Paul Hamaker & Josephine Hamaker v. Highline Medical Center

• Court: Court of Appeals of Washington
• Decided: March 25, 2019
• Docket: 77578-2
• Status: Unpublished

Opinion

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V. UNPUBLISHED OPINION HIGHLINE MEDICAL CENTER, a Washington non-profit corporation,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.

2 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.

3 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.

4 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.

9 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).

10 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

11 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.

12 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.