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Arbitration sought in ambulance overbilling

Sat., April 8, 2006

A Superior Court judge is considering whether to send a lawsuit about ambulance overbilling in Spokane to arbitration instead of letting a jury decide if American Medical Response violated the state’s Consumer Protection Act.

The ambulance company, which holds the exclusive contract to provide emergency medical service within the city of Spokane, filed a motion asking Superior Court Judge Jerome Leveque to send the suit to arbitration before a private judge.

But former AMR patients Lori E. Davis-Bacon and Lorraine and Doug Bacon, who filed the suit in December, want to have their day in court, before a jury.

They were overbilled about $105 but want their suit expanded to a “class action,” which could include as many as 30,000 other patients living in Spokane who were transported by AMR since 1998.

At a hearing Friday before Leveque, the plaintiffs’ attorney, Roger Reed, said sending the case to arbitration would force his clients to pay “prohibitive legal costs.”

The former AMR patients would have to pay a $3,250 preliminary filing fee and another $8,000 if the arbitrator certified the litigation as a class action, Reed told the court.

The plaintiffs also would have to pay the arbitrator, essentially a private judge, between $250 and $300 an hour to hear the matter. The loser in the arbitration also likely would be faced with paying the legal fees of the other side.

“What person in their right mind would take on these kinds of costs with a $100 claim?” Reed asked the court.

“There’s a tremendous cost that attends going to arbitration,” Reed told the judge. “What we have here is the prohibitive-cost defense.”

AMR’s attorney, Paul Dayton, of Seattle, said the contract between the ambulance company and the city of Spokane mandates that any legal disputes must be submitted to arbitration.

Even though the plaintiffs aren’t parties to the contract, Dayton argued, they nonetheless are relying on the contract to push their legal claims, alleging violations of the state’s Consumer Protection Act.

Dayton said the plaintiffs had failed to lay out the factual basis to argue they can’t afford the costs of arbitration.

The suit names AMR and the company’s Spokane manager Jerry Lueck as defendants. Reed told the court he soon will file an amended complaint, also naming AMR regional vice president Randy Strozyk as a defendant.

At a meeting of the City Council’s Public Safety Committee in early March, Strozyk took personal responsibility for AMR overbilling patients a total of $320,689 since January 2003.

In the pending suit, Reed wants to examine overbilling back to 1998. He told the court that the potential figure for overbilling could range between $1 million and $5 million.

If the suit is sent to arbitration, only the claims against AMR would be heard by the arbtrator. Alleged actions of negligence by Lueck and Strozyk would remain in Superior Court, but they would become largely moot, depending on the outcome of the arbitration.

“If I grant the stay, this matter is resolved in arbitration,” the judge said at the conclusion of the hearing. Leveque said he likely would rule within 10 days.

The judge said he needed more time to research legal issues, including an appeals court ruling in Spokane cited by Reed. The ruling by the Court of Appeals, Division III, said it was wrong to deny a low-income man a court trial and force him to pay $2,000 arbitration filing fees to seek legal redress against a mobile home company who took his $1,000 down payment.

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