United States District Court, N.D. Alabama, Middle Division
MARILYN BROWN, et al. Plaintiffs,
GADSDEN REGION MEDICAL CENTER, et al. Defendants.
OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE.
Marilyn Brown and Aaron Grindstaff brought suit in Etowah
County Circuit Court against Gadsden Regional Medical Center
(GRMC); Triad Holdings V, LLC; Triad of Alabama, LLC; and
Professional Account Services, Inc. (PAS), for breach of
contract, conversion, and breach of fiduciary duty. Each
count is paired with a conspiracy claim.
removed the action to this court, and then all the Defendants
jointly filed a motion to dismiss, or in the alternative, a
motion for summary judgment on all claims. (Doc. 14). As
discussed in this opinion, the court will grant the motion.
Specifically, the court will dismiss the breach of express
contract count because the Plaintiffs lack standing to
enforce a contract to which they are not an intended party;
dismiss the breach of implied contract and conversion counts
for failure to state a med-pay claim; and will enter judgment
for the Defendants on the breach of fiduciary duty count.
case centers on two patients' claims that Gadsden Region
Medical Center improperly placed liens on their automobile
insurance med-pay benefits rather than seeking payment from
Blue Cross Blue Shield, their personal healthcare insurance
Cross and GRMC have a provider agreement in which the
hospital agrees to submit bills of member patients directly
to Blue Cross for reimbursement. The agreement says that the
hospital should not file liens against Blue Cross members and
that nothing in the contract is intended to confer a right,
benefit, or cause of action on a third party, including a
Blue Cross member.
March 23, 2012, Marilyn Brown was injured in a car wreck and
taken to GRMC for treatment. During the intake process, GRMC
says it did not receive any indication Ms. Brown had private
health insurance. Ms. Brown says she cannot remember if she
told the hospital she was insured by Blue Cross. GRMC filed a
hospital lien against any claims, judgments, causes of
action, or settlements received or entitled to be received by
Ms. Brown for the costs of Ms. Brown's care.
September 2012, Ms. Brown returned to GRMC for a
pre-operation examination. At that time, Ms. Brown informed
GRMC that she had private health insurance through Blue
Cross, but that the other driver's auto insurance would
cover her medical bills related to the accident. GRMC
submitted her September surgery to Blue Cross, who paid the
Brown's automobile insurer refused to issue a check
solely to her for her med-pay benefits, instead insisting on
issuing a two-party check including GRMC as a payee. Even
though Ms. Brown told the insurer that GRMC had withdrawn the
lien, the insurer still refused to issue a check payable only
to Ms. Brown.
Brown filed suit in state court against the other driver in
her accident, claiming that he was liable for her injuries.
The other driver moved for two continuances prior to trial.
First, he moved the court to continue the trial based on a
settlement offer made to Ms. Brown. Ms. Brown opposed the
motion, stating she would not accept a settlement for less
than the policy's limit.
defendant driver also requested a stay of the case prior to
trial, arguing that the existence of GRMC's lien
permitted Ms. Brown to argue inconsistent positions and
permitted a potential double recovery. Ms. Brown opposed that
motion, stating that GRMC had withdrawn the lien and so it
would have no effect on the case. In October 2015, the case
was tried by a jury, who returned a verdict finding the other
driver not liable to Ms. Brown.
on May 14, 2014, Aaron Grindstaff was injured in a car
accident and treated at GRMC. Mr. Grindstatff had private
health insurance through Blue Cross, and informed GRMC of
that fact on his admission paperwork. Less than a month
later, GRMC filed a hospital lien against Mr. Grindstaff,
seeking payment from his car insurance med-pay.
Mr. Grindstaff made a claim against his auto policy for the
med-pay benefits, his auto insurer wrote a check payable to
him and GRMC. Mr. Grindstaff s attorney informed his auto
insurer that Blue Cross had already paid the GRMC bill and
requested a check made payable only to Mr. Grindstaff.
However, his auto insurer refused to do so.
STANDARD OF REVIEW
Defendants argue the Plaintiffs lack standing to bring their
claims, that the complaint fails to state a claim, and that
they are entitled to summary judgment. Accordingly, three
different legal standards are at issue: Federal Rules of
Civil procedure 12(b)(1), 12(b)(6), and 56. The court will
set out the standard for each in turn.
Motion to Dismiss ...