McMeans v. Scripps Health, Inc.
| Decision Date | 24 July 2002 |
| Docket Number | No. D035486.,D035486. |
| Citation | 100 Cal.App.4th 507,123 Cal.Rptr.2d 143 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Paul E. McMEANS et al., Plaintiffs and Appellants, v. SCRIPPS HEALTH, INC., Defendant and Respondent. |
Blumenthal, Ostroff & Markham, Sheldon A. Ostroff, David R. Markham, San Diego, and Michael D. Marchesini for Plaintiffs and Appellants.
Friestad & Giles and Deborah Giles, San Diego, for Defendant and Respondent.
Manatt, Phelps & Phillips, Barry S. Landsberg and Harvey L. Rochman, Los Angeles, for Catholic Healthcare West as Amicus Curiae on behalf of Defendant and Respondent.
Paul E. McMeans, Joseph P. Denny, and Mary Ann Shaul, as class representatives (Class members), appeal from a judgment granting summary judgment in favor of Scripps Health, Inc. (Scripps) and Medical Liability Recoveries, Inc. (MLR) and denying their motion for summary adjudication.1 The Class members are patients who were treated at hospitals operated by Scripps for injuries caused by third parties, who the Class members had sued. The Class members were insured by medical insurance carriers, some of whom had entered into contracts with Scripps that specified fixed charges agreed to in advance for covered services. Class members and/or their medical insurance carriers paid Scripps for services provided to Class members. MLR on behalf of Scripps then placed liens on the judgments or settlements Class members received from the third parties or their liability insurance carriers under California's Hospital Lien Act (HLA), Civil Code sections 3045.1 through 3045.6.2 In each case, the liens were greater than the amounts Scripps had been paid by the Class members or their medical insurance carriers.
Class members filed this class action against Scripps on July 1,1998. The operative complaint is the third amended complaint, filed on October 18, 1999, which contains causes of action for unfair business practices, violation of the consumer legal remedies act, trespass to chattels, breach of contract, negligence, accounting, unjust enrichment, declaratory relief, mandatory injunction and prohibitory injunction.
Class members contend the court erred in granting summary judgment for Scripps because Scripps placed section 3045.1 liens on Class members' recovery although Class members owed no debts to Scripps. Class members also contend the court should have granted their motion for summary adjudication of Scripps's affirmative defense that it was privileged to assert the HLA liens under section 47, subdivision (b)(2) and of their cause of action for declaratory relief. We reverse the order granting summary judgment in favor of Scripps. We affirm the court's denial of Class members' motion for summary adjudication of Scripps affirmative defense of the section 47, subdivision (b)(2) privilege. We affirm in part and reverse in part the court's denial of Class members' motion for summary adjudication of their cause of action for declaratory relief.
In November 1996 McMeans was injured in an automobile accident caused by an uninsured third party and was treated at Scripps Mercy Hospital. As a result of his accident, McMeans suffered pain in his ribs that interrupted his sleep and prevented him from sitting, standing, driving and bending. Because he could not work for a period, he sustained lost income of $6,250. McMeans settled his claim for $35,500, the uninsured motorist limits of the Farmers Insurance policy that covered the car in which McMeans was a passenger.
At that time of his treatment, McMeans was insured under a preferred medical provider insurance plan issued by Aetna Life Insurance Company (Aetna) and Scripps Mercy Hospital was a participating health provider under the Aetna plan. Although Aetna paid Scripps Aetna's share of the contract rate for McMeans's treatment and Farmers Insurance paid McMeans's share of the contract rate, MLR asserted a lien on behalf of Scripps in the amount of $4,298.86 against McMeans's settlement.
In June 1998 Shaul was injured in an automobile accident and underwent surgery at Scripps Memorial Hospital, consisting of open reduction internal fixation of her medial malleolus and right talus, and bone grafting of her right talus. As a result, she was totally disabled for about six months and lost income of about $60,000. She continues to have chronic right leg and ankle pain, which may require additional medical treatment. Shaul has incurred out-of-pocket expenses of about $5,000 for therapy, orthotic devices, and chiropractic treatment.
In June 1998 Shaul was insured under Sharp Health Plan, a managed care plan, which had no contract with Scripps Memorial Hospital. Sharp Health Plan paid Scripps for Shaul's treatment and Shaul paid a $100 copayment. Shaul settled with the third party tortfeasor for $100,000, the liability insurance policy limits of the tortfeasor. MLR filed a lien on behalf of Scripps in the amount of $6,168.17 "upon any damages which a claim of action has been brought or will be brought."
In April 1996 Denny was injured in an automobile accident and sustained multiple head, neck, shoulder and knee injuries. He later had neck surgery at Scripps Memorial Hospital, which consisted of an anterior cervical discectomy and fusion. Denny was disabled for several months, resulting in net lost wages in excess of $4,000. As a result of his injuries, Denny continues to suffer limited movement in his neck and chronic pain. He can no longer participate in activities he used to enjoy, such as hiking, bicycling, and physical education with his students. Denny received $100,000 in settlement.
At the time of surgery, Denny was insured under the CaliforniaCare HMO plan of Blue Cross of California and Scripps Memorial Hospital was a participating health provider under that plan. Blue Cross paid Scripps for its services and Denny paid the applicable copayments or deductibles. Nine days after Denny's settlement, MLR filed a lien on behalf of Scripps for $13,790.38 on Denny's recovery from the tortfeasor.
In April 1999 the trial court certified Class members' lawsuit against Scripps as a class action "to include as class plaintiffs all persons who: [1] were injured in accidents and thereafter treated at hospitals operated by ScrippsHealth (`Scripps'); [2] were insured under individual or group medical insurance plans, including but not limited to Health Maintenance Organization plans, Preferred Provider Organization plans and/or Managed Care plans; [3] whose medical insurers have contracted with Scripps in which Scripps agreed to provide covered services for the insurer's policyholders/beneficiaries at negotiated discounted rates; or alternatively, pursuant to the Knox-Keene Health Care Service Plan Act of 1975, the payments received by Scripps based on pre-determined rates from the patient's insurer (plus any applicable co-pay or deductible) constitute full payment; [4] whose bills at such negotiated discounted rates or pre-determined rates have been paid; and [5] against whom Scripps within the last four years either directly, or through the action of Medical Liability Recoveries, Inc. or any other agent of Scripps, has asserted a lien under Civil Code section 3045.1 demanding payment of the difference between the negotiated discounted rate or pre-determined rate and Scripps' ordinary full charge for the covered service."
On May 21, the court denied Scripps's motion for judgment on the pleadings, which asserted that each cause of action was barred by the litigation privilege. (§ 47, subd. (b)(2).) On September 2, the court denied a renewed motion for judgment on the pleadings.
The parties then agreed to file cross-motions for summary adjudication and summary judgment. Class members filed a motion for summary adjudication of Scripps's thirteenth affirmative defense, the privilege conferred under section 47, subdivision (b)(2), and the eighth cause of action for declaratory relief. Scripps filed a motion for summary judgment. On February 23, 2000, the court granted Scripps's motion for summary judgment and denied Class members' motion for summary adjudication.
Summary judgment is granted when there is no triable issue as to any material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) We review de novo the trial court's decision to grant summary judgment and are not bound by the trial court's stated reasons or rationales. (Hersant v. Department of Social Services (1997) 57 Cal.App.4th 997, 1001, 67 Cal.Rptr.2d 483.) Further, we review issues of statutory interpretation de novo. (Heavenly Valley v. El Dorado County Bd. of Equalization (2000) 84 Cal. App.4th 1323, 1334, 101 Cal.Rptr.2d 591.) The appellate rules applicable to review of summary adjudication are the same as applicable to summary judgment.
Section 3045.1 provides: "Every person, partnership, association, corporation, public entity, or other institution or body maintaining a hospital licensed under the laws of this state which furnishes emergency and ongoing medical or other services to any person injured by reason of an accident or negligent or other wrongful act ..., shall, if the person has a claim against another for damages on account of his or her injuries, have a lien upon the damages recovered, or to be recovered, by the person ... to the extent of the amount of the reasonable and necessary charges of the hospital ..., in which services are provided for the treatment, care, and maintenance of the person in the hospital or health facility affiliated with the hospital resulting from that accident or negligent or other wrongful act." Section 3045.1 creates a "statutory nonpossessory lien ... in favor of a hospital against third persons liable for the patient's injuries." (Mercy Hospital & Medical...
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