Court: California Courts of Appeal
Docket: C086518(Third Appellate District)
Opinion Date: February 2, 2022
Judge: Harry E. Hull, Jr.
Areas of Law: Contracts, Health Law, Insurance Law, Personal Injury
This case law update is brought to you by Freeway Law auto accident and personal injury lawyers in Orange County. The following is not one of our cases, but it is of some significance, and we thought we should share it with our readers for informational purposes. The information above is for informational purposes only and not to be construed as legal advice.
Appellant Dameron Hospital Association (Dameron) required patients or their family members to sign Conditions of Admissions (COAs) when Dameron provided the patients’ medical care. The COAs at issue, in this case, contained language that assigned to Dameron direct payment of uninsured and underinsured motorist (UM) benefits and medical payment (MP) benefits that would otherwise be payable to those patients under their automobile insurance policies. Dameron treated five of California State Automobile Association Inter-Insurance Bureau’s (“CSAA”) insureds for injuries following automobile accidents. Those patients had UM and/or MP coverage as part of their CSAA coverage, and Dameron sought to collect payment for those services from the patients’ UM and/or MP benefits at Dameron’s full rates. Instead of paying Dameron the lesser of either all benefits due to the patients under their UM and MP coverage or Dameron’s full charges, CSAA paid portions of those benefits directly to the patients which left balances owing on some of Dameron’s bills. Dameron sued CSAA to collect UM and MP benefits it contended CSAA owed Dameron under the assignments contained in the COAs. The trial court concluded that Dameron could not enforce any of the assignments contained in the COAs and entered judgment in CSAA’s favor following CSAA’s successful motion for summary judgment. The Court of Appeal held Dameron could not collect payment for emergency services from the UM or MP benefits due to patients that were covered under health insurance policies. Further, the Court held: (1) the COA forms were contracts of adhesion; (2) it was not within the reasonable possible expectations of patients that a hospital would collect payments for emergency care directly out of their UM benefits; and (3) a trier of fact might find it was within the reasonable expectations of patients that a hospital would collect payments for emergency care directly out of their MP benefits. Accordingly, the Court concluded Dameron could not maintain causes of action to collect MP or UM benefits due to four of the five patients directly from CSAA. However, consistent with this opinion, the trial court could consider whether an enforceable assignment of MP benefits was made by one adult patient.