Opinion
No. X02 CV 04-04001227-S
September 1, 2005
RULING ON MOTION TO STRIKE
The five plaintiffs have brought this purported class action against defendant Yale-New Haven Hospital, Inc., raising claims under or related to the charitable bed funds statute, General Statutes § 19a-509b. The defendant has moved to strike fifty of the fifty-one counts of the operative sixth amended complaint — a statement that reveals the unwieldy nature and unfortunate history of this case. Applying the governing standards, see Novametrix Medical Systems, Inc. v. BOC Group, Inc., 224 Conn. 210, 214-15, 618 A.2d 25 (1992), the court rules as follows on the motions to strike.
I.
The court grants the motion to strike counts one and thirty-nine because the passage of the 2003 amendment to General Statutes § 19a-509b makes clear, in the absence of uncontroverted legislative history to the contrary, that the 1991 bed funds statute did not apply to debt collection activity after the patient left the hospital. See In re Michael S., 258 Conn. 621, 629, 784 A.2d 317 (2001); State v. State Employees Review Board, 239 Conn. 638, 648-49, 687 A.2d 134 (1997). Count thirteen fails for this reason and the additional reason that plaintiff Chicester does not allege any facts showing that, during her hospitalizations, the hospital should "reasonably [have believed that] the patient will have limited funds to pay for any portion of the patient's hospitalization not covered by insurance . . ." General Statutes § 19a-509b(c) (1991 version).
II.
According to the breach of written contract counts (counts 2, 14, 27, and 40), the contract in question provided that "the prospective patient will pay `any charges incurred by the patient that are the patient's self-pay responsibility.'" (Sixth amended complaint ("complaint"), count one, ¶ 12.) Such a contract, while not containing an exact contract price in dollars, nonetheless contains a definite and enforceable standard by which a liquidated price may be determined. See Burton v. William Beaumont Hospital, 2005 WL 1422232, at *9-*10 (E.D.Mich. June 20, 2005). Given the existence of an express contract provision regarding price, there is no basis to allege, as plaintiffs do, that an implied obligation to pay a reasonable price governs the issue of payment under the contract. See Janusauskas v. Fichman, 264 Conn. 796, 807 n. 9, 826 A.2d 1006 (2003). Accordingly, the plaintiffs' breach of written contract counts fail to state a claim.
The plaintiffs' brief incorrectly relies on other language from the actual contract. The plaintiffs neither allege this additional language in the complaint, nor attach the contract to the complaint.
The implied contract counts are difficult to comprehend. The plaintiffs initially incorporate by reference the allegations that, among other things, they entered into written contracts with the defendant. They then allege that "[i]f the plaintiff did not enter into a written contract with YNHH, then the plaintiff entered into an implied contract in which YNHH agree to provide medical services at a reasonable cost." (E.g., complaint, count three, ¶¶ 1-74.) But the plaintiffs' brief also discusses the terms of the written contract and even attaches it as an exhibit. Although pleading in the alternative is permissible, it seems evident that this case is about a written contract, not an implied one. In any case, the implied contract counts fail to allege that the plaintiffs were damaged in any way, which is an essential element of any breach of contract action. See Bouchard v. Sunberg, 80 Conn.App. 180, 189, 834 A.2d 744 (2003). Indeed, in the case of all plaintiffs except David Martinez, the allegations reveal or at least suggest that these individuals did not pay even the charges that they admit are reasonable, thus casting grave doubt as to whether these plaintiffs could in good faith allege, in yet another iteration of the complaint, that they had suffered any damage from the alleged breach. (E.g., complaint, count fifteen, ¶¶ 19, 22, 100, 103-04.) For these reasons the current complaint does not establish a cause of action for breach of implied contract.
III.
Counts four, sixteen, twenty-nine, and forty-two allege fraudulent misrepresentation based on the claim that the hospital informed the plaintiffs that their "only option was to pay the hospital's charges" when, in fact, the statute allowed the patients to apply or reapply for bed funds. (E.g., complaint, count four, ¶ 80.) See General Statutes § 19a-509b(d) (1991 version). While it seems unlikely and certainly difficult to prove that many years ago the hospital used the critical term "only" in telling each of the five plaintiffs that their "only option was to pay," the court must presume the allegations true at this point. So presumed, this allegation is sufficiently specific to allege an act of fraud. However, the plaintiffs also confusingly allege, on the one hand, that the defendant had "knowledge to the contrary" about the right to apply or reapply for bed funds and, on the other hand, that the defendant only "knew or should have known" that its representation was false or that the plaintiffs had a right to apply or reapply. (E.g., complaint, count four, ¶¶ 81-83.) The "knew or should have known" formulation is not sufficient for fraud, which requires proof that a false representation was "known to be untrue by the party making it." (Internal quotation marks omitted.) Cadle Co. v. Ginsberg, 70 Conn.App. 748, 769, 802 A.2d 137, cert. denied, 262 Conn. 905, 810 A.2d 271 (2002). Accordingly, the court grants the motion to strike the fraudulent misrepresentation counts.
While the defendant cites authority for a heightened standard of specificity for pleadings alleging fraud, neither this authority nor any other of which the court is aware applies the heightened pleading standard to negligent misrepresentation. See St. Denis v. De Toledo, 2002 WL 845689, at *5 (Conn.Super.Ct. April 5, 2002). The "knew or should have known" allegation, which the plaintiffs incorporate into the negligent misrepresentation counts, is adequate for these counts, especially when coupled with other allegations that the defendant "should have known" that the plaintiff had a right to apply or reapply for bed funds. (E.g. complaint, count five, ¶¶ 1-86, 89.) See Visconti v. Pepper Partners, Limited Partnership, 77 Conn.App. 675, 682-83, 825 A.2d 210 (2003). Similarly, the plaintiffs sufficiently allege pecuniary harm by claiming that, as a result of the defendant's statement, they failed to apply or reapply for free bed funds and paid at least a portion of the hospital's bill. (E.g. complaint, count thirty, ¶¶ 147-48.) The court therefore denies the motion to strike the negligent misrepresentation counts.
The fraudulent nondisclosure counts are based on the allegation that the defendant failed to fulfill a duty mandated by the bed funds statute to disclose information about free hospital care. (E.g. complaint, count six, ¶¶ 98-100.) As discussed above, however, the hospital did not have such a statutory duty to these plaintiffs at the time in question. Accordingly, the court grants the motion to strike counts six, eighteen, thirty-one, and forty-four.
The plaintiffs also assert in their brief that liability for nondisclosure arises because, upon inquiry by plaintiff Martinez, the hospital did not fully and fairly disclose all the payment options available to him. The complaint, however, makes no such allegations.
IV.
Only plaintiffs Deatra and Ulysses Casteel allege a violation of General Statutes § 19a-673(b), the collecting at cost statute. To be eligible for relief under this statute, a patient must be "uninsured." General Statutes § 19a-673(b). The plaintiffs have in fact alleged that they were "statutorily uninsured." (Complaint; count six, ¶ 117.) The defendant's argument that this allegation is insufficient or untrue goes to the merits, which the court does not consider at this point. The court has ruled in the companion Ahmad case that any cause of action based solely on the statute must arise from the collection — rather than the billing — of more than the cost of providing services. (Ruling on Motions to Dismiss and Strike, pp. 16-17.) In one of their alternative allegations, the plaintiffs allege that the defendant in fact collected more than the actual cost of services rendered. (Complaint, count twenty-six, ¶ 124.) The plaintiffs have therefore satisfactorily alleged a cause of action arising under the statute.
V.
The plaintiffs conclude their omnibus complaint by alleging that every substantive statutory or common-law violation is also a violation of the Connecticut Unfair Trade Practices Act ("CUTPA"), General Statutes § 42-110a et seq. As the plaintiffs conceded at oral argument, the CUTPA counts premised on the bed funds statute fail if there is no underlying statutory violation alleged, as the court has found to be the case here for all bed funds counts that the defendant has challenged. See Lees v. Middlesex Insurance Co., 229 Conn. 842, 851, 643 A.2d 1282 (1994).
The defendant has not moved to strike count twenty-five, in which the Casteel plaintiffs claim a violation of the bed funds statute in part arising from the defendant's failure to inform them of the result of their bed funds application. The defendant nevertheless moves to strike count thirty-two, the related CUTPA count, on the ground that the bed funds statute does not regulate "trade or commerce" within the meaning of General Statutes § 42-110b(a). The plaintiffs summarily state their disagreement with the defendant on this point but do not provide any meaningful analysis. The plaintiffs thus overlook the fact that the touchstone for determining "trade or commerce" is whether the activity relates to the "entrepreneurial or business aspect of the provision of services . . ." Haynes v. Yale-New Haven Hospital, 243 Conn. 17, 32, 38, 699 A.2d 964 (1997). Accord Ventres v. Goodspeed Airport, LLC, 275 Conn. 105, 156-58 (2005). In the absence of any allegation or analysis by the plaintiffs showing that the hospital's alleged failure to inform the plaintiffs of the result of their application stemmed from business considerations, the court concludes that the CUTPA count based on that alleged failure does not state a claim upon which relief can be granted.
The CUTPA counts based on breach of contract and fraud cannot survive for the reason that the underlying breach of contract and fraud counts fail to state a claim. Although the plaintiffs have successfully alleged negligent misrepresentation, CUTPA liability does not exist for mere negligence when, as here, the sole CUTPA claim is that the defendant's negligence offends public policy. (E.g. complaint, count eleven, ¶ 81.) See Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 593, 657 A.2d 212 (1995). Therefore, the court grants the motion to strike all CUTPA counts based on common-law violations.
The defendant's only basis for attacking the CUTPA count premised on the collecting at cost statute is that the underlying statutory count does not state a cause of action. Given the court's ruling above that the Casteel plaintiffs have sufficiently alleged a cause of action based on the collecting at cost statute, the defendant's CUTPA argument must fail. Supporting this conclusion is the fact that, in addition to alleging that the defendant actually collected more than the cost of services rendered, the plaintiffs have alleged that the defendant engaged in various other attempts to do so. (Complaint, count twenty-six, ¶¶ 121-23.) While the attempts might not violate the literal language of the statute, they may fall within the "penumbra of [the] . . . statutory . . . concept of unfairness" that offends public policy and that therefore can constitute a basis for a CUTPA violation. (Internal quotation marks omitted.) Williams Ford, Inc. v. Hartford Courant Co., supra, 232 Conn. 591.
VI.
For these reasons, the court denies the motion to strike counts five, seventeen, twenty-six, thirty, thirty-three, and forty-three, and grants the remainder of the motion.
All counsel in this case and the related cases of Ahmad, Blumenthal v. Yale-New Haven Hospital, and Tirado v. Yale-New Haven Hospital shall appear on December 19, 2005 at 2:15 p.m. at the hearing on the motion for class certification after which the court will convene a conference to schedule the remaining events in these cases.
It is so ordered.
Carl J. Schuman
Judge, Superior Court