Bratton v. Sisters of CharityBratton v. Sisters of Charity
COUNSEL OF RECORD:
For Appellants:
John Heenan, Joe Cook, Heenan & Cook, PLLC, Billings, Montana
Michael P. Manning, Ritchie Manning Kautz PLLP, Billings, Montana
For Appellee:
Robert C. Lukes, Garlington, Lohn & Robinson, PLLP, Missoula, Montana
Kathryn A. Reilly, Jessica G. Scott, Wheeler Trigg O‘Donnell LLP, Denver, Colorado
For Amici Curiae Montana Legal Services, National Consumer Law Center, and National Association of Consumer Advocates:
David K. W. Wilson, Jr., Morrison, Sherwood, Wilson & Deola, PLLP, Helena, Montana
Mark Elliott Budnitz, Bobby Lee Cook, Georgia State University College of Law, Atlanta, Georgia
For Amici Montana Bankers Association, American Bankers Association, and Consumer Bankers Association
Kenneth K. Lay, Crowley Fleck, PLLP, Helena, Montana
Submitted on Briefs: February 19, 2020
Decided: April 14, 2020
Filed:
Clerk
¶1 Cheryl Bratton (Bratton) appeals an order granting summary judgment in favor of Defendant Sisters of Charity of Leavenworth Health System, Inc. (SCL Health or SCL) on her claims, entered by the Thirteenth Judicial District Court, Yellowstone County. We affirm, and restate the issues as follows:
- Did the District Court err by granting SCL Health‘s motion for summary judgment on Bratton‘s request for declaratory judgment that SCL violated
§ 28-1-1002, MCA ? - Did the District Court err by granting SCL Health‘s motion for summary judgment on Brаtton‘s request for a constructive trust based on unjust enrichment?
- Did the District Court err by granting SCL Health‘s motion for summary judgment on Bratton‘s Montana Consumer Protection Act claim?
- Did the District Court err by granting SCL Health‘s motion for summary judgment on Bratton‘s “money had and received” claim?
FACTUAL AND PROCEDURAL BACKGROUND
¶2 In January of 2015, SCL Health began issuing refunds to its patients, for such reasons as overpayment on an account, in the form of prepaid MasterCard debit cards issued through Bank of America (the Patient Refund Card Program or Program). Prior to initiation of the Program, SCL had effectuatеd patient refunds via bank drafts or checks issued through its internal billing department. This internal process cost SCL approximately $5.00 per check, and involved delay in the issuance of refund checks to patients. SCL implemented the Program to reduce costs, as the cost of issuing prepaid debit cards was approximately $3.50 each, and to provide patients with more timely access to their refunds.
¶3 Bratton received services at a SCL Health facility in 2018, and after Bratton‘s primary health insurer provided paymеnt for those services, SCL billed Bratton for the remaining cost, which Bratton paid. Subsequently, Bratton‘s secondary insurer also paid the remaining cost. Thus, SCL Health had been overpaid, and owed Bratton a refund in the amount of $12.75, for which it initiated issuance to Bratton of a Patient Refund Card from Bank of America in that amount, in June of 2018. In December of 2018, under similar circumstances, SCL Health had a second Patient Refund Card issued to Bratton, in the amount of $15, bringing the total amount refunded to Bratton through the Program to $27.75.
¶4 Under the Patient Refund Card Program, whеn a patient is owed a refund, SCL Health transmits the amount, name, and contact information of the patient to Bank of America. Bank of America removes the amount due to the patient from SCL Health‘s
¶5 Along with the card, Bank of America also sends a short letter, or card carrier, bearing SCL Health‘s logo to the patient.1 The letter explains that, upon activating the card, the patient may access her funds in a number of ways without incurring any fee: the
patient may use the card as payment at any vendor who accepts MasterCard; may take the card to any bank that accepts MasterCard and ask for the card to be exchanged for cash; or, may withdraw the money on the card at any Allpoint ATM, including 94 locations in Montana. To activate the card, the patient need only call the Bank of America number provided in the letter and enter the last four digits of their phone number. Although, by activating the card, the patient agrees to Bank of America‘s terms of service for the card, the patient is not required to open an account with Bank of America.
¶6 The letter provides customer service telephone numbers for both SCL Health and Bank оf America. At any time a balance remains on the card, if the patient wishes to receive a check instead of using the card, she may request a check. Although checks may be issued even after the card is activated, a patient does not need to activate the card to request a check. In Montana, as of February 6, 2019, 194 checks were requested via this method and sent to patients for SCL Health refunds. The checks are issued without charge.
¶7 Neither SCL nor Bank of America retain unused funds associаted with the Program. The Patient Refund Cards have a three-year expiration date and, after the card expires, the Patient‘s money remains in the account until the balance becomes eligible for escheatment to the State of Montana after five years, in accordance with Montana‘s unclaimed property statute. See
¶8 Bratton did not incur any fees associated with either of the refund cards she was issued. Bratton‘s husband activated the first refund card, but the card was not used. Bratton did not activatе the second card, request issuance of checks for the cards, use the cards to
pay for goods, withdraw the money from the cards at an ATM, or exchange the cards for cash at a bank.
¶9 In October of 2018, Bratton brought this suit against SCL Health, alleging constructive trust, conversion, unjust enrichment, violation of the Montana Consumer Protection Act (MCPA), money had and received, and declaratory judgment and injunctive relief.2 During her deposition in this case, Bratton made her first request to SCL that the cards be cancelled, and that checks be issued for her refunds. Pursuant to this request, SCL asked Bank of America to issue checks to Bratton for her total refunds, which Bank of America did.
¶10 The parties filed cross motions for summary judgment, and after hearing, the District Court issued an order granting SCL Health‘s motions for summary judgment and denying Bratton‘s cross motion for summary judgment. Bratton appeals the dismissal of her claims for declaratory judgment, unjust enrichment and constructive trust, money had and received, and unfair trade practices under the (MCPA). She does not appeal the dismissal оf her conversion claim.3
¶11 This Court reviews a district court‘s grant of summary judgment de novo, using the same criteria as the district court. Graham-Rogers v. Wells Fargo Bank, N.A., 2019 MT 226, ¶ 12, 397 Mont. 262, 449 P.3d 798 (citations omitted). Therefore, “[s]ummary judgment is proper when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law.” Sprunk v. First Bank Sys., 252 Mont. 463, 465, 830 P.2d 103, 104 (1992) (citing
DISCUSSION
¶12 1. Did the District Court err by granting SCL Health‘s motion for summary judgment based on Bratton‘s request for a declaratory judgment that SCL violated
¶13 Bratton asserts the District Court erred by denying her declaratory claim that SCL Health‘s use of the Patient Refund Card Program violated
the Program is simply a financial mechanism by which SCL fulfilled its obligation to Bratton.
¶14
¶15 There is no demonstrated issue of material fact regarding application of the statute to SCL‘s actions. Under the statute‘s plain language, the “burden” at issue here is the money obligation SCL owed to Bratton. Although Bratton correctly notes that SCL used Bank of America to distribute refund payments to her, the undisputed facts in the record demonstrate that SCL Health did not transfer its obligation, or “burdеn” of owing money,
to Bank of America. The refund money received by Bratton was debited from SCL Health‘s bank account, establishing that the payment came from SCL‘s funds, not Bank of America‘s. Consistent therewith, the record demonstrates a continuous acknowledgment by SCL Health throughout the process that it remained liable for refunds due Bratton, despite its use of Bank of America to distribute the refunds. Bratton brought this lawsuit against SCL Health, not Bank of America, and SCL never disclaimed liability by asserting Bank of America was the cause of any injuries suffеred by Bratton. Although
¶16 The Restatement (Second) of Contracts § 318(1), helps to illustrate the distinction between actions prohibited by
¶17 The Restatement offers further guidance for the situation here, providing “where payment or offer of payment of money is made a condition of an obligor‘s duty, payment or offer of payment in any manner current in the ordinary course of business satisfies the requirement unless the obligee demands payment in legal tender and gives any extension of time reasonably necessary to procure it.” Restatement (Second) of Contracts, § 249 (emphasis added). The District Court concluded that the process SCL Health implemented to refund money owed to Bratton is similar to the authorization of a wire transfer or cashier‘s check, because the money was debited from SCL‘s account and then transferred to Bratton using Bank of America‘s system. While Amici for both parties explain the nuances of such transactions, including how they are like or dislike issuance of a check,5 we cannot conclude the record here demonstrates either a departure from a “manner current in the ordinary course of business” of these transactions or the imposition of another financial burden upon consumers, here Bratton. And, as noted by the Restatement, accommodation was made here for Bratton, as the obligee, to demand payment in the form of a check.
¶18 The cases cited by Bratton in support of her argument are distinguishable. In Skinner v. Scholes, 229 N.W. 114 (N.D. 1930), the plaintiff purchased land from the Scholes Land Company (the Company) on an installment contract that provided the Company would transfer the land in fee simple, “clear of all encumbrаnces whatever, by good sufficient warranty deed[.]” Skinner, 229 N.W. at 115. Prior to completion of performance, the Company deeded the property to a third party, assigned the contract to that third party, and dissolved. When preparing to make his final contract payment, plaintiff learned of the deed transfer and contract assignment, and sought to rescind the contract and recover his payments and costs. Skinner, 229 N.W. at 115. The North Dakota Supreme Court held that the plaintiff could properly rescind the contract because “[t]he plaintiff was entitled to insist upon the terms of the contract and to a deed in conformity therewith.” Skinner, 229 N.W. at 116. It based this conclusion on the contract‘s terms, which it determined included a condition to convey a covenant against encumbrances, which the third party could not provide to the same extent, because any covenant against encumbrances it made would not “run with the land” under the laws of North Dakota. Further, the contract between the
obligation” to be “transferred with the consent of the party entitled to its benefit.” Skinner, 229 N.W. at 116.
¶19 The holding in Skinner was premised on the determination that the plaintiff could not receive the property interest as contracted, because it could not be transferred with the proper covenants. Here, first, the parties did not contract regarding the method of any refund, but, more significantly, Bratton takes issue only with the form or mechanism of the refund. Bratton does not allege she did not receive the value of money owed to her, or demonstrate that she suffered any cost or disability because of the manner in which it was delivered. Bratton aсknowledged in her deposition that if the refund had been issued to her in the form of a check, rather than a prepaid debit card, she would have been satisfied. This is distinguishable from Skinner, where the plaintiff suffered a concrete injury.
¶20 In AICCO, Inc. v. Ins. Co. of N. Am., 90 Cal. App. 4th 579, 588 (Cal. Ct. App. 2001), an insurer transferred its obligations under several insurance policies to another insurer. The original insurer then contended that as a result of this transfer, it was “free of any obligation to its California policyholders under the . . . policies it had written. . . . if [the new insurer] is unable to satisfy all those obligations, the owners of the transferred policies will have no rеcourse against [the original insurer][.]” As explained above, SCL maintained just the opposite, and Bratton‘s attempt to equate SCL‘s inability to reverse a transfer from its bank account to a debit card after fourteen days, to the disclaimer of liability by the insurer in AICCO, Inc., is not persuasive. Unlike the insurer in AICCO, Inc., SCL did not contend that, after fourteen days, it no longer owed Bratton the money.
Rather, after fourteen days, SCL‘s funds remained in an account, which would not revert to SCL. Thus, in addition to involving the obligations of an insurer, AICCO, Inc., concerned a disclaimed liability not at issue here.
¶21 We conclude the District Court did not err in holding SCL Health is entitled to summary judgment regarding Bratton‘s request for a declaration that SCL violated
¶22 2. Did the District Court err by granting SCL Health‘s motion for summary judgment on Bratton‘s request for a constructive trust based on unjust enrichment?
¶23 Bratton argues she is entitled to relief on her claim of unjust enrichment because SCL Health indisputably saved money by implementing the Program, which SCL unjustly retained the benefit of in light of its violation of
¶24 A constructive trust is a remedy for unjust enrichment and arises under statute “when a person holding title to property is subject to an equitable duty to convey it to another on the ground that the person holding title would be unjustly enriched if he were permitted to retain it.”
Mont. 382, 367 P.3d 378. Additionally, this Court “has broad discretion afforded by the principles of equity to impose a constructive
¶25 To the extent Bratton‘s unjust enrichment argument is premisеd upon her allegation that SCL violated
under the Program her money would escheat to the state in accordance with Montana‘s laws on unclaimed propеrty. Therefore, Bratton has not proven the third element of her unjust enrichment claim, and by extension, the necessity of her request for relief by constructive trust.
¶26 Finally, we are likewise unpersuaded by Bratton‘s argument that the benefit conferred in this case is the money SCL Health saved by issuing her a prepaid debit card rather than a check. In any event, Bratton eventually requested issuance of her refunds by checks, which were issued to her, and therefore any savings SCL could have obtained under the Program did not occur in her case, eliminating any “benefit conferred.”
¶27 We conclude the District Court did not err by holding SCL was entitled to summary judgment on Bratton‘s unjust enrichment claims, and therefore, was not entitled to the remedy of constructive trust.
¶28 3. Did the District Court err by granting SCL Health‘s motion for summary judgment on Bratton‘s Montana Consumer Protection Act claim?
¶29 Bratton argues there are issues of material fact regarding whether SCL‘s Program violated the MCPA, and argues she suffered an ascertainable loss because “it is undisputed she cannot obtain her money from SCL Health . . . and SCL Health has disclaimed all liability for paying it.” SCL Health argues the District Court did not err in granting summary judgment in its favor because it found upon the record Bratton did not suffer an ascertainable loss, which is required to bring a claim under the MCPA.
¶30
bring a claim under the MCPA, the plaintiff must allege they suffered “any ascertainable loss of money or property, real or personal[.]”
¶31 Bratton‘s claim that SCL Health “disclaimed all liability” for her refunds was resolved undеr our analysis above. On this record, Bratton did not establish that SCL had transferred its obligation or otherwise disclaimed liability for her refunds. Similarly, while Bratton is not required to show actual damages to support a MCPA claim, she has not established an ascertainable loss. It is undisputed on this record that Bratton received the refunds owed her by SCL, initially by way of the Bank of America prepaid debit cards, and ultimately by issuance of two checks. Bratton admitted she did not read the accompanying letter or terms of service that werе issued with the cards, and thus, no deception or ascertainable injury was established by these means. Prior to the litigation, Bratton neither
attempted nor was frustrated in a request for issuance of a check in place of her cards, never attempted to use the cards issued to her, and did not attempt to cash or deposit them. Thus, Bratton has not demonstrated any injury in the refund process employed by SCL. Consequently, even though we interpret the MCPA liberally, we cannot conclude on this record that Bratton suffered аny ascertainable injury, as is requisite for a claim under the Act.
¶32 We conclude the District Court did not err in concluding SCL Health is entitled to summary judgment on Bratton‘s MCPA claims. Because we find Bratton was not entitled to bring suit under
¶33 4. Did the District Court err by granting SCL Health‘s motion for summary judgment on Bratton‘s “money had and received” claim?
¶34 Bratton contends the District Court erred in granting summary judgment to SCL on her money had and received claim because “it is undisputed thаt SCL . . . was obligated to return Bratton‘s overpayment” but “rather than returning the overpayment directly to Bratton, SCL paid it to Bank of America, ceded all control over the funds, and disclaimed any further liability.” SCL maintains Bratton‘s claim for money had and received fails because Bratton received the funds owed to her by SCL Health through the prepaid debit cards. Similarly, the District Court held that “SCL Health paid Bratton the money it owed her[,]” and therefore, Bratton‘s claim failed.
¶35 Generally, a claim of money had and received is based on the premise that the defendant received money to be paid to the plaintiff, but the defendant did not in fact pay
the plaintiff that money. See, e.g., Donovan v. McDevitt, 36 Mont. 61, 92 P. 49 (1907); Olson v. McLean, 132 Mont. 111, 112, 313 P.2d 1039, 1040 (1957). The cause of action “was invented by the common law judges to obtain relief from the common law procedure which, in many cases of merit, afforded no remedy.” Grady v. Livingston, 115 Mont. 47, 88-89, 141 P.2d 346, 365-66 (1943) (Adair, J. dissenting). As the District Court noted, Montana‘s case law has not dealt substantially with money had and received claims in several decades.
¶36 As we have determined above, Bratton received the money owed to her by SCL Hеalth. Additionally, as we have concluded, SCL Health‘s use of Bank of America to distribute the payments does not equate to SCL Health disclaiming the obligation to refund the money to Bratton. Therefore, the District Court did not err by granting summary judgment to SCL Health on Bratton‘s money had and received claims.
¶37 Based on the record in Bratton‘s individual case, we conclude the District Court did not err by granting summary judgment to SCL Health on Bratton‘s claims, and by denying Bratton‘s cross motions for summary judgment.
¶38 Affirmed.
/S/ JIM RICE
We concur:
/S/ MIKE McGRATH
/S/ JAMES JEREMIAH SHEA
/S/ DIRK M. SANDEFUR