Opinion
FSTCV156024492S
01-19-2017
The Stamford Hospital v. Chaim Schwartz et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
William A. Mottolese, Judge
In this action the court is called upon to review the findings of fact made by a fact finder pursuant to P.B. § 23-58 and G.S. § 52-549n. The fact finder has filed a written memorandum of decision in compliance with P.B. § 23-56. In accordance with P.B. § 23-57 the defendants have filed their objections to acceptance of the fact finder's report. A hearing on the objections was held on January 4, 2017.
As a threshold matter preliminary to consideration of the merits, the court must address the defendants' challenge to the jurisdiction of the fact finder because if the subject matter of the claim is beyond the scope of the fact finder's jurisdiction, the fact finder had no jurisdiction to entertain the claim and his report must therefore be rejected. Birch v. Williams, 82 Conn.App. 728, 733, 846 A.2d 905 (2004). Although the defendants did not make this challenge before the fact finder, it is axiomatic that absence of subject matter jurisdiction cannot be waived and may be raised at any time.
" Whenever the absence of subject matter jurisdiction is brought to the notice of the court . . . cognizance of it must be taken and the matter passed upon before it can move one further step in the cause; as any movement is necessarily the exercise of jurisdiction, " and this includes a motion to amend. Federal Deposit Insurance Corp. v. Peabody, 239 Conn. 93, 99-100, 680 A.2d 1321 (1996). Correspondingly, the plaintiff has the burden of proving subject matter jurisdiction, whenever and however raised, and even though it is not raised in a timely manner. Fink v. Golenbock, 238 Conn. 183, 199, n.13, 680 A.2d 1243 (1996). On the other hand, every presumption is to be indulged in favor of jurisdiction. Demar v. Open Space and Conservation Commission, 211 Conn. 416, 425, 559 A.2d 1103 (1989).
The crux of the defendants' argument is that when the debt was incurred it was indefinite as to amount because neither party knew at the time what the final amount would be. The plaintiff argues that neither § § 52-549n nor P.B. 23-58 requires a definite amount to be included within the body of the agreement between the parties and all that is necessary is that the complaint seek a definite sum based on an agreement which allows for the ascertainment of a definite sum.
Our case law has established that fact finders have jurisdiction over claims for unpaid hospital services. Milford Hospital v. Casey, 1999 Sup. CT 6781, (1999, Flynn, J.). All that is required to satisfy the condition precedent to a fact finder referral is that the claim be based on a sum of money which is " capable of reduction to certainty" without a necessity " that the exact amount in figures be stated in the agreement." Housing Authority v. Melvin, 12 Conn.App. 711, 715, 533 A.2d 1231 (1987). It is not a fair reading of either the statute or the rule to superimpose a requirement that the agreement sued on specify a definite sum. In fact, our Supreme Court has recognized the special nature of a contract between a medical provider and the parents of a minor.
" Thus, when a medical service provider renders necessary medical care to an injured minor, two contracts arise: the primary contract between the provider and the minor's parents; and an implied in law contract, between the provider and the minor himself. The primary contract between the provider and the parents is based on the parents' duty to pay for their children's necessary expenses, under both common law and statute. Such contracts, where not express, may be implied in fact and generally arise both from the parties' conduct and their reasonable expectations." Yale Diagnostic Radiology v. Estate of Fountain, 267 Conn. 351, 359, 838 A.2d 179 (2004). Thus the court finds that the fact finder had jurisdiction to act.
The standard of review for this court is set forth in Wilcox Trucking, Inc. v. Mansour Builders, Inc., 20 Conn.App. 420, 424, 567 A.2d 1250 (1999).
A reviewing authority may not substitute its findings for those of the trier of the facts. This principle applies no matter whether the reviewing authority is the Supreme Court; Pandolphe's Auto Parts, Inc. v. Manchester, 181 Conn. 217, 220, 435 A.2d 24 (1980); the Appellate Court; Lerner v. Ceslik, 17 Conn.App. 369, 372, 553 A.2d 1142 (1989); or the Superior Court reviewing the findings of either administrative agencies; Gervasoni v. McGrath, 36 Conn.Supp. 297, 300, 418 A.2d 952 (1980), or attorney trial referees. See Practice Book § 443; Rostenberg-Doern Co. v. Weiner, 17 Conn.App. 294, 299, 552 A.2d 827 (1989). This court has articulated that attorney trial referees and factfinders " 'share the same function . . . " whose determination of the facts is reviewable in accordance with well established procedures prior to the rendition of judgment by the court." ' " Rostenberg-Doern Co. v. Weiner, supra, quoting Seal Audio, Inc. v. Bozak, Inc., 199 Conn. 496, 502, 508 A.2d 415 (1986).
" In a contract action, findings of fact should be overturned only when they are clearly erroneous. Pomarico v. Gary Construction, Inc., 5 Conn.App. 106, 112, 497 A.2d 70, cert. denied, 197 Conn. 816, 500 A.2d 1336 (1985)." (Alternate citations omitted.) Kupstis v. Michaud, 20 Conn.App. 425, 567 A.2d 1253 (1989).
With these guidelines in mind the court has reviewed the exhibits in evidence and has read the transcript of the trial and finds that the numerous findings of fact are amply supported by the evidence and are not clearly erroneous. Additionally, the court finds that the principles of law which the fact finder applied to these facts are legally and logically correct. Premier Capital, Inc. v. Grossman, 68 Conn.App. 51, 57, 789 A.2d 565 (2002).
The basic facts which form the basis of the dispute are as follows. The plaintiff, The Stamford Hospital (hereinafter " the plaintiff" or " the hospital"), commenced this action against Chaim Schwartz (hereinafter " Schwartz") and Rena Gelb (hereinafter " Gelb"), alleging in its complaint dated January 21, 2015 that at the defendants' request the plaintiff furnished medical services to the defendants' minor child from March 5, 2013 through March 6, 2013 for which the plaintiff rendered bills for its services in the amount of $14, 051.99. Of that amount there remains a balance due and payable in the amount of $8, 076.25 which is the portion of the charge that was not covered by the defendants' health insurance. Plaintiff further alleges that the defendants, who are the legal parents of the minor child, are liable for the outstanding balance pursuant to C.G.S. § 46b-37(b).
The Complaint contains two counts, each alleging the same cause of action against each defendant. The defendants' amended answers denied all relevant allegations and each included fourteen special defenses which were all denied by the plaintiff.
The court will now proceed to discuss the controlling issues gleaned from the record.
I. CREDIBILITY OF THE PARTIES
It is appropriate to discuss the credibility of the parties as an initial matter because the extent of their credibility permeates the entire proceeding. The factfinder found that the plaintiff's witnesses were " substantial and overwhelming with detail regarding the services rendered including the cost factor." He further found that the defendant Gelb, the mother of the patient, lied under oath when she denied that she was the mother of the child and that the defendant Schwartz, the father " testified that this was not the first billing dispute he has been involved in" and " that he has had other collection matters for things he didn't pay for, which would remain in collections for a period of time and then the business would simply write it off. He did not think this matter would result in litigation." Moreover, the transcript reveals that Schwartz agreed with Gelb's denial and later equivocated on the parentage of the patient. In fact, Schwartz himself took a similar position on the subject.
Chaim Schwartz --" I denied knowledge that Jennifer is my daughter: aside from when I am under oath that I claim she is my daughter and there is nothing wrong with that. I don't know if she is my daughter. I never had a paternity test."
The fact finder declared that " This Tribunal is strained to accept any testimony provided by either Defendant as truthful. Throughout the proceedings, both Defendants admitted to lies and underhanded actions, under the guise of trial strategy or their lack of knowledge of trial procedure, despite great deference given to both Defendants as pro se litigants."
" In a case tried before a court, the trial judge is the sole arbiter of the credibility of the witnesses and the weight to be given specific testimony." Cadle Co. v. D'Addario, 268 Conn. 441, 462, 844 A.2d 836 (2004). Substituting the fact finder for the jury, our Appellate Court has approved of the application by the trial court (fact finder) of the maxim " falsus in uno, falsus in omnibus." " This maxim expresses the general principle of law that it is the prerogative of the jury (fact finder) to discredit the entire testimony of a witness if it determines the witness intentionally testified falsely in some respect. State v. Stevenson, 53 Conn.App. 551, 577 n.21, 733 A.2d 253 cert. denied, 250 Conn. 917, 734 A.2d 990 (1999), citing State v. Smith, 201 Conn. 659, 666, 519 A.2d 26 (1986)." (Alternate citations omitted.) Opotzner v. Bass, 63 Conn.App. 555, 564, n.7, 777 A.2d 718.
Ironically, as nonlawyers both parents who have demonstrated exceptional acumen in researching the law and fashioning their legal arguments, have overlooked the rule that in Connecticut there is a presumption of legitimacy which provides that a child born in wedlock is presumed to be the issue of the mother and her husband. Weidenbacher v. Duclos, 234 Conn. 51, 63, 661 A.2d 988 (1995). Their testimony reveals that they have impermissably shifted the burden of proof on the issue to the plaintiff. The fact finder clearly had ample grounds to disbelieve the defendants' testimony.
II. DEFENSE OF ACCORD AND SATISFACTION
The fact finder determined correctly that the defendants' tender of a check for $112.48, accompanied by correspondence saying that it was payment in full satisfaction of the hospital's invoice of $8, 076.25, was not an accord and satisfaction as argued by the defendants, for two reasons.
First, the fact finder found that the defendants intentionally sent the tendered check to an address which the invoice clearly specified was for payment rather than to an address clearly specified for correspondence and as a result, the hospital authorities never saw the correspondence. Second, the fact finder found that the defendants acted deceitfully when, during the pleading stage of the litigation, the defendants waited in excess of the ninety-day requirement specified under G.S. § 42a-3-311(c)(2) to raise the special defense of accord and satisfaction in their amended answer of May 11, 2015 when they could have raised it in their prior answer of March 24, 2015. In fact, Schwartz admitted that he waited until after expiration of the ninety-day period purposely to take advantage of subsection (c)(2) of the statute.
The address specified for payment is the location of a lockbox at Wells Fargo bank. Therefore, no one at the hospital would have seen the check or the letter and there was no proof that the Wells Fargo bank had an agency relationship with the plaintiff such as to impute knowledge of Wells Fargo to the plaintiff. See Reardon v. Mutual Life Insurance Co., 138 Conn. 510, 516, 86 A.2d 570 (1952).
Based upon the fact finder's accurate characterization of the defendants' conduct as deceitful, his rejection of the accord and satisfaction defense finds additional support in the threshold requirement of Section 42a-3-311 that the tender of the instrument (the check) be made in good faith. Comment number 4 of the statute states that " good faith" in subsection a(i) is defined as not only honesty in fact, but the observance of reasonably commercial standards and fair dealing. The comment also suggests that the amount of the tender in relation to the amount of the claim is significant in the determination of whether the tender was made in good faith. As the plaintiff points out in its brief, the amount tendered represents 1.39 percent of the debt. Schwartz testified that he arbitrarily picked a number over one hundred dollars because he thought that the plaintiff would reject anything less.
In Connecticut bad faith is defined as the absence of good faith. " Bad faith in general implies both actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interest or sinister motive." Black's Law Dictionary (5th Ed. 1979). Bad faith means more than mere negligence; it involves a dishonest purpose. Funding Consultants, Inc. v. Aetna Casualty & Surety Co., 187 Conn. 637, 644, 447 A.2d 1163 (1982); Hartford National Bank & Trust Co. v. Credenza, 119 Conn. 368, 371, 177 A. 132 (1935). (Alternate citations omitted.) Habetz v. Condon, 224 Conn. 231, 237, 618 A.2d 501 (1992).
To be unenforceable, the contract requires the element of oppressiveness. Madden v. Kaiser Foundation Hospitals, 17 Cal.3d 699, 131 Cal.Rptr. 882, 552 P.2d 1178 (Cal. 1976). Moreover, " It is the burden of the party asserting the lack of good faith to establish its existence and whether that burden has been satisfied in a particular case is a question of fact." Warner v. Konover, 210 Conn. 150, 156, 553 A.2d 1138 (1989). Morever, our courts have said that: " We do not generally find contracts unconscionable where the parties are business persons." Employee Equipment Leasing Corp. v. Waterbury Transmission, Inc., 31 Conn.App. 455, 464, 626 A.2d 307 (1993). By either definition, it is clear that the defendants acted in bad faith in tendering the payment and therefore are not entitled to the benefit conferred by § 42a-3-311.
It is noted that both defendants are commercially sophisticated with graduate degrees, that Schwartz is employed at a financial institution and has responsibility for fair lending practices.
III. CONTRACT OF ADHESION
The defendants have raised the special defense that the Patient Authorization Agreement (Hospital Contract) is invalid and unenforceable because it is an " unconscionable adhesion contract." " [t]he most salient feature [of adhesion contracts] is that they are not subject to the normal bargaining processes of ordinary contracts, " and that they tend to involve a " standard form contract prepared by one party, to be signed by the party in a weaker position, [usually] a consumer, who has little choice about the terms . . ." (Internal quotation marks omitted.) Reardon v. Windswept Farm, LLC, 280 Conn. 153, 162-63, 905 A.2d 1156 (2006).
" The classic definition of an unconscionable contract is one " which no man in his senses, not under delusion, would make, on the one hand, and which no fair and honest man would accept, on the other." (Internal quotation marks omitted.) Neal v. Lacob, 31 Ill.App.3d 137, 142, 334 N.E.2d 435 (1975), quoting Hume v. United States, 132 U.S. 406, 410, 10 S.Ct. 134, 33 L.Ed. 393 (1889). In practice, we have come to divide this definition into two aspects of unconscionability, one procedural and the other substantive, the first intended to prevent unfair surprise and the other intended to prevent oppression. (Alternate citation omitted.) Smith v. Mitsubishi Motors Credit of America, Inc., 247 Conn. 342, 349, 721 A.2d 1187 (1998).
In Connecticut the amount which a hospital may bill for a particular service is controlled by the " pricemaster" pursuant to chapters 368z and 368aa. " Pricemaster" is defined in the statute as a detailed schedule of hospital charges. In accordance with § 19a-681(b) " Each hospital shall file with the office (Office of Health Care Access) its current pricemaster which shall include each charge in its detailed scheduled of charges." Thus, the rates which the plaintiff may have charged for the services performed on the patient are available for public inspection. Additionally, subsection (c) of the statute imposes a severe penalty on a hospital for deviation from the pricemaster. As the court observed in William W. Backus Hospital v. Belisle, [63 Conn.L.Rptr. 135, ] 2016 WL 6118987, where the same defense was raised, " the court finds the patients promised to pay the hospital's regular charges for their period of hospitalization not covered by insurance, and it finds that those charges were the plaintiff's pricemaster rates which it was required to post and charge. Those charges could be certainly and definitely ascertained by comparing the services performed to the publicly published pricemaster rates." The court further concluded " in the instant case the court finds that the plaintiff followed the mandatory legislative and regulatory scheme for public posting of its hospital prices to notify patients of their potential liability, and it was prevented from charging a different rate absent a negotiated agreement. The legislative and regulatory scheme reflects a public policy in favor of the contractual procedures followed by the plaintiff in the instant case." The court notes that the defendants make no claim that any of the charges exceed the rates posted in the pricemaster.
Subsection (c) provides as follows:
In the Backus Hospital case the court held that the hospital payment contract was procedurally unconscionable because of the lack of equal bargaining power between the parties and the absence of choice. Id. at 4. The court quoted from Bender v. Bender, 292 Conn. 696, 730, 732, 975 A.2d 636 (2009), which stated that for a contract to be both procedurally and substantively unconscionable when made there must be " some showing of an absence of meaningful choice on the part of the parties together with contract terms which are unreasonably favorable to the other party . . . (Internal quotation marks omitted.) Hottle v. BDO Seidman, LLP, 268 Conn. 694, 846 A.2d 862 (2004)." (Alternate citation omitted.)
This court concludes that it is arguable whether the hospital contract is procedurally unconscionable because while the defendants had no meaningful choice under the exigent circumstances which existed, the element of " unfair surprise" (see Smith v. Mitsubishi Credit of America, Inc., supra ) was not present because of the public availability of the then current pricemaster. The court further concludes that because the rates on the pricemaster are based on a national database and there are severe consequences for a hospital if it exceeds these rates, they are not oppressive. The defendants offered no evidence of comparative rates in other Connecticut hospitals for the same services or expert opinion as to what are fair and reasonable charges. Therefore, there is no basis for a finding of substantive unconscionability.
IV. SCHWARTZ NOT A SIGNATORY TO THE CONTRACT
The fact finder addressed Schwartz's special defense that he was not a signatory to the hospital contract. Section 46b-37 in pertinent part provides as follows: " (b) Notwithstanding the provisions of subsection (a) of this section, it shall be the joint duty of each spouse to support his or her family, and both shall be liable for: (1) The reasonable and necessary services of a physician or dentist; (2) hospital expenses rendered the husband or wife or minor child while residing in the family of his or her parents." Thus, whether or not Schwartz signed the contract, he is liable under the statute nonetheless. Accordingly, the court finds that the plaintiff has proved that the defendants have breached their contract as alleged in the second count of the complaint.
It is well established that " (t)he elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages." (Internal quotation marks omitted.) (Alternate citations omitted.) Meadowbrook Center, Inc. v. Buchman, 149 Conn.App. 177, 185, 90 A.3d 219 (2014).
The remainder of the fourteen special defenses either have been addressed implicitly by the foregoing analysis or are otherwise unmeritorious or as the fact finder put it, " disingenuous." Therefore judgment may enter for the plaintiff in the amount of $7, 963.77.
Not only does the court agree with this characterization but the transcript may fairly be titled " a study in prevarication, equivocation and obfuscation."
V. INTEREST AND ATTORNEYS FEES
As the court reads the fact finder's memorandum of decision the issue of pre- and postjudgment interest has been left to the court. The court finds that under the circumstances of this case it is eminently fair and equitable to award pre- and postjudgment interest as requested by the plaintiff. Therefore, pursuant to G.S. § 37-3a pre- and postjudgment interest is limited to five percent which is hereby awarded from June 19, 2014, the date the defendants were provided with a billing statement. The fact finder has also reserved to the court the issue of an award of reasonable attorneys fees pursuant to paragraph four of the hospital contract. Plaintiff may file an itemized affidavit of attorneys fees in implementation of that paragraph. The defendants shall have ten days to object. In the event of such an objection the court will hold a hearing sometime after March 6, 2017.
So ordered.
(c) Upon the request of the Department of Public Health or a patient, a hospital shall provide to the department or the patient a detailed patient bill. If the billing detail by line item on a detailed patient bill does not agree with the detailed schedule of charges on file with the office for the date of service specified on the bill, the hospital shall be subject to a civil penalty of five hundred dollars per occurrence payable to the state not later than fourteen days after the date of notification. The penalty shall be imposed in accordance with section 19a-653. The office may issue an order requiring such hospital, not later than fourteen days after the date of notification of an overcharge to a patient, to adjust the bill to be consistent with the detailed schedule of charges on file with the office for the date of service specified on the detailed patient bill.