Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. IP 78-393-C -- S. Hugh Dillin, Judge .
Before Tone and Bauer, Circuit Judges, and Will, Senior District Judge.*fn*
Appellants Kathy Bright and Susan Barber seek reversal of the district court's determination that appellee Ball Memorial Hospital Association, Inc. ("Ball Memorial" or "Hospital") was not a "creditor" within the meaning of the Truth in Lending Act ("Act"), 15 U.S.C. §§ 1601, et seq., and seek a further determination that Ball Memorial violated the provisions of the Act as to them. For the reasons stated, we affirm the district court's judgment on grounds other than those relied upon by the district court.
Ball Memorial is a not-for-profit hospital incorporated under the laws of the State of Indiana. Located in Delaware County, Indiana, Ball Memorial serves its own and four surrounding counties and operates as the primary referral hospital for East Central Indiana. It is a general public hospital, admitting all persons without regard to ability to pay.
Upon admission to the hospital, inpatients are shown and asked to sign an "Initial Credit Disclosure Statement and Consent to Treatment" form. The Initial Credit Disclosure Statement initially states: "You are requested to remit the balance due on your account with the hospital at the time of discharge." This Statement further sets forth, however, conditions under which an inpatient may pay the account balance in installments "IF IT IS NECESSARY" for the patient to use such a procedure. The conditions include the imposition of a "FINANCE CHARGE of 3/4% per month on any unpaid balance, unpaid for more than thirty (30) days." Similarly, one of the pamphlets contained in the "Hospital Patient Guide" given to each inpatient informs the patient that the account is "payable at the time of your discharge," but also informs the patient that, if unable to pay the entire bill,
you or your relative must be prepared to talk with the credit manager . . . to make satisfactory credit arrangements. Our credit department will discuss with you financial arrangements and will set up the payment of your account according to your ability to pay.
This pamphlet also makes "FINANCIAL DISCLOSURE" of a "FINANCE CHARGE" which "will be added to all uncollected or past due accounts."
Pursuant to these written directives and additional oral instructions, Ball Memorial will make arrangements, prior to discharge, with inpatients without insurance or other third-party coverage who are unable to pay the bill in full upon discharge such that an installment payment schedule is established. These schedules sometimes call for payment in more than four installments. Regardless of whether the agreements contemplate more than four installments, a 3/4% monthly charge is assessed on the outstanding account balance each month while the installments are paid. Patients making these arrangements subsequently receive from the Hospital an initial bill and a coupon book embodying the installment plan arranged, and subsequently receive monthly statements of their balances as the installments are paid. They do not receive the billing statements which are described in Ball Memorial's general billing cycle, infra.
Inpatients not making such installment payment arrangements at the time of discharge receive an initial bill from Ball Memorial on the fourth day after discharge which delineates the specific charges assessed to their accounts. On the reverse side of this initial bill is a schedule of information headed "FINANCE CHARGE," which advises the patient that a "FINANCE CHARGE" of 3/4% per month or a 50 "HANDLING CHARGE," whichever is greater, will be added to any unpaid balance of 30 days or more, but that no such charge would be imposed if the bill were paid in full within 30 days. The schedule concludes by stating that "All charges are in compliance with the Truth and (sic) Lending Act and Uniform Consumer Credit Code."
If an inpatient has not made payment arrangements with the Hospital, on the eighteenth day after discharge the patient is mailed the first billing statement which indicates the total amount due. On its face, the statement states: "Your account is now due and payable. Please remit today." This statement, as do all subsequent statements, also bears the language: "Payment is due in full when service is rendered." On its reverse side, the statement contains a schedule of information headed "FINANCE CHARGE" which is identical to the schedule of information contained on the reverse side of the initial bill, except for the addition of the following:
BALANCEIS 10-200 201-300 301-400 401-500
MONTHLY PMT. IS 10 15 20 25
BALANCEIS 501-600 601-700 701-800 800
MONTHLY PMT. IS 30 35 40 5%
10) You may pay a larger part or all of the balance of your ...