Applied Sciences

Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER. Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email corrections@akcourts.us.

THE SUPREME COURT OF THE STATE OF ALASKA

RACHEL L. THOMAS and STEVEN N. THOMAS, husband and wife,

Appellants,

v.

SARAH B. ARCHER and PEACEHEALTH MEDICAL GROUP d/b/a KETCHIKAN OB/GYN,

Appellees.

) ) Supreme Court No. S-15372

Superior Court No. 1KE-10-00613 CI

O P I N I O N

No. 7136 – December 2, 2016

) ) ) ) ) ) ) ) ) ) ) ) )

Appeal from the Superior Court of the State of Alaska, First Judicial District, Ketchikan, William B. Carey, Judge.

Appearances: C. Keith Stump, Port Angeles, Washington, for Appellants. Scott J. Gerlach and Donna M. Meyers, Delaney Wiles, Inc., Anchorage, for Appellees.

Before: Stowers, Chief Justice, Winfree, Maassen, and Bolger, Justices. [Fabe, Justice, not participating.]

MAASSEN, Justice.

I. INTRODUCTION

A woman was admitted to a hospital emergency room with pregnancy-

related complications. The attending physician recommended that she be transported by

medivac to a different facility. The woman and her husband informed the physician that

they needed their insurer’s preauthorization for that course of action or they could be

personally liable for the costs. The physician allegedly promised to call the insurer and,

if it would not approve the medivac, have the hospital bear the costs itself. But the

physician failed to contact the insurer until much later, and the insurer declined coverage.

The couple sued the physician and the hospital, alleging that the physician

breached her fiduciary duty by failing to obtain preauthorization as promised; that her

promise created an enforceable contract, which was breached; and that if there was no

contract the physician’s promise should be enforced through the doctrine of promissory

estoppel. The superior court granted summary judgment to the physician and hospital.

The couple appeals.

We hold that the superior court did not err when it ruled in favor of the

physician and hospital on the claims for breach of fiduciary duty and breach of contract,

but that genuine issues of material fact precluded summary judgment on the claim for

promissory estoppel. We therefore reverse and remand for further proceedings.

II. FACTS AND PROCEEDINGS

A. Facts

Rachel Thomas was admitted to the emergency room at Ketchikan General

Hospital in October 2008 for pregnancy-related complications.1 She was seen by Dr.

Sarah B. Archer, who determined that Rachel was at risk of premature delivery and

needed an immediate transfer to a facility better equipped to handle her condition.

Because of weather conditions in Anchorage, Dr. Archer recommended that Rachel be

medivacked to Swedish Medical Center in Seattle. According to the Thomases, they told

Ketchikan General Hospital is operated by PeaceHealth Medical Group, which also does business as Ketchikan OB/GYN.

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Dr. Archer they could not personally afford the medivac and needed preauthorization

fromthe Ketchikan Indian Corporation Tribal Health Clinic (KIC) and the Alaska Native

Medical Center (ANMC) before they could be covered for treatment outside of ANMC’s

Anchorage facilities.2 The Thomases allege that Dr. Archer told them “she would

contact KIC, not to worry, that everything will be taken care of, and that if KIC didn’t

cover it ‘we’ will.” According to the Thomases, they understood “we” to mean the

hospital.

In the process of arranging the transfer, Steven Thomas signed an

“Acknowledgment of Financial Responsibility,” which cautioned that the Guardian

Flight medivac charges could be significant. Though naming KIC as the “Payment

Source,” Steven agreed to be personally responsible for any unpaid charges and to “save

and hold the hospital harmless therefrom.”

The Thomases were eventually billed over $23,000 by Swedish Medical

Center and over $69,000 by Guardian Flight, the medivac provider. The Thomases

sought payment from KIC and ANMC under their coverage plan but were denied for

three stated reasons: (1) they failed to request preauthorization within 72 hours of

beginning treatment or of admission to the healthcare facility; (2) ANMC was “available

and accessible to provide the necessary medical services to the patient”; and (3) the

Thomases lacked a referral or authorization for the transfer from an ANMC physician.

TheThomasesadmitknowingabout thepreauthorization requirements and thatobtaining

preauthorization was ultimately their responsibility; they allege, however, that they

boarded the flight based on Dr. Archer’s assurances that those requirements would be

satisfied by someone else. Dr. Archer did later write KIC and ANMC to explain her

KIC acts as an agent for the Thomases’ insurer, Contract Health Services (CHS).

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decision to have Rachel transported to Seattle, but not until May 2009, over six months

after the transfer.

B. Proceedings

In 2010 the Thomases filed suit against the hospital and Dr. Archer

(collectively “the hospital”)3 alleging breach of fiduciary duty, breach of contract,

promissory estoppel,4 and negligent or intentional infliction of emotional distress. The

claims were all based on Dr. Archer’s alleged promise to contact the Thomases’

insurance providers and ensure coverage for the expenses related to Rachel’s transport

to and treatment in Seattle. The superior court granted summary judgment to the hospital

on the Thomases’ fiduciary duty claim, agreeing with the hospital’s argument that a

physician’s fiduciary duty is limited to the context of medical treatment. The court later

granted summary judgment to the hospital on the remaining claims, holding that the facts

as alleged did not create an enforceable contract and that there was no actual promise to

the Thomases or substantial change in position by the Thomases sufficient to support

their promissory estoppel claim. The court also dismissed the claims for negligent and

intentional infliction of emotional distress, noting that the Thomases had agreed to

withdraw them, although they had not yet done so, and had produced no evidence or

legal authority to support the claims.5

3 The hospital and the physician shared the same counsel and the same litigation position on all issues.

4 The Thomases did not articulate a promissory estoppel claim as such until they filed their opposition to the hospital’s motion for summary judgment on the breach of contract claim. The superior court nonetheless considered the promissory estoppel claim as consistent with the Thomases’ other claims.

5 The Thomases also withdrew their claim for the costs of the Guardian Flight after confirming they had a separate insurance plan that covered the medivac.

(continued…)

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The hospital moved for attorney’s fees as the prevailing party, supporting

its motion with an affidavit that summarized its fees and offering to file itemized billing

records under seal for in camera review. The Thomases opposed the motion. The

superior court ordered the hospital to submit its billings for in camera review but did not

require that they be shared with the Thomases. Following in camera review, the court

awarded the hospital approximately $25,000 in attorney’s fees (20% of the total billings)

and over $6,000 in costs. This appeal followed.

III. STANDARD OF REVIEW

“We review grants of summary judgment de novo.”6 “We ‘will affirm a

grant of summary judgment if the evidence in the record presents no genuine issue of

material fact and the moving party is entitled to judgment as a matter of law.’ ”7

Whether there is a fiduciary duty and whether promissory estoppel applies

are both questions of law to which we apply our “independent judgment, adopting the

rule of law that is most persuasive in light of precedent, reason, and policy.”8

5(…continued) Thus, only the expenses of treatment at Swedish Medical Center remain at issue.

6 Christensen v. Alaska Sales &Serv., Inc., 335 P.3d 514, 516 (Alaska 2014) (citing Hurn v. Greenway, 293 P.3d 480, 483 (Alaska 2013)).

7 Copper River Sch. Dist. v. Traw, 9 P.3d 280, 283 (Alaska 2000) (quoting Davis v. Dykman, 938 P.2d 1002, 1006 (Alaska 1997)).

8 Beal v. McGuire, 216 P.3d 1154, 1162 (Alaska 2009) (citing K & K Recycling, Inc. v. Alaska Gold Co., 80 P.3d 702, 724 n.66 (Alaska 2003)) (fiduciary duty); Ross v. State, Dep’t of Revenue, 292 P.3d 906, 909 (Alaska 2012) (citing Hidden Heights Assisted Living, Inc. v. State, Dep’t of Health &Soc. Servs., Div. of Health Care Servs., 222 P.3d 258, 268 (Alaska 2009)) (promissory estoppel).

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IV. DISCUSSION

The Thomases argue three substantive points on appeal: (1) that the

superior court erred by deciding that Dr. Archer did not owe the Thomases a fiduciary

duty to contact KICfor authorization after having promised to do so; (2) that the superior

court erred by deciding on summary judgment that the parties’ words and actions did not

create an enforceable contract; and (3) that the superior court erred by rejecting

promissory estoppel as a basis for enforcement of Dr. Archer’s alleged promise to the

Thomases.9

“Alaska Civil Rule 56 provides for judgment to be granted to a party where

‘there is no genuine issue as to any material fact’ and ‘the moving party is entitled to

judgment as a matter of law.’ ”10 “[A] party seeking summary judgment has the initial

burden of proving, through admissible evidence, that there are no disputed issues of

material fact and that [it] is entitled to judgment as a matter of law.”11 “Once the moving

party has made that showing, the burden shifts to the non-moving party ‘to set forth

specific facts showing that he could produce evidence reasonably tending to dispute or

contradict the movant’s evidence and thus demonstrate that a material issue of fact

exists.’ ”12 The court “draw[s] all reasonable inferences in favor of the non[-]moving

9 The Thomases also appeal the superior court’s award of attorney’s fees and argue they should be awarded the costs and fees associated with appeal, but we do not find it necessary to reach these issues.

10 Christensen, 335 P.3d at 517 (quoting Alaska R. Civ. P. 56(c)).

11 Mitchell v. Teck Cominco Alaska Inc., 193 P.3d 751, 760 n.25 (Alaska 2008) (citing Shade v. Co & Anglo Alaska Serv. Corp., 901 P.2d 434, 437 (Alaska 1995)).

12 Christensen, 335 P.3d at 517 (quoting State, Dep’t of Highways v. Green, 586 P.2d 595, 606 n.32 (Alaska 1978)).

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party.”13 “We require only that the evidence proposed for trial must not be based entirely

on ‘unsupported assumptions and speculation’ and must not be ‘too incredible to be

believed by reasonable minds.’ ”14 “After the court makes reasonable inferences from

the evidence in favor of the non-moving party, summary judgment is appropriate only

when no reasonable person could discern a genuine factual dispute on a material issue.”15

Accordingly, for purposes of our review of the superior court’s decision on

summary judgment, we assume that Dr. Archer made the statement, as described by the

Thomases, “that she would contact KIC, not to worry, that everything will be taken care

of, and that if KIC didn’t cover it ‘we’ will.”

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