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Thomas v. Archer

Supreme Court of Alaska

December 2, 2016

RACHEL L. THOMAS and STEVEN N. THOMAS, husband and wife, Appellants,
v.
SARAH B. ARCHER and PEACEHEALTH MEDICAL GROUP d/b/a KETCHIKAN OB/GYN, Appellees.

         Appeal from the Superior Court of the State of Alaska, First Judicial District, No. IKE-10-00613 CI Ketchikan, William B. Carey, Judge.

          C. Keith Stump, Port Angeles, Washington, for Appellants.

          Scott J. Gerlach and Donna M. Meyers, Delaney Wiles, Inc., Anchorage, for Appellees.

          Before: Stowers, Chief Justice, Winfree, Maassen, and Bolger, Justices. [Fabe, Justice, not participating.]

          OPINION

          MAASSEN, JUSTICE.

         I. INTRODUCTION

         A woman was admitted to a hospital emergency room with pregnancy-related complications. The attending physician recommended that she be transported by medivac to a different facility. The woman and her husband informed the physician that they needed their insurer's preauthorization for that course of action or they could be personally liable for the costs. The physician allegedly promised to call the insurer and, if it would not approve the medivac, have the hospital bear the costs itself. But the physician failed to contact the insurer until much later, and the insurer declined coverage.

         The couple sued the physician and the hospital, alleging that the physician breached her fiduciary duty by failing to obtain preauthorization as promised; that her promise created an enforceable contract, which was breached; and that if there was no contract the physician's promise should be enforced through the doctrine of promissory estoppel. The superior court granted summary judgment to the physician and hospital. The couple appeals.

         We hold that the superior court did not err when it ruled in favor of the physician and hospital on the claims for breach of fiduciary duty and breach of contract, but that genuine issues of material fact precluded summary judgment on the claim for promissory estoppel. We therefore reverse and remand for further proceedings.

         II. FACTS AND PROCEEDINGS

         A. Facts

         Rachel Thomas was admitted to the emergency room at Ketchikan General Hospital in October 2008 for pregnancy-related complications.[1] She was seen by Dr. Sarah B. Archer, who determined that Rachel was at risk of premature delivery and needed an immediate transfer to a facility better equipped to handle her condition. Because of weather conditions in Anchorage, Dr. Archer recommended that Rachel be medivacked to Swedish Medical Center in Seattle. According to the Thomases, they told Dr. Archer they could not personally afford the medivac and needed preauthorization from the Ketchikan Indian Corporation Tribal Health Clinic (KIC) and the Alaska Native Medical Center (ANMC) before they could be covered for treatment outside of ANMC s Anchorage facilities.[2] The Thomases allege that Dr. Archer told them "she would contact KIC, not to worry, that everything will be taken care of, and that if KIC didn't cover it 'we' will." According to the Thomases, they understood "we" to mean the hospital.

         In the process of arranging the transfer, Steven Thomas signed an "Acknowledgment of Financial Responsibility, " which cautioned that the Guardian Flight medivac charges could be significant. Though naming KIC as the "Payment Source, " Steven agreed to be personally responsible for any unpaid charges and to "save and hold the hospital harmless therefrom."

         The Thomases were eventually billed over $23, 000 by Swedish Medical Center and over $69, 000 by Guardian Flight, the medivac provider. The Thomases sought payment from KIC and ANMC under their coverage plan but were denied for three stated reasons: (1) they failed to request preauthorization within 72 hours of beginning treatment or of admission to the healthcare facility; (2) ANMC was "available and accessible to provide the necessary medical services to the patient"; and (3) the Thomases lacked a referral or authorization for the transfer from an ANMC physician. The Thomases admit knowing about the preauthorization requirements and that obtaining preauthorization was ultimately their responsibility; they allege, however, that they boarded the flight based on Dr. Archer's assurances that those requirements would be satisfied by someone else. Dr. Archer did later write KIC and ANMC to explain her decision to have Rachel transported to Seattle, but not until May 2009, over six months after the transfer.

         B. Proceedings

         In 2010 the Thomases filed suit against the hospital and Dr. Archer (collectively "the hospital")[3] alleging breach of fiduciary duty, breach of contract, promissory estoppel, [4] and negligent or intentional infliction of emotional distress. The claims were all based on Dr. Archer's alleged promise to contact the Thomases' insurance providers and ensure coverage for the expenses related to Rachel's transport to and treatment in Seattle. The superior court granted summary judgment to the hospital on the Thomases' fiduciary duty claim, agreeing with the hospital's argument that a physician's fiduciary duty is limited to the context of medical treatment. The court later granted summary judgment to the hospital on the remaining claims, holding that the facts as alleged did not create an enforceable contract and that there was no actual promise to the Thomases or substantial change in position by the Thomases sufficient to support their promissory estoppel claim. The court also dismissed the claims for negligent and intentional infliction of emotional distress, noting that the Thomases had agreed to withdraw them, although they had not yet done so, and had produced no evidence or legal authority to support the claims.[5]

         The hospital moved for attorney's fees as the prevailing party, supporting its motion with an affidavit that summarized its fees and offering to file itemized billing records under seal for in camera review. The Thomases opposed the motion. The superior court ordered the hospital to submit its billings for in camera review but did not require that they be shared with the Thomases. Following in camera review, the court awarded the hospital approximately $25, 000 in attorney's fees (20% of the total billings) and over $6, 000 in costs. This appeal followed.

         III. STANDARD OF REVIEW

         "We review grants of summary judgment de novo."[6] "We 'will affirm a grant of summary judgment if the evidence in the record presents no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.' "[7]

         Whether there is a fiduciary duty and whether promissory estoppel applies are both questions of law to which we apply our "independent judgment, adopting the rule of law that is most persuasive in light of precedent, reason, and policy."[8]

         IV. DISCUSSION

         The Thomases argue three substantive points on appeal: (1) that the superior court erred by deciding that Dr. Archer did not owe the Thomases a fiduciary duty to contact KIC for authorization after having promised to do so; (2) that the superior court erred by deciding on summary judgment that the parties' words and actions did not create an enforceable contract; and (3) that the superior court erred by rejecting promissory estoppel as a basis for enforcement of Dr. Archer's alleged promise to the Thomases.[9]

         "Alaska Civil Rule 56 provides for judgment to be granted to a party where 'there is no genuine issue as to any material fact' and 'the moving party is entitled to judgment as a matter of law.' "[10] "[A] party seeking summary judgment has the initial burden of proving, through admissible evidence, that there are no disputed issues of material fact and that [it] is entitled to judgment as a matter of law."[11] "Once the moving party has made that showing, the burden shifts to the non-moving party 'to set forth specific facts showing that he could produce evidence reasonably tending to dispute or contradict the movant's evidence and thus demonstrate that a material issue of fact exists.' "[12] The court "draw[s] all reasonable inferences in favor of the non[-]moving party."[13] "We require only that the evidence proposed for trial must not be based entirely on 'unsupported assumptions and speculation' and must not be 'too incredible to be believed by reasonable minds.' "[14] "After the court makes reasonable inferences from the evidence in favor of the non-moving party, summary judgment is appropriate only when no reasonable person could discern a genuine factual dispute on a material issue."[15]

         Accordingly, for purposes of our review of the superior court's decision on summary judgment, we assume that Dr. Archer made the statement, as described by the Thomases, "that she would contact KIC, not to worry, that everything will be taken care of, and that if KIC didn't cover it 'we' will."

         A. The Superior Court Did Not Err By Granting Summary Judgment To The Hospital On The Thomases' Fiduciary Duty Claim.

         The Thomases first argue that the superior court erred by granting summary judgment on the Thomases' claim that Dr. Archer "owed a fiduciary duty to [the] Thomases to contact KIC for authorization as she promised." The superior court noted in its order that "the parties do not dispute the existence of a fiduciary relationship, only the scope of the duties that relationship imposes." The court cited two Alaska cases discussing fiduciary duties[16] and relied heavily upon an unpublished Ohio decision with facts and arguments similar to those here, Northern Ohio Medical Specialists, LLC v. Huston[17] These precedents, the superior court decided, "indicate that the duties imposed by the physician-patient fiduciary relationship should be kept to matters involving medical treatment and advice, which are not at issue here." The court observed that the fiduciary relationship could nonetheless be relevant to the Thomases' promissory estoppel claim as evidence of the reasonableness of their reliance on what the doctor told them.

         We discussed the scope of a physician-patient fiduciary duty in Pedersen v. Zielski.[18] The plaintiff brought a malpractice action against a hospital and the surgeons who operated on him following a car accident; the trial court ruled that the action was barred by the statute of limitations.[19] We reversed, holding that there were genuine issues of material fact as to whether the plaintiffs doctor should be estopped from relying on the statute of limitations when he failed to disclose to the patient that a likely cause of his permanent paralysis was the surgery rather than the underlying accident.[20] Of importance here, we explained why the physician-patient relationship gives rise to a fiduciary duty of full disclosure:

The physician-patient relationship is one of trust. Because the patient lacks the physician's expertise, the patient must rely on the physician for virtually all information about the patient's treatment and health. A physician therefore undertakes [] not only to treat a patient physically, but also to respond fully to a patient's inquiry about his treatment, i.e., to tell the patient everything that a reasonable person would want to know about the treatment., [21]

         In Northern Ohio Medical Specialists, the plaintiff, whose case had been dismissed on the pleadings, argued on appeal that he had pleaded "sufficient, operative facts to support recovery under his claims that a doctor, . . . [has] a fiduciary duty to submit claims to an insurance company when he promises to do so."[22] The Ohio appellate court recognized that a fiduciary duty is "[a] duty to act for someone else's benefit, while subordinating one's personal interests to that of the other person."[23] But the court held that while "[a] physician undisputedly owes a fiduciary duty to his or her patient with respect to diagnosing and treating diseases and injuries, " no such "duty extends beyond the medical relationship"; accordingly, the physician's fiduciary duties did not include submitting insurance claims after promising to do so.[24]

         This reasoning is consistent with our description of the physician's fiduciary duty in Pedersen. A physician's expertise in the practice of medicine is unique, respected, and highly valued. The patient, lacking that expertise, relies on the physician's judgment and care and is especially vulnerable to the physician's mistakes; the law protects the patient's vulnerability by imposing on the physician a heightened duty of care when the physician is acting within the scope of that expertise.[25]

         At the heart of this case are two different statements attributed to Dr. Archer. The first and undisputed one is her recommendation that Rachel be immediately transported by medivac to a hospital that was better equipped to treat her pregnancy-related complications. The second is Dr. Archer's alleged promise that she would obtain preauthorization for the transport costs from the Thomases' insurance providers and that the costs would otherwise be covered by the hospital. The first recommendation is plainly within the scope of Dr. Archer's fiduciary duty; determining whether a transport was necessary was a matter of medical expertise on which the Thomases had little choice but to rely. The alleged promise regarding insurance and payment, on the other hand, did not stem from Dr. Archer's special expertise as a physician. The Thomases themselves knew about the preauthorization procedure, having followed it already that evening when Rachel was admitted to the emergency room. The Thomases did not need Dr. Archer's special expertise in order to understand the requirements of their insurance coverage and to obtain the required preauthorization.

         Because the physician-patient fiduciary duty exists to protect the vulnerable patient relying on the physician's special expertise in medicine, a physician's promise to obtain preauthorization of medical treatment for purposes of insurance coverage is outside the scope of the physician's fiduciary duty. The superior court did not err when it granted summary judgment to the hospital on the Thomases' breach of fiduciary duty claim.[26]

         B. The Superior Court Did Not Err By Granting Summary Judgment To The Hospital On The ...


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