No: 04-1613 COMMUNITY MEDICAL CENTER, Estelle Hopkins, Richard Sharkey v. LOCAL 464A UFCW WELFARE REIMBURSEMENT PLAN, Community Medical Center

Honorable Richard L. Nygaard assumed senior status on July 9, 2005.*
1
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No: 04-1613
COMMUNITY MEDICAL CENTER,
(Estelle Hopkins, Richard Sharkey)
v.
LOCAL 464A UFCW WELFARE REIMBURSEMENT PLAN,
Community Medical Center, Appellant
On Appeal from the United States District Court
for the District of New Jersey
(Civil Action No. 03-02658)
District Judge: Hon. Stanley R. Chesler
Argued: March 24, 2005
Before: NYGAARD , McKEE and RENDELL, Circuit Judges*
(Filed: July 29, 2005)
__________________
Keith McMurdy, Esq. (Argued)
Shea Hutchins Lukacsko, Esq.
Grotto, Glassman & Hoffman
75 Livingston Avenue
Roseland, NJ 07068

-- 1 of 7 --

2
Camille J. Kassar, Esq.
Maloof, Lebowitz, Connahan & Oleske
127 Main Street
Chatham, NJ 07928
Attorneys for Appellant
George R. Murphy, Esq.
Michael T. Anderson, Esq. (Argued)
Mark Hanna, Esq.
Davis, Cowell & Bowe, LLP
1701 K Street, Suite 210
Washington, D.C. 20006
John M. Agnello, Esq.
Kerrie R. Heslin, Esq.
Carella, Byrne, Bain, Gilfillan Cecchi, Stewart & Olstein
Five Becker Farm Road, 2d Floor
Roseland, NJ 07068
Attorneys for Appellee
Frank R. Ciesla, Esq.
Giordano, Halleran & Ciesla
125 Half Mile Road
P.O. Box 190
Middletown, NJ 07748
Attorney for Amicus-appellant
OPINION
McKEE, Circuit Judge.
Community Medical Center (“CMC”) appeals the District Court’s orders granting
summary judgment and awarding attorneys’ fees to Local 464A UFCW Welfare
Reimbursement Plan (the “Plan”), and denying CMC’s motion for remand. For the
reasons that follow, we will dismiss this appeal, vacate the District Court’s grant of
summary judgment, and remand to the District Court with instructions to remand to the

-- 2 of 7 --

3
state court.
I.
Because we write primarily for the parties, it is not necessary to recite the facts or
procedural history of this case except insofar as may be helpful to our brief discussion.
We note that the Plan entered into a contract with MagNet, Inc., in 1995 that provided in
relevant part:
Pursuant to a valid assignment from Eligible Person,
Subscriber or its authorized agent shall directly pay
Network Hospitals for Covered Services provided to
Eligible Persons within thirty (30) days after date of
receipt of submitted Clean Claims . . .
Where obligated, if Subscriber fails to pay within the
appropriate time frame, the Subscriber acknowledges
that it will lose the benefit of the MagNet discounted
reimbursement rate and that the Network Hospital is
then entitled to bill and collect from Subscriber and
Eligible Person its customary rate for services rendered.
If Subscriber fails to make the payment, the Network
Hospital may pursue any remedies available against
Subscriber and Eligible Person.
Two plan participants – Estelle Hopkins and Richard Sharkey (hereinafter “plan
participants”) – received medical treatment at CMC. The Plan paid CMC for its services
at the discounted rate after CMC sent claims for each these participants.
Thereafter, CMC sued the Plan in state court alleging breach of contract and
seeking to recover $24,115.00, which was the difference between the discounted rate the
Plan paid, and the customary rate for the services that the plan participants received.

-- 3 of 7 --

4
CMC maintained that the Plan had improperly paid the discounted rate since payment was
not made within the requisite 30-day time period specified in the contract. The Plan
removed the case to District Court, based upon federal question jurisdiction under 28
U.S.C. § 1331 and 28 U.S.C. § 1332(e) and (f). The Plan argued that CMC’s claims were
claims for benefits under ERISA Section 502(a)(1)(B), 29 U.S.C. § 1332(a)(1)(B).
Thereafter, the District Court denied CMC’s motion to remand to state court and granted
the Plan’s motion for summary judgment based upon the court’s conclusion that CMC’s
claims were preempted by ERISA. The court explained: “where a plaintiff health care
provider’s claim is predicated upon an assignment of benefits of the beneficiary . . . there
is derivative standing to assert the claim . . . therefore, [the claim] is one which, in fact,
arises under Section 1132(a) and constitutes a claim for benefits.”
II.
For reasons we have already stated in Pascack Valley Hospital, Inc. v. Local 464A
UFCW Welfare Reimbursement Plan, 388 F.3d 393 (3d Cir. 2004), we hold that there is
no federal jurisdiction over CMC’s claim. There, we explained that
Section 502(a) of ERISA allows “a participant or beneficiary”
to bring a civil action, inter alia, “to recover benefits due to
him under the terms of his plan, to enforce his rights under the
terms of the plan, or to clarify his rights to future benefits
under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). By
its terms, standing under the statute is limited to participants
and beneficiaries . . . .
The parties dispute whether, under the law of this
Circuit, the Hospital can obtain standing under § 502(a) by

-- 4 of 7 --

5
virtue of an assignment of a claim from a participant or
beneficiary. We need not resolve this dispute, however,
because there is nothing in the record indicating that [the plan
participants] did, in fact, assign any claims to the Hospital.
As the party seeking removal, the Plan bore the burden
of proving that the Hospital’s claim is an ERISA claim.
Accordingly, the Plan bore the burden of establishing the
existence of an assignment . . . .
. . . .
Because the Plan has failed to demonstrate that the
Hospital obtained an assignment from [the plan participants],
we do not reach the “standing-by-assignment of claim” issue.
Therefore, the Plan cannot demonstrate that the Hospital has
standing to sue under § 502(a). As a result, the Hospital’s
state law claims could not have been brought under the scope
of § 502(a) and are not completely pre-empted by ERISA.
Pascack Valley, 388 F.3d at 400-02 (citations omitted). We decided Pascack Valley after
the District Court filed its opinion. Accordingly, that court did not have the benefit of the
holding in Pascack Valley when it decided this case.
Nevertheless, here, as in Pascack Valley, there is no evidence of any assignments
executed by the plan participants. Accordingly, we have no way of knowing if executed
assignments exist. Moreover, even assuming that such assignments do exist, we still have
no way of knowing their terms or parameters.
The Plan argues that, because “[t]he MagNet contract defines the Hospital’s claim
as an assignment of the patient’s right to reimbursement . . . [t]he MagNet contract itself
is sufficient to establish the legal fact of the assignment, even in the absence of a

-- 5 of 7 --

In fact, counsel repeatedly maintained that any such assignment form only**
assigned the right to reimbursement.
6
separately executed document.” We disagree.
Whether the Subscriber Agreement requires the Hospital to
obtain an assignment in order to demand payment from the
Plan says nothing about whether an assignment was in fact
made. Because neither [plan participant is a party] to the
Subscriber Agreement, that document cannot, in and of itself,
establish an assignment of their claims.
Pascack Valley, 388 F.3d at 401.
We are also unpersuaded by the Plan’s argument that we can proceed based upon a
concession CMC made in the District Court. CMC’s counsel merely stated “that an
actual [assignment] form has been executed.” Counsel did not concede that the
assignment encompassed claim benefits.**
Also as in Pascack Valley, the Plan has the burden of proving that CMC’s claim is
governed by ERISA since the Plan sought removal. It is now clear that the Plan has not
satisfied that burden. Even assuming CMC can obtain standing under ERISA by an
assignment of claimants’ benefits, its failure to establish that an appropriate assignment
exists is fatal to its standing.
III.
Accordingly, we conclude that there is no federal jurisdiction over CMC’s claim,
and we will therefore dismiss this appeal, vacate the District Court’s grant of summary
judgment and attorneys’ fees orders, and remand to the District Court with instructions to

-- 6 of 7 --

CMC appealed the District Court’s January 29, 2004 order awarding attorneys’***
fees to defendant; however, that order did not quantify the amount of fees to be awarded.
The order quantifying the attorneys’ fees was issued on August 6, 2004, after CMC filed
this appeal. The Fund maintains that we have no jurisdiction to review the District
Court’s January 29, 2004 order since it did not quantify the fee amount. We do not agree.
Faced with a similar situation in Bernardsville Bd. of Ed. v. J.H., 42 F.3d 149, 156 n.10
(3d Cir. 1994), we concluded that the appeal, which specified only the District Court’s
initial, unquantified attorneys’ fees award order, incorporated the subsequent order
quantifying the attorneys’ fees award. We found that:
Because the [initial] order designates the prevailing party for purposes of
attorneys' fees, we recognize an adequate connection between it and the
[subsequent] order for purposes of extending our jurisdiction over the latter,
given that the subsequent appellate proceedings manifest the appellant's
intent to appeal the attorneys' fees issue. Importantly, here the opposing
party had and exercised a full opportunity to brief the issue and did not raise
any claim of prejudice.
Id.; see also Ragan v. Tri-County Excavating, Inc., 62 F.3d 501, 505-506 (3d Cir.
1995) (exercising jurisdiction over an unquantified attorneys’ fees award, pursuant to
28 U.S.C. § 1291 and the principle expressed in Cape May Greene, Inc. v. Warren,
698 F.2d 179, 184-85 (3d Cir. 1983), which provides that “this Court may entertain an
appeal from a nonfinal order if an order which is final is subsequently entered before
our adjudication on the merits.”).
7
remand to state court.***

-- 7 of 7 --