Hennen Construction Co., Appellant, vs. Pilot Land Development, Respondent.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (1998).

STATE OF MINNESOTA

IN COURT OF APPEALS

C1-99-1543

Rita Strickland, Special Administrator for the
Estate of Margaret Louise Peterson, Deceased,

and Trustee for Next of Kin of

Margaret Louise Peterson, Deceased,
Appellant,
 
vs.
 
Vencor, Inc., and Ventas, Inc.,
Foreign Corporations,
Respondents.

Filed May 16, 2000

Affirmed

Peterson, Judge

Olmsted County District Court

File No. C599188

David L. Weidt, Providence Building, 332 West Superior Street, Suite 421, P.O. Box 630, Duluth, MN 55801 (for appellant)

Kristen N. Anderson, Sarah L. Brew, Greene Espel, P.L.L.P., 333 South Seventh Street, Suite 1700, Minneapolis, MN 55402 (for respondents)

            Considered and decided by Peterson, Presiding Judge, Anderson, Judge, and Huspeni, Judge.*

U N P U B L I S H E D   O P I N I O N

PETERSON, Judge

            Appellant Rita Strickland challenges the dismissal of her breach-of-contract claims for failure to state a claim on which relief can be granted.  We affirm.

Margaret Louise Peterson, a resident of Woodside Convalescent Center, died on December 28, 1996, 12 days after falling at the center.  Rita Strickland, Peterson's daughter, was appointed to serve as special administrator for Peterson's estate and as the trustee to maintain an action for the claims asserted against respondents, Ventas, Inc., and Vencor, Inc.,[1] which owned and operated Woodside.  Strickland asserted claims for wrongful death, breach of contract for services to provide personal care, and breach of Medicare and Medicaid contracts. 

Ventas moved to dismiss under Minn. R. Civ. P. 12.02(e) for failure to state a claim upon which relief can be granted.  The district court granted Ventas's motion to dismiss both breach-of-contract claims.  The court concluded that Strickland's breach-of-contract claim sounded in tort rather than contract and therefore did not survive Peterson's death, and that Minnesota law did not provide a private right of action to enforce or recover on Medicare and Medicaid contracts.  The district court granted Strickland's later motion to dismiss her wrongful-death claim with prejudice and entered final judgment on that claim. 

D E C I S I O N

            When reviewing an action dismissed for failure to state a claim on which relief can be granted, this court's review is de novo and is limited to whether the complaint sets forth a legally sufficient claim for relief.  Elzie v. Commissioner of Pub. Safety, 298 N.W.2d 29, 32 (Minn. 1980); Sather v. Woodland Liquors, Inc., 597 N.W.2d 295, 297 (Minn. App. 1999).  It is immaterial whether the facts alleged can be proved.  Elzie, 298 N.W.2d at 32.  A claim will be dismissed only if it is certain that no facts exist, which could be introduced consistent with the pleading, to support granting the demanded relief.  Northern States Power Co. v. Franklin, 265 Minn. 391, 395, 122 N.W.2d 26, 29 (1963).  This court views all assumptions and inferences in favor of the party against whom the dismissal is sought.  Id. at 396, 122 N.W.2d at 30.

1.  Breach of Contract Claim

            Strickland argues that the district court erred by holding that Minn. Stat. § 573.01 (1996), which provides that a cause of action arising out of an injury to the person dies with the person, precludes her claim for restitution based on breach of contract.  Strickland sought restitution of the money paid by Peterson or on her behalf to Ventas, arguing that Ventas breached its express or implied contract with Peterson by failing to provide care in accordance with standards imposed by federal and state regulations, resulting in great pain and physical suffering, severe mental anguish and emotional distress, and death. The district court found that Strickland was attempting to recharacterize the professional-negligence theory in the wrongful-death claim as a breach-of-contract claim and that the provision of substandard care at a nursing home sounded more in tort than contract.  The court determined that the substance of the claim was personal injury to Peterson and concluded that under Minn. Stat. § 573.01, the claim did not survive Peterson's death.

            "A cause of action arising out of an injury to the person dies with the person," but a contract action survives to the personal representative of the decedent.  Minn. Stat. § 573.01.  The statute "provides for the abatement of causes of action for personal injuries even when they constitute breaches of contract."  Webber v. St. Paul City Ry. Co., 97 F. 140, 145 (8th Cir. 1899) (estate of decedent injured in streetcar accident could not evade survival statute by alleging cause of action for breach of contract to transport decedent safely).  The survival statute does not define "injury to the person," but whether a claim survives lies "in the substance, not the form, of the cause of action."  Beaudry v. State Farm Mut. Auto. Ins. Co., 518 N.W.2d 11, 13 (Minn. 1994) (citing Webber, 97 F. at 145). 

            Applying this test, we note that Strickland's complaint refers to Ventas's "failing to provide personal care to Margaret Peterson in accordance with standards of care imposed by federal and state regulations," causing Peterson "to suffer great pain and physical suffering, severe mental anguish and/or emotional distress and death."  Strickland also asserts that Ventas "knew or should have foreseen the breach of this contract would result in severe injuries and death to Margaret Peterson."

            The fact that Strickland seeks restitution of funds paid to Ventas under a contract theory does not mean that the contract claim survives Peterson's death.  Where plaintiffs argued in support of an underinsured motorist (UIM) claim that they were not seeking damages for pain and suffering, but rather enforcement of contractual rights, the supreme court viewed the argument as elevating form over substance and held that the UIM claim abated with the death of the insured.  Beaudry, 518 N.W.2d at 14.  Strickland argues that this analysis is inapplicable because it involved a contract claim for UIM benefits where the primary cause of the damages sought was necessarily injury the insured suffered in an automobile accident.  Strickland contends that the mere mention of Peterson's physical suffering in the complaint does not transform her contract claim into a personal-injury claim any more than the characterization of the UIM claim in Beaudry, which was based on a physical injury, transformed it into a contract claim. 

            But Strickland's complaint does not merely mention Peterson's physical suffering.  The complaint first alleges that Ventas had a contract to provide care for Peterson in accordance with standards of care imposed by federal and state regulations and accepted standards of medical practice.  The complaint then claims that Ventas breached its contract to provide care that met these standards, and that because of this breach, Peterson suffered "great pain and physical suffering."  The essence of the complaint is that Ventas had a duty to provide care that met certain standards, Ventas breached this duty, and as a result of this breach, Peterson suffered personal injury.  The only basis set forth in the complaint to conclude that Ventas breached its contract is that Peterson was injured. 

            Although Strickland seeks restitution, the chief damage she alleges is Peterson's personal injuries.  We, therefore, agree with the district court that the substance of the cause of action is an injury to the person, and the claim abated at Peterson's death.  The district court did not err by dismissing this count of the complaint for failure to state a claim upon which relief can be granted.

2.  Breach of Medicare/Medicaid Contracts

            Strickland also challenges the district court's conclusion that Minn. Stat. § 256B.042 (1996) does not provide a private right of action to recover for a nursing home's breach of medical assistance contracts.  Strickland alleges that Peterson was an intended third-party beneficiary of Medicare and/or Medicaid contracts between Woodside and the State of Minnesota and/or the Secretary of Health and Human Services, and that Ventas "knew or should have foreseen the breach of these contracts would result in severe injuries and death to Margaret Peterson."  Strickland claims that she, the State of Minnesota, and the United States Secretary of Human Services are entitled to restitution of the money paid to Ventas by Peterson or on her behalf.

            We conclude that, like Stricklund's direct contract action, the chief damage alleged in the third-party beneficiary claim is the injuries to Peterson.  Therefore, the substance of the action is an injury to the person, and the cause of action abated at Peterson's death. Accordingly, we do not reach the issue of whether section 256B.042 creates a private cause of action to recover for an institution's breach of medical assistance contracts.  See Myers through Myers v. Price, 463 N.W.2d 773, 775 (Minn. App. 1990) (court of appeals will affirm summary judgment if it can be sustained on any grounds), review denied (Minn. Feb. 4, 1991).

            Affirmed.

*  Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art VI, § 10.

[1]  Vencor, Inc. filed for bankruptcy and all actions against it, including the portion of this appeal relating to Vencor, have been stayed.