MORRISTOWN MEMORIAL HOSPITAL v. MICHAEL PELLETIER

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2853-04T22853-04T2

MORRISTOWN MEMORIAL HOSPITAL,

Plaintiff-Respondent,

v.

MICHAEL C. PELLETIER,

Defendant-Appellant.

________________________________________________________________

 

Argued December 21, 2005 - Decided June 14, 2006

Before Judges Fall, Parker and Miniman.

On appeal from the Superior Court of New

Jersey, Law Division, Morris County,

Docket No. DC-3961-03.

Michael C. Pelletier, appellant, argued

the cause pro se.

John T. Grogan argued the cause for respondent

(Bubb, Grogan & Cocca, attorneys; Alyssa A.

Verderami, on the brief).

PER CURIAM

Defendant Michael Pelletier appeals pro se from a judgment entered on August 7, 2003 after a bench trial in Special Civil Part in which plaintiff Morristown Memorial Hospital (hospital) was awarded $8,887.22, plus costs and pre- and post-judgment interest. Pursuant to the judgment, plaintiff moved for expenses and counsel fees on the ground that the answer and defenses were frivolous and defendant cross-moved to dismiss the complaint. The trial judge rendered a written decision in which he declined to find defendant's answer and defenses frivolous, but awarded counsel fees pursuant to the offer of judgment rule, R. 4:58-1 and -2. The decision was memorialized in an order entered on January 17, 2005 granting plaintiff $12,827.50 in counsel fees and $485.15 in litigation expenses. Defendant appeals from that order, as well. We affirm.

The facts giving rise to this appeal are as follows. On November 19, 1999, defendant presented to the emergency room at the hospital with chest pains. He was discharged on November 23, 1999 after a number of tests and an angioplasty were performed. The total charge for defendant's hospital treatment was $37,174.47.

In April 2000, defendant received the first bill from the hospital, which included a credit of $9,293.62. The evidence demonstrated that the credit was an error, however, because defendant was incorrectly credited with an adjustment for Prudential, which was not defendant's health insurance carrier. Defendant's health insurance carrier was Travelers. On July 7, 2000, plaintiff adjusted the bill and deleted the $9,293.62 that had been incorrectly credited to defendant.

Travelers, initially paid $21,731.32, declared $6,555.93 in hospital charges to be unreasonable and excessive, and withheld defendant's deductible of $8,887.22, leaving a balance of $15,443.15. On December 13, 2001, plaintiff filed a complaint seeking that amount, plus interest and costs. Defendant filed an answer on February 8, 2002, asserting three affirmative defenses: (1) that the hospital had waived its right to, and was estopped from, collecting 100% of its hospital charges; (2) recoupment based on alleged malpractice by his attending physician; and (3) recoupment based on alleged negligent infliction of emotional distress by a hospital nurse.

In May 2002, plaintiff moved to dismiss the two affirmative defenses based on recoupment and defendant cross-moved for summary judgment or, alternatively, to compel discovery. Two orders entered on June 26, 2002 (1) granted plaintiff's motion to dismiss the recoupment defenses on the ground that "defendant's second and third defense for recoupment is really a third-party complaint and medical personnel are necessary parties which defendant has not joined;" and (2) denied defendant's cross-motion for summary judgment on the ground that the "amount in controversy is disputed and subject to fact finding." Defendant's form of order submitted to the court did not include a provision for the alternative motion to compel discovery and that issue was not addressed by the court.

On July 16, 2002, defendant moved for reconsideration of the court's dismissal of the recoupment defenses and did not address his motion to compel. The motion for reconsideration was denied on August 26, 2002. In October 2002, defendant sought additional discovery, which plaintiff declined to provide because it related to the dismissed affirmative defenses.

During the pendency of the matter, Travelers paid the additional $6,555.93 it had initially disputed, leaving a balance of $8,887.22 payable by defendant, the amount of his deductible under the Travelers policy. On October 29, 2002, plaintiff served defendant with an offer of judgment in the amount of $4,443, 50% of defendant's balance. Defendant did not accept the offer of judgment within the time required by R. 4:58-1 and plaintiff advised defendant that "it, therefore, shall be deemed to have been withdrawn. Accordingly, the consequences set forth in Rule 4:58-2 shall now apply."

Mandatory arbitration was scheduled for November 21, 2002. On November 6, 2002, however, defendant moved again to compel discovery. Since the motion was not returnable before the arbitration date and the court declined to hear it on short notice, defendant served a Notice in Lieu of Subpoena dated November 13, 2002, demanding that the hospital produce at the arbitration the documents he had previously sought to compel.

Plaintiff moved for a protective order pursuant to R. 1:9-2 and R. 4:10-3(a), (d) and (g) "limiting the discovery sought in this matter, subsequent to the discovery end date, by Notice in Lieu of Subpoena demanding the production of discovery at the mandatory arbitration scheduled in this matter for November 21, 2002." Defendant then cross-moved to dismiss the complaint "for plaintiff's willful failure to comply with defendant's November 13, 2002 Notice in Lieu of Subpoena at the November 21, 2002 arbitration of this matter."

The arbitration proceeded on November 21, 2002, and the arbitrator found defendant 100% liable for the $8,877.22 due and owing. Subsequent to the arbitration, defendant's motions to compel discovery and dismiss the complaint were denied and plaintiff's motion for a protective order was granted in an order entered on February 25, 2003 (1) prohibiting defendant from seeking discovery "that would require disclosure of any privileged and proprietary agreements and contracts in effect at any time between plaintiff and any insurance company other than the company insuring Defendant . . . as of the date of the Defendant's hospitalization, November 19, 1999;" (2) declaring defendant's Notice in Lieu of Subpoena null and void as "an improper use of R. 1:9-1 and R. 1:9-2;" and (3) authorizing plaintiff to move for counsel fees and costs for the motion.

On March 4, 2003, the matter was administratively transferred from the Civil Part to the Special Civil Part and was tried before the court on July 14 and 17, 2003. After considering the evidence presented, the trial judge rendered a decision on the record on July 17, 2003, stating:

In this case, we have had significant evidence . . . and there is no dispute about some things. First, there is no dispute that Mr. Pelletier had a contract of insurance with Traveler's. That is beyond dispute.

There is evidence in the case that there was a bill that was submitted to Mr. Pelletier that included in it a credit for $9,293.62 and that bill was sent out, I believe in April of 2000. Thereafter, Mr. Pelletier sent a letter dated June 8, 2000, complaining about the bill and about the treatment that he had received in the hospital. And from that moment on, there's [been] quite a dispute about what occurred.

I don't have any doubt that it was Mr. Pelletier's letter that prompted someone to go look at the billing that was done in the case. There [are] documents that suggest that's so, but in all of the documentation with respect to the review of the billing makes it clear to me - and I find that in fact, the credit of $9,293.62 was a credit to which Mr. Pelletier was not entitled because that credit was given apparently in a mistaken belief by someone that he had Prudential Insurance.

I think that the mistake is probably something that you're never going to be able to determine precisely how it happened. But I don't think there's any doubt that it was a mistake and somebody just took an EOB, I guess, and maybe as the witness said, it was where you put the ruler with these large lists that you have EOBs and patients and somebody just made a mistake, and gave the Prudential credit.

I am convinced that Mr. Pelletier's letter did not scare the hospital into reversing the credit. Rather, I think what it did, if anything, was to prompt the hospital billing people to take a look at the situation to try to figure out what was - - the status with the bill, and they found that there was an error and the reversal was not as a result of the threat, but the reversal was as a result of discovering that there had been an error in granting it in the first place.

You can take certain documents and suggest that there may have been a contract, for example, the Godfrey memo. You could take that document, and you can suggest that there was, in fact, a contract with Traveler's for the same 25 percent discount, but everybody who has testified, and subsequent documents all seem to indicate that there was no contract with Traveler's, and I think under the circumstances, if defendant was asserting that he was entitled to . . . the 25 percent . . . through the contract between Traveler's and the Morristown Memorial Hospital, that such a contract would have been produced.

All of the testimony here is clear that there was no contract and I find that most of the documents except, perhaps, the Godfrey document, make it clear there was no contract with Traveler's for a 25 percent discount. So I'm convinced that the reversal of the credit was done, and done because it was determined that there was an error made; and I'm completely convinced there's no waiver here.

A waiver is a known relinquishment of a known right, and by giving him the credit, there wasn't any kind of a waiver involved because it was by mistake. It's not a knowing relinquishment of a known right, and there's no estoppel because clearly, an estoppel wouldn't apply in a situation like this.

Mr. Pelletier's position wasn't prejudiced in any way by a reversal of that credit. He had, at that time, he could have gone to the Traveler's, and said, look, you've got a contract with Morristown Memorial; I'm entitled to the 25 percent. But he didn't. So there's no waiver, there's no estoppel, and I'll enter a judgment in the amount of . . . eight thousand, eight hundred-eighty-seven dollars and twenty-two cents.

Defendant appealed and argues:

POINT ONE

THE COURT BELOW ERRED IN STRIKING MY MALPRACTICE AND NEGLIGENCE DEFENSES ON SUMMARY JUDGMENT, AND I AM ENTITLED TO A NEW TRIAL ON THOSE ISSUES.

POINT TWO

THE COURT BELOW CLEARLY ERRED IN FINDING AT TRIAL THAT THE HOSPITAL MISTAKENLY DISCOUNTED MY BILL AND THAT THE HOSPITAL WAS NOT ESTOPPED TO RESCIND THE DISCOUNT.

A. Waiver/Mistake

B. Estoppel

POINT THREE

THE COURT BELOW ERRED IN AWARDING THE HOSPITAL RELIEF UNDER THE OFFER OF JUDGMENT RULE, WHICH DOES NOT APPLY IN SPECIAL CIVIL PART.

POINT FOUR

IF THE OFFER OF JUDGMENT RULE DOES APPLY, THE COURT BELOW ERRED IN NOT ENFORCING THE OFFER AGAINST THE HOSPITAL FOR ITS LATE PRODUCTION OF CRUCIAL DISCOVERY.

POINT FIVE

THE COURT BELOW ERRED IN ENTERTAINING THE HOSPITAL'S APPLICATION FOR FEES, BECAUSE IT DID NOT MEET THE REQUIREMENTS OF RULE 4:42-9, WHICH DOES APPLY IN SPECIAL CIVIL PART MATTERS.

POINT SIX

THE COURT BELOW ERRED IN AWARDING UNREASONABLE FEES TO THE HOSPITAL, AND IN EXCEEDING THE JURISDICTIONAL LIMIT OF THE SPECIAL CIVIL PART.

Defendant first argues that the trial court erred in granting summary judgment dismissing his medical malpractice and negligence defenses.

Summary judgment is appropriate

if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law. An issue of fact is genuine only if, considering the burden of persuasion at trial, the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact. The court shall find and state its conclusions in accordance with R. 1:7-4.

[R. 4:46-2(c).]

We have carefully considered the record in light of defendant's argument and the applicable law respecting the dismissal of his negligence defenses. We are satisfied that it lacks sufficient merit to warrant consideration in a written decision. R. 2:11-3(e)(1)(E). Nevertheless, we note that defendant failed to (1) join necessary parties to pursue the medical malpractice and negligence claims; (2) failed to provide an affidavit of merit as required by N.J.S.A. 2A:53A-27; and (3) failed to demonstrate any genuine issue of material fact sufficient to permit a rational fact finder to hold plaintiff liable for medical malpractice or negligent infliction of emotional distress. The grant of summary judgment dismissing the recoupment defenses is affirmed.

Defendant next argues that the trial court erred in finding that plaintiff mistakenly discounted his bill and contends that "plaintiff explicitly waived and is estopped to collect $9,293.62 on its $15,443.15 alleged claim against defendant." He maintains that the trial court "misapprehended" his estoppel defense because "[t]he hospital gave me an 'adjustment' on my bill, the permanence of which I relied on when I complained rather than seeking an additional payment from Traveler's."

After carefully considering the record on this point, we are satisfied that the trial court's finding that the credit was a mistake and "not a knowing relinquishment of a known right," is supported by substantial credible evidence in the record. R. 2:11-3(e)(1)(A). We further agree with the trial judge that there is "no estoppel because clearly, an estoppel wouldn't apply [since defendant's] position wasn't prejudiced in any way by a reversal of that credit." Defendant's assertion that he relied on the "adjustment" is simply not supported by any evidence in the record.

Defendant next argues that the trial court erred in awarding counsel fees and costs pursuant to the offer of judgment rule, R. 4:58, because the rule does not apply in Special Civil Part. Ordinarily, we would agree because application of the rule in the Special Civil Part "would defeat the purpose of the Special Civil Part and its rules . . . by creating . . . a costly trap for [pro se litigants who are] unfamiliar with the potential consequences of nonacceptance of a reasonable judgment offer." Bandler v. Maurice, 352 N.J. Super. 158, 165 (App. Div. 2002).

Here, however, plaintiff filed the complaint in the Civil Part, made the offer of judgment and confirmed defendant's non-acceptance while the matter was still pending in the Civil Part. Plaintiff did not choose to litigate in Special Civil Part; the matter was administratively transferred after Travelers paid an additional sum reducing plaintiff's claim against defendant to an amount below the jurisdictional level for the Special Civil Part. Moreover, defendant is an attorney admitted in New Jersey and, according to his letterhead, maintains three offices for practice in New Jersey and New York. Consequently, the rationale for excluding the offer of judgment in Special Civil Part does not apply here. Under all of these circumstances, we are satisfied that the trial judge correctly awarded counsel fees and costs pursuant to R. 4:58.

Defendant next argues that the trial court erred in awarding counsel fees under the offer of judgment rule because plaintiff withheld "crucial discovery" until after the offer expired. Defendant contends that either counsel fees should not be awarded under R. 4:58 or the offer of judgment should be reinstated. Defendant's argument would have been far more persuasive if he had made it immediately after he realized that the "crucial discovery" was withheld. As we have stated previously, we are satisfied that under the circumstances presented, fees were appropriately awarded under R. 4:58.

Defendant next argues that if we find that the offer of judgment rule applies, the amount of fees awarded to plaintiff "is absurd" because the non-jury trial in the Special Civil Part "took about five (5) hours to try and had already been arbitrated." Defendant overlooks the motion practice prior to trial, however.

The award of counsel fees is discretionary. Packard-
Bamberger & Co. v. Collier, 167 N.J. 427, 443-44 (2001). We have reviewed the submissions made to the trial court by plaintiff and we are satisfied that plaintiff substantially complied with R. 4:42-9 and that the judge did not abuse his discretion in awarding those fees. R. 2:11-3(e)(1)(A).

Finally, defendant argues that the trial court erred in awarding unreasonable fees and exceeded the jurisdictional limit of the Special Civil Part. This argument lacks sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). Nevertheless, we note that counsel fees are not included in the jurisdictional amount in Special Civil Part. Surf Cottages Homeowners Ass'n v. Janel Assocs., 362 N.J. Super. 70, 75 (App. Div. 2003) (citing Lettenmaier v. Lube Connection, Inc., 162 N.J. 134, 143 (1999)).

Affirmed.

 

The record indicates that the hospital negotiates discounts with certain health insurance carriers, such as Prudential, but did not discount Travelers' coverage.

EOB refers to the Explanation of Benefits.

(continued)

(continued)

14

A-2853-04T2

June 14, 2006