Judge: Anne Richardson, Case: 23STCV01331, Date: 2023-08-21 Tentative Ruling

Case Number: 23STCV01331    Hearing Date: March 22, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Court Order

I. Background

A. Pleadings

Plaintiffs Heeshik Ganocy D.D.S.—individually and as successor-in-interest to Terry Kent Ganocy, M.D., deceased (Dr. Ganocy)—Alexa Gisela Ganocy, Sophia Isabella Ganocy, and Ariana Soleil Ganocy sue Defendants Kaiser Foundation Health Plan, Inc. (Kaiser Plan), The Permanente Federation LLC (Permanente Federation), Southern California Permanente Medical Group (Permanente Group), and Does 1 through 100 pursuant to a September 5, 2023, First Amended Complaint.

The FAC alleges claims of: (1) Wrongful Death and Survival against Kaiser Plan, Permanente Federation, and Does 1 to 100; (2) Retaliation in Violation of FEHA against Permanente Group and Does 1 to 100; (3) Failure to Provide Reasonable Accommodation in Violation of FEHA against Permanente Group and Does 1 to 100; (4) Failure to Engage in the Interactive Process against Permanente Group and Does 1 to 100; and (5) Violation of Labor Code § 1102.5, et seq. [Whistleblower Retaliation] against Permanente Group and Does 1 to 100.

B. Motion Before the Court

On November 13, 2023, Kaiser Plan and Permanente Federation filed a demurrer to the FAC’s first cause of action, i.e., the sole claim directed against them.

On February 27, 2024, Plaintiffs filed an opposition to the demurrer.

On March 15, 2024, Kaiser Plan and Permanente Federation filed a reply to the opposition.

The Kaiser Plan and the Permanente Federation’s demurrer is now before the Court.

II. Demurrer

A. Opposition Request for Judicial Notice

Per the request in Plaintiffs’ opposition, the Court takes judicial notice of Health & Safety Code section 1371.25. (Opp’n, p. 3; Evid. Code, §§ 452, subd. (a), 453, subds. (a)-(b).)

B. Legal Standard

1. Sufficiency

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747; see Code Civ. Proc., § 430.10, subd. (e).) This device can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) To sufficiently allege a cause of action, a complaint must allege all the ultimate facts—that is, the facts needed to establish each element of the cause of action pleaded. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 212, superseded by statute as stated in Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.) Thus, “[t]o survive a [general] demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) In testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-67.) A demurrer, however, “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228, disapproved on other grounds, Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1162.) The face of the complaint includes exhibits attached to the complaint. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) If facts appearing in the exhibits contradict those alleged, the facts in the exhibits take precedence. (Holland v. Morse Diesel Intern., Inc. (2001) 86 Cal.App.4th 1443, 1447, superseded by statute on other grounds as stated in White v. Cridlebaugh (2009) 178 Cal.App.4th 506, 521.)

C. Analysis

1. Demurrer, Complaint, First Cause of Action, Wrongful Death and Survival: SUSTAINED, with leave to amend.

a. Local Standard

The elements of a cause of action for wrongful death are a tort, such as negligence, and resulting death.” (Lopez v. City of Los Angeles (2011) 196 Cal.App.4th 675, 685.) “The elements of a cause of action for negligence are well established. They are ‘(a) a legal duty to use due care; (b) a breach of such legal duty; [and] (c) the breach as the proximate or legal cause of the resulting injury.’” (Ladd v. County of San Mateo (1996) 12 Cal.4th 913, 917.)

b. Allegations

The FAC’s first cause of action alleges wrongful death and survival against the Kaiser Plan, the Permanente Federation, and Does 1-100 based on the following allegations. Kaiser Plan and Permanente Federation are vicariously liable for any and all actions of the Kaiser Group, including the actions of Harsimran Brara (the Group’s then-Chief of Neurosurgery), Shayan Rahman (the Group’s then-Assistant Chief of Neurosurgery), and Ramin Davidoff (the Group’s Executive Area Medical Director). (FAC, ¶ 69.) Kaiser Plan and Permanente Federation are also directly liable for failure to remedy certain conditions in Dr. Ganocy’s employment. (FAC, ¶¶ 70-82.)

c. Analysis

In their demurrer, Kaiser Plan and Permanente Federation argue that the FAC’s first cause of action fails as to these Defendants because it fails to sufficiently allege vicarious liability and direct liability against them. (Demurrer, pp. 4-5, 5-11.)

i. Vicarious Liability

I. Parties’ Arguments

In their demurrer, Kaiser Plan and Permanente Federation argue that that this Court has already sustained a demurrer to the prior Complaint’s vicarious liability allegations on various grounds and that the FAC failed to amend the pleadings to cure the defects discussed by the Court in its ruling. (Demurrer, pp. 4-5, citing 8/21/23 Order, pp. 11-13.) To highlight their point, Kaiser Plan and Permanente Federation provide a copy of the FAC that uses “redline” notations to show the allegations that were added to or removed from the pleadings as compared to the original Complaint in this action. (Demurrer, Fursevich Decl., Ex. A.)

In opposition, Plaintiffs, for the first time, present arguments relating to vicarious liability (Opp’n, pp. 2-7), arguments that were missing from Plaintiffs’ opposition to Kaiser Plan and Permanente Federation’s demurrer to the original Complaint (see 6/20/23 Opposition, pp. 3-5), and which were only raised in limited fashion at the August 21, 2023, hearing, at which the Court ruled on Kaiser Plan and Permanente Federation’s prior demurrer (8/21/23 Minutes, p. 12 [“While Plaintiffs’ counsel argued at oral argument that the Knox-Keene Act should be limited to medical malpractice, there is no case that so provides”]). The opposition to the demurrer to the FAC emphasizes that this Court can take a different position from its prior interim August 21, 2023, court order, and that the FAC does not plead that Kaiser Plan or Permanente Federation are health care plans that qualify for protection under the Knox-Keene Act. (Opp’n, pp. 3-6.)

In reply, Kaiser Plan and Permanente Federation argue that Plaintiffs are essentially asking for reconsideration of the August 21, 2023, order beyond the statutory time limit. Kaiser Plan and Permanente Federation otherwise respond to Plaintiffs’ opposition arguments. (Reply, pp. 2-9.)

II. Court’s Determination

After review, the Court finds in favor of Kaiser Plan and Permanente Federation.

First, Plaintiffs are correct in arguing that the Court may take a position on this order inconsistent with the August 21, 2023, order. (See Vertex Inv. Co. v. Schwabacher (1943) 57 Cal.App.2d 406, 410 [A trial court’s first determination of a preliminary or interlocutory matter, e.g., an intermediate ruling on pleadings, is not res judicata; the judge who made the ruling may reverse himself or herself].)

Second, as argued by the reply, the FAC alleges grounds to determine that (1) the Knox Keene Act applies to Kaiser Plan as a “health care services plan” that pays or reimburses the costs of healthcare services provided by the Kaiser Group, (2) the liability limitation in the Act would apply to Kaiser Plan as a healthcare services plan, and (3) Permanente Group as an entity contracting with a healthcare plan, i.e., Kaiser Group or Kaiser Plan, would qualify for the liability limitation in the Act. (Reply, pp. 4-5, citing FAC, ¶¶ 28 [Plan], 29 [Federation], 42 [Plan], Health & Saf. Code, § 1345, subds. (f)(1)-(2) [defining health care services plan], and Health & Saf. Code, § 1371.25 [liability limitation provision of Act applicable to “any entity contracting with a plan,” among others].)

Third, based on the limitation discussed above, Kaiser Plan and Permanente Federation cannot be held liable for Kaiser Group’s acts or omissions, undercutting vicarious liability.

Fourth, the Court rejects the opposition argument that section 1371.25 does not apply because the type of claims at issue here—harassment, hostile work environment—do not involve the issue related to the intent and purposes of the Knox Keene Act, as summarized in Health and Safety Code section 1342, subdivisions (a)-(h). While section 1342 expresses the intent and purposes of the Knox Keene Act, it does not modify the liability limitation in the Act, which is not qualified to specific types of claims. (Health & Saf. Code, §§ 1342, subds. (a)-(h), 1371.25 [“A plan, any entity contracting with a plan, and providers are each responsible for their own acts or omissions, and are not liable for the acts or omissions of, or the costs of defending, others. Any provision to the contrary in a contract with providers is void and unenforceable. Nothing in this section shall preclude a finding of liability on the part of a plan, any entity contracting with a plan, or a provider, based on the doctrines of equitable indemnity, comparative negligence, contribution, or other statutory or common law bases for liability.”].) When the language of a statute is clear and unambiguous, the Court does not need to resort to other inpretative aids, such as legislative purpose. (Weiss v. City of Del-Mar (2019) 39 Cal.App.5th 609, 618.) There is no case law supporting Plaintiffs’ interpretation. Thus the Court finds the language of the section 1371.25 unambiguous.

Fifth, the Court determines that the agency allegations in the FAC are defective. As explained by the Court on August 21, 2023, a plan cannot be held vicariously liable for the wrongdoing of an entity with which it contracted based on agency principles. (Watanabe v. California Physicians’ Service (2008) 169 Cal.App.4th 56, 68 (Watanabe) [“We have not been given a reason, and cannot conceive of one, that would empower us to override the explicit dictate of section 1371.25 and replace it with agency principles or even a broader concept of ‘nondelegable duty’ that would impose vicarious liability on Blue Shield”]; see Futterman v. Kaiser Foundation Health Plan, Inc. (Apr. 25, 2023) 91 Cal.App.5th 656, 667, 669 (Futterman) [finding trial court erred in granting summary judgment because, in relevant part, triable issues remained as to direct liability rather than vicarious liability, where only the latter is barred by the liability limitation in Knox Keene Act, as discussed in Watanabe, supra, at pp. 62, 68, and Martin v. PacifiCare of California (2011) 198 Cal.App.4th 1390, 1398, 1408]; cf. Gopal v. Kaiser Foundation Health Plan, Inc. (2016) 248 Cal.App.4th 425, 432 [finding joint enterprise doctrine inappropriate in part because the “close relationship” between the Plan and its providers is authorized by Knox Keene Act and is necessary for the Plan to meet its obligations of a health plan to oversee and manage its providers per the statutory requirements of Knox Keene Act].)

As a result, the Court again finds that the first cause of action is not sufficiently alleged as to vicarious liability.

ii. Direct Liability

Kaiser Plan and Permanente Federation that the first cause of action fails to allege direct liability for wrongful death and survival against them because the claim fails to sufficiently allege a duty, breach of that duty, and causation. (Demurrer, pp. 5-11.)

I. Duty

A. Parties’ Arguments

 In their demurrer, Kaiser Plan and the Permanente Federation argue that the FAC fails to plead a duty to Plaintiffs for various reasons. These include that: (1) the FAC’s attempts to cure the deficiencies in the Complaint through conclusory allegations that the Permanente Federation controlled the conditions at Kaiser Group; (2) the conditions that the Permanente Federation allegedly controlled in Kaiser Group according to the FAC related to equity, inclusion, and diversity, with “nothing in the FAC so much as suggest[ing] that those ‘committees’ had the responsibility to ensure that [Kaiser Group] partners are free from the wrongful conduct alleged here,” i.e., “consisting primarily of alleged improper access to patient charts to fabricate Quality Management allegations, [FAC,] at 12, ¶ 41; overscheduling physicians, id.; removing physician privileges, titles, and benefits, id.; moving targeted doctors and staff from one office to another, id.; and making threats of investigations, terminations, and other adverse actions, id.—was supposedly committed by SCPMG partners over whom the Federation is not alleged to have any control, either through the ‘committees’ or otherwise”; and (3) the FAC alleges that the Permanente Federation is controlled by Kaiser Plan and Kaiser Group. (Demurrer, pp. 8-10.)

In opposition, Plaintiffs argue that the amendments to the FAC had brought the duty allegations to sufficiency, specifically citing the FAC’s allegations regarding agency and by citing the 28th and 29th paragraphs in the FAC. (Opp’n, pp. 9-10.)

In reply, Kaiser Plan and Permanente Group argue that the Court has already considered paragraphs 28 and 29 of the FAC in its August 21, 2023, order because those same allegations were identically alleged in Plaintiffs’ original Complaint and found insufficient by the Court’s August 21st order. (Reply, p. 9.)

B. Court’s Determination

The Court finds in favor of Kaiser Plan and Permanente Group.

First, the Court has already rejected agency as a ground for liability as between Defendants based on the liability limitation in the Knox Keene Act. (See Section II.C.1.c.i.II.) discussion supra.)

Second, the Court determines that the FAC fails to allege grounds for a duty from Kaiser Plan or Permanente Group to Plaintiffs.

“Where the defendant has neither performed an act that increases the risk of injury to the plaintiff nor sits in a relation to the parties that creates an affirmative duty to protect the plaintiff from harm, … cases have uniformly held the defendant owes no legal duty to the plaintiff.” (Brown v. USA Taekwondo (2021) 11 Cal. 5th 204, 213.)

A comparison of the original Complaint and operative FAC shows that the 28th and 29th paragraphs in these pleadings are identical. (Compare Complaint, ¶¶ 28-29, with FAC, ¶¶ 28-29.) As before, the opposition fails to cite authority supporting a conclusion that these relationships between the parties imposed some kind of duty on Kaiser Plan and Permanente Group in relation to Dr. Ganocy. (8/21/23 Minutes, p. 13; Opp’n, pp. 9-10.)

The closest relevant authority cited by Plaintiffs is Lugtu v. Cal. Highway Patrol (2010) 26 Cal.4th 703 (Lugtu), cited for the proposition that a defendant is liable to a plaintiff for exposing the plaintiff to the foreseeable conduct (including reasonably foreseeable negligent conduct) of a third party. (Opp’n, p. 9.)

However, it is unclear how, as alleged in the FAC, Defendants Kaiser Plan and Permanente Group exposed Plaintiff to reasonably foreseeable negligent conduct by Kaiser Group. As noted by the reply, the FAC does not appear to add any allegations to the FAC in relation to Kaiser Plan (Demurrer, p. 5, § B.1., citing Demurrer, Fursevich Decl., Ex. A), allegations which the Court found insufficient in its August 21, 2023, order. (8/21/23 Minutes, pp. 13-14.) As to Permanente Group, the FAC alleges that Kaiser Plan and Kaiser Group control Permanente Group, foreclosing a conclusion that Permanente Group, as controlled by Kaiser Group or Kaiser Plan, exposed Plaintiffs to Kaiser Group’s negligent conduct for pleading purposes. (FAC, ¶ 29 [“FEDERATION exists solely to service GROUP and PLAN, takes direction from GROUP and PLAN, and is controlled by GROUP and PLAN”].) Any contradictory allegations in the FAC in Plaintiffs’ favor as to Permanente Federation do not assist Plaintiffs because they render the FAC uncertain. In other words, any allegations in the FAC to the effect that Permanente Federation controlled work conditions at Kaiser Group—Plaintiffs’ alleged employer during his life (FAC, ¶¶ 21, 23)—are contradicted by prior allegations that Kaiser Group and Kaiser Plan instead control Permanente Federation. (FAC, ¶ 29.)

As a result, the FAC fails to allege direct liability against Kaiser Plan and Permanente Group for failure to plead an adequate basis for duty.

II. Breach and Causation

Because the Court has determined no duty has been properly alleged against Kaiser Plan and Permanente Group in the FAC, the Court need not reach the breach and causation arguments in the parties’ papers.

iii. Final Determination

Given that both grounds for liability against Kaiser Plan and Permanente Group in relation to the FAC’s first cause of action fail, Kaiser Plan and Permanente Group’s demurrer is SUSTAINED.

However, the Court permits leave to amend to give Plaintiff another opportunity to plead around the above defects, which is particularly proper where the Code permits up to three amendments to a pleading following a sustained demurrer or other challenge to those pleadings. (Code Civ. Proc., § 430.41, subd. (e)(1) [“In response to a demurrer and prior to the case being at issue, a complaint or cross-complaint shall not be amended more than three times, absent an offer to the trial court as to such additional facts to be pleaded that there is a reasonable possibility the defect can be cured to state a cause of action”].) 

III. Conclusion

Defendants Kaiser Foundation Health Plan, Inc., The Permanente Federation LLC, and Southern California Permanente Medical Group’s Demurrer to First Amended Complaint is SUSTAINED, with leave to amend.

Plaintiffs Heeshik Ganocy D.D.S.—individually and as successor-in-interest to Terry Kent Ganocy, M.D., deceased (Dr. Ganocy)—Alexa Gisela Ganocy, Sophia Isabella Ganocy, and Ariana Soleil Ganocy may file an amended pleading relating solely to the first cause of action and background allegations no later than 10 days after this ruling.