Harris v. Chartone

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Harris v. Chartone

State: Illinois

Court: 5th District Appellate

Docket No: 5-03-0796 NRel

Case Date: 12/06/2005

NOTICE

Decision filed 12/6/05. The text ofthis decision may be changed orcorrected prior to the filing of aPetition for Rehearing or thedisposition of the same.

NO. 5-03-0796

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT

________________________________________________________________________

LORICE HARRIS, LAMANDA MILLMAN, ) Appeal from the

and JACK CARSON, ) Circuit Court of

) Madison County.

Plaintiffs-Appellants, )

)

v. ) No. 02-L-1134

)

CHARTONE, f/k/a QUARDRAMED, f/k/a )

HCC HEALTH INFORMATION MANAGEMENT )

SERVICES, and SMART CORPORATION, ) Honorable

) Phillip J. Kardis,

Defendants-Appellees. ) Judge, presiding.

________________________________________________________________________

PRESIDING JUSTICE SPOMER delivered the opinion of the court:

The plaintiffs appeal from the order of the circuit court of Madison County dismissingtheir class action complaint with prejudice pursuant to section 2-615 of the Illinois Code ofCivil Procedure (735 ILCS 5/2-615 (West 2002)). On August 19, 2002, the plaintiffs fileda class action complaint against the defendants. The complaint alleged that the defendantswere engaged in the business of record retrieval and copying on behalf of hospitals and otherhealth care providers. The complaint also contained allegations that the defendants chargedthe plaintiffs excessive fees for copying medical records and/or charged fees for services thatwere not delivered. The allegations of the complaint stated that all the plaintiffs had receivedinvoices from the defendants which contained a breakdown of the charges. The ChartOneinvoices contained a charge for a "clerical fee," a charge per page, and a charge for ashipping fee. The Smart Corp. invoices contained a charge for a "basic fee," a charge for a"retrieval fee," a charge per page, a shipping and handling charge, and a sales tax charge. The complaint further alleged that all the allegedly excessive charges had been paid by eitherthe plaintiffs or their respective attorneys. One of the plaintiffs, Lorice Harris, alleged thatshe had gone to the hospital to inspect her deceased husband's medical records and "was notoffered an opportunity to see the records and/or she was not allowed to see the records." None of the other plaintiffs alleged any attempt to inspect or copy the records from theproviders themselves. The complaint purported to state various causes of action, includingbreach of contract, breach of prior, year-2000 versions of sections 8-2001 and 8-2003 of theIllinois Code of Civil Procedure (Code) (735 ILCS 5/8-2001, 8-2003 (West 2000)), andviolations of the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS505/1 et seq. (West 2000)), the Illinois Antitrust Act (740 ILCS 10/1 et seq. (West 2000)),and various other states' statutes governing access to medical records.

The defendants filed responsive pleadings containing various motions to dismisspursuant to sections 2-615 and 2-619 of the Code (735 ILCS 5/2-615, 2-619 (West 2002)). The motions raised, inter alia, the voluntary-payment doctrine as an affirmative defense toall the counts of the complaint. The defendants argued that because the plaintiffs' complaintalleged that they had received and paid the invoices detailing the charges for copies, therewas no question of fact on the face of the pleadings regarding the applicability of thevoluntary-payment doctrine and that the complaint should be dismissed. After considerablebriefing and lengthy oral argument on the issue, the circuit court entered its order. The orderdetailed the circuit court's rulings on various other issues raised by the parties, which are notat issue on appeal, and dismissed all the counts of the complaint, based on the voluntary-payment doctrine. In a prior ruling, the circuit court had dismissed all the counts of thecomplaint directed to hospital records because the circuit court had found that, in contrastto the 2000 version of section 8-2003 (735 ILCS 5/8-2003 (West 2000)), the 2000 versionof section 8-2001 (735 ILCS 5/8-2001 (West 2000)) did not require that charges for copiesof hospital records be reasonable.

The plaintiffs appeal, contending that the circuit court erred (1) in dismissing thecomplaint on the pleadings pursuant to the voluntary-payment doctrine, (2) in dismissing theplaintiffs' claims relating to copying charges for hospital records on the grounds that the 2000version of section 8-2001 (735 ILCS 5/8-2001 (West 2000)) did not require that charges forcopies of hospital records be reasonable, and (3) in denying the plaintiffs leave to amendtheir complaint to allege a common law basis for requiring hospitals to assess onlyreasonable charges for copying patient records. Because, for the reasons set forth below, weaffirm the judgment of the circuit court granting the motion to dismiss based on thevoluntary-payment doctrine, we need not reach the remaining issues on appeal.

When the legal sufficiency of a complaint is challenged by a section 2-615 motion todismiss, all well-pleaded facts in the complaint are taken as true and a reviewing court mustdetermine whether the allegations of the complaint, construed in a light most favorable to theplaintiff, are sufficient to establish a cause of action upon which relief may be granted. Kingv. First Capital Financial Services Corp., 215 Ill. 2d 1, 11-12 (2005). A motion to dismissunder section 2-619 admits the legal sufficiency of the plaintiff's complaint but assertsaffirmative matter that defeats the claim. King, 215 Ill. 2d at 12. Review under eithersection is de novo. King, 215 Ill. 2d at 12.

The defendants argue that the voluntary-payment doctrine applies to the plaintiffs'claims because the plaintiffs alleged in their complaint that they received invoices detailingthe charges and paid them in full without protest. It has been a universally recognized rulethat absent fraud, duress, or mistake of fact, money voluntarily paid on a claim of right to thepayment cannot be recovered on the ground that the claim was illegal. King, 215 Ill. 2d at27-28. The voluntary-payment doctrine applies to any cause of action which seeks torecover a payment on a claim of right, whether that claim is premised on a contractualrelationship or a statutory obligation, as in the case at bar. Smith v. Prime Cable of Chicago,276 Ill. App. 3d 843, 855 n.7 (1995). In Smith, the court explained the reasoning for this ruleas follows:

" 'The reason [for] the rule *** and its propriety[] are quite obvious whenapplied to a case of payment on a mere demand of money unaccompanied with anypower or authority to enforce such demand, except by a suit at law. In such case, ifthe party would resist an unjust demand, he must do so at the threshold. The partiestreat with each other on equal terms, and if litigation is intended by the one of whomthe money is demanded, it should precede payment. When the person making thepayment can only be reached by a proceeding at law, he is bound to make his defensein the first instance, and he cannot postpone the litigation by paying the demand insilence or under a reservation of the right to litigate the claim[] and afterward sue torecover the amount paid.' " Smith, 276 Ill. App. 3d at 848 (quoting 66 Am. Jur. 2dRestitution & Implied Contracts §94, at 1035-36 (1973)).

There is no question from the pleadings that the plaintiffs allege they paid the invoiceswithout protest. However, the plaintiffs argue that all three exceptions to the voluntary-payment doctrine are pleaded in the complaint and raise questions of fact sufficient to defeata motion to dismiss on the pleadings. First, the plaintiffs argue that it is clear from theallegations of the complaint that they paid the money under a mistake of fact because theyallege the invoices included multiple charges for the same service and/or charges for serviceswhich had not been provided at all and the plaintiffs did not realize they were beingovercharged. The plaintiffs also use these allegations to argue that they sufficiently pleadedfraud as an exception to the voluntary-payment doctrine.

We find the plaintiffs' arguments unpersuasive. The plaintiffs' argument is analogousto that of the plaintiff in Goldstein Oil Co. v. County of Cook, 156 Ill. App. 3d 180 (1987). In that case, the plaintiff argued that it had properly pleaded the absence of knowledge withwhich to formulate a protest to the voluntary payment of a tax. Goldstein Oil Co., 156 Ill.App. 3d at 185. The court found that the facts were not obscured or inaccessible but, rather,that the plaintiff's lack of knowledge could be attributed to its lack of investigation into thedefendant's claim of liability and the basis upon which the defendant was seeking the tax. Goldstein Oil Co., 156 Ill. App. 3d at 185. The court reasoned that the plaintiff did notallege that it had attempted to ascertain the basis of the tax but was unable to do so, and therecord did not show that the plaintiff had made any effort to obtain the relevant informationneeded to form a protest. Goldstein Oil Co., 156 Ill. App. 3d at 186. The court concludedthat it is no exception to the voluntary-payment doctrine when the plaintiff makes no effortto ascertain the factual basis of the tax but pays it anyway. Goldstein Oil Co., 156 Ill. App.3d at 186.

As in Goldstein Oil Co., the plaintiffs did not allege that they made any effort todiscover the exact nature of the fees charged. The invoices described what the defendantspurported to charge for and the amount of all the charges. The ChartOne invoices containeda charge for a "clerical fee," a charge per page, and a charge for a shipping fee. The SmartCorp. invoices contained a charge for a "basic fee," a charge for a "retrieval fee," a chargeper page, a shipping and handling charge, and a sales tax charge. We conclude that theplaintiffs had enough information to determine whether there was a basis to protest or at leastto investigate the exact factual basis for the charges. The plaintiffs or their attorneys paidthe invoices voluntarily, knowing the purported basis for the charges. Furthermore, there isno allegation in the plaintiffs' complaint setting forth any facts that were not known to themat the time of payment and that they later discovered. Therefore, the plaintiffs cannotestablish a mistake of fact or fraud under the allegations of their complaint.

The plaintiffs next argue that the allegations of the complaint were sufficient toestablish a factual basis for the duress exception to the voluntary-payment doctrine. In orderto defeat the voluntary-payment doctrine as a defense on the basis of duress, it is necessaryto show not only that the claim asserted was unlawful but also that the payment was notvoluntary because there was some necessity that amounted to compulsion and the paymentwas made under the influence of that compulsion. King v. First Capital Financial ServicesCorp., 215 Ill. 2d 1, 28 (2005). The issue of duress and compulsory payment generally isone of fact to be judged in light of all the circumstances surrounding a transaction. Smith v.Prime Cable of Chicago, 276 Ill. App. 3d 843, 850 (1995). However, where the facts are notin dispute and only one valid inference concerning the existence of duress can be drawn fromthe facts, the issue can be decided as a matter of law, including on a motion to dismiss. Smith, 276 Ill. App. 3d at 850.

The circuit court ruled that there was no compulsion for the plaintiffs to pay theinvoices because pursuant to sections 8-2001 and 8-2003 of the Code (735 ILCS 5/8-2001,8-2003 (West 2000)), the plaintiffs had a reasonable alternative to employing the defendantsto furnish copies of their medical records. Both statutes confer a duty on medical providersto permit the patient or the patient's physician or authorized attorney to examine the recordsand permit copies of those records to be made by the patient or the patient's physician orauthorized attorney. 735 ILCS 5/8-2001, 8-2003 (West 2000). Both statutes also providefor a remedy to enforce their provisions. Both statutes provide as follows: "Failure tocomply with the time limit requirement of this Section shall subject the denying party toexpenses and reasonable attorneys' fees incurred in connection with any court[-]orderedenforcement of the provisions of this Section." 735 ILCS 5/8-2001, 8-2003 (West 2000).

We find the circuit court's reasoning persuasive. There are no allegations in theplaintiffs' complaint setting forth any effort to obtain the medical records pursuant to thestatutes. Although plaintiff Lorice Harris alleged that she had gone to the hospital to inspecther deceased husband's medical records and "was not offered an opportunity to see therecords and/or she was not allowed to see the records," section 8-2001 of the Code (735ILCS 5/8-2001 (West 2000)) required that a request be in writing and gave the hospital 60days in which to comply with the request. Lorice Harris did not allege that she made arequest in writing or that she waited for the 60-day period to elapse. Furthermore, she doesnot allege that she availed herself of the enforcement provision of the statute. Therefore,there was a reasonable alternative to engaging the defendants to copy the records, and theplaintiffs' allegations do not show that the plaintiffs were compelled to accept the recordsfrom the defendants and pay the defendants' invoices. Accordingly, we cannot find that theduress exception to the voluntary-payment doctrine was sufficiently alleged in the plaintiffs'complaint.

For the reasons set forth above, the order of the circuit court dismissing the plaintiffs'complaint is affirmed.

Affirmed.

HOPKINS and McGLYNN, JJ., concur.