Med. Recovery Servs., LLC v. Eddins

Decision Date01 September 2021
Docket NumberDocket No. 47848
Citation494 P.3d 784,169 Idaho 236
CourtIdaho Supreme Court
Parties MEDICAL RECOVERY SERVICES, LLC, an Idaho limited liability company, Plaintiff-Respondent, v. Michael D. EDDINS, Defendant-Appellant.

Lowell N. Hawkes, Chartered, Pocatello, attorney for Appellant. Lowell N. Hawkes argued.

Smith Driscoll and Associates, Idaho Falls, attorneys for Respondent. Bryan D. Smith argued.

SUBSTITUTE OPINION.

THE COURT'S PRIOR OPINION DATED JULY 9, 2021 IS HEREBY WITHDRAWN.

BEVAN, Chief Justice.

This is a medical collection case involving two medical bills. Medical Recovery Services, LLC, (MRS) sued Michael Eddins to collect on debts that had purportedly been assigned to MRS by Intermountain Emergency Physicians and Intermountain Anesthesia. After a bench trial, the magistrate court dismissed MRS's complaint, holding MRS lacked standing because it failed to prove a valid assignment occurred. MRS appealed to the district court. That court reversed, holding the magistrate court erred in limiting the admission of two exhibits that MRS relied upon to establish that Eddins’ accounts had been validly assigned to it. Alternatively, the district court held Eddins was judicially estopped from raising the assignment issue at trial because he did not raise it earlier during the litigation. Eddins timely appealed to this Court. We affirm in part, reverse in part, and remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

On March 22, 2014, Eddins went to the emergency room at Eastern Idaho Regional Medical Center (EIRMC) complaining of abdominal pain. Eddins’ appendix was removed and other medical services were performed on his behalf. Eddins received medical treatment from Intermountain Emergency Physicians (IEP) and Intermountain Anesthesia (IA) related to these procedures. Eddins did not pay for the services and the two healthcare providers allegedly assigned the accounts to MRS for collection.

On April 20, 2015, MRS filed a complaint against Eddins to collect $996.22 for services he received from IEP, and $1,633.66 for services he received from IA. Eddins filed an answer asserting the charges were not reasonable and demanding a jury trial. Eddins later filed an amended answer and jury demand. On April 4, 2016, MRS filed a motion for summary judgment, which the magistrate court denied after concluding there were material issues of fact regarding the reasonableness of the charges for services provided to Eddins.

The parties waived a jury trial and a bench trial was held on April 24, 2018. At the outset, MRS noted the only issue the court addressed at summary judgment was the reasonableness of the fees and asked whether that would be the only issue for trial. Eddins replied he did not have a problem acknowledging he received treatment in the ER and that there was an appendectomy, but reiterated his concerns about the reasonableness of the charges, stating:

I believe everything fits within reasonableness. I would stipulate that before the suit was filed, there was [sic] demand made, letters sent, or letter, whatever. There's some documents on that that typically we wouldn't go in; but if he wants to put those in to show that context, I probably wouldn't have a problem with that. And I – in a big scope I do agree that reasonableness is what we're talking about here.

During trial, MRS sought to introduce two exhibits, Exhibit 2 and Exhibit 6, which purported to show the assignment to MRS of Eddins’ obligations to IEP and IA. Exhibit 2 is relevant to IEP's claim. It is titled "ASSIGNMENT OF ACCOUNT," and provides, in relevant part:

WE HEREBY ASSIGN AND TRANSFER OUR CLAIM AGAINST Michael D. Eddins IN THE AMOUNT OF $883.00 OVER TO MEDICAL RECOVERY SERVICES, LLC, WITH FULL POWER AND AUTHORITY TO DO AND PERFORM ALL LEGAL ACTS NECESSARY FOR THE COLLECTION, SETTLEMENT, COMPROMISE OR SATISFACTION OF SAID CLAIM, EITHER IN THE NAME OF THE UNDERSIGNED OR IN THE NAME OF THE AGENCY.

(Capitalization in original). Exhibit 2 is signed by Kerrie Finuf, the business officer manager of IEP. Exhibit 6 contains identical language but assigns IA's claim for $1,448 against Eddins to MRS. Exhibit 6 is signed by Jennifer Waddell of IA.

At trial, MRS attempted to introduce Exhibits 2 and 6 during Taylor Thomas Lugo's testimony. Lugo is the president of MRS and has no direct connection to either medical entity. Eddins objected on foundation, arguing there was no proof from either medical firm that these were valid assignments. Eddins expressed that he would not object to the admission of Exhibit 2 for the limited purpose of showing MRS relied on it. MRS conveyed that Eddins’ foundation objection would be addressed later in the trial when the signatory of Exhibit 2, Ms. Finuf, testified about the document. At that time, MRS agreed to the limited admission of Exhibit 2 solely for the purpose of showing MRS relied on it.

When MRS asked to introduce Exhibit 6, Eddins lodged the same objection, stating, "I don't have a ... problem, [y]our Honor, for the same reason as the other one, that it's submitted for purposes of showing they relied upon it. They have not made a showing of actual authority." Counsel for MRS replied that he would follow up with an additional witness. The magistrate court ruled it was admitting Exhibit 6 for the limited purpose at that time.

Later in the trial, Finuf testified she had worked for IEP for 14 years and that "her doctors" put her in charge of all the business aspects of the company, which included assigning billing accounts to MRS for collection as needed. MRS then asked the court to admit Exhibit 2 without limitation to show that the account was properly assigned to MRS. Eddins renewed his objection, arguing that Finuf could not give the time or circumstances, or even the identity, of the person who gave her specific authority to make assignments. The magistrate court reserved ruling to allow the parties to submit more briefing on the issue. Both parties submitted post-trial briefing, however, it is not included in the record on appeal, so we are unable to ascertain what the parties argued in regard to the foundation for Exhibits 2 and 6. MRS never called another witness at trial to clarify the foundation for Exhibit 6.

On August 29, 2018, the magistrate court issued its memorandum decision. The court began by noting it had not received testimony or evidence from any officer or director at IEP regarding Finuf's authority to make assignments on its behalf. Likewise, the court did not receive testimony from Jennifer Waddell, the signatory of Exhibit 6, nor did it receive evidence from any officer or director at IA regarding the authority or agency of Ms. Waddell to make assignments for IA.

The magistrate court concluded that MRS lacked standing because it failed to prove the individuals who signed Exhibits 2 and 6 had authority to make assignments for either IEP or IA. Accordingly, the magistrate court dismissed MRS's claims against Eddins without reaching any conclusion as to the reasonableness of the charges. The magistrate court later awarded attorney fees and costs against both medical entities.

On January 7, 2019, MRS filed a timely notice of appeal to the district court. There are no documents that were filed with the district court in the record before this Court. On January 23, 2020, the district court entered its opinion and order on appeal, reversing the magistrate court's decision and remanding the case. The district court concluded the magistrate court erroneously disregarded Finuf's testimony about her agency relationship and her authority to assign Eddins’ account to MRS. The district court held that both Exhibit 2 and 6 should have been admitted for all purposes based on the testimony of Finuf and Lugo. The district court did not explain why Jennifer Waddell, the signatory of Exhibit 6, was not required to provide testimony similar to Finuf to establish her agency relationship with IA at trial. The district court held the magistrate court abused its discretion when it failed to admit Exhibits 2 and 6 to show there was a legitimate assignment of Eddins’ accounts to MRS for collection.

In addition, the district court held that in the interest of justice and fairness Eddins was judicially estopped from raising the assignment issue at trial because he did not object earlier during the proceedings. Specifically, in Eddins’ response to MRS's motion for summary judgment, he only challenged the reasonableness of the medical charges—not the assignment to MRS. The district court vacated the judgment and remanded the case to the magistrate court for consideration on the merits of the reasonableness of the fees charged. The district court also awarded MRS attorney fees and costs under Idaho Code sections 12-120(1) and (3), and Idaho Appellate Rules 40 and 41.1 Eddins filed a timely notice of appeal to this Court.

II. STANDARD OF REVIEW

This Court's standard of review for appellate decisions from district courts sitting in an appellate capacity is familiar. We review such decisions by affirming the district court "as a matter of procedure," when a district court affirms a magistrate court's decision:

When this Court reviews the decision of a district court sitting in its capacity as an appellate court, the standard of review is as follows:
The Supreme Court reviews the trial court (magistrate) record to determine whether there is substantial and competent evidence to support the magistrate's findings of fact and whether the magistrate's conclusions of law follow from those findings. If those findings are so supported and the conclusions follow therefrom and if the district court affirmed the magistrate's decision, we affirm the district court's decision as a matter of procedure.
Thus, this Court does not review the decision of the magistrate court. Rather, we are procedurally bound to affirm or reverse the decisions of the district court.

Medrain v. Lee , 166 Idaho 604, 607, 462 P.3d 132, 135 (2020) (quotin...

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