Marco Ochoa Versus Brad Aldrete, Aldrete & Sons Shoring Co., Inc. and State Farm Mutual Automobile Insurance Company ( 2021 )

MARCO OCHOA NO. 21-C-632
VERSUS FIFTH CIRCUIT
BRAD ALDRETE, ALDRETE & SONS COURT OF APPEAL
SHORING CO., INC. AND STATE FARM
MUTUAL AUTOMOBILE INSURANCE STATE OF LOUISIANA
COMPANY
ON APPLICATION FOR SUPERVISORY REVIEW FROM THE
TWENTY-FOURTH JUDICIAL DISTRICT COURT
PARISH OF JEFFERSON, STATE OF LOUISIANA
NO. 793-366, DIVISION "A"
HONORABLE RAYMOND S. STEIB, JR., JUDGE PRESIDING
December 08, 2021
FREDERICKA HOMBERG WICKER
JUDGE
Panel composed of Judges Fredericka Homberg Wicker,
Jude G. Gravois, and John J. Molaison, Jr.
WRIT GRANTED
FHW
JGG
JJM
COUNSEL FOR PLAINTIFF/RELATOR,
MARCO OCHOA
Miguel A. Elias
Paula J. Ferreira
Adam M. Klock
Mario D. Zavala, Jr.
Graham Brian
Donald A. Mau
Olivia L. Kinnear
Rashim J. Khan
Robert E. Duhon
COUNSEL FOR DEFENDANT/RESPONDENT,
BRAD ALDRETE, ALDRETE & SONS SHORING CO., INC. AND STATE
FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Nicholas C. Gristina
Andrew G. West
Gordon P. Guthrie, III
WICKER, J.,
Relator-plaintiff, Marco Ochoa, seeks review of the district court’s August 10,
2021 judgment in favor of Respondents-defendants, Brad Aldrete, Aldrete & Sons
Shoring Co., Inc., and State Farm Mutual Automobile Ins. Co. The district court
granted Respondents’ Motion in Limine to exclude the total medical expenses billed
by Relator’s medical providers and to limit Relator to only offering at trial evidence
of the medical expenses paid to his healthcare providers by the third-party
funding/factoring company, HMR Funding, LLC (hereinafter “HMRF”). For the
foregoing reasons, we grant the writ, vacate the August 10, 2021 judgment, and
remand this matter for further proceedings.
Pertinent Factual and Procedural History
On June 28, 2018, Mr. Ochoa was involved in a motor vehicle accident with
Brad Aldrete. Mr. Ochoa had limited financial resources to cover the costs of his
medical treatment for his alleged accident-related injuries. Prior to filing suit, his
medical providers, One Spine Institute - Dr. Peter Liechty; Crescent View Surgery
Center; and Louisiana Rehab Products, Inc., entered into an agreement with a third-
party medical funding/factoring company, HMR Funding, LLC, for it to purchase
Mr. Ochoa’s outstanding medical bills at a negotiated or discounted rate in exchange
for an assignment to collect the billed amount of the medical expenses from Mr.
Ochoa and the proceeds of the resolution of his claim. To obtain Mr. Ochoa’s
consent to that agreement, a representative for each medical provider, One Spine
Institute - Dr. Peter Liechty; Crescent View; and Louisiana Rehab Products, Inc.,
entered into an Assignment Agreement1 with Mr. Ochoa detailing, inter alia, his
personal responsibility to each provider and the providers’ assignment of its rights
to HMRF. No representative from HMRF signed the agreement.
1
The Assignment Agreements were executed on October 19, 2018 by Mr. Ochoa and a representative of One Spine
Institute - Dr. Peter Liechty and Crescent View Surgery Center, respectively. On November 7, 2018, Mr. Ochoa and
a representative of Louisiana Rehab Products, Inc. executed an Assignment Agreement.
On March 21, 2019, Mr. Ochoa filed suit against Brad Aldrete, Aldrete &
Sons Shoring Co., Inc., and State Farm Mutual Automobile Ins. Co. for damages and
injuries sustained in connection with the June 28, 2018 automobile accident.
On June 29, 2021, Respondents filed a Motion in Limine seeking to exclude
evidence as to the billed amount of medical specials and to limit Relator to only
presenting the actual amounts paid to his medical providers. In connection with their
motion, Respondents attached the Lien and Receivables Purchase and Assignment
Agreements between HMRF and One Spine Institute - Dr. Peter Liechty; Crescent
View; and Louisiana Rehab Products, Inc.2 Also submitted were the Master
Purchase Agreement between Benchmark Rehabilitation Partners, LLC and
HMRF3; the 1442 deposition transcript of Deborah Lukhard, a corporate
representative of HMRF; three Assignment Agreements executed by Relator and his
medical providers, One Spine Institute - Dr. Peter Liechty; Crescent View; and
Louisiana Rehab Products, Inc., respectively.
In their motion, Respondents argued that HMRF purchased the account
receivables from Mr. Ochoa’s medical providers at a significantly discounted rate,
cumulatively less than 42% of the billed amounts, in satisfaction of the medical bills,
and thus, Mr. Ochoa is not responsible to pay any amount over that which was paid
by the third-party financing company, HMRF. Ultimately, Respondents asserted that
the collateral source rule is inapplicable to this matter.
On July 13, 2021, Mr. Ochoa filed an Opposition to Respondents’ motion. He
averred that HMRF’s involvement with his medical providers should be excluded
on the grounds that the collateral source rule and La. C.E. art. 409 prohibits the
admissibility of such information at trial. Mr. Ochoa relies on Whitley v. Pinnacle
2
The Assignment Agreements between HMRF and Mr. Ochoa’s medical providers were not attached to the writ
application or in the opposition thereto. Because we are limited to our review of the documents attached to the writ
application, we are unable to review and opine as to agreements absent from the writ application.
3
The Master Purchase Agreement between HMRF and Benchmark Rehab was not attached to the writ application or
in the opposition thereto. Thus, we are unable to review and opine as to the agreement absent from the application
since we are limited to review of the documents included with the writ.
2
Entm't, Inc. of Delaware, CV 15-00595-BAJ-RLB, 2017 WL 1051188 (M.D. La.
Mar. 20, 2017), to support his position that there is no windfall or double recovery
by him, and that the billed amount for his medical expenses are costs he will actually
incur. Later that same day, Respondents filed a Reply to Mr. Ochoa’s opposition
wherein they re-urged that the collateral source rule does not apply, that Hoffman4
and Bozeman5 are controlling, and that Mr. Ochoa never entered into an agreement
with HMRF or negotiated with his medical providers regarding a discounted
payment to satisfy the billed amount of his medical bills.
At the July 22, 2021 hearing, after considering the arguments of the parties
and the evidence introduced, the district court took the matter under advisement. On
August 10, 2021, the district court rendered judgment, with written reasons6, in favor
of Respondents and against Mr. Ochoa. Mr. Ochoa seeks supervisory review.
Law and Analysis
The trial court is granted broad discretion in its evidentiary rulings, which are
not to be disturbed on appeal absent a clear abuse of discretion. Moonan v. Louisiana
Med. Mut. Ins. Co., 16-113 (La. App. 5 Cir. 9/22/16); 202 So.3d 529, 534, writ
denied, 16-2048 (La. 1/9/17); 214 So.3d 869 (internal citations omitted). A motion
in limine presents an evidentiary matter that is subject to the great discretion of the
trial court. Id. On appeal, the court must consider whether the complained-of ruling
was erroneous and whether the error prejudiced the plaintiff's case, otherwise a
reversal is not warranted. La. C.E. art. 103(A). Id. The determination is whether the
4
Hoffman v. 21st Century North American Ins. Co., 14-2279 (La. 10/2/15), 209 So.3d 702.
5
Bozeman v. State, 03-1016 (La. 7/2/04), 879 So.2d 692, 697.
6
In the district court’s August 11, 2021 reasons for judgment, a discussion of Respondents First Motion in Limine
filed on July 24, 2020 has been contained therein. The issues presented and the ruling of the district court made in
connection with that motion are not before this Court, and have not been considered upon review of the matter before
us.
3
error, when compared to the record in its totality, has a substantial effect on the
outcome of the case, and it is the complainant's burden to so prove. Id.The central issue before this Court is whether the collateral source rule applies
to the difference between the amounts billed by Mr. Ochoa’s medical providers and
the discounted amounts paid by HMRF, a third-party medical funding/factoring
company, to those providers in satisfaction of receivables when Mr. Ochoa remains
liable for the billed amount.
We first address if, pursuant to the Assignment Agreements, Mr. Ochoa is
liable for the remaining balance of the billed invoices after HMRF acquired, by
paying a negotiated or discounted amount of the medical invoices, the account
receivables from the medical providers.
As preliminary matter, we address the nature of the contracts between the
medical providers and Mr. Ochoa, and its bearing on HMRF.
Assignments of right are governed by La. C.C.P. art. 698, which provides:
An incorporeal right which has been assigned, whether
unconditionally or conditionally for purposes of collection
or security, shall be enforced judicially by:
(1) The assignor and the assignee, when the assignment is
partial; or
(2) The assignee, when the entire right is assigned.
A cause of action in tort is both an incorporeal movable thing and property
that is owned under Louisiana law. See La. C.C. arts. 448, 461, and 473; Heyse v.
Fidelity & Casualty Co. of New York, 255 La. 127, 229 So.2d 724, 726 (La. 1969);
Conrad v. Swiss Chalet Picnic Grounds & Catering Service, 96–606 (La. App. 5
Cir. 12/30/96), 686 So.2d 1055. No particular form or words are necessary to
constitute a valid assignment. Katz v. Saruessen, 476 So.2d 16, 19 (La. App. 5 Cir.
1985).
Further, all rights may be assigned, with the exception of those pertaining to
obligations that are strictly personal. La. C.C. art. 2642. Strictly personal obligations
on the part of an obligee are those for which the performance is intended for the
4
benefit of the obligee exclusively. La. C.C. art. 1766. It is well settled that most
litigious rights can be assigned, transferred, or inherited and are therefore not strictly
personal. La. C.C. art. 2652; Guidry v. Theriot, 377 So.2d 319, 324 (La. 1979)
(victim's action for recovery of tort damages is not strictly personal).
Upon review of the documents attached to the writ application, the
Assignment Agreements executed by Mr. Ochoa and by the medical providers, One
Spine Institute - Dr. Peter Liechty, Crescent View, and Louisiana Rehab Products,
Inc., respectively, contain identical language and provisions. The pertinent sections
of the Assignment Agreements are as follows:
1. Assignment Of Proceeds And Acknowledgment of
Lien. Patient hereby irrevocably assigns, transfers, and
conveys to Medical Provider, and its assigns, all right, title
and interest in and to any proceeds recovered by Patient,
or on Patient’s behalf, arising out of any claim, settlement,
mediation, litigation, arbitration, verdict, judgment, or
other collection activity related to the Incident, regardless
of the source of such proceeds (collectively, the
“Proceeds”), in the Expense Amount. Patient
acknowledges and agrees that, notwithstanding the
existence of this Agreement, Patient remains directly
responsible for all medical expenses arising out of the
Services provided by Medical Provider to Patient, and the
parties’ entering into this Agreement does not constitute a
waiver by Medical Provider of any right to collect the
Expense Amount from Patient. This Agreement does not
make Medical Provider’s ability to collect the Expense
Amount, or Patient’s responsibility to pay the Expense
Amount, contingent on the receipt of the Proceeds or on
Patient’s prevailing on the claims arising out of the
Incident. This assignment is in addition to and does not
negate the lien Medical Provider, or its assigns, has on the
Proceeds, and the parties acknowledge the existence and
enforceability of such lien.
6. Medical Providers’ Intent To Assign Rights. Patient
acknowledges that Medical Provider intends to assign its
rights under this agreement to HMR Funding, LLC, a
Delaware limited liability company, or its affiliates
(collectively, “HMRF”). Patient agrees that such
assignment is permitted under this Agreement. Patient
agrees that upon such assignment, all obligations Patient
owes under this agreement, including without limitation
the obligation to pay the Proceeds, shall be obligations
owed to HMRF and that HMRF shall have all rights of
Medical Provider under this Agreement, including without
5
limitation the right to collect the Proceeds, remedies upon
Patient’s breach, and any right to indemnification.
Based on the language of the agreements, clearly One Spine Institute - Dr.
Peter Liechty, Crescent View Surgery Center, and Louisiana Rehab Products each
intended to assign its rights to HMRF to collect the Medical Lien and the remaining
balance of the billed amount for medical treatment received by Mr. Ochoa in
connection with the June 29, 2018 accident. Specifically, One Spine Institute - Dr.
Peter Liechty, Crescent View Surgery Center, and Louisiana Rehab Products
expressly and explicitly stated that Mr. Ochoa (the Patient) consents to “all
obligations Patient owes under this agreement, including without limitation the
obligation to pay the Proceeds, shall be obligations owed to HMRF and that HMRF
shall have all rights of Medical Provider under this Agreement, including without
limitation the right to collect the Proceeds, remedies upon Patient’s breach, and any
right to indemnification.” These words fully and unequivocally lead to the
conclusion that One Spine Institute - Dr. Peter Liechty, Crescent View Surgery
Center, and Louisiana Rehab Products assigned all of its rights to HMRF when a
representative of each provider along with Mr. Ochoa signed the agreements. We
find that One Spine Institute - Dr. Peter Liechty, Crescent View Surgery View, and
Louisiana Rehab Products rights were not strictly personal and therefore assignable.
We now address whether the Assignment Agreements contained any
provisions such that HMRF could hold Mr. Ochoa liable for the full amount of the
billed medical invoices for treatment rendered by the medical providers.
The interpretation of a contract is the determination of the common intent of
the parties. La. C.C. art. 2045. For purposes of interpreting a contract, a contract is
“ambiguous” when it lacks a provision bearing on the issue, its written terms are
susceptible to more than one interpretation, there is uncertainty as to its provisions,
or the parties' intent cannot be ascertained from the language used. Lomark, Inc. v.
LavigneBaker Petroleum, L.L.C., 12-389 (La. App. 5 Cir. 2/21/13); 110 So.3d 1107,
6
writ denied, 13-0654 (La. 4/26/13); 112 So.3d 848 (internal citations omitted). The
common intent of the parties to a contract is determined in accordance with the
general, ordinary, plain and popular meaning of the words used in the contract. Id.(internal citations omitted). Although parol evidence is inadmissible to vary the
terms of a written contract, when the terms of a written contract are susceptible to
more than one interpretation, or there is uncertainty or ambiguity as to its provisions,
or the intent of the parties cannot be ascertained from the language employed, parol
evidence is admissible to clarify the ambiguity and to show the intention of the
parties. Id. (internal citations omitted).
In their opposition, Respondents make substantively and substantially the
same arguments they made before the trial court in their motion at issue.
Respondents contend that Mr. Ochoa’s medical providers were fully compensated
when HMRF purchased the account receivables at a significantly discounted rate of
42%, that is $120,250.00, when the outstanding bills totaled $286,070.50 – a
difference of $165,820.50. In its written reasons for judgment, the district court gave
significant consideration to the testimony of Deborah Lukhard, a corporate
representative of HMRF, who testified in a 1442 deposition that it has not “gone
personally after any of the patients for failure to pay the full medical expense.”
It is well established that “when the words of a contract are clear and explicit
and lead to no absurd consequences, no further interpretation may be made in search
of the parties’ intent.” La. C.C. art. 2046; Perfection Metal & Supply Co. v. Indep.
Supply of N.O. Inc., 97-800 (La. App. 5 Cir. 1/14/98); 707 So.2d 86 (internal
citations omitted). Testimonial or other evidence may not be admitted to negate or
vary the contents of an act under private signature, although evidence may be
admissible in the interest of justice to prove vices of content or subsequent oral
modifications of a contract. La. C.C. art. 1848; Id. (internal citations omitted).
7
Consideration of this evidence by the district court was improper to confirm
not if the right exists, but if HMRF actually exercises its right to litigate claims
against injured plaintiffs to recoup the unpaid difference between the amount HMRF
paid for the receivables and the amount billed by the medical providers. On its face,
the provisions and terms of the Assignment Agreements are unambiguous regarding
Mr. Ochoa’s responsibility to pay the total amount billed by his medical providers.
Thus, we find that pursuant to the language and provisions contained in the
Assignment Agreements executed by Mr. Ochoa and his medical providers, Mr.
Ochoa remains liable to HMRF for the full amount of the billed medical invoices for
treatment received in connection with the June 28, 2018 accident.
Next, we address whether the collateral source rule applies to the difference
between the amount billed by Mr. Ochoa’s medical providers and the discounted
amount paid by HMRF.
Louisiana courts embrace and apply the collateral source rule, which is a rule
of evidence and damages. Bozeman v. State, 03-1016 (La. 7/2/04), 879 So.2d 692,
697. Under the collateral source rule, a tortfeasor may not benefit, and an injured
plaintiff's tort recovery may not be reduced, because of monies received by the
plaintiff from sources independent of the tortfeasor's procuration or contribution. Id.
at 698. Hence, the payments received from the independent source are not deducted
from the award the aggrieved party would otherwise receive from the wrongdoer,
and, a tortfeasor's liability to an injured plaintiff should be the same, regardless of
whether or not the plaintiff had the foresight to obtain insurance. Id.
In Bozeman, our Supreme Court explained that where a plaintiff's “patrimony
has been diminished in some way” to obtain collateral source payments, such as with
private insurance or Medicare, then a plaintiff is entitled to the benefit of the bargain
and may recover the full value of the medical services, including the “write-off”
amount. Id. at 705–06. However, a plaintiff may not recover “write-off” amounts as
8
damages where no consideration is provided by the plaintiff for the benefit. Id. at
705. Thus, there are two primary considerations for determining whether the
collateral source rule applies: “(1) whether application of the rule will further the
major policy goal of tort deterrence; and (2) whether the victim, by having a
collateral source available as a source of recovery, either paid for such benefit or
suffered some diminution in his or her patrimony because of the availability of the
benefit, such that no actual windfall or double recovery would result from
application of the rule.” Lockett v. UV Ins. Risk Retention Grp., Inc., 15-166 (La.
App. 5 Cir. 11/19/15), 180 So. 3d 557, 570; citing Bellard v. Am. Cent. Ins. Co., 980
So. 2d 654, 669 (La. 2008).
In Hoffman v. 21st Century North American Ins. Co., our Supreme Court
declined to apply the collateral source rule to an attorney-negotiated medical
discount. 14-2279 (La. 10/2/15), 209 So.3d 702. In Simmons v. Cornerstone
Investments, LLC, the Supreme Court reasoned that “allowing the plaintiff to recover
an amount for which he has not paid, and for which he has no obligation to pay, is
at cross purposes with the basic principles of tort recovery in our Civil Code.” 18-
0735 (La. 5/8/19); 282 So.3d 199, 205. Ultimately, it held that the collateral source
rule does not apply to a discount in the amount of medical expenses paid by workers’
compensation because “any recovery in addition to the reduced amount of medical
bills would be a windfall to Plaintiff and against the rationale behind the collateral
source rule.” Id. In other words, for the collateral source rule to apply to ‘write-off’
amounts of medical expenses that were billed but not paid because a third-party
negotiated to pay a lesser amount, the plaintiff must give some consideration for the
benefit obtained or otherwise suffer a diminution of patrimony.” Miciotto v. United
States, 270 Fed. Appx. 301, 303 (5th Cir. 2008) (per curiam) (citing Bozeman, 879
So. 2d at 705–06).
9
In the case at bar, the agreement between HMRF and One Spine Institute - Dr.
Peter Liechty, Crescent View Surgical Center, and Louisiana Rehab Products,
respectively, provides no discount to Mr. Ochoa. Further, Mr. Ochoa did not
negotiate any of the discounted amounts or sign a contract with HMRF. Respondents
admit this undisputed fact in their opposition to the writ application. Rather, the
medical providers assigned to HMRF the right to recover the full amount billed to
Mr. Ochoa, and he remains personally liable for the full amount billed. Mr. Ochoa’s
attorney has not negotiated a discount of the total amounts owed by him, which must
be passed on to the tortfeasor under Hoffman. In his writ application, Mr. Ochoa
contends that the total amounts billed is the appropriate measure of damages, despite
HMRF’s purchase of the receivables at a discounted rate, which represents HMRF’s
profit, because he is still required to pay the full costs of his medical expenses.
Respondents argue that the instant matter is similar to Hoffman because Mr. Ochoa
will not be responsible for the full amount of the medical bills. In support of their
contention, they submitted the 1442 deposition transcript of Ms. Lukhard, a
corporate representative of HMRF, who testified that HMRF has not pursued any
injured patients for failure to pay the full amount billed by the medical provider.
As previously discussed, parol evidence is inadmissible to vary the terms of a
written contract. Moreover, any discounts or write-offs obtained through
negotiations by a health insurer, Patterson v. State Farm Mut. Automobile Ins. Co.,
244 So. 3d 800, 803-04 (La. App. 2 Cir. 2017), or a plaintiff individually, Lockett v.
UV Ins. Risk Retention Grp., Inc., 180 So. 3d 557, 571-71 (La. App. 5 Cir. 2015),
are subject to the collateral source rule, and therefore are not deducted from
plaintiff’s recoverable medical expenses.
In Whitley, a federal magistrate court held that the exception to the collateral
source doctrine did not apply and denied a motion in limine to exclude evidence of
total amount billed for medical treatment, noting that “while [the funding company]
10
received a discount upfront, at most, this difference between the customary cost—
which plaintiff has to pay in full—and the discounted rate consists of the profit [the
funding company] receives for agreeing to finance the medical costs up-front.”
Whitley v. Pinnacle Entm't, Inc. of Delaware, 2017 WL 1051188 (M.D. La. Mar. 20,
2017). It reasoned that plaintiff is entitled to present evidence of the total costs she
is actually obligated to pay, which, under the terms of the operative financing
agreements, are the full billed costs. Id.In the present case, just like the plaintiff in Whitley, Mr. Ochoa is responsible
for the full amounts billed by his medical providers pursuant to the Assignment
Agreements, and thus, he is entitled to present evidence of the total costs he is
obligated to pay. Accordingly, Respondents have failed to prove that Mr. Ochoa is
not liable for the amounts billed by his medical providers. Since Mr. Ochoa has not
actually received a benefit from the discount negotiated between the third-party
funding company and the healthcare providers, Respondents cannot subtract that
discount from a theoretical damage award to Mr. Ochoa. Respondents may not
introduce evidence regarding this financial arrangement to argue that Mr. Ochoa’s
recovery in this litigation should be limited to the discounted rate paid by HMRF to
Mr. Ochoa’s healthcare providers.
Next, we address whether Mr. Ochoa was in bad faith relative to the
customary and reasonableness of his medical expenses such that a diminution in his
bills was appropriate. In its written reasons for judgment, the district court reasoned
that because Mr. Ochoa acknowledged in the Assignment Agreements that the billed
amounts may differ from other patients who were not funded by a third-party entity,
the healthcare provider may receive a larger percentage of the amounts billed. The
district court explained that it considered an affidavit and report furnished by Nancy
Michalski, a registered nurse in California, who reviewed the medical bills of Mr.
Ochoa’s three medical providers.
11
Louisiana courts routinely state that the trier of fact commits reversible error
if it finds that the plaintiff has incurred past medical expenses because of the
defendant's negligence, but then does not award the plaintiff the full amount of those
expenses. Gunn v. Robertson, 01-347 (La. App. 5 Cir. 11/14/01); 801 So.2d 555,
564, writ denied, 02-0170 (La. 3/22/02); 811 So.2d 942, and writ denied, 02-0176
(La. 3/22/02); 811 So.2d 942. In Gunn, this Court explained that a “tortfeasor is
required to pay for medical treatment of his victim, even over treatment or
unnecessary treatment, unless such treatment was incurred by the victim in bad
faith.” Id. This Court also stated that a “trier of fact is in error for failing to award
the full amount of medical expenses” when proved by a preponderance of the
evidence. Id.A jury could only reduce plaintiff's award for past medical expenses if it found
that not all of his injuries were caused by defendant's negligence or that he incurred
unnecessary treatment in bad faith. Simon v. Lacoste, 05-550 (La. App. 3 Cir.
12/30/05), 918 So.2d 1102, 1104-05. Bad faith exists where plaintiffs continue
treatment, despite having already been healed, for the sole purpose of increasing
their damages. Bass v. Allstate Ins. Co., 32,652 (La. App. 2 Cir. 1/26/00), 750 So.2d
460. Similarly, a plaintiff's deliberate exaggeration of the impact of a vehicle
collision and the extent any alleged injuries may constitute “bad faith.” Hamilton v.
Wild, 40,410 (La. App. 2 Cir. 12/14/05), 917 So.2d 695. On the other hand, courts
will not find bad faith on the part of a plaintiff simply because the trier of fact
disagrees with a course of treatment. Vines v. Wood, 34,555 (La. App. 2 Cir. 4/4/01),
785 So.2d 126, 131.
Upon review of the documents attached to the writ application, we point out
that neither the affidavit nor the report furnished by Nancy Michalski is contained
in the attachments of the writ application and in the opposition thereto. Nevertheless,
this Court will address the merits of Respondents’ contention since neither document
12
has any direct bearing on their assertions. Ultimately, Respondents apparently do not
object to the treatment received by Mr. Ochoa, but they dispute the costs of his
treatment.
Simply put, no such evidence of bad faith exists in this instant writ application.
Instead, Respondents aver that Mr. Ochoa was overcharged for treatment and
procedures performed at One Spine Institute - Dr. Peter Liechty and Crescent View
Surgery View. They further asserted that HMRF did not perform any investigation
to determine if the medical expenses billed are reasonable. Also, the district court,
in its written reasons for judgment, stated that Mr. Ochoa was in bad faith for
accepting treatment that may be billed at a different rate than billed for patients who
were not funded by a third-party entity.
We disagree. There is no evidence that Mr. Ochoa acted in bad faith by
continuing treatment, despite having already been healed, for the sole purpose of
increasing his damages. Respondents have not submitted any proof that Mr. Ochoa
has deliberately exaggerated the impact of the June 28, 2018 accident and the extent
of his alleged injuries in connection with same. Further, the testimony of Nancy
Michalski alone is insufficient to meet the standard set forth by Louisiana
jurisprudence regarding a plaintiff’s bad faith relative to the customary and
reasonableness of his medical expenses. Louisiana law is clear that “[e]ven if a tort
victim has been overcharged for medical treatment, the tortfeasor is liable for the
expenses unless they were incurred by the victim in bad faith.” Lair v. Carriker, 574
So.2d 551, 553 (La. App. 3d Cir. 1991) (internal citations omitted). Accordingly,
whether a treating physician overcharged a plaintiff for medical service is not within
the jury’s purview. See La. C.C. arts. 2315, 2315.6, 2316, and 2317.
Lastly, we address Respondents’ arguments regarding La. R.S. 22:18747 and
La. C.C. art. 2652. While Respondents did raise the applicability of La. R.S. 22:1874
7
La. R.S. 22:1874 provides, in pertinent part, as follows:
13
and La. C.C. art. 2652 in support of their motion in the district court below, the
district court did not address those arguments and the judgment makes no mention
of same. As a general rule, appellate courts will not consider issues that were not
addressed by the trial court. Stone v. Lakes of Chateau N., L.L.C., 16-529 (La. App.
5 Cir. 12/14/16); 208 So.3d 1053, writ denied, 2017-0087 (La. 2/24/17). In its
reasons for judgment, the district court merely referenced the applicability of La
C.C. art. 2652 relative to HMRF’s right to recovery in connection with Mr. Ochoa’s
medical providers’ assignment. Once the court made its findings regarding the issues
presented in the motion, any additional statements in its reasons for judgment
discussing whether defendants could prevail under certain theories of law were not
essential to the judgment. Thus, the court's comments on these issues are purely
obiter dicta, and are not binding on the parties. We further point out that La C.C. art.
2652 permits the debtor to extinguish an obligation when the litigious right is
assigned, but it has no application to transfers of rights before a suit is filed; it neither
authorizes nor prohibits such transfers, but is silent on the subject. King v. Illinois
Nat. Ins. Co., 43,237 (La. App. 2 Cir. 6/4/08); 986 So.2d 839, writ granted, 08-1491
(La. 10/10/08); 993 So.2d 1271, and aff'd, 08-1491 (La. 4/3/09); 9 So.3d 780. Here,
A. (1) A contracted health care provider shall be prohibited from discount billing,
dual billing, attempting to collect from, or collecting from an enrollee or insured
a health insurance issuer liability or any amount in excess of the contracted
reimbursement rate for covered health care services.
(2) No contracted health care provider shall bill, attempt to collect from, or collect
from an enrollee or insured any amounts other than those representing
coinsurance, copayments, deductibles, noncovered or noncontracted health care
services, or other amounts identified by the health insurance issuer on an
explanation of benefits as an amount for which the enrollee or insured is liable.
(3) However, in the event that any billing, attempt to collect from, or the collection
from an enrollee or insured of any amount other than those representing
copayment, deductible, coinsurance, payment for noncovered or noncontracted
health care services, or other amounts identified by the health insurance issuer as
the liability of the enrollee or insured is based on information received from a
health insurance issuer, the contracted health care provider shall not be in
violation of this Subsection.
***
B. No contracted health care provider may maintain any action at law against an
enrollee or insured for a health insurance issuer liability or for payment of any
amount in excess of the contracted reimbursement rate for such services. In the
event of such an action, the prevailing party shall be entitled to recover all costs
incurred, including reasonable attorney fees and court costs. However, nothing in
this Subsection shall be construed to prohibit a contracted health care provider
from maintaining any action at law against an enrollee or insured after a health
insurance issuer determines that the health insurance issuer is not liable for the
health care services rendered.
14
the Assignment Agreements were executed on October 19, 2018 and November 7,
2018, but suit was not filed until March 21, 2019, which was well after the
agreements had been executed. Thus, Louisiana's litigious redemption statute is
inapplicable in the instant matter.
Regarding La. R.S. 22:1874, the Balance Billing Act, it prohibits a health care
provider from collecting or attempting to collect amounts from an insured patient in
excess of the contracted reimbursement rate, a practice referred to as “balance
billing.” Leet v. Hosp. Serv. Dist. No. 1 of E. Baton Rouge Par., 18-1148 (La. App.
1 Cir. 2/28/19); 274 So.3d 583, 588. An insured has an implied right of action under
the Balance Billing Act grounded in individual restitution where a health care
provider collects or attempts to collect amounts from the insured patient in excess of
the contracted reimbursement rate. Id; citing Anderson v. Ochsner Health System,
13-2970 (La. 7/1/14), 172 So.3d 579, 583-585. Moreover, where a health care
provider asserts a lien pursuant to La. R.S. 9:47523 for the full amount of
undiscounted charges, that practice constitutes “an action at law” prohibited by La.
R.S. 22:1874(B), thus entitling the insured injured person to a private right of action
under the express language of La. R.S. 22:1874(B). Id; citing Anderson, 172 So.3d
at 585.
We reject Respondents’ argument that La. R.S. 22:1874 is applicable under
the facts present in this matter, and find their reasoning and characterization of the
Balance Billing Act is misplaced. The act was designed to protect an insured injured
party who was enrolled with and paid premiums to a health insurance issuer, who
contracted with health care providers for discounted rates for medical treatment. In
Emigh, the Louisiana Supreme Court addressed the existence of a cause of action by
an insured against her insurer for a contracted provider's failure to bill her the
negotiated group discounts for health care costs. Emigh v. West Calcasieu Cameron
Hosp., 13-2985 (La. 7/1/14), 145 So. 3d 369, 374-75. The Supreme Court found that
15
the object of the contract between an insured and her insurer is not only to pay
covered medical bills, but also to secure reduced health care costs and tender
payment for those negotiated, discounted costs. Id.In the present case, a health insurance insurer has not been involved in this
litigation. Moreover, HMRF is not a health insurance insurer that Mr. Ouchoa has
made payments to or insured by for his medical treatment. Mr. Ouchoa has not
presented any health insurance to pay for the medical treatment he has received at
One Spine Institute - Dr. Peter Liechty, Crescent View Surgical Center, and
Louisiana Rehab Products. Thus, we find that Respondents argument lacks merit.
In their opposition to the writ application, Respondents aver that they are
entitled to challenge Dr. Liechty’s credibility and opinion at trial by introducing into
the record his agreements with HMRF. As a general rule, appellate courts will not
consider issues raised for the first time on appeal, which are not pleaded in the court
below and which the trial court has not addressed. Stone v. Lakes of Chateau N.,
L.L.C., 16-529 (La. App. 5 Cir. 12/14/16); 208 So.3d 1053, writ denied, 2017-0087
(La. 2/24/17). This issue is not before this Court since Respondents did not brief this
issue in their Motion in Limine, and thus, we decline to address it.
For the reasons discussed herein, we grant this writ application and set aside
the district court’s judgment in favor of Brad Aldrete, Aldrete & Sons Shoring Co.,
Inc., and State Farm Mutual Automobile Ins. Co. We hold that (1) pursuant to the
language and provisions contained in the Assignment Agreements executed by Mr.
Ochoa and his medical providers, Mr. Ochoa remains liable to HMRF for the full
amount of the billed medical invoices for treatment received in connection with the
June 28, 2018 accident; (2) Mr. Ochoa is entitled to present evidence of the total
medical costs he is obligated to pay; (3) Brad Aldrete, Aldrete & Sons Shoring Co.,
Inc., and State Farm Mutual Automobile Ins. Co. may not introduce evidence
regarding the financial arrangement to argue that Mr. Ochoa’s recovery in this
16
litigation should be limited to the discounted rate paid by HMRF; and (4) Mr.
Ochoa’s medical expenses may not be reduced since there is no evidence that he
acted in bad faith. We further remand this matter for further proceedings consistent
with this opinion.
WRIT GRANTED
17
SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
NANCY F. VEGA
FREDERICKA H. WICKER
CHIEF DEPUTY CLERK
JUDE G. GRAVOIS
MARC E. JOHNSON
ROBERT A. CHAISSON SUSAN S. BUCHHOLZ
STEPHEN J. WINDHORST
FIRST DEPUTY CLERK
HANS J. LILJEBERG
JOHN J. MOLAISON, JR. FIFTH CIRCUIT
MELISSA C. LEDET
JUDGES 101 DERBIGNY STREET (70053)
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DECEMBER 8, 2021 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES
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