2016 Va. Cir. LEXIS 76
Norfolk Cir. Ct.2016Background
- Dominion Pathology Laboratories (three-physician lab) had been in Anthem’s preferred provider network for over a decade; Anthem notified Dominion on Oct. 15, 2014 of an Amendment reducing reimbursement rates effective Feb. 2, 2015.
- Dominion negotiated with Anthem (proposed alternatives Nov. 11, 2014); Anthem countered Dec. 9, 2014 and gave options including termination notice by Dec. 17, 2014; Dominion emailed Dec. 17 that it would remain in-network but might seek declaratory relief, then executed the Amendment Dec. 18, 2014 (finalized Feb. 9, 2015).
- Dominion sued (Mar. 3, 2015) claiming Anthem’s amended rates violated Virginia’s Any Willing Provider statute and §2706 of the ACA (anti‑discrimination provisions) and breached the Agreement’s compliance clause.
- Anthem filed a counterclaim and moved for partial summary judgment seeking a declaration that the contract’s Termination Without Cause clause (120 days’ notice) is valid and that it may terminate under that clause; Anthem also pleaded waiver and estoppel against Dominion for executing the Amendment.
- The court considered whether Dominion (1) waived contract claims by executing the Amendment, (2) is estopped from challenging the Amendment, and (3) whether Anthem may lawfully terminate under the Termination Without Cause provision.
Issues
| Issue | Plaintiff's Argument (Dominion) | Defendant's Argument (Anthem) | Held |
|---|---|---|---|
| Did Dominion waive its right to sue for breach by executing the Amendment? | Dominion: no release or waiver language was negotiated or included; it expressly preserved right to litigate. | Anthem: Dominion knowingly accepted the Amendment and thereby relinquished claims. | Dominion did not waive its rights; court finds no intent to relinquish and Anthem failed to secure a release. |
| Is Dominion estopped from challenging the Amendment? | Dominion: no representation of waiver, Anthem cannot show detrimental reliance; litigation was anticipated. | Anthem: Dominion accepted amended rates and received consideration, so it should be estopped from claiming breach. | Dominion not estopped; court finds lack of reasonable reliance and evidence of anticipated litigation. |
| Is the Termination Without Cause provision void as against public policy or the Any Willing Provider statute? | Dominion: enforcing termination undermines statutory nondiscrimination and public policy favoring provider choice. | Anthem: provision is contractual; statute prohibits unreasonable discrimination but does not bar termination rights. | Provision is enforceable; court declines to invalidate it on public‑policy or statutory grounds. |
| Is Anthem contractually entitled to terminate the Agreement by 120 days’ notice? | Dominion: argues termination should be constrained by amendment terms and public policy. | Anthem: plain contract language permits either party to terminate without cause after 120 days’ notice. | Held for Anthem: contract’s four corners allow termination; Amendment fixed rates through Feb. 1, 2017 but did not eliminate termination right. |
Key Cases Cited
- Stanley’s Cafeteria v. Abramson, 226 Va. 68, 306 S.E.2d 870 (1983) (defines waiver as intentional relinquishment of a known right)
- Virginia Polytechnic Inst. v. Interactive Return Serv., 267 Va. 642, 595 S.E.2d 1 (2004) (elements of waiver: knowledge and intent to relinquish)
- Princess Anne Hills Civic League, Inc. v. Susan Constant Real Estate Trust, 243 Va. 53, 413 S.E.2d 599 (1992) (elements of estoppel)
- Commonwealth, ex rel. Attorney Gen. v. Washington Gas Light Co., 221 Va. 315, 269 S.E.2d 820 (1980) (estoppel must be proven by clear, precise, unequivocal evidence)
- Noell Crane Sys. GmbH v. Noel Crane & Serv., 677 F. Supp. 2d 852 (E.D. Va. 2009) (parties may release unknown claims by general release; cited on risk of inferior knowledge)
- HCA Health Servs. v. Metropolitan Life Ins. Co., 752 F. Supp. 202 (E.D. Va. 1990) (interpreting Virginia Any Willing Provider statute and reasonableness standard for discrimination)