PC v. Terri May (2013)

MEMORANDUM OF DECISION

This is a collection matter in which a default entered on June 5, 2013 and this Court has opened that default and allowed the defendant to present a defense.   The plaintiff claims that a certain medical procedure was performed on the defendant on November 11, 2010, resulting in a total charge to the defendant in the amount of $25,484.   The plaintiff claims that this procedure was performed by two medical professionals, Dr. Jarob Mushaweh and his physician assistant, who billed separately for this surgical procedure.   Pursuant to the plaintiff's evidence, the physician assistant was considered to be “in network” and therefore those specific charges ($6,371.00—Def's.Exh. C) were covered under the defendant's husband's medical insurance program through his employment.

The balance of the plaintiff's charges ($19,870.71) were for the doctor's services which were considered to be “out of network” and therefore not covered under the husband's Capital Blue Cross insurance plan.   The plaintiff claims that the defendant is “financially responsible for all approved and covered charges whether or not paid by insurance.”  (Plf's.Exh. 3.) The plaintiff claims that the patient's signature constitutes a contract for “all approved and covered charges.”

The defendant claims that she was never informed by the plaintiff's agents and employees that certain medical services would be considered “out of network,” and therefore not covered by medical insurance.   Certain interoffice memoranda generated by the plaintiff (Plf's. Exhs. # 4 and # 7) were not given to the defendant who further claims that the “out of network” status was not clearly explained to her prior to the said medical procedure.

The issue posed under these circumstances is whether or not a valid and enforceable contract exists between the plaintiff and the defendant, and if so, to what extent does the concept of a good faith and fair dealing and certain equitable principles lessen the defendant's obligation to the plaintiff concerning the outstanding balance claimed.

This is a case based on inferences rather than any ill will, fraud or malice between the parties.   The plaintiff, through its employees, made certain representations to the defendant concerning her medical insurance coverage.   The Court finds that the defendant's reliance on the plaintiff's representations to be credible and reasonable and in effect an operative part of the purported contract and a probative element of the defendant's defense.

The plaintiff was in the stronger bargaining position concerning any contract for its medical services as seen in its preprinted “registration” form (Plf's.Exh. # 3).   The plaintiff knew or should have known that Dr. Mushaweh was “out of network” and that insurance coverage could be an issue for this patient.   Whether the defendant understood the representations made by the plaintiff and relied on those representations is an issue of fact, which this Court decides in favor of the defendant.

“[I]t is axiomatic that the ․ duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship ․ In other words, every contract carries an implied duty requiring that neither party do anything that will injure the right of the other to receive the benefits of the agreement.”  (Internal quotation marks omitted.)  Ulster Savings Bank v. 28 Brynwood Lane, Ltd., 134 Conn.App. 699, 713, 41 A.3d 1077 (2012).  “Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.”   2 Restatement (Second), Contracts § 205 (1981).

“There is a split of authority in the Superior Courts as to what factual allegations are sufficient to constitute the element of bad faith.   The first line of cases requires specific allegations establishing a dishonest purpose or malice ․ The second line of cases holds the plaintiff to a less stringent standard ․ [where] the plaintiffs need only allege sufficient facts or allegations from which it may reasonably be inferred that the defendant breached the implied covenant of good faith and fair dealing ․ the appellate courts of this state have not addressed the ․ issue ․ [of] where an insurer denies or limits coverage under an insurance policy, what allegations are required to allege bad faith as opposed to breach of contract.”   Katz v. Hartford Financial Services Group, Inc., Superior Court, judicial district of Hartford, Docket No. CV116020408 (May 11, 2012, Domnarsky, J.)

There is no finding of bad faith made against either party in this case, but the burden of proof remains with the plaintiff.   This Court invokes the second part of the covenant involving “fair dealing” and places that burden upon the plaintiff to inform and verify in a timely manner whether proper medical insurance coverage is available and enforceable wherever possible for any patient seeking their medical services and care.   This is a shared responsibility between patient and provider as the evidence has indicated, and therefore any default in verifying and providing such available insurance coverage information should fall upon both parties.

The plaintiff is invoking and seeking in its claim for relief “any other remedy the Court deems equitable.”   The Court relies on such principles as “He who seeks equity, must do equity.”   Equity Jurisprudence, J.N. Pomeroy, Fifth Edition, Vol. II, Section III, 385.   In that same context of “fair dealing,” the Court applies those time-proven principles in this context, and finds that the uninsured portion of the plaintiff's billings should be adjusted to reflect that shared burden.

Therefore, the outstanding balance of $20,295.77 should be shared equally by each party and the outstanding balance is reduced accordingly by $10,147.88.   Judgment enters for the plaintiff in the said amount of $10,147.88 which includes proposed costs.   No fees are awarded to either party.   An order of payments may enter in the amount of $150 per month commencing on October 30, 2013.   Post-judgment interest of 3% per annum is awarded to the plaintiff.

BY THE COURT

V. ROCHE, J.

Roche, Vincent E., J.