Court Opinion

ID: 4655796
Source: CourtListenerOpinion
Date Created: 2021-01-29 15:06:29.344636+00
Date Added: 2024-06-11T08:00:30.834851
License: Public Domain

RENDERED: JANUARY 22, 2021; 10:00 A.M.
                           NOT TO BE PUBLISHED

                   Commonwealth of Kentucky
                               Court of Appeals

                                   NO. 2020-CA-0151-MR

JOHNATHAN DAVIS                                                                  APPELLANT

               APPEAL FROM JEFFERSON CIRCUIT COURT
v.          HONORABLE JUDITH MCDONALD-BURKMAN, JUDGE
                       ACTION NO. 16-CI-003792

NORTON HEALTHCARE, INC.                                                             APPELLEE

                                          OPINION
                                         AFFIRMING

                                        ** ** ** ** **

BEFORE: ACREE, DIXON, AND K. THOMPSON, JUDGES.

DIXON, JUDGE: Johnathan Davis1 appeals from the opinion and order granting

summary judgment in favor of Norton Healthcare, Inc. (“Norton”) entered on

January 23, 2020, by the Jefferson Circuit Court. Following a careful review of the

briefs, record, and applicable law, we affirm.

1
  In his notice of appeal, Davis identifies himself as the appellant “on behalf of himself and a
class of similarly situated persons.” However, no class or class representative was ever certified
by the trial court in this purported class action suit.
                   FACTS AND PROCEDURAL BACKGROUND

                On July 27, 2014, Johnathan Davis was injured in a motor vehicle

accident (MVA), following which he sought medical treatment at Norton’s

Leatherman Spine Center. Davis hired Attorney T. Scott Abell to represent him in

the MVA litigation. On November 19, 2015, Abell sent a letter to Norton’s

medical records custodian requesting a certified copy of Davis’s updated medical

records and expenses from the Leatherman Spine Center. Abell enclosed an

authorization signed by Davis to release protected healthcare information pursuant

to the Health Insurance Portability and Accountability Act (HIPAA)2 and state law.

The HIPAA authorization stated, “I hereby authorize the FREE copy of the

patient’s medical records pursuant to KRS[3] 422.317 be sent.” (Emphasis in

original) (footnote added). On January 7, 2016, Norton provided Abell a certified

copy of Davis’s medical records, accompanied by an invoice in the amount of $50

for processing and notary fees of $25 each.

                On July 12, 2016, Abell issued payment for the invoice, and less than

one month later, on August 10, 2016, he filed the instant lawsuit on behalf of

Davis. Davis claims Norton violated KRS 64.300 by charging an excessive notary

fee and violated KRS 422.317 by charging a processing fee when he was entitled

2
    45 Code of Federal Regulations (CFR) 164.508; 42 United States Code (U.S.C.) § 1320d-2.
3
    Kentucky Revised Statutes.

                                              -2-
to one free copy of his medical records. On September 28, 2016, Norton

responded with a motion to dismiss, primarily alleging that Davis lacked standing

to sue since he neither requested his medical records nor paid the invoice for them.

In October 2016, Davis’s wife issued a check to reimburse Abell’s payment of

Norton’s invoice. On March 3, 2017, the trial court entered an order denying

Norton’s motion to dismiss. The trial court found Davis had standing but made no

ruling on whether KRS 64.300 was applicable to the case herein or whether Norton

had violated KRS 422.317.

             On May 17, 2018, Davis filed an amended complaint, alleging Norton

violated the Kentucky Consumer Protection Act (KCPA) contained in KRS

Chapter 367, et seq., and seeking a permanent injunction prohibiting such charges

in the future. Afterward, Norton moved the trial court for summary judgment.

Following full briefing and oral arguments, the trial court granted Norton’s motion

for summary judgment finding: recovery under KRS 422.317 unavailable due to

the voluntary payment doctrine; no privity under the KCPA; KRS 64.300

inapplicable; and injunctive relief moot. This appeal followed.

                            STANDARD OF REVIEW

             Summary judgment is appropriate “if the pleadings, depositions,

answers to interrogatories, stipulations, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any material fact and

                                          -3-
that the moving party is entitled to a judgment as a matter of law.” CR4 56.03. An

appellate court’s role in reviewing a summary judgment is to determine whether

the trial court erred in finding no genuine issue of material fact exists and the

moving party was entitled to judgment as a matter of law. Scifres v. Kraft, 916

S.W.2d 779, 781 (Ky. App. 1996). A grant of summary judgment is reviewed de

novo because factual findings are not at issue. Pinkston v. Audubon Area Cmty.

Servs., Inc., 210 S.W.3d 188, 189 (Ky. App. 2006) (citing Blevins v. Moran, 12

S.W.3d 698 (Ky. App. 2000)).

                           VOLUNTARY PAYMENT RULE

                The trial court relied on City of Morganfield v. Wathen, 202 Ky. 641,

261 S.W. 12 (1924), and Causey v. Cohron, 216 Ky. 164, 287 S.W. 544 (1926)—

which it correctly pronounced are still good law—in finding relief unavailable to

Davis under the voluntary payment rule. In Wathen, Kentucky’s highest court

held: “Where one pays an illegal demand with full knowledge of all the facts

which render the demand illegal, without an immediate and urgent necessity

therefor, or unless to release his person or property from detention or to prevent an

immediate seizure of his person or property, the payment is voluntary.” 261 S.W.

at 14. In Causey, the court held: “One cannot voluntarily become the creditor of

another so as to enforce his claim in a court.” 287 S.W. at 545. Davis urges our

4
    Kentucky Rules of Civil Procedure.

                                           -4-
court to abandon these well-settled principles as “antiquated” to follow other

jurisdictions which would lead to a different result in the case herein. In this case,

we note that it was evident to all parties involved, through actual or constructive

knowledge,5 that the charges should not be permitted under Kentucky law, and

there was no duress to pay the invoice (the medical records were provided, and

Norton did not pursue payment in the months following issuance of the invoice).

Davis’s arguments concerning hypothetical harm scenarios in which refusal to pay

would place Abell on a “black list” and/or harm his credit are insufficient to create

genuine issues of material fact on this issue.6 Consequently, we decline to depart

from Kentucky’s voluntary payment doctrine in favor of applying any of the

varying approaches used in other jurisdictions.

         CHARGES FOR MEDICAL RECORDS UNDER KRS 422.317

               KRS 422.317(1) provides: “Upon a patient’s written request, a

hospital licensed under KRS Chapter 216B or a health care provider shall provide,

without charge to the patient, a copy of the patient’s medical record.” This statute

does permit the hospital or healthcare provider to charge a “copying fee, not to

exceed one dollar ($1) per page . . . for furnishing a second copy of the patient’s

5
  Davis claims he has never testified that he knew the charges were illegal; however, it is
undisputed that his agent—Attorney Abell—knew these charges were impermissible.
6
 Moreover, these scenarios do not create a real or justiciable controversy as neither did nor
could happen herein. HealthAmerica Corp. of Kentucky v. Humana Health Plan, Inc., 697
S.W.2d 946, 948 (Ky. 1985).

                                               -5-
medical record upon request either by the patient or the patient’s attorney or the

patient’s authorized representative.” Id. (emphasis added). Davis argues the

public policy and purpose behind this statute is to “allow all patients to timely

receive a copy of their records, unhindered by the financial ability to pay.” Here,

although he may have been erroneously billed, Abell received a copy of Davis’s

medical records without first having to pay for them. This fact alone completely

undercuts Davis’s argument that the invoice violated public policy.

             Nonetheless, the trial court correctly found that, in the absence of a

statutory penalty, Davis must pursue his KRS 422.317 claim under KRS 446.070.

Another panel of our Court held:

             KRS 446.070 codifies the common-law doctrine of
             “negligence per se” in Kentucky. Davidson v. American
             Freightways, Inc., 25 S.W.3d 94, 99 (Ky. 2000).
             Negligence per se “is merely a negligence claim with a
             statutory standard of care substituted for the common law
             standard of care.” [Real Estate Mktg., Inc. v. Franz, 885
             S.W.2d 921, 926-27 (Ky. 1994), quoting Atherton
             Condo. Apartment-Owners Ass’n Bd. of Dir.’s v. Blume
             Dev. Co.,] 115 Wash.2d 506, 799 P.2d 250 (1990). KRS
             446.070 provides an avenue by which a damaged party
             may sue for a violation of a statutory standard of care if
             the statute in question provides no inclusive civil remedy
             and if the party is within the class of persons the statute is
             intended to protect. Hargis v. Baize, 168 S.W.3d 36, 40
             (Ky. 2005). It provides that “[a] person injured by the
             violation of any statute may recover from the offender
             such damages as he sustained by reason of the violation,
             although a penalty or forfeiture is imposed for such
             violation.” KRS 446.070.

                                          -6-
Young v. Carran, 289 S.W.3d 586, 588-89 (Ky. App. 2008). The first element

which must be proven in any negligence claim is the existence of a duty. Here,

like the trial court, we are unaware of any Kentucky cases which indicate such a

duty. A review of cases from the Sixth Circuit also reveals the absence of any

authority imposing such a duty. (“[W]e are unaware of any negligence claim that

could hold [a health care provider] liable for ‘overcharging[.]’” Faber v. Ciox

Health, LLC, 944 F.3d 593, 598 (6th Cir. 2019)). Failure to establish the existence

of a duty is fatal to Davis’s claims. Even so, the trial court also alluded that

Norton’s conduct was not a substantial factor in causing Davis’s damages under

the voluntary payment doctrine. We agree for the reasons discussed above.

                 NOTARY FEES UNDER FORMER KRS 64.300

              Norton invoiced Abell on January 7, 2016. This invoice included a

$25 “Notary Public” fee. On July 12, 2016, more than six months later, but absent

further prompting by Norton, Abell issued payment for the full amount of the

invoice. Until July 14, 2016,7 KRS 64.300(1) stated:

              The fees of notaries public for the following services
              shall be not more than set out in the following schedule:

              Every attestation, protestation, or taking acknowledgment
              of any instrument of writing, and certifying the same
              under seal including, but not limited to, the notarization
              of votes of absentee voters                           $0.50

7
  2016 Kentucky Senate Bill 214 proposing the repeal of this statute was introduced on February
22, 2016; enrolled March 29, 2016; and adopted on April 8, 2016.

                                             -7-
             Recording same in book to be kept for that purpose 0.75

             Each notice of protest                                 0.25

             Administering oath and certificate thereof              0.20

On July 15, 2016, the repeal of this statute became effective, removing this

maximum schedule.

             The statutory definition of a notary public has also been amended

since this action was filed. Until December 31, 2019, KRS 423.010 defined a

notary public as someone:

             eighteen (18) years of age, a resident of the county from
             which he or she makes his or her application or be
             principally employed in the county from which he or she
             makes his or her application, of good moral character,
             and capable of discharging the duties imposed upon him
             or her by this chapter, and the endorsement of the officer
             approving the application shall so state.

(Emphasis added). The trial court found that the use of the phrases “of good moral

character,” “he or she,” and “him or her” indicate that it was the legislature’s intent

that a notary public be an individual, not a corporation. KRS 423.300(15),

effective January 1, 2020, now defines a notary public as “an individual

commissioned to perform a notarial act by the Secretary of State. This term does

not include other notarial officers who may perform a notarial act in this state[.]”

(Emphasis added). KRS 423.300(14), effective the same date, defines a notarial

officer as “a notary public or other individual authorized to perform a notarial

                                          -8-
act[.]” (Emphasis added). Both the current and prior statutory definitions of a

notary public describe such as an individual. Norton is not an individual. Thus, it

is ineligible to be a notary and is not prevented from making charges in excess of

those set forth in former KRS 64.300. Accordingly, the trial court did not err in its

decision that Norton did not violate KRS 64.300 because Norton is not a notary

public.

             Davis further alleges that Norton may be liable under KRS 64.300 as

part of a concert of action theory. Davis cites Farmer v. City of Newport, 748

S.W.2d 162, 164 (Ky. App. 1988), quoting RESTATEMENT (SECOND) OF TORTS,

Section 876 (AM. LAW INST. 1979), in support of this argument:

             For harm resulting to a third person from the tortious
             conduct of another, one is subject to liability if he (a)
             does a tortious act in concert with the other or pursuant to
             a common design with him, or (b) knows that the other’s
             conduct constitutes a breach of duty and gives substantial
             assistance or encouragement to the other so to conduct
             himself, or (c) gives substantial assistance to the other in
             accomplishing a tortious result and his own conduct
             separately considered, constitutes a breach of duty to the
             third person.

Id. (emphasis added). However, this theory fails for reasons previously discussed

herein. For a negligence claim, it is incumbent that Davis establish that Norton

owed him a duty. He has failed to do so. Therefore, the trial court correctly

dismissed his claim.

               KENTUCKY CONSUMER PROTECTION ACT

                                         -9-
             The trial court dismissed Davis’s KCPA claims due to lack of privity.

Claims may only be brought under the KCPA by individuals who personally

purchase goods or services from a merchant pursuant to KRS 367.220(1), which

provides:

             Any person who purchases or leases goods or services
             primarily for personal, family or household purposes and
             thereby suffers any ascertainable loss of money or
             property, real or personal, as a result of the use or
             employment by another person of a method, act or
             practice declared unlawful by KRS 367.170, may bring
             an action under the Rules of Civil Procedure in the
             Circuit Court in which the seller or lessor resides or has
             his principal place of business or is doing business, or in
             the Circuit Court in which the purchaser or lessee of
             goods or services resides, or where the transaction in
             question occurred, to recover actual damages.

Although Davis received medical treatment from the Leatherman Spine Center,

there was no privity of contract between Davis and Norton concerning the request

for his medical records made by Abell or the payment of the resulting invoice paid

by Abell. We are not at liberty to add to, subtract from, or otherwise alter the

KCPA to forgo the privity requirement. See Travelers Indem. Co. v. Reker, 100

S.W.3d 756, 765 (Ky. 2003). Because Davis failed to establish the required privity

of contract with Norton to sustain these claims, the trial court properly disposed of

them as a matter of law.

             Furthermore, KRS 367.170 states:

                                        -10-
             (1) Unfair, false, misleading, or deceptive acts or
             practices in the conduct of any trade or commerce are
             hereby declared unlawful.

             (2) For the purposes of this section, unfair shall be
             construed to mean unconscionable.

Even if privity existed herein, Davis failed to demonstrate that Norton engaged in

unconscionable, false, misleading, or deceptive acts—the types of acts from which

the KCPA is intended to protect consumers.

             Not every failure to perform a contract is sufficient to
             trigger application of the [KCPA]. The statute requires
             some evidence of “unfair, false, misleading or deceptive
             acts” and does not apply to simple incompetent
             performance of contractual duties unless some element of
             intentional or grossly negligent conduct is also present.

Capitol Cadillac Olds, Inc. v. Roberts, 813 S.W.2d 287, 291 (Ky. 1991) (citing

Dare to Be Great, Inc. v. Commonwealth, ex rel. Hancock, 511 S.W.2d 224 (Ky.

1974)). The evidence presented indicates the allegedly erroneous invoice does not

rise to the level of a substantial wrong required by the KCPA. Thus, the trial court

did not err in its determination that Norton was entitled to summary judgment on

Davis’s KCPA claims.

                             INJUNCTIVE RELIEF

             The trial court denied Davis’s request for injunctive relief as moot

because Davis had no viable claims against Norton, citing Estate of Goodin v.

                                        -11-
Knox County, Kentucky, No. CIV. 12-18-GFVT, 2014 WL 2719816, (E.D. Ky.

June 16, 2014). CR 65 governs injunctive relief in Kentucky. Injunctive relief

may be granted if it is clearly shown that a party’s rights are being, or will be,

violated and the party will suffer immediate and irreparable harm. Norsworthy v.

Kentucky Bd. of Med. Licensure, 330 S.W.3d 58, 62 (Ky. 2009). Because the trial

court correctly found that Davis’s rights were not violated, it appropriately denied

his request for injunctive relief.

                                     CONCLUSION

             Therefore, and for the foregoing reasons, the order entered by the

Jefferson Circuit Court is AFFIRMED.

             ACREE, JUDGE, CONCURS.

             THOMPSON, K., JUDGE, DISSENTS AND FILES SEPARATE

OPINION.

             THOMPSON, K., JUDGE, DISSENTING: I respectfully dissent.

Kentucky Revised Statute (KRS) 422.317(1) provides in relevant part:

             Upon a patient’s written request, a hospital licensed
             under KRS Chapter 216B or a health care provider shall
             provide, without charge to the patient, a copy of the
             patient’s medical record.

Davis and those similarly situated should be entitled to redress when this

mandatory statute is disregarded by their healthcare providers, rather than have

justice denied them based on a hyper-technical application of the law.

                                         -12-
                 When Davis’s attorney requested Davis’s healthcare records on his

behalf, he provided an appropriate authorization form which stated: “I hereby

authorize the FREE copy of the patient’s medical records pursuant to KRS 422.317

be sent.” But rather than receiving a free copy, Abell received a bill which charged

him a $25 processing fee and a $25 notary public fee.

                 When Davis filed this putative class action,8 he suspected that he was

not the only patient (either acting on his own or through an authorized

representative) being charged fees for the statutorily mandated one free copy of his

medical records in contravention of KRS 422.317. After engaging in discovery,

Davis learned from testimony provided by two of Norton’s employees, along with

Norton’s written policies, which took effect on January 1, 2010, that Norton was

routinely charging patients and their authorized representatives for records

regardless of whether it was the patient’s first copy and continued in such a

practice until at least a year after this lawsuit was filed.

                 KRS 422.317 was examined and interpreted in Eriksen v. Gruner &

Simms, PLLC, 400 S.W.3d 290 (Ky. App. 2013). The Court determined, “in a

situation where a patient is requesting their one free copy allowed under KRS

422.317, providers must make a complete copy of the records available in some

manner without requiring additional payments of any type.” Id. at 292. It further

8
    Davis never moved for certification of the class.

                                                 -13-
explained “a free copy of the records must be made available to an agent of the

patient if the patient expressly so requests. Any other interpretation would mean

that an incapacitated patient could face insurmountable obstacles to obtaining his

or her medical records.” Id. at 292-93. In providing this interpretation, the Court

stated “[t]he intent of the statute is to ensure that a patient may obtain one copy of

his or her medical records without charge.” Id. at 293. The Court noted that

“[p]lacing this minimal burden on health care providers is rationally related to the

legislature’s objective of ensuring that all patients, including the economically

disadvantaged, have free access to one copy of their medical records” and “the

state interest in providing medical records to patients outweighs any minor

inconvenience to the providers.” Id. at 294.

             While the Eriksen decision provided “[w]e also agree that any

reasonable expenses incurred by the medical provider in mailing, faxing or

otherwise transmitting the records can be charged to the patient[,]” id. at 293, I

note that the fees that Norton was charging, a processing fee and a notary public

fee, were not these sorts of reasonable expenses. Indeed, it appears that Norton

understood it was Davis’s first copy as he was not charged “[a]

copying fee, not to exceed one dollar ($1) per page,” as permitted for additional

copies pursuant to KRS 422.317(1). And although the copy was apparently mailed

out, Davis was not charged the cost of mailing.

                                         -14-
               In charging these other fees, Norton appears to have been acting

creatively to try to make money off making a copy of Davis’s record even though

it knew it was his first “free” copy. While I acknowledge there may be some basis

for charging for the certification that Davis requested, although not necessarily the

amount he was charged,9 there can be no reasonable reason that anyone should be

charged a processing fee for a patient’s first free copy. It appears that in

contravention of the law as interpreted in Eriksen, Norton was trying to charge

Davis for its “minor inconvenience.”

               Norton had a duty to follow the statute and not charge Davis for his

first copy of his medical records and is liable to Davis for charging him when it

should not have done so. Redress in court should be available where Norton

clearly violated the law meant to benefit patients like Davis. While I acknowledge

the voluntary payment rule may still be appropriately applied to other situations, I

believe it is improper to apply it to allow Norton to blatantly violate a law designed

to protect patients.

               Unlike other consumer situations where a person can seek out

alternative options if unhappy with how the entity does business, when it comes to

9
  The majority advances an oddly convoluted argument that Norton can charge a notarization fee
in excess of the prior statute because it is not a notary, as it is not an individual. The purpose of
KRS 64.300(1) appears to have been to prevent excessive notarization fees, which is stymied if
entities can charge excessive fees for notary services which they control.

                                                -15-
healthcare records the patient must deal with the entity that holds them. This

“monopoly” on Davis’s records and the certification of them left him and his

counsel subject to Norton’s whims.

             Although, perhaps, Davis could have gotten Norton to rescind the fees

charged to him, this would not have solved the ongoing problem as it related to

other patients. If he waited and never paid the fees, according to the majority’s

decision, he could never challenge the practice unless the matter went to

collections, a situation most people seek to avoid. It was reasonable for Davis to

pay the improper fee and then challenge its imposition. As Davis gets only one

free copy of his records, the situation would not reoccur for him and is the sort of

situation which is capable of repetition yet evading review which should be

reviewed.

             I would have reversed the grant of summary judgment and allowed

this lawsuit to proceed and let Davis try to obtain class certification to remedy the

situation for all patients who have wrongly been charged for their records. The

majority’s opinion gives Norton and other entities holding healthcare records

permission to continue to violate KRS 422.317 with impunity. The General

Assembly’s purpose in enacting this law should not be stymied by the court system

on a technicality.

             Accordingly, I dissent.

                                         -16-
BRIEFS FOR APPELLANT:     BRIEF FOR APPELLEE:

T. Scott Abell            V. Brandon McGrath
Joshua T. Rose            Jason T. Ams
Louisville, Kentucky      Rachel A. Washburn
                          Louisville, Kentucky

                        -17-