Judge Daniel M. Crowley, Case Number: 24STCV14859, Date: 2024-12-06 Tentative Ruling

Defendant Preferred IPA of California’s unopposed demurrer to Plaintiff Claudia Weight’s 3rd cause of action is sustained with 20 days leave to amend.

Defendant Preferred IPA of California’s motion to strike portions of Plaintiff’s complaint is denied as moot.

Defendant Preferred IPA of California (“Preferred IPA”) (“Moving Defendant”) demurs unopposed to the 3rd cause of action alleged in Plaintiff Claudia Weight’s (“Weight”) (“Plaintiff”) complaint (“Complaint”). (Notice of Demurrer, pg. 2; C.C.P. §§430.10(e), (f), 430.41.)[1]

Moving Defendant also moves to strike portions of Plaintiff’s Complaint. (Notice of MTS, pgs. 1-2; C.C.P. §§435, 436, 437.)

Moving Defendant’s 9/25/24 request for judicial notice of (1) the March 12, 1996, Articles of Incorporation of Preferred IPA of California, a

professional corporation, on file in the office of the Secretary of State of the State of California (D-RJN, Exh. 1) is granted.

Moving Defendant’s 9/25/24 request for judicial notice of (1) the April 2, 2024, Motion to Strike filed by Preferred IPA in Alis Masihi Honarchian v. Blue Cross of California, Preferred IPA of California (Case No. 23STCV30842), in Department 16 of the Los Angeles Superior Court, Central District; and (2) the June 6, 2024, Minute Order granting Preferred IPA’s Motion to Strike in Alis

Masihi Honarchian v. Blue Cross of California, Preferred IPA of California (Case No. 23STCV30842), entered by the Hon. Steve Cochran in Department 16 of the Los Angeles Superior Court, Central District, is denied as irrelevant.

Before filing a demurrer, the demurring party must meet and confer in person, by telephone, or by video conference with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading and obviate the need for filing the demurrer. (C.C.P. §430.41(a).)

The demurring party shall file and serve with the demurrer a declaration stating either of the following: (A) The means by which the demurring party met and conferred with the party who filed the pleading subject to demurrer, and that the parties did not reach an agreement resolving the objections raised in the demurrer. (B) That the party who filed the pleading subject to demurrer failed to respond to the meet and confer request of the demurring party or otherwise failed to meet and confer in good faith. (C.C.P. §430.41(a)(3).)

Moving Defendants’ counsel declares that on September 18, 2024, he met and conferred with Plaintiff’s counsel telephonically to discuss the instant demurrer and motion to strike and the parties were unable to reach an agreement. (See Decl. of Koeller ¶¶6-7.) Moving Defendant’s counsel’s declaration is sufficient under C.C.P. §430.41(a). Therefore, the Court will consider Moving Defendant’s demurrer.

Plaintiff filed her operative Complaint on June 13, 2024 against Moving Defendant and Non-moving Defendant Blue Cross of California DBA Anthem Blue Cross (“Blue Cross”) (collectively, “Defendants”), alleging four causes of action: (1) Breach of Implied Covenant of Good Faith and Fair Dealing [against Blue Cross]; (2) Breach of Contract [against Blue Cross]; (3) Violations of Business & Professions Code §17200 [against Defendants]; and (4) Negligence [against Moving Defendant].

Moving Defendant filed the instant demurrer on September 25, 2024. As of the date of this hearing no opposition to the demurrer has been filed.

Plaintiff alleges that in August 2018 she was diagnosed with a duodenal fistula. (Complaint ¶9.) Plaintiff alleges her surgeon, Dr. Sujit Kulkarni of the USC Keck Hospital, decided to perform a Roux-en-Y hepaticojejunostomy, in which the bile ducts are rerouted to attach at the jejunum, the middle part of the small intestine, therefore bypassing the duodenum and the fistula that is present there. (Complaint ¶9.) Plaintiff alleges her surgeon successfully performed this procedure, and following this surgery, she enjoyed five years of good health. (Complaint ¶9.)

Plaintiff alleges that On June 19, 2023, she went to the emergency room with severe pain on the right side of her stomach. (Complaint ¶10.) Plaintiff alleges her original surgeon, Dr. Kulkarni, assessed her and discovered stones and infection in her bile ducts. (Complaint ¶10.) Plaintiff alleges Dr. Kulkarni recommended that she have a biliary drain placed to allow the stones and infection to flush out of her system. (Complaint ¶10.) Plaintiff alleges she was discharged on June 24, 2023, with a recommendation from Dr. Kulkarni to return for a follow-up appointment in 10 days. (Complaint ¶10.) Plaintiff alleges Dr. Kulkarni’s office submitted an authorization request for this follow-up appointment to Moving Defendant. (Complaint ¶10.) Plaintiff alleges Moving Defendant delayed approving this authorization for over a month. (Complaint ¶10.) Plaintiff alleges that instead of seeing Dr. Kulkarni for a follow-up 10 days after her procedure, she was not able to see Dr. Kulkarni until August 7, 2023, 45 days after her procedure. (Complaint ¶10.)

Plaintiff alleges at this follow-up appointment, Dr. Kulkarni recommended that she undergo an open Roux-en-Y hepaticojejunostomy revision as soon as possible. (Complaint ¶11.) Plaintiff alleges that during this surgery, the drain the drain that was still implanted in her abdomen would be removed. (Complaint ¶11.) Plaintiff alleges Dr. Kulkarni’s office submitted a prior authorization request to Moving Defendant for this surgery and subsequent hospital stay. (Complaint ¶11.)

Plaintiff alleges that on August 23, 2023, she received a letter from Moving Defendant denying Dr. Kulkarni’s request for surgery. (Complaint ¶12.) Plaintiff alleges Moving Defendant instead authorized her to see a Dr. Natalie Saiser, whom Plaintiff had never seen before. (Complaint ¶12.) Plaintiff alleges when she saw Dr. Saiser on September 19, 2023, Dr. Saiser declined to treat her. (Complaint ¶12.) Plaintiff alleges Dr. Saiswer stated that she was unfamiliar with Plaintiff’s case and medical history, and that it was in Plaintiff’s best interest to continue in Dr. Kulkarni’s care instead. (Complaint ¶12.) Plaintiff alleges that immediately following Dr. Saiser’s decision, Dr. Kulkarni’s office submitted a second authorization request to Moving Defendant on September 19, 2023. (Complaint ¶12.) Plaintiff alleges Dr. Kulkarni’s office reached out to Non-moving Defendant Blue Cross regarding the authorization request, but neither Dr. Kulkarni’s office nor Blue Cross were able to contact Moving Defendant regarding this request. (Complaint ¶12.)

Plaintiff alleges that for the next several weeks, she did not hear anything from Moving Defendant regarding the pending authorization request and was not able to get in contact with any representative of Moving Defendant despite numerous phone calls. (Complaint ¶13.) Plaintiff alleges she reached out to Blue Cross several times for their assistance in contacting Moving Defendant, but Blue Cross was also unable to contact Moving Defendant. (Complaint ¶13.) Plaintiff alleges that on October 9, 2023, she filed a complaint with Blue Cross about Moving Defendant. (Complaint ¶13.) Plaintiff alleges she was also forced to file an emergency appeal for continued care with Dr. Kulkarni on October 26, 2023. (Complaint ¶13.) Plaintiff alleges that at this point she had had the drain for almost four months. (Complaint ¶13.)

Plaintiff alleges that on October 30, 2023, Moving Defendant finally approved one appointment with Dr. Kulkarni, but did not authorize any further care. (Complaint ¶14.) Plaintiff alleges the drain did indeed improve her condition, so Dr. Kulkarni hoped they would be able to remove the drain without having to perform revision surgery. (Complaint ¶14.) Plaintiff alleges that in order to determine it was safe to do so, Dr. Kulkarni ordered a cholangiogram, a radiographic image of the bile ducts. (Complaint ¶14.) Plaintiff alleges if the cholangiogram did not show any filling defects, strictures, or bile duct dilation, she would be able to avoid surgical intervention and have the drain removed. (Complaint ¶14.)

Plaintiff alleges Moving Defendant yet again delayed authorization for almost two months. (Complaint ¶15.) Plaintiff alleges that during this time, she frequently called both Moving Defendant and Blue Cross, filed multiple complaints, and despite her best efforts, was told time and time again that the only thing she could do was wait, as the authorization was still pending. (Complaint ¶15.)

Plaintiff alleges she was finally able to receive the cholangiogram on December 22, 2023, almost two months after it was requested, and about six months after the drain was placed. (Complaint ¶16.) Plaintiff alleges that, unfortunately, the cholangiogram showed severe dilation of a hepatic bile duct, meaning she would indeed require revision surgery. (Complaint ¶16.) Plaintiff alleges the only thing Dr. Kulkarni could do was replace the drain, and once again request authorization for the surgery that was denied by Moving Defendant in August 2023. (Complaint ¶16.)

Plaintiff alleges that since June 2023, her care has been delayed and denied by Moving Defendant over and over again. (Complaint ¶17.) Plaintiff alleges that beginning with a follow-up appointment that should have taken place within ten days, to denied appointments, denied surgery, and delayed diagnostic imaging, Moving Defendant has made it almost impossible for Plaintiff to get the care that she so desperately needs. (Complaint ¶17.) Plaintiff alleges that on top of Moving Defendant’s improper conduct, Blue Cross has done nothing to intervene on Plaintiff’s behalf. (Complaint ¶17.) Plaintiff alleges she has had the drain placed with a tube protruding from her abdomen since June of 2023, while Moving Defendant continues to deny and delay her access to care. (Complaint ¶17.) Plaintiff alleges she has yet to undergo the surgery requested in August and will require routine drain changes until it is possible for her to obtain this care. (Complaint ¶17.) Plaintiff alleges she is still waiting for either Moving Defendant or Blue Cross to treat her with the care she deserves and continues to suffer in the meantime. (Complaint ¶17.)

Moving Defendant demurs to the 3rd cause of action on the basis it fails to state facts sufficient to constitute causes of action against it because the Complaint is devoid of allegations showing Moving Defendant engaged in conduct or business practices that were “unlawful,” “unfair,” or “fraudulent.” Moving Defendant demurs to the 3rd cause of action on the basis it is impermissibly vague. Moving Defendant demurs to the cause of action on the basis Plaintiff lacks standing because her Complaint does not allege any facts indicating that Plaintiff paid money to Moving Defendant or that it acquired her money or property through any wrongful act. (Demurrer, pg. 3.)

A cause of action for unfair business practices under the unfairness prong must allege the following elements: (1) a business practice; (2) that is unfair, unlawful or fraudulent; and (3) an authorized remedy. (Bus. & Prof. Code §17200; Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 676; see also People ex rel. Dept. of Motor Vehicles v. Cars 4 Causes (2006) 139 Cal.App.4th 1006, 1016 [“An ‘unlawful’ practice requires violation of another statute, and a business practice may be ‘unfair’ even if not otherwise proscribed by statute as long as the practice is not expressly authorized by law.”]; Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1266 [“The Unfair Business Practices Act defines ‘unfair competition’ as any ‘unlawful, unfair or fraudulent business practice and unfair, deceptive, untrue or misleading advertising….’ (§ 17200.) The Legislature intended this ‘sweeping language’ to include ‘anything that can properly be called a business practice and that at the same time is forbidden by law.’”]; Drum v. San Fernando Valley Bar Ass’n (2010) 182 Cal.App.4th 247, 256 [“a split of authority developed among the Courts of Appeal, which have applied three different tests for unfairness in consumer cases.”].)

In consumer cases, in consumer cases, the following guidelines apply to determine whether a practice is unfair: “(1) the consumer injury must be substantial; (2) the injury must not be outweighed by any countervailing benefits to consumers or competition; and (3) it must be an injury that consumers themselves could not reasonably have avoided.” (Camacho v. Automobile Club of Southern California (2006) 142 Cal.App.4th 1394, 1403; see Aron v. U-Haul Co. of California (2006) 143 Cal.App.4th 796, 804 [“[A]lthough the UCL is broadly written to permit courts to restrain dishonest or unfair business dealings, its scope is not unlimited. ‘Courts may not simply impose their own notions of the day as to what is fair or unfair. Specific legislation may limit the judiciary’s power to declare conduct unfair. If the Legislature has permitted certain conduct or considered a situation and concluded no action should lie, courts may not override that determination. When specific legislation provides a ‘safe harbor,’ plaintiffs may not use the general unfair competition law to assault that harbor.’”].)

Plaintiff alleges Defendants’ conduct as alleged above, in 1) denying medically necessary treatment without conducting a full, fair, and thorough investigation, 2) using software interfaces for utilization review nurses and utilization review physicians that ensure that its reviewers will not conduct full, fair, and thorough investigations, 3) incentivizing its reviewers to deny medically necessary care, and 4) undermining its formal contractual promises of covered treatment through its negotiations and funding of defendant medical group, which necessarily limit and frustrate members’ access to timely medically necessary treatment, constitutes acts of unfair, unlawful, misleading, and fraudulent business practices as set forth in Business & Professions Code section 17200 et seq. (Complaint ¶37.)
Plaintiff alleges on information and belief that Defendants employ these policies and practices to further their own financial interests at the expense of its members’ health and wellbeing. (Complaint ¶38.)

Plaintiff alleges she has suffered injury in fact and has lost money or property as the result of Defendants’ conduct in that she was not provided the coverage promised under her health care policy despite paying premiums. (Complaint ¶39.) Plaintiff respectfully requests that the Court order restitution and any equitable relief deemed necessary by the Court including injunctive relief to stop Blue Cross’ and Moving Defendant’s wrongful practices. (Complaint ¶39.)

Plaintiff fails to allege a cause of action for Violation of Business & Professions Code §17200 against Moving Defendant. Plaintiff fails to allege unlawful or fraudulent conduct against Moving Defendant, leading this Court to an analysis under the unfairness prong of the cause of action. Plaintiff fails to allege an authorized remedy under the unfairness prong. To bring a claim under §17200, a plaintiff must have suffered an injury in fact and lost money or property as a result of the defendant’s conduct, and defendant must have acquired the plaintiff’s money or property. (Bus. & Prof. Code §17204; Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322.) Here, Plaintiff alleges that she suffered injury because she “was not provided the coverage promised under her health care policy despite paying premiums.” (Complaint ¶39.) However, Plaintiff’s health insurance policy was with Blue Cross, not Moving Defendant. (Complaint ¶9.) Plaintiff does not allege that she paid any premiums or other money to Moving Defendant. (Complaint ¶¶10-17, 39.)

Furthermore, Plaintiff improperly attempts to use the Section 17200 claim as a “catch-all” for her tort and contract causes of action. Moving Defendant is not named as a defendant in Plaintiff’s causes of action for breach of contract or breach of implied covenant of good faith and fair dealing because Plaintiff and Moving Defendant did not have a contractual relationship, as alleged. It is well settled that a §17200 claim cannot be used as a “catch all” cause of action or “all-purpose substitute for a tort or contract action.” (Shaolian v. Safeco Insurance Co. (1999) 71 Cal.App.4th 268, 275-76; Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1150.)

Accordingly, Moving Defendants’ demurrer to Plaintiff’s 3rd cause of action is sustained with 20 days leave to amend.

Moving Defendant’s demurrer to Plaintiff’s 3rd cause of action is sustained with 20 days leave to amend.

In light of the Court’s ruling on the demurrer, Moving Defendant’s Motion to Strike is denied as moot.

Hon. Daniel M. Crowley

Judge of the Superior Court

[1] The Court notes Moving Defendant only demurs to the 3rd cause of action and does not demur to the 4th cause of action which is also alleged against it.