Credit Bureau Enterprises, Inc. v. Pelo

Supreme Court of Iowa · Contracts

Contractsimplied in law contractquasi-contractunjust enrichmentrestitutionmental impairmentinvoluntary hospitalizationprivate hospital

Facts

Pelo was taken to Ellsworth Municipal Hospital, a private hospital, after threats of self-harm, and a magistrate entered an emergency hospitalization order under Iowa Code section 229.22 based on probable cause that he was seriously mentally impaired and likely to injure himself. He refused at first to sign a hospital release form but later signed it; he was hospitalized from January 8 to January 13, 1995, and then released after a referee found the elements for further involuntary hospitalization were lacking. The hospital billed $2,775.79 for services rendered, and after Pelo refused to pay or authorize insurance payment, the hospital assigned the claim to Credit Bureau Enterprises for collection. Pelo argued he never agreed to pay and did not want or need the services.

Issue

Is a patient who was involuntarily hospitalized at a private hospital personally liable for the reasonable value of mental health medical services rendered during that hospitalization? More specifically, may the hospital recover under a contract implied in law or quasi-contract theory even though the patient did not request or voluntarily consent to the services?

Rule

A provider may recover the reasonable value of medical or necessary services under a contract implied in law or quasi-contract theory when the provider, acting unofficiously and not gratuitously, confers benefits on a person who, because of mental impairment, lacks sufficient capacity to make responsible decisions or give meaningful consent. In such circumstances, the recipient's unwillingness or failure to request the services does not bar restitution, and the law implies a promise to pay for services knowingly accepted or necessarily rendered for the recipient's benefit.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Des Moines, Noah Mercer was taken by police to Prairie Lakes Behavioral Hospital, a private facility, after a judge signed an emergency mental-health detention order based on probable cause that he was likely to harm himself. Noah repeatedly said he did not want evaluation or treatment, but the hospital kept him for two days, evaluated him, and later billed him for reasonable charges.

If Noah refuses to pay because he never requested the services and expressly objected to them, which is the strongest argument for the hospital's recovery?

Explanation. The majority held that a provider may recover the reasonable value of necessary medical services under a contract implied in law when it acts unofficiously and not gratuitously, even if the patient did not request or consent to treatment, where mental impairment makes consent immaterial. A court-ordered emergency hospitalization supports the conclusion that the patient lacked sufficient judgment to make responsible decisions, so refusal does not bar restitution.