ALEXANDER JULIAN, III, individually and on behalf of all others similarly situated, Plaintiff,
THE UNIVERSITY OF NORTH CAROLINA HEALTH CARE SYSTEM, d/b/a THE UNIVERSITY OF NORTH CAROLINA HOSPITALS, Defendant.
in the Court of Appeals 28 November 2018.
by plaintiff from order entered 28 November 2017 by Judge
Michael J. O'Foghludha in Orange County No. 16 CVS 001206
& Roberts, PLLC, by Matthew D. Quinn and James A.
Roberts, III, for plaintiff-appellant.
Attorney General Joshua H. Stein, by Assistant Attorney
General Derek L. Hunter, for defendant-appellee.
Julian brought this class action lawsuit against the
University of North Carolina Health Care System after a visit
to one of the system's hospitals. The hospital charges
for operating room time in half-hour increments. Julian
alleges that this billing practice permits the hospital to
overcharge patients-Julian, for example, was in the operating
room for approximately two hours and four minutes but the
hospital billed him for two and a half hours of operating
room time. This, Julian claims, is a breach of the contract
between the hospital and its patients.
trial court dismissed Julian's complaint under Rule
12(b)(6) for failure to state a claim on which relief can be
granted. As explained below, we affirm that ruling. Julian
asserts that N.C. Gen. Stat. § 131E-273-a statute he
believes is incorporated by law into his contract with the
hospital-bars healthcare providers from charging for a
"component of any health care procedure that was not
performed or supplied." Julian contends that the
hospital violated this statute by charging him for time when
he was not actually in the operating room.
even assuming that this statute is part of the contract and
means what Julian claims (the hospital disputes both these
points), the "component" of a healthcare procedure
at issue here is a half-hour block of operating room time.
The hospital supplied that component to Julian, although he
did not use it in full. This is no different from charging a
patient for a bag of solution used in an intravenous fluid
drip even though the patient does not use every drop of fluid
in the bag. The plain language of N.C. Gen. Stat. §
131E-273 permits a hospital to bill for these types of
components of a procedure even if they are only partially
express contract claim fails for a similar reason: the terms
of the contract state that operating room time is billed in
"half hour increments" even if only a portion of
that final half hour block is used. This means the hospital
billed Julian precisely as the contract required.
Accordingly, Julian's claims fail as a matter of law and
the trial court properly dismissed them under Rule 12(b)(6).
and Procedural History
October 2014, Alexander Julian, III arrived at the UNC
Ambulatory Surgery Center in Chapel Hill for outpatient
surgery. Before beginning his surgery, Julian entered into a
contract with the hospital. Julian concedes that this
contract included a document that the parties refer to as the
"O.R. Charge Rules," although Julian did not
receive a copy of that particular document before his
surgery. The O.R. Charge Rules establish the rates the
hospital will charge for operating room services. The rules
state that the hospital charges patients for operating room
time "based on half hour increments with time measured
from the time the patient enters the room until the patient
leaves the room." The charge rules also state that
"[i]f the procedure goes into the next time increment,
the charge is for the next increment of time."
January 2015, Julian received a non-itemized bill from the
hospital for his surgery. The bill was much higher than
Julian expected, so he contacted the hospital for additional
information. In February 2015, the hospital sent Julian a
letter explaining that his total operating room time was
"2 hours and 4 minutes" and "OR time is
charged in 30 minutes [sic] increments, making 2 hours and 4
minutes fall between the OR time charge of 2:01 to 2:30
hours." Although Julian concedes in this lawsuit that he
agreed to be bound by the terms of the O.R. Charge Rules when
he signed the contract with the hospital, the parties also
acknowledge that Julian did not receive a copy of the O.R.
Charge Rules when he signed the contract and agreed to be
bound by its terms. As a result, when Julian received this
response from the hospital, it was the first time Julian
learned that the hospital billed for operating room time in
2016, Julian filed a putative class action against the
University of North Carolina Health Care System, alleging
claims for breach of contract, breach of implied-in-fact
contract, and breach of the implied covenant of good faith
and fair dealing. The complaint also requested a declaratory
judgment and injunctive relief. The hospital moved to dismiss
the complaint under Rules 12(b)(1), (2), and (6) of the North
Carolina Rules of Civil Procedure. After a hearing, the trial
court granted the ...