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State v. Ommen

February 24, 2009

THE STATE OF WYOMING, EX REL., SANDY ARNOLD, APPELLANT (PETITIONER),
v.
RON OMMEN, IN HIS OFFICIAL CAPACITY AS DIRECTOR OF THE WYOMING DEPARTMENT OF ADMINISTRATION AND INFORMATION, AND SANDY PADILLA, IN HER OFFICIAL CAPACITY AS RISK MANAGER, APPELLEES (RESPONDENTS).



Appeal from the District Court of Laramie County, The Honorable Peter G. Arnold, Judge

The opinion of the court was delivered by: Kite, Justice.

Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

[¶1] After her claim for medical benefits under the State Employees' and Officials' Group Plan (Group Plan) was denied, Sandy Arnold filed a grievance with the Employees' and Officials' Group Insurance Program (Group Insurance Program) section of the Wyoming Department of Administration and Information (A&I). The Office of Administrative Hearings (OAH) dismissed the grievance and Ms. Arnold presented the State Office of Risk Management with a notice of claim pursuant to the Wyoming Governmental Claims Act (WGCA) in which she asserted the State breached the insurance contract by failing to pay her claim.

[¶2] The risk manager forwarded the notice of claim to the Group Insurance Program. Ms. Arnold then filed a petition for writ of mandamus and complaint for declaratory judgment in district court seeking a writ requiring the risk manager to process her notice of claim and a declaration of her rights under the Group Plan. The district court granted summary judgment, and dismissed Ms. Arnold's claims. She appeals, claiming error in two respects: first, she claims she was entitled to issuance of a writ of mandamus requiring the risk manager to settle or deny her claim; second, she claims that she was entitled to a district court declaration of her rights under the Group Plan and under the WGCA. We affirm the district court's denial of a writ of mandamus. However, we conclude that Ms. Arnold was entitled to a declaration of her rights and, proceeding to declare her rights, we hold that she was required to complete the Group Plan appeals process before filing a legal action.

ISSUES

[¶3] Ms. Arnold presents the following issues for our determination:

1. Did Appellant's Verified Petition for Writ of Mandamus, affidavits and supporting documents present a justiciable controversy?

2. Did Appellant's Complaint for Declaratory Judgment, affidavits and supporting documents present a justiciable controversy?

The State rephrases the issues as follows:

I. Did the District Court properly grant Appellees' Converted Motion for Summary Judgment regarding Appellant's Petition for Writ of Mandamus, when Appellant has not cited to any Wyoming law which requires the State Risk Manager to assume jurisdiction and investigate her governmental claim?

II. Did the District Court properly grant Appellees' Converted Motion for Summary Judgment regarding Appellant's Complaint for Declaratory Judgment, when Appellant seeks an advisory opinion in anticipation of future legal actions without a current justiciable controversy?

FACTS

[¶4] Ms. Arnold is an employee of the State of Wyoming covered by the Group Plan. Ron Ommen was the director of A&I, which is responsible for administering and managing the state employees' group insurance program. Sandy Padilla is the manager of the risk management section of the general services division of A&I, and is responsible for administering the State Self-Insurance Program established in Wyo. Stat. Ann. §§ 1-41-101 through 1-41-111 (LexisNexis 2007).

[¶5] An understanding of the interplay between the State Self-Insurance Program and WGCA and between the Group Plan and the State Employees and Officials Group Insurance Act (Group Insurance Act) is necessary for resolution of the issues presented in this case. We begin with consideration of the State Self-Insurance Program and WGCA.

[¶6] In the 1980s the State was unable to procure affordable commercial liability insurance coverage for claims brought against it and its employees under the WGCA and federal law. The legislature passed the State Self-Insurance Program Act which established a self-insurance account to cover such claims. The WGCA requires that written notice of a liability claim against the State or its employees be presented to the general services division of A&I. Pursuant to § 1-41-105(a)(iii) of the State Self-Insurance Program Act, the risk manager is required to supervise and manage the investigation, adjustment and settlement of liability claims brought against the State and its employees under the WGCA.

[¶7] We next consider the interplay between the Group Plan and the Group Insurance Act, Wyo. Stat. Ann. §§ 9-3-201 through 9-3-210 (LexisNexis 2007). The health benefits provided to state employees under the Group Plan are self-funded by the State of Wyoming. Great-West contracts with the State to process claims and benefits under the Group Plan but does not insure or guarantee benefits. The Group Plan sets forth procedures for filing claims for health benefits and for contesting claims determinations. Additionally, in accordance with § 9-3-205 of the Group Insurance Act, A&I has adopted rules establishing procedures for hearing insured employee complaints concerning benefit claims.

[¶8] As authorized by § 9-3-209 of the Group Insurance Act, Ms. Arnold elected to have her dependent spouse covered under the Group Plan. He incurred healthcare consultation fees and drug prescription costs for which Ms. Arnold requested a determination of medical necessity and benefits under the Group Plan. Great-West's physician reviewer concluded there was "insufficient documentation of the underlying condition and proven benefits of treatment to establish that this treatment is medically necessary" and denied her request. In the denial letter, Great-West notified Ms. Arnold that she could appeal the determination.

[¶9] Ms. Arnold did not appeal. Instead, she filed a grievance with the Group Insurance Program. The Group Insurance Program forwarded the grievance to the OAH. The OAH issued an order dismissing the grievance for lack of jurisdiction, concluding Ms. Arnold had failed to exhaust the Great-West appeals process before filing a grievance as required by the Group Plan.

[¶10] Ms. Arnold then presented a notice of claim to the risk manager under the WGCA, Wyo. Stat. Ann. § 1-39-101 through 1-39-121 (LexisNexis 2007), claiming the State, by and through Great-West, breached the Group Plan when it failed to pay her benefits claim. She sought $9,368.20 in damages. The risk management office responded with a letter notifying Ms. Arnold that the State Self-Insurance Program was not the proper venue for her claim and that it had forwarded her claim to the Group Plan Program.

[¶11] Ms. Arnold then filed her petition for writ of mandamus and complaint for declaratory relief in district court. She alleged that the risk manager was required to accept, investigate and act on her notice of claim in accordance with the WGCA. Instead, she asserted, the risk manager improperly treated her notice of claim as falling under the Wyoming Administrative Procedure Act (WAPA), Wyo. Stat. Ann. §§ 16-3-101 through 16-3-115 (LexisNexis 2007). She sought a writ of mandamus ordering the risk manager to accept and investigate her claim and settle or deny it. She also sought a declaration of her rights under the WGCA, the State Self-Insurance Program and the Group Plan.

[¶12] A&I's director and risk manager filed a motion to dismiss Ms. Arnold's petition and complaint, claiming that she had not exhausted available administrative remedies and was seeking an advisory opinion on her legal claims. They supplemented the motion with documents outside of the pleadings. After hearing argument on the motion, the district court converted it to one for summary judgment and entered an order granting the motion. The district court held that Ms. Arnold had failed to exhaust her administrative remedies; a declaratory judgment action will not lie to allow a court to prejudge issues that should be decided by an agency; judicial involvement was premature and inappropriate until an administrative decision had been made; and a judicial declaration of Ms. Arnold's rights under the Group Plan was inappropriate because it would be an advisory opinion with no binding effect. Ms. Arnold appealed the district court's order to this Court.

STANDARD OF REVIEW

[¶13] When this Court reviews a grant of summary judgment entered in response to a petition for declaratory judgment, we invoke our usual standard for review of summary judgments. Goglio v. Star Valley Ranch Ass'n, 2002 WY 94, ¶ 12, 48 P.3d 1072, 1076 (Wyo. 2002). Summary judgment motions are governed by W.R.C.P. 56(c):

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

We review a district court's summary judgment rulings de novo, using the same materials and following the same standards as the district court. Winship v. Gem City Bone & Joint, P.C., 2008 WY 68, ¶ 8, 185 P.3d 1252, 1254 (Wyo. 2008). The facts are reviewed from the vantage point most favorable to the party opposing the motion, and we give that ...


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