Emigh v. W. Calcasieu Cameron Hosp.

• Citation: 145 So.3d 369
• Decision Date: 01 July 2014
• Docket Number: No. 2013–CC–2985.,2013–CC–2985.
• Parties: Aaron EMIGH, et al. v. WEST CALCASIEU CAMERON HOSPITAL, et al.
• Court: Supreme Court of Louisiana

145 So.3d 369

Aaron EMIGH, et al.
v.
WEST CALCASIEU CAMERON HOSPITAL, et al.

No. 2013–CC–2985.

Supreme Court of Louisiana.

July 1, 2014.

[145 So.3d 370]

Blue Cross Blue Shield of LA, Charles Andrew O'Brien, III, Allison Nunley Pham, for Applicant.

Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Errol J. King, Jr., Layna Suzanne Cook, Broussard & Hart, LLC, J. Steven Broussard, Aaron James Broussard, Robert Sere' Kleinschmidt, Jr., Flanagan Partners, LLP, Andy Joseph Dupre, Anders F. Holmgren, Thomas More Flanagan, Hoffoss Devall, LLC, Donald Wayne McKnight, Claude P. Devall, Jr., John Lee Hoffoss, Jr., Scofield, Gerard, Pohorelsky, Gallaugher & Landry, Robert E. Landry, Peter Jan Pohorelsky, Veron, Bice, Palermo & Wilson, Michael Glenn Hodgkins, for Respondent.

CLARK, Justice.

A putative class action was filed against West Calcasieu Cameron Hospital (hereinafter referred to as “WCCH”) for alleged violations of La. R.S. 22:1874, also known as the “Balance Billing Act.” This suit was expanded to name several health insurance issuers as defendants. The current claim under review is asserted by the plaintiff Laura Delouche against her insurer, Louisiana Health Service & Indemnity Company, d/b/a Blue Cross and Blue Shield of Louisiana (hereinafter referred to as “Blue Cross”). We granted certiorari to determine whether a cause of action exists, whereby Delouche can pursue a legal remedy against Blue Cross. For the reasons that follow, we affirm the lower court's denial of Blue Cross's exception of no cause of action and remand for proceedings consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

On or about August 13, 2010, Delouche was injured in an automobile accident and

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received treatment at WCCH in Calcasieu Parish. As alleged in the petition for damages, Delouche was insured by Blue Cross at the time of the accident under an individual Blue Saver High Deductible policy.¹ Pursuant to this policy of health insurance, Delouche paid premiums and agreed to use specific providers in exchange for reduced health care rates, known in the policy as the “Allowable Charge.” ² WCCH was a “contracted health care provider” with Blue Cross, as defined in La. R.S. 22:1872(6). As such and pursuant to the Provider Agreement between WCCH and Blue Cross, WCCH contractually agreed to accept these reduced rates as payment in full for services provided to the Blue Cross insured (Delouche). Additionally, WCCH agreed to hold the insured (Delouche) harmless for any amounts other than any applicable deductible, co-pay, and/or coinsurance.

At the time of treatment, Delouche notified WCCH that she was insured by Blue Cross; however, WCCH refused to accept her insurance and ignored the agreed upon reduced price. Instead, WCCH charged Delouche the full, undiscounted amount of $718.00 and asserted a lien against any tort recovery Delouche may receive from a third party as a result of the automobile accident. This practice of rejecting insurance and collecting or attempting to collect full charges is referred to as “balance billing” and is prohibited by law. SeeLa. R.S. 22:1874. Delouche sued WCCH for this practice of over-billing. ³

In a supplemental petition, Delouche added Blue Cross as a defendant, claiming Blue Cross was liable for WCCH's failure to perform. Blue Cross filed several exceptions, including an exception of no cause of action. The trial court overruled the exception, and the court of appeal denied writs, with one dissenting judge noting that a full opinion was required.⁴

Blue Cross filed a writ application with this court. We granted certiorari to determine whether the factual allegations in Delouche's petition give rise to any cause of action against Blue Cross.⁵

APPLICABLE LAW

The peremptory exception of no cause of action is designed to test the legal sufficiency of a petition by determining whether a party is afforded a remedy in law based on the facts alleged in the pleading. La.Code Civ.P. art. 927; Everything on Wheels Subaru, Inc. v. Subaru South, Inc., et al., 616 So.2d 1234, 1235 (La.1993). All well-pleaded allegations of fact are accepted as true and correct, and all doubts

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are resolved in favor of sufficiency of the petition so as to afford litigants their day in court. La.Code Civ.P. art. 865; Kuebler v. Martin, 578 So.2d 113, 114 (La.1991). The burden of demonstrating that a petition fails to state a cause of action is upon the mover. Fink v. Byrant, 01–0987, p. 4 (La.11/28/01), 801 So.2d 346, 349.

In Greemon v. City of Bossier City, 2010–2828, p. 8 (La.7/1/11), 65 So.3d 1263, 1268, this court explained Louisiana's fact pleading system:

Louisiana's Code of Civil Procedure uses a system of pleading based upon the narration of factual allegations. See Montalvo v. Sondes, 93–2813, p. 6 (La.5/23/94), 637 So.2d 127, 131. As described in La.Code Civ.P. art. 854: “No technical forms of pleading are required. All allegations of fact of the petition, exceptions, or answer shall be simple, concise, and direct, and shall be set forth in numbered paragraphs.” The fact-pleading requirement replaces an earlier “theory of the case” pleading requirement. SeeLa.Code Civ.P. art. 862, Official Revision Comments—1960, cmt. (b). Because the “theory of the case” pleading requirement has been abolished, “[s]o long as the facts constituting the claim or defense are alleged or proved, the party may be granted any relief to which he is entitled under the fact-pleadings and evidence.” Cox v. W.M. Heroman & Co., Inc., 298 So.2d 848, 855 (La.1974), overruled on other grounds by A. Copeland Enterprises, Inc. v. Slidell Memorial Hosp., 94–2011, p. 9 (La.6/30/95), 657 So.2d 1292, 1299. However, even though the “theory of the case” need no longer be pled, La. Civ. P. art. 891 provides that a petition “shall contain a short, clear, and concise statement of all causes of action arising out of, and of the material facts of, the transaction or occurrence that is the subject matter of the litigation.” (Emphasis added.)

The sufficiency of a petition subject to an exception of no cause of action is a question of law, and a de novo standard is applied to the review of legal questions; this court renders a judgment based on the record without deference to the legal conclusions of the lower courts. See Foti v. Holliday, 2009–0093, p. 6 (La.10/30/09), 27 So.3d 813, 817.

DISCUSSION

To determine whether any valid cause of action exists, we must examine the factual allegations contained in the petition. We note that typically evidence is not allowed to be admitted to support or controvert an exception of no cause of action. SeeLa.Code Civ. P. art. 931. However, the parties, without objection, admitted the contracts at issue, thereby expanding what the court may examine in determining whether a legal remedy exists. ( See City of New Orleans v. Bd. of Directors of Louisiana State Museum, 98–1170 (La.3/2/99), 739 So.2d 748, 756, wherein the court recognized the jurisprudential exception to the rule that allows evidence admitted without an objection to enlarge the pleadings.)

Delouche alleges Blue Cross “agreed and promised that if its insureds were treated by a contracted health care provider, such as WCCH, the provider would submit claims to the insurer, and that all that the insured would be required to pay to the provider for covered services would be any deductible, co-payment, co-insurance or other amounts as provided for in the policy of insurance as the insured[']s responsibility.” Delouche alleges that WCCH did not comply with its obligations. Thus, as averred in her petition, Blue Cross is liable for WCCH's failure to perform as promised by Blue Cross. The

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petition generally alleges liability under a breach of contract theory and also detrimental reliance. Moreover, Delouche contends Blue Cross “has failed to take reasonable steps to enforce the agreement and promise described above, and has allowed and encouraged WCCH” to engage in this prohibited billing practice.

In support of her lawsuit, Delouche contends the petition clearly states a cause of action. She, an insured, entered into a contract with Blue Cross whereby she agreed to pay premiums in exchange for the availability of negotiated group discounts for health care costs.⁶ She contends she upheld her obligation but did not receive the promised discount. Additionally, Delouche argues Blue Cross promised that the provider (WCCH) would file all claims with Blue Cross on her behalf, as the insured, but WCCH did not submit her claim to Blue Cross. Instead, WCCH actively rejected her insurance. Delouche contends this is an additional example of Blue Cross disregarding its promise to her. Blue Cross's failure to deliver what it promised subjects it to liability.

Blue Cross, in defending its exception of no cause of action, argues the sole object of the contract...