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S.S. v. IHC Health Services, Inc.

Supreme Court of Utah

April 10, 2018

S.S., by and through his mother and guardian, Staci Shaffer, and Staci Shaffer, Appellants,
v.
IHC Health Services, Inc., Cardon Healthcare Network, LLC, and Cardon Outreach, Appellees.

          On Direct Appeal Third District, Salt Lake The Honorable Kara L. Pettit No. 150909015

          Leonard E. McGee, Peter R. Mifflin, Sandy, for appellants

          Alan C. Bradshaw, Steven C. Bednar, Salt Lake City, for appellee IHC Health Services, Inc.

          Derek J. Williams, Nathaneal J. Mitchell, Salt Lake City, for appellees Cardon Healthcare Network, LLC and Cardon Outreach

          Justice Himonas authored the opinion of the Court, in which Chief Justice Durrant, Associate Chief Justice Lee, Justice Pearce, and Judge Christiansen joined.

          Having recused herself, Justice Petersen does not participate herein; Court of Appeals Judge Michele M. Christiansen sat.

          OPINION

          HIMONAS JUSTICE

         ¶1 A child was struck by a car and seriously hurt. The owner of the hospital at which the child received medical care sought to secure payment for that care by asserting liens against the child's interest in the tort claim against the driver of the car. The child, who was Medicaid eligible, and his mother brought a number of claims against the hospital owner and its payments vendor, nearly all of which centered on contentions that the liens violated Medicaid law.[1]After the liens had been released, the district court granted summary judgment in favor of the defendants. We affirm the grant based upon basic principles of mootness and plaintiffs' inability to state a claim as a matter of law.

         BACKGROUND

         ¶2 There are very few material facts relevant to the causes of action we address upon the merits in this appeal. S.S. was hit by a car being driven by Gayla Stumpf. As a result of the accident, S.S. was severely injured, necessitating extensive medical treatment, which he received over the course of two years at Primary Children's Hospital, an IHC facility.[2]

         ¶3 Staci Shaffer entered into a two-page, standard-form patient agreement with IHC. Under the terms of that contract, Ms. Shaffer agreed to pay IHC for the medically necessary and appropriate health care services it provided to S.S.

         ¶4 IHC uses Cardon to help it collect from patients hurt in accidents caused by third parties. In early 2014, Cardon asserted a hospital lien on behalf of IHC against any potential recovery going from Ms. Strumpf to S.S. Cardon released that lien three months later. It then asserted a second hospital lien in March 2015.

         ¶5 After Cardon had asserted and released the first hospital lien and asserted the second hospital lien, plaintiffs brought this lawsuit. In their complaint, plaintiffs asserted eleven claims: (1) violation of the Utah False Claims Act, (2) civil conspiracy, (3) conversion, (4) vicarious liability, (5) willful refusal to release a lien, (6) negligence, (7) intentional infliction of emotional distress, (8) tortious interference with economic relations, (9) breach of the implied covenant of good faith and fair dealing, (10) wrongful lien, and (11) declaratory judgment of a void lien. Five months after the complaint was filed, defendants released the second hospital lien. And five months after that, in October 2016, plaintiffs settled their claims against Ms. Strumpf.

         ¶6 Defendants moved for summary judgment the following month. Broadly speaking, defendants argued that the district court should grant summary judgment because, first, the claims were all mooted when they released the second hospital lien; second, the claims all failed for independent legal reasons; and third, the claims were all based upon an incorrect interpretation of Medicaid law. The court granted the motion by order dated March 14, 2017. In that order, the court reasoned "that all of [p]laintiffs' claims are moot, with the exception of" the intentional infliction of emotional distress claim and the possible exception of the tortious interference and good faith and fair dealing claims. ...


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