Smith v. RecordQuest, LLC
380 F. Supp. 3d 838
E.D. Wis.2019Background
- Daphne Smith, injured in 2014, authorized her law firm to obtain her medical records from Milwaukee Health Services, Inc. (MHS).
- RecordQuest, LLC (a third‑party records vendor, not a statutorily defined "health care provider") responded to the requests on behalf of MHS and sent invoices that allegedly exceeded fees permitted by Wis. Stat. § 146.83(3f)(b).
- Smith alleges RecordQuest knowingly or negligently charged excessive fees and seeks damages under Wis. Stat. § 146.84(1) and disgorgement via unjust enrichment; she also proposes a class.
- RecordQuest moved to dismiss under Fed. R. Civ. P. 12(b)(6), arguing (1) statute of limitations bars the claims, (2) it is not a "health care provider" and thus cannot be liable under § 146.83, and (3) unjust enrichment fails as a matter of law.
- The court accepted the complaint's factual allegations as true for the motion but evaluated legal sufficiency, focusing on whether a non‑health‑care‑provider agent can be liable under the statute and whether unjust enrichment is pleaded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a non‑health‑care‑provider agent (RecordQuest) can be liable under Wis. Stat. § 146.83(3f)(b) for charging fees in excess of statutory limits | Smith: § 146.84(1) permits suit against "any person" who violates § 146.83, so agents who bill on behalf of providers can be liable | RecordQuest: not a statutory "health care provider," so cannot violate § 146.83(3f)(b); only providers can violate that fee limit | Dismissed — Court: only a "health care provider" can violate the statute limiting fees; agency does not convert a non‑provider into a statutory provider; principal's liability is not automatically imputed to agent under the statute |
| Whether general rules of agency or Wis. Stat. § 990.001(9) require treating agent as liable under the statute when acting for a provider | Smith: statutory construction and agency rules mean acts done by an authorized agent are treated as done by the principal, so agents should be within § 146.84(1)'s reach | RecordQuest: agency law imputes agent's acts to principal (making principal liable), but does not impute the principal's statutory status or liability to the agent when the statute limits liability to specific classes | Held for RecordQuest — agency law imputes agent actions to principal (so provider remains liable), but does not make non‑providers statutory "health care providers" or subject them to § 146.83(3f)(b) liability |
| Whether Smith stated an unjust enrichment claim against RecordQuest | Smith: RecordQuest received and retained the excessive fees; retention is inequitable | RecordQuest: it acted as MHS's agent; the payment to RecordQuest satisfied Smith's obligation to MHS, and any benefit turned over to RecordQuest was effectively MHS’s or was agreed compensation | Dismissed — Court: payment conferred the benefit on MHS (the principal) and it is not inequitable for RecordQuest to retain its agreed compensation; plaintiff may pursue MHS under the statutory remedy |
| Whether amendment should be permitted after dismissal | Smith did not allege any curable defects or request leave to amend | RecordQuest sought dismissal on merits | Court denied leave to amend and directed entry of judgment for defendant |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (conclusory allegations disregarded on 12(b)(6))
- United States v. 7108 West Grand Ave., Chicago, Ill., 15 F.3d 632 (7th Cir. 1994) (agency: principal bound by agent's deeds)
- Rosecky v. Tomaszewski, 274 N.W. 259 (Wis. 1937) (acts of authorized agent imputed to principal under state rule)
- Nelson v. Preston, 55 N.W.2d 918 (Wis. 1952) (elements of unjust enrichment)