Valencia v. Saint Alphonsus Med. Ctr. Nampa, Inc.

• Court: Idaho Supreme Court
• Writing for the Court: BEVAN, Justice
• Citation: Valencia v. Saint Alphonsus Med. Ctr. Nampa, Inc., 167 Idaho 397, 470 P.3d 1206 (Idaho 2020)
• Decision Date: 15 July 2020
• Docket Number: Docket No. 46741
• Parties: Nathaniel VALENCIA and Emily Williams, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. SAINT ALPHONSUS MEDICAL CENTER - NAMPA, INC., an Idaho non-profit corporation; and Does 1 through 25, inclusive, Defendants-Respondents.

167 Idaho 397

470 P.3d 1206

Nathaniel VALENCIA and Emily Williams, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants,

v.SAINT ALPHONSUS MEDICAL CENTER - NAMPA, INC., an Idaho non-profit corporation; and Does 1 through 25, inclusive, Defendants-Respondents.

Docket No. 46741

Supreme Court of Idaho.

Opinion Filed: July 15, 2020

Law Offices of Barry L. Kramer, Las Vegas, and Douglas W. Crandall, Boise, attorneys for Appellants. Barry L. Kramer argued.

Duke Law Group, PLLC, Boise, and King & Spalding, LLP, Los Angeles, attorneys for Respondents. Keeley Duke argued.

BEVAN, Justice

I. NATURE OF THE CASE

Appellants, Nathaniel Valencia and Emily Williams (collectively "Patients"), are self-pay patients who received emergency medical services at Saint Alphonsus Medical Center—Nampa, Incorporated ("Saint Alphonsus") in 2015. During their respective visits, Patients agreed to pay for "all charges incurred" for services rendered to them. Patients were billed in accordance with Saint Alphonsus' "chargemaster" rates.¹ Patients sought declaratory relief requesting the district court rule Saint Alphonsus was only entitled to bill and seek collection of the reasonable value of the treatment provided to self-pay patients. Saint Alphonsus moved the district court to dismiss the complaint pursuant to Idaho Rule of Civil Procedure ("I.R.C.P.") 12(b)(6). The district court treated the motion to dismiss as a motion for summary judgment pursuant to I.R.C.P. 12(d). Ultimately, the district court granted summary judgment for Saint Alphonsus. Patients timely appealed. We affirm.

II. FACTUAL AND PROCEDURAL BACKGROUND

In 2015, Patients Valencia and Williams received emergency medical services at Saint Alphonsus in Nampa, Idaho. Patients were self-pay patients.² During their respective visits, Patients signed Saint Alphonsus' Consent to Medical Care and Patient Services Agreement ("the Agreement"). The Agreement includes a section titled "[f]inancial [p]olicy" which states:

I agree to abide by the financial policies relating to my payment obligations for medical care received by Patient as such policies are adopted from time to time by Saint Alphonsus and acknowledge that a copy of such policies is available in the registration area and upon request. I further understand and agree that I am financially responsible for payment of all charges incurred which are not paid by any Third-Party Payors (with such charges payable upon discharge unless other arrangements have been made in advance), including, any and all products provided or services rendered to Patient which are not eligible for payment by any Third-Party Payors (e.g., services rendered by health care providers who do not participate with Patient's insurance plan).

By signing the Agreement, Patients acknowledged:

This form has been explained to me, and I certify that I have read it, understand its contents, and have had an opportunity to have my questions answered. By signing this form, I consent to medical care by [Saint Alphonsus] and to each of the provisions set forth in this form. In the event I do not understand, or consent to, any provision of this form, I will immediately speak with a representative of Saint Alphonsus to ask questions or to register my lack of consent. ...

Saint Alphonsus later billed Patients for the services rendered totaling $4,259.60 for Valencia and $3,644.85 for Williams. The amounts billed reflected Saint Alphonsus' chargemaster rates. The chargemaster is a document maintained by the billing department at Saint Alphonsus that consists of a schedule of codes, descriptions of service items, and the hospital's gross charges for each item of treatment or service.

Patients sought declaratory relief requesting the district court find Saint Alphonsus was only entitled to bill and seek collection of the reasonable value of the treatment and services provided to self-pay patients. According to Patients, the Agreement was unenforceable because the Agreement contained an "open price" term, or in the alternative, because the Agreement was unconscionable. Patients argued the Agreement contained an "open price" term because the language "all charges incurred" does not refer to Saint Alphonsus' chargemaster rate at which self-pay patients are charged. Alternatively, Patients argued even if the Agreement had no "open price" term, the Agreement was unconscionable because the chargemaster rate far exceeded any reasonable profit margin of Saint Alphonsus. Patients alleged the chargemaster rates were about 2.8 times higher than the actual fees and charges collected by Saint Alphonsus and almost three times the costs of providing treatment. Although Patients sought a declaratory judgment limiting Saint Alphonsus to charging the reasonable value of the services provided to them, Patients did not include the Agreement with their original complaint. The complaint also did not seek a determination of what the reasonable value of any services rendered to them or similarly situated self-paying patients was.

Saint Alphonsus responded by moving to dismiss the case under I.R.C.P. 12(b)(6). In so doing, Saint Alphonsus' attorney provided a declaration in support of its motion to dismiss and attached the Agreement at issue to the declaration. The district court found that Saint Alphonsus' decision to make the Agreement part of the record required the court to treat the motion to dismiss as a motion for summary judgment because the Agreement was not attached to Patients' original complaint. See I.R.C.P. 12(d). The district court applied Rule 12(d) by giving "[a]ll parties ... a reasonable opportunity to present all the material that is pertinent to the motion" Id. It ordered the parties to file supplemental responses and provide any materials relevant to the court's consideration of the motion to dismiss as required by I.R.C.P. 56 for motions for summary judgment. Patients filed no evidence in support of their position, although they did file a supplemental brief in opposition to Saint Alphonsus' motion to dismiss. This left only the bare allegations of Patients' complaint, together with the Agreement, to inform the district court's analysis of the motion.

After hearing arguments on the motion for summary judgment, the district court issued its memorandum and order granting summary judgment for Saint Alphonsus and dismissing the case. Patients timely appealed.

III. ISSUES ON APPEAL

1. Whether the case presented an actual or justiciable controversy.

2. Whether the district court's grant of summary judgment for Saint Alphonsus was erroneous.

IV. STANDARD OF REVIEW

"[A] declaratory judgment can only be rendered in a case where an actual or justiciable controversy exists." Ada Cnty. v. City of Garden City ex rel. Garden City Council , 155 Idaho 914, 918, 318 P.3d 904, 908 (2014). "Jurisdictional issues, like standing, are questions of law, over which this Court exercises free review." Westover v. Idaho Cntys. Risk Mgmt. Program , 164 Idaho 385, 388, 430 P.3d 1284, 1287 (2018) (quoting Tucker v. State , 162 Idaho 11, 17, 394 P.3d 54, 60 (2017) ). "Similarly, this Court has free review over whether dismissal for lack of jurisdiction was properly granted." Tucker , 162 Idaho at 17, 394 P.3d at 60. Questions of justiciability are reviewed under I.R.C.P. 12(b)(1). See id .

V. ANALYSIS

Patients argue the district court erred by finding the pleadings and undisputed facts presented did not establish a justiciable controversy. Patients also allege the district court erred by treating the motion to dismiss as a motion for summary judgment and granting summary judgment for Saint Alphonsus because the Agreement was unenforceable. Patients maintain the Agreement was unenforceable because it contained an "open price" term, or in the alternative, it was unconscionable. For the reasons discussed below, we hold the district court did not err by finding that the bare pleadings and undisputed facts failed to establish a justiciable controversy. As a result, we do not reach the merits of Patients' claims.

A. The district court properly dismissed Patients' action because Patients lack standing where the judicial relief requested will not redress any claimed injury.

The district court found the pleadings and undisputed facts presented to it did not establish a justiciable controversy. The court's reasoning included three grounds: (1) Patients lacked standing because their injury was not redressible; (2) the case was not ripe because Saint Alphonsus had not yet demanded payment; and (3) the relief requested would not resolve the case through a decree of conclusive character because a ruling for Patients would not resolve the amount they owed Saint Alphonsus.

Patients argue this ruling was erroneous. Patients maintain they have standing under Idaho's Declaratory Judgments Act ("IDJA") whether they sought a determination of the reasonable value of the services provided or not. Patients also contend that the relief they sought would redress the injury suffered and would resolve the case because a declaration invalidating Saint Alphonsus' billing practices would require Saint Alphonsus to modify the Agreement's language, stop ongoing collection actions, pursue unpaid open accounts on a quantum meruit basis, and discount outstanding balances. For the reasons discussed, we disagree with Patients' contentions and affirm because no actual or justiciable controversy exists.

Under the IDJA, courts have the power "to declare rights, status, and other legal relations, whether or not further relief is or could be claimed." I.C. § 10-1201. Idaho Code section 10-1202 provides:

Any person interested under a deed, will, written contract or other writings constituting a contract or any oral contract, or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, stat

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