Grauberger v. St. Francis Hosp., C-00-2625 CAL.

• Citation: 149 F.Supp.2d 1186
• Decision Date: 15 June 2001
• Docket Number: No. C-00-2625 CAL.,C-00-2625 CAL.
• Parties: Marina GRAUBERGER Plaintiff, v. ST. FRANCIS HOSPITAL, Catholic Health Care West, Defendants.
• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California

149 F.Supp.2d 1186

Marina GRAUBERGER Plaintiff, v. ST. FRANCIS HOSPITAL, Catholic Health Care West, Defendants.

No. C-00-2625 CAL.

United States District Court, N.D. California.

June 15, 2001.

Laurence F. Padway, Law Office of Laurence F. Padway, Alameda, CA, for plaintiff.

John F. Libby, Mnatt Phelps & Phillips, Los Angeles, CA, for defendant.

ORDER ON CROSS-MOTIONS

LEGGE, District Judge.

Defendants St. Francis Memorial Hospital (the "Hospital") and Catholic Healthcare West ("CHW") (collectively "defendants") move for summary judgment on the first amended complaint ("FAC"). Plaintiff cross-moves for partial summary judgment, seeking: (1) an injunction restraining defendants from asserting or collecting on the hospital lien discussed below; and (2) an order stating that the funds currently held in trust pendente lite be disbursed to Grauberger.

The motions have been briefed, argued and submitted for decision. Having considered the arguments of counsel, the moving and opposing papers, the evidence of record, and the applicable authorities, the court now orders as follows.

I.

The underlying facts are not significantly in dispute. Plaintiff was injured in an automobile collision on January 14, 1998. She received treatment for her injuries at the Hospital between April 20 and April 24, 1998 and again between January 19 and January 23, 1999. She alleges that her group insurance policy — issued by Blue Cross as part of the employee benefit plan of United Airlines, her spouse's employer — paid the hospital its negotiated rates in full except for the deductible amounts and copayments, which plaintiff paid herself.¹ See FAC at ¶¶ 5-6.

Grauberger brought suit against Loren Holden, the driver who allegedly caused the accident ("tortfeasor"). FAC at ¶ 7. The Hospital then filed a lien in that action pursuant to the Hospital Lien Act ("HLA"), California Civil Code sections 3045.1-3045.6, seeking to recover the balance of its "regular rates," i.e., the difference between the Hospital's normal rates and the negotiated rates that it charged to Grauberger as a plan member.² Grauberger settled the suit with Holden for $100,000. After deducting attorneys' fees and costs, the net proceeds to plaintiff from the settlement totaled $63,495.48.³ Plaintiff and defendants have placed half of this figure, or $31,747.74, in trust pending resolution of this suit. See FAC at ¶ 11.

II.

Plaintiff filed the instant action in San Francisco Superior Court and alleges that the Hospital is "double billing" her. FAC at ¶ 8. She contends that she and her insurance plan had already paid their negotiated rate in full, so there was no underlying obligation for the Hospital's lien in the Holden lawsuit. Id. at ¶ 10. Moreover, plaintiff alleges that defendants' customary charges are "false and inflated" and are intentionally concealed from patients. Id. at ¶¶ 9, 11. She further claims that the Hospital filed the lien in order "to extort payment" on the double billings, knowing that the lien claims "impede and impair settlement." Id. at ¶ 10.

Plaintiff's first amended complaint states eight claims for relief: (1) conversion; (2) fraudulent concealment; (3) unfair business practices; (4) breach of contract; (5) violation of public policy; (6) interference with contract; (7) abuse of process; and (8) violation of civil RICO. Plaintiff seeks declaratory and injunctive relief as well as treble damages. Plaintiff also seeks to certify a class consisting of "all other patients of defendants' facilities who are insured by private insurance and to whom treatment is rendered on account of accidental injury and who make claim against third party tortfeasors for recovery." FAC at ¶ 13.⁴

Defendants removed the action to federal court because it involves RICO allegations and is "related to" an ERISA plan. Defendants maintain that the HLA authorizes a hospital that provides services to any person injured in an accident to file a lien, in the amount of the hospital's "reasonable and necessary charges," against any damages recovered by the injured person. They point out that a lien can be placed on damages recovered by "judgment, settlement or compromise." Defendants contend that they are not double billing plaintiff; instead they seek "additional compensation from the third party tortfeasor responsible for the patient's injuries, not from the patient."

III.

Summary judgment should be granted if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no `genuine issue for trial.'" Matsushita Elec. Industrial Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citing First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). "At the summary judgment stage, the district court is not to weigh the evidence or determine the truth of the matter but should only decide whether there is a genuine issue for trial." Washington v. Garrett, 10 F.3d 1421, 1428 (9th Cir.1993) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

The moving party bears the initial responsibility of "informing the district court of the basis for its motion, and identifying those portions of `the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 56(c)).

When the nonmoving party will bear the burden of proof at trial on a dispositive issue, the nonmoving party must then "go beyond the pleadings and by her own affidavits, or by the `depositions, answers to interrogatories and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 56(c) & (e)). The court views all facts and draws all inferences therefrom in the light most favorable to the nonmoving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962). If, however, the nonmoving party's evidence is "merely colorable" or "not significantly probative," summary judgment may be granted. Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505.

IV.

Defendants' argument in support of summary judgment is three-fold: (1) the HLA authorizes the Hospital to impose a lien against the Holden settlement; (2) the Hospital's contract with Blue Shield to provide benefits to Blue Shield members does not limit the Hospital's lien rights; and (3) the Hospital's lien rights exist independently of any debt owed by plaintiff to the Hospital.

In addition, defendants argue that plaintiff should not be permitted to question the amount of the Hospital's full charges (and by extension the validity of the lien) because Grauberger relied on those figures to secure the settlement in the Holden litigation. However, the authority cited by defendants is inapposite. In American Title Ins. Co. v. Lacelaw, 861 F.2d 224 (9th Cir.1988), the court merely held that a statement in a trial brief could constitute a judicial admission at a later stage in the same litigation. Since the plaintiff in Lacelaw "did not introduce the statement into evidence or object to the introduction of contradictory testimony," however, the court decided it was not an abuse of discretion to refuse to treat the statement as a binding admission after trial. Id. at 227. First National Ins. Co. v. Federal Deposit Ins. Corp., 977 F.Supp. 1051 (S.D.Cal.1997) is also not on point. That case addressed whether a party could be judicially estopped from asserting a position when: (1) the position was adopted in a prior litigation; but (2) the judgment was reversed by the Ninth Circuit. See id. at 1058. In First National the court explained that judicial estoppel "bars a party from taking inconsistent positions in the same proceeding." Id. at 1057 (emphasis added). Furthermore, the court explained that the Ninth Circuit follows the rule allowing judicial estoppel only when the inconsistent position was "actually adopted by the first court." Id. (quoting Masayesva for and on Behalf of Hopi Indian Tribe v. Hale, 118 F.3d 1371, 1381-82 (9th Cir.1997)). In the present case, Grauberger's settlement with Holden can hardly be construed as a judicial adoption of Grauberger's position, regardless of the consistency or inconsistency of that position with the claims she is now asserting. This court therefore rejects defendants' argument concerning judicial admissions.

Plaintiff argues that the Hospital's lien is based on an underlying debt owed by plaintiff to the Hospital, which debt had already been discharged by the payments plaintiff and Blue Shield made to the Hospital. In essence, plaintiff is pointing out that the money the Hospital seeks from the settlement proceeds ultimately comes out of plaintiff's recovery, and not out of the tortfeasor's assets or the tortfeasor's insurance company. In other words, since tortfeasor cares only about being released from liability and not about who receives the proceeds from the settlement, the Hospital's lien actually impacts the plaintiff and not the tortfeasor. In plaintiff's view, by seeking additional proceeds from the settlement, the Hospital is charging her the maximum rates for its services, when her health plan had negotiated discounted rates that have been paid in full.

Defendants persistently contend that the Hospital's lien is independent of the debt that plaintiff owed the Hospital for her medical treatments, or the payments made by plaintiff or her insurer. According to defendants, the lien runs against the tortfeasor, whereas the prior payments came from plaintiff and her...