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NEGLIGENT CONCEALMENT CAUSE OF ACTION AGAINST HOSPITAL ALLEGING THE FAILURE TO DISCLOSE BILLING PRACTICES SHOULD HAVE BEEN DISMISSED; GENERAL BUSINESS LAW 349 CAUSE OF ACTION PROPERLY SURVIVED (SECOND DEPT).

The Second Department determined the complaint did not state a cause of action for negligent concealment/misrepresentation, but did state a cause of action for violation of General Business Law 349. The plaintiff alleged defendant hospital failed to to disclose material facts about the hospital’s billing practices for emergency treatment:

As a threshold matter, while the parties appear to dispute whether the first cause of action should be characterized as one sounding in “negligent concealment” or “negligent misrepresentation,” this is a distinction without a difference. The gravamen of the plaintiff’s allegations are that the hospital negligently failed to disclose material facts to him concerning the hospital’s billing practices. This is a species of negligent misrepresentation based on the omission to disclose material facts … . As a general proposition, “a duty to speak with care exists when the relationship of the parties, arising out of contract or otherwise, [is] such that in morals and good conscience the one has the right to rely upon the other for information” … . Thus, “liability for negligent misrepresentation has been imposed only on those persons who possess unique or specialized expertise, or who are in a special position of confidence and trust with the injured party such that reliance on the negligent misrepresentation is justified” … . Contrary to the plaintiff’s contention, the fact that the parties are in a contractual relationship, without more, is insufficient to support the imposition of a duty to speak with care … .

While it cannot be doubted that the relationship between a physician and a patient is one of confidence and trust regarding matters of medical treatment … , we decline to hold that such relationship, and any duty to speak with care that may come with it, also extends to matters of billing having nothing to do with the rendition of medical treatment. …

… [W]e agree with the Supreme Court’s determination that the hospital was not entitled to summary judgment dismissing the General Business Law § 349 cause of action insofar as asserted against it. First, contrary to the hospital’s contention, it was engaged in consumer-oriented activity … . Second, it is possible to engage in deceptive trade practices through omissions as well as affirmative representations … , particularly where, as here, it is alleged that “the business alone possesses material information that is relevant to the consumer and fails to provide this information” … . Third, contrary to the hospital’s contention, there is a triable issue of fact as to whether the plaintiff suffered an injury under General Business Law § 349 … . Krobath v South Nassau Communities Hosp., 2019 NY Slip Op 08838, Second Dept 12-11-19

 

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