NO. 94-452

IN THE SUPREME COURT OF THE STATE OF MONTANA

1995

KAPNER, WOLFBERG & ASSOCIATES,

INC., a California corporation,

Plaintiff and Respondent,

BLUE CROSS AND BLUE SHIELD OF

MONTANA, a Montana corporation,

Defendant and Appellant.

APPEAL FROM: District Court of the First Judicial District,

In and for the County of Lewis and Clark,

The Honorable Jeffrey Sherlock, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Stuart L. Kellner and John Alke, Hughes, Kellner,

Sullivan & Alke, Helena, Montana

For Respondent:

Peter Michael Meloy and John M. Morrison, Meloy &

Morrison, Helena, Montana

Submitted on Briefs: February 9, 1995

Decided: March 16, 1995

Filed:
Chief Justice J. A. Turnage delivered the Opinion of the Court.

Kapner, Wolfberg & Associates, Inc. (KWA), seeks to recover

monies due under a contract between Blue Cross and Blue Shield of

Montana (BCBS) and St. Peter's Community Hospital of Helena,

Montana. Upon a jury verdict in favor of KWA, the District Court

for the First Judicial District, Lewis and Clark County, entered

judgment of $144,968.64 plus interest and costs. BCBS appeals from

the District Court's denial of its post-trial motion for judgment

notwithstanding the verdict. We affirm.

BCBS states the issue as whether an indemnitor may be held

liable on claims for which its indemnitees had no liability. We

restate the issue as whether the District Court erred in failing to

enter judgment notwithstanding the verdict.

In June 1989, KWA contracted with St. Peter's Community

Hospital to analyze hospital patient accounts closed within the

previous eighteen months. Using the corresponding medical records,

KWA identified items not included in the original hospital bills

and issued rebills for those items. This process was undertaken

only in regard to accounts on which there was a third-party payor

other than Medicare or Medicaid. The rebills were sent only to the

insurer, not to the insured.

When BCBS became aware of this rebilling practice, it refused

to pay any more of the rebills and reversed payments it had already

made to the hospital on rebilled charges. BCBS advised the

hospital that it would no longer process bills for omitted charges

submitted as a result of KWA's analysis.

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After negotiations between the hospital and BCBS on this

subject failed, the hospital assigned to KWA its right to recover

the charges in the rebills. KWA then commenced this action.

KWA presented evidence at trial that the contract between the

hospital and BCBS entitled it to recover the disputed amounts.

Additionally, it presented evidence that hospital patients who were

insured by BCBS routinely signed a form assigning to the hospital

the right to charge BCBS directly. KWA further argued that BCBS

was liable for tort damages for neglecting to attempt prompt, fair,

and equitable settlement of claims in which liability had become

reasonably clear.

BCBS argued that it was not liable to pay the claims in the

rebills because the rebills resulted in its insureds being charged

more than other hospital patients, which was prohibited in the

agreement between BCBS and the hospital. BCBS also argued that it

was not liable to pay the claims because its insureds were not sent

copies of or held liable for the rebilled charges.

The jury found for KWA on the contract claim and for BCBS on

the tort claim. BCBS appeals from the District Court's denial of

its post-trial motion for judgment notwithstanding the verdict.

Did the District Court err in failing to enter judgment

notwithstanding the verdict?

ITI considering a motion for judgment notwithstanding the

verdict (n.o.v.), the court must view the evidence in a light most

favorable to the opposing party and deny the motion if a prima

facie case is made. The court must decide whether substantial

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credible evidence supports the jury verdict. Hash v. State (1991),

247 Mont. 497, 500, 807 P.2d 1363, 1365. Judgment n.o.v. may only

be granted when it appears as a matter of law that the nonmoving

party could not recover upon any view of the evidence, including

the legitimate inferences to be drawn from the evidence. Wilkerson

v. Sch. Dist. No. 15, Glacier Cty. (1985), 216 Mont. 203, 211, 700

P.2d 617, 622. This Court's standard of review of a ruling on a

motion for judgment n.o.v. is whether substantial evidence

supported submission to the jury. Gunlock v. Western Equipment Co.

(1985), 219 Mont. 112, 115, 710 P.2d 714, 716.

On appeal, BCBS cites statutory and case law for the proposition that an indemnitor is not liable on claims for which its

indemnitee has no liability. See 5 28-ll-314(2), MCA; see, e.q.,

St. Paul Fire and Marine Insurance Co. v. Thompson (1969), 152

Mont. 396, 403, 451 P.2d 98, 102. However, at trial, BCBS offered

no jury instructions on the indemnity theory and none were given.

BCBS did not request that the jury be asked to make a finding as to

whether BCBS's insureds had been released from liability.

Theories of law not presented at trial will not be heard on

appeal. Chamberlain v. Evans (1979), 180 Mont. 511, 517, 591 P.2d

237, 240. For example, where an asserted agency relationship was

not raised as an issue at the trial court level, this Court held

that the existence of that relationship could not be argued on

appeal to support a claim of breach of fiduciary duty. Service

Funding, Inc. v. Craft (1988), 234 Mont. 431, 434, 763 P.2d 1131,

1133. We will not further consider the indemnity argument.

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BCBS asserts that the hospital admitted at trial it did not

plan to hold the insureds liable for the amounts rebilled.

However, a decision by the hospital not to pursue payment by the

patient does not necessarily translate into a release of liability.

KWA presented evidence justifying the decision not to bill patients

directly as a collection strategy.

After reviewing the record, we conclude that KWA presented

sufficient evidence to support submission to the jury of the

question of BCBS's liability for the rebills. We therefore hold

that the District Court did not err in denying the motion for

judgment n.o.v.

Affirmed.

We concur: