Judge: Cherol J. Nellon, Case: 24STLC06787, Date: 2025-05-14 Tentative Ruling
Case Number: 24STLC06787 Hearing Date: May 14, 2025 Dept: 14
#17
Case Background
This is an action for quantum meruit, enforcement of
lien benefits, conspiracy, fraud, and negligence. Plaintiff alleges it was retained
by Defendant Dloies Guillory for injuries she sustained in an auto collision. After
Plaintiff treated Guillory, she agreed to pay Plaintiff for medical treatment.
Guillory filed an insurance claim against the party responsible for the
collision. Plaintiff informed Defendant Bristol West Insurance Services of
California, Inc. (Bristol) that Guillory assigned insurance benefits to
Plaintiff. Bristol paid the insurance benefits to Guillory who then refused to
pay Plaintiff.
On September 19, 2024, Plaintiff State-of-the-Art
Technologies, Inc. filed its Complaint against Defendants Deloies Haney
Guillory and Bristol West Insurance Services of California, Inc.
On April 8, 2025, Defendant Bristol filed its demurrer
and motion to strike.
Instant Pleading
Defendant Bristol demurs to the Complaint.
Defendant Bristol moves to strike Plaintiff’s demand
for punitive damages from the Complaint.
Decision
Bristol’s demurrer is OVERRULED.
Bristol’s motion to strike is GRANTED with leave to
amend.
Plaintiff may file a First Amended Complaint within 15
days of receiving notice of this order.
Discussion
1.
Demurrer
Bristol Demurs to the second through seventh causes of
action on the grounds that (1) there is no privity of contract between
Plaintiff and Bristol and (2) the Complaint fails to plead facts which show
Bristol owed Plaintiff a duty of care.
Privity of Contract
Bristol demurs to the Second, Third, Sixth, and Seventh
causes of action on the grounds that it has no contractual privity with
Plaintiff. Specifically, Bristol argues that the Complaint merely alleges a
legal relationship existed between Plaintiff and Guillory, not Bristol.
The Complaint alleges that Guillory filed an insurance
claim for benefits against the party responsible for the auto collision and
assigned her claim to these benefits to Plaintiff. (Compl., ¶9.) Plaintiff
informed Bristol of the assignment of insurance benefits and provided a copy of
Guillory’s bill for the medical services it provided. (Id., ¶11.) Bristol
instead forwarded the insurance benefits payment to Guillory. (Id.,
¶12.)
An assignee stands in the shoes of the assignor, taking
his or her rights and remedies, subject to any defenses that the obligor has
against the assignor prior to notice of the assignment. (Lazar v. Bishop
(2024) 107 Cal.App.5th 668, 677, citing Dagher v. Ford Motor Co. (2015)
238 Cal.App.4th 905, 925.)
It is reasonable to infer from the facts pled in the
Complaint that a contractual relationship existed between Bristol and Guillory.
Guillory submitted a claim for insurance benefits. Because Guillory was
eventually paid, it is reasonable to infer that Bristol agreed to pay the
insurance benefits to settle her insurance claim. Therefore, the Complaint
alleges that some contractual relationship existed between Bristol and
Guillory. Once Guillory assigned her interest in the insurance benefits to
Plaintiff and Plaintiff gave notice of the assignment, Bristol became liable to
Plaintiff for its obligations under the contract with Guillory to pay the
insurance benefits. Although Bristol is correct that it was not a party to the
lien agreement between Guillory and Plaintiff, Bristol was a party to the
agreement to pay insurance benefits to Guillory which Guillory then assigned to
Plaintiff. Therefore, the Complaint alleges contractual privity existed between
Bristol and Plaintiff.
The demurrer is OVERRULED as to the Second, Third,
Sixth, and Seventh causes of action.
Negligence
Bristol demurs to the fifth cause of action for
negligence on the grounds that the Complaint fails to allege Bristol owed
Plaintiff a duty of care. The Complaint alleges that Bristol owed Plaintiff a
duty of care to ensure that it complied with the Guillory’s assignment of her
rights to insurance benefits after receiving notice of the assignment. (Compl.,
¶45.) The Court finds this allegation is sufficient to allege that Bristol owed
Plaintiff a duty of ordinary care to pay Plaintiff as the assignee entitled to
the insurance benefits. Although this cause of action may be duplicative of
those based on contract principles, a party may allege recovery through alternative,
and even contradictory, causes of action at the pleadings stage. (Gherman
v. Colburn (1977) 72 Cal.App.3d 544, 565.) Therefore, the demurrer is
OVERRULED as to the Fifth cause of action for negligence.
2.
Motion to Strike
Bristol moves to strike Plaintiff’s demand for punitive
damages on the grounds that the Complaint fails to allege that it engaged in
conduct which would support a demand for punitive damages.
In
order to state a
prima facie claim for punitive damages, a complaint
must set forth the elements as stated in the general punitive damage statute,
Civil Code section 3294. (College Hospital, Inc. v. Superior Court
(1994) 8 Cal.4th 704, 721.) These statutory elements include allegations
that the defendant has been guilty of oppression, fraud or malice. (Civ. Code, section
3294, subd. (a).) “Malice is defined in the statute as
conduct intended by the defendant to cause injury to the plaintiff or
despicable conduct which is carried on by the defendant with a willful and
conscious disregard of the rights or safety of others.” (College Hospital,
Inc., supra, 8 Cal.4th at p. 725 [examining Civ. Code, section 3294,
subd. (c)(1)].) “As amended to include
[despicable], the statute plainly indicates that absent an intent to injure the
plaintiff, ‘malice’ requires more than a ‘willful and conscious’ disregard of
the plaintiffs’ interests. The additional component of ‘despicable conduct’
must be found.” (College Hospital, Inc., supra, 8 Cal.4th at
p. 725.)
In actions against
insurers, an insured may be entitled to recover punitive damages if they can
prove that the insurer not only denied payment of policy benefits unreasonably
or without proper cause, by also was guilty of malice, oppression, or fraud. (Jordan
v. Allstate Ins. Co. (2007) 148 Cal.App.4th 1062, 1080.) It is not enough
that the insurer engages in bad faith insurance handling practices. (Id.)
Here, as discussed above, the Complaint alleges Bristol paid Guillory
despite receiving a notice of Guillory’s assignment to Plaintiff. Merely
alleging that Bristol paid the wrong party is not sufficient to allege that
Bristol engaged in conduct amounting to malice, oppression, or fraud. The
motion to strike is GRANTED with leave to amend.
Conclusion
Bristol’s demurrer is OVERRULED.
Bristol’s motion to strike is GRANTED with leave to
amend.
Plaintiff may file a First Amended Complaint within 15
days of receiving notice of this order.