Holbrook v. Healthport, Inc.

• Decision Date: 28 February 2013
• Docket Number: No. 12-457,12-457
• Citation: 2013 Ark. 87
• Parties: THERESA HOLBROOK, INDIVIDUALLY AND ON BEHALF OF A CLASS OF ALL OTHER ARKANSANS SIMILARLY SITUATED APPELLANT v. HEALTHPORT, INC.; HEALTHPORT TECHNOLOGIES, LLC F/K/A SMART DOCUMENT SOLUTIONS, LLC; HEALTHPORT INCORPORATED F/K/A COMPANION TECHNOLOGIES CORPORATION; AND RICHARD WEISS, IN HIS OFFICIAL CAPACITY AS DIRECTOR; AND ARKANSAS DEPARTMENT OF FINANCE AND ADMINISTRATION, AS AGENCY OF THE STATE OF ARKANSAS APPELLEES
• Court: Arkansas Supreme Court

2013 Ark. 87

THERESA HOLBROOK, INDIVIDUALLY AND ON BEHALF OF A CLASS OF ALL OTHER ARKANSANS SIMILARLY SITUATEDAPPELLANT

v.HEALTHPORT, INC.; HEALTHPORT TECHNOLOGIES, LLC F/K/A SMART DOCUMENT SOLUTIONS, LLC;HEALTHPORT INCORPORATED F/K/A COMPANION TECHNOLOGIES CORPORATION;AND RICHARD WEISS, IN HIS OFFICIAL CAPACITY AS DIRECTOR;AND ARKANSAS DEPARTMENT OF FINANCE AND ADMINISTRATION, AS AGENCY OF THE STATE OF ARKANSASAPPELLEES

No. 12-457

SUPREME COURT OF ARKANSAS

Opinion Delivered February 28, 2013

APPEAL FROM THE POPE COUNTY CIRCUIT COURT[NO. CV-10-588]

HONORABLE KEN D. COKER, JR., JUDGE

DISMISSED WITHOUT PREJUDICE.

COURTNEY HUDSON GOODSON, Associate Justice

AppellantTheresa Holbrook, individually and on behalf of a class of all other Arkansans similarly situated, appeals an order of the Pope County Circuit Court granting a motion for partial summary judgment in favor of appelleesHealthport, Inc.; Healthport Technologies, LLC f/k/a Smart Document Solutions, LLC; Healthport Incorporated f/k/a Companion Technologies Corporation(collectively "Healthport"); and Richard Weiss, in his official capacity as director of the Arkansas Department of Finance and Administration(DF&A).We dismiss without prejudice for lack of a proper 54(b) certificate.

On May 14, 2010, Holbrook requested her medical records from the Millard Henry Clinic located in Russellville.Pursuant to its contract with Holbrook's medical-care provider, Healthport, a private company that fulfills such requests for medical records, obtained and sold Holbrook the copies of her requested medical records.Healthport sent Holbrook two invoices.The first invoice related to the production of seven pages of medical records and reflected that Healthport charged Holbrook sales tax for these records.The second invoice related to the production of three pages of medical records, and again, Healthport charged sales tax.On May 27, 2010, Holbrook remitted two money orders to Healthport, paying both invoices in full.

On October 12, 2010, Holbrook, individually and on behalf of other Arkansans similarly situated, filed a class-action complaint, alleging one count of Healthport's violation of the Arkansas Deceptive Trade Practices Act (ADTPA), one count of declaratory judgment, and one count of unjust enrichment.Specifically, in her complaint, Holbrook sought damages and requested the court(1) to declare that Healthport, in violation of section 16-46-106(Repl. 1999), illegally collected sales tax on charges for services rendered in retrieving and copying medical records; (2) to find that Healthport's practice of billing for and collecting the sales tax violated the ADTPA; and (3) to find that appellees were unjustly enriched by the sales tax collected.On March 23, 2011, Healthport impleaded Weiss and DF&A by filing a counterclaim and a third-party complaint seeking declaratory judgment on whether our tax statutes require the collection of sales tax on labor and copy chargesassociated with the production of medical records pursuant to section 16-46-106.On May 24, 2011, Holbrook amended her complaint to include an alternative count for illegal exaction and class allegations against DF&A.Subsequently, on Holbrook's motion, the circuit court dismissed her cause of action for illegal exaction against DF&A without prejudice, thereby leaving a declaratory-judgment claim against DF&A.

The parties filed cross-motions for summary judgment on the declaratory-judgment count of Healthport's third-party complaint.The parties later filed a stipulation that allowed class-certification proceedings to follow the circuit court's adjudication of the pending cross-motions.On February 8, 2012, after hearing the cross-motions for summary judgment, the circuit court entered an order granting Healthport's and DF&A's motions for summary judgment and denying Holbrook's motion for summary judgment.Specifically, the circuit court found that sales tax applied to the sale of copies of medical records, pursuant to section 16-46-106.The court further found that ruling in appellees' favor rendered the remainder of Holbrook's claims moot and attached a Rule 54(b) certificate.Holbrook timely filed its notice of appeal and now appeals the February 8, 2012 order.

Before we reach the merits of Holbrook's argument, we must determine whether the Rule 54(b) certificate is sufficient.Whether an order is subject to an appeal is a jurisdictional issue that this court has the duty to raise, even if the parties do not.Myers v. McAdams, 366 Ark. 435, 236 S.W.3d 504(2006).Rule 2(a)(1) of the Arkansas Rules of Appellate Procedure-Civil provides that an appeal may be taken from a final judgment or decree entered by the circuit court.Although the purpose of requiring a final order is to avoidpiecemeal litigation, a circuit court may certify an otherwise nonfinal order for an immediate appeal by executing a certificate pursuant to Rule 54(b) of the Arkansas Rules of Civil Procedure.Robinson v. Villines, 2012 Ark. 211.Rule 54(b) provides in part that the circuit court may direct the entry of a final judgment "only upon an express determination supported by specific factual findings, that there is no just reason for delay and upon an express direction for the entry of judgment."Further, the rule provides that, if such a determination is made, the court must execute a certificate "which shall set forth the factual findings upon which the determination to enter the judgment as final is based[.]"We have consistently held that the rule requires the order to include specific findings of any danger of hardship or injustice that could be alleviated by an immediate appeal and to set out the factual underpinnings that establish such hardship or injustice.Id.;Blackman v. Glidewell, 2011 Ark. 23;Kowalski v. Rose Drugs of Dardanelle, Inc., 2009 Ark. 524, 357 S.W.3d 432.

In the present case, the circuit court issued a Rule 54(b) certificate with its order as follows:

With respect to the issues determined by the above judgment, the Court finds:

That [Holbrook's] other procedural and substantive claims for relief in this case not addressed in the Motions for Partial Summary Judgment, which are related to class certification and alleged violations of the Arkansas Deceptive Trade Practices Act, and which request alleged damages, costs, and fees, could only be sustained with a finding in favor of [Holbrook] and against the Defendants as to the declaratory judgment issues addressed herein.Therefore, the granting of the motions for partial summary judgment filed by DefendantsHealthport Technologies, LLC and Weiss, and the denial of the motion for summary judgment filed by [Holbrook], renders every other claim by [Holbrook] moot, effectively ending the litigation.

Upon the basis of the foregoing factual findings, the Court hereby certifies, in accordance with Rule 54(b)(1), Ark. R. Civ. P., that it hasdetermined that there is no just reason for delay of the entry of a final judgment and that the Court has and does hereby direct that the judgment shall be a final judgment for all purposes.

Here, the circuit court's Rule 54(b) certificate merely states a conclusion that the granting of the motions for partial summary judgment"renders every other claim by [Holbrook] moot, effectively ending the litigation."This one-sentence explanation does not contain any specific factual findings of any danger of hardship or injustice that could be alleviated by an immediate appeal.¹Thus, the certificate fails to comply with Rule 54(b).Kowalski, supra.Therefore, in the absence of an effective Rule 54(b) certification or a final order, we dismiss the appeal without prejudice.

Dismissed without prejudice.

HART, J., dissents.

JOSEPHINE LINKER HART, Justice, dissenting.

Rule 54(b) of the Arkansas Rules of Civil Procedure states in relevant part:

(1) Certification of Final Judgment.When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination, supported by specific factual findings, that there is no just reason for delay and upon an express direction for the entry of judgment.

(Emphasis supplied.)In its Rule 54(b) certificate, the trial court made the following findings:

That Plaintiff's other procedural and substantive claims for relief in this case not addressed in the Motions for Partial Summary Judgment, which are related to class certification and alleged violations of the Arkansas Deceptive Trade Practices Act, and which request alleged damages, costs, and fees, could only be sustained with a finding in favor of Plaintiff and against the Defendants as to the declaratory judgment issues addressed herein.Therefore, the granting of the motions for partial summary judgment issues addressed herein.Therefore, the granting of the motion for partial summary judgment filed by DefendantsHealthport Technologies, LLC and Weiss, and the denial of the motion for summary judgment filed by PlaintiffTheresa Holbrook, renders every other claim by Plaintiff moot, effectively ending the litigation.

Essentially, the trial court has found that, given its ruling, the plaintiffs could not prevail in their remaining causes of action.I cannot understand how the majority can conclude that the trial court's findings are "mere conclusions."

I am mindful that the trial court's Rule 54(b) certificate does not refer to the phrase "there must be some danger of hardship or injustice which would be alleviated by an immediate appeal."That phrase first appeared as dicta in Tulio v. Arkansas Blue Cross and Blue Shield, Inc., 283 Ark. 278, 675 S.W.2d 369(1984).The Tuliocourt imported the phrase from Campbell v. Westmoreland Farm, Inc., 403 F.2d 939(2d Cir.1968), where—also in dicta—Judge Joseph Smith of the ...