955 N.E.2d 804
Ind. Ct. App.2011Background
- Allen and Moore sued Clarian as uninsured patients, alleging breach of contract for charging unreasonable fees.
- Both signed Clarian contracts before treatment stating they would pay the account but without any price/fee schedule.
- Clarian billed using chargemaster rates; insured payments would have been substantially lower than billed.
- Trial court granted 12(B)(6) dismissal; court held no breach given lack of price term.
- Court of Appeals reversed, holding Indiana common law implies a reasonable charge when price is open, and remanded for proceedings.
- Court reasoned that damages depend on reasonable value of services; declaratory judgment framework functions to construe missing terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did complaint plead breach by charging unreasonable fees? | Allen/Moore contend no price term; implied reasonable value breach. | Clarian argues chargemaster rates bind; price term open cannot imply reasonableness. | Yes; complaint states viable breach by unreasonable charges. |
| Are the contracts ambiguous about pricing, requiring reasonable value? | Contracts silent on price; reasonable value implied. | Pricing term unambiguous if chargemaster referenced; open-term issue non-ambiguous. | Ambiguous; inference of reasonable value permissible. |
| Is the claim inadequate for lack of consideration adequacy review? | Not a challenge to consideration, but reasonableness of charges under contract. | Court should not review consideration adequacy. | Not an adequacy-of-consideration challenge; claim survives. |
| Do damages adequately plead causation under breach claim? | Damages equal difference between charged and reasonable amount; plus collection harms. | Damages not ripe until payment is made. | Damages pled; Declaratory Judgments Act supports relief. |
| Is the judiciary proper to determine reasonable medical expenses? | Courts can determine reasonable value despite healthcare complexities. | Public policy/deference to policymakers warranted; implications of health care pricing. | Yes; Indiana courts may determine reasonable value; not precluded by policy concerns. |
Key Cases Cited
- Louisville, New Albany & Chicago Ry. Co. v. Hubbard, 116 Ind. 193, 18 N.E. 611 (Ind. 1888) (implied promise to pay reasonable value when price not fixed)
- Stanley v. Walker, 906 N.E.2d 852 (Ind. 2009) (proper measure of medical expenses is reasonable value; not strictly amount paid)
- Jackson v. Trancik, 953 N.E.2d 1087 (Ind. App. 2011) (reasonableness of physician fees; even contract actions consider reasonable value)
- DiCarlo v. St. Mary Hospital, 530 F.3d 255 (3d Cir. 2008) (federal court rejected hospital contract breach claims when charges not open terms)
- Doe v. HCA Donelson Hospital, 197 S.W.3d 197 (Tenn. 2001) (absence of explicit price references renders price term indefinite)
- First Federal Savings Bank of Indiana v. Key Markets, Inc., 559 N.E.2d 600 (Ind. 1990) (contract enforceability without requiring good faith unless ambiguity)