April Fike v. the Medical Center at Bowling Green

RENDERED: MAY 7, 2021; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2020-CA-0824-MR
APRIL FIKE APPELLANT
APPEAL FROM WARREN CIRCUIT COURT
v. HONORABLE JOHN R. GRISE, JUDGE
ACTION NO. 18-CI-00475
THE MEDICAL CENTER AT BOWLING GREEN APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; MCNEILL AND L. THOMPSON,
JUDGES.
THOMPSON, L., JUDGE: April Fike (“Appellant”) appeals from a final order
and judgment of the Warren Circuit Court awarding damages to The Medical
Center at Bowling Green (“Appellee”) for medical services rendered to Appellant
in 2005. Appellant argues that the circuit court erred in failing to conclude that the
defense of laches barred Appellee’s recovery. For the reasons addressed below,
we find no error and affirm the order and judgment on appeal.
FACTS AND PROCEDURAL HISTORY
On December 15, 2005, Appellant went to Appellee’s emergency
room complaining of severe abdominal pain and fever. She presented proof of
medical insurance, signed a document agreeing to pay for any services, received
treatment from an emergency room physician, and was discharged. The cost of the
services rendered was $3,822.51.
Though Appellee was informed of Appellant’s health insurance
coverage, it never billed the insurance provider for the services rendered to
Appellant. In 2006, Appellee used Hillcrest Credit Agency (“Hillcrest”), a debt
collection agency, to attempt recovery of the sums owed by Appellant. Those
efforts were not successful. In 2009, Hillcrest renewed its efforts, resulting in
Appellant allegedly saying that she was not going to pay the debt. Appellant
received other medical services from Appellee in 2009 related to the birth of her
child.
No other collection efforts were made through 2017, other than a $20
credit being applied to Appellant’s account arising from the 2009 services.
Hillcrest made another collection effort in 2018. When this effort was not
successful, Appellee filed the instant action seeking recovery of the principal, plus
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pre- and post-judgment interest and attorney fees for a total of $7,407.38.
Appellant raised the defense of laches, arguing that Appellee’s unreasonable delay
of about twelve years in prosecuting the claim made it impossible for her to
produce medical and insurance records required to defend the claim.
In April 2019 and May 2019, the parties filed competing motions for
summary judgment. Those motions were denied by way of an order entered in
September 2019, and a bench trial was scheduled. In March 2020, the parties filed
a joint motion to waive the bench trial and have the matter submitted on the record
for final adjudication. The matter was taken under submission, and the following
month, the court entered its final order and judgment.
In its judgment, the circuit court ruled in relevant part that the doctrine
of laches could not bar Appellee’s recovery because the claim was governed by a
statute of limitation. While acknowledging that the long statutory period might
encourage a plaintiff to delay an action thereby increasing accumulated interest,
the court determined that it was bound by the law to enter a judgment in favor of
Appellee for the sums owed. Though not believing that Appellee was equitably
entitled to pre-judgment interest brought about by the years-long delay in seeking
recovery, the court determined that the law was clear on this matter and the circuit
court had no discretion but to award accrued interest. As such, it entered a
judgment in favor of Appellee in the amount of $3,802.51 plus pre- and post-
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judgment interest, as well as attorney fees in the amount of $1,500.00. This appeal
followed.
ARGUMENT AND ANALYSIS
Appellant argues that the Warren Circuit Court erred by failing to
apply the doctrine of laches to bar Appellee’s recovery of the sums owed.
Appellant directs our attention to Plaza Condominium Association, Inc. v.
Wellington Corporation, 920 S.W.2d 51, 54 (Ky. 1996), wherein the Kentucky
Supreme Court held that the doctrine of laches “serves to bar claims in
circumstances where a party engages in unreasonable delay to the prejudice of
others rendering it inequitable to allow that party to reverse a previous course of
action.” (Citation omitted.) She asserts that the facts of the instant proceeding are
precisely of the type envisioned by Plaza Condominium Association, as Appellee
unreasonably delayed its collection efforts resulting in prejudice to Appellant.
Specifically, Appellant asserts that Appellee’s unreasonable delay denied her
access to essential billing and insurance records required to defend the action. She
also argues that the delay unnecessarily increased any accrued pre-judgment
interest.
Appellant argues that the Warren Circuit Court erred in concluding
that the doctrine of laches was not applicable because the statute of limitations had
not yet run. Rather, Appellant maintains that the circuit court should have
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considered 1) whether the delay in bringing the claim was unreasonable and, if so,
then 2) whether the unreasonable delay prejudiced Appellant. Appellant asserts
that both of these questions must be answered in the affirmative, as Appellee’s
unreasonable delay of twelve years prevented Appellant from compiling necessary
billing and insurance documents. Appellant further argues that the pre-judgment
interest of $3,604.87 and attorney fees of $1,500.00 also prejudiced her, as these
sums would not have been awarded had Appellee pursued the claim in a timely
manner. Appellant contends that we must review questions of law de novo without
deference to the circuit court’s decision, and she seeks an opinion remanding the
matter with instructions to dismiss the action with prejudice based on the defense
of laches.1
In order to receive medical treatment on December 15, 2005,
Appellant signed a document titled “General Conditions of Admission, Consent,
Assignment of Benefits & Financial Agreement.” This agreement contains
language in which Appellant agreed to pay for the services rendered. She further
acknowledged that while Appellee may submit a claim for insurance benefits as a
courtesy to Appellant, she remained responsible for the filing process and for any
1
We should note again that the parties’ motions for summary judgment were denied by way of
an order entered on September 4, 2019. The final order and judgment was entered on April 20,
2020. Appellant appeals only from the final order and judgment. Though Appellant cites
summary judgment law in her written argument, the September 4, 2019 order denying summary
judgment has not been appealed and is not now before us.
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unpaid portion of the bill. The services rendered totaled approximately $3,822.512
and were never billed to Appellant’s health insurance provider. Appellant does not
dispute signing the financial agreement, nor that she received medical treatment
costing approximately $3,822.51. The salient question for our consideration, then,
is not whether the medical services were rendered or whether Appellant agreed to
pay the bill, but whether Appellee’s purported delay in seeking payment should
operate to bar it from recovery. After closely examining the record and the law,
we must answer this question in the negative.
Plaza Condominium Association, upon which Appellant relies in part,
stands for the general proposition that “[p]rior to the expiration of the limitation
period . . . one claiming [laches] must also show prejudice.” Plaza Condominium
Ass’n, 920 S.W.2d at 54. The Court in Plaza Condominium Association
determined that while the statutory period in that case had not concluded, laches
could not be applied to avoid payment because no prejudice was found. Id.
In considering Appellant’s defense to Appellee’s claim for damages,
however, the Warren Circuit Court determined that “laches is not an applicable
defense in this case because Plaintiff seeks a legal remedy.”3 In reaching this
2
Appellant points to what she claims are contradictory billing statements and disputes the
amount owed.
3
Judgment on appeal at p. 3.
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conclusion, the circuit court relied on Gover’s Administrator v. Dunagan, 299 Ky.
38, 184 S.W.2d 225 (1944). In Gover’s Administrator, Kentucky’s then-highest
court distinguished between legal and equitable claims, ultimately concluding that
in purely legal claims “the statute of limitations rather than the doctrine of laches is
applicable.” Id. at 227.4 And as noted by the Warren Circuit Court, Gover’s
Administrator has no negative history and has not been overturned.
We find no error in the Warren Circuit Court’s conclusion that the
doctrine of laches does not apply to a purely legal claim for money damages
prosecuted within the applicable statutory period. In the matter before us,
Appellee raised a legal claim for money damages within the statutory period. As
such, the statutory period rather than the doctrine of laches determines Appellee’s
window of recovery. The record demonstrates that Appellee provided medical
services to Appellant; that prior to the receipt of those services she agreed to pay
the bill irrespective of insurance; that no payment was made for the services
rendered; and that Appellee sought damages arising therefrom during the statutory
period. The record on appeal contains the agreement signed by Appellant, her
admissions, an affidavit of the medical records custodian, the original bill,
4
A claim is said to be equitable when it seeks a nonmonetary award, such as an order to do or
not do something “when monetary damages are not sufficient to repair the injury.” Equitable
Relief, NOLO.COM, https://www.nolo.com/dictionary/equitable-relief-term.html (last visited
April 30, 2021).
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documentation of occasional collection attempts throughout the years, Appellant’s
answers to interrogatories, an affidavit from a Hillcrest manager documenting its
collection attempts, and the affidavit of Appellant’s mother. The record and the
law are sufficient to affirm the ruling of the Warren Circuit Court on this issue.
Arguendo, even if the doctrine of laches were properly applied to the
matter before us, we would find no prejudice in Appellee’s years-long delay in
prosecuting its claim. It is uncontroverted that Appellant received medical services
from Appellee, that Appellee sought payment, and that no payment was made.
Prejudice arising from the delay in prosecuting the claim, if any, could derive only
from the question of whether insurance coverage should pay the bill. Because
Appellant executed a document agreeing to pay her bill irrespective of insurance
coverage, such coverage could not form the basis for showing prejudice.
Appellant also argues that Appellee’s unreasonable delay in
prosecuting its claim prejudiced her by accruing interest in an amount almost
equaling the principal amount owed. In examining this issue, the Warren Circuit
Court noted the “perverse incentive” inherent in the statute of limitations, which
may incentivize a party to delay action in order to accrue additional interest. The
court, however, recognized that such an award is a matter of right as a result of the
written agreement between the parties and the case law. We agree, and find no
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error. See generally Hall v. Rowe, 439 S.W.3d 183, 188 (Ky. App. 2014), Shanklin
v. Townsend, 434 S.W.2d 655, 656 (Ky. 1968).
CONCLUSION
The doctrine of laches does not apply to a claim seeking money
damages within the statutory period. Gover’s Adm’r, supra. Even if laches did
apply to such a claim, the necessary element of prejudice could not be proven
because it was uncontested that Appellant received medical services and did not
pay the bill despite agreeing to do so irrespective of insurance coverage. And
finally, pre- and post-judgment interest accrued on the debt, as well as reasonable
attorney fees. For the foregoing reasons, we affirm the judgment of the Warren
Circuit Court.
ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
Lanna Martin Kilgore C. Terrell Miller
Bowling Green, Kentucky Bowling Green, Kentucky
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