McNew v. Fletcher Hosp., Inc, 2022 NCBC 53.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION MADISON COUNTY 22 CVS 19
CHARLES SANDERS MCNEW, for himself & on behalf of all others similarly situated,
Plaintiff, ORDER AND OPINION ON DEFENDANT’S MOTION TO DISMISS v. AMENDED COMPLAINT FLETCHER HOSPITAL, INC., d/b/a ADVENTHEALTH HENDERSONVILLE, INC.,
Defendant.
1. THIS MATTER is before the Court on Defendant Fletcher Hospital,
Inc., d/b/a AdventHealth Hendersonville, Inc.’s (“Defendant” or the “Hospital”)
Motion to Dismiss Plaintiff Charles Sanders McNew’s (“Plaintiff” or “McNew”)
Amended Complaint (the “Motion”) under Rule 12(b)(6) of the North Carolina Rules
of Civil Procedure (the “Rule(s)”) filed 25 May 2022 in the above-captioned action. 1
2. Having considered the Motion, the related briefing, and the arguments
of counsel at the hearing on the Motion, the Court hereby GRANTS in part and
DENIES in part the Motion as set forth below.
McNew, P.A., by Charles S. McNew, for Plaintiff Charles Sanders McNew, for himself and on behalf of all others similarly situated.
Roberts & Stevens, P.A., by Philip Pence, Phillip T. Jackson, John D. Noor, and David C. Hawisher, for Defendant Fletcher Hospital, Inc. d/b/a AdventHealth Hendersonville, Inc.
Bledsoe, Chief Judge.
1 (ECF No. 15.) I.
FACTUAL BACKGROUND
3. The Court does not make findings of fact when ruling on a motion to
dismiss under Rule 12(b)(6). The following background assumes that the allegations
of the Amended Complaint are true. See, e.g., White v. White, 296 N.C. 661, 667 (1979)
(requiring the trial court to treat a complaint’s allegations as true under Rule
12(b)(6)).
4. On 30 June 2021, McNew sought medical treatment at the Hospital’s
emergency room for injuries sustained to his side and head that evening when he fell
from a six-foot high wall at his home in Marshall, North Carolina. 2 A triage nurse at
the Hospital took information from McNew, performed a brief examination of his
injuries, processed his admission to the emergency room, and scheduled McNew to
receive two diagnostic tests: a cranial CT scan without contrast dye, and chest x-rays.
These diagnostic tests were performed by two different hospital technicians. 3
5. Wake Forest Emergency Providers (“Wake Forest”) performs emergency
room services for the Hospital as an independent contractor. McNew was not
examined by a physician present at the Hospital but instead was diagnosed remotely
by one of Wake Forest’s physicians, Dr. Jason Strombaugh. 4
2 (Am. Compl. ¶¶ 15–16, ECF No. 11.)
3 (Am. Compl. ¶¶ 21–24.)
4(Am. Compl. ¶¶ 25, 27–28.) 6. McNew was discharged from the hospital early the following morning
and, in September 2021, and he received a bill from the Hospital in the total amount
of $4,413.48 for his care ($1,440.00 for “Emergency Center”; $2,509.86 for “CT Scan
Imaging”; and $463.62 for “Radiology/Services”). After accounting for insurance
payments received on McNew’s behalf, the Hospital’s billing statement reflected that
McNew owed the Hospital an uninsured balance of $2,667.96. 5 McNew alleges that
the Hospital’s charges for the emergency and imaging services it provided far exceed
those disclosed in its published rates as well as those of similar providers providing
similar services both locally and nationally. 6
7. McNew also claims that Defendant’s charges are part of a systematic
practice of “surprise billing” involving the charging of undisclosed fees far beyond the
actual worth of the provided services, resulting in harm to consumers. 7 In particular,
he alleges that the Hospital never disclosed that it would charge rates far in excess
of both its published rates and local and national market rates or that its charges
would substantially exceed the amount of his insurance reimbursement. 8 He avers
5 (Am. Compl. ¶¶ 29–31.)Plaintiff also received a separate bill from Wake Forest in the total amount of $463.00 for Dr. Strombaugh’s services. After accounting for insurance, Wake Forest billed McNew $72.41 for this medical care. (Am. Compl. ¶¶ 33–34.)
6 (Am. Compl. ¶¶ 35–43.) For example, McNew pleads that he was charged $2,667.96 for a cranial CT scan without contrast dye even though the Hospital’s online price estimator states that the price for that scan is $205.58, Asheville’s Mission Imaging Services’ published fee schedule prices the scan at $457.32, and the national average for the scan is $449.00. (Am. Compl. ¶¶ 35–38.)
7 (Am. Compl.¶¶ 2–3.)
8 (Am. Compl. ¶¶ 43–44.) that the Hospital did not post a price schedule visible to consumers in the public areas
of the emergency room or give him a fee schedule or fee estimate prior to providing
him emergency and imaging services. 9
8. Plaintiff attempted to negotiate a reduction in the amounts he was
charged with a Hospital supervisor but was unsuccessful. The supervisor advised
him that the Hospital’s charges for the services he received were the “usual and
customary amounts they charge all consumers for th[o]se services.” 10 After agreeing
to a review, the Hospital reissued Plaintiff’s bill without modification on 27 October
2021. 11
II.
PROCEDURAL BACKGROUND
9. McNew asserts this action individually and on behalf of a purported
class of all North Carolina citizens that he alleges the Hospital has, without notice,
charged amounts in excess of prevailing local or national rates for emergency and
imaging services within the past four years. 12 He asserts individual and class claims
for (i) violation of North Carolina’s Unfair and Deceptive Trade Practices Act
9 (Am. Compl. ¶¶ 17–18.)
10 (Am. Compl. ¶ 53.)
11 (Am. Compl. ¶ 56.)
12 (Am. Compl. ¶ 57.) (“UDTPA”), N.C.G.S. § 75-1.1 (ii) breach of fiduciary duty, (iii) constructive fraud, and
(iv) breach of contract. 13
10. Defendant filed the Motion on 25 May 2022. After full briefing, the
Court held a hearing on the Motion on 30 August 2022. At the Hearing, Defendant
conceded that Plaintiff had sufficiently pleaded his claim for breach of contract and
withdrew its Motion as to that claim. As a result, the Court need address Defendant’s
Motion only to the extent it seeks to dismiss Plaintiff’s claims for breach of fiduciary
duty, constructive fraud, and unfair and deceptive trade practices under section 75-
1.1. The Motion is now ripe for resolution.
III.
LEGAL STANDARD
11. In ruling on a motion to dismiss under Rule 12(b)(6), the Court may only
consider the pleading and “any exhibits attached to the [pleading,]” Krawiec v.
Manly, 370 N.C. 602, 606 (2018). The Court examines “whether the allegations of the
complaint, if treated as true, are sufficient to state a claim upon which relief can be
13 (Am. Compl. ¶¶ 73, 84, 89, 98, 104.) McNew also included an individual claim for fraud in his Amended Complaint, (Am. Compl. ¶¶ 99–104), but consents to its dismissal for failure to state a claim under Rule 12(b)(6), (see Pl.’s Br. Opp’n Mot. Dismiss Am. Compl. 3, n.2, ECF No. 23.) Given that Plaintiff did not seek to persuade the Court that he should be afforded an opportunity to amend his fraud claim or that the dismissal of the claim should be without prejudice, the Court, in the exercise of its discretion, shall dismiss Plaintiff’s fraud claim with prejudice. See, e.g., First Fed. Bank v. Aldridge, 230 N.C. App. 187, 192 (2013) (affirming dismissal with prejudice under Rule 12(b)(6) when “nothing in the record indicat[ed] that Plaintiff moved that the dismissal be without prejudice”); see also Johnson v. Bollinger, 86 N.C. App. 1, 9 (1987) (“Since the dismissal order operates as an adjudication on the merits unless the order specifically states to the contrary, the party whose claim is being dismissed has the burden to convince the court that the party deserves a second chance; thus, the party should move the trial court that the dismissal be without prejudice.”) granted under some legal theory.” Corwin v. British Am. Tobacco PLC, 371 N.C. 605,
615 (2018) (quoting CommScope Credit Union v. Butler & Burke, LLP, 369 N.C. 48,
51 (2016)). The Court, however, is not required “to accept as true allegations that are
merely conclusory, unwarranted deductions of fact, or unreasonable inferences.”
Izydore v. Alade, 242 N.C. App. 434, 438 (2015) (quoting Strickland v. Hedrick, 194
N.C. App. 1, 20 (2008)). The Court may also ignore a party’s legal conclusions set
forth in its pleading. See McCrann v. Pinehurst, LLC, 225 N.C. App. 368, 377 (2013).
12. “Dismissal of an action under Rule 12(b)(6) is appropriate when the
complaint ‘fail[s] to state a claim upon which relief can be granted.’ ” Arnesen v.
Rivers Edge Golf Club & Plantation, Inc., 368 N.C. 440, 448 (2015) (alteration in
original) (quoting N.C. R. Civ. P. 12(b)(6)). The Supreme Court of North Carolina has
determined that a “complaint fails in this manner when: ‘(1) the complaint on its face
reveals that no law supports the plaintiff’s claim; (2) the complaint on its face reveals
the absence of facts sufficient to make a good claim; or (3) the complaint discloses
some fact that necessarily defeats the plaintiff’s claim.’ ” Krawiec, 370 N.C. at 606
(quoting Wood v. Guilford Cty., 355 N.C. 161, 166 (2002)).
A. Breach of Fiduciary Duty
13. To successfully plead a claim for breach of fiduciary duty, “a plaintiff
must show that: (1) the defendant owed the plaintiff a fiduciary duty; (2) the
defendant breached that fiduciary duty; and (3) the breach of fiduciary duty was a
proximate cause of injury to the plaintiff.” Sykes v. Health Network Sols., Inc., 372
N.C. 326, 339 (2019). “Thus, to make out a claim for breach of a fiduciary duty, plaintiffs must first allege facts that, taken as true, demonstrate that a fiduciary
relationship existed between the parties.” Id. at 339–40.
14. “[A] fiduciary relationship is generally described as arising when ‘there
has been a special confidence reposed in one who in equity and good conscience is
bound to act in good faith and with due regard to the interests of the one reposing
confidence.’ ” Dallaire v. Bank of Am., N.A., 367 N.C. 363, 367 (2014) (quoting Green
v. Freeman, 367 N.C. 136, 141 (2013)). “North Carolina recognizes two types of
fiduciary relationships: de jure, or those imposed by operation of law, and de facto, or
those arising from the particular facts and circumstances constituting and
surrounding the relationship.” Hager v. Smithfield E. Health Holdings, LLC, 264
N.C. App. 350, 355 (2019) (citing Lockerman v. S. River Elec. Membership Corp., 250
N.C. App. 631, 635 (2016)).
15. The Supreme Court of North Carolina has cautioned that “[t]he list of
relationships that we have held to be fiduciary in their very nature is a limited one,
and we do not add to it lightly.” CommScope Credit Union v. Butler & Burke, LLP,
369 N.C. 48, 52 (2016) (citation omitted). As noted by the Court of Appeals, “[t]hat
list has, thus far, been limited to legal relationships, including attorney and client,
physician and patient, spouses, business partners, and guardian and ward,” Hager,
264 N.C. App. at 355. See King v. Bryant, 369 N.C. 451, 464 (2017) (listing de jure
fiduciary relationships).
16. McNew argues that his relationship with the Hospital during his
emergency room visit was a fiduciary one by operation of law, contending that the Hospital’s duty to its patient in the emergency room setting is no different than the
de jure fiduciary duty that a physician owes to his or her patient. 14 See, e.g., Watts v.
Cumberland Cty. Hosp. Sys., Inc., 317 N.C. 110, 116 (1986) (“the relationship of
patient and physician is considered to be a fiduciary one ‘imposing upon the physician
the duty of good faith and fair dealing.’ ” (quoting Black v. Littlejohn, 312 N.C. 626,
646 (1985)). As a result, McNew contends that his breach of fiduciary duty claim
must survive Defendant’s Motion on this ground. The Court disagrees.
17. The de jure fiduciary duty McNew seeks to establish arises from the
Hospital’s charges and billing practices, not from the care that the Hospital provided
to him. The concerns driving the North Carolina courts to recognize a de jure
fiduciary duty between a physician and his or her patient—i.e., the “special
knowledge and skill in diagnosing and treating diseases and injuries, which the
patient lacks,” that drives the patient to choose the physician, King, 369 N.C. at 451
(quoting Black, 312 N.C. at 646), and the high level of personal trust and confidence
undergirding the patient’s decision to disclose sensitive, confidential medical
information to the physician and rely on that physician’s treatment advice—are
simply not present in a patient’s billing relationship with the Hospital. The billing
relationship is instead one of debtor and creditor, which our courts have made clear
is not a de jure fiduciary relationship. See, e.g., Dallaire, 367 N.C. at 368 (“The ‘mere
existence of a debtor-creditor relationship between the parties does not create a
14 (Am. Compl. ¶¶ 76, 78.) fiduciary relationship.’ ” (quoting Branch Banking & Trust Co. v. Thompson, 107 N.C.
App. 53, 61 (1992) (cleaned up)).
18. Perhaps not surprisingly, Plaintiff has not cited, nor has the Court
located, any case—from North Carolina or any other jurisdiction—in which a court
has found that a hospital’s billing relationship with its patient is a fiduciary one by
operation of law. Indeed, courts that have considered the issue have found to the
contrary. See, e.g., Hill v. Sisters of St. Francis Health Servs., Inc., No. 06 C 1488,
2006 U.S. Dist. LEXIS 92874, *9 (N.D. Ill. 2006) (under Illinois law, “there is no
fiduciary duty between a hospital and its patients with respect to billing practices”);
Burton v. William Beaumont Hosp., 373 F. Supp. 2d 707, 723–24 (E.D. Mich. 2005)
(“While Michigan courts have recognized fiduciary relationships such as . . . doctors
and patients, there is no authority for the proposition that a fiduciary relationship
exists between a hospital and a patient for what plaintiffs complain of here, namely
billing practices.”) (citation omitted); Morrell v. Wellstar Health Sys., Inc., 280 Ga.
App. 1, 7–8 (2006) (under Georgia law, “we hold that a nonprofit hospital generally
has no fiduciary duty to a patient with respect to the price the hospital charges for
medical care.”); see also Dicarlo v. St. Mary’s Hosp., Civil Action No. 05-1665 (DRD-
SDW) 2006 U.S. Dist. LEXIS 49000, *27 (D.N.J. Jul. 19, 2006) (concluding that “it is
unlikely that the New Jersey courts would expand a hospital’s fiduciary duty to its
billing practices”). 19. Based on the above, the Court concludes that Plaintiff has failed to plead
that the Hospital owed him a de jure fiduciary duty in connection with the Hospital’s
billing practices.
20. Plaintiff’s additional contention that he enjoyed a de facto fiduciary
relationship with the Hospital fares no better. 15 A de facto fiduciary relationship
exists when there is “ ‘confidence reposed on one side, and resulting domination and
influence on the other.’ ” Dalton v. Camp, 353 N.C. 647, 652 (2001) (quoting Abbitt v.
Gregory, 201 N.C. 577, 598 (1931)) (cleaned up). “The standard for finding a de facto
fiduciary relationship is a demanding one: ‘Only when one party figuratively holds
all the cards—all the financial power or technical information, for example—have
North Carolina courts found that the special circumstance of a fiduciary relationship
has arisen.’ ” Lockerman, 250 N.C. App. at 636 (quoting S.N.R. Mgmt. Corp. v.
Danube Partners 141, LLC, 189 N.C. App. 601, 613 (2008)).
21. Of significance here, “[o]ur courts have been clear that general
contractual relationships do not typically rise to the level of fiduciary relationships.”
Sykes, 372 N.C. at 340. “Parties to a contract do not thereby become each other’s
fiduciaries; they generally owe no special duty to one another beyond the terms of the
contract[.]” Id. (quoting Branch Banking & Tr. Co., 107 N.C. App. at 61)); see also
Dallaire, 367 N.C. at 368 (“An ordinary debtor-creditor relationship generally does
not give rise to . . . a special confidence”) (cleaned up).
15 (Am. Compl. ¶ 78.) 22. Even when one party is in the “position as the holder of the purse
strings,” “no [fiduciary] relationship arises absent the existence of dominion and
control by one party over another.” Kaplan v. O.K. Techs., L.L.C., 196 N.C. App. 469,
474 (2009). “In the event that a party ‘fail[s] to allege any special circumstances that
could establish a fiduciary relationship,’ dismissal of a claim which hinges upon the
existence of such a relationship would be appropriate.” Azure Dolphin, LLC v.
Barton, 371 N.C. 579, 599 (2018) (citation omitted).
23. Here, McNew received medical care for his injuries at the Hospital’s
emergency room. McNew pleads that the Hospital “occupied a position of superior
power and influence” over him in the Hospital’s subsequent billing. 16 However,
McNew does not plead any facts to support that claim. He does not challenge the
adequacy of the medical care he received or question the medical knowledge of the
Hospital’s staff; 17 he challenges only the amount he was billed after the services were
rendered, and he provides insufficient facts to plead the substantial difference in
bargaining power our courts require to establish that he had a de facto fiduciary
relationship with the Hospital.
24. To the contrary, McNew pleads that he “agreed to pay [the Hospital] an
unspecified sum representing the uninsured portion of the costs of care as a [Hospital]
patient,” and contends that the Hospital “breached its contract with Plaintiff by
charging him rates that far exceeded its own published rates, as well as other
16 (Am. Compl. ¶¶ 77, 80.)
17 (Am. Compl. ¶ 69.) comparable rates from other providers, for the services it provided.” 18 Plaintiff’s
relationship with the Hospital for its charges is thus defined by contract, and Plaintiff
alleges no facts that suggest that the parties’ billing relationship imposed duties on
either party beyond those contract duties. Plaintiff’s contentions that the Hospital
had a fiduciary duty not to “goug[e]” him with charges for “emergency and imaging
services far in excess of local or national rates” and “to disclose its billing rates and
practices before performing services on Plaintiff’s behalf” 19 are duties arising from
the parties’ contract, not duties arising from a fiduciary relationship between them.
25. Accordingly, the Court concludes that McNew has failed to allege that
he had either a de jure or a de facto fiduciary relationship with the Hospital. As a
result, Plaintiff’s claim for breach of fiduciary duty must be dismissed.
B. Constructive Fraud
26. “A constructive fraud claim requires a plaintiff to allege and show (1)
that the defendant owes the plaintiff a fiduciary duty; (2) that the defendant breached
that duty; and (3) that the defendant sought to benefit himself in the transaction.”
Ironman Med. Props., LLC v. Chodri, 268 N.C. App. 502, 513 (2019) (cleaned up). A
confidential or fiduciary relationship is a prerequisite to sustaining a constructive
fraud claim. See Head v. Gould Killian CPA Grp., P.A., 371 N.C. 2, 9 (2018) (stating
that “ ‘[c]onstructive fraud arises where a confidential or fiduciary relationship
exists[.]’ ”) (cleaned up). As made clear above, Plaintiff has failed to plead a fiduciary
18 (Am. Compl. ¶¶ 91, 98.)
19 (Am. Compl. ¶¶ 81–82.) relationship with the Hospital and has not otherwise pleaded facts showing a
confidential one on which a constructive fraud claim may rest. Accordingly, Plaintiff’s
constructive fraud claim must be dismissed.
C. Unfair and Deceptive Trade Practices
27. Under the UDTPA, “[u]nfair methods of competition in or affecting
commerce, and unfair or deceptive acts or practices in or affecting commerce, are
declared unlawful.” N.C.G.S. § 75-1.1(a). To state a UDTPA claim, a plaintiff must
allege: “(1) an unfair or deceptive act or practice, (2) in or affecting commerce, and (3)
which proximately caused injury to plaintiff[.]” Walker v. Fleetwood Homes of N.C.,
Inc., 362 N.C. 63, 71–72 (2007) (quoting Gray v. N.C. Ins. Underwriting Ass’n, 352
N.C. 61, 68 (2000)). “ ‘A practice is unfair when it offends established public policy as
well as when the practice is immoral, unethical, oppressive, unscrupulous, or
substantially injurious to consumers,’ and a ‘practice is deceptive if it has the capacity
or tendency to deceive.’ ” Bumpers v. Cmty. Bank of N. Va., 367 N.C. 81, 91 (2013)
(quoting Walker, 362 N.C. at 72). “Neither fraud, bad faith, deliberate acts of
deception or actual deception need be shown, but the acts must have had a tendency
or capacity to mislead or created the likelihood of deception.” Moretz v. Miller, 126
N.C. App. 514, 518 (1997). 20
20 To the extent that Plaintiff premises his UDTPA claim against the Hospital on his claims
for breach of fiduciary duty and constructive fraud, (Am. Compl. ¶ 70), the UDTPA claim necessarily fails because of Plaintiff’s failure to adequately plead the underlying claims. See Craven v. SEIU COPE, 188 N.C. App. 814, 819 (2008) (dismissing an unfair and deceptive trade practices claim where the underlying tort was dismissed); Crescent Foods, Inc. v. Evason Pharms., Inc., 2016 NCBC LEXIS 76, *27 (N.C. Sup. Ct. Oct. 5, 2016) (dismissing UDPTA claim based on dismissed claims for breach of fiduciary duty and fraud). 28. Defendant contends that Plaintiff’s UDTPA claim should be dismissed
under the learned profession exemption to section 75-1.1. See N.C.G.S. § 75-1.1
(stating, in pertinent part, that “(a) Unfair methods of competition in or affecting
commerce, and unfair or deceptive acts or practices in or affecting commerce, are
declared unlawful.” and that “(b) For purposes of this section, “commerce” includes
all business activities, however denominated, but does not include professional
services rendered by a member of a learned profession.”) (emphasis added).
29. Although addressed on numerous occasions by our Court of Appeals, the
Supreme Court of North Carolina first considered the learned profession exemption
in Sykes v. Health Network Sols., Inc., 372 N.C. 326 (2019). There, the Court
explained that courts must “conduct a two-part inquiry to determine whether the
‘learned profession’ exemption applies: ‘[F]irst, the person or entity performing the
alleged act must be a member of a learned profession. Second, the conduct in question
must be a rendering of professional services.” Id. at 334. As such, the Court
recognized that “a matter affecting the professional services rendered by members of
a learned profession . . . falls within the exception in N.C.G.S. § 75-1.1(b).” Id.
(cleaned up).
30. Sykes, like this case, involved the application of the learned profession
exemption in the healthcare industry. Sykes recognized both that “members of health
care professions fall within the learned profession exemption to N.C.G.S. § 75-1.1,” 21
and that “this exception for medical professionals has been broadly interpreted.”
21 Hospitals are included within the definition of “medical professionals” under the exemption. See Shelton v. Duke Univ. Health Sys., 179 N.C. App. 120, 126 (2006). (cleaned up). Id. A challenge for the courts in applying the exemption has been in
deciding whether the activity at issue is sufficiently related to the provision of patient
care to be excluded from the reach of the UDTPA. Id.
31. For example, in Sykes, the Supreme Court concluded that because the
defendant’s actions in “terminat[ing plaintiff chiropractic] providers’ in-network
access to patients when those providers exceed[ed] a certain average cost per patient”
reduced the level of chiropractic services patients actually received, defendant’s
conduct was “directly related to providing patient care” and thus exempted from the
UDTPA by section 75-1.1(b). Id. at 336. The Court of Appeals has reached the same
conclusion in similar contexts. See, e.g., Wheeless v. Maria Parham Med. Ctr., Inc.,
237 N.C. App. 584, 590 (2014) (concluding “defendant-doctors’ alleged conduct in
making a complaint to the Medical Board [about plaintiff doctor’s inappropriate and
disruptive behavior was] integral to their role in ensuring the provision of adequate
medical care”); Burgess v. Busby, 142 N.C. App. 393, 407 (2001) (concluding
defendant-doctor’s discouragement of other doctors from providing health care to
plaintiffs “affect[ed] the professional services rendered by members of a learned
profession”); Cameron v. New Hanover Memorial Hospital, 58 N.C. App. 414, (1982)
(exempting defendant-hospital’s denial of staff privileges to plaintiff-podiatrists
because the “consideration of whom to grant hospital staff privileges is a necessary
assurance of good health care”); see also Gaunt v. Pittaway, 139 N.C. App. 778, 784
(2000) (exempting defendant-doctors’ allegedly defamatory statements about
plaintiff-doctor’s training, expertise, and practices); Abram v. Charter Medical Corp., 100 N.C. App. 718, 722–723 (1990) (exempting defendant medical provider’s
opposition to plaintiff provider’s CON application for allegedly illegitimate reasons).
32. At the same time, the Supreme Court has recognized that “the mere
status of a defendant as a member of a ‘learned profession’ does not shield that
defendant from any claim under N.C.G.S. § 75-1.1 regardless of how far removed the
claim is from that defendant’s professional practice.” Sykes, 372 N.C. at 336.
Consistent with this principle, the Court of Appeals concluded, prior to Sykes, in
Hamlet H.M.A., LLC v. Hernandez, 262 N.C. App. 51 (2018), that the learned
profession exemption did not bar a defendant doctor’s counterclaim that he had been
fraudulently induced to enter an employment contract with the plaintiff hospital.
The Court of Appeals rejected the notion that “negotiations regarding a business
arrangement, even between a physician and a hospital” are exempted from the
UDTPA, concluded that “[t]he learned profession exception does not cover claims
simply because the participants in the contract are medical professionals,” id. at 64,
and held that the parties’ contract dispute “involve[d] a business deal, not rendition
of professional medical services.” Id. at 63. 22
33. Mindful of these decisions, the Court must determine whether the
Hospital’s alleged conduct is sufficiently related to the provision of patient care to fall
within the exemption. The Court concludes that it is. As an initial matter, the
Hospital’s bills reflect the Hospital’s charges for the medical care Plaintiff received in
the emergency room; in that way, they directly relate to the provision of Plaintiff’s
22 The Supreme Court in Sykes discussed but did not expressly adopt or approve the Court of
Appeals’ holding in Hamlet H.M.A., LLC. See Sykes, 372 N.C. at 335. medical care. In addition, Plaintiff’s UDTPA claim based on those charges challenges
not only the amounts the Hospital charged, but also the Hospital’s conduct in not
disclosing those charges in the course of rendering its emergency and imaging
services to Plaintiff. 23 In contrast to the employment contract at issue in Hamlet
H.M.A., LLC, which was a business contract that enabled the defendant’s subsequent
provision of medical services, the Hospital’s alleged misconduct here—overbilling
without disclosing its actual rates to Plaintiff at the time of treatment—is entwined
with, and directly tied to, the provision of Plaintiff’s medical care at the Hospital’s
emergency room.
34. Particularly given our appellate courts’ expansive interpretation of the
learned profession exemption in the healthcare field, the Court concludes, based on
the above, that Plaintiff’s UDTPA claim is sufficiently tied to the provision of patient
care to fall within the exemption’s reach. See, e.g., Shelton v. Duke Univ. Health Sys.,
179 N.C. App. 120, 121 (2006), (affirming dismissal of UDTPA claim premised on
hospital’s provision of allegedly misleading billing information as exempt under
section 75-1.1(b)); McClean v. Duke Univ., 376 F. Supp. 3d 585, 610 (M.D.N.C. 2019)
(concluding that “[s]tatements about medicine, treatment or billing are protected by
the ‘learned profession’ exclusion to [section] 75-1.1, while statements made by
doctors outside of those categories (such as during business negotiations) are not.”);
see also Alamance Family Practice, P.A., 2018 NCBC LEXIS 83, *20–21 (N.C. Super.
23 (Am. Compl. ¶ 71 (“AdventHealth’s practice of billing for services far in excess of market
rates, without disclosing its billing practices in advance of rendering services, is deceptive to consumers.”). Ct. Aug. 14, 2018) (holding that exemption applied where defendant allegedly “
‘fraudulently obtain[ed] patient information,’ misappropriate[ed] Plaintiff’s trade
name and internet contacts, . . . us[ed] Plaintiff’s funds to pay unauthorized
expenses . . . form[ed] her own business while employed by Plaintiff[,] and solicit[ed]
Plaintiff’s patients”).
35. Accordingly, based on the above, the Court concludes that Defendant’s
motion to dismiss Plaintiff’s UDTPA claim should be granted, and that claim shall
therefore be dismissed. 24
CONCLUSION
36. WHEREFORE, the Court, for the reasons set forth above, hereby
ORDERS as follows:
a. Defendant’s Motion is GRANTED as to Plaintiff’s claims for breach of
fiduciary duty, constructive fraud, fraud, and unfair and deceptive trade
practices under section 75-1.1, and those claims are hereby
DISMISSED with prejudice.
b. Defendant’s Motion is DENIED as moot as to Plaintiff’s claim for breach
of contract, and that claim shall proceed to discovery.
SO ORDERED, this the 20th day of September 2022.
/s/ Louis A. Bledsoe, III Louis A. Bledsoe, III Chief Business Court Judge
24 In light of the Court’s conclusion, the Court declines to address Defendant’s other grounds
for dismissal of Plaintiff’s UDTPA claim.