Ninth Circuit Holds Medical Providers to Terms of Oral Settlement with Health Insurance Company

In Infoneuro Group, DBA Beverly Hills Pain Inst. & Neurology, a California Corporation; et al. v. Aetna Life Insurance Company, No. 22-55239, 2023 WL 2052781 (9th Cir. Feb. 16, 2023), Plaintiff-Appellants Playa Advanced Surgical Institute and affiliated parties, collectively referred to as “Playa,” are a medical practice, surgery center, and urgent care facility that sued Aetna Life Insurance Company (“Aetna”) under ERISA seeking reimbursement for medical charges incurred by numerous patients who were members of health plans insured or administered by Defendant Aetna Life Insurance Company. The district court granted summary judgment to Aetna on most of Playa’s claims because of lack of standing. The parties then engaged in a settlement conference with a Magistrate Judge, at which time they entered into an oral settlement agreement on the record and agreed to settle and dismiss all of their claims and counterclaims. After the settlement conference, the parties could not agree on written language to execute their settlement. Aetna moved to enforce the settlement and the district court granted Aetna’s motion. Playa appealed the district court’s orders on summary judgment and the motion to enforce the settlement. The Ninth Circuit affirmed the dismissal of the case because the settlement and joint stipulation required Playa to dismiss all of its claims in this case.

The Ninth Circuit noted that it reviews a district court’s enforcement of a settlement for abuse of discretion. Under California law, the parties must consent to any agreement to settle a legal dispute. Such mutual assent consists of a communicated offer and acceptance, which is “absolute and unqualified.” Some protest or grumbling with an acceptance does not invalidate the agreement. The court reviewed the settlement conference transcript and found that Playa’s representative, Dr. Guven Uzun, “understood and accepted the terms of the oral agreement, which created a binding settlement.” Although Dr. Uzun expressed some hesitancy during the conference, he ultimately accepted the terms unequivocally and without condition. The court rejected Playa’s argument that there was no qualified acceptance because Dr. Uzun felt compelled to accepted the settlement involuntarily. The record shows that despite Dr. Uzun’s expressed dissatisfaction with the settlement, the record shows that he knew what he was doing when he agreed to the settlement. The failure of the parties to sign a written settlement that executed the oral agreement has no effect on the validity of the parties’ oral agreement.