Ronald Mell, Sr. v. Anthem, Inc.
2012 U.S. App. LEXIS 15299
6th Cir.2012Background
- Plaintiffs, on behalf of the City’s employees and retirees, seek the value of 870,021 Anthem shares issued to the City in Anthem’s 2001 demutualization.
- City had a Master Group Contract for health benefits with CMIC; CMIC bylaws defined a policyholder as the member with voting and equity rights in CMIC.
- Pre-merger grandfather clause preserved City membership rights through CMIC/Associated merger, constraining post-merger rights.
- Anthem demutualized as an Indiana mutual to stock conversion; Indiana DOIs approved the plan and designated eligible statutory members to receive proceeds.
- Plaintiffs contend Ohio law governs ownership and entitlement to demutualization proceeds despite Indiana demutualization law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who was the policyholder for the group policy? | Plaintiffs: employees/policyholders after merger. | Court: City remained policyholder via bylaws and grandfather rights. | City was the policyholder pre- and post-merger. |
| Are employees Class A or Class B eligible for demutualization proceeds? | Group A employees are grandfathered and entitled to proceeds. | Employees are not policyholders; post-merger employees not entitled. | Employees not entitled to demutualization proceeds. |
| Did post-merger employees (Group B) gain new membership rights triggering demutualization rights? | Merger documents gave equity rights to certain employees. | Merger language did not create new employee membership rights. | No new membership rights created; Group B excluded. |
| What law governs the demutualization process? | Ohio law controls demutualization. | Indiana law governs demutualization as Anthem was Indiana mutual. | Indiana law governs; Ohio law not applied. |
Key Cases Cited
- Burris v. Grange Mut. Cos., 546 N.E.2d 83 (Ohio 1989) (contractual interpretation of policyholder rights)
- Greathouse v. City of East Liverpool, 823 N.E.2d 539 (Ohio Ct. App. 2004) (city as policyholder before merger; grandfather rights recognized)
- Talley v. Teamsters, Chauffers, Warehousemen, and Helpers, Local No. 377, 357 N.E.2d 44 (Ohio 1976) (certificate vs. policy controls; group contract governs)