Richard Bloss v. St. Luke's Hospital of Duluth

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
July 6, 2023
A party may file with the Supreme Court a
Samuel A. Christensen petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2021AP352 Cir. Ct. No. 2019CV112

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III

RICHARD BLOSS,

PLAINTIFF-APPELLANT,

V.

ST. LUKE’S HOSPITAL OF DULUTH,

DEFENDANT-RESPONDENT.

APPEAL from an order of the circuit court for Ashland County:
KELLY J. McKNIGHT, Judge. Affirmed.

Before Stark, P.J., Hruz and Gill, JJ.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).

¶1 PER CURIAM. Richard Bloss appeals a circuit court order
dismissing his class action complaint against St. Luke’s Hospital of Duluth
No. 2021AP352

(SLHD) for failure to state an actionable claim. The court concluded that Bloss’s
complaint failed to sufficiently plead facts that, if true, would entitle him to relief
under WIS. STAT. § 146.84(1) (2021-22).1 Specifically, the court concluded that
Bloss failed to sufficiently state facts to allege that SLHD is a “health care
provider” subject to that statute.

¶2 On appeal, Bloss contends that his complaint contained sufficient
facts to allege that SLHD is a “rural medical center” and therefore a “health care
provider.” Alternatively, he argues that the circuit court should have granted him
leave to amend his complaint. We conclude that Bloss failed to state sufficient
facts to overcome SLHD’s motion to dismiss for failure to state a claim upon
which relief could be granted. We also conclude that if the court erroneously
exercised its discretion by failing to grant Bloss leave to file an amended
complaint, such error was harmless. We therefore affirm the court’s order.

BACKGROUND

¶3 Bloss filed a class action lawsuit against SLHD, a Minnesota-based
corporation, alleging multiple statutory and common law claims, all of which were
related to SLHD’s alleged violations of Wisconsin’s patient health care records

1
All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise
noted.

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laws.2 According to the complaint, Bloss’s attorneys sought certified health care
records from SLHD’s Chequamegon Clinic and provided Bloss’s written consent.
In response, SLHD purportedly charged more than is statutorily prescribed for
health care records, contrary to WIS. STAT. § 146.83(3f)(b).

¶4 SLHD filed a motion to dismiss Bloss’s complaint for failure to state
a claim upon which relief could be granted. SLHD argued, among other things,
that Bloss’s complaint failed to allege that SLHD is a health care provider subject
to Wisconsin’s patient health care records laws.

¶5 Following briefing and a motion hearing, the circuit court granted
SLHD’s motion and dismissed Bloss’s complaint in its entirety and without
prejudice.3 The court agreed with SLHD’s argument that Bloss’s complaint failed
to sufficiently allege that SLHD is a health care provider.

¶6 Bloss now appeals. Additional facts will be provided below as
necessary.

2
In addition to alleging two causes of action for violations of Wisconsin’s patient health
care records laws under WIS. STAT. § 146.84(1), Bloss’s complaint alleged two common law
claims (unjust enrichment and conversion) as well as a claim for fraudulent misrepresentation
under WIS. STAT. § 100.18. On appeal, Bloss argues that the circuit court erred by dismissing his
claims on the grounds that his complaint did not allege sufficient facts to show that SLHD is a
health care provider as defined under Wisconsin law. Bloss does not separately challenge the
dismissal of his common law claims or his statutory misrepresentation claim on any other
grounds, and instead he solely addresses the issues surrounding Wisconsin’s patient health care
records laws. We will therefore address the dismissal of all of Bloss’s claims as an issue of
whether the court properly determined that the facts alleged in Bloss’s complaint did not
sufficiently establish that SLHD is a health care provider. In other words, we will assume
without deciding that all of Bloss’s claims hinge on the question of whether his complaint
sufficiently alleged claims under § 146.84(1), and we deem any other claims abandoned on
appeal. See A.O. Smith Corp. v. Allstate Ins. Cos., 222 Wis. 2d 475, 491, 588 N.W.2d 285
(Ct. App. 1998).
3
SLHD concedes that the circuit court’s dismissal was without prejudice.

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DISCUSSION

¶7 A motion to dismiss for failure to state a claim tests the legal
sufficiency of a complaint. Data Key Partners v. Permira Advisers LLC, 2014
WI 86, ¶19, 356 Wis. 2d 665, 849 N.W.2d 693. To survive a motion to dismiss, a
complaint must include, among other things, “[a] short and plain statement of the
claim, identifying the transaction or occurrence or series of transactions or
occurrences out of which the claim arises and showing that the pleader is entitled
to relief.” See WIS. STAT. § 802.02(1)(a).

¶8 The applicable standard applied to a motion to dismiss for failure to
state a claim is well settled:

Upon a motion to dismiss, we accept as true all facts
well-pleaded in the complaint and the reasonable inferences
therefrom. However, a court cannot add facts in the
process of construing a complaint. Furthermore, legal
conclusions stated in the complaint are not accepted as true,
and they are insufficient to enable a complaint to withstand
a motion to dismiss.

Data Key Partners, 356 Wis. 2d 665, ¶19 (citations omitted). “Plaintiffs must
allege facts that, if true, plausibly suggest a violation of applicable law.” Id., ¶21.
Courts are to construe all pleadings liberally so “as to do substantial justice.” WIS.
STAT. § 802.02(6). We independently review whether a complaint states a claim
upon which relief can be granted. Data Key Partners, 356 Wis. 2d 665, ¶17.

¶9 Subject to exceptions not relevant to this appeal, “if a person
requests copies of a patient’s health care records, provides informed consent, and
pays the applicable fees … the health care provider shall provide the person
making the request copies of the requested records.” WIS. STAT. § 146.83(3f)(a).

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(emphasis added). Section 146.83(3f)(b) outlines the maximum fees that may be
charged by the health care provider for such records.

¶10 WISCONSIN STAT. § 146.81(1) defines “health care provider” by
providing an exhaustive list of specific types of entities and persons. See
Townsend v. ChartSwap, LLC, 2021 WI 86, ¶14, 399 Wis. 2d 599, 967 N.W.2d
21 (defendant was not a health care provider because it did not fall under
§ 146.81(1)). As relevant here, the term “health care provider” means “[a] rural
medical center.”4 Sec. 146.81(1)(p). In turn, a

“[r]ural medical center” means an arrangement of facilities,
equipment, services and personnel that is all of the
following:

(a) Organized under a single governing and corporate
structure.

(b) Capable of providing or assuring health care services,
including appropriate referral, treatment and follow-up
services, at one or more locations in a county, city, town or
village that has a population of less than 15,000 and that is
in an area that is not an urbanized area, as defined by the
federal bureau of the census.

(c) A provider of at least 2 health care services under the
arrangement or through a related corporate entity.

WIS. STAT. § 50.50(11).

4
At the circuit court level, Bloss argued that SLHD is a “health care provider” because it
also qualifies as “[a] corporation or limited liability company of any providers specified under
[WIS. STAT. § 146.81(1)(a)-(hp)] that provides health care services” and as “[a]n inpatient health
care facility, as defined in [WIS. STAT. §] 50.135 (1).” See § 146.81(1)(j), (m). Because Bloss
does not renew these arguments on appeal, we will not address § 146.81(1)(j) or (m) further.

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¶11 Bloss’s complaint contained the following relevant assertions:

2. [SLHD] is a corporation … that has acted and acts as a
“health care provider” as that term is contemplated by
WIS. STAT. § 146.81(1).

3. [SLHD] is a network of clinics and hospitals serving
more numerous locations throughout Wisconsin.

….

36. That on or about September 13, 2018, [Bloss’s]
attorneys wrote and requested certified health care
medical records from [SLHD’s] Chequamegon Clinic
and provided a written consent … signed by [Bloss].

….

41. [SLHD] knew it was illegal to charge [certain fees] to
[Bloss] contrary to WIS. STAT. § 146.83 to obtain his
certified health care records when a third party was
authorized in writing to obtain the records.

42. [SLHD] charged [certain fees] in violation of WIS.
[STAT. §]§ 146.83 and 146.84.

43. [SLHD has] knowingly and willfully charged these
illegal fees contrary to the statute.

Paragraphs 37 and 39 of the complaint also referenced an attached exhibit of a
record request invoice that SLHD sent to Bloss. The invoice included a notice
informing Bloss that “[t]hese charges have been set in accordance with [a
Minnesota statute], the maximum fee a health care provider may charge for
providing copies.” (Emphasis added.)

¶12 The circuit court concluded that paragraph 2 in Bloss’s complaint
was a legal conclusion, not a factual allegation. The court stated that it did “not
assume that [Bloss’s] allegation in paragraph 2 [was] true and [did] not consider it
for purposes of this motion to dismiss.” The court then concluded that Bloss’s
complaint failed to state sufficient facts to allege that SLHD meets the

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requirements of WIS. STAT. § 50.50(11)(b). That is, Bloss did not state facts
alleging that SLHD provides “health care services … at one or more locations in a
county, city, town or village that has a population of less than 15,000 and that is in
an area that is not an urbanized area.” See § 50.50(11)(b). Regarding additional
information provided by Bloss in his response to SLHD’s motion to dismiss, the
court stated that Bloss “asks this [c]ourt to go outside the complaint to find
facts … which is not the process for deciding a motion to dismiss.” The court did
not address the remaining two requirements under § 50.50(11)(a) and (c).

¶13 Like the circuit court, we conclude that paragraph 2 in Bloss’s
complaint is nothing more than a legal conclusion, and we will not consider it in
our analysis of SLHD’s motion to dismiss. Paragraph 2 merely states that SLHD
“has acted and acts as a ‘health care provider’ as that term is contemplated by WIS.
STAT. § 146.81(1).” The statement lacks any facts to sufficiently support such a
claim.

¶14 We also agree with the circuit court that Bloss’s complaint lacks any
factual allegations that sufficiently allege that SLHD meets the definition of a
health care provider under WIS. STAT. § 146.81(1).5 Bloss’s complaint alleged
5
On appeal, Bloss asserts that because SLHD’s answer admitted that Bloss’s “attorneys
wrote and requested certified health care medical records,” SLHD admitted that it is a health care
provider. In support of this argument, Bloss cites the definition of “certified health care medical
records,” which includes records “prepared by or under the supervision of a health care provider.”
See WIS. STAT. § 146.81(4). Bloss cites other “admissions” SLHD made in its answer to argue
the same. Bloss also states that SLHD admitted that it is a health care provider because it
responded to paragraphs 37 and 39—which referenced the record request invoice—by stating that
the invoice “speaks for itself.”

We disagree with Bloss’s arguments in this regard for many reasons. Most notably,
SLHD expressly stated in its answer, on numerous occasions, that it rejected any assertion that it
is a health care provider as defined by WIS. STAT. § 146.81(1). Furthermore, we disagree that
SLHD’s admission that it is a Minnesota health care provider has any bearing on whether it is a
health care provider under Wisconsin law.

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that SLHD “has acted and acts as a ‘health care provider.’” (Emphasis added.)
However, it is not enough that SLHD “act[s] as” a health care provider.
WISCONSIN STAT. § 146.83(3f)(a) requires a “health care provider”—not an entity
that acts as a health care provider—to provide requested health care records.
Moreover, as the court recognized, to meet the definition of a “health care
provider” for purposes of § 146.83(3f)(a), the person or entity must actually
qualify as one of the expressly listed types of persons or entities described in
§ 146.81(1). Section 146.81(1) is not a list of examples of health care providers—
it is an exhaustive list. In that regard, we note that nothing in Bloss’s complaint
alleged that SLHD is a “rural medical center”—one of twenty-nine types of health
care providers expressly listed under § 146.81(1).

¶15 Furthermore, as SLHD argues, even if Bloss’s complaint had alleged
that SLHD is a rural medical center, his complaint failed to allege that SLHD
meets the statutory requirements of a rural medical center. The only allegation in
Bloss’s complaint that comes close to addressing the rural medical center standard
is the statement that Bloss’s attorneys “requested certified health care medical
records from [SLHD’s] Chequamegon Clinic.” Bloss, however, did not allege
that: SLHD is “[c]apable of providing or assuring health care services, including
appropriate referral, treatment and follow-up services, at one or more locations in”
Wisconsin; the Chequamegon Clinic is in Ashland, Wisconsin, which has a
population of less than 15,000 (as Bloss alleged in his response to SLHD’s motion
to dismiss); or the Chequamegon Clinic is not in an urbanized area as defined by
the federal bureau of the census. See WIS. STAT. § 50.50(11).

¶16 In response to SLHD’s motion to dismiss, Bloss provided the circuit
court with two website links that he claimed demonstrated that the Chequamegon
Clinic is located in Ashland, Wisconsin, and that Ashland has a population of

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approximately 7,823. Bloss contends that the court essentially ignored this
information, despite the fact that WIS. STAT. § 50.50(11)(b) “requires that the
federal census bureau data be referred to.” Similarly, Bloss argues that the court
should have taken judicial notice of Ashland’s population. See WIS. STAT.
§ 902.01(2). Bloss also maintains that there was “nothing before the [c]ourt to
prove that [SLHD] could not meet the definition of a rural medical center.”

¶17 Bloss misapplies the pleading standard under WIS. STAT. § 802.02.
A party suing must plead facts sufficient to plausibly show that he or she is
entitled to relief. See Data Key Partners, 356 Wis. 2d 665, ¶21. Plausible
“[f]actual assertions are evidenced by statements that describe: ‘who, what,
where, when, why, and how.’” Id., ¶21 n.9. While Bloss’s complaint alleged
facts showing it is possible that SLHD could be a health care provider, nothing in
his complaint makes that fact plausible. A court properly dismisses “a complaint
if, ‘[u]nder the guise of notice pleading, [it] requires the court to indulge in too
much speculation leaving too much to the imagination of the court.’ It is not
enough for the plaintiff to contend that the requisite facts will be ‘supplied by the
discovery process.’” Doe v. Archdiocese of Milwaukee, 2005 WI 123, ¶36, 284
Wis. 2d 307, 700 N.W.2d 180 (first alteration in original; citations omitted).

¶18 Even if the circuit court took judicial notice of Ashland’s population,
the federal bureau of the census defined an “urbanized area” in the 2020 census as
an area that has “at least 2,000 housing units or [has] a population of at least
5,000.” See United States Census Bureau, Urban Area Announcement and
Criteria for the 2020 Census (available at https://www.census.gov/programs-
surveys/geography/guidance/geo-areas/urban-
rural.html#:~:text=To%20qualify%20as%20an%20urban,population%20of%20at
%20least%205%2C000), last visited July 3, 2023. For purposes of the 2010

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census, the federal bureau of the census defined an “urbanized area” simply as an
area that has a population of 2,500. See id. As such, assuming the population of
Ashland is 7,823 as Bloss suggests, Ashland has met the definition of an
“urbanized area” for at least the past two censuses. Therefore, Bloss’s complaint
failed to state sufficient facts to allege that SLHD is a rural medical center.6

¶19 Lastly, Bloss asserts that even if the circuit court correctly decided
SLHD’s motion to dismiss for failure to state a claim, “the appropriate course of
action would be to allow an amended complaint to be filed.”

¶20 After an action has been pending for more than six months, “a party
may amend [its] pleading only by leave of court or by written consent of the
adverse party; and leave shall be freely given at any stage of the action when
justice so requires.” WIS. STAT. § 802.09(1). While “Wisconsin embraces a
policy in favor of liberal amendment of pleadings,” circuit courts have “wide
discretion in determining whether to permit the amendment of pleadings at any
stage of the proceedings.” Tietsworth v. Harley-Davidson, Inc., 2007 WI 97, ¶25,
303 Wis. 2d 94, 735 N.W.2d 418. “We affirm a [circuit] court’s exercise of
discretion if the court applied the correct legal standard to the facts of record in a

6
On appeal, both parties dispute whether SLHD must be a licensed rural medical center
for purposes of WIS. STAT. § 146.81(1). We need not answer that question as we decide the issue
on appeal using narrower grounds. See Patrick Fur Farm, Inc. v. United Vaccines, Inc., 2005
WI App 190, ¶8 n.1, 286 Wis. 2d 774, 703 N.W.2d 707 (“[W]e decide cases on the narrowest
possible grounds.”).

For the same reason, we also refuse to address other reasons raised by SLHD for
affirming the circuit court’s decision. For example, SLHD argues that the complaint failed to
state sufficient facts to allege that SLHD’s actions were “knowing and willful” or “negligent,” in
violation of WIS. STAT. § 146.84(1). Similarly, SLHD asserts that Bloss’s remaining claims fail
as a matter of law and are barred by the “voluntary payment doctrine.”

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reasonable manner.” Mach v. Allison, 2003 WI App 11, ¶20, 259 Wis. 2d 686,
656 N.W.2d 766 (2002).

¶21 Assuming without deciding that the circuit court erroneously
exercised its discretion in failing to allow Bloss to amend his complaint, we
conclude any such error was harmless. See WIS. STAT. § 805.18. Bloss asked the
court to allow him leave to amend the original complaint if the court “believes that
[Bloss] needs to plead more facts … to show [SLHD] is indeed a health care
provider.” According to information provided in Bloss’s response in opposition to
SLHD’s motion to dismiss, SLHD’s only other Wisconsin location is in Superior.
Superior has a population of over 25,000. See WIS. STAT. § 902.01(2); United
States Census Bureau, QuickFacts (available at
https://www.census.gov/quickfacts/superiorcitywisconsin), last visited July 3,
2023. Therefore, even if Bloss were given an opportunity to amend his complaint,
he necessarily would again fail to demonstrate that SLHD meets the definition of a
rural medical center. Furthermore, Bloss’s complaint was dismissed without
prejudice.

By the Court.—Order affirmed.

This opinion will not be published. See WIS. STAT. RULE
809.23(1)(b)5.

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