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Fowler v. Morristown-Hamblen Hospital Association

Court of Appeals of Tennessee, Knoxville

June 24, 2019

SHALEEN FOWLER, ET AL.
v.
MORRISTOWN-HAMBLEN HOSPITAL ASSOCIATION, ET AL.

          Session April 16, 2019

          Appeal from the Circuit Court for Hamblen County No. 2016-CV-101 Thomas J. Wright, Judge.

         The plaintiffs, individually and as a proposed class action, alleged violations of Tennessee Code Annotated section 68-11-262.[1] The defendants asserted as a defense that Tennessee Code Annotated section 1-3-119 precludes any private right of action under section 68-11-262. Pursuant to Rule 24.04 of the Tennessee Rules of Civil Procedure, the plaintiffs submitted a notice of claim that the statute was unconstitutional and violated Article I, section 17 of the Tennessee Constitution. The State of Tennessee was allowed to intervene in a limited capacity to defend the constitutionality of that statute. In its consideration of the motion to dismiss for failure to state a claim upon which relief can be granted, the trial court held that the statute did not violate the "Open Courts" Clause of Article I, section 17. This holding necessitated a finding that Tennessee Code Annotated section 68-11-262 did not give a private right of action and, therefore, the plaintiffs did not have a cause of action. Accordingly, the motion to dismiss for failure to state a claim was granted and the plaintiffs' complaint was dismissed with prejudice in its entirety. The plaintiffs now appeal the finding that Tennessee Code Annotated section 1-3-119 does not violate Article I, section 17 of the Tennessee Constitution. The defendants challenge the trial court's decision that Plaintiffs fell within the meaning of "uninsured patient" in Tennessee Code Annotated section 68-11-262. We affirm the judgment of the trial court.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed; Case Remanded

          F. Braxton Terry, Morristown, Tennessee, and W. Lewis Jenkins, Jr., Dyersburg, Tennessee, for the appellants, Shaleen Fowler and Melissa Turner Livesay.

          George E. Koontz and Richard T. Klingler, Chattanooga, Tennessee, and F. Michael Fitzpatrick, Knoxville, Tennessee, for the appellees, Morristown-Hamblen Hospital Association and Covenant Health.

          Herbert H. Slatery, III, Attorney General and Reporter, Andree Sophia Blumstein, Solicitor General, and Melissa Broadhag, Senior Assistant Attorney General, for the intervenor-appellee, State of Tennessee.

          John W. McClarty, J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and Richard H. Dinkins, J., joined.

          OPINION

          JOHN W. MCCLARTY, JUDGE.

         I. BACKGROUND

         Both Shaleen Fowler ("Appellant Fowler") and Melissa Turner Livesay ("Appellant Livesay") (collectively "Appellants") were involved in unrelated automobile accidents in 2014. Each of Appellants was treated at Morristown-Hamblen County Healthcare ("Morristown-Hamblen") for their injuries. Covenant Health ("Covenant") (collectively with Morristown-Hamblen as "Appellees") performs all billing and collection for patients who receive services at Morristown-Hamblen. Each of Appellants was treated as an "uninsured person" within the meaning of that term in Tennessee Code Annotated section 68-11-262. They allege that Appellees charged them in excess of the statutory rate applicable to uninsured persons in violation of section 68-11-262, which provides in part as follows:

(a) Each healthcare facility licensed under this chapter shall be prohibited from requiring an uninsured patient to pay for services in an amount that exceeds one hundred seventy-five percent (175 %) of the cost for the services provided, calculated using the cost to charge ratio in the most recent joint annual report.
(b) As used in this section, the following terms shall have the meaning indicated:
(3) "Uninsured patient" means a person with no public or private source of payment for medical services, including, but not limited to, [M]edicare, TennCare, a contract of insurance, an employer-sponsored health plan, or other enforceable obligation under which a person is responsible for payment for healthcare services provided to the patient. . . .

Tenn. Code Ann. § 68-11-262.[2]

         In response to Appellants' complaint in this matter, Appellees filed a motion to dismiss for failure to state a claim on which relief can be granted pursuant to Rule 12.02(6) of the Tennessee Rules of Civil Procedure. They asserted, inter alia, that "(a) the [Appellants] have failed to plead facts sufficient to bring them within the scope of Tenn. Code Ann. § 68-11-262; … (c) even if the [Appellants] are within the scope of Tenn. Code Ann. § 68-11-262, there is no private right for recovery under Tenn. Code Ann. § 68-11-262; …." Appellants responded that the Tennessee Rules of Civil Procedure only require a plaintiff asserting a violation of a statute refer to the statute and that there is no requirement to show detailed factual allegations a plaintiff falls within the coverage of a statute. Appellants further argued that there is an implied private right of action in Tennessee Code Annotated section 68-11-262 because uninsured persons are the direct and intended beneficiaries of the statute pursuant to precedent set by our Supreme Court.[3] One of the central disagreements between the parties at this point was whether recovery from tort damages falls within the meaning of "payment for medical services" under section 68-11-262. Appellees noted that Appellants received settlements from the insurors of the tortfeasors in their respective automobile accidents. According to Appellees, a patient who has been injured by a tortfeasor has an "enforceable obligation" under which the tortfeasor is required to pay for medical services rendered to a patient. Appellees argued that a person is "uninsured" under section 68-11-262 only if there is no source of payment for healthcare services.

         As to Appellees' later claimed defense that Tennessee Code Annotated section 1-3-119 precludes a private right of action in this case, Appellants, pursuant to Rule 24.04 of the Tennessee Rules of Civil Procedure, submitted a notice of claim that section 1-3-119 is unconstitutional and violates the Open Courts Clause in Article I, section 17 of the Tennessee Constitution.

         Tennessee Code Annotated section 1-3-119, passed by the legislature in 2012, provides as follows:

(a) In order for legislation enacted by the general assembly to create or confer a private right of action, the legislation must contain express language ...

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