Opinion
112,249.
06-12-2015
STORMONT–VAIL HEALTHCARE, INC., Appellant, v. The BOARD OF COUNTY COMMISSIONERS FOR SHAWNEE COUNTY, Kansas, State of Kansas, and City of Topeka, Kansas, Appellees.
Wm. Scott Hesse, of Newman, Riffel & Hesse, P.A., of Topeka, and E. Lou Bjorgaard Probasco, of Probasco & Associates, P.A., of Topeka, for appellant. Lisa A. Mendoza, assistant attorney general, for appellee State of Kansas, Kansas Highway Patrol.
Wm. Scott Hesse, of Newman, Riffel & Hesse, P.A., of Topeka, and E. Lou Bjorgaard Probasco, of Probasco & Associates, P.A., of Topeka, for appellant.
Lisa A. Mendoza, assistant attorney general, for appellee State of Kansas, Kansas Highway Patrol.
Before MALONE, C.J., ARNOLD–BURGER and GARDNER, JJ.
MEMORANDUM OPINION
PER CURIAM.
The driver of a stolen vehicle crashed during a high-speed chase, and the Kansas Highway Patrol (KHP) called an ambulance. When the driver could not pay the medical bills he accrued at Stormont–Vail Healthcare, Inc. (Stormont), Stormont contacted the KHP and demanded payment. KHP refused, and Stormont sued. The district court determined that because KHP's refusal constituted an agency action, Stormont could only obtain relief under the Kansas Judicial Review Act (KJRA), K.S.A. 77–601 et seq. , and not in a limited action lawsuit. Accordingly, the district court dismissed the case against the State of Kansas/KHP, and Stormont now appeals. Because we find that the KJRA provides the exclusive means of review for the KHP's refusal to pay Stormont, the district court was correct in finding it lacked jurisdiction over Stormont's claim. We affirm the district court and dismiss the appeal for lack of jurisdiction.
Factual and Procedural History
On a summer's day in 2010, KHP engaged Robert Horton in a high-speed car chase after he refused to stop. During the chase, Horton—who was driving a stolen vehicle—ran a red light and caused a traffic collision. Horton sustained injuries, and an ambulance transported him to Stormont for treatment. Horton's medical bills totaled over $75,000, but he did not pay. Stormont contacted KHP in February 2011 and requested that it cover the bills pursuant to statutes that require law enforcement agencies to cover certain medical expenses. When KHP did not pay, Stormont demanded payment a second time, this time in August 2012. This letter presented KHP with a 30–day time limit and warned that Stormont might proceed with a lawsuit if KHP refused payment. A few days later, KHP replied and formally denied responsibility for Horton's medical bills.
A full year later, Stormont responded to the continued nonpayment by filing a limited action lawsuit against the Board of County Commissioners for Shawnee County (Shawnee County), the State of Kansas (State)/KHP, and the City of Topeka (City). Stormont alleged that by refusing to pay, KHP violated a statutory duty to pay, breached an implied contract, and received an uncompensated benefit from Stormont. Stormont moved for $21,198.14 in damages, which represented the Medicaid cost of Horton's bills. The City answered and claimed, among other defenses, that the district court lacked jurisdiction to consider the suit. Shawnee County and the State also raised jurisdictional defenses.
At that time, the State moved to dismiss the suit because it was “beyond the proper scope of limited actions cases.” The State contended that because KHP is a state agency, Stormont needed to invoke the KJRA to obtain review of KHP's decision regarding the medical bills. Because the KJRA provided the only remedy available to Stormont and Stormont failed to act timely under the KJRA, the State reasoned that district court lacked jurisdiction to hear a limited action suit. The State also raised other grounds for dismissal that are not germane to this appeal. Stormont opposed the dismissal, arguing that the KJRA did not apply and that, even if it did, KHP failed properly serve its order denying the claim, thereby tolling the time for filing an action under the KJRA. Stormont also argued that the statutes requiring that KHP and other law enforcement agencies pay the medical bills of individuals in their custody created a private right of action that Stormont could pursue in a limited action.
The district court dismissed Stormont's suit in March 2014. In its decision, the district court determined that because KHP constituted a state agency, its refusal to pay Horton's medical bills was an agency action. The district court further held that the KJRA governs review of all agency actions and therefore establishes Stormont's exclusive means of relief. As such, Stormont needed to pursue judicial review through the mechanisms provided by the KJRA and not a limited action lawsuit.
Shortly thereafter, Stormont filed a motion for relief from the district court's order. Stormont argued that the district court mistakenly “based its decision on the authority presented by [KHP and the State]” when KHP had failed to follow the KJRA. Additionally, Stormont contended that because KHP did not follow the KJRA, the district court should have ordered KHP to reissue its decision regarding Horton's medical bills, thereby allowing Stormont to pursue the appropriate relief. Stormont also renewed its argument that the statutes requiring law enforcement agencies to pay for certain medical treatments created a private right of action—specifically, a tort claim for damages—that could be pursued outside of the KJRA's confines. The State opposed this motion. The district court determined that none of the grounds for relief in K.S.A.2014 Supp. 60–260(b) applied and therefore denied the motion.
Stormont timely appealed.
Analysis
The sole question on appeal is whether the district court erred in dismissing Stormont's suit against KHP for lack of jurisdiction.
Whether jurisdiction exists is a question of law over which this court's scope of review is unlimited. Frazier v. Goudschaal, 296 Kan. 730, 743, 295 P.3d 542 (2013). Parties cannot confer subject matter jurisdiction by consent, waiver, or estoppel, and a failure to object will not invest the court with the requisite jurisdiction. Ryser v. Kansas Bd. of Healing Arts, 295 Kan. 452, 456, 284 P.3d 337 (2012). Moreover, if the district court lacks jurisdiction to enter an order, an appellate court does not acquire jurisdiction over the matter on appeal. 295 Kan. at 456.
In this particular case, the district court dismissed the limited action because it determined that Stormont could only challenge KHP's decision through the KJRA. The KJRA “applies to all agencies and all proceedings for judicial review and civil enforcement of agency actions” except when those actions are specifically exempted from the Act. K.S.A.2014 Supp. 77–603(a). As such, the KJRA “establishes the exclusive means of judicial review of” any agency actions that fall within its scope. K.S.A. 77–606. Failure to comply with this exclusive jurisdictional requirement deprives a district court of the ability consider any claims arising from the agency's action. See Schall v. Wichita State University, 269 Kan. 456, 482, 7 P.3d 1144 (2000) (KJRA only remedy for breach of contract; no separate contract action; citing cases).
On appeal, both parties generally acknowledge that KHP is a state agency and that its action in denying the payment to Stormont was an agency action. Moreover, neither party alleges that KHP's actions were exempted from the KJRA. See K.S.A.2014 Supp. 77–603(c) (listing the specific agency actions that lie outside the KJRA's scope). Instead, the dispute lies in whether the district court properly disposed of Stormont's claims in light of the KJRA.
As Stormont splits this overall jurisdictional question into two discrete issues, we will address each separately.
The district court did not err in determining that the KJRA constituted the exclusive means for relief and dismissing Stormont's claim.
Stormont admits on appeal that the district court correctly determined that the KJRA applied to KHP's decision regarding the medical bills and barred at least some of its claims, but it disagrees with the district court's ultimate disposition of the case. Instead of dismissing the action entirely, Stormont contends, the district court should have delved deeper into its arguments and determined that (1) KHP failed to follow certain service provisions of the KJRA, and (2) KHP's failure to follow these provisions tolled the 30–day time limit for Stormont to file a KJRA petition for review. Stormont argues that the district court needed to “remand this case with directions to [KHP] to follow” the KJRA rather than dismissing the case outright.
The specific service provision at issue, K.S.A. 77–613(e), provides in relevant part:
“Service of an order, pleading, or other matter shall be made upon the parties to the agency proceeding and their attorneys of record, if any.... Unless reconsideration is a prerequisite for seeking judicial review, a final order shall state the agency officer to receive service of a petition for judicial review on behalf of the agency.”
Stormont contends that KHP's August 2012 letter constituted an order and that, as such, KHP needed to serve that letter on Stormont itself and provide Stormont the name of the KHP official who should receive a petition for judicial review. Instead, the letter was sent only to Stormont's legal counsel and said nothing about who should receive a petition for judicial review.
Kansas caselaw supports this argument. In Reifschneider v. Kansas State Lottery, 266 Kan. 338, 969 P.2d 875 (1998), the owners of a winning lottery ticket attempted to collect the unclaimed portion of a lottery jackpot. In a letter to the owners' attorney, the Kansas Lottery (Lottery) denied the claim. A few months later, the owners filed a suit for breach of contract, and the district court dismissed the suit because the KJRA offered the owners their sole means of relief. The district court also reasoned that because the owners filed the suit long after the 30–day limit for filing a petition for review, the suit could not be construed as a petition for review.
On appeal, our Kansas Supreme Court agreed that the KJRA provided the sole means for relief. 266 Kan. at 341. But the court also reasoned that the Lottery's letter constituted a final agency action and final order under the KJRA and therefore required strict compliance with K.S.A. 77–613(e). 266 Kan. at 341–42. Because the Lottery did not comply with this provision—sending the letter only to counsel and failing to designate the agency officer to receive a petition for judicial review—the court determined that the final order was improperly served on the ticket's owners and that, as such, the time for filing a petition for review had not yet begun to run. 266 Kan. at 342–43. Accordingly, the district court's additional and alternative finding that the 30–day time limit for filing a petition for review under K.S.A. 77–613(b) had lapsed was incorrect.
Stormont contends that this precedent required the district court to (1) determine that the letter from KHP constituted a final order, (2) find that the order was improperly served on Stormont, (3) order KHP to comply with K.S.A. 77–613(e), and (4) allow Stormont to file a petition for review. At oral argument, KHP conceded that the KHP letter was a final order. In addition, it cannot be disputed that the letter did not strictly comply in content or in its method of service with K.S.A. 77–613(e).
But the district court dismissed the action on jurisdictional grounds without commenting on any of Stormont's service and time-limit arguments. Such action was consistent with the Supreme Court's action in Reifschneider. The Reifschneider court affirmed the district court's dismissal despite determining that the Lottery did not comply with K.S.A. 77–613(e). 266 Kan. at 343. It gave no explicit direction to the Lottery to accept a petition for review from the Reifschneiders. The court simply confirmed that service had not been properly effectuated. The Reifschneider case is indistinguishable from the case at bar.
All parties in this case correctly recognize that the KJRA is the sole means for Stormont to obtain relief. Any issue that Stormont wishes to raise regarding statutory time limits, improper service, and the correct characterization of KHP's letter should have been raised pursuant to the KJRA, not in a limited action lawsuit. As such, the district court properly dismissed the action for want of jurisdiction.
The district court did not err in failing to consider those claims that could be construed as tort claims.
In its second argument, Stormont contends that although the KJRA applies to its implied contract and quantum meruit claims (thereby stripping the district court of jurisdiction), the district court failed to consider that the action also constituted a general tort claim for damages. Stormont reasons that the statutes that require law enforcement agencies to pay the medical bills of individuals in custody create a legal duty and that KHP breached that duty by refusing to pay.
Preliminarily, Stormont brought a limited action against KHP. A limited action exists to seek judgments for claims. See K.S.A. 61–2802(a). Specifically, these claims are either (1) unsecured debts arising out of contracts providing for “goods, services or money”; (2) secured debts arising out of those same types of contracts and not exceeding $25,000; or (3) other claims not arising out of contracts and that do not exceed $25,000 “not counting costs, interest and fees.” K.S.A. 61–2802(a)(1)–(3). The statute also provides a number of claims that are outside of the scope of a limited action. See K.S.A. 61–2802(b). Stormont admits that any claims other than a tort claim are jurisdictionally barred and must be brought under the KJRA but argues that the action can proceed as a tort claim not exceeding $25,000.
But this contention is flawed. It is clear from the record that Stormont initiated the limited action either to (1) collect the debt that KHP allegedly owes or (2) obtain review of KHP's refusal to pay. But although the KJRA does not apply to “claims for damages for wrongful acts committed by the agency” outside that agency's usual duties, it encompasses “all proceedings for judicial review of agency proceedings and civil enforcement of agency actions.” Lindenman v. Umscheid, 255 Kan. 610, 619, 875 P.2d 964 (1994). An agency action is in part an “agency's performance of, or failure to perform, any other duty, function or activity, discretionary or otherwise.” K.S.A. 77–602(b)(3). Even assuming for the sake of argument that KHP is obligated to pay Horton's medical bills, Stormont's lawsuit is not an attempt to collect damages for wrongs KHP committed apart from its usual duties but instead an attempt to force KHP into performing the duty at issue. See Lindenman, 255 Kan. at 619. To put it another way, the only act committed by KHP in this case was its refusal to pay and that refusal is clearly an agency action.
Stormont attempts to avoid this outcome by arguing that the statutes that require the KHP to pay Horton's medical bills also create an independent statutory duty from which its tort action stems. But if such a duty exists, KHP's decision to ignore that duty is an agency action and therefore within the scope of KJRA. See K.S.A. 77–602(b)(3). And as the KJRA establishes the sole means for relief in this case, Stormont's limited action must be dismissed for lack of jurisdiction.
The district court correctly determined that Stormont's limited action proceeding sought to obtain judicial review of an agency action and that Stormont needed to invoke the KJRA to obtain a remedy. We affirm the district court's dismissal for lack of jurisdiction and dismiss the appeal.
Affirmed and appeal dismissed.