Chambers v. The Moses H. Cone Memorial Hospital

2021 NCBC 43

CHRISTOPHER CHAMBERS, on behalf of himself and all others similarly situated, Plaintiff, v. THE MOSES H. CONE MEMORIAL HOSPITAL; THE MOSES H. CONE MEMORIAL HOSPITAL OPERATING CORPORATION d/b/a MOSES CONE HEALTH SYSTEM and d/b/a CONE HEALTH; and DOES 1 through 25, inclusive, Defendants.

No. 12 CVS 6126

Superior Court of North Carolina, Guilford

July 19, 2021

Higgins Benjamin, PLLC, by John F. Bloss, and Law Offices of Barry L. Kramer, by Barry L. Kramer, for Plaintiff Christopher Chambers.

Womble Bond Dickinson (US) LLP, by Philip J. Mohr and Brent F Powell, for Defendants The Moses H. Cone Memorial Hospital and The Moses H. Cone Memorial Hospital Operating Corporation.

ORDER AND OPINION ON DEFENDANTS' MOTION TO DISMISS

Adam M. Conrad, Special Superior Court Judge

1. This class action, though begun almost ten years ago, remains in its early stages. Pending is the defendants' second motion to dismiss the amended complaint. (ECF No. 104.)

2. Christopher Chambers is a former patient of The Moses H. Cone Memorial Hospital ("Moses Cone"). He had an emergency appendectomy there in August 2011. (See Am. Compl. ¶ 25, ECF No. 49.) Uninsured at the time Chambers signed a standard form contract and agreed to pay all charges "in accordance with the regular rates and terms" used by the hospital. (Am. Compl. ¶ 12.) According to Chambers, the phrase "regular rates" is meaningless because Moses Cone uses a smorgasbord of rate schedules that vary by patient and service provider. There are, for example, government-mandated rates for Medicare and Medicaid recipients, negotiated rates for insured patients and discounted rates for charitable services. (See Am. Compl. ¶ 15.) Chambers alleges that his bill-totaling more than $14, 000-was based on "artificial and grossly excessive Chargemaster rates." (Am. Compl. ¶ 42; see also Am. Compl. ¶ 27.) Rather than pay in full, Chambers sued Moses Cone and its parent company.

3. Early motions and amendments have winnowed the claims. All that remains is a claim for declaratory judgment. Chambers seeks declarations that Moses Cone's form contract includes an open price term, that it may not bill self-pay patients at Chargemaster rates, and that it is entitled only to the reasonable value of its services. (See Am. Compl. ¶¶ 40, 41.) He asserts the claim on behalf of a class of similarly situated self-pay patients. (See Am. Compl. ¶¶ 28, 31.)

4. Shortly after the amended complaint was filed, Moses Cone renounced its intention to seek payment from Chambers. It then moved to dismiss his claim as moot. This Court agreed that Chambers's individual claim was moot, concluded that he could no longer represent the putative class, and dismissed the amended complaint. See Chambers v. Moses H. Cone Mem'l Hosp., 2017 NCBC LEXIS 22, at *12-20 ( N.C. Super. Ct. Mar. 13, 2017). The Court of Appeals affirmed that decision, but the Supreme Court granted review, reversed, and held that Chambers "retains the legal capacity to pursue class certification and class-wide relief, even though his individual claim may have been satisfied." Chambers v. Moses H. Cone Mem'l Hosp., 374 N.C. 436, 451 (2020).

5. Now, on remand, Moses Cone has moved to dismiss the amended complaint for failure to state a claim. After full briefing and a hearing on 13 July 2021, the motion is ripe.

6. Dismissal for failure to state a claim "is seldom appropriate" in declaratory-judgment actions. Morris v. Plyler Paper Stock Co., 89 N.C.App. 555, 557 (1988) (citing N.C. Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434, 439 (1974)). It is usually sufficient to allege "the existence of a real controversy arising out of the parties' opposing contentions and respective legal rights under a . . . contract." Id.; see also N.C. G.S. § 1-254 (authorizing contracting parties to "have determined any question of construction or validity arising under the" contract).

7. Chambers has cleared that relatively low bar. The amended complaint alleges a real controversy about whether the contract at issue has an open price term and whether the hospital may bill self-pay patients at Chargemaster rates. Moses Cone concedes as much. (See Reply Br. 2, ECF No. 109.)

8. So, what is Moses Cone's argument for dismissal? Its position is that, even if Chambers prevails, his victory in this battle will not end the war. A determination that the contract contains an open price term will spawn new disputes about what each class member owes. On that basis, Moses Cone contends that a declaratory judgment will not settle things once and for all and that the Court must refuse to issue one. (See Br. in Supp. 6, ECF No. 105.)

9. Certainly, a trial court has discretion "to decline a request for declaratory relief when (1) the requested declaration will serve no useful purpose in clarifying or settling the legal relations at issue; or (2) the requested declaration will not terminate or afford relief from the uncertainty, insecurity, or controversy giving rise to the proceeding." Augur v. Augur, 356 N.C. 582, 588-89 (2002) (citing N.C. G.S. § 1-257). But neither condition exists here. Entry of the declarations sought by Chambers would serve a useful purpose by clarifying the contract's price term. It would also afford relief to class members from the uncertainty over whether Moses Cone may bill self-pay patients at Chargemaster rates. See, e.g., Perry v. Bank of Am., N.A., 251 N.C.App. 776, 780-81 (2017) (reversing dismissal of declaratory-judgment action).

10. Although Moses Cone an...