February 13, 1995, Health Plan refused to authorize the surgery, scheduled to be performed at Stanford University Hospital two days later. The Toledos borrowed $ 22,400 to pay the hospital admission charge and the surgeon waived his fee. The Toledos state that they made several phone calls protesting the denial, but they do not specify whom nor when they called. They never submitted to Kaiser a written or formal appeal.

 Rather than submitting the matter to arbitration, the Toledos filed this action in state court alleging state law causes of action. Kaiser filed a notice of removal to federal court on the ground that all of Plaintiffs' claims are summarily preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and are removable under Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 95 L. Ed. 2d 55, 107 S. Ct. 1542 (1987). Plaintiffs now move to remand the case to state court. Defendants oppose the motion and move to compel arbitration.

 DISCUSSION

 1. PLAINTIFFS' MOTION TO REMAND.

 Plaintiffs contend that remand is proper because (1) ERISA does not govern the health plan operative at the time Kaiser denied the hospital and surgical benefits, (2) even if ERISA governs, it does not preempt their state law claims, and (3) even if ERISA governs, the "savings clause" of ERISA would take their claims out of ERISA's scope anyway.

 a. The Toledos' Health Care Plan Is an ERISA Plan


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.