Chambers v. Moses H. Cone Mem'l Hosp.

2021 NCBC 43

• Court: North Carolina Business Court
• Decided: July 19, 2021
• Docket: 12-CVS-6126
• Status: Published

Opinion

Chambers v. Moses H. Cone Mem’l Hosp., 2021 NCBC 43.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION GUILFORD COUNTY 12 CVS 6126

CHRISTOPHER CHAMBERS, on behalf of himself and all others similarly situated,

Plaintiff,

v. ORDER AND OPINION THE MOSES H. CONE MEMORIAL ON DEFENDANTS’ MOTION HOSPITAL; THE MOSES H. CONE TO DISMISS MEMORIAL HOSPITAL OPERATING CORPORATION d/b/a MOSES CONE HEALTH SYSTEM and d/b/a CONE HEALTH; and DOES 1 through 25, inclusive,

Defendants.

Higgins Benjamin, PLLC, by John F. Bloss, and Law Offices of Barry L. Kramer, by Barry L. Kramer, for Plaintiff Christopher Chambers.

Womble Bond Dickinson (US) LLP, by Philip J. Mohr and Brent F. Powell, for Defendants The Moses H. Cone Memorial Hospital and The Moses H. Cone Memorial Hospital Operating Corporation.

Conrad, Judge.

1. This class action, though begun almost ten years ago, remains in its early

stages. Pending is the defendants’ second motion to dismiss the amended complaint.

(ECF No. 104.)

2. Christopher Chambers is a former patient of The Moses H. Cone Memorial

Hospital (“Moses Cone”). He had an emergency appendectomy there in August 2011.

(See Am. Compl. ¶ 25, ECF No. 49.) Uninsured at the time, Chambers signed a

standard form contract and agreed to pay all charges “in accordance with the regular rates and terms” used by the hospital. (Am. Compl. ¶ 12.) According to Chambers,

the phrase “regular rates” is meaningless because Moses Cone uses a smorgasbord of

rate schedules that vary by patient and service provider. There are, for example,

government-mandated rates for Medicare and Medicaid recipients, negotiated rates

for insured patients, and discounted rates for charitable services. (See Am. Compl.

¶ 15.) Chambers alleges that his bill—totaling more than $14,000—was based on

“artificial and grossly excessive Chargemaster rates.” (Am. Compl. ¶ 42; see also Am.

Compl. ¶ 27.) Rather than pay in full, Chambers sued Moses Cone and its parent

company.

3. Early motions and amendments have winnowed the claims. All that

remains is a claim for declaratory judgment. Chambers seeks declarations that

Moses Cone’s form contract includes an open price term, that it may not bill self-pay

patients at Chargemaster rates, and that it is entitled only to the reasonable value of

its services. (See Am. Compl. ¶¶ 40, 41.) He asserts the claim on behalf of a class of

similarly situated self-pay patients. (See Am. Compl. ¶¶ 28, 31.)

4. Shortly after the amended complaint was filed, Moses Cone renounced its

intention to seek payment from Chambers. It then moved to dismiss his claim as

moot. This Court agreed that Chambers’s individual claim was moot, concluded that

he could no longer represent the putative class, and dismissed the amended

complaint. See Chambers v. Moses H. Cone Mem’l Hosp., 2017 NCBC LEXIS 22, at

*12–20 (N.C. Super. Ct. Mar. 13, 2017). The Court of Appeals affirmed that decision,

but the Supreme Court granted review, reversed, and held that Chambers “retains the legal capacity to pursue class certification and class-wide relief, even though his

individual claim may have been satisfied.” Chambers v. Moses H. Cone Mem’l Hosp.,

374 N.C. 436, 451 (2020).

5. Now, on remand, Moses Cone has moved to dismiss the amended complaint

for failure to state a claim. After full briefing and a hearing on 13 July 2021, the

motion is ripe.

6. Dismissal for failure to state a claim “is seldom appropriate” in

declaratory-judgment actions. Morris v. Plyler Paper Stock Co., 89 N.C. App. 555,

557 (1988) (citing N.C. Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434, 439

(1974)). It is usually sufficient to allege “the existence of a real controversy arising

out of the parties’ opposing contentions and respective legal rights under a . . .

contract.” Id.; see also N.C.G.S. § 1-254 (authorizing contracting parties to “have

determined any question of construction or validity arising under the” contract).

7. Chambers has cleared that relatively low bar. The amended complaint

alleges a real controversy about whether the contract at issue has an open price term

and whether the hospital may bill self-pay patients at Chargemaster rates. Moses

Cone concedes as much. (See Reply Br. 2, ECF No. 109.)

8. So, what is Moses Cone’s argument for dismissal? Its position is that, even

if Chambers prevails, his victory in this battle will not end the war. A determination

that the contract contains an open price term will spawn new disputes about what

each class member owes. On that basis, Moses Cone contends that a declaratory judgment will not settle things once and for all and that the Court must refuse to

issue one. (See Br. in Supp. 6, ECF No. 105.)

9. Certainly, a trial court has discretion “to decline a request for declaratory

relief when (1) the requested declaration will serve no useful purpose in clarifying or

settling the legal relations at issue; or (2) the requested declaration will not terminate

or afford relief from the uncertainty, insecurity, or controversy giving rise to the

proceeding.” Augur v. Augur, 356 N.C. 582, 588–89 (2002) (citing N.C.G.S. § 1-257).

But neither condition exists here. Entry of the declarations sought by Chambers

would serve a useful purpose by clarifying the contract’s price term. It would also

afford relief to class members from the uncertainty over whether Moses Cone may

bill self-pay patients at Chargemaster rates. See, e.g., Perry v. Bank of Am., N.A., 251

N.C. App. 776, 780–81 (2017) (reversing dismissal of declaratory-judgment action).

10. Although Moses Cone analogizes this case to Augur, the cases are nothing

alike. There, the trial court dismissed a claim for declaratory judgment because the

party asserting the claim had already received complete relief through other means.

The Supreme Court affirmed, observing that declaratory relief would not have altered

the parties’ legal positions. See Augur, 356 N.C. at 589–90. That isn’t true in this

case. The class (unlike Chambers) has not received relief of any kind; declaratory

relief would alter the parties’ legal positions and clarify their contractual rights.

11. The possibility that Moses Cone and some class members will go on to

dispute the reasonable value of services provided is not a sound reason to dismiss the

claim. Declaratory relief is available “whether or not further relief is or could be claimed.” N.C.G.S. § 1-253. And nothing requires “one seeking an adjudgment of

contract rights to go further and seek an enforcement of those rights.” Knotville

Volunteer Fire Dep’t, Inc. v. Wilkes Cnty., 94 N.C. App. 377, 379 (1989).

12. Finally, Moses Cone argues that the requested declarations “necessitate an

individualized factual inquiry” for each class member. (Reply Br. 10.) That objection,

if true, might preclude class certification. At some point, Chambers will need to show

that his claim is capable of class-wide resolution and that questions of law and fact

common to the class predominate over individual issues. See Hefner v. Mission Hosp.,

Inc., 2015 NCBC LEXIS 115, at *9–12 (N.C. Super. Ct. Dec. 15, 2015). But that is an

issue for another day.

13. For now, the question is simply whether Chambers has adequately alleged

a basis for declaratory relief. He has. The Court therefore DENIES the motion to

dismiss.

14. The parties shall file a revised case management report and proposed case

management order no later than 2 August 2021. The Court will schedule a case

management conference at a later time.

SO ORDERED, this the 19th day of July, 2021.

/s/ Adam M. Conrad Adam M. Conrad Special Superior Court Judge for Complex Business Cases