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Saint Barnabas Medical Center v. County of Essex

Decided: June 29, 1988.


On certification to the Superior Court, Appellate Division, whose opinion is reported at 216 N.J. Super. 161 (1987).

For affirmance in part; reversal in part -- Chief Justice Wilentz, and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. The opinion of the Court was delivered by Stein, J. Pollock, J., concurring.


The novel question for decision in this case is the extent to which a county is responsible for the hospitalization costs of an indigent county jail inmate where the inmate remains hospitalized past the termination of his sentence. The Appellate Division held that an implied contract existed between the parties obligating defendant Essex County to pay to plaintiff, Saint Barnabas Medical Center (Saint Barnabas), the full amount owing for the inmate's hospitalization, here nearly $54,000, provided Saint Barnabas could prove that the entire duration of the patient's stay was necessary. We reverse. We find that no contract was formed, and hold that in the absence of a valid contractual arrangement the County is responsible only for the hospitalization costs incurred during the tenure of the inmate's sentence. The loss resulting from the unpaid portion of the bill is to be borne by Saint Barnabas, where, through administrative rate-setting procedures, and beginning in 1987 through the mechanism of the Uncompensated Care Trust Fund, it is spread out among all "payers" for hospital services.


On July 13, 1982, Jessie Williams was committed to the Essex County Jail Annex, located in Caldwell, to begin serving a fifteen-day sentence. On July 16, Williams set himself on fire and required emergency treatment. Although Essex County had an existing arrangement with University Hospital for the

treatment of its prisoners, corrections officers transported Williams to Saint Barnabas because of its specialized burn unit. The officers apparently told the hospital staff that they had brought Williams from the Essex County Jail, and gave them a phone number to call for information. However, there is no evidence of any discussion concerning responsibility for his medical bills.

Three days later, on July 19, 1982, Ray Grimm of Saint Barnabas phoned Elizabeth Neff in the Jail Annex's business office to confirm Williams' status as an inmate and to ascertain whether the County would be responsible for the treatment costs. Earlier that day, on the County's motion, the remaining eight days of Williams' sentence had been vacated by the Newark Municipal Court, R. 3:21-10(a), (b)(2). Accordingly, Neff informed Grimm that Williams was being "released," but acknowledged that the County would pay for the hospitalization costs incurred thus far, from Williams' admission to the hospital on the sixteenth through the end of the day. Her statements were based on the jail's customary method of handling such cases with University Hospital, with which the County had a contract for treating its prisoners when necessary, whereby the County would pay the hospital for the number of days the hospitalized inmate was still in the County's custody. In a letter to Grimm dated July 23, 1982, Neff confirmed her statement that the County would pay for Williams' medical care only through the nineteenth.

On August 10, 1982, Grimm responded by letter, informing Neff that Saint Barnabas considered the County "responsible for the total cost of the care for Mr. Williams." After roughly seven weeks of treatment, Williams was released from the hospital on September 2, 1982; the total cost of his treatment and hospitalization came to $53,725.59, and an invoice in that amount was forwarded to the County. Consistent with its stated position, the County refused to acknowledge liability except for the first four days of Williams' treatment, an amount stipulated to be $5,401.

Saint Barnabas commenced this action against Williams and Essex County for the total cost of treatment. Williams was never served, and the case against him was subsequently dismissed without prejudice.*fn1

In January 1986, cross motions for summary judgment were argued before the Law Division, and in a published opinion, the court granted plaintiff's motion, ruling that the County was liable for the full term of Williams' stay in the hospital. Saint Barnabas Medical Center v. Essex County, 211 N.J. Super. 488 (1986). The court found an implied agreement to pay, reasoning that "the hospital had a right to rely on the credit of the County." Id. at 493. The court also found that the County had a duty to obtain medical treatment for Williams, pursuant to applicable administrative regulations. It rejected the County's claim that its responsibility for treatment ended when Williams' sentence was vacated, ruling that the County was estopped from altering the terms of its implied agreement with the hospital. Id. at 494-96. The court did not, however, expressly assign any basis for the County's liability for the five-week period between the date Williams' sentence was originally scheduled to end, July 27, 1982, and his discharge from the hospital on September 2, 1982.

The Appellate Division recognized this gap in the trial court's ruling, noting in its opinion of March 23, 1987, that "even if the County had not obtained the order suspending Williams' sentence, his [jail] term would have expired before he was discharged from the hospital." 216 N.J. Super. 161, 164. The Appellate Division agreed that "an implied contract had been formed," citing Shapiro v. Solomon, 42 N.J. Super. 377, 383

(App.Div.1956), for the proposition that "the rendition of services at the request of another, under circumstances which negative the idea that they were gratuitous, creates an obligation implied from the request to pay what the services are reasonably worth." Id. at 164-65. This reasoning, said the court, was "clearly applicable" to the period after July 27 as well, observing that the fact that Williams' right to medical care at the County's expense ended with the termination of his sentence was "not germane." Id. at 165.

Although the Appellate Division ruled that the County's implied contractual obligation was sufficient to impose liability on it for the entire term of Williams' care, it remanded the case to the Law Division, in the interests of "fundamental fairness," and ordered that plaintiff prove it could not have lawfully discharged or transferred Williams prior to his actual release on September 2, 1982. Id. at 165-66. The Appellate Division's view was that the County's implied obligation to pay should go no further than the point at which Saint Barnabas could have effected a lawful termination of Williams' hospitalization.

We granted the County's petition for certification. 108 N.J. 186. St. Barnabas filed no cross petition from the Appellate Division's modification of the trial court ruling.



The basic issue in this case can be stated simply: As between a county and a hospital, which entity should bear the cost associated with the medical treatment of an indigent initially requiring such treatment while a ward of the county? Its resolution derives partially from principles of contract law, but is based primarily on the legal duties imposed on counties, with respect to the health care of indigent county jail inmates, and on hospitals, with respect to the health care of indigents generally.

As a matter of both state and federal law, defendant Essex County had an absolute duty to see that Williams received medical treatment for his injuries. Pursuant to regulations promulgated by the Commissioner of Corrections, see N.J.S.A. 30:1B-10, county prisoners, while confined, are classified as "wards of the county" with the "right to * * * proper medical care." N.J.A.C. 10:34-3.1(a), -3.2(5) (current version at N.J.A.C. 10A:31-3.15(a)). Counties must establish in-house medical facilities for their jails, but prison physicians are authorized to recommend that seriously ill inmates be transferred to a "civilian hospital." N.J.A.C. 10:34-3.5, -3.7(a)(6) (current versions at N.J.A.C. 10A:31-3.15(b), (b)(16), (b)(17)). These regulations implement the State's federal constitutional duty "to provide medical care for those whom it is punishing by incarceration." Estelle v. Gamble, 429 U.S. 97, 103, 97 S. Ct. 285, 290, 50 L. Ed. 2d 251, 259 (1976) (eighth amendment proscribes "deliberate indifference to serious medical needs of prisoners"); see also Revere v. Massachusetts Gen. Hosp., 463 U.S. 239, 103 S. Ct. 2979, 77 L. Ed. 2d 605 (1983) (fourteenth amendment due process clause mandates that injured pretrial detainees receive necessary medical care). Thus, having determined that Williams could not receive adequate care in the jail's own facilities, county corrections officials had a duty to obtain proper treatment elsewhere.

New Jersey counties are not, however, legally obligated to help finance the costs of providing medical care to indigent county citizens. Perth Amboy Gen. Hosp. v. Board of Chosen Freeholders, Middlesex County, 158 N.J. Super. 556, 563-67 (Law Div.1978). Nor is there any statute expressly "requiring a county to pay for the medical treatment of county jail inmates received in civilian hospitals." Cooper Medical Center v. Johnson, 204 N.J. Super. 79, 84 (Law Div.1985), aff'd o.b., 208 N.J. Super. 38 (App.Div.1986). With respect to county residents in general, the Legislature has ...

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