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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Smallwood v. Central Peninsula General Hospital, Inc. (4/2/2010) sp-6466

Smallwood v. Central Peninsula General Hospital, Inc. (4/2/2010) sp-6466, 227 P3d 457

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Personal Representative of the ) Supreme Court No. S-12832
Estate of John L. Smallwood, )
) Superior Court No. 3KN-01-00971 CI
Appellant, )
) O P I N I O N
v. )
) No. 6466 April 2, 2010
Appellee. )

          Appeal  from the Superior Court of the  State
          of  Alaska,  Third Judicial District,  Kenai,
          Charles  T.  Huguelet  and  Anna  M.   Moran,

          Appearances:   Nikole  Nelson,  Alaska  Legal
          Services    Corporation,    Anchorage,    for
          Appellant.  Robert J. Molloy and Kristine  A.
          Schmidt,  Molloy  Schmidt  LLC,  Kenai,   for

          Before:   Carpeneti,  Chief  Justice,   Fabe,
          Winfree, and Christen, Justices, and  Bolger,
          Justice pro tem.*

          BOLGER, Justice pro tem.

          John  L.  Smallwood  obtained an  injunction  requiring
Central Peninsula General Hospital to discontinue its practice of
balance  billing  certain  Medicaid patients,  and  the  hospital
complied  by  implementing  a  new  billing  system.   But   when
Smallwood did not dispute the hospitals compliance, the  superior
          court erroneously concluded that he had abandoned his balance
billing  claim.  Smallwood appealed the order that was  based  on
this  erroneous  conclusion, but he died while  this  appeal  was
pending.   The  superior  court then dismissed  this  case,  even
though  supervision  and  control had been  transferred  to  this
court.  We  reverse  the superior courts finding  that  Smallwood
abandoned his claim, vacate the superior courts dismissal  order,
and remand for a determination of attorneys fees.
          Smallwood   was  a  Medicaid  recipient  whom   Central
Peninsula  General Hospital treated on multiple occasions.1   The
hospital   sent  Smallwood  bills  that  included  both  approved
Medicaid co-payment amounts and unauthorized charges.2  Smallwood
did  not  pay the bills and sued the hospital, alleging  that  it
violated  state and federal Medicaid law by charging him  amounts
exceeding  those  allowed as co-payments,  a  practice  known  as
balance billing.3  He also alleged that the hospital violated the
Alaska  Unfair Trade Practices and Consumer Protection Act (UTPA)
because its billing practices were confusing and misleading.4  He
requested declaratory and injunctive relief for himself  and  all
of  the hospitals Medicaid patients.5  The superior court awarded
the  hospital all fees allowed by Medicaid, ordered the  hospital
to  stop overcharging Smallwood, and concluded that neither party
had  prevailed  on  the  issues  of  injunctive  and  declaratory
          Smallwood  appealed the decision  to  this  court.   We
affirmed the superior courts order requiring the hospital to stop
overcharging  Smallwood  and the award of  the  valid  co-payment
amounts   to  the  hospital.7   We  vacated  the  order   denying
injunctive and declaratory relief on the balance billing and UTPA
claims  and  remanded  the  case  for  reconsideration  of  those
          On  remand, the superior court held a hearing at  which
it  ordered the hospital to stop all balance billing.  The  court
ordered  the  hospital to provide an affidavit within  two  weeks
confirming  that  it  was  no  longer  balance  billing  Medicaid
patients.  It instructed Smallwoods attorney to request a hearing
if  she was not satisfied with the affidavit.  The court also set
a briefing schedule for the UTPA claim.
          The  hospital  submitted a timely affidavit  describing
the  procedures the hospital had put in place to prevent  balance
billing of Medicaid recipients.  Smallwood and the hospital  both
filed briefs addressing only the UTPA claim.
          The   superior  court  issued  a  memorandum   decision
concluding that Smallwood had abandoned his claim for relief from
balance  billing  because he did not include that  issue  in  his
brief.   The court also concluded that the balance billing  claim
was  moot because Medicaid patients were no longer being  balance
billed.   It   further  concluded  that  the  hospitals   billing
statements did not violate the UTPA.9
          Smallwood  filed  this appeal from the superior  courts
memorandum decision.10  But Smallwood died several months  later.
The  hospital  moved  for dismissal in the superior  court  as  a
result  of  Smallwoods  failure to substitute  another  plaintiff
          within ninety days, as required by Alaska Civil Rule 25(a)(1).11
The superior court granted the motion to dismiss, noting that  it
had received no opposition.
          The  hospital also filed a motion to dismiss with  this
court.   Smallwoods  daughter Patricia then filed  a  motion  for
substitution  as the personal representative of the  estate.   We
denied the hospitals motion to dismiss and substituted the estate
as the appellant.
     A.   Standard of Review
          This case involves purely legal issues.12  We apply our
independent  judgment  to the superior courts  rulings  involving
questions  of law.13  When we apply our independent judgment,  we
adopt  the  rule  of law most persuasive in light  of  precedent,
reason, and policy.14
     B.   The  Superior Court Had No Jurisdiction To Dismiss  the
          Underlying Case While This Appeal Was Pending.
          The  hospital argues that this case is moot because the
superior court granted its motion to dismiss under Civil Rule 25.
Smallwoods  estate  argues  that  the  superior  court   had   no
jurisdiction to consider the motion to dismiss while this  appeal
was pending.
          Appellate  courts  have  supervision  and  control   of
proceedings following the filing of a notice of appeal.15  Absent
an  express  remand order, the superior court cannot then  modify
any  matters directly or necessarily involved in the matter under
review,  although  the superior court retains  jurisdiction  over
collateral matters.16
          The proper procedure following the death of a party  is
not  a  collateral  matter:   The choice  of  forum  can  make  a
substantial  difference in the proceedings.  In the trial  court,
under  Civil  Rule  25(a)(1), a motion for substitution  must  be
filed  within  ninety days after the death is  suggested  on  the
record  or  the matter is dismissed, effectively terminating  the
action with respect to the deceased party.17  In contrast,  under
Appellate Rule 516(a), the death of a party during a civil appeal
does not affect the case, except that certain time deadlines  are
extended to allow the proper representatives to be substituted.18
          The  federal  courts  do  not apply  the  corresponding
provisions of Federal Rule of Civil Procedure 25(a)(1)  to  cases
on  appeal.19   We likewise conclude that, while  a  case  is  on
appeal,   the   superior  court  lacks  jurisdiction   to   order
substitution  of parties or dismissal following the  death  of  a
party.   Proceedings relating to the death of a  party  after  an
appeal has been filed must either occur in the appellate court or
in the superior court following a remand.20
          Here,  the hospital filed a motion to dismiss with  the
superior court based on Smallwoods death.  But the superior court
lacked jurisdiction to address the matter because this appeal was
then  pending.   We  therefore vacate the superior  courts  order
dismissing this case.
     C.   Smallwood Did Not Abandon His Balance Billing Claim.
          Smallwoods  estate argues that it was clear  error  for
          the superior court to conclude that Smallwood abandoned his claim
for  relief from balance billing.  The estate argues that he  did
not  abandon his claim, but rather received the injunctive relief
that he sought.
          Failure   to   argue   a  point  of   law   constitutes
abandonment.21  But a litigant does not abandon a claim  when  he
obtains  an  injunction, then agrees that  the  other  party  has
          The  superior court granted Smallwoods request  for  an
injunction at the hearing on remand when it ordered the  hospital
to  stop  balance billing anyone thats on Medicaid.  The hospital
complied  with the injunction by filing an affidavit establishing
that  the  hospital  had  implemented new billing  procedures  to
ensure  that  no Medicaid patients would be balance billed.   The
court  gave Smallwood the opportunity to contest the adequacy  of
the  hospitals compliance by filing a request for a hearing,  but
Smallwood did not do so.  Smallwoods failure to contest that this
new  system  effectively  complied with the  injunction  did  not
constitute  abandonment  of  his  claim:  Smallwood  had  already
succeeded by obtaining the injunction he requested.
     D.   The Estate Has Not Waived Its Attorneys Fees Claim.
          The hospital asserts that this case is now moot because
Smallwood  has  died  and  the hospital  has  complied  with  the
superior  courts  injunction.   But  this  court  will  hear   an
otherwise moot case to determine who is the prevailing party  for
purposes  of  awarding attorneys fees.23  This case is  not  moot
because  our conclusion that Smallwood did not abandon his  claim
may change[] the status of the prevailing party and thus an award
of attorneys fees.24
          The  prevailing  party is the one who succeeds  on  the
main  issue; it does not need to prevail on every issue or obtain
formal  judicial relief.25 The court may award attorneys fees  to
the Smallwood estate under the catalyst theory if it demonstrates
the  following  elements: (1) that it achieved the  goal  of  the
litigation by succeeding on any significant issue which  achieves
some  of  the benefit sought in bringing the suit, and  (2)  that
there  is  a  causal  connection between  the  defendants  action
generating   relief  and  the  lawsuit.26   Smallwoods   implicit
agreement that the hospital had complied with the injunction does
not  prevent the superior court from determining that  Smallwoods
estate  is  the  prevailing party for  the  purpose  of  awarding
attorneys fees.27
          We  must  therefore remand this case  to  the  superior
court  for determination of the prevailing party and an award  of
attorneys fees.

          We  VACATE the superior courts order of dismissal  that
was  based  on Smallwoods death.  We REVERSE the superior  courts
conclusion  that Smallwood abandoned his balance  billing  claim.
We REMAND for entry of judgment and an award of attorneys fees.
     *     Sitting  by  assignment made pursuant to  article  IV,
section 16 of the Alaska Constitution.

1     Smallwood  v.  Cent. Peninsula Gen. Hosp.,  151  P.3d  319,
321 (Alaska 2006).

     2    Id.

     3    Id.

     4    Id. at 321, 329.

     5    Id. at 321.

     6    Id. at 322.

     7    Id. at 322, 332.

     8    Id. at 332.

     9     Smallwoods  estate now agrees that the UTPA  claim  is
likely moot as a result of Smallwoods death.

     10    Alaska  Civil Rule 58 requires a judgment  to  be  set
forth on a separate document distinct from any . . . opinion[] or
memorandum.   In this case, the superior court did  not  enter  a
separate  order  labeled as a final judgment.   Our  prior  cases
allow  us  to  recognize a decision as a final  judgment  if  the
decision  effectively disposes of the entire  case,  Williams  v.
City  of  Valdez,  603  P.2d  483, 487  (Alaska  1979)  (internal
citations omitted),  and  clearly evidences the judges intent  to
presently  and finally dispose of the matter.  Breese  v.  Smith,
501 P.2d 159, 163 (Alaska 1972) (quoting In re Mountain View Pub.
Util.  Dist.  No.  1,  359  P.2d 951, 954  (Alaska  1961)).   The
superior  courts memorandum decision disposed of all  claims  and
displayed the courts intent to dispose of the matter.  Under  the
circumstances of this case, we recognize it as final and  subject
to review.

11   Alaska Civil Rule 25(a)(1) provides:

          If  a party dies and the claim is not thereby
          extinguished,    the    court    may    order
          substitution  of the proper parties.  .  .  .
          Unless  the motion for substitution  is  made
          not later than 90 days after the death . .  .
          ,  the  action shall be dismissed as  to  the
          deceased party.
     12    See Noey v. Bledsoe, 978 P.2d 1264, 1275 (Alaska 1999)
(whether superior court lacks subject matter jurisdiction over  a
case on appeal is a legal question).

     13   Smallwood, 151 P.3d at 322.

     14   Jacob v. State, Dept of Health & Soc. Servs., Office of
Childrens Servs., 177 P.3d 1181, 1184 (Alaska 2008) (quoting Guin
v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979)).

     15   Alaska R. App. P. 203.

     16    Asher v. Alkan Shelter, LLC, 212 P.3d 772, 783 (Alaska
2009)  (quoting Heppinstall v. Darnall Kemna & Co., 851 P.2d  78,
79 (Alaska 1993)).

     17    See  Estate of Lampert Through Thurston v.  Estate  of
Lampert Through Stauffer, 896 P.2d 214, 217 (Alaska 1995).

     18   Alaska Rule of Appellate Procedure 516(a) provides that
[t]he death of a party in a civil action or proceeding shall  not
affect any appeal taken or petition for review made, except  that
any  deadlines may be extended until up to sixty days  after  the
death of the party to allow time for substitution.

     19    See  Servidone Constr. Corp. v. Levine, 156 F.3d  414,
416  (2nd Cir. 1998); 7C Charles Alan Wright, Arthur R. Miller  &
Mary  Kay  Kane, Federal Practice and Procedure  1951, at  649-50
(3d ed. 2007).

     20    See Duriron Co. v. Bakke, 431 P.2d 499, 500-01 (Alaska

     21   See State v. ONeill Investigations, Inc., 609 P.2d 520,
528 (Alaska 1980).

     22    See  City of Kenai v. Friends of the Recreation  Ctr.,
Inc.,  129 P.3d 452, 460-61 (Alaska 2006) (holding that plaintiff
was  prevailing  party  for attorneys  fee  purposes  because  it
obtained preliminary injunction even though it agreed that claims
were moot).

     23    Lamoureaux v. Totem Ocean Trailer Express,  Inc.,  651
P.2d 839, 840 n.1 (Alaska 1982).

     24   Ulmer v. Alaska Rest. & Beverage Assn, 33 P.3d 773, 777
(Alaska  2001)  (denying attorneys fees  claim  of  a  party  who
explicitly stated that it was not seeking any fees).

     25    Braun  v.  Denali Borough, 193 P.3d 719,  727  (Alaska
2008) (internal citations omitted).

     26    Progressive  Corp. v. Peter ex rel.  Peter,  195  P.3d
1083,  1094 (Alaska 2008) (quoting Interior Cabaret, Hotel, Rest.
&  Retailers  Assn v. Fairbanks N. Star Borough, 135  P.3d  1000,
1008 (Alaska 2006)).

     27    See Friends of the Recreation Ctr., Inc., 129 P.3d  at

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