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Atlantic Ambulance Corporation v. Cullum

Superior Court of New Jersey, Appellate Division

June 29, 2017

ATLANTIC AMBULANCE CORPORATION, Plaintiff-Respondent,
v.
JOHN G. CULLUM and MARY CLARE CULLUM, Defendants-Appellants. ATLANTIC AMBULANCE CORPORATION, Plaintiff-Respondent,
v.
HALA HITTI and ANTOINE HITTI, Defendants-Appellants.

          Argued May 23, 2017

         On appeal from an interlocutory order of the Superior Court of New Jersey, Law Division, Morris County, Docket Nos. L-264-12 and L-2097-12.

          Robert W. Mauriello, Jr., argued the cause for appellants (Graham Curtin, P.A., attorneys; Kelley J. Hastie and Mr. Mauriello, on the briefs).

          James W. Brown (Skadden, Arps, Slate, Meagher & Flom) of the New York bar, admitted pro hac vice, argued the cause for respondent (Schenck Price Smith & King, LLP and Mr. Brown, attorneys; Lauren E. Aguiar (Skadden, Arps, Slate, Meagher & Flom) of the New York bar, admitted pro hac vice, Mr. Brown and Peter A. Marra, on the brief).

          Before Judges Reisner, Koblitz and Mayer.

          OPINION

          MAYER, J.S.C. (TEMPORARILY ASSIGNED)

         Appellants John G. Cullum and Mary Clare Cullum (Cullum) and Hala Hitti and Antoine Hitti (Hitti)[1] were granted leave to appeal denial of their motion for class certification. We affirm in part and remand in part.

         In reaching this decision, we hold that ambulance service providers are not subject to consumer fraud claims under the "learned professional" exception because ambulance services are comprehensively regulated by a State agency. We also hold that the reasonableness of rates charged for ambulance services is a policy matter to be addressed by the Legislature and agencies within the Executive branch of government. We further determine that consumers are not required to pay a defendant's bill for allegedly overpriced services, in order to establish an ascertainable loss under the Consumer Fraud Act.

         We briefly recite the relevant procedural history. Atlantic Ambulance Corp. (Atlantic) filed complaints in the Special Civil Part against Cullum and Hitti seeking payment for ambulance services. Cullum and Hitti filed answers and counterclaims, alleging that Atlantic overbilled for ambulance services in violation of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -2 0 (CFA). The counterclaims also asserted causes of action against Atlantic for negligence, common law fraud, breach of contract and unjust enrichment.[2] Appellants also sought class certification on behalf of themselves as class representatives and on behalf of all proposed class members who were overcharged for ambulance services during a six-year period. The Cullum and Hitti matters were transferred from the Special Civil Part to the Law Division and were consolidated. After five years of discovery, appellants filed a motion seeking class certification.

         The facts giving rise to appellants' overbilling claims against Atlantic are undisputed. Cullum and Hitti initially alleged that they did not receive services from Atlantic and, therefore, the fees charged by Atlantic for services were improper and/or excessive. However, during oral argument on the class certification motion, counsel clarified that Cullum and Hitti received services, but claimed the bills they received were unconscionably high. The dispute focused on Atlantic's provision of ALS services, which are divided into three categories: ALS Assessment, ALS-1 and ALS-2. Different services are provided to patients for each ALS category, ranging from a basic physical examination and electrocardiogram readings to more complex medical treatments.

         The amount billed to patients receiving ambulance services depends on the category of the support rendered. For ALS services, Atlantic charged the following: $1500 for an ALS Assessment, plus a mileage fee; $1750 for ALS-1 services, plus a mileage fee; and $2300 for ALS-2 services, plus a mileage fee. Appellants challenged Atlantic's formulation of the billing rates for ALS services. They claimed that Atlantic's fees for ALS services should be itemized, specifying the amount charged for each service, rather than bundled. Appellants alleged that Atlantic's uniform flat rates were excessive and disproportionate to the reimbursement rates assessed by insurance providers for similar services.

         In Cullum's case, he passed out at his gym and Atlantic was called to provide ambulance services. Other than blood pressure monitoring, Cullum denied receiving any medical services from Atlantic. Cullum's bill from Atlantic was $1750, plus a mileage fee for transporting him to the hospital. Cullum's health insurance provider paid a portion of Atlantic's bill, and he was responsible for payment of the outstanding balance of $1459.20.

         In Hitti's case, she fainted in her home and Atlantic performed an ALS Assessment. Hitti declined transportation to the hospital but was charged $14 for transport of one mile. Hitti's bill was $1500, plus the mileage fee. Hitti's health insurance provider declined to pay Atlantic's bill due to a purported billing code error.

         Appellants sought class certification on behalf of themselves and approximately 36,000 individuals who were allegedly overbilled by Atlantic.[3] Appellants claimed that their cause of action satisfied the requirements for class certification. See R. 4:32-1(a); see also Muise v. GPU, Inc., 371 N.J.Super. 13, 30 (App. Div. 2004) (the requirements are numerosity, commonality, typicality and adequacy). Appellants also argued that they met the requirements of Rule 4:32-1(b)(3) by raising "questions of law or fact common to the members of the class [that] predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fair and efficient adjudication of the controversy." R. 4:32-1(b)(3); see also Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 106-07 (2007).

         Appellants maintained their claims were common, typical and adequate with respect to the claims of the proposed class members because all were victims of Atlantic's unlawful billing practices and unconscionable rates in violation of the CFA.[4] Appellants contended that Atlantic had a duty to charge a reasonable fee for services and breached that duty. For the Hitti class, the issue was Atlantic's $14 mileage fee for patients not transported to a hospital.[5] For the Cullum class, the issue was the reasonableness of the fee charged by Atlantic for ALS-1 and ALS-2 services. Appellants reasoned that the time, energy and cost to pursue individual lawsuits against Atlantic would make it financially unfeasible for aggrieved class members to pursue their claims in the absence of class certification.

         Atlantic countered that appellants' claims were not typical because proof of their claims would not prove the claims of the proposed class members. Atlantic highlighted the dissimilar aid and assistance rendered to individuals who received ALS-1 services and ALS-2 services, and noted that neither Cullum nor Hitti received ALS-2 services. Atlantic claimed the reasonableness of the fees charged for the services required individual adjudication on a patient-by-patient basis and, therefore, was not amenable to class certification. Further, Atlantic contended that neither Cullum nor Hitti suffered damages under a breach of contract theory or CFA violation claim because: (1) appellants denied receiving any services from Atlantic, and (2) even if they conceded receipt of services, appellants did not pay Atlantic's bill to establish an ascertainable loss under the CFA.

         In deciding the motion, the judge found that appellants' claims were not common, not typical and not in alignment with the claims of proposed class members because appellants did not receive ALS-2 services and did not pay for Atlantic's services. The judge ruled that appellants did not suffer an ascertainable loss under the CFA because Cullum and Hitti failed to pay Atlantic's bill. The judge expressly rejected appellants' argument that an excessive bill from Atlantic was sufficient to prove an ascertainable loss.

         On appeal, Cullum and Hitti argue the judge erred in denying class certification based upon his determination that they were unable to prove an ascertainable loss to sustain a CFA claim. We conclude that the judge's denial of class certification on that basis was flawed because appellants were not required to have paid Atlantic's bill to demonstrate an ascertainable loss.

The certainty implicit in the concept of an "ascertainable" loss is that it is quantifiable or measurable. Moreover, it need not yet have been experienced as an out-of-pocket loss to the plaintiff. An "estimate of damages, calculated within a reasonable degree of certainty" will suffice to demonstrate an ascertainable loss.
[Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J. 234, 248-49 (2005) (quoting Cox v. Sears Roebuck & Co., 138 ...

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