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Premier Comp Solutions, LLC v. Penn National Insurance Co.; Inservco Insurance Services

March 28, 2012


The opinion of the court was delivered by: Conti, District Judge.


Pending before this court is a motion for partial summary judgment (the "Motion", ECF No. 91) filed by defendants Penn National Insurance Co. ("PNI"), Inservco Insurance Services, Inc. ("Inservco"), and Hoover Rehabilitation Services, Inc. ("Hoover") (collectively, "defendants"). Plaintiff Premier Comp Solutions, LLC. ("Premier" or "plaintiff") filed this action in state court asserting a claim under the Lanham Act, 15 U.S.C. § 1125, for false statement (count V) and various claims under state law, i.e., count I (unfair competition), count II (tortious interference), count III (fraud), count IV (conspiracy), and count VI (business libel) (ECF No. 1). This case was removed by defendants to this court. Because the court, after considering all the parties' submissions, concludes no reasonable jury could render a verdict in favor of plaintiff with respect to the Lanham Act claim, the court will grant the Motion with respect to count V with prejudice, deny the motion without prejudice with respect to the state law claim for business libel (count VI) and will remand this case to the Court of Common Pleas of Allegheny County, Pennsylvania.

I.Factual background*fn1

Premier initiated this action on December 6, 2007, by filing a complaint against defendants in the Court of Common Pleas of Allegheny County, Pennsylvania. On December 28, 2007, this action was removed by defendants to this court. ECF No. 1.

Premier is a Pennsylvania limited liability company "whose services include the development of functional panels of healthcare providers, injury management, discontinued physical therapy and diagnostic networks, medical bill review, and repricing services." ECF No. 128 at 4. PNI is a Pennsylvania mutual insurance company that provides workers' compensation insurance coverage to employers. Id. at 4, 22. Inservco, a Pennsylvania corporation wholly owned by PNI, offers third-party administration services to risk pool or self-insured employers. Id. Hoover, a Pennsylvania corporation, is a "health and disability company that has a contract with PNI and Inservco to perform medical bill review, repricing, and nurse case management services." Id.

On January 25, 2006, a PNI and Inservco employee located in Harrisburg, Pennsylvania, Karen Lord ("Lord'), ECF No. 91-3 at 4, sent an email to a number of defendants' employees,*fn2 with the subject header "Payments to Premier Comp Solutions & Similar Providers" ("January 25, 2006 e-mail" or "Lord's email"). ECF No. 128 at 4-5. The text of the email at issue here reads as follows:

Ladies and Gentlemen, Inservco recently brought a situation to my attention regarding the use of Premier Comp. In exploring the situation I have uncovered some information that you need to be made aware of. First we should not issue any future payments to Premier Comp, they are not a provider of service, the reason for this is that the billings being received from Premier Comp have their tax id but another provider's Medicare number, as a result they may be committing Medicare fraud. My understanding is that the FBI is currently reviewing this situation. When we receive these bills we should deny payment. Premier Comp cannot file a fee review as they are not the provider of service. If and when we receive a bill from the actual provider of service, have the bill repriced and paid to the provider of service. I am asking Hoover to return all bills where the tax id and Medicare provider numbers do not match. When you receive bills back for this reason please send a denial of charges to the billing party. The reason for the denial should be that the billing party is not the provider of service as required by the WC Act. This email basically addresses the Premier Comp situation, however you should apply the same logic to all similar bills received for payment. If you question whether or not a bill falls into this category please contact me for assistance.

If you have any question please feel free to give me a call. I trust that you will share this information with all of your claim handlers.

Thanks, Karen

PS: as a heads up I suspect that Universal Smart Comp fall [sic] into the category discussed above.

ECF Nos. 91-2; 106-3 at 2.

The statements in the email that Premier may be committing Medicare fraud and that the FBI was reviewing the situation were false. ECF No. 128 at 36.

Staci Ulp ("Ulp"), one of the individuals that received Lord's email, is the Regional Vice-President for Inservco and responsible for Pennsylvania accounts. ECF Nos. 91-6 at 3; 107-3 at 21; 128 at 7. Ulp, in turn, on the same day, forwarded that email to a number of individuals. ECF Nos. 106-4; 128 at 38.*fn3

Jack Maher ("Maher"), a claims adjustor with Inservco, was one the recipients of the email forwarded by Ulp. ECF No. 128 at 7, 9. Maher works in Pennsylvania. Id. at 9. Maher discussed the email with Toni Roberts ("Roberts"), who is the Executive Director and owner of "The Workforce," located in the Pittsburgh, Pennsylvania area, ECF No. 91-8 at 3, and a consultant to the Municipality of Monroeville, Pennsylvania. ECF Nos. 91-4 at 5; 106-16 at 4. At that time, the Municipality of Monroeville was a member of PennPRIME Trust, a risk-pool of municipal employees.*fn4 ECF No. 128 at 32. Maher recalls discussing the content of that email with Roberts, but could not say what the conversation was about. ECF Nos. 91-4 at 5-6; 106-16 at 6-7. Roberts had contacted Maher to find out why Inservco stopped paying Premier's invoices to Monroeville Borough. ECF No. 106-17 at 3. Maher told Roberts that he had been instructed by the "people superior to him" within Inservco not to pay Premier's invoices. Id. at 4. Roberts testified that Maher read or paraphrased portions of an email he had received in which Maher was told not to pay Premier's invoices because Premier was under investigation for Medicare fraud. Id. at 5.

Roberts discussed this conversation with her staff and Linda Schmac ("Schmac"), plaintiff's president and founder. ECF No. 128 at 10. In Roberts' conversation with Schmac, they discussed what Roberts would say to Susan Werksman ("Werksman"), the director of personnel and finance for the Municipality of Monroeville, located in Monroeville, Pennsylvania, about the content of the email. ECF Nos. 91-8 at 7-8; 91-9; 93 at 4; 103 at 6; 106-17. Roberts discussed Lord's email with Werksman. ECF Nos. 91-8 at 7; 106-17 at 9. Werksman recalled talking with Roberts over the phone and being informed by Roberts that Inservco discontinued paying Premier's invoices. ECF No. 91-9 at 4. Werksman also had a conversation with Schmac in which Schmac told Werksman about an email from Inservco concerning unfounded allegations about an investigation of Premier for Medicare or Medicaid fraud. ECF Nos. 91-9 at 5-6; 106-15 at 9.

Ulp discussed Lord's email with Olivia Zitelli ("Zitelli"), the Director of Human Resources of Turtle Creek Valley Mental Health Mental Retardation, Inc. ("Turtle Creek"), located in Braddock, Pennsylvania. ECF Nos. 128 at 14, 57. Turtle Creek is a member of the PCPA*fn5 Trust. ECF No. 128 at 58. Zitelli testified that in July 2006 she asked Ulp what was the problem with Premier. ECF Nos. 91-10 at 5; 128 at 60. Ulp told her that Premier's business model was not ethical because Premier used providers they were not allowed to use under Pennsylvania's Workers' Compensation Act ("WCA"). She advised that Inservco would not be involved in that conduct. ECF Nos. 91-10 at 5; 107-7 at 10-11, 14. Zitelli testified that she was "80%" certain that Ulp told her that Premier was committing Medicare fraud. ECF Nos. 91-10 at 7; 107-7 at 13; 128 at 14-15.

Zitelli, in turn, "probably" told Bill Lehr ("Lehr"), a consultant and executive representative for the PCPA Trust, about her conversation with Ulp. ECF Nos. 91-10 at 5; 107-7; 128 at 15. Sometime in 2006, the PCPA Trust entered into contract with Inservco. Under the contract, Inservco was to provide third-party administrator ("TPA") services to PCPA Trust. ECF No. 128 at 59-60. In an email to Eugene Barilla ("Barilla"), Premier's marketing director, Lehr told Barilla that the PCPA Trust's policy is to pay all medical charges directly to providers, but not TPAs. Id. at 63. During his deposition, Leher stated that there was not in fact such a policy. Id. 64. Any change in the way the PCPA Trust would handle medical bills coincided with Inservco becoming the TPA provider of PCPA. Id. at 63.

Ulp once "likely" discussed the content of Lord's email with George Price ("Price"), the Director of Risk Management for Penn PRIME. ECF No. 91-7 at 4. Price recalled that Ulp told him that there was some allegation that Premier was being investigated by the FBI. Id. at 5; ECF No. 106-18 at 3. Ulp, however, did not state it was a fact, but just an "innuendo" or a "rumor." Id. at 106-18 at 5-6. Price did not tell anyone about the conversation with Ulp because he was not certain it was true. ECF No. 91-7 at 6. Price, however, talked with Gary Scoulos, Premier's legal counsel, about the reason provided by Inservco for not paying Premier, i.e., "only medical providers can be reimbursed for services." ECF Nos. 106-6 at 1; 128 at 41. In an email to Ulp, Price asked Ulp to share with him any writing in which PNI formalized its position with respect to payments to Premier. Id. No such writing was ever provided. Id. In February 2006, Price sent Werksman a copy of portions of the WCA relevant to the issue whether Premier is a provider under the WCA. ECF No. 128 at 42. Price stated that he was directed to these sections by Ulp. Id. at 42-3.

With respect to the nature of Premier's business, Schmac submitted an affidavit, ECF No. 108-1, in which she averred: "Premier has the ability to provide medical bill review, repricing, and workers' compensation Preferred Provider Organization ("PPO") network access services in all 50 states and markets these services to national, regional, and local employers, insurance carriers, and third party administrators." ECF No. 108-1 at 13. Premier also provided services to employers with locations outside of Pennsylvania. See ECF Nos. 108-1 at 16; 108-3. Premier receives referrals from employers who are located outside of Pennsylvania. ECF Nos. 108-1 at 16; 108-4. Exhibits B and C referred to in Schmac's affidavit list hundreds of employers to whom Premier provided services or from whom Premier received referrals. ECF Nos. 108-3; 108-4. Schmac reported that Inservco listed 600 clients on its website. ECF No. 108-1 at 15.

II.Standard of Review

A motion for summary judgment is governed by Federal Rule of Civil Procedure 56, which provides in relevant part:

(a) Motion for Summary Judgment or Partial Summary Judgment. A party may move for summary judgment, identifying each claim or defense -- or the part of each claim or defense -- on which summary judgment is sought. The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a ...

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