Elrod v. WakeMed
| Decision Date | 31 January 2023 |
| Docket Number | 21-2203 |
| Parties | PEGGY ELROD; YVONNE BERTOLO; JANINE PALMER; JUSTIN PALMER, and all similarly situated persons within the proposed class, Plaintiffs-Appellants, 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., Defendants-Appellees, and ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY; PENNSYLVANIA NATIONAL MUTUAL INSURANCE COMPANY; UNKNOWN DEFENDANTS 1 THROUGH 25, Defendants. |
| Court | U.S. Court of Appeals — Fourth Circuit |
PEGGY ELROD; YVONNE BERTOLO; JANINE PALMER; JUSTIN PALMER, and all similarly situated persons within the proposed class, Plaintiffs-Appellants,
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., Defendants-Appellees,
and ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY; PENNSYLVANIA NATIONAL MUTUAL INSURANCE COMPANY; UNKNOWN DEFENDANTS 1 THROUGH 25, Defendants.
No. 21-2203
United States Court of Appeals, Fourth Circuit
January 31, 2023
UNPUBLISHED
Submitted: November 29, 2022
Appeal from the United States District Court for the Eastern District of North Carolina, at Raleigh. Louise W. Flanagan, District Judge. (5:20-cv-00413-FL)
ON BRIEF:
Arlene L. Velazquez-Colon, Kendra Renee Alleyne, THE LAW OFFICE OF COLON & ASSOCIATES, PLLC, Wake Forest, North Carolina, for Appellants.
Matthew Nis Leerberg, Troy D. Shelton, Jeffrey R. Whitley, FOX ROTHSCHILD LLP, Raleigh, North Carolina, for Appellees
Wake Med; WakeMed Specialty Physicians, LLC; WakeMed Specialists Group, LLC. James C. Thornton, Steven A. Bader, R. Robert El-Jaouhari, CRANFILL SUMNER LLP, Raleigh, North Carolina, for Appellee Argos Health, Inc.
Before KING and AGEE, Circuit Judges, and Henry E. HUDSON, Senior United States District Judge for the Eastern District of Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Peggy Elrod, Yvonne Bertolo, and Janine Palmer on behalf of her minor son, Justin Palmer (collectively, "Patients"), sued WakeMed[1] and Argos Health, Inc. ("Argos"), alleging that an assignment of benefits ("AOB") that Patients signed with WakeMed is unenforceable. The district court dismissed the amended complaint under Federal Rule of Civil Procedure 12(b)(6). As explained below, we agree with the district court that dismissal was appropriate, although under Rule 12(b)(1) and (b)(6). Accordingly, we affirm.
I.
We begin with the allegations in the amended complaint, which we accept as true and construe in the light most favorable to Patients for Rule 12(b)(6) purposes.[2] Bing v. Brivo Sys., LLC, 959 F.3d 605, 608-09 (4th Cir. 2020).
Following unrelated car accidents, Patients sought emergency medical treatment from WakeMed, an emergency-room ("ER") healthcare service provider. WakeMed required Patients to execute a general consent form ("GCF") to obtain emergency treatment. The GCF indicated that, by executing the form, the patient "consent[ed] to the provision of all medical treatment and other health care that [his or her] physician(s) or
other caregivers consider[ed] necessary, which may include diagnostic, radiology, and laboratory procedures." J.A. 146. In relevant part, the GCF also included an AOB that provided:
Irrevocable Assignment of Insurance Benefits: I, on behalf of myself and the patient, in consideration of health care services provided, voluntarily and irrevocably assign and authorize direct payment of all surgical and medical benefits directly to WakeMed .... I also authorize payment of applicable benefits directly to all physicians or other practitioners involved in my care ....Benefits assigned shall include, but may not be limited to, major medical insurance, liability insurance (including excess, umbrella and automobile uninsured/underinsured coverages), medpay[3] and personal injury protection (PIP) benefits
I understand this assignment means that WakeMed can and will seek and receive direct payment from any potential insurer or other payment source, which may limit what I can recover personally for my injury....I authorize WakeMed, as necessary, to endorse benefit checks made payable to me and/or WakeMed or independent practitioner(s).
J.A. 146.
When Bertolo and Elrod presented at the ER following their car accidents, Bertolo had "severe pain" and "foggy memory," J.A. 118, and Elrod "was terrified and in a panicked state because of potential internal bleeding complications . . . posing a significant threat to life or function." J.A. 119. "[A]s a prerequisite for emergency medical treatment," they were asked to sign the GCF. J.A. 110. When they signed it, the form was visible only on a WakeMed employee's computer screen. The employee briefly explained each form to Bertolo and Elrod and directed them to sign on an electronic signature pad. The employee
did not point out that "they were signing away their rights to their Med Pay," J.A. 124, and Patients did not "thoroughly read" the GCF "due to their state of mind." J.A. 125. But they allege that even if they had read the GCF, "it is doubtful they would have understood the significance of the legal terms within the form under such circumstances." J.A. 125. Elrod and Bertolo "contend that if they had known, or been made aware, of the contractual provisions and their effect . . ., they would not have known what to do." J.A. 124.
As for Janine Palmer, after her son Justin was injured in a car accident, she saw him bleeding, strapped down to a gurney, and loaded into an ambulance. She then arrived at the ER to witness employees cutting off Justin's clothing and removing shards of glass from his skin, after which she was directed to sign a hard copy of the GCF. She alleged that "she was in such a state of shock and panic that she would have signed anything she was directed to sign under the impending fear that any delay on her part would delay the treatment her son critically needed." J.A. 124-25. Adding to her anxiety, a WakeMed employee brought a member of the clergy into the room while she was signing. According to the amended complaint, "[a]t no time was Mrs. Palmer made aware that signing this form would effectively forfeit the rights and benefits under her automotive insurance policy." J.A. 121.
After Patients were treated, WakeMed worked with Argos to send invoices for the services provided, plus the signed GCFs, to Patients' auto insurers, among others.[4] After determining that they had medpay coverage, Elrod and Bertolo's insurers sent checks to
WakeMed as payment toward their medical bills. Patients do not allege that the Palmers' insurers sent their medpay proceeds to WakeMed.[5]
Patients assert that WakeMed and Argos took advantage of their compromised state to force them to sign the GCFs to obtain medpay benefits to which WakeMed was not otherwise entitled. Patients claim that they "simply had no choice but to sign," even though they had no intention of assigning their rights under their insurance policies. J.A. 126.
Patients filed an amended class action complaint in November 2020, bringing five claims against WakeMed, Argos, and various insurers.[6] Patients sought a declaratory judgment that the AOB was void based on unconscionability, lack of mutual assent, lack of consideration, unilateral mistake, fraud, imposition, and public policy. Patients also brought a claim for breach of fiduciary duty against WakeMed and claims for fraud, conversion, and violations of the North Carolina Unfair and Deceptive Trade Practices Act, N.C. Gen. Stat. § 75-1 et seq., against WakeMed and Argos.
WakeMed and Argos moved to dismiss under Rule 12(b)(1) and (b)(6), and the district court granted the motions on 12(b)(6) grounds.
On the 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...
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