Falvan v. Northwestern Memorial Hospital ( 2008 )

FIRST DIVISION
April 14, 2008
Nos. 1-05-3620, 1-05-4083 (Cons.)
ANTONIO GALVAN, Individually and on ) Appeal from the
Behalf of All Others Similarly Situated,) Circuit Court of
) Cook County.
Plaintiff-Appellant, )
)
v. )
) No. 05 CH 1800
NORTHWESTERN MEMORIAL HOSPITAL, )
Individually and on Behalf of All )
Others Similarly Situated, ) The Honorable
) Thomas P. Quinn,
Defendant-Appellee. ) Judge Presiding.
JUSTICE GARCIA delivered the opinion of the court.
The plaintiff, Antonio Galvan, brought a class action
lawsuit against the defendant, Northwestern Memorial Hospital,
and other similarly situated not-for-profit hospitals in Illinois
to challenge their practices of charging uninsured patients more
for services than they charged insured patients. Following a
motion by the defendant, the trial court dismissed the
plaintiff's complaint with prejudice pursuant to section 2-615 of
the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West
2004)). The plaintiff appeals, arguing he sufficiently pleaded a
cause of action under the Illinois Consumer Fraud and Deceptive
Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1
et seq. (West 2004)) and for unjust enrichment.
Nos. 1-05-3620, 1-05-4083 (Cons.)
BACKGROUND
On August 27, 2003, the plaintiff was involved in an
automobile accident and suffered serious injuries. He was taken
to the emergency room at Northwestern where he underwent surgery.
The plaintiff remained at Northwestern for 15 days. After he was
released, Northwestern billed the plaintiff $87,033.99 for the
health care services it provided. At the time of his
hospitalization, the plaintiff was uninsured.
In an action to recover for his injuries, the plaintiff was
awarded $240,000 in a settlement agreement with the tortfeasor.
Northwestern asserted a lien on the proceeds of the settlement in
the amount of $87,033.99.
On January 27, 2005, the plaintiff, individually and on
behalf of "all uninsured persons who were treated at or were
admitted to Northwestern Memorial Hospital and similar not-for-
profit hospitals throughout the state of Illinois from 2001 to
the present and who have been billed list or gross hospital
charges by Northwestern Memorial Hospital and similar not-for-
profit hospitals," filed a two-count complaint against
Northwestern "and similarly situated not-for-profit hospitals
operating in the state of Illinois that have charged or are
charging their uninsured patients gross or list hospital
charges." Count I alleged violations of the Consumer Fraud Act.
Specifically, it alleged Northwestern's practice of billing
uninsured patients gross or list hospital charges, which was more
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than 50% what it charged insured patients, was unfair and
deceptive. In count II, the plaintiff alleged Northwestern was
unjustly enriched by its imposition of the lien on the
plaintiff's settlement.
The Illinois Hospital Association, in its amicus brief,
explained the federal government mandates, through Medicare
regulations, all hospitals maintain a charge master list, which
outlines customary charges for each of a hospital's services and
supplies. The plaintiff alleged when Northwestern billed him for
his health care expenses, he was billed based on this list. He
maintains this violated the Consumer Fraud Act because insured
patients are generally charged significantly lower rates for the
same services. The Hospital Association explained that, in
general, insured patients are billed less than the price set in
the charge master list because their insurance companies have
contracted with the hospital.
In May 2005, Northwestern moved to dismiss the plaintiff's
complaint, arguing the plaintiff failed to state a claim upon
which relief could be granted. On November 11, 2005, the trial
court granted Northwestern's motion. The court held because the
plaintiff was taken to Northwestern in an emergency, he could not
allege any damages proximately caused by a deceptive act.
Further, the plaintiff could not allege unfairness because
Northwestern's policy did not violate public policy, the
plaintiff was free to challenge the amount he was charged, and
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Nos. 1-05-3620, 1-05-4083 (Cons.)
the imposition of the lien was a benign act. The court also held
the plaintiff failed to state a claim for unjust enrichment
because he did not pay any money to Northwestern and thus could
not allege Northwestern retained a benefit to his detriment.
The November 11, 2005, order contained the wrong case
number. On December 12, 2005, the trial court granted the
plaintiff's motion for the entry of an order bearing the correct
case number. This appeal followed.
AMICI BRIEFS
The Service Employees International Union (SEIU) was granted
leave to file an amicus brief in support of the plaintiff. The
Illinois Hospital Association submitted an amicus brief in
support of Northwestern. These briefs outline hospital billing
procedures and policies and the effect of these policies on
workers. The amici briefs also disclose challenges to hospital
billing practices raised in different lawsuits in Illinois and
throughout the country.
ANALYSIS
The plaintiff argues the trial court erred when it granted
Northwestern's section 2-615 motion to dismiss because he
sufficiently stated a cause of action for violations of the
Consumer Fraud Act and unjust enrichment. In the alternative,
the plaintiff argues in his reply brief he should have been
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Nos. 1-05-3620, 1-05-4083 (Cons.)
granted leave to amend his complaint.1 A section 2-615 motion to
dismiss challenges the legal sufficiency of a complaint. 735
ILCS 5/2-615 (West 2004); First Midwest Bank, N.A. v. Stewart
Title Guaranty Co., 218 Ill. 2d 326, 334, 843 N.E.2d 327 (2006).
In the context of a section 2-615 motion, "[t]he central inquiry
is whether the allegations of the complaint, when considered in
the light most favorable to the plaintiff, are sufficient to
state a cause of action relief may be granted on." Hill v. PS
Illinois Trust, 368 Ill. App. 3d 310, 312, 856 N.E.2d 560 (2006).
A court should not dismiss a complaint on the pleadings "unless
it clearly appears that no set of facts can be proved under the
pleadings which will entitle the plaintiff to recover." Bryson
v. News America Publications, Inc., 174 Ill. 2d 77, 86-87, 672
N.E.2d 1207 (1996). We review the trial court's dismissal of a
complaint de novo. First Midwest Bank, 218 Ill. 2d at 334.
In order to state a claim, a plaintiff must allege facts
sufficient to bring a claim within a legally cognizable cause of
action. City of Chicago v. Beretta U.S.A. Corp., 213 Ill. 2d
1There is no need to address this contention, as issues not
raised in the main brief are waived. See Stephens v. Industrial
Comm'n, 284 Ill. App. 3d 269, 276 (1996) (argument raised for the
first time in the reply brief in violation of Rule 341(g) (155
Ill. 2d R.341(g)) need not be addressed).
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Nos. 1-05-3620, 1-05-4083 (Cons.)
351, 368, 821 N.E.2d 1099 (2004). A court considering a motion
to dismiss for failure to state a claim will "disregard the
conclusions that are pleaded and look only to well-pleaded facts
to determine whether they are sufficient to state a cause of
action against the defendant." Beretta, 213 Ill. 2d at 368. If
the facts are not sufficient, a court will grant a defendant's
motion to dismiss. Beretta, 213 Ill. 2d at 368.
A. Consumer Fraud Act
The plaintiff maintains he adequately pleaded Northwestern's
practice of billing uninsured patients at its list or gross rate,
which was more than 50% what it charged insured patients, was
unfair and deceptive. "The Consumer Fraud Act is a regulatory
and remedial statute intended to protect consumers, borrowers,
and business persons against fraud, unfair methods of
competition, and other unfair and deceptive business practices."
Robinson v. Toyota Motor Credit Corp., 201 Ill. 2d 403, 416-17,
775 N.E.2d 951 (2002). The Consumer Fraud Act provides:
"Unfair methods of competition and
unfair or deceptive acts or practices,
including but not limited to the use or
employment of any deception, fraud, false
pretense, false promise, misrepresentation or
the concealment, suppression or omission of
any material fact, with intent that others
rely upon the concealment, suppression or
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Nos. 1-05-3620, 1-05-4083 (Cons.)
omission of such material fact, *** in the
conduct of any trade or commerce are hereby
declared unlawful whether any person has in
fact been misled, deceived or damaged
thereby." 815 ILCS 505/2 (West 2004).
Thus, under the Act, a plaintiff must plead three elements:
(1) an unfair or deceptive act or practice by the defendant; (2)
the defendant's intent that the plaintiff rely on the unfair or
deceptive practice; and (3) the unfair or deceptive practice
occurred in the course of conduct involving trade or commerce.
Robinson, 201 Ill. 2d at 417. In addition, "a valid claim must
show that the consumer fraud proximately caused plaintiff's
injury." Connick v. Suzuki Motor Co., 174 Ill. 2d 482, 501, 675
N.E.2d 584 (1996).
1. Unfairness
The plaintiff alleges Northwestern's practice of charging
uninsured patients "artificially inflated" gross or list rates
for services was unfair because if Northwestern collected the
gross or list rates from uninsured patients, the hospital would
receive an unconscionable 50% profit. The plaintiff also argued
it was unfair that Northwestern gave patients with insurance
significant discounts that uninsured patients did not get.
Northwestern argues the plaintiff's unfairness claim fails for
three reasons: (1) the plaintiff did not plead actual profits;
(2) Northwestern's practice of charging uninsured patients higher
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Nos. 1-05-3620, 1-05-4083 (Cons.)
prices, by itself, was insufficient to establish unfairness; and
(3) Northwestern had legitimate reasons for charging uninsured
patients more than it charges insured patients.
To the extent the plaintiff's unfairness claim is based on
Northwestern making a substantial profit from uninsured patient
care, the claim must fail because the plaintiff did not allege
Northwestern actually profited from charging these rates, much
less that it received an unconscionable profit. The plaintiff's
complaint, instead, was couched in the language of potential
profit:
"19. According to a report published by
the Service Employees International Union
('SEIU'), Illinois hospitals routinely charge
the uninsured list or gross charges for
medical services that are up to double the
actual cost of providing health care and
Northwestern charges the uninsured over
double the net price that an insured patient
would be charged.
20. The uninsured have become a profit
center for Northwestern. According to the
SEIU Hospital Accountability Project,
Northwestern had a potential profit of 50%
per uninsured discharge in 2001.
* * *
8
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28. Northwestern and the Defendant
Class through their deceptive and unjust
assessment of the gross overcharges to the
uninsured reaps thousands of dollars each
year from the uninsured residing in Illinois,
including Plaintiff and the putative
plaintiff class, by willfully and
surreptitiously assessing their grossly
overstated list charges on the self-pay or
uninsured patients." (Emphasis added.)
The plaintiff also argued the practice of charging uninsured
patients rates of more than 50% of that charged to insured
patients was unfair under the Consumer Fraud Act. When measuring
unfairness, courts consider three factors: "(1) whether the
practice offends public policy; (2) whether it is immoral,
unethical, oppressive, or unscrupulous; [and] (3) whether it
causes substantial injury to consumers." Robinson, 201 Ill. 2d
at 417-18. All three criteria do not need to be satisfied to
support a finding of unfairness. "'A practice may be unfair
because of the degree to which it meets one of the criteria or
because to a lesser extent it meets all three.'" Robinson, 201
Ill. 2d at 418, quoting Cheshire Mortgage Services, Inc. v.
Montes, 223 Conn. 80, 106, 612 A.2d 1130, 1143-44 (1992).
Charging an unconscionably high price, by itself, is
generally insufficient to establish a claim for unfairness.
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Instead, the "defendant's conduct must [also] violate public
policy, be so oppressive as to leave the consumer with little
alternative except to submit to it, and injure the consumer."
Robinson, 201 Ill. 2d at 418.
In this case, the plaintiff argues Northwestern's practice
violates public policy because by charging the uninsured gross or
list rates, knowing most of these patients cannot pay that
amount, hospitals can justify collecting higher rates from
private insurers and the government, and hospitals can exaggerate
the value of the charity care they provide. The SEIU maintains
this practice violates public policy because Northwestern and
other not-for-profit hospitals are exempt from taxation based on
being institutions of public charity. As such, the hospitals
have a legal duty to provide free and reduced-price care to those
unable to pay. Charging uninsured patients more than other
patients offends this policy.2
The plaintiff maintains this practice is oppressive because,
as an emergency room patient, he had no choice but to accept the
medical services provided to him at the inflated rates. He
points out he was taken to Northwestern's emergency room
2
The plaintiff did not raise the charity-care argument in
his complaint or his brief. The plaintiff never alleged he was
unable to pay for his services or he was entitled to charity
care.
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Nos. 1-05-3620, 1-05-4083 (Cons.)
following an automobile accident, he needed immediate medical
attention, and he had no meaningful choice as to which hospital
he was taken to. He argues he was harmed by Northwestern's
collection efforts, which included a lien on one-third of his
settlement funds.
The plaintiff points to an order by Circuit Court Judge
Stuart A. Nudelman, denying Our Lady of the Resurrection Medical
Center's motion to dismiss a similar claim in Servedio v. Our
Lady of the Resurrection Medical Center, No. 04L3381 (Cir. Ct.
Cook Co., January 6, 2006). In that case, the plaintiffs sued
Resurrection for violations of the Consumer Fraud Act, breach of
contract, violations of the Illinois revenue code, and
unconscionable conduct. The plaintiffs were all uninsured
patients who presented at the emergency room at Resurrection.
After services were rendered, none of the plaintiffs were able to
pay their hospital bills. To collect for its services,
Resurrection sued Servedio and sent collection notices to the
other plaintiffs. The plaintiffs then sued Resurrection.
According to the trial court's order, the plaintiffs
specifically alleged the rates Resurrection charged to insured
patients were the de facto rates for services and uninsured
patients were charged rates significantly higher than those
de facto rates. In fact, the plaintiffs alleged they were
charged double and triple the amounts charged to insured
patients. The plaintiffs argued this practice was unfair under
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Nos. 1-05-3620, 1-05-4083 (Cons.)
the Consumer Fraud Act because it violated Illinois' public
policy that hospitals should provide health care to low income
individuals, it was oppressive because the plaintiffs were in a
position in which they had no reasonable alternative but to
accept medical services and agree to pay, and it was injurious
because if the plaintiffs and other low income uninsured patients
were charged exorbitantly high fees for medical services, they
would likely forgo medical attention when it was needed. Based
on these allegations, the trial court found the plaintiffs
sufficiently pleaded a cause of action under the Consumer Fraud
Act. See also Cristiani v. Advocate Health Systems Care Network,
Inc., No. 03L14635 (Cir. Ct. Cook Co., January 27, 2006) (in a
similar motion to dismiss, Circuit Court Judge Barbara J. Disko
denied Advocate's motion to dismiss a claim under the Consumer
Fraud Act, finding a 50% cost reduction for uninsured patients
"could constitute a violation of the Consumer Fraud Act"); but
compare with Schmitt v. St. Elizabeth's Hospital Sisters of the
Third Order of St. Francis, No. 05L0186 (Cir. Ct. St. Clair Co.,
December 16, 2005) (similar complaint dismissed because
"Plaintiff has failed to allege that he has paid any amount to
St. Elizabeth's, or even offered to pay any amount, or that St.
Elizabeth's has undertaken any collection activities against him,
he has no actual damages, and thus cannot state a claim under the
[Consumer Fraud Act]").
Northwestern maintains the only "clear-cut" circumstance in
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Nos. 1-05-3620, 1-05-4083 (Cons.)
which a high price would violate the Consumer Fraud Act is where
the seller violates public policy by giving little or no services
for the price paid. Northwestern cites two cases as authority:
People ex rel. Hartigan v. Knecht Services, Inc., 216 Ill. App.
3d 843, 854-56, 575 N.E.2d 1378 (1991) (explaining high prices
alone are generally insufficient to establish unfairness under
the Consumer Fraud Act, a party must also show the practice
violates public policy, is immoral, unethical, or oppressive, and
harms consumers); People ex rel. Fahner v. Hedrich, 108 Ill. App.
3d 83, 90, 438 N.E.2d 924 (1982) (practice of charging a $1,500
sales commission when there was little or no service in
connection with the sale was unfair under the Consumer Fraud Act
because it violated public policy, the consumers were in a
position in which they had no reasonable alternative but to pay,
and consumers were injured where they were forced to pay a $1,500
fee for little or no services). In this case, because the
plaintiff received numerous medical procedures and therapies
during his 15-day stay at Northwestern, he could not allege
unfairness based on high prices.
Northwestern also argues it has a legitimate reason for
charging uninsured patients more than it charges insured
patients. Specifically, with insured patients, Northwestern
knows it will be paid promptly for the services it provided;
thus, it has assurance it will be paid. Further, by contracting
with insurance companies for discounted rates, Northwestern can
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legitimately expect insured members to use its services. In
support of this argument, Northwestern cites Laughlin v. Evanston
Hospital, 133 Ill. 2d 374, 550 N.E.2d 986 (1990), for the
proposition that our supreme court has rejected the claim that
volume discounts given by health care providers to other parties
are unfair to those who do not receive such discounts.
In Laughlin, the plaintiffs were third-party payors who
indemnified or insured patients for the cost of hospital
services. Every plaintiff was charged the same amount for
services provided by the defendant hospitals. However, one
payor, Illinois Blue Cross Plan, had a contract with the
hospitals whereby any amount that Blue Cross paid that exceeded
105% of a hospital's actual cost would be returned to Blue Cross
at the end of the year. In 1982, that amount was $50 million.
Laughlin, 133 Ill. 2d at 376-77.
The plaintiffs sued these hospitals for violations of the
Antitrust Act (740 ILCS 10/1 et seq. (West 2004)) and the
Consumer Fraud Act. The hospitals moved to dismiss the
complaint. The court dismissed the Antitrust Act count, holding:
"Price discrimination of the character complained of by the
plaintiffs, that is, discrimination which is not predatory, which
is not the result of a concerted refusal to deal or a conspiracy
and the basis of which is simply that the plaintiff did not
obtain services at a lesser price bargained for by a competing
buyer, is, in and of itself, not sufficient to state a cause of
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Nos. 1-05-3620, 1-05-4083 (Cons.)
action under [the Antitrust Act]." Laughlin, 133 Ill. 2d at 388.
Concerning the unfairness claim under the Consumer Fraud
Act, the court held the reach of the Consumer Fraud Act is
"limited to conduct that defrauds or deceives consumers or
others." Laughlin, 133 Ill. 2d at 390. Further, the court held,
"To construe the Consumer Fraud Act to give a cause of action for
discriminatory pricing that the legislature refused to give under
the Antitrust Act would be incongruous." Laughlin, 133 Ill. 2d
at 391.
While the holding in Laughlin is informative, the plaintiff
raises public policy arguments and allegations of oppressiveness
that were not relevant in that case. Northwestern argues the
public policy favoring charity care is not relevant in this case
(nor was it raised by the plaintiff) because the plaintiff made
no allegations he qualified for charity care. Further,
Northwestern argues the plaintiff's oppressiveness argument is
unpersuasive because the plaintiff did not and cannot allege he
was required to pay anything as a condition of Northwestern
treating him. Further, the lien imposed in the settlement
agreement was not oppressive where Northwestern performed
services and the plaintiff failed to pay for those services.
The plaintiff's claim of unfairness is founded on the
oppressiveness of the medical charges by Northwestern and his
lack of meaningful choice "but to pay [Northwestern]'s exorbitant
rates." The plaintiff cites Central Standard Life Insurance Co.
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Nos. 1-05-3620, 1-05-4083 (Cons.)
v. Davis, 10 Ill. App. 2d 245, 255, 134 N.E.2d 653 (1956) for the
definition of oppressive as "unjustly severe" or "unreasonably
burdensome." We are unpersuaded that either describes
Northwestern's billing practices here.
Underlying the plaintiff's claim that charging uninsured
patients a higher price amounts to oppressive pricing is a
suggestion that the insured and uninsured patients are similarly
situated. They are not. The plaintiff ignores the obvious
difference between an insured patient and one uninsured. An
insured patient by definition has medical insurance either paid
by him directly or by his employer as a benefit. In return for
the insurance premiums, his insurance company contracts with a
hospital for medical services at a reduced rate. The contract
benefits the hospital because payment is guaranteed. There is no
such guarantee from uninsured patients. The reality is an
insured patient comes into the hospital with expenses already
incurred for medical coverage. That his insurance company has
been able to negotiate a reduced rate for medical services from
the hospital is simply a product of doing business. There is no
suggestion the billing contract negotiated between Northwestern
and a particular insurance company is negotiated at anything
other than at arm's length. That an uninsured patient is charged
a higher rate for medical services is the flip side of the
revenue-stream coin. Those that have incurred the expense of
medical insurance guaranteeing payment to a medical services
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Nos. 1-05-3620, 1-05-4083 (Cons.)
provider receive reduced billing rates; those that have incurred
no expense to guarantee payment to a medical services provider
must bear the full cost for those services. While the plaintiff
contends the rate he was charged was "exorbitant" and unrelated
to the actual costs of the providing the medical services
received, as a court of law we find no basis to address such
arguments for "unfairness" as it would require we examine the
billing practices in their entirety for both insured and
uninsured patients, for each is a part of the revenue stream; we
cannot ignore one and examine only the other. As the amicus
Illinois Hospital Association correctly contends, the contentions
of the plaintiff should be directed to the deliberative process
of the legislature.
We agree with the trial court; the plaintiff has failed to
make out a case for unfairness in Northwestern's billing
practices.
2. Deception
The plaintiff also argues his complaint adequately set out a
deception claim under the Consumer Fraud Act because Northwestern
concealed material facts from him and other uninsured patients.
Specifically, the plaintiff argues Northwestern failed to
disclose it charged uninsured patients at least double what it
charged insured patients. The trial court held because of the
emergency nature of the plaintiff's admission to Northwestern, he
could not allege any damages proximately caused by the
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Nos. 1-05-3620, 1-05-4083 (Cons.)
concealment or omission of any facts.
As outlined above, to state a cause of action under the Act,
a plaintiff must plead four elements: (1) a deceptive act or
practice by the defendant; (2) an intent by the defendant that
the plaintiff rely on the practice; (3) the deceptive practice
occurred in the course of conduct involving trade or commerce;
and (4) the practice proximately caused the plaintiff's injury.
Robinson, 201 Ill. 2d at 417; Connick, 174 Ill. 2d at 501.
An omission or concealment of a material fact in the conduct
of trade or commerce constitutes consumer fraud. 815 ILCS 505/2
(West 2004); Connick, 174 Ill. 2d at 504. "A material fact
exists where a buyer would have acted differently knowing the
information, or if it concerned the type of information upon
which a buyer would be expected to rely in making a decision
whether to purchase." Connick, 174 Ill. 2d at 505. Concealment
is only actionable where it is employed as a device to mislead.
Pappas v. Pella Corp., 363 Ill. App. 3d 795, 799, 844 N.E.2d 995(2006).
In a cause of action for fraudulent misrepresentation, a
plaintiff must plead he was actually deceived by the
misrepresentation in order to establish proximate causation.
Pappas, 363 Ill. App. 3d at 804. In other words, under the
Consumer Fraud Act, deceptive advertising could not be the
proximate cause of the plaintiff's damages unless the plaintiff
was deceived by the advertising. Pappas, 363 Ill. App. 3d at
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Nos. 1-05-3620, 1-05-4083 (Cons.)
804. However, in a case where the plaintiff alleges consumer
fraud based on concealment of facts, a plaintiff need only allege
he relied on the defendant's concealment by silence. "Requiring
anything more would eviscerate the spirit and purpose of the
Consumer Fraud Act." Pappas, 363 Ill. App. 3d at 805. In
Pappas, the plaintiff alleged the defendant, even though it was
aware of a material defect in a product, never notified its
customers that the product was defective. The court held the
plaintiff, in effect, alleged he relied on the plaintiff's
silence, which was sufficient to plead proximate cause. Pappas,
363 Ill. App. 3d at 805.
In this case, the plaintiff pleaded:
"15. Northwestern and the Defendant
Class do not disclose the disparate cost
treatment to the uninsured in any of its
promotional materials while touting its
provision of services to charities and the
poor.
* * *
27. There is no meaningful disclosure
of these discrepancies in charges to the
uninsured. Northwestern and the Defendant
Class are instead deceptively and unlawfully
embedding these gross charges set forth in
the billing statement sent to the uninsured
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in a manner that was deliberately calculated
by Northwestern and the Defendant Class to
conceal its gross overcharges from the
uninsured.
28. Northwestern and the Defendant
Class through their deceptive and unjust
assessment of the gross overcharges to the
uninsured reaps thousands of dollars each
year from the uninsured residing in Illinois,
including Plaintiff and the putative
plaintiff class, by willfully and
surreptitiously assessing their grossly
overstated list charges on the self-pay or
uninsured patients.
* * *
35. The uninsured have little choice as
to which hospital they enter, particularly in
an emergency. They cannot 'shop around' for
the best prices. In Cook County in 2001, the
emergency room was the referral source for a
higher proportion of self-pay patients (67%)
than for patients with health insurance
(45%). A higher proportion of self-pay
patient admissions (69%) were deemed to be
emergencies than were insured patient
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admissions (50%). See the Hospital
Accountability Project of the Service
Employees Union report entitled: Why the
Working Poor Pay More: A Report on
Discriminatory Pricing of Health Care.
* * *
62. Defendant's actions as alleged
herein are unfair and deceptive, and
constitute fraud, misrepresentation and the
concealment, suppression and omission of
material facts with the intent that Plaintiff
and the Plaintiff Class would rely upon the
fraudulent misrepresentation, concealment,
suppression and omission of such material
facts, all in violation of the Illinois
Consumer Fraud Act.
63. By reason of the premises, and as a
proximate cause thereof, Plaintiff and the
Plaintiff Class have been injured and are
thus entitled to damages from Northwestern,
for its own fraudulent billing practices and
for its conduct with respect to the
uninsured, and all other relief prayed for in
this Class Action Complaint."
The plaintiff adequately pleaded that Northwestern concealed
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Nos. 1-05-3620, 1-05-4083 (Cons.)
information about its rates and billing practice from him.
However, he did not plead that he suffered any damages from the
concealment, or that any alleged damages were proximately caused
by the concealment. As Northwestern points out, the plaintiff
never alleged he would have been charged a different rate had he
been "informed of the existence of discounted rates for certain
insured patients" or he would have sought care elsewhere if
Northwestern had disclosed this information to him. In fact, he
pleaded the existence of the practice at Northwestern and other
not-for-profit hospitals of charging uninsured patients more.
Further, the plaintiff never paid anything for the medical
services he received, nor did he plead Northwestern instituted
any collection action other than asserting a lien on his
settlement agreement. Finally, because the plaintiff was taken
to Northwestern in an emergency situation so that care would have
been provided before any discussions of rates or payments were
had, the plaintiff makes no claim of reliance on Northwestern's
rates and billing practice for the medical services he received.
The trial court properly dismissed count I of the
plaintiff's complaint.
II. Unjust Enrichment
In count II of his complaint, the plaintiff alleged
Northwestern was unjustly enriched when it asserted a lien
against the plaintiff's personal injury settlement. Although the
trial court found the plaintiff suffered a detriment, it
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Nos. 1-05-3620, 1-05-4083 (Cons.)
dismissed this count, holding the plaintiff never pleaded that
Northwestern retained a benefit.
To state a cause of action for unjust enrichment, a
plaintiff must allege the defendant unjustly retained a benefit
to the plaintiff's detriment, and the defendant's retention
violated the fundamental principles of justice, equity, and good
conscience. HPI Health Care Services, Inc. v. Mt. Vernon
Hospital, Inc., 131 Ill. 2d 145, 160, 545 N.E.2d 672 (1989).
The plaintiff argues Northwestern's lien on his settlement
award was a property interest and, thus, Northwestern retained a
benefit. Northwestern argues the lien was unadjudicated and so
long as it remains unadjudicated, it has retained no benefit.
Section 10 of the Health Care Services Lien Act (Lien Act)
(770 ILCS 23/10(a) (West 2004)), provides:
"Every health care professional and
health care provider that renders any service
in the treatment, care, or maintenance of an
injured person *** shall have a lien upon all
claims and causes of action of the injured
person for the amount of the health care
professional's or health care provider's
reasonable charges ***."
Once a health care provider asserts a lien, a trial court will
adjudicate the rights of the interested parties and enforce the
lien after petitioned by either the injured party or the health
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Nos. 1-05-3620, 1-05-4083 (Cons.)
care provider. 770 ILCS 23/30 (West 2004).
A lien is a "legal claim upon the property recovered as
security for payment of [a] debt." In re Estate of Cooper, 125
Ill. 2d 363, 369, 532 N.E.2d 236 (1988). In other words, "when a
hospital attaches a lien upon an accident victim's recovery, it
fashions for itself a type of property interest in any assets
constituting the recovery, because a lien is a property
interest." Memedovic v. Chicago Transit Authority, 214 Ill. App.
3d 957, 959, 574 N.E.2d 726 (1991). A lien can come into
existence only when a recovery is made, because absent a
provision to the contrary, a lien is created only when there is
property to which it may attach. Cooper, 125 Ill. 2d at 369.
"Under the Hospital Lien Act, the lien is created only when the
injured person has a 'sum paid or due' him. [Citation.] In the
case of a compromise settlement, the lien attaches to 'any money
or property which may be recovered.' [Citation.]" Cooper, 125
Ill. 2d at 369.3 Cooper and Memedovic establish a lien is a type
of property interest, but until a trial court adjudicates the
rights of the parties and enforces the lien, the health care
provider, in this case Northwestern, has retained no benefit.
The trial court, therefore, properly dismissed Count II as
well.
3
The Hospital Lien Act was repealed and replaced by the
Lien Act in 2003.
24
Nos. 1-05-3620, 1-05-4083 (Cons.)
CONCLUSION
For the reasons stated above, the decision of the circuit
court of Cook County is affirmed.
Affirmed.
WOLFSON, J., concurs.
JUSTICE ROBERT E. GORDON, specially concurring:
I agree with the majority that the trial court properly
dismissed plaintiff’s complaint with prejudice pursuant to
section 2-615 of the Code of Civil Procedure (CODE) 735 ILCS 5/2-
615 (West 2004).
In order for a hospital to collect a bill for services
rendered they must show that the bill is the fair, usual and
customary charge for the services received at area hospitals at
the time of the charge. Victory Memorial Hospital vs. Rice, 143
Ill. App. 3d 621 (1986). In re the Estate of Ahbergo v. Hull, et
al., 275 Ill. App. 3d 439 (1995). Therefore, a trial court will
adjudicate a hospital lien on the same basis. 770 ILCS 23/30
(West 2004). The amicus brief filed by the Service Employees
International Union (SEIU) outlines hospital billing procedures
and policies. The Illinois Hospital Association, in its amicus
brief, explains how all hospitals maintain a master charge list
outlining the customary charge for each hospital charge based on
what other hospitals in the area are charging for each service
they provide. Plaintiff admits he was billed for his health care
expense based on this list. If a hospital individually enters in
25
Nos. 1-05-3620, 1-05-4083 (Cons.)
a contract with a health care insurance company to bill their
insured at a reduced rate, there is nothing in the law that
prohibits that conduct under the theory that it violates the
Illinois Consumer Fraud and Deception Business Provision Act or
under the theory for unjust enrichment as noted by the majority
in their opinion.
26
Nos. 1-05-3620, 1-05-4083 (Cons.)
REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT
_________________________________________________________________
ANTONIO GALVAN, Individually and on
Behalf of All Others Similarly Situated,
Plaintiff-Appellant,
v.
NORTHWESTERN MEMORIAL HOSPITAL,
Individually and on Behalf of All
Others Similarly Situated,
Defendant-Appellee.
________________________________________________________________
Nos. 1-05-3620, 1-05-4083 (Cons.)
Appellate Court of Illinois
First District, First Division
Filed: April 14, 2008
_________________________________________________________________
JUSTICE GARCIA delivered the opinion of the court.
Wolfson and R. Gordon, JJ., concur.
_________________________________________________________________
Appeal from the Circuit Court of Cook County
Honorable Thomas P. Quinn, Judge Presiding
_________________________________________________________________
For DEFENDANT - George F. Galland, Jr.
APPELLEE Miner, Barnhill & Galland, P.C.
14 W. Erie Street
Chicago, IL 60610
David S. Rosenbloom
McDermott, Will & Emery
227 W. Monroe Street
Chicago, IL 60606
For PLAINTIFF - Marvin A. Miller, Dom J. Rizzi, Lori A. Fanning
APPELLANT Miller, Faucher and Cafferty, LLP
27
Nos. 1-05-3620, 1-05-4083 (Cons.)
30 N. LaSalle Street, Suite 3200
Chicago, IL 60602
Dominic Fichera
Fichera & Miller
415 North LaSalle Street, Third Floor
Chicago, IL 60610
AMICUS CURIAE Kathleen T. Pankau, Thaddeus J. Nodzenski
BRIEF OF THE Illinois Hospital Association
ILLINOIS HOSPITAL 1151 East Warrenville Road
ASSOCIATION P.O. Box 3015
Naperville, IL 60566
AMICUS CURIAE Craig Becker
BRIEF OF THE Service Employees International Union
SERVICE EMPLOYEES 25 East Washington Street
INTERNATIONAL Suite 1400
UNION Chicago, IL 60602
28