         THE STATE OF SOUTH CAROLINA
             In The Court of Appeals

Jeanne Beverly, individually and on behalf of others
similarly situated, Appellant,

v.

Grand Strand Regional Medical Center, LLC,
Respondent.

Appellate Case No. 2016-001499



              Appeal From Horry County
       Benjamin H. Culbertson, Circuit Court Judge


                  Opinion No. 5708
     Heard November 8, 2018 – Filed January 15, 2020


AFFIRMED IN PART, REVERSED IN PART, AND
              REMANDED


Sidney L. Major, Jr. and Roy F. Harmon, III, of Harmon
& Major, PA, of Greenville; John Gressette Felder, Jr., of
McGowan, Hood & Felder, LLC, of Columbia; Chad
Alan McGowan and Jordan Christopher Calloway, both
of McGowan, Hood & Felder, LLC, of Rock Hill; and
Jeffrey Christopher Chandler, of Chandler Law Firm, of
Myrtle Beach, for Appellant.

James Lynn Werner, William R. Thomas, and Katon
Edwards Dawson, Jr., all of Parker, Poe, Adams &
Bernstein, LLP, of Columbia, for Respondent.
MCDONALD, J.: Jeanne Beverly appeals the circuit court's order granting Grand
Strand Medical Center, LLC's (Grand Strand's) motion to dismiss Beverly's claims
for breach of contract, bad faith, and unjust enrichment. Beverly argues the circuit
court erred in: (1) finding Beverly is not an intended third-party beneficiary of the
preferred provider contract between Blue Cross Blue Shield (BCBS) of South
Carolina and Grand Strand and (2) dismissing Beverly's claim for unjust
enrichment, despite her complaint's allegation that Grand Strand impermissibly
collected payments from Beverly and others "at a higher value than contracted for
with BCBS." We affirm in part, reverse in part, and remand to the circuit court for
further proceedings.

Facts and Procedural History

On April 29, 2005, Grand Strand contracted with BCBS of South Carolina to
become a preferred provider within the BCBS preferred provider organization
(PPO)1. In exchange for this status and access to BCBS members (Members),
Grand Strand promised to bill BCBS directly for certain medical services delivered
to Members2 and to accept a discounted reimbursement rate from BCBS for such
services. Specifically, the Institutional Agreement (the Agreement) prohibits
Grand Strand from "solicit[ing] any payment from Members"3 and requires Grand
Strand to "accept the reimbursement terms and rates" BCBS established for the
PPO. After executing the Agreement, Grand Strand began marketing itself to
Members as a BCBS preferred provider.

1
 The PPO is a network of hospitals and medical practices marketed to Members as
"preferred providers."
2
 The contract defines "Member" as "anyone who is covered for health care
services under the terms of a Benefits Contract or who is eligible for Covered
Services as a result of an agreement between Plan and an Associate Plan." A
"Benefits Contract" is defined, in pertinent part, as "any PPO contract between
Plan and Member entitling the Member to receive Covered Services or other
services as designated in the Benefits Contract."
3
  Exceptions to this provision include: co-payments, deductibles, coinsurance, non-
covered services rendered, covered services deemed to be not medically necessary,
or covered services provided to Members who are unable to provide sufficient
information regarding eligibility and coverage either prior to receiving service or
following services rendered.
On September 6, 2012, Beverly was injured in an automobile accident. That same
day, she went to Grand Strand's emergency room, where she was evaluated and
treated by an emergency room physician. Thereafter, Grand Strand sent Beverly a
bill for $8,000.00.4 Because Beverly had previously purchased a health insurance
policy from BCBS—and thus became a Member with access to the PPO
network—Beverly did not expect to receive such a bill.

Beverly filed suit against Grand Strand, asserting claims for breach of contract, bad
faith, and unjust enrichment. Beverly claimed Grand Strand breached its contract
with BCBS and violated its contractual and fiduciary duties to her (and other
Members who contracted for access to the PPO network) by billing her directly
and charging her an amount exceeding the contractual reimbursement rate.

Grand Strand moved to dismiss and, following a hearing, the circuit court
dismissed Beverly's complaint. The circuit court denied Beverly's subsequent Rule
59(e), SCRCP, motion to alter or amend.

Standard of Review

"On appeal from the dismissal of a case pursuant to Rule 12(b)(6), an appellate
court applies the same standard of review as the trial court." Rydde v. Morris, 381
S.C. 643, 646, 675 S.E.2d 431, 433 (2009). "In considering such a motion, the trial
court must base its ruling solely on allegations set forth in the complaint." Spence
v. Spence, 368 S.C. 106, 116, 628 S.E.2d 869, 874 (2006). "If the facts and
inferences drawn from the facts alleged in the complaint, viewed in the light most
favorable to the plaintiff, would entitle the plaintiff to relief on any theory, then the
grant of a motion to dismiss for failure to state a claim is improper." Id. "At the
Rule 12 stage, therefore, the first decision for the trial court is to decide only
whether the pleading states a claim." Skydive Myrtle Beach, Inc. vs. Horry Cty.,
426 S.C. 175, 180, 826 S.E.2d 585, 588 (2019).

Law and Analysis

I.    Third-Party Beneficiary

Beverly argues the circuit court erred in finding a Member is not an intended third-

4
 Grand Strand billed Beverly $7,031.25 for the initial medical treatment and
$968.75 for removal of staples.
party beneficiary of the Institutional Agreement between BCBS and Grand Strand
because the Agreement adds Grand Strand to a PPO network structured to provide
direct benefits to Members. She further asserts the Agreement's purported
"beneficiary disclaimer" does not bar her claims because the disclaimer's own
language renders it inapplicable to "a Member's right to receive Covered Services."
We agree.

Under South Carolina law, it is well settled that a nonparty may enforce
contractual terms that intentionally provide her direct benefits. See, e.g., Kingman
v. Nationwide Mut. Ins. Co., 243 S.C. 405, 412, 134 S.E.2d 217, 221 (1964) ("We
have held in numerous cases that a contract between two persons, for the benefit of
a third, even though such third party be not named therein, can be enforced by such
third party."); Jennings v. First of Ga. Underwriters Co., 283 S.C. 455, 457, 322
S.E.2d 694, 695 (Ct. App. 1984) (explaining contracts between two persons for the
benefit of a third can be enforced by the third person even though she is not named
therein). "The presumption that [a] contract is not enforceable by [a nonparty] may
be overcome by showing he was intended to be the direct beneficiary of the
contract." Touchberry v. City of Florence, 295 S.C. 47, 48–49, 367 S.E.2d 149,
150 (1988).

"The cardinal rule of contract interpretation is to ascertain and give legal effect to
the parties' intentions as determined by the contract language." Whitlock v. Stewart
Title Guar. Co., 399 S.C. 610, 614, 732 S.E.2d 626, 628 (2012) (quoting McGill v.
Moore, 381 S.C. 179, 185, 672 S.E.2d 571, 574 (2009)). "Courts must enforce, not
write, contracts of insurance, and their language must be given its plain, ordinary
and popular meaning." Id. (quoting USAA Prop. & Cas. Ins. Co. v. Clegg, 377
S.C. 643, 655, 661 S.E.2d 791, 797 (2008)). "A contract is read as a whole
document so that one may not create an ambiguity by pointing out a single
sentence or clause." Williams v. Gov't Emps. Ins. Co. (GEICO), 409 S.C. 586, 595,
762 S.E.2d 705, 710 (2014) (quoting McGill, 381 S.C. at 185, 672 S.E.2d at 574).
"Whether a contract is ambiguous is to be determined from examining the entire
contract, not by reviewing isolated portions of the contract." Id.

The circuit court excluded Beverly as a third-party beneficiary based upon its
examination of Section 16.16 of the Agreement, titled "No Third Party
Beneficiaries," which states:

             This Agreement is not intended to, and shall not be
             construed to, make any person or entity a third party
             beneficiary. Notwithstanding the preceding, nothing in
             this section shall affect Plans rights under Article XV, or
             a Member's right to receive Covered Services[5] pursuant
             to the terms of this Agreement.

Construing Section 16.16's first sentence in isolation, the circuit court concluded
BCBS and Grand Strand disclaimed the possibility of any third-party beneficiary
claim by Members. However, the provision's second sentence clarifies that despite
this provision "nothing in this section shall affect . . . a Member's right to receive
Covered Services pursuant to the terms of this Agreement." A similar phrase is
found in the Agreement's recitals: "Whereas, [Grand Strand] desires to become a
PPO provider to allow it to provide Covered Services under the terms of this
Agreement." Grand Strand's refusal to submit Beverly's bill directly to BCBS is
arguably actionable because the language of the Agreement requires Grand Strand
to do just that. Likewise, Beverly's allegation that Grand Strand's billing her and
demanding an undiscounted sum for covered services states a claim because,
pursuant to the terms of the Agreement, Grand Strand agreed to bill BCBS and to
accept a discounted reimbursement for Member Beverly's benefit.

Moreover, the remaining twenty pages of the Agreement impose requirements on
Grand Strand specifically intended to benefit Beverly and other Members. South
Carolina courts have recognized that the parties' intent must be derived from the
Agreement's language taken as a whole. This isolated sentence—when considered
within the context of the entire Institutional Agreement—does not retract the
benefits the Agreement repeatedly bestows upon BCBS PPO Members.
Significantly, Section 16.16's second sentence recognizes a "Member's right to
receive Covered Services pursuant to the Agreement," thus carving out related
claims from any purported third-party beneficiary exclusion.

Further, interpreting Section 16.16's language as a bar to Beverly's claims
disregards expressions of the parties' intent set forth elsewhere in the contract.

5
  The Agreement defines "Covered Services" as "those inpatient and outpatient
hospital services, supplies, equipment, and/or items to be delivered by or through
Institution to Members that are reimbursable under the applicable Member
Benefits Contract. Certain services, supplies, equipment and/or items are not
included under this Agreement as Covered Services, including but not limited to
services provided by skilled nursing facilities, durable medical equipment
suppliers, outpatient retail pharmacies, and physician services other than radiology,
pathology, anesthesiology, and emergency room that are combined billed on [a
certain form]." Article XV addresses Associate Plans and is inapplicable here.
BCBS established its PPO "for the benefit of Members." The very first
responsibility Grand Strand undertook in the "Institution Services and
Responsibilities" section of the Agreement was to "provide Covered Services to
any Member." Members are also direct beneficiaries of Grand Strand's promise to
accept the negotiated reimbursement rate from BCBS as well as its promise to bill
BCBS, not the Member, for covered services.

Other jurisdictions have found a third-party beneficiary disclaimer may not apply
when substantive provisions in the contract contradict the purported disclaimer.
In a case similar to Beverly's, the Wisconsin Court of Appeals found an insured
covered by a health maintenance organization (HMO) was a third-party beneficiary
of her insurer's HMO provider contract with the hospital where she was treated
following an automobile accident. Dorr v. Sacred Heart Hospital, 597 N.W.2d
462, 475 (Wis. App. 1999). The contract's language expressing a general intent to
disclaim third-party beneficiaries was ineffective as to the insured because it was
inconsistent with other portions of the same contract protecting subscribers' rights.
Id. (finding "hold harmless" provision's terms were "designed specifically for the
purpose of protecting HMO subscribers"). Likewise, a federal district court in
Pennsylvania applied similar principles to reject a third-party beneficiary exclusion
offered to prevent a medical provider from enforcing a PPO contract between an
insurer and a health insurance network. See Aetna Life Ins. Co. v. Huntingdon
Valley Surgery Ctr., Civil Action No. 13-03101, 2015 WL 1954287 (E.D. Pa. Apr.
30, 2015). Because the contract in question purported to exclude third-party
beneficiaries while also granting specific benefits to nonparties, the contract was
patently ambiguous and the third-party beneficiary claim could not be dismissed on
a pre-answer motion. Id. at *10. Like the defendant in Huntingdon Valley, Grand
Strand cannot selectively enjoy certain benefits of the Agreement while
disregarding terms beneficial to Members. Id.

The Tennessee Supreme Court addressed whether a patient was a third-party
beneficiary entitled to enforce a similar institutional agreement between a
Tennessee hospital and BCBS of Tennessee in Benton v. Vanderbilt University,
137 S.W.3d 614 (Tenn. 2004). Benton involved an arbitration dispute, but the
dispute arose in part because the court had recognized a BCBS insured was a third-
party beneficiary of the hospital's agreement with BCBS of Tennessee. Id. at 620.
The court explained:

             Applying these principles, we conclude that the Court of
             Appeals correctly held that Benton was bound by the
             arbitration provision contained in the contract between
             Vanderbilt and [BCBS]. Benton was a third-party
             beneficiary to the contract who filed an action seeking to
             enforce rights under the contract. Benton's claim was
             dependent on his status as a third-party beneficiary to the
             contract and Vanderbilt's alleged obligations under
             section 6.1 of the agreement. Accordingly, based on the
             general principle that a third-party beneficiary cannot
             enforce favorable terms of a contract while avoiding
             unfavorable terms, we conclude that Benton's claim
             seeking to enforce the contract is subject to the
             arbitration provision.

Id.; see also West v. Shelby Cty. Healthcare Corp., 459 S.W.3d 33, 45 (Tenn.
2014) (citing Benton and noting the court had "already held that persons insured by
an insurance company are intended third-party beneficiaries of the contract
between their insurance company and a hospital. Thus, with regard to an insurance
company's customers, 'reasonable charges' are the charges agreed to by the
insurance company and the hospital.").

In another billing dispute between a Blue Cross insured and a hospital contracting
with the insurer, an Arizona court found a provision requiring the hospital to
accept a discounted reimbursement rate was "clearly a benefit to the subscriber;
that benefit is both intentional and direct." Nahom v. Blue Cross & Blue Shield of
Arizona, Inc., 885 P.2d 1113, 1117 (Ariz. App. 1994). As further evidence that the
insured was an intended third-party beneficiary, Nahom noted the numerous times
the class of Blue Cross subscribers was named in the contract. Id. at 1118. The
South Dakota Supreme Court reached the same conclusion when construing a
hospital's contract with a self-insured health plan. Jennings v. Rapid City Reg'l
Hosp. Inc., 802 N.W.2d 918 (S.D. 2011). The health plan's members were third-
party beneficiaries to the contract because "the contract language clearly expresses
intent to benefit" the members. Id. at 922. The Jennings court made special note
of the contract's recitals which, as in this case, identified the benefits to members
the insurance plan expressly intended to provide. Id. Jennings rejected the notion
that the members could not be third-party beneficiaries because the contract
provided direct benefits to its parties, i.e. the hospital and insurer. Notwithstanding
its benefits to the contracting parties, the contract also benefited the members, and
as such, the members were permitted to protect those benefits by enforcing the
contract's terms. Id. at 923 ("We look only at who was directly and primarily
benefited. In this case, it is [the health plan's insured employees].").
Here, the Agreement's language, structure, and purpose directly benefit Members
like Beverly. From its opening provision, the Agreement acknowledges its core
objective is to support a PPO created "for the benefit of its Members." The
Agreement defines a PPO as "a network of providers under contract with the Plan
whereby Benefit Contracts contain financial incentives for Members to seek
Covered Services from such providers." These financial incentives are made
explicit later in the contract where Grand Strand agreed to accept reimbursement
for its services for BCBS Members at a discounted rate. Beyond co-pays and
deductibles, Grand Strand was prohibited from directly charging Members for
covered services, even at the reduced rate. In clear terms, Grand Strand agreed it
would not solicit any payment from Members. Indeed, the Agreement conferred
an additional practical benefit on Members by placing on preferred providers such
as Grand Strand the obligation to submit the Members' bills to BCBS.

Beverly's third-party beneficiary status is also evident from the PPO's structure,
which is established by the Agreement. As a South Carolina district court has
explained:

             A PPO is a means of health insurance whereby the
             insurance company contracts with a network of health
             care providers, including hospitals. The insurer attempts
             to negotiate favorable rates of reimbursement for the cost
             of health care that reflects the volume of patients the
             insurer expects to deliver to the preferred health care
             provider. The insurer then passes through some of this
             cost saving to subscribers in the form of lower co-
             payments and reduced deductibles, which creates the
             incentive for the patient to use the preferred providers
             and, in turn, creates the volume to support the "discount."

Drs. Steuer & Latham, P.A. v. Nat'l Med. Enters., Inc., 672 F. Supp. 1489, 1513
(D.S.C. 1987).

Beverly argues and we agree the PPO here is intended to benefit its participants.
Grand Strand gained access to BCBS's expansive membership along with
guaranteed reimbursements from BCBS in exchange for accepting both reduced
payments as well as the responsibility of submitting Members' claims to BCBS.
BCBS gained greater cost control in exchange for promising prompt payment for
Grand Strand's services and touting Grand Strand's PPO provider status to
Members. Beverly's allegations that Grand Strand's failure to submit Beverly's bill
to BCBS and refusal to bill her at the reduced reimbursement rate state a claim that
Grand Strand breached its contract in denying Beverly benefits arising from the
Agreement. Therefore, the circuit court erred in dismissing Beverly's breach of
contract claim.

II.   Fiduciary Relationship

The circuit court dismissed Beverly's breach of fiduciary duty claims against Grand
Strand as based on duties arising from a contract Beverly lacked standing to
enforce. However, as discussed above, a nonparty may enforce a contract that
intentionally provides her direct benefits.

Although Beverly's complaint alleges certain required elements of a breach of
fiduciary duty claim, the circuit court concluded Beverly and Grand Strand did not
have a relationship from which a fiduciary duty arose. Beverly claims Grand
Strand and Beverly created a relationship of trust when Grand Strand became a
PPO preferred provider and accepted the Agreement's terms, and Beverly sought
out Grand Strand for medical services because it was a part of the BCBS PPO. By
providing Grand Strand with her BCBS PPO insurance identification card, Beverly
contends she met the requirements for Grand Strand to fulfill the duties arising
from its relationship with BCBS. Thus, Beverly claims Grand Strand breached its
duty of trust.

While South Carolina courts have recognized fiduciary relationships between
agents and principals, attorneys and clients, the administrator and beneficiaries of
an estate, business partners, officers and shareholders of a corporation, and doctors
and their patients, there is no authority to support the proposition that a fiduciary
relationship exists between a hospital and patient with respect to a hospital's
contractual duty to submit an insurance claim. See Wogan v. Kunze, 366 S.C. 583,
605, 623 S.E.2d 107, 119 (Ct. App. 2005), affd as modified, 379 S.C. 581, 666
S.E.2d 901 (2008) ("[T]his state has not found that medical negligence or
malpractice will support a cause of action for breach of fiduciary duty. Nor have
our courts found the failure of a doctor to offer assistance in filing a Medicare
claim or other claim is a breach of fiduciary duty."); see also Burton v. William
Beaumont Hosp., 373 F. Supp. 2d 707, 723-24 (E.D. Mich. 2005) (finding
Michigan law does not authorize the imposition of a fiduciary duty related to a
hospital's billing practices); DiCarlo v. St. Mary Hosp., 530 F.3d 255, 269 (3d Cir.
2008) ("It is clear, however, that in general New Jersey does not find fiduciary
duty in the debtor-creditor context, and, given that the cases cited by both sides
relate only to the provision of care and not the payment therefor, it is unlikely that
the New Jersey courts would expand a hospital's fiduciary duty to its billing
practices. In the absence of a fiduciary duty, no cause of action exists for its
alleged breach, and [the breach of fiduciary duty claim] will therefore be
dismissed.").

Here, Beverly does not challenge the quality of the medical care she received.
Rather, she complains only of Grand Strand's billing practices and its breach of the
BCBS Agreement. Beverly attempts to expand the fiduciary relationship that may
in certain circumstances exist between a doctor and patient to encompass a
hospital's billing practices for medical services rendered. In essence, Beverly is
asking the court to impose a fiduciary duty on a creditor-debtor relationship; South
Carolina law does not impose such a duty in the absence of some special trust
reposed in the creditor. See Regions Bank v. Schmauch, 354 S.C. 648, 671, 582
S.E.2d 432, 444 (Ct. App. 2003) ("South Carolina holds the normal relationship
between a bank and its customer is one of creditor-debtor and not fiduciary in
nature." (citing Burwell v. South Carolina Nat'l Bank, 288 S.C. 34, 40, 340 S.E.2d
786, 790 (1986)). The circuit court properly found South Carolina does not
recognize a fiduciary duty related to a hospital's billing practices. Accordingly, we
affirm the circuit court's dismissal of Beverly's claim for breach of fiduciary duty.

III.   Unjust Enrichment/Quantum Meruit

Beverly argues the circuit court essentially found it equitable for Grand Strand to
charge a Member in violation of its agreement with BCBS. While we disagree the
circuit court's order so finds, we agree with Beverly's contention that the court
erred in dismissing her quantum meruit claim. See Columbia Wholesale Co. v.
Scudder May N.V., 312 S.C. 259, 261, 440 S.E.2d 129, 130 (1994) ("Absent an
express contract, recovery under quantum meruit is based on quasi-contract, the
elements of which are: (1) a benefit conferred upon the defendant by the plaintiff;
(2) realization of that benefit by the defendant; and (3) retention by the defendant
of the benefit under conditions that make it unjust for him to retain it without
paying its value."); Barnes v. Johnson, 402 S.C. 458, 466, 742 S.E.2d 6, 10 (Ct.
App. 2013) (explaining quantum meruit is a remedy for unjust enrichment);
Williams Carpet Contractors, Inc. v. Skelly, 400 S.C. 320, 327–28, 734 S.E.2d 177,
181 (Ct. App. 2012) (allowing a party to allege an unjust enrichment cause of
action as an alternative claim for breach of contract).

Grand Strand argues Pitts v. Jackson National Life Insurance Co., 352 S.C. 319,
574 S.E.2d 502 (Ct. App. 2002), supports the circuit court's dismissal. We
disagree. The asserted wrong in Pitts was a breach of an alleged "duty of insurer to
inform an applicant of the availability of an allegedly superior product." Id. at 338,
574 S.E.2d at 512. However, the court found it was not inequitable for an insurer
to retain the price of an insurance policy where the insurer could have offered a
policy with similar coverage at a lesser price. There simply was no duty to provide
such a notification. Id. at 339, 574 S.E.2d at 512. Pitts also relied on the fact that
the alleged wrongdoing was performed when the plaintiff was a mere insurance
applicant. Id. at 331, 574 S.E.2d at 508. At that point, there was no existing
relationship on which to build a fiduciary duty or to impose liability for unjust
enrichment. Id.

But Beverly is not a mere insurance applicant; she is a defined Member in a PPO
Agreement under which Grand Strand contracted to provide Covered Services.
Additionally, Beverly's complaint does not allege a failure to inform; it alleges
affirmative inequitable conduct seeking to deprive her of the benefit of her funds.
While the Pitts defendant was permitted to refuse to offer a gratuitous discount,
Grand Strand is not permitted to bill a Member for its services at a higher payment
rate than it contractually agreed to accept. The complaint does not allege a mere
matter of erroneous billing. When Grand Strand billed Beverly for covered
services, it declined to bill her at the contracted for, discounted rate, and it sent her
the bill in violation of its contract with BCBS. Accordingly, it was error for the
circuit court to dismiss the quantum meruit claim at the 12(b)(6) stage.

Conclusion

We reverse the circuit court's dismissal of Beverly's breach of contract and
quantum meruit claims. We affirm as to the dismissal of the claim for breach of
fiduciary duty and remand this matter for further proceedings.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

KONDUROS and HILL, JJ., concur.
