Justia Contracts Opinion Summaries

A hospital in Siskiyou County, California, filed a lawsuit against the County of Siskiyou and other defendants, challenging the practice of bringing individuals with psychiatric emergencies to its emergency department under the Lanterman-Petris-Short (LPS) Act. The hospital argued that it was not equipped or licensed to provide the necessary psychiatric care and sought to prevent the county from bringing such patients to its facility unless they had a physical emergency condition. The hospital also sought reimbursement for the costs associated with holding these patients.The Siskiyou County Superior Court denied the hospital's motion for a preliminary injunction, which sought to stop the county from bringing psychiatric patients to its emergency department. The court found that the hospital had not demonstrated a likelihood of success on the merits and that the burden on the county and the potential harm to the patients outweighed the hospital's concerns.The hospital's complaint included several causes of action, including violations of Medicaid laws, disability discrimination laws, mental health parity laws, and section 17000 of the Welfare and Institutions Code. The hospital also alleged breach of an implied-in-fact contract for the costs incurred in providing post-stabilization services to psychiatric patients. The trial court sustained demurrers to the complaint without leave to amend, finding that the hospital failed to identify any clear legal mandate that the county or the Department of Health Care Services had violated.The California Court of Appeal, Third Appellate District, affirmed the trial court's judgment of dismissal. The appellate court concluded that the hospital had not identified any mandatory and ministerial duty that the county or the department had violated, which is necessary to obtain a writ of mandate. The court also found that the hospital's breach of contract claim failed because there were no allegations of mutual consent to an implied contract. Consequently, the hospital's appeal from the denial of its motion for a preliminary injunction was dismissed as moot. View "Siskiyou Hospital v. County of Siskiyou" on Justia Law

A healthcare consulting firm, Core Finance Team Affiliates, LLC (Core), provided data services to three Maine hospitals (the Hospitals) to support their claims for federal reimbursement for Medicare-eligible patients. Core's services included adjustments to the Hospitals' internal data, specifically annual hourly wage data and occupational mix survey (OMS) data. The Maine Hospital Association entered into a contract with Core, which included a contingent fee for OMS services. The Hospitals used Core's data but refused to pay the contingent fee, leading Core to file a complaint for breach of contract and unjust enrichment.The Superior Court (Cumberland County) held a jury trial on the breach of contract claim, resulting in a verdict for the Hospitals, finding they were not contractually obligated to pay the contingent fee for OMS services. Subsequently, the Business and Consumer Docket (Duddy, J.) held a bench trial on the unjust enrichment claim, awarding Core $566,582.25 based on the increased federal reimbursement the Hospitals received due to Core's services. The court ruled that the Hospitals waived the issue of quantum meruit by not pleading it as an affirmative defense.The Maine Supreme Judicial Court reviewed the case and vacated the judgment. The court held that the trial court erred in awarding restitution for unjust enrichment without first addressing the adequacy of a quantum meruit claim. The court emphasized that quantum meruit, a legal remedy, should be considered before unjust enrichment, an equitable remedy. The court also found that the award exceeded the amount Core would have received under the proposed contract and was improperly based on the Hospitals' increased federal reimbursement rather than the market value of Core's services. The case was remanded for entry of judgment in favor of the Hospitals. View "Core Finance Team Affiliates, LLC v. Maine Medical Center" on Justia Law

Dignity Health, operating as French Hospital Medical Center, filed a complaint against orthopedic surgeon Troy I. Mounts, M.D., and his corporation to recover an advance paid under their Physician Recruitment Agreement. Mounts filed a cross-complaint alleging retaliation for his complaints about patient care quality, interference with his economic opportunities, and unlawful business practices. Dignity responded with an anti-SLAPP motion to strike the cross-complaint, which the trial court initially denied. The appellate court reversed this decision and remanded the case for further consideration.Upon remand, the trial court concluded that Mounts had not demonstrated a probability of prevailing on his claims. The court found that Dignity's actions were protected by the litigation privilege, the common interest privilege, and were barred by the statute of limitations. Consequently, the court granted Dignity's motion to strike the cross-complaint and ordered Mounts to pay Dignity's attorney fees and costs.The California Court of Appeal, Second Appellate District, Division Six, reviewed the case. The court affirmed the trial court's decision, holding that all of Mounts' claims were based on conduct protected by the litigation privilege (Civil Code § 47, subd. (b)) and the common interest privilege (Civil Code § 47, subd. (c)). The court also found that Dignity's actions were immune under federal law (42 U.S.C. § 11137) and that some claims were barred by the statute of limitations. The appellate court upheld the trial court's orders granting the motion to strike and awarding attorney fees to Dignity. View "Dignity Health v. Mounts" on Justia Law

Farzam Salami received emergency services at Los Robles Regional Medical Center on three occasions in 2020. He signed a conditions of admission contract agreeing to pay for services rendered, as listed in the hospital's chargemaster. Los Robles billed him for these services, including a significant emergency services fee (EMS fee). Salami paid part of the discounted bill but disputed the EMS fee, claiming it covered general operating costs rather than services actually rendered. He argued that had he known about the EMS fee, he would have sought treatment elsewhere.Salami sued Los Robles in December 2021 for breach of contract and declaratory relief. The trial court sustained Los Robles's demurrer to the first amended complaint (FAC), finding that Salami did not allege he performed his duties under the contract or that Los Robles failed to perform its duties. The court also found that the breach of contract claim could not be cured by amendment. Salami was granted leave to amend to assert claims under the Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA). In his third amended complaint (TAC), Salami alleged that Los Robles failed to disclose the EMS fee adequately.The Court of Appeal of the State of California, Second Appellate District, Division Six, reviewed the case. The court affirmed the trial court's decision, holding that Los Robles had no duty to disclose the EMS fee beyond including it in the chargemaster. The court referenced recent cases, including Moran v. Prime Healthcare Management, Inc., which held that hospitals are not required to provide additional signage or warnings about EMS fees. The court concluded that Los Robles complied with its statutory and regulatory obligations, and Salami's claims under the UCL and CLRA failed as a result. The judgment in favor of Los Robles was affirmed. View "Salami v. Los Robles Regional Medical Center" on Justia Law

A group of retired firefighters from the City of Columbia claimed that the City had promised them free lifetime health insurance. This promise was allegedly made through verbal statements, newsletters, and retirement letters. The dispute arose when the City Council required all active and retired employees under 65 to contribute to their health insurance premiums, and later extended this requirement to Medicare supplemental coverage for retirees over 65. The firefighters argued that the City should be held to its promise under the doctrine of promissory estoppel.Initially, the Circuit Court granted summary judgment in favor of the City, but the Court of Appeals reversed this decision, allowing the promissory estoppel claim to proceed. After a nonjury trial, Judge Sprouse ruled in favor of the City, and the Court of Appeals affirmed this decision, stating that the firefighters had not proven an unambiguous promise or reasonable reliance on such a promise.The Supreme Court of South Carolina reviewed the case and affirmed the Court of Appeals' decision but modified the reasoning. The Supreme Court found that the firefighters did not prove the City made a clear promise of free lifetime health insurance. Additionally, the Court emphasized that the City Council, not individual employees, had the authority to make such promises. The Court also clarified that promissory estoppel claims need only be proven by the greater weight of the evidence, not by clear and convincing evidence, except in cases involving specific performance of land transfers. The Court concluded that the firefighters had no right to rely on statements made by City employees who lacked the authority to bind the City. View "Cruz v. City of Columbia" on Justia Law

The case involves Image API, LLC, a company that provided services to the Texas Health and Human Services Commission (HHSC) from 2009 to 2015. Image's job was to manage a processing center for incoming mail related to Medicaid and other benefits programs. The agreement between the parties stated that HHSC would compensate Image using its “retrospective cost settlement model”. In 2016, HHSC notified Image that an independent external firm would conduct an audit of Image’s performance and billing for the years 2010 and 2011. The audit concluded that HHSC had overpaid Image approximately $440,000 in costs relating to bonuses, holiday pay, overtime, and other unauthorized labor expenses. HHSC then sought to recoup the overpayments by deducting from payments on Image’s invoices.The trial court granted HHSC’s motion for summary judgment and signed a final judgment for the commissioner. The court of appeals reversed the trial court’s judgment and dismissed Image’s entire suit for want of jurisdiction. Image sought review.The Supreme Court of Texas held that Image is a Medicaid contractor under Section 32.0705(a), and that the deadline in Section 32.0705(d) for auditing HHSC’s Medicaid contractors is mandatory. However, the court ruled that HHSC’s failure to meet the deadline does not preclude it from using the result of the audit or pursuing recoupment of overcharges found in the audit. The court affirmed the part of the court of appeals’ judgment dismissing Image’s claims arising from the 2016 audit for lack of jurisdiction, reversed the part of the judgment dismissing the remainder of Image’s suit, and remanded to the trial court for further proceedings. View "IMAGE API, LLC v. YOUNG" on Justia Law

In this case, Amy Bricker, a high-ranking executive, moved from Cigna Corporation to CVS Pharmacy, Inc., both of which are major healthcare conglomerates. Cigna sued Bricker and CVS, seeking to enforce a non-compete agreement that Bricker had signed while employed at Cigna. The district court granted a temporary restraining order and a preliminary injunction to preserve the status quo and protect Cigna's business interests. Bricker and CVS appealed the preliminary injunction.Previously, the district court had found that Cigna's protected interests were numerous and substantial, spanning multiple lines of products and services. It also found that Bricker likely retained a considerable amount of protected information from her time at Cigna. The court concluded that Cigna had a fair chance of demonstrating that the non-compete agreement was reasonable and enforceable under Missouri law.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court agreed with the lower court's findings and concluded that the non-compete agreement was likely enforceable under Missouri law. The court also found that Cigna would likely suffer irreparable harm if the preliminary injunction was not granted, as Bricker could potentially disclose Cigna's trade secrets to CVS. The court concluded that the balance of equities favored Cigna and that the public interest supported the enforcement of contractual obligations. Therefore, the court held that the district court did not abuse its discretion in granting the preliminary injunction. View "Cigna Corporation v. Bricker" on Justia Law

The case involves Bristol SL Holdings, Inc., the successor-in-interest to Sure Haven, Inc., a defunct drug rehabilitation and mental health treatment center, and Cigna Health and Life Insurance Company and Cigna Behavioral Health, Inc. Bristol alleged that Sure Haven's calls to Cigna verifying out-of-network coverage and seeking authorization to provide health services created independent contractual obligations. Cigna, however, denied payment based on fee-forgiving, a practice prohibited by the health plans. Bristol brought state law claims for breach of contract and promissory estoppel against Cigna.The district court initially dismissed Bristol’s claims, but the Ninth Circuit Court of Appeals reversed the dismissal, holding that Bristol had derivative standing to sue for unpaid benefits as Sure Haven’s successor-in-interest. On remand, the district court granted Cigna’s motion for summary judgment, ruling that the Employee Retirement Income Security Act of 1974 (ERISA) preempted Bristol’s state law claims.On appeal, the Ninth Circuit Court of Appeals affirmed the district court's decision. The court held that Bristol’s state law claims were preempted by ERISA because they had both a “reference to” and an “impermissible connection with” the ERISA plans that Cigna administered. The court reasoned that Bristol’s claims were not independent of an ERISA plan because they concerned the denial of reimbursement to patients who were covered under such plans. The court also held that allowing liability on Bristol’s state law claims would interfere with nationally uniform plan administration, a central matter of plan administration. View "Bristol SL Holdings, Inc. v. Cigna Health and Life Insurance Co." on Justia Law

A teacher, who was involved in a car accident caused by a third party, sustained serious injuries. The teacher was covered under his employer’s self-insured healthcare plan, which stipulates that the employer has a right of reimbursement for medical expenses if a covered person receives a separate settlement. The employer paid for the teacher’s medical expenses and the teacher also received $500,000 in settlements from two separate insurers. The teacher requested that the employer waive its right to reimbursement twice, but the employer never agreed. Two years after the teacher notified the employer of his insurance settlements, the employer requested reimbursement and later sued him for breach of contract.The Superior Court of the State of Alaska granted summary judgment to the employer on the issue of whether the teacher breached the contract to reimburse the employer. The employer then moved for summary judgment on the amount of damages, providing an affidavit from its Plan Administrator and a claims ledger. The teacher opposed the motion, providing his own affidavit and a self-created spreadsheet in support of his argument that some of the medical costs paid by the employer were not associated with the accident. The court granted the employer’s motion for summary judgment on contract damages.The Supreme Court of the State of Alaska affirmed the lower court’s summary judgment order regarding breach of contract, but held that the teacher raised a genuine dispute of material fact regarding damages. Therefore, the Supreme Court reversed and remanded the lower court’s summary judgment order regarding contract damages. View "Fischer v. Kenai Peninsula Borough School District" on Justia Law

The Supreme Court of California considered whether a health care agent, who had signed two contracts with a skilled nursing facility on behalf of a principal, had the authority to sign an optional, separate arbitration agreement. The first contract ensured the principal’s admission to the facility, while the second made arbitration the exclusive method for resolving disputes with the facility. The court concluded that the execution of the arbitration contract was not a "health care decision" within the authority of the health care agent. Therefore, the facility’s owners and operators could not rely on the agent’s execution of the arbitration agreement to compel arbitration of claims arising from the principal’s alleged maltreatment. The court affirmed the judgment of the Court of Appeal and remanded the case for further proceedings. View "Harrod v. Country Oaks Partners, LLC" on Justia Law