88 Hawai'i 489, Queen's Medical Center v. Kagawa, 21034

• Decision Date: 23 September 1998
• Docket Number: No. 21034,21034
• Citation: 967 P.2d 686
• Parties: 88 Hawai'i 489 The QUEEN'S MEDICAL CENTER, Plaintiff-Appellant, v. June Tokiyo KAGAWA, Defendant-Appellee.
• Court: Hawaii Court of Appeals

Page 686

967 P.2d 686

88 Hawai'i 489

The QUEEN'S MEDICAL CENTER, Plaintiff-Appellant, v. June Tokiyo KAGAWA, Defendant-Appellee.

No. 21034.

Intermediate Court of Appeals of Hawai'i.

Sept. 23, 1998.

Reconsideration Denied Oct. 7, 1998.

Mark D. Clement, Honolulu, on the briefs, for plaintiff-appellant.

Judith Ann Pavey (Pavey & Glickstein), Honolulu, on the brief, for defendant-appellee.

Before WATANABE, ACOBA AND KIRIMITSU, JJ.

ACOBA, Judge.

We hold that pursuant to the plain and unambiguous terms of Hawai'i Revised Statutes (HRS) § 572-24 (1993), the spousal liability statute, Defendant-Appellee June Tokiyo Kagawa (Wife) is liable to pay for "necessaries," in this case, services which were provided by Plaintiff-Appellant The Queen's Medical Center (QMC) to her now deceased husband, Wendell I. Kagawa (Husband). In our view, such a construction comports with the underlying purposes of the spousal liability statute, which are to enforce the duty owed by husband and wife to support each other, to encourage providers of goods and services to extend necessaries to needy spouses, and to compensate providers for such goods and services. Accordingly, we vacate the July 21, 1995 findings of fact (findings), conclusions of law (conclusions), and judgment, and the September 10, 1997 final judgment of the first circuit court (the court) ordering Wife to pay QMC a sum in the amount of $18,500, Husband's anticipated proceeds if a divorce action between Wife and Husband had been completed, as satisfaction of Husband's debt. We remand the case for a determination of the amount to be awarded QMC for its services in light of our opinion.

I.

A.

The case was tried on June 19, 1995 by stipulating to documents in the court record. ¹ As best as can be ascertained, the following matters are relevant.

Husband and Wife (collectively, the Kagawas) were married in 1977. During the course of the marriage, Wife claimed to be primarily responsible for the Kagawas' sustenance. According to Wife, she paid the majority of the Kagawas' expenses, with Husband occasionally contributing to the payment of utility and grocery bills. Initially, Wife included Husband as a covered person under her health insurance policy (the policy) with the Hawaii Medical Service Association (HMSA).

A few years after the marriage began, Wife discontinued her joint checking account with Husband. From this point forward, Wife indicated that the Kagawas maintained separate finances and assets, and that at no point in the marriage did she loan or give Husband money.

In July 1989, Wife informed Husband that she wanted to obtain a divorce, and requested that he vacate the marital residence. Wife stated she informed Husband that she was going to "remove" him from the policy, and that he should obtain his own health insurance coverage. The only direct evidence that Husband agreed to obtain his own health insurance coverage came from Wife's testimony at her deposition. Through her employer, Wife requested that Husband be removed from the policy. In 1990, Wife discovered that, "mistakenly," Husband's name had not been deleted from the policy. Wife soon thereafter personally ensured that Husband's coverage under the policy was terminated. There is no evidence as to whether Husband attempted to secure his own health insurance coverage at that time.

Wife filed a complaint for divorce on March 11, 1991. On May 31, 1991, Wife signed an "Agreement Incident to Divorce" (the agreement), which Husband also signed on June 3, 1991. ² The undated agreement stated that "[e]ach party shall be responsible for and shall assume and pay his or her respectively-incurred debts, and shall indemnify and hold the other party harmless from any claims made against the non-responsible party." Husband also signed a "Waiver of Appearance," stating that he had no objection to the family court entering a final decree of divorce without his presence. Wife delivered the agreement and the Waiver of Appearance to her divorce lawyers by June 3, 1991.

B.

On June 5, 1991, Husband required emergency hospitalization and was admitted to QMC. QMC acknowledged that Husband's admission was considered "urgent," and that he would have been admitted regardless of his insurance coverage, marital status, or ability to pay the bill.

Although not made a part of the findings, the record reflects that Mr. Liuone Faagai, a patient registrar for QMC, testified that in an urgent care situation, the patient's physician will contact the hospital's "bed control department" to ascertain whether there is any available bed space. If there is availability, "in anticipation" of the patient's arrival, QMC will determine if there is "an account already available," and will "reactivate [the] old account." This way, QMC has simply to "go over all of the information" with the patient to verify its accuracy. Mr. Faagai further testified that "[a]ccording to [his] standard practice and training, [he] confirmed all of the information contained in [the "Authorization for Admission and Treatment Form" (the admission form) ] with [Husband]."

The admission form states Husband's marital status as "married" and his "next of kin" as Wife. It also lists Husband's "first insurance" as HMSA and his "second insurance" as "self-pay." ³ Mr. Faagai asserted in a June 16, 1995 affidavit, that "[he] prepared the [a]dmission [f]orm prior to [Husband's] arrival at the hospital by retrieving most of the information from the computer system. The fact that the information was already available on the computer means that [Husband] must have been treated at [QMC] on a prior occasion."

Mr. Faagai stated "that [he] reviewed the entire [a]dmission [f]orm with [Husband], and he confirmed/verified that all of the information contained therein was accurate and current." Although Mr. Faagai "[could] not specifically remember [Husband]," he based his testimony on "routine procedures that [he] would follow[.]"

The court also made no finding as to whether Husband presented an HMSA insurance card to QMC at the time of his admission. However, according to Mr. Faagai's affidavit, "[Husband] presented an insurance card indicating that he had insurance with HMSA. A copy of the card was made and put into [his] file." The card, attached as "Exhibit 2" to Mr. Faagai's affidavit, listed the "Subscriber" as Wife. The membership number of "9567041" was indicated on the face of the card, as was the group number of "42519." "Family" was written in the "contract" box of the card, and the plan was effective in July 1986. The date on the bottom of the card read "9/16/87," but it is not clear from the record as to what this date refers.

When Husband was admitted to QMC, he and Wife were not physically separated. Wife testified at her deposition that she asked Husband to secure his own residence, but that he had continued to reside at the marital residence until his hospitalization. Upon discovering that Husband had no hope of recovery, Wife testified that she found it unnecessary to pursue a divorce action against someone who would soon be deceased.

"[A] few days prior to [Husband's] demise," Wife notified her attorney that she wished to terminate the divorce action. The agreement that had been signed by Husband and Wife was thus never filed in court. According to Wife, financial liability for debts incurred by Husband "never entered [her] mind." The divorce proceeding against Husband was dismissed on September 14, 1991. ⁴

On June 25, 1991, approximately three weeks after his admission to QMC, Husband passed away, leaving a hospital debt of $151,870.65. Wife claimed that QMC did not inquire into Husband's health insurance coverage or his ability to pay additional uncovered expenses during Husband's hospitalization or immediately following his death. Again, although not made a part of the findings, Rita Albina, a patient account representative for QMC, testified she typically waits to contact the family of a deceased patient concerning an outstanding debt "to give them time to do the burial and get over their grief." She stated that generally, there is "no reason to call [the family] right when the patient passes away [to] discuss bills with them." According to Wife, QMC contacted her about Husband's debt approximately three months after his death.

C.

After Wife refused to pay QMC for Husband's hospital stay, QMC commenced an action to recover payment for Husband's medical services plus interest, costs, and attorney's fees.

QMC filed its first motion for summary judgment on December 16, 1993. In its supporting memorandum, QMC first argued, as it similarly maintains on appeal, that "[HRS] § 572-24 imposes a mandatory duty on [Wife] to pay the debts contracted by [Husband] for medical treatment."

On February 3, 1994, Wife filed a cross-motion for summary judgment. In her supporting memorandum, she argued that Hawai'i has traditionally looked to "all of the facts and equities of the situation" in determining whether one spouse should be held liable for the debts of the other spouse. She maintained that the Kagawas were on the "verge of divorcing[,]" and that they had "all but completed their divorce when [Husband] was taken ill." According to Wife, her removal of Husband from the policy "manifest[ed] the couple's intent that each person would be responsible for their [sic] own medical expenses." Further, Wife argued that QMC relied solely on Husband's credit when it admitted him, precluding QMC from seeking payment from Wife. In her brief, Wife discussed traditional contract rules of reliance and mistake, arguing that QMC should bear the risk of its mistake concerning Husband's insurance coverage since they "took his 'word' that he had valid HMSA coverage." Lastly, Wife claimed that she would suffer "significant hardship" if she were forced to pay Husband's bill.

QMC filed its opposition memorandum on April 12, 1994, contending that in the absence of a final decree...