Justia Contracts Opinion Summaries

Appellant Dameron Hospital Association (Dameron) required patients or their family members to sign Conditions of Admissions (COAs) when Dameron provided the patients’ medical care. The COAs at issue in this case contained language that assigned to Dameron direct payment of uninsured and underinsured motorist (UM) benefits and medical payment (MP) benefits that would otherwise be payable to those patients under their automobile insurance policies. Dameron treated five of California State Automobile Association Inter-Insurance Bureau's ("CSAA") insureds for injuries following automobile accidents. Those patients had UM and/or MP coverage as part of their CSAA coverage, and Dameron sought to collect payment for those services from the patients’ UM and/or MP benefits at Dameron’s full rates. Instead of paying to Dameron the lesser of either all benefits due to the patients under their UM and MP coverage, or Dameron’s full charges, CSAA paid portions of those benefits directly to the patients which left balances owing on some of Dameron’s bills. Dameron sued CSAA to collect UM and MP benefits it contended CSAA owed Dameron under the assignments contained in the COAs. The trial court concluded that Dameron could not enforce any of the assignments contained in the COAs and entered judgment in CSAA’s favor following CSAA’s successful motion for summary judgment. The Court of Appeal held Dameron could not collect payment for emergency services from the UM or MP benefits due to patients that were covered under health insurance policies. Further, the Court held: (1) the COA forms were contracts of adhesion; (2) it was not within the reasonable possible expectations of patients that a hospital would collect payments for emergency care directly out of their UM benefits; and (3) a trier of fact might find it was within the reasonable expectations of patients that a hospital would collect payments for emergency care directly out of their MP benefits. Accordingly, the Court concluded Dameron could not maintain causes of action to collect MP or UM benefits due to four of the five patients directly from CSAA. However, consistent with this opinion, the trial court could consider whether an enforceable assignment of MP benefits was made by one adult patient. View "Dameron Hospital Assn. v. AAA Northern Cal. etc." on Justia Law

Two cases were consolidated for the Mississippi Supreme Court's review. In the first appeal, Singing River MOB, LLC (MOB), argued that the leases between itself and Singing River Health System (SRHS) and the lease between Jackson County, Mississippi (County), and SRHS were valid and that the chancery court erred by finding the leases invalid under Mississippi’s “minutes rule.” In the second appeal, Jackson County and SRHS contended the chancery court erred by fashioning its own equitable relief as a result of the first ruling. MOB also raised its own objection as to the manner in which the equitable relief was fashioned. After careful review, the Supreme Court affirmed and remanded the partial summary-judgment order as to the first appeal (No. 2019-IA-01630-SCT); however, the Court reversed and remanded that order as to the second appeal (No. 2019-IA-01653-SCT). View "Singing River MOB, LLC v. Jackson County" on Justia Law

A patient sued a hospital after learning that a hospital employee intentionally disclosed the patient’s health information in violation of the Health Insurance Portability and Accountability Act (HIPAA). The patient alleged the disclosure breached the hospital’s contractual obligations to him. The superior court instructed the jury to return a verdict for the hospital if the jury found that the employee was not acting in the course and scope of employment when she disclosed the patient’s information. The jury so found, leading to judgment in the hospital’s favor. The Alaska Supreme Court found the jury instruction erroneously applied the rule of vicarious liability to excuse liability for breach of contract. "A party that breaches its contractual obligations is liable for breach regardless of whether the breach is caused by an employee acting outside the scope of employment, unless the terms of the contract excuse liability for that reason." The Court therefore reversed judgment and remanded for further proceedings, in particular to determine whether a contract existed between the patient and hospital and, if so, the contract’s terms governing patient health information. View "Guy v. Providence Health & Services Washington" on Justia Law

This appeal presented an issue of first impression for the Court of Appeals: does a commercial property insurance policy provide coverage for a business’s lost income due to the COVID-19 pandemic? After review of the specific insurance policy that California Mutual Insurance Company (California Mutual) issued to The Inns by the Sea (Inns) for its five lodging facilities, the Court determined Inns could not recover from California Mutual for its lost business income resulting from the COVID-19 pandemic. Further, Inns did not identify any manner in which it could amend its complaint to state a claim for coverage. Accordingly, the Court affirmed the trial court’s order sustaining California Mutual’s demurrer without leave to amend. View "The Inns by the Sea v. Cal. Mutual Ins. Co." on Justia Law

Healthcare revenue cycle management contractors manage billing and behind-the-scenes aspects of patient care, from pre-registering patients to reviewing and approving documentation upon release. Reid Hospital contracted with Dell, a revenue cycle management contractor. Their contract limited both sides’ damages in a breach of contract action in the absence of willful misconduct or gross negligence. Dell sold much of its portfolio to Conifer in 2012 while Dell was still losing money on the Reid contract. Conifer began reducing staff and neglecting duties; there was a slowdown throughout the revenue-management cycle and in processing patients’ discharge forms, leading to longer hospital stays that third-party payors refused to reimburse fully. After two years, Reid took its revenue operation back in-house. Reid's consultant found significant errors in Conifer’s work. Reid sued for breach of contract, claiming that Conifer’s actions caused the hospital to lose tens of millions of dollars. The court granted Conifer summary judgment, reading the contract as defining all claims for lost revenue as claims for “consequential damages,” prohibited absent “willful misconduct.”The Seventh Circuit reversed. Even if lost revenue is often considered consequential, this was a contract for revenue collection services and did not define all lost revenue as an indirect result of any breach. Lost revenue would have been the direct and expected result of Conifer’s failure to collect and process that revenue as required under the contract. The parties did not intend to insulate Conifer entirely from damages. View "Reid Hospital and Health Care, Inc. v. Conifer Revenue Cycle Solutions, LLC" on Justia Law

The Supreme Court affirmed the decision of the district court granting Defendants' motion for summary judgment and dismissing Plaintiff's claims for negligent misrepresentation, fraudulent misrepresentation, and breach of contract, holding that Plaintiff's claims were subject to the two-year statute of limitations set forth in Iowa Code 614.1(9) and were untimely.On Defendants' motion for summary judgment, the district court held that Plaintiff's causes of action arose out of patient care and were barred by section 614.1(9), the two-year statute of limitations governing malpractice action. The Supreme Court affirmed, holding that each of Plaintiff's allegations originated from representations regarding patient care and the patient care Defendants provided, and therefore, Plaintiff's claims were untimely under section 614.1(9). View "Kostoglanis v. Yates" on Justia Law

Plaintiff Anna Sandoval-Ryan signed admission documents on behalf of her brother, Jesus Sandoval, following his admission to Sacramento Post-Acute (Post- Acute), a skilled nursing facility owned by Oleander Holdings, LLC (Oleander) and Plum Healthcare Group, LLC (Plum Healthcare). Among the documents plaintiff signed were two agreements to arbitrate claims arising out of the facility’s care for Sandoval. Sandoval’s condition deteriorated while being cared for at the facility, and he was transferred to a hospital where he later died. Plaintiff sued defendants Post-Acute, Oleander, and Plum Healthcare in superior court; she brought claims on her own behalf and on behalf of Sandoval. Defendants moved to compel arbitration of plaintiff’s claims. The trial court denied the motion on the basis the agreements were invalid because they were secured by fraud, undue influence, and duress. Defendants appealed the trial court’s ruling, contending the parties agreed to allow the arbitrator to decide threshold questions of arbitrability, and the trial court erred by deciding the issue instead. Absent clear and unmistakable language delegating threshold arbitrability issues to the arbitrator, the Court of Appeal concluded defendants’ claim lacked merit. View "Sandoval-Ryan v. Oleander Holdings" on Justia Law

In this action brought against a long-term care facility by Kenneth, as administrator of Estate of Tommy Patton, the Supreme Court reversed in part the court of appeals' decision concluding that an arbitration agreement was enforceable as to Kenneth's individual wrongful death claim but that the agreement was not enforceable as to the Estate's claims, holding that the agreement was valid as to both claims.Kenneth signed an arbitration agreement at the time his father, Tommy, was admitted to Signature HealthCARE of East Louisville's long-term care facility. Tommy later suffered a fall and died a few weeks later. Kenneth brought sued Signature, alleging negligence and wrongful death. Signature filed a motion to compel arbitration. The trial court denied the motion in its entirety. The court of appeals reversed in part, concluding that the arbitration agreement was not enforceable against the Estate but that Kenneth's wrongful death claim was arbitrable because he executed the arbitration agreement in his individual capacity. The Supreme Court reversed in part, holding that both the Estate's and Kenneth's individual claims were subject to arbitration because the arbitration agreement was valid and enforceable as to the Estate claim and as to Kenneth's individual wrongful death claim. View "LP Louisville East, LLC v. Patton" on Justia Law

Plaintiffs Rafi Ghazarian and Edna Betgovargez had a son, A.G., with autism. A.G. received applied behavior analysis (ABA) therapy for his autism under a health insurance policy (the policy) plaintiffs had with defendant California Physicians’ Service dba Blue Shield of California (Blue Shield). Mental health benefits under this policy are administered by defendants Magellan Health, Inc. and Human Affairs International of California (collectively Magellan). By law, the policy had to provide A.G. with all medically necessary ABA therapy. Before A.G. turned seven years old, defendants Blue Shield and Magellan approved him for 157 hours of medically necessary ABA therapy per month. But shortly after he turned seven, defendants denied plaintiffs’ request for 157 hours of therapy on grounds only 81 hours per month were medically necessary. Plaintiffs requested the Department of Managed Health Care conduct an independent review of the denial. Two of the three independent physician reviewers disagreed with the denial, while the other agreed. As a result, the Department ordered Blue Shield to reverse the denial and authorize the requested care. Plaintiffs then filed this lawsuit against defendants, asserting breach of the implied covenant of good faith and fair dealing against Blue Shield, and claims for intentional interference with contract and violations of Business and Professions Code section 17200 (the UCL) against defendants. Defendants each successfully moved for summary judgment. As to the bad faith claim, the trial court found that since one of the independent physicians agreed with the denial, Blue Shield acted reasonably as a matter of law. As to the intentional interference with contract claim, the court found no contract existed between plaintiffs and A.G.’s treatment provider with which defendants could interfere. Finally, the court found the UCL claim was based on the same allegations as the other claims and thus also failed. After its review, the Court of Appeal concluded summary judgment was improperly granted as to the bad faith and UCL claims. "[I]t is well established that an insurer may be liable for bad faith if it unfairly evaluates a claim. Here, there are factual disputes as to the fairness of defendants’ evaluation. . . .There are questions of fact as to the reasonability of these standards. If defendants used unfair criteria to evaluate plaintiffs’ claim, they did not fairly evaluate it and may be liable for bad faith." Conversely, the Court found summary judgment proper as to the intentional interference with contract claim because plaintiffs failed to show any contract with which defendants interfered. View "Ghazarian v. Magellan Health" on Justia Law

Appellants-patients Nathaniel Valencia and Emily Williams were self-pay patients who received emergency medical services at Saint Alphonsus Medical Center—Nampa, Inc. (“Saint Alphonsus”) in 2015. During their respective visits, Patients agreed to pay for “all charges incurred” for services rendered to them. Patients were billed in accordance with Saint Alphonsus’ “chargemaster” rates. Patients sought declaratory relief requesting the district court to rule Saint Alphonsus was only entitled to bill and seek collection of the reasonable value of the treatment provided to self-pay patients. Saint Alphonsus moved the district court to dismiss the complaint pursuant to Idaho Rule of Civil Procedure 12(b)(6). The district court treated the motion to dismiss as a motion for summary judgment pursuant to I.R.C.P. 12(d). Ultimately, the district court granted summary judgment for Saint Alphonsus, and Patients timely appealed. Finding no reversible error, the Idaho Supreme Court affirmed. View "Williams v. St. Alphonsus Medical Center" on Justia Law