Opinion ID: 901638
Heading Depth: 1
Heading Rank: 8

Heading: Implied Price Term

Text: [¶ 12.] Because there were no price terms itemized in the agreements, Patients pleaded that [i]mputed in these contracts is the express and/or implied contractual obligation by [Hospitals] that [they] would charge Plaintiff[s] and the Class no more than the fair and reasonable charge for such medical care. However, we conclude that this theory fails to state a claim because the price terms were controlled by language in the contracts. The complaints all allege that the Hospitals required the Patients to sign contracts agreeing to pay, in full, unspecified and undiscounted charges for medical care, which charges [were] pre-set by [the Hospitals]. . . . (Emphasis added.) Because, as we explain below, pre-set price charges were pleaded, the price terms were fixed and determinable, and because the contracts spoke to the issue of price, the law does not permit imputation of different, implied price terms for what patients later claimed were the reasonable values of the services provided. [¶ 13.] [I]n order to ascertain the terms and conditions of a contract, we examine the contract as a whole and give words their `plain and ordinary meaning.' Canyon Lake Park, L.L.C., v. Loftus Dental, P.C., 2005 SD 82, ¶ 17, 700 N.W.2d 729, 734 (quoting Gloe v. Union Ins. Co., 2005 SD 30, ¶ 29, 694 N.W.2d 252, 260). Although the price of each hospital service was not listed in the contract itself, [w]ords [that] fix an ascertainable fact or event, by which the term of a contract [] can be determined, make the contract definite and certain in that particular. Kuhfeld v. Kuhfeld, 292 N.W.2d 312, 315 (S.D. 1980). See also Restatement (Second) of Contracts 33(2) (1981) (stating: The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.). [¶ 14.] Here, the word pre-set is the operative language of the contracts regarding price. The prefix pre- is defined as [e]arlier; before; prior to. The American Heritage College Dictionary, 1075 (3d 1997). Set is defined as [t]o fix at a given amount. Id. at 1247. Therefore, under the ordinary meaning of the language pre-set charges, the contract prices were fixed at a given amount prior to the execution of the contracts. And obviously, prices that are previously fixed at a given amount are determinable. [¶ 15.] Therefore, according to the pleadings, the price terms were fixed and determinable from the language of the contracts. For that reason, the contracts were not silent or open concerning price and we cannot impute commercially reasonable or fair and reasonable price terms into the agreements. As most courts have noted in similar hospital pricing litigation, if the charges are ascertainable through reference to outside sources, there is no need to judicially impute a fair and reasonable price term. See Morrell v. Wellstar Health System, Inc., 280 Ga.App. 1, 5, 633 S.E.2d 68, 72 (2006) (noting: The rules of contract construction enabled [the conclusion] that [the term] `all charges' unambiguously referred to the written summary of specific charges required by [a statute.]); Cox v. Athens Regional Medical Center, Inc., 279 Ga.App. 586, 587-592, 631 S.E.2d 792, 795-797 (2006) (concluding that agreeing to pay in accordance with the rates and terms of the hospital is not an open price term subject to an implication of reasonableness considering statutory requirement that hospitals provide written price summaries upon request); Shelton v. Duke Univ. Health System, Inc., 633 S.E.2d 113, 116-117 (N.C.App.2006) (concluding that regular rates and terms of the Hospital is not an open price term when the prices are set forth in a chargemaster list). [5] [¶ 16.] We acknowledge that the pleadings do not reference the disclosure statutes or chargemaster lists [6] that were referenced in these decisions. However, the point of these cases is that if the contract price is fixed and determinable from sources outside the written agreement, the price term is not open in the sense that it allows a claim for some imputed, commercially reasonable price term. See Restatement (Second) of Contracts § 204 cmt c (stating where a term can be supplied by logical deduction from agreed terms and the circumstances, interpretation may be enough). [¶ 17.] That is precisely what occurred in this case. Patients pleaded that the price terms were pre-set. Therefore, the prices were fixed and determinable, and the pre-set price terms precluded imputation of different, implied terms. [7] The application of this rule is especially compelling in these cases: in a hospital setting, it is not possible to know at the outset what the cost of the treatment will be, because it is not known what treatment will be medically necessary. Cox, 279 Ga.App. at 590-591, 631 S.E.2d at 797. The application of the rule is also compelling because Patients did not plead that they were charged something other than the pre-set charges, or that they requested but were denied access to the pre-set charges. Other courts have concluded that similar omissions support a dismissal for failure to state a claim. See Shelton, 633 S.E.2d 113 (affirming dismissal of breach of contract claim when contract's price term was regular rates of the hospital, reasoning that patient had not requested information on the regular rates and did not claim that the rates charged were not regular); Elliot Hospital v. Boerner, 04-C-739 (HillsboroughSuperCtNDNH July 15, 2005) (dismissing breach of contract claim, reasoning that although the hospital contract required payment of the usual and customary charges, there [was] no indication that [the patient] requested an estimate or questioned what the [hospital's] usual and customary charges were prior to signing the agreement). See also Satterfield v. Southern Regional Health System, Inc., 280 Ga.App. 584, 585-586, 634 S.E.2d 530, 531 (2006) (dismissing breach of contract claim in a state where a statute required availability of prices and patients had failed to allege that the pricing information was unavailable).