Central Collection v. Columbia Medical

COUCH, Judge. In this case we are presented with two questions for review. Our threshold inquiry must necessarily relate to the procedural issue raised in the Court of Special Appeals: whether the order of the trial court denying a motion for reconsideration of an order sustaining a demurrer was an appealable final judgment, where the plaintiff alleged its inability to amend the declaration. The Court of Special ³²⁰ Appeals held it was an appealable final judgment and, in an unreported decision, dismissed as untimely the appeal to that court which was taken from a later entry of judgment for the defendant.

No. 601 (Sept. 9, 1983) (per curiam). We think it was error to dismiss the appeal and in the interest of judicial economy we shall also decide the substantive issue raised but not decided in the Court of Special Appeals: whether the language of the hospital registration form which appellee’s insured signed constitutes á valid assignment of benefits. The facts of this case are undisputed. On June 28, 1977, Eva Parker was admitted to the University of Maryland Hospital for medical treatment.

The hospital is owned and operated by the State of Maryland. From June 28, 1977 to August 1, 1977, Mrs. Parker received numerous medical services at the hospital and incurred a bill in the amount of Forty-one Thousand Three Hundred Thirty-four Dollars and Forty Eight Cents ($41,334.48). At the time she was under treatment Mrs. Parker was a member of the Columbia Medical Plan (Columbia), which is a health maintenance organization operating pursuant to Maryland Code (1982, 1983 Cum.Supp.), Health—General Article, §§ 19-701-734. When Mrs. Parker was admitted and registered at the hospital she signed a registration form that reads in part as follows: “I hereby authorize payment direct to the University of Maryland Hospital of the benefits for hospital expense otherwise payable to me as determined by the Insurance Company, but not to exceed the hospital’s regular charges for this period of hospitalization.

I understand I am financially responsible to the hospital for charges not covered by this authorization.” Mrs. Parker subsequently died without having paid the outstanding hospital bill or any part thereof. The hospital made demand upon the appellee, Columbia, for payment, relying upon the language in the registration form, as quoted above. Columbia refused to pay the hospital’s ³²¹ claim. Thereafter, the account was transferred from the University of Maryland Hospital to the appellant, Central Collection Unit, pursuant to Maryland Code (1957, 1982 Repl.Vol., 1983 Supp.), Article 41, § 71. 1 Appellant filed suit in the Circuit Court for Howard County, to recover the costs of Mrs. Parker’s medical treatment.

Appellee demurred to the declaration alleging that the University of Maryland Hospital did not have a cause of action against it based on the language used on the registration form. Appellee asserted in its demurrer that the language in the registration form was not a valid assignment but merely an authorization to Columbia to pay the hospital directly; because the hospital was not an assignee of Mrs. Parker’s insurance benefits it did not succeed to her rights and remedies against Columbia and, consequently, the hospital could not sue Columbia directly for the value of the medical services provided to Mrs. Parker. On February 26, 1982, a hearing was held on the demurrer. On March 5, 1982 the trial judge issued a “Memorandum and Order” granting appellee’s demurrer.

However, the order did not grant all of the relief appellee was seeking, such as: “That the Plaintiff’s cause of action be dismissed with prejudice;” and “That this Demurrer be granted without leave for Plaintiff to amend its pleadings.” As a matter of fact, the order was silent as regards leave for appellant to amend. Appellant did not amend; rather, on March 23, 1982, appellant filed a Motion for Reconsideration asking the court to reconsider its grant of appellee’s demurrer or, in the alternative, to enter a final judgment in favor of the defendant, since it had “no means to amend its declaration.” On May 5, 1982, 2 the trial judge issued a “Memorandum and Order” denying appellant’s motion for reconsideration; there was no reference to the alternative ³²² relief requested, nor was a judgment for costs entered in favor of Columbia. ' This status quo was maintained until March 15, 1983. At that time appellant wrote a letter to the trial judge reviewing the procedural history of the case and requesting that the court enter “Final Judgment which will be binding against” the state. Appellant stated in the letter that it had “no means with which to amend its pleadings.” On March 29, 1983, the trial judge ordered judgment entered in favor of appellee.

On April 21, 1983, appellant filed an appeal in the Court of Special Appeals. That court dismissed the appeal as untimely. Thereafter, appellant filed a Petition for Writ of Certiorari, which we granted. (1) The first issue for consideration is whether the order of May 5, 1982 denying appellant’s motion for reconsideration of the March 5, 1982 order sustaining the demurrer, was an appealable final judgment.

The Court of Special Appeals held that it was and therefore held that the appeal filed in that court on April 21, 1983 was not timely. Maryland Rule 1012 a. We disagree. The Court of Special Appeals reviewed both of the trial court’s orders of March 5, 1982 and May 5, 1982.

The court stated that the order of March 5, 1982 granting the demurrer was not an appealable final judgment. This, of course, is the position that appellant advocates; appellee takes a contrary stance. We agree with the Court of Special Appeals’ analysis and conclusion on that point. On March 5, 1982 the trial court granted appellee’s demurrer, in a written order, but the order was silent regarding amendment. “Unless the court otherwise directs any of the proceedings, including ... pleadings, ... may be amended so that the case may be tried on its merits.” Maryland Rule 320, § a.l.

The court may also prohibit further amendment in its order. See Maryland Rule 320, ³²³ § d.3. 3 Thus, when the court granted the demurrer but was silent as to amendment, in effect, it allowed appellant leave to amend. The case precedents hold consistently that an order sustaining a demurrer is not an appealable final judgment. Martin G. Imbach, Inc. v. Deegan, 208 Md. 115 , 117 A.2d 864 (1955); Pennsylvania ex rel.

Warren v. Warren, 204 Md. 467 , 105 A.2d 488 (1954); Ernst v. Keough, 197 Md. 554 , 80 A.2d 23 (1951); O’Keefe v. Scott, 198 Md. 310 , 83 A.2d 860 (1951); Montgomery County Welfare Board v. Donnally, 195 Md. 442 , 73 A.2d 505 (1950); Goodman v. Clark, 193 Md. 521 , 69 A.2d 496 (1949); Smith v. Baltimore & Ohio Railroad, 168 Md. 89 , 176 A. 642 (1935). However, Rule 345, § e. allows for an exception to this general rule where the order (1) sustains a demurrer to the entire declaration and (2) expressly prohibits amendment. In such a case the order “shall be deemed to include and constitute a final judgment for costs for the demurring party.” Id. Under the facts of this case, where the order did not expressly prohibit amendment, appellant was entitled, by law, to amend; therefore, the cases stating the general rule are applicable-the March 5, 1982 order was not a final appealable order.

The May 5, 1982 order denied the motion for reconsideration and in all respects our analysis of this order is the same as the previous order. The May 5, 1982 order did not constitute a final judgment since this order, like the former order, contained no actual prohibition on appellant’s leave to amend. The Court of Special Appeals acknowledged that the May order was not final by its terms, but ruled that it was a “ ‘final judgment for costs for the demurring party’ ”, State Central Collection Unit v. Columbia Medical Plan, No. 601, slip op. at 7 (quoting Md.Rule 345, § e.) (Sept. 9, 1983) (per curiam), when “cou ³²⁴ pled with” appellant’s statement in its motion to reconsider, that appellant was without means to amend its declaration. Id.

This position cannot be reconciled with the clear language of Rule 345, § e. As the court below stated, in order “to prevent amendment, and thus to permit an immediate appeal, [the rule] requires an actual prohibition of amendment.” Id. at 5. This prohibition must be expressed in the court’s order and should be reflected in the docket entry. Griffin v. St. Mary’s College, 258 Md. 276 , 265 A.2d 757 (1970), presented an issue similar to the case at bar.

The trial judge sustained a demurrer and granted Griffin 15 days leave to amend. Griffin did not amend, but did note an appeal approximately one month later. The notice of appeal concluded “ ‘kindly further note that plaintiff does not elect to amend his declaration.’ ” Griffin, 258 Md. at 279 , 265 A.2d at 758 . The Court dismissed the appeal because it was not an appeal from a final judgment. ' The Court stated: “That Griffin allowed the time within which he could have amended to expire without taking any action does not improve his position.” Id. at 279 , 265 A.2d at 759 ; see also Smith v. Baltimore & Ohio Railroad, supra; Ernst v. Keough, supra.

In Griffin our decision was not based on the requirements of Rule 345, § e.; however, the case is illustrative of our position that the order itself must reflect a final judgment, and we will not look to a party’s actions or extrinsic statements in order to determine finality- There being no finality under Rule 345 we look to Maryland Code (1973, 1984 Repl.Vol.), Courts & Judicial Proceedings, § 12-101(f), and § 12-301. Section 12-101(f) states: “(f) Final judgment.—‘Final judgment’ means a judgment, decree, sentence, order, determination, decision, or other action by a court, including an orphans’ court, from which an appeal, application for leave to appeal, or petition for certiorari may be taken.” Section 12-301 states in pertinent part: “Except as provided in § 12-302, a party may appeal from a final judgment entered in a civil or criminal case ³²⁵ by a circuit court. The right of appeal exists from a final judgment entered by a court in the exercise of original, special, limited, statutory jurisdiction, unless in a particular case the right of appeal is expressly denied by law.” Appellee’s position is that the docket entry of May 6, 1982, “Ordered that the Motion to Reconsider is denied,” is sufficient under the statute to support an appeal. We disagree.

This Court has had numerous occasions to state what actions of the trial court constituted an appealable final judgment within the contemplation of section 12-301. In Fred W. Allnutt, Inc. v. Commissioner of Labor and Industry, 289 Md. 35, 40 , 421 A.2d 1360, 1363 (1980), we stated as a general rule “the cases hold that a judgment or order of a court is appealable if it is so final as to deny the appellant the means of further prosecuting or defending his rights and interests in the subject matter of the proceeding.” The basic premise is clear; it is the action of the trial court, the order of the court, which by its terms must reveal that it is so final as to conclude the litigation by determining the rights of the parties. This is the distinguishing factor and where we disagree with the position taken by the Court of Special Appeals. Expressions of intention by the trial judge are not final orders because they are always subject to change by the judge.

Waters v. Smith, 277 Md. 189 , 352 A.2d 793 (1976); Lewis v. Lewis, 290 Md. 175 , 428 A.2d 454 (1981). Likewise, expressions of intention of a party “coupled with,” State Central Collection Unit, slip op. at 7, an order cannot become a final order because the parties’ intentions are still subject to change. In this instance if the trial judge had entered an order as appellant requested, there would have been no further opportunity to amend and it would have been appealable, but that was not done. Even though appellant stated in the motion that it was not possible to amend, it still had the opportunity to do ³²⁶ so.

Therefore, until the court entered an appropriate order appellant did not have a right to appeal. In March of 1983 appellant wrote a letter to the trial judge outlining the procedural history