Wainscott v. Centura Health Corp.
2014 COA 105
| Colo. Ct. App. | 2014Background
- Patient Donald Wainscott was treated at a Centura-managed hospital after an automobile accident; Centura filed a statutory hospital lien but omitted naming the tortfeasors in the filing and did not serve them directly (it did serve the tortfeasors’ insurer and Wainscott).
- The Wainscotts settled with the tortfeasors/insurer; a dispute over Centura’s lien withheld settlement funds and prompted a declaratory-judgment action seeking to invalidate the lien.
- The district court granted partial summary judgment for the Wainscotts declaring the lien invalid for lack of strict statutory compliance; it earlier dismissed CCPA and fraudulent concealment claims for failure to state a claim.
- Centura appealed the lien ruling; the Wainscotts cross-appealed the dismissals of their CCPA and fraudulent concealment claims.
- The court considered whether Colorado’s hospital-lien filing/notice statute requires strict compliance or whether substantial compliance suffices, and whether the Wainscotts pleaded viable CCPA and fraudulent-concealment claims.
- The court held Centura’s lien enforceable (substantial compliance) because actual, timely notice reached the parties against whom enforcement was sought; it affirmed dismissal of the CCPA and fraudulent-concealment claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge lien validity | Wainscotts: lien impairs their ability to receive settlement funds, so they have injury | Centura: no prejudice from notice defects because Wainscotts had actual notice | Wainscotts have standing; declaratory relief appropriate because lien affects their rights |
| Preservation of substantial-compliance issue | Wainscotts: Centura failed to preserve argument for appeal | Centura: district court addressed substantial- vs strict-compliance; issue was litigated | Preserved — issue was central to district-court adjudication |
| Degree of compliance required by § 38-27-102 (filing/notice) | Wainscotts: statute requires strict compliance; technical defects invalidate lien | Centura: substantial compliance suffices when statute’s purposes are met (actual timely notice) | Substantial compliance suffices; lien enforceable against persons who received timely actual notice |
| CCPA and fraudulent concealment claims | Wainscotts: Centura deceptively concealed its intent to pursue insurer/settlement rather than bill Medicare | Centura: it was legally required (by Medicare secondary-payer rules) to seek insurer payment and had no duty to disclose; no deceptive practice pleaded | Dismissed: allegations do not show unfair/deceptive conduct or duty to disclose; claims fail as pleaded |
Key Cases Cited
- Trevino v. HHL Fin. Servs., Inc., 945 P.2d 1345 (Colo. 1997) (recognizing legislature’s intent to protect hospitals via hospital-lien statute)
- Rose Med. Ctr. v. State Farm Mut. Auto. Ins. Co., 903 P.2d 15 (Colo. App. 1994) (discussing perfection of hospital liens)
- Finnie v. Jefferson County Sch. Dist. R-1, 79 P.3d 1253 (Colo. 2003) (statutory notice requirements assessed by reference to legislative purpose)
- Via Christi Reg’l Med. Ctr., Inc. v. Reed, 314 P.3d 852 (Kan. 2013) (debate over strict vs substantial compliance with hospital-lien notice provisions)
- Cirrincione v. Johnson, 703 N.E.2d 67 (Ill. 1998) (invalidating lien for immaterial technicalities is contrary to lien purposes)