Barry v. St. Mary's Hospital Decatur
2016 IL App (4th) 150961
| Ill. App. Ct. | 2017Background
- Sept. 2013: Barry treated at St. Mary’s after a car accident; three hospital bills arose. Two bills were submitted to Barry’s insurer (Consociate) and initially denied; a third bill was never submitted to Consociate.
- St. Mary’s filed liens against Barry’s prospective personal-injury recovery for the full (nondiscounted) amounts for all three bills; later Consociate paid the two submitted bills at discounted rates.
- Barry sued (seven-count complaint) alleging Consumer Fraud Act violation, breach of contract (consent form), third-party beneficiary, unjust enrichment, interference, outrage, and seeking injunctive relief and class treatment.
- St. Mary’s moved under section 2-615 (and a combined motion including summary judgment); trial court dismissed Barry’s complaint with prejudice, relying on Rogalla.
- On appeal, the court considered statutory interpretation of the Health Care Services Lien Act, the Facility Agreement between St. Mary’s and PHS/Consociate, and whether Barry pleaded viable claims; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether St. Mary’s had to bill Barry’s insurer before filing a lien | Barry: hospital was required to submit bills to Consociate before asserting liens | St. Mary’s: Lien Act allows liens on claims; Facility Agreement and Lien Act permit pursuing third-party first | Held: No statutory or contractual requirement to bill insurer first; Lien Act permits liens regardless of insurer status |
| Whether liens for the two bills remain after Consociate paid at discounted rates | Barry: liens were improper and should be removed despite timing | St. Mary’s: liens were proper when filed; may be maintained | Held: Because Consociate paid the bills at discounted rates, the debt was extinguished and liens for those two bills cannot be maintained; St. Mary’s should withdraw or Barry may seek adjudication |
| Consumer Fraud Act claim based on alleged concealment of billing/lien practice | Barry: St. Mary’s concealed policy/practice of sending full-amount liens and not informing patients of discount limits, causing damages | St. Mary’s: conduct was authorized by statute and governed by contract; no actionable deception under CFA | Held: Claim barred—actions were authorized by statute (10b(1) exemption); CFA claim fails |
| Contract / third-party beneficiary / unjust enrichment claims (consent form & Facility Agreement) | Barry: consent form and Facility Agreement created duties to bill insurer and conferred rights; Barry was intended beneficiary and St. Mary’s retention of settlement funds is unjust | St. Mary’s: consent form only authorizes billing (no obligation); Facility Agreement disclaims third-party beneficiary rights; no undue enrichment when provider seeks payment for services | Held: Breach claim fails (no contract obligation alleged); Facility Agreement expressly disclaims third-party beneficiaries; unjust enrichment claim fails as pleaded (no wrongful retention shown for unpaid third bill; two bills were paid) |
Key Cases Cited
- Rogalla v. Christie Clinic, P.C., 341 Ill. App. 3d 410 (holding provider may assert statutory lien against third‑party recovery despite contractual "hold‑harmless" language)
- N.C. v. A.W., 305 Ill. App. 3d 773 (holding lien extinguished where insurer’s contract extinguished patient’s debt)
- Lopez v. Morley, 352 Ill. App. 3d 1174 (reaffirming N.C. principle regarding extinguished debt and liens)
- HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 131 Ill. 2d 145 (explaining unjust enrichment framework where benefit passed from third party)
- McVey v. M.L.K. Enterprises, LLC, 2015 IL 118143 (statutory interpretation principles cited by court)