344 P.3d 1167
Utah Ct. App.2015Background
- Kellene and Scott Bishop appealed a final judgment favoring Outsource Receivables Management, Inc. (Outsource) on a debt collection claim for anesthesia services.
- Kellene underwent surgery at Orem Community Hospital in June 2012; the anesthesiologist was employed by Lone Peak Anesthesia, LC (LPA), an affiliate, not the hospital.
- Kellene received two bills: one from the hospital and one from LPA for anesthesia; she made partial payments and sought hardship relief.
- Outsource obtained judgment for $801.57 for anesthesia services, plus $3,680 in attorney fees and $95 in costs, largely based on implied contracts.
- The trial court found Kellene and LPA formed a contract implied in fact through Kellene’s receipt of anesthesia and the anesthesiologist’s expectations of payment; this supported Outsource’s recovery.
- The Bishops challenge both the contract-implied-in-fact theory and the attorney-fee award under a bad-faith provision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a contract implied in fact existed. | Outsource contends Kellene requested services and LPA reasonably expected payment. | Bishops argue no direct solicitation; hospital/surgeon; no implied contract with Kellene. | Yes, implied-in-fact contract existed. |
| Whether LPA could expect payment without a signed consent form. | Expectation of payment can arise from conduct and prior dealings. | No signed contract with Kellene, no expectation. | Implied-in-fact contract can arise without a signed form. |
| Whether the amount awarded reflects the value of the anesthesia services. | The trial court found LPA’s charge fair value for services rendered. | Challenge to the calculation; seeks review of damages. | Damages sustained; value supported by undisputed evidence. |
| Whether attorney fees were properly awarded under the bad-faith statute. | Award supported by court findings of bad faith and lack of merit. | Argument that defense was lawful and not in bad faith. | Attorney fees awarded under the bad-faith statute affirmed. |
Key Cases Cited
- ProMax Dev. Corp. v. Mattson, 943 P.2d 247 (Utah Ct. App. 1997) (review of factual findings in light of standard)
- Uhrhahn Constr. & Design, Inc. v. Hopkins, 179 P.3d 808 (Utah Ct. App. 2008) (deferential review of implied-contract questions)
- Knight v. Post, 748 P.2d 1097 (Utah Ct. App. 1988) (elements of contract implied in fact)
- Davies v. Olson, 746 P.2d 264 (Utah Ct. App. 1987) (implied-contract theory appropriately applied)
- Still Standing Stable, LLC v. Allen, 122 P.3d 556 (Utah 2005) (bad-faith attorney-fee standard and merits inquiry)
- Migliore v. Livingston Fin., LLC, 2015 UT 9 (Utah) (continuing development of bad-faith attorney-fee framework)
- Jeschke v. Willis, 811 P.2d 202 (Utah Ct. App. 1991) (standard for bad-faith findings)
- Cady v. Johnson, 671 P.2d 149 (Utah 1983) (support for bad-faith analysis)