Judge: Christopher K. Lui, Case: 24STCV0818, Date: 2024-08-29 Tentative Ruling

Case Number: 24STCV0818    Hearing Date: August 29, 2024    Dept: 76

            Plaintiff medical providers seeks quantum meruit reimbursement for emergency medical services rendered to Defendant health care service plan’s insured.

Defendant UnitedHealthCare Insurance Company demurs to the Complaint.

TENTATIVE RULING

Defendant UnitedHealthCare Insurance Company’s demurrer to the Complaint is OVERRULED as to the first and only cause of action. Defendant is to answer the Complaint within 10 days.

ANALYSIS

Demurrer

Requests For Judicial Notice

            Defendant requests that the Court take judicial notice of the following:

1. The Plan attached as Exhibit “A” to the Declaration of Jane Stalinski (“Stalinski Decl.”) filed in Support of United’s Notice of Removal at Dkt. 1-3, when this case was pending in the United States District Court for the Central District of California, setting forth the status of certain business records related to a welfare benefit plan under which Plaintiffs claim reimbursement, which is referenced in paragraphs 3, 13, 15, 17, and 27 of the Complaint.  A copy of the Stalinski Decl. and Exhibit “A” thereto is filed concurrently hereto as Exhibit “1”.

2. Exhibit “A” to the Slaught Decl., which sets forth correspondence from the Department of Managed Health Care (“DMHC”), the regulatory agency responsible for the oversight and enforcement of the Knox-Keene Act, which confirmed that UnitedHealthcare Insurance Company is not a “Health Care Service Plan,” nor licensed to be a “Health Care Service Plan,” nor is it subject to the Knox-Keene Act.  A copy of this DMHC letter is filed currently hereto as Exhibit “2”.

3. Exhibit “B” to the Slaught Decl., which sets forth publicly available information from the DMHC, which proves that United does not have a license with the DMHC. A copy of a printout of this publicly-available information is filed currently hereto as Exhibit “3”.

            Request Nos. 1 – 3 are DENIED, as they are being offered for the truth of hearsay statements contained therein without establishing that exceptions to the rule against hearsay apply.

The motion judge took judicial notice of the declarations filed in these three cases, but not of the truth of their hearsay contents. The ruling was correct. The hearsay rule applies to statements contained in judicially noticed documents, and precludes consideration of those statements for their truth unless an independent hearsay exception exists. (See 1 Witkin, Cal. Evidence (4th ed. 2000) Judicial Notice, § 25, p. 119.)

(North Beverly Park Homeowners Assn. v. Bisno (2007) 147 Cal.App.4th 762, 778  [bold emphasis added].)

            Plaintiff requests that the Court take judicial notice of the following:

Exhibit 1: Emsurgcare et al. v. Avery Hager et al. Case No. 2:24-cv-02243-AB-PD, Ruling of The Honorable Judge Andre Birotte Jr., United States District Court for the Central District of California, on August 8, 2024, finding that UnitedHealthcare Oxford could be a health care service plan even if it has a license with the Department of Insurance and does not have a license with the Department of Managed Healthcare. 

            The request is DENIED. The Court cannot accept the truth of the facts recited in the federal district court opinions. (See Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882.)

Meet and Confer

            The Declaration of Katheleen Cahill Slaught reflects that Defendant’s counsel satisfied the meet and confer requirement set forth in Civ. Proc. Code, § 430.41.

Discussion

Defendant UnitedHealthCare Insurance Company demurs to the Complaint as follows: 

1.         First and Only Cause of Action (Quantum Meruit).

            Defendant makes the following arguments:

A.        The Knox-Keene Act is inapplicable.

Defendant argues: United confirmed that it is not a  “Health Care Service Plan” within the meaning of the Knox-Keene Act.  (Declaration of Kathleen Cahil Slaught, ¶ 3.)  United provided Plaintiffs’ counsel with additional, conclusive proof from the Department of Managed Health Care, which confirmed that United is not subject to the Knox-Keene Act.  (Id.)  United has also previously put Plaintiffs on notice of the exclusionary language in Cal. Health & Safety Code § 1343(e)(1), and the fact that United maintains an active license with the California Department of Insurance.  (Id. ¶¶ 2-3.) 

“A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed (Code Civ. Proc., §§ 430.30, 430.70). The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action [citation].” (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905 [200 Cal. Rptr. 497].)

(Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)

            The Court has denied Defendant’s request for judicial notice of the truth of the matters asserted in the extrinsic evidence presented by Defendant. As such, the argument based on such evidence is not persuasive on demurrer. Defendant will have to bring a motion for summary judgment in this regard.

            Moreover, the Court cannot accept the truth of the facts recited in the federal district court opinions cited by Defendant.

[W]hile courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files. ( Citation omitted.) Courts may not take judicial notice of allegations in affidavits, declarations and probation reports in court records because such matters are reasonably subject to dispute and therefore require formal proof. (Citation omitted.)

The underlying theory of judicial notice is that the matter being judicially noticed is a law or fact that is not reasonably subject to dispute. ( Citation omitted.) “By making an order establishing the law of the case, it seems that the facts are no longer in dispute and can therefore be considered true as set forth in an order, findings of fact, or conclusions of law.” (Citation omitted.) Such facts would not be the proper subject of judicial notice. (Ibid.)

The appropriate setting for resolving facts reasonably subject to dispute is the adversary hearing. It is therefore improper for courts to take judicial notice of any facts that are not the product of an adversary hearing which involved the question of their existence or nonexistence. (Citation omitted.) “A litigant should not be bound by the court’s inclusion in a court order of an assertion of fact that the litigant has not had the opportunity to contest or dispute.” (Ibid.)

(Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882.) 

   B.        Plaintiffs’ quantum meruit claim is expressly preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”).

            Defendant argues: Plaintiffs’ state law cause of action in the Complaint “relates to” the administration of the ERISA-governed Plan.  See Goel v. UHS, 2024 WL 1361800 at *5-6 (finding that each of Plaintiffs’ claims were preempted by ERISA); see Bristol SL Holdings, Inc. v. Cigna Health and Life Ins. Co., 2024 WL 2801531 (9th Cir. May 31, 2024); Dedicato Treatment Center, Inc. v. Aetna Life Ins. Co., 2024 WL 3346241 (C.D. Cal. July 8, 2024) (same). Plaintiffs’ quantum meruit claim is expressly preempted. 

            However, whether Plaintiff administers an ERISA-governed plan which is the subject of this lawsuit, and whether it is a self-funded employee benefit plan, are evidentiary questions outside the scope of this demurrer.

Under the “deemer clause,” a state law that regulates “self-funded” ERISA plans, even if it regulates insurance within the meaning of the saving clause, is not “saved” from preemption. (FMC Corp. v. Holliday (1990) 498 U.S. 52, 61 [112 L. Ed. 2d 356, 111 S. Ct. 403] (FMC).) A “self-funded” employee benefit plan “does not purchase an insurance policy from any insurance company in order to satisfy its obligations to its participants.” (Id. at p. 54.)

(Coast Plaza Doctors Hospital v. Blue Cross of California (2009) 173 Cal.App.4th 1179, 1189.)

      This ground is not persuasive on demurrer.

Defendant will have to bring a motion for summary judgment in this regard.

C.        Plaintiffs’ Complaint lacks factual allegations to state a cognizable cause of action.   

            Defendant argues that ERISA preempts Plaintiff’s quantum meruit claims. Defendant only cites non-binding federal cases holding this, but California case law recognizes that quantum meruit is permitted under the Knox-Keene scheme. Further, as discussed below, the applicability of ERISA to the subject plan is beyond the scope of this demurrer.

Thus, as this court and others have previously observed, the Knox-Keene Act’s statutory and regulatory scheme contemplates that private actions under a quantum meruit theory may be used to recoup appropriate reimbursement for services rendered. (Citations omitted.)

(County of Santa Clara v. Superior Court (2023) 14 Cal.5th 1034, 1044.)

            This ground for demurrer is not persuasive.

            The demurrer to the first and only cause of action is OVERRULED. Defendant is to answer the Complaint within 10 days.