Paul Hamaker & Josephine Hamaker v. Highline Medical Center

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
PAUL HAMAKER, individually and as a
putative class representative, and JOSEPHINE
HAMAKER, individually and as a putative class No. 77578-2-I
representative,
DIVISION ONE
Appellant,
V.
UNPUBLISHED OPINION
HIGHLINE MEDICAL CENTER, a Washington
non-profit corporation,
Respondent,
REBECCA A. ROHLKE, individually, on behalf
of the marital community and as agent of non-
party Hunter Donaldson; JOHN DOE
ROHLKE, on behalf of the marital community;
RALPH WADSWORTH, individually, on behalf
of the marital community, and as agent of
nonparty Hunter Donaldson, JANE DOE
WADSWORTH, on behalf of the marital
community; TIM CARDA, individually, on
behalf of the marital community, and as agent
of non-party Hunter Donaldson, JANE DOE
CARDA, on behalf of the marital community;
GRACIELA PULIDO, individually, on behalf of
the marital community and as agent of non
party Hunter Donaldson, JOHN DOE PULIDO,
on behalf of the marital community,
KIMBERLY WADSWORTH, individually, on
behalf of the marital community and as agent
of nonparty Hunter Donaldson, and JOHN
DOE WADSWORTH, on behalf of the marital
community,
Defendants. FILED: March 25, 2019
No. 77578-2-1/2
CHuN, J. —After Paul and Josephine Hamaker (the Hamakers) suffered
injuries in a car accident for which they were not at fault, they received medical
treatment at Highline Medical Center (Highline). Under an agreement with
Highline, Hunter Donaldson, LLC (HD) recorded medical liens on Highline’s
behalf against the tortfeasor’s insurer. After Highline discovered HD had filed
improperly notarized liens, it instructed HD to withdraw medical liens previously
recorded. HD, however, did not record corresponding lien releases for several
years. Prior to the recording of lien releases as to their obligations, the
Hamakers settled their personal injury case and paid Highline for their medical
bills out of their recovery.
The Hamakers then filed a putative class action complaint against Highline
for declaratory and injunctive relief, alleging negligence, fraud, unjust enrichment,
and violations of the Consumer Protection Act (CPA).1 The parties filed cross-
motions for summary judgment and the Hamakers additionally filed a motion for
class certification. The court granted summary judgment for Highline and
dismissed all of the Hamakers’ claims for lack of standing. Because the
Hamakers raised a genuine issue as to whether they suffered an injury such that
they may bring their claims, we reverse.
BACKGROUND
On March 1, 2011, Highline entered a First and Third Party Liability
Recovery Service Agreement (the Agreement) with HD. The Agreement allowed
1 The additional defendants (employees of HD) were not involved in the summary
judgment dismissal and are not involved in this appeal.
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No. 77578-2-1/3
HD, on Highline’s behalf, to record and collect on medical services liens against
third-party tortfeasors responsible for a patient’s injuries.
The Hamakers suffered a rear-end vehicular collision on May 30, 2012.
Highline treated the Hamakers for injuries sustained in the accident and coded
their medical accounts as “01” to indicate they had sought care due to injuries
sustained in a motor vehicle accident. Highline charged $542.85 to each of the
Hamakers for physician services. The Hamakers paid the charges with their
credit card. Although the Hamakers had commercial health insurance with
United Healthcare/UMR (UMR), they chose not to give Highline their health
insurance information. The Hamakers preferred to pay out of pocket and then
seek reimbursement because the accident was another’s fault.
Because of the “01” code on the Hamakers’ accounts, Highline
automatically transferred the accounts to HD for processing and management.
On June 27, 2012, HD recorded notices of a claim to a medical services lien.
The notices identified the Hamakers as patients and American Commerce
Insured (the tortfeasor’s insurer) as the tortfeasor. Rebecca Rohlke served as
the notary. The Hamakers learned of these notices on June 29, 2012.
Paul2 called Highline to inquire about the medical services lien on
January 15, 2013. Highline directed him to HD. HD told him there was an
outstanding bill “for the facility” separate from the previously satisfied bill for
2 For clarity, we refer to Paul and Josephine Hamaker by their first names when
individually referenced. We intend no disrespect.
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No. 77578-2-1/4
physician services. HD also informed Paul it had filed the lien against the
tortfeasor’s insurer because it was responsible for his bills.
Throughout 2013, the Hamakers incurred additional accident-related
medical expenses from other healthcare providers. These providers submitted
the medical bills to UMR, and UMR paid them.
On May 1,2013, the Notary Public Program of the Washington State
Department of Licensing received a complaint that Rohlke had falsely notarized
medical liens. Rohlke voluntarily resigned her notary appointment on May 31,
2013.
HD sent two notices of recorded lien claim (one for each of the Hamakers)
to the Hamakers’ personal injury attorney3 on April 29, 2014. The notices
provided as follows:
Hunter Donaldson, LLC is the authorized agent of Highline Medical
Center. NOTICE IS HEREBY GIVEN THAT Highline Medical
Center claims a lien on any damages that the patient named above
may recover. Our Lien was duly executed and recorded. It is your
legal obligation to make sure that this lien is paid, if payment is
received from any settlement, recovery, and or judgment, pursuant
to RCW6O.44.010.
On June 20, 2014, after learning of litigation surrounding Rohlke’s false
notarizations, Highline directed HD to withdraw all lien claims and to stop
executing further claims.
The Hamakers’ attorney received two additional letters from HD (again
one for each of the Hamakers) on June 26, 2014. The letters stated, As the duly
~ The Hamakers hired Christopher Williams to represent them in their personal injury
claims related to the automobile accident.
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No. 77578-2-1/5
authorized recovery agent for Highline Medical Center, please be advised that
our office is withdrawing our lien for medical services rendered to the above-
referenced plaintiff.” However, HD did not record lien releases at that time.
The facility charges remained on the Hamakers’ accounts. The Hamakers
received two statements dated July 20, 2014 indicating that they each owed
$833 to Highline.
In September 2014, the Hamakers provided proof of UMR as their primary
insurer. Highline then billed UMR $833 for each Hamaker. On October 23,
2014, UMR denied both claims as untimely. Highline then wrote off the $833
balance on each account on November 7, 2014.
The Hamakers settled their personal injury case for $16,343.43,~ and
signed releases on March 27, 2015.
On April 20, 2015, the Hamakers directed their attorney to “pay to Highline
medical center $1 110.72 for our medical bill. I recognize the medical bill is
$1660 but [our personal injury attorney] is reducing their fees pursuant to
Mahler.”5 Highline received the payment on May 27, 2015 and applied it equally
to Paul and Josephine’s accounts ($555.36 to each account). Highline wrote off
each account’s remaining balance.
The Hamakers filed their putative class action complaint on February 4,
2016. The complaint asserted claims against Highline for declaratory and
“$8,343.43 and $8,000 to Paul and Josephine respectively.
~ The Hamakers appear to have been referring to Mahier v. Szucs, 135 Wn.2d 398, 957
P.2d 632 (1998), which supports reducing an insurance company’s recovery from an insured’s
settlement for subrogation payments by a pro rata share of an insured’s legal costs in obtaining
the settlement.
5
No. 77578-2-1/6
injunctive relief, violations of the Consumer Protection Act (CPA), negligence,
fraud, and unjust enrichment against Highline.6 Each claim arose from HD’s lien
practices and the false notarization of the liens.
On July 12, 2017, Highline recorded releases for the liens against the
Hamakers’ recovery.
On August 4, 2017, Highline moved for summary judgment. Highline
asserted (1) the Hamakers “Iack[ed] standing to challenge the validity of the
notices of claim”; (2) the Hamakers could not “present a genuine issue of
material fact on the essential element of damages”; and (3) it “is not liable for
acts of independent contractor, [H D].”
Also on August 4, 2017, the Hamakers filed two cross-motions for partial
summary judgment and a motion for class certification. The first partial summary
judgment motion requested the trial court rule that all of the falsely notarized
medical services liens filed by HD were invalid as a matter of law. The second
sought declaratory relief that the medical services liens were unenforceable due
to passage of time. The motion further asked the court to require Highline to
“create” releases for the unenforceable liens and pay the fees to file them.
The trial court granted summary judgment in favor of Highline “for lack of
standing” on October 27, 2017. That same day, the trial court denied both of the
Hamakers’ cross-motions for partial summary judgment and their motion for class
certification, also for lack of standing. In early 2018, the trial court entered an
order granting the Hamakers’ motion for CR 54(b) certification and stay of
6 The complaint included additional claims against other defendants.
6
No. 77578-2-1/7
proceedings regarding its claims against the non-Highline defendants pending
appeal.
ANALYSIS
A. Non-CPA Claims
Highline argues the Hamakers lack standing to bring their claims for
declaratory and injunctive relief, negligence, fraud, and unjust enrichment. First,
with respect to the claim for declaratory relief, Highline contends the Hamakers
fall outside the zone of interests of RCW 60.44. Additionally, Highline asserts the
Hamakers do not have standing to bring any of their non-CPA claims because
they have not demonstrated a cognizable injury. The Hamakers assert they fall
within the statute’s zone of interests, and were injured by their $1 110.72
payment to Highline from their settlement. We determine the Hamakers have
standing to bring their non-CPA claims because they (1) fall within the statute’s
zone of interests; and (2) have raised a genuine issue of fact as to whether they
suffered an injury.
Appellate courts review de novo a grant of summary judgment. Fed. Way
Sch. Dist. No. 210 v. State, 167 Wn.2d 514, 523, 219 P.3d 941 (2009). Courts
view all reasonable inferences in the light most favorable to the nonmoving party
and will grant summary judgment only where there are no genuine issues of
material fact such that the nonmoving party is entitled to judgment as a matter of
law. Fed. Way Sch. Dist. No. 210, 167 Wn.2d at 523.
7
No. 77578-2-1/8
The question of standing constitutes a threshold issue that courts review
de novo. In re Estate of Becker, 177 Wn.2d 242, 246, 298 P.3d 720 (2013).
The standing doctrine requires a plaintiff to have a personal stake in the
outcome of the case to bring a suit. Germeau v. Mason County, 166 Wn. App.
789, 803, 271 P.3d 932 (2012).
1. Declaratory Relief— Zone of Interests
As to the Hamakers’ claim for declaratory relief, the Uniform Declaratory
Judgment Act (UDJA) requires the plaintiffs to show their “rights, status, or other
legal relations are affected by a statute” to have standing. Five Corners Family
Farmers v. State, 173 Wn.2d 296, 302, 268 P.3d 892 (2011). The Washington
Supreme Court created a two-part test to determine whether a party has standing
under the UDJA. Five Corners Family Farmers, 173 Wn.2d at 302. Under this
test, the asserted interest must arguably fall within the zone of interests protected
or regulated by the statute and the challenged action must have resulted in an
injury-in-fact. Five Corners Family Farmers, 173 Wn.2d at 302-03. The party
seeking standing bears the burden of proving it has met both elements. Branson
v. Port of Seattle, 152 Wn.2d 862, 876, 101 P.3d 67 (2004).
The Hamakers’ first claim requests a judicial declaration that HD’s lien
enforcement practices violated RCW 60.44. They argue their claim falls within
the zone of interests protected by RCW 60.44 because it concerns if and how a
lien may be secured on their property. Highline asserts the Hamakers’ claim falls
outside the zone because the statute seeks to regulate tortfeasors and claimants
rather than patients.
8
No. 77578-2-1/9
When determining whether a claim falls within a statute’s zone of
interests, courts begin by looking at both the operation of the statute and its
general purpose. Five Corners Family Farmers, 173 Wn.2d at 304-05. RCW
60.44.010 provides:
Every operator, whether private or public, of an ambulance
service or of a hospital, and every duly licensed nurse,
practitioner, physician, and surgeon rendering service, or
transportation and care, for any person who has received a
traumatic injury and which is rendered by reason thereof shall
have a lien upon any claim, right of action, and/or money to which
such person is entitled against any tort-feasor and/or insurer of
such tort-feasor for the value of such service, together with costs
and such reasonable attorney’s fees as the court may allow,
incurred in enforcing such lien . .PROVIDED, FURTHER, That
.
all the said liens for service rendered to any one person as a
result of any one accident or event shall not exceed twenty-five
percent of the amount of an award, verdict, report, decision,
decree, judgment, or settlement.
RCW 66.44.020 requires the notice of the lien to include “the name and address
of the patient and place of domicile or residence.”
Although the medical provider enforces the medical lien against the
tortfeasor and their insurer, the payment to the medical provider comes from the
funds recovered by the patient. When filing a notice of a medical lien, the
medical provider must include the patient’s information. Furthermore, the statute
protects patients’ interest in their claims by limiting the amount recoverable by a
lien to 25 percent of the total received by the patient. To be sure, RCW 60.44
both protects and regulates the patient’s interest in the funds he or she recovers.
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No. 77578-2-1/10
As such, we conclude the Hamakers’ claim falls within the zone of interests of
RCW 60.44.~
2. Injury (as to all non-CPA claims)
As to all of the non-CPA claims, the Hamakers are required to prove an
injury as either part of the test for standing under the UDJA or as an element for
their cause of action.8 The Hamakers contend they suffered an injury because
they paid Highline $1,110.72 due to HD’s lien practice and the false notarization.
Highline argues the Hamakers paid the money because they chose not to
provide Highline with their health insurance information. We determine the
Hamakers raise a genuine issue of fact as to whether they suffered an injury.
Viewing the facts in the light most favorable to the Hamakers:
Highline maintained a practice of billing a patient’s carrier when the patient
had private health insurance. In the absence of a patient’s health insurance
information, Highline would mark the account as a “self-pay” account and send
the patient a letter requesting insurance information.
Here, the Hamakers’ account was marked as “self-pay” after they did not
provide their health insurance information to Highline. The account was then
~ Highline additionally argues RCW 60.44 does not create a private right of action for a
patient to seek redress where a lien holder has not sought to enforce the lien. But the Hamakers
do not assert a private right of action under the statute. Rather, their claims derive from the
UDJA, CPA, and common law. Accordingly, the absence of a private right of action under
RCW 60.44 does not impede their claims. See Nelson v. Aprleway Chevrolet, Inc., 160 Wn.2d
173, 187, 157 P.3d 847 (2007) (no additional private right of action is necessary for parties to
seek a declaratory judgment whenever their rights are affected by a statute”).
8 Five Corners Family Farmers, 173 Wn.2d at 302 (injury-in-fact required for declaratory
relief); Alhadeffv. Meridian on Bainbridge Island, LLC, 167 Wn.2d 601, 618, 220 P.3d 1214(2009) (injury required for negligence claim); Adams v. King County, 164 Wn.2d 640, 662, 192
P.3d 892 (2008) (injury required for fraud claim); Lynch v. Deaconess Med. Ctr., 113 Wn.2d 162,
165-66, 776 P.2d 681 (1989) (unjust enrichment claim requires plaintiff to prove a party recovered
more than it was owed).
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No. 77578-2-I/I I
transferred to HD because Highline’s code indicated the injuries arose from a
motor vehicle accident. Instead of requesting health insurance information from
the Hamakers when the bill for the facility fees arose, Highline immediately
recorded medical liens. The Hamakers did not know they owed facility fees until
they received the notice of the liens.
Neither Highline nor HD ever asked the Hamakers if they wanted the
facility fees to be paid by their health insurer. Although the Hamakers used their
credit card to pay the physician fees, they did not know of the facility fee at that
time. Moreover, while the Hamakers originally chose to pay the physician fees
out of pocket, they sent several other medical bills stemming from the accident to
their insurer. Accordingly, filing the lien without first notifying the Hamakers that
they owed money forced them to pay Highline out of their settlement. Thus, HD’s
decision to file a medical lien before informing the Hamakers of the facility fees
deprived them of the choice to have their health insurer pay for the fees.
The foregoing raises a genuine issue of fact as to whether the Hamakers
suffered an injury as a result of the alleged wrongful conduct. Accordingly, the
trial court erred by dismissing the Hamakers’ non-CPA claims on the ground that
they lacked standing.
B. CPA Claims
The Hamakers assert they suffered multiple CPA injuries. Specifically,
they point to (I) the $1,110.72 paid to Highline; (2) a decision to not refinance
their home; and (3) the failure to record lien releases. Highline again claims the
Hamakers did not suffer any injury caused by the liens. We agree with the
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No. 77578-2-1/12
Hamakers and conclude they raise a genuine issue of material fact as to the
injury element of their CPA claim.9
The CPA provides, ‘Unfair methods of competition and unfair or deceptive
acts or practices in the conduct of any trade or commerce are hereby declared
unlawful.” RCW 19.86.020. Fora plaintiff to bring a claim under the CPA, he or
she “must prove (1) an unfair or deceptive act or practice, (2) occurring in trade
or commerce, (3) affecting the public interest, (4) injury to a person’s business or
property, and (5) causation.” Panag v. Farmers Ins. Co. of Washington, 166
Wn.2d 27, 37, 204 P.3d 885 (2009), (citing Hangman Ridge Training Stables,
Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 784, 719 P.2d 531 (1986)).
A plaintiff meets the injury element if they prove the unlawful conduct
diminished a business or property interest, even if the injury is minimal. Panag,
166 Wn.2d at 57. Unquantifiable damages, such as loss of goodwill or delay in
receiving money, may also satisfy the element. Panag, 166 Wn.2d at 58. When
the claimed injury is the payment of money, “The issue is whether the plaintiff
was wrongfully induced to pay money on a debt not owed or to incur expenses
that would not otherwise have been incurred.” Panag, 166 Wn.2d at62 (internal
quotation omitted).
Again, viewing the evidence in the light most favorable to the Hamakers,
HD’s lien practices caused them to pay for certain medical bills out of their
~ The Hamakers correctly note in their briefing that under Washington law standing is
not a separate requirement for demonstrating a valid CPA claim. ~ Panag v. Farmers Ins. Co.
of Wash., 166 Wn.2d 27, 37-38, 204 P.3d 885 (2009). The trial court granted summary judgment
to Highline based on a lack of standing. But presumably, the trial court determined the CPA claim
failed to meet the injury element; the court stated its primary concern was injury.
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No. 77578-2-1113
settlement instead of having their insurance pay for them. Thus, when viewing
the evidence in the light most favorable to the Hamakers, they demonstrated they
incurred costs they otherwise would not have. This raises a genuine issue as to
whether the Hamakers suffered an injury under the CPA.1°
Because the Hamakers demonstrated HD’s lien practices raised a
genuine issue as to whether they suffered an injury as to both the non-CPA and
CPA claims, we reverse the trial court’s order granting summary judgment for
Highline and denying partial summary judgment and class certification for the
Hamakers. Because the trial court based its decisions solely on its conclusion
that plaintiffs lacked standing and failed to raise an issue of fact as to injury—and
this opinion limits its discussion to only those issues—our reversal is without
prejudice as to other arguments raised by the parties in their motions below.
Reversed.
d /
WE CONCUR:
~/
V
10 Because we determine the Hamakers’ payment to Highline constituted an injury under
the CPA, we do not address their other theories of injury.
13