Morrell v. Wellstar Health System, Inc.

• Decision Date: 20 June 2006
• Docket Number: No. A06A0394.,A06A0394.
• Citation: 280 Ga. App. 1,633 S.E.2d 68
• Parties: MORRELL et al. v. WELLSTAR HEALTH SYSTEM, INC. et al.
• Court: Georgia Court of Appeals

280 Ga. App. 1

633 S.E.2d 68

MORRELL et al. v. WELLSTAR HEALTH SYSTEM, INC. et al.

No. A06A0394.

Court of Appeals of Georgia.

June 20, 2006.

Vroon & Crongeyer, Bryan A. Vroon, John W. Crongeyer, Atlanta, Cathey & Strain, Dennis T. Cathey, Edward E. Strain III, David A. Sleppy, Cornelia, for appellants.

Parker, Hudson, Rainer & Dobbs, John H. Parker, Jr., Leo E. Reichert, Atlanta, Sherrod & Bernard, Kenneth R. Bernard, Jr., Douglasville, Womble, Carlyle, Sandridge & Rice, Nisbet S. Kendrick III, Atlanta, for appellees.

ANDREWS, Presiding Judge.

Michael Morrell and William C. Morrell sought and received medical care at Douglas Hospital, Inc. without having private medical insurance or benefits under Medicare or Medicaid government programs to cover the charges for the care. After being individually charged for the care, the Morrells sued Wellstar Health System, Inc. and its affiliate, Douglas Hospital, Inc. (collectively referred to as Wellstar Health), alleging that Wellstar Health overcharged them for the medical care at rates grossly in excess of the rates charged to private medical insurers, or to Medicare/Medicaid benefit programs, for the same medical care provided to their covered patients. In addition to seeking class action certification to represent similarly situated Wellstar Health patients, the complaint alleged in nine counts that Wellstar Health's overcharges for the medical care: breached implied contractual obligations requiring the charge of reasonable rates for medical care (Count 1); violated the Uniform Deceptive Trade Practices Act (Count 2); constituted unjust enrichment justifying the imposition of a constructive trust on profits wrongfully obtained by overcharging (Count 3); justified imposition of injunctive and declaratory relief prohibiting the overcharges and efforts to collect the charges (Count 4); constituted fraud, constructive fraud, and negligent misrepresentation (Counts 5, 6, and 7); breached fiduciary duties owed to patients (Count 8); and constituted negligence and negligence per se (Count 9).

Wellstar Health moved pursuant to OCGA § 9-11-12(b)(6) for dismissal of the complaint for failure to state a claim upon which relief can be granted. The trial court granted the motion by dismissing all counts of the complaint, and the Morrells contend on appeal that the trial court erred in dismissing Counts 1, 2, 3, 4 and 8.¹ For the reasons that follow, we affirm.

1. As an initial matter we note that, in ruling on the motion, the trial court elected to consider identical written documents prepared by Wellstar Health and signed by Michael and William Morrell by which they consented to and agreed to pay for the medical care. A copy of the document signed by the Morrells was submitted by Wellstar Health in support of its motion to dismiss. The substance of the document was not incorporated into the complaint, nor was a copy of the document attached as an exhibit to the complaint, so it was clearly a matter outside of the Morrells' pleadings. Bakhtiarnejad v. Cox Enterprises, 247 Ga.App. 205, 207-208, 541 S.E.2d 33 (2000); Hoffman v. PMC Dev. Co., 238 Ga. 258, 232 S.E.2d 541 (1977). When matters outside the pleadings are considered by the trial court on a motion to dismiss for failure to state a claim, the motion is converted to a motion for summary judgment pursuant to OCGA § 9-11-56, and the trial court has the burden of informing the party opposing the motion that the court will consider matters outside the pleadings and that, if the opposing party so desires, the party has no less than 30 days to submit evidence in response to the motion for summary judgment. Cox Enterprises v. Nix, 273 Ga. 152, 153, 538 S.E.2d 449 (2000); OCGA § 9-11-12(b). The record does not show that the trial court gave the required notice, but the party opposing the motion may waive the right to the 30-day notice by acquiescing in the movant's submission of evidence in support of the motion to dismiss. Cox Enterprises, 273 Ga. at 153-154, 538 S.E.2d 449. The record shows that the Morrells acquiesced in the submission of this evidence by conceding they signed the documents and by urging the trial court and this Court to consider the documents. All the parties, in effect, treated the motion to dismiss as being converted to a motion for summary judgment, and no party was denied an opportunity to respond to evidence submitted. Id. at 154, 538 S.E.2d 449. Under these circumstances, there is no indication of prejudice despite the trial court's failure to give notice of the conversion, and the Morrells "waived any formal notice from the trial court that it would consider the motion to dismiss as one for summary judgment." Id.

Because Wellstar Health's motion to dismiss for failure to state a claim was converted by law to a motion for summary judgment and granted by the trial court, the standard of review as to the issues on appeal is whether the record supports the conclusion that there was no genuine issue of material fact, and that viewing the evidence in the light most favorable to the Morrells, Wellstar Health was entitled to judgment as a matter of law. OCGA § 9-11-56; Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991).

2. The Morrells contend that the trial court erred by dismissing their breach of contract claims. It is undisputed that, prior to receiving medical care, the Morrells entered into identical written contracts with Wellstar Health by which they each consented to the medical care they received and agreed to pay for the care. As set forth in Division 1, supra, the contracts at issue were submitted as evidence and considered by the trial court in granting summary judgment in favor of Wellstar Health. With respect to the agreement to pay for medical care charges, each contract provided in relevant part: "I have not presented any evidence of insurance coverage to Wellstar Health System for my services today. I accept full financial responsibility for all charges incurred for services received today." It is also undisputed that, pursuant to these contractual agreements, Wellstar Health charged the Morrells for the provided medical care at its so-called "chargemaster" rates, which are standard rates higher than the rates charged by Wellstar Health for the same medical care provided to patients whose care is covered by private medical insurance or Medicare/Medicaid benefits.²

In their breach of contract claims, the Morrells contend that, although the written contracts were sufficiently defined to be binding contracts for payment of charges for medical care, the agreement to pay for "all charges" for medical care, without setting forth the specific charges, showed there was a lack of agreement as to the price terms in the contracts. The Morrells argue that, in the absence of an agreement on the amount to be charged, these were "open price" contracts which contained an implied agreement for Wellstar Health to charge a reasonable amount for the medical care, and that Wellstar Health breached the contracts by charging more than was reasonable under the circumstances. They also claim that the amounts charged by Wellstar Health breached an implied contractual duty of good faith and fair dealing.

In construing the contracts at issue, the trial court correctly found that these claims failed as a matter of law because the parties agreed to the charges made by Wellstar Health for the provided medical care. Construction of the contracts presented a question of law for the court, unless the contracts contained an ambiguity that could not be resolved by the rules of construction. Hardman v. Dahlonega-Lumpkin County Chamber of Commerce, 238 Ga. 551, 553, 233 S.E.2d 753 (1977); Imerys Marble Co. v. J.M. Huber Corp., 276 Ga. 401, 403, 577 S.E.2d 555 (2003). The cardinal rule of contract construction is to ascertain the intent of the parties, and "[w]here the terms of a written contract are clear and unambiguous, the court will look to the contract alone to find the intention of the parties." (Citation and punctuation omitted.) Magnetic Resonance Plus, Inc. v. Imaging Systems Intl., 273 Ga. 525, 527, 543 S.E.2d 32 (2001). Moreover, statutory provisions related to the contract construction must be considered a part of the contract. "The laws which exist at the time and place of the making of a contract, enter into and form a part of it; and the parties must be presumed to have contracted with reference to such laws and their effect on the subject matter." (Citations and punctuation omitted.) Id.

Applying these principles, the trial court found that the contracts by which the Morrells agreed to pay for "all charges" for medical care provided by Wellstar Health must be construed in light of the statutory requirements set forth in OCGA § 31-7-11(a) for providing patients with a "[w]ritten summary of hospital charge rates." Section 31-7-11(a) provides that, upon request, a hospital must provide patients with a written summary of hospital charges "composed in a simple clear fashion so as to enable consumers to compare hospital charges and make cost-effective decisions in the purchase of hospital services." Although the statute provides a list of the types of charges that must be provided in the written summary—such as admission charges; daily room rates emergency, operating and recovery room charges; anesthesia charges; intravenous administration charges; routine tests (including blood count, urinalysis, and chest X-ray), and specific special tests (including electrocardiogram, electroencephalogram, various CAT scans, spirometry, and complete pulmonary function)—the statute also specifically states that the written summary is not limited to the listed charges. The statute clearly required that Wellstar Health maintain and make available upon request a written summary of its charges to patients or other consumers for all medical care, whether the charges are at the "chargemaster" rates applied by...