Elrod v. WakeMed

Decision Date22 September 2021
Docket Number5:20-CV-413-FL
Citation561 F.Supp.3d 592
Parties Peggy ELROD; Yvonne Bertolo; Janine Palmer; Justin Palmer; and All Similarly Situated Persons Within the Proposed Class, Plaintiffs, v. WAKEMED; WakeMed Specialty Physicians, LLC d/b/a WakeMed Physician Practices; WakeMed Specialists Group, LLC d/b/a WakeMed Physician Practices; Argos Health, Inc.; Allstate Property and Casualty Insurance Company; Pennsylvania National Mutual Insurance Company; Unknown Defendants 1 Through 25, Defendants.
CourtU.S. District Court — Eastern District of North Carolina

Arlene L. Velasquez-Colon, Kendra R. Alleyne, Law Office of Colon & Associates, Wake Forest, NC, for Plaintiffs.

Jeffrey R. Whitley, Troy D. Shelton, Matthew Nis Leerberg, Fox Rothschild LLP, Raleigh, NC, for Defendants WakeMed, WakeMed Specialty Physicians, LLC, WakeMed Specialists Group, LLC.

James C. Thornton, R. Robert El-Jaouhari, Cranfill Sumner & Hartzog LLP, Raleigh, NC, for Defendant Argos Health, Inc.

Elizabeth A. Martineau, Sharon Suh, Martineau King PLLC, Charlotte, NC, for Defendant Allstate Property and Casualty Insurance Company.

Richard Leonard Pinto, Pinto Coates Kyre & Bowers, PLLC, Greensboro, NC, for Defendant Pennsylvania National Mutual Insurance Company.


LOUISE W. FLANAGAN, United States District Judge This putative class action challenging emergency room billing practices is before the court on defendantsmotions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6). (DE 73, 75, 81, 83). The motions have been briefed fully, and in this posture the issues raised are ripe for ruling. For the following reasons, the motions are granted.1


Plaintiffs commenced this action in Wake County Superior Court on July 2, 2020, asserting common law claims seeking to set aside agreements for assignment of insurance benefits they executed at a hospital emergency room operated by defendants WakeMed, WakeMed Specialty Physicians, LLC, and WakeMed Specialists Group, LLC (collectively, "defendant WakeMed"). WakeMed filed a notice of removal in this court on July 28, 2020, on the basis that the complaint raises a substantial question as to the proper interpretation of federal law, including, the Emergency Medical Treatment and Labor Act, 42 U.S.C. § 1395dd, as well as statutes and regulations governing Medicare, 42 U.S.C. § 1395 et seq.

Plaintiffs filed the operative amended complaint on November 20, 2020, asserting the following claims: 1) declaratory judgment against all defendants; 2) breach of fiduciary duty against defendant WakeMed; and 3) fraud, conversion, and unfair and deceptive trade practices against defendants Argos Health, Inc. ("Argos") and WakeMed.2 As for relief, plaintiffs seek to "rescind or for the Court to set aside or strike the contractual provisions complained of within [a] general consent form at issue." (Compl. p. 35).3 Plaintiffs also seek to have the court impose a constructive trust upon defendants WakeMed and Argos "to be funded with the monies and insurance proceeds improperly collected from the Plaintiffs and proposed class members, such amounts to be returned to Plaintiffs and the proposed class members, with interest." (Id. ). Plaintiffs seek certification as a class action, compensatory, trebled, and punitive damages, as well as interest and fees.

Defendants Allstate Property and Casualty Insurance Company ("Allstate") and Pennsylvania National Mutual Insurance Company ("Penn National") filed their instant motions to dismiss, seeking dismissal for lack of jurisdiction and failure to state a claim. Defendant Argos filed its instant motions to dismiss for failure to state a claim, and defendant WakeMed seeks dismissal on the same basis and for lack of jurisdiction. In support of that part of its motion to dismiss for lack of jurisdiction, WakeMed relies upon an affidavit of Liz Watson ("Watson") who is "revenue cycle" director for WakeMed. (DE 83-1).

Plaintiffs responded in opposition to the motions to dismiss by defendants Allstate and Penn National, relying upon a Medicare claim detail, as well as correspondence between Argos, the insurance defendants, and plaintiffs. Plaintiffs responded in opposition to defendant WakeMed's motion to dismiss, relying upon correspondence from two doctors who treated plaintiff Justin Palmer. Plaintiffs responded in opposition to defendant Argos's motion to dismiss. Shortly thereafter WakeMed and Argos replied.

Following submission of the instant motions in April 2021, plaintiffs filed a surreply and defendant WakeMed filed a sur-surreply, with leave of court. Finally, plaintiffs filed the instant motion for leave to file a sur-sur-surreply on August 3, 2021, accompanied by a proposed sur-sur-surreply.


The facts alleged in the complaint may be summarized as follows.

Plaintiff Peggy Elrod ("Elrod") was involved in a motor vehicle accident on April 5, 2019, "and sought treatment that same day at one of [d]efendant WakeMed's emergency rooms." (Compl. ¶ 63). When she arrived at the emergency room, "she was terrified and in a panicked state because of potential internal bleeding complications stemming from her single-lead pacemaker and blood-thinning medication; complications posing a significant threat to life or function." (Id. ¶ 65).

"Notwithstanding, ... [p]laintiff Elrod was presented with numerous forms that needed to be signed in order for her to receive emergency medical treatment." (Id. ¶ 66). "Most of these forms were not presented to her in paper format, but rather were merely pulled up on [d]efendant WakeMed's employee's computer screen as the employee briefly mentioned what each form was, and directed [p]laintiff Elrod to sign the electronic signature pad." (Id. ).

"One of the electronic documents signed by [p]laintiff Elrod at [d]efendant WakeMed's emergency room during this process was [a] ‘general consent’ form" out of which this action arises (the "general consent form"). (Id. ¶ 67). The general consent form is comprised of 13 enumerated paragraphs, beginning with the first five as follows:

(Compl. Ex. 2 (DE 65-3) at 1). The general consent form then continues with the following four paragraphs, including an "Irrevocable Assignment of Insurance Benefits" (hereinafter, the "assignment of benefits"), which is the focus of plaintiffs’ claims in this case:

(Id. ). The final four enumerated paragraphs of the general consent comprise provisions for release of liability for valuables, termination of consent, "White Board" consent, and "Rehab Hospital" information. (Id. at 2).

The thirteen enumerated paragraphs are followed by an attestation as follows:

(Id. ). Because plaintiff Elrod signed on a touch screen, her signatures and printed name appear as follows in the medical record:

(Compl. Ex. 6 (DE 65-6) at 2).

Plaintiff Elrod received "emergency treatment on the day of the accident," and she again visited defendant WakeMed's "emergency room ... for emergency medical care believed to be a result of the accident," on April 22, 2019. (Compl. ¶¶ 68-69 n. 18). "Defendant WakeMed generated charges at the undiscounted rate totaling $19,314.48 for [p]laintiff Elrod's emergency treatment on the day of the accident," and charges $751.00 for her care on April 22, 2019, totaling $20,065.48 in aggregate charges. (Id. ).

On the dates of her motor vehicle accident and treatment, plaintiff Elrod "had a motor vehicle insurance policy with [defendant] Penn National that included ... coverage of $5,000" for "medical payments," also referenced in the complaint as "Med Pay coverage," and "Med Pay automotive insurance benefits." (Id. ¶¶ 29, 64, 91d). On April 25, 2019, defendant Argos, allegedly "representing itself as an agent of WakeMed, faxed a claim on behalf of [p]laintiff Elrod to [defendant] Penn National for the $20,065.48, stating in pertinent part: ‘Attached is a valid North Carolina Lien, UB's for med pay/PIP coverage, and an executed Assignment of Benefits.’ " (Id. ¶ 69).4 According to the complaint, on April 26, 2019, defendant Penn National "issued a check for $5000 to WakeMed and WakeMed Specialty Physicians, completely exhausting [p]laintiff Elrod's coverage under the MedPay provisions in her motor vehicle insurance policy." (Id. ¶ 70).

Plaintiff Justin Palmer had a similar experience with treatment in defendant WakeMed's emergency room. According to the complaint, "[o]n April 26, 2019, [plaintiff] Justin Palmer was seventeen years old and driving a vehicle with two of his friends inside when another vehicle severely T-boned [his] vehicle in an intersection, rendering [him] unconscious and bleeding as his friends pulled him from the mangled vehicle." (Id. ¶ 71). "Upon receiving a phone call, [plaintiff] Justin Palmer's mother, [plaintiff] Janine Palmer, rushed to the scene of the accident and witnessed her son bleeding from his head, while [emergency medical] personnel applied a neck brace before loading him onto a gurney, strapping him down, and loading him into an ambulance." (Id. ¶ 73). "Thereafter, [p]laintiff Janine Palmer rode in the back of the ambulance with [plaintiff] Justin [Palmer] to [d]efendant WakeMed's emergency room while [emergency medical] personnel administered immediate treatment." (Id. ).

"Upon arrival at Defendant WakeMed's emergency room, [plaintiff Janine] Palmer witnessed WakeMed's employees cut off her son's clothing and begin to remove the shards of glass embedded in [his] arm, shoulder, and head." (Id. ¶ 74). According to the complaint, plaintiff Janine Palmer "was then escorted to a small room by an employee of [d]efendant WakeMed and was directed to sign numerous patient registration documents while her son was being treated in an adjacent room." (Id. ¶ 75). "Defendant WakeMed's employee also brought a Clergyman into the room while [plaintiff Janine] Palmer was signing the documents, whose presence alone greatly intensified [her] anxiety and gravity of the critical emergency medical treatment...

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1 cases
  • Elrod v. WakeMed
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • January 31, 2023
    ...declaratory judgment claim, the district court reasoned that Patients' signatures manifested their assent to the GCF. Elrod v. WakeMed, 561 F.Supp.3d 592, 606 (E.D. N.C. 2021). The court also found adequate consideration based on the exchange of healthcare services for the AOB. Id. at 606-0......

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