Benton v. Vanderbilt University

137 S.W.3d 614 (2004)

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Nature of the Case

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Facts

P was injured in an accident and was hospitalized for five days at D. He was released from the hospital on December 18, 1998, after incurring hospital expenses of $31,504.84. P was insured by Blue Cross and Blue Shield, which had a contract with D. The contract provided, in part, that D would provide health care services to members of the Blue Cross health care plan at established discounted rates and that D would not bill any Blue Cross member for the difference between the actual medical expenses and the discounted rates. Blue Cross paid D its full obligation under the contract, which covered all but $14,772.09 of the hospital expenses. P later filed a lawsuit against Lynn in the Circuit Court for Coffee County for the personal injuries he suffered in the accident. D then sought to recover $14,772.09. D had previously filed a statutory Notice of Hospital Lien with the Clerk of the Circuit Court for Davidson County against any monetary recovery P might receive from Lynn. P filed a complaint against D alleging an abuse of process, breach of contract, and a violation of the Tennessee Consumer Protection Act on the grounds that D had agreed to accept payment in full from Blue Cross. D filed a motion seeking to compel arbitration. P argued that he was not bound by the arbitration provision because he was not a 'party' to the contract. The trial court found that P was 'not bound to the arbitration provision.' The Court of Appeals reversed, concluding that P was subject to the arbitration provision because he was a third-party beneficiary to the contract who was seeking to enforce rights under the contract. This appeal resulted.