Mark Young, Et Al. v. H & H Testing, LLC Et Al.

This appeal arises from a financial dispute between a drug testing laboratory, H & H Testing, Inc. (“H & H Testing” or “H & H”), and Wesley Young, for whom H & H performed 64 qualitative drug screens while Mr. Young was a client of Transcend Recovery Community (“Transcend”), which operates recovery communities nationwide. Upon commencing treatment for drug addiction at Transcend, Mr. Young agreed to adhere to treatment guidelines that included abstaining from drugs and alcohol and submitting to a rigorous drug screening protocol. Pursuant to this protocol, Transcend forwarded 64 of Mr. Young’s random urine samples to H & H Testing for comprehensive laboratory testing. After H & H performed each drug screen, it submitted a claim to Mr. Young’s health insurance provider, BlueCross BlueShield of Tennessee (“BlueCross” or “BCBST”). BlueCross approved each and every claim submitted by H & H Testing and remitted payment for the services rendered by H & H in the aggregate of $85,837.11. Because H & H Testing was an out-of-network provider, BlueCross remitted payment for the services rendered by H & H to its insured, Mr. Young, expecting he would forward the proceeds to H & H. Instead of remitting the funds to H & H Testing, Mr. Young entrusted the money to his parents, but they did not forward the proceeds to H & H. When H & H Testing demanded payment, Mr. Young and his parents commenced this action to declare the rights of the parties to the funds. They contended that H & H Testing was not entitled to the insurance proceeds because Mr. Young did not have a contract with H & H Testing, its services were not medically necessary, and the charges were exorbitant. H & H Testing filed an answer and counterclaims for breach of contract, conversion, and unjust enrichment. Following a hearing on cross-motions for summary judgment, the trial court granted summary judgment in favor of H & H Testing without identifying the claims upon which the judgment was granted and imposed a constructive trust over the insurance proceeds. This appeal followed. We affirm the trial court’s decision to grant summary judgment in favor of H & H Testing based on its claims of conversion and unjust enrichment. But we vacate the trial court’s decision to impose a constructive trust over the proceeds because the parties failed to raise the issue in any of the pleadings.