Henry v. QHG of Springdale, Inc
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Cite as 2010 Ark. App. 847
ARKANSAS COURT OF APPEALS
DIVISION I
No. CA10-167
Opinion Delivered D ECEMBER 15, 2010
RICKEY HENRY
APELLANT
APPEAL FROM THE BENTON
COUNTY CIRCUIT COURT,
[NO. CV 2009-422-5]
V.
QHG OF SPRINGDALE, INC.,
NORTHWEST MEDICAL CENTER
OF BENTON COUNTY, and
WELLCARE HEALTH INSURANCE
OF ARIZONA, INC.
APPELLEES
HONORABLE XOLLIE DUNCAN,
JUDGE
SUBSTITUTED OPINION UPON
THE GRANT OF A PETITION FOR
REHEARING; AFFIRMED
ROBERT J. GLADWIN, Judge
Appellant Rickey Henry challenged the Benton County Circuit Court’s November
9, 2009 order granting attorney’s fees to appellee QHG of Springdale, Inc., d/b/a Northwest
Medical Center of Benton County, Arkansas, claiming that the trial court erred. An appeal
followed, and an opinion was filed and published by the Arkansas Court of Appeals on
September 15, 2010. A petition for rehearing was filed September 30, 2010, and is hereby
granted. Thus, we vacate our prior opinion and reinstate the appeal. As a result, we now have
before us the question of whether the trial court erred in granting attorney’s fees to appellee
QHG. We affirm the trial court’s award of attorney’s fees.
Cite as 2010 Ark. App. 847
Statement of Facts
Henry was a patient at Northwest Medical Center as a result of an automobile
accident, and presented his health insurance information during his treatment. The hospital
asked patients with insurance to provide insurance information and agreed to process the
charges. Henry’s insurance company was WellCare Health Insurance of Arizona, Inc.
On March 11, 2008, QHG filed a notice of lien against Henry for $12,277.40 for
medical charges related to his care at Northwest Medical Center. On February 11, 2009,
Henry brought a suit against WellCare for breach of contract. On March 31, 2009, QHG
filed a second notice of lien against Henry for unpaid medical bills in the amount of
$12,277.40. On April 21, 2009, Henry filed a second amended complaint, adding QHG as
a defendant and asserting that pursuant to its contract with WellCare, the hospital should have
taken an agreed-upon reduction in charges instead of attempting to collect the full bill from
him, and that in breaching its contractual obligations to WellCare by improperly submitting
Henry’s charges to WellCare, QHG also breached its fiduciary duty to him.
On May 7, 2009, QHG wrote off the remaining $12,216.40, but adjusted the account
on May 14, 2009, to reflect a payment of $869.67 from WellCare. On May 21, 2009 (a little
over three months after Henry’s suit was initially filed and one month after Henry amended
his complaint to add the hospital), QHG wrote off the remaining co-pay amount of $146.09,
fully settling Henry’s account. Thereafter, QHG filed a motion to dismiss, or alternately, a
motion for summary judgment.
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Cite as 2010 Ark. App. 847
By order dated August 31, 2009, the circuit court denied QHG’s motion to dismiss,
granted QHG’s motion for summary judgment as to Henry’s breach-of-fiduciary-duty claim
against QHG, and denied WellCare’s motion to dismiss. On November 6, 2009, the circuit
court denied QHG’s motion for sanctions, but, stating that the award was pursuant to
Arkansas Code Annotated section 16-22-309(a)(1) (Repl. 1999), the court granted QHG’s
request for attorney’s fees in the amount of $1,500 (out of the $4,477.74 requested). Henry
filed a motion for reconsideration, or in the alternative, motion for findings of fact and
conclusions of law on November 21, 2009, and a motion for clarification on November 24,
2009, both of which were deemed denied pursuant to Arkansas Rule of Civil Procedure
52(b)(1). Henry filed a motion to dismiss his claims against WellCare with prejudice, so that
there would be a final, appealable order, and the circuit court granted the motion.
Henry filed this appeal claiming that the notice of appeal was from the order awarding
fees and the deemed denial of the motion for reconsideration and motion for clarification. The
hospital argues that Henry filed his notice of appeal as to the order awarding attorney’s fees
only, and that no other orders of the trial court are properly before this court. The notice of
appeal is incomplete with respect to the motions appealed from in both the addendum and
the record before this court. The court only has pages 1 and 3 before it. From these two
pages, it is clear that Henry appeals the award of attorney’s fees. Further, the notice of appeal
was filed on December 4, 2009. Under Arkansas Rule of Civil Procedure 52(b)(1), a motion
is deemed denied only if the trial court fails to act on it within thirty days of its filing.
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Cite as 2010 Ark. App. 847
Accordingly, Henry’s motions for reconsideration and clarification were not deemed denied
until December 20 and December 23, respectively. An appeal from the denial of these
motions that is taken prior to these dates where the notice is not amended after these dates
is not timely and will not be considered, leaving the sole issue on appeal whether the circuit
court erred in awarding attorney’s fees to the hospital.
Standard of Review
The appellate standard of review for issues of statutory construction is well settled:
The basic rule of statutory construction is to give effect to the intent of the legislature.
Where the language of a statute is plain and unambiguous, we determine legislative
intent from the ordinary meaning of the language used. In considering the meaning
of a statute, we construe it just as it reads, giving the words their ordinary and usually
accepted meaning in common language. We construe the statute so that no word is
left void, superfluous or insignificant, and we give meaning and effect to every word
in the statute, if possible.
Great Lakes Chem. Corp. v. Bruner, 368 Ark. 74, 82, 243 S.W.3d 285, 291 (2006) (internal
citations omitted).
The decision to grant or deny attorney’s fees lies within the sound discretion of the
trial court, and we will not reverse the decision of the trial court absent a showing of an abuse
of that discretion. Taylor v. George, 92 Ark. App. 264, 212 S.W.3d 17 (2005). Generally, in
Arkansas, an award of attorney’s fees is not allowed, unless an award of fees is specifically
permitted by statute. See Seidenstricker Farms v. Doss, 374 Ark. 123, 286 S.W.3d 142 (2008).
Discussion
Arkansas Code Annotated section 16-22-309(a)(1) provides as follows:
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Cite as 2010 Ark. App. 847
In any civil action in which the court having jurisdiction finds that there was a
complete absence of a justiciable issue of either law or fact raised by the losing party
or his attorney, the court shall award an attorney’s fee in an amount not to exceed five
thousand dollars ($5,000), or ten percent (10%) of the amount in controversy,
whichever is less, to the prevailing party unless a voluntary dismissal is filed or the
pleadings are amended as to any nonjusticiable issue within a reasonable time after the
attorney or party filing the dismissal or the amended pleadings knew, or reasonably
should have known, that he would not prevail.
Subsection (b) of this statute sets forth what is required to find that an issue is nonjusticiable:
In order to find an action, claim, setoff, counterclaim, or defense to be lacking a
justiciable issue of law or fact, the court must find that the action, claim, setoff,
counterclaim, or defense was commenced, used, or continued in bad faith solely for
purposes of harassing or maliciously injuring another or delaying adjudication without
just cause or that the party or the party’s attorney knew, or should have known, that
the action, claim, setoff, counterclaim, or defense was without any reasonable basis in
law or equity and could not be supported by a good faith argument for an extension,
modification, or reversal of existing law.
Subsection (d) provides, “On appeal, the question as to whether there was a complete absence
of a justiciable issue shall be determined de novo on the record of the trial court alone.” See
Drummond v. Shepherd, 97 Ark. App. 244, 247 S.W.3d 526 (2007); see also Stilley v. Hubbs, 344
Ark. 1, 40 S.W.3d 209 (2001). A finding of a complete lack of a justiciable issue is a
prerequisite to awarding attorney’s fees under this provision of the Code. See City of Ft. Smith
v. Didicom Towers, Inc., 362 Ark. 469, 209 S.W.3d 344 (2005). Our case law requires that we
not reverse the trial court’s factual findings unless they are clearly erroneous. Drummond, 97
Ark. App. at 247, 247 S.W.3d at 528; see also Stanley v. Burchett, 93 Ark. App. 54, 216 S.W.3d
615 (2005).
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Cite as 2010 Ark. App. 847
The November 6, 2009 order does not set forth any findings of fact or law upon which
the court might base either its denial of Rule 11 sanctions or its grant of attorney’s fees, other
than its citation to Arkansas Code Annotated section 16-22-309(a)(1). In order to award the
attorney’s fees to QHG, as the prevailing party, the statute dictates that the circuit court must
find a complete lack of a justiciable issue. QHG prevailed in this case by virtue of the circuit
court’s August 31, 2009 order, granting QHG’s motion for summary judgment. In pertinent
part, the circuit court states the following in its order:
There is no issue of material fact as to [Henry]’s breach of fiduciary relationship claim
against QHG. The Court finds that the undisputed facts as presented do not rise to the
level to state a claim for breach of fiduciary responsibility. The Court specifically finds
that [Henry]’s claim cannot survive the motion for summary judgment due to his
failure to establish any damages for his claim. Therefore, the claim of [Henry] as against
the separate defendant, QHG, should be and hereby is dismissed with prejudice.
In the foregoing findings, the circuit court does not state specifically that the claim is dismissed
for complete lack of a justiciable issue. Going to the record on our de novo review, the circuit
court states in the hearing on the motion to dismiss,
My take on this is that the issue of whether there is a fiduciary duty between a patient
and a hospital is much closer than what [QHG] argues, but much closer still doesn’t
get there, and I don’t think there has been a fiduciary duty established. The reason I
had some question in my mind about it is because the hospital does take on the role
of give us your insurance card, and we are going to pursue all this, and you have to
assign the insurance proceeds to us. I think they take a much more active and greater
role in dealing with the insurance company than just simply you are our patient, and
we are your hospital, and that’s the end of it. I think it is much more than that. But
that being said, I still don’t believe that it rises to the level of a fiduciary duty. At least
I am not convinced in this case it did.
The other issue is the lack of damages, and I think that is absolutely the death knell to
this case between [Henry] and [QHG] because I don’t think he can establish damages
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Cite as 2010 Ark. App. 847
that the entire amount that was not paid in excess of $11,000 has been written off, and
I just don’t see how he could possibly claim damages. So for those two reasons
together I am going to grant [QHG]’s motion for summary judgment.
Instead of remanding for further findings by the circuit court regarding the question
of whether Henry’s failure to dismiss the lawsuit, after QHG wrote off the entire amount of
the hospital bill, was in bad faith or was without any reasonable basis in law or equity, this
court, pursuant to Arkansas Code Annotated section 16-22-309(d), looks at the record de
novo to answer the question. A review of the record above shows that the circuit court had
made its position exceedingly clear with regard to Henry’s claim of breach of fiduciary duty.
Further, the damages issue was one of fact, which was properly before the circuit court on
summary judgment. The circuit court determined that there were no damages because the
patient did not owe the hospital. Thus, the circuit court’s award of attorney’s fees based on
section 16-22-309(b) was not an abuse of discretion. The record supports that, by continuing
the lawsuit once the debt had been waived, Henry’s actions had no basis in law or equity at
the very least, and at the most, amounted to bad faith. Because there was a lack of a justiciable
issue, the circuit court’s award of attorney’s fees to QHG was not in error.
Affirmed.
R OBBINS, G LOVER and H ENRY, JJ., agree.
H ART and B AKER, JJ., dissent.
K AREN R. B AKER, Judge, dissenting. On rehearing, the majority holds that the trial
court’s decision to award attorney’s fees to appellee QHG was not erroneous because
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Cite as 2010 Ark. App. 847
appellant’s complaint did not contain a justiciable issue. I believe that appellant presented a
justiciable issue, making an award of attorney’s fees inappropriate. I would reverse.
W e are charged in our de novo review with the singular task of determining
whether—as a matter of law—appellant presented a justiciable claim. Subsection 16-22309(b) states that in order to be awarded attorney’s fees, it is necessary to prove that the
plaintiff was acting in bad faith. I do not find that the order, the transcript of the hearing, or
the record as a whole demonstrates that appellant brought the breach-of-fiduciary-duty claim
in bad faith.
In reaching its conclusion, the circuit court and the majority opinion particularly focus
on damages. QHG filed a notice of lien against appellant first on March 11, 2008, and then
again on March 31, 2009. On May 21, 2009—a little over three months after appellant’s suit
was filed and one month after appellant amended its complaint to add QHG—QHG wroteoff the remaining co-pay amount of $146.09, fully settling appellant’s account. The lien was
released on July 17, 2009. Under these facts, I cannot agree that there were no damages.
While QHG had “written off” the charges before the hearing on summary judgment, it had
filed a second personal lien against appellant just two weeks prior to appellant amending the
complaint to add QHG. The fact that QHG wrote the debt off some two weeks after the
complaint was amended to bring QHG into the case mitigated damages but did not nullify
the cause of action.
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Cite as 2010 Ark. App. 847
In any event, the circuit court never found that the claim was commenced, used, or
continued in bad faith or otherwise met the requirements for awarding attorney’s fees under
section 16-22-309(a)(1). Because the requirement of bad faith underlying an award of
attorney’s fees under this statute was not met, I would reverse.
H ART, J., joins.
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