Judge: Gail Killefer, Case: 24STCV03294, Date: 2025-02-04 Tentative Ruling
Case Number: 24STCV03294 Hearing Date: February 4, 2025 Dept: 37
HEARING DATE: Tuesday, February 4, 2025
CASE NUMBER: 24STCV03294
CASE NAME: Keith Feder, M.D. v. Los Angeles Firemen’s Relief Association
MOVING PARTY: Defendant Los Angeles Firemen’s
Relief Association, Joiner filed by HealthComp
Integrated Solutions, LLC
OPPOSING PARTY: Plaintiff Keith Feder, M.D., Inc.
TRIAL DATE: Not Set
PROOF OF SERVICE: OK
PROCEEDING: Demurrer to First
Amended Complaint
OPPOSITION: 21 January 2025
REPLY: 28
January 202
TENTATIVE: Defendant LAFRA’s demurrer is sustained with
leave to amend. Plaintiff is granted 10 days leave to amend. The court sets the
OSC RE: Amended Complaint for February 25, 2025, at 8:30 a.m.
Background
On February 8, 2024, Keith Feder, M.D., Inc. (“Plaintiff”) filed a
Complaint against the Los Angeles Firemen’s Relief Association (“Defendant” and
“LAFRA”) and Does 1 to 10.
The operative First Amended Complaint (“FAC”) alleging three
causes of action (1) Negligent Misrepresentation, (2) Promissory Estoppel, or
in the alternative (3) Breach of Contract.
Defendant LAFRA now demurs to the FAC. HealthComp Integrated
Solutions, LLC, filed a joiner to Defendant LAFRA’s demurrer. Plaintiff opposes
the Motion. The matter is now before the court.
I. Legal Standard
Where pleadings are defective, a party may raise the defect
by way of a demurrer. (Coyne v. Krempels (1950) 36 Cal.2d 257, 262.) A
demurrer tests the sufficiency of a pleading, and the grounds for a demurrer
must appear on the face of the pleading or from judicially noticeable matters.¿
(CCP, § 430.30(a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) In
evaluating a demurrer, the court accepts the complainant’s properly pled facts
as true and ignores contentions, deductions, and conclusory statements. (Daar
v. Yellow Cab Co. (1976) 67 Cal.2d 695, 713; Serrano v. Priest (1971)
5 Cal.3d 584, 591.) Moreover, the court does not consider whether a plaintiff
will be able to prove the allegations or the possible difficulty in making such
proof. (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d
590, 604.)
Leave to amend must be allowed
where there is a reasonable possibility of successful amendment. (Goodman v.
Kennedy (1976) 18 Cal.3d 335, 348.)¿ The burden is on the complainant to
show the Court that a pleading can be amended successfully. (Ibid.)
II. Discussion
A. Summary of Allegations
The FAC alleges that on from 2019 to 2022, Plaintiff provided
surgical services and other non-surgical services such as consolations and
injections to the Patient. (FAC, ¶ 29.)
The FAC alleges that Defendant LAFRA failed “to make proper
payments and/or the underpayment” to Plaintiff for medical services related to
surgical care, treatment, and procedures provided to a Patient “who is an
insured, member, policyholder, certificate-holder or were otherwise covered for
health, hospitalization and major medical insurance through policies or
certificates of insurance issued and underwritten by” Defendant. (FAC, ¶ 9.)
The FAC alleges that nonparties HealthComp Integrated Solutions,
LLC. (“HCIS”) and Anthem Blue Cross Life & Health Ins. Co. (“ABCLH”),
collectively “Administrators” made “oral and other representations that the
Patient was insured by DEFENDANT either as a subscriber to coverage or a
dependent of a subscriber to coverage under a policy or certificate of
insurance issued and underwritten by DEFENDANT[.]” (FAC, ¶¶ 3, 4, 10.)
Plaintiff’s employees, “B.E., and Z.E., obtained representations from Administrators
and DEFENDANT’s representative, Katie, and Janet regarding the manner in which
Medical Provider would be paid for services.” (Id. ¶ 30.)
“Administrators on behalf of Defendant represented to [Plaintiff] that it pays
100%.” (Id. ¶ 33.) “Despite having Administrators make these
representations on its behalf, DEFENDANT and Administrators knew or should have
known that they would be paying Medical Provider at a Medicare rate.” (Id.
¶ 43.) Plaintiff relied on “relied and provided services solely based on
Administrators’ representations, promises and statements on behalf of
DEFENDANT.” (Id. 46.) “All of the information obtained was documented by
[Plaintiff”] as part of [Plaintiff]’s office policy and practice. “ (Id.
¶ 39.)
In the alternative, “DEFENDANT has failed to reimburse Patient and
now Medical Provider in accordance with the terms of Patient’s Plan.” (FAC, ¶
47.) “On or about January 5, 2021, Patient assigned all rights to reimbursement
for medical services under Patient’s Plan to Medical Provider.” (Id., ¶
48.) However, Plaintiff was never informed that that Patient’s plan had an
anti-assignment provision. (Id. ¶¶ 50-53.) Moreover, “Defendant’s health
plan, states Defendant is obligated to pay the UCR value for the services
“unless otherwise noted”. (Id. ¶ 55.)
Defendant LAFRA now demurs to all three causes of action in the
FAC on the bases they are inadequately pled.
B. First Cause of Action – Negligent Misrepresentation
“The elements of negligent misrepresentation, a form of deceit,
are misrepresentation of a past or existing material fact, without reasonable
ground for believing it to be true, and with intent to induce another's
reliance on the fact misrepresented; ignorance of the truth and justifiable
reliance on the misrepresentation by the party to whom it was directed; and
resulting damage.” (Home Budget Loans, Inc. v. Jacoby & Meyers Law
Offices (1989) 207 Cal.App.3d 1277, 1285.)
Defendant LAFRA asserts Plaintiff’s negligent misrepresentation is
barred by the two year statute of limitations. (CCP, ¶ 391(1).) However, the
statute of limitations for fraud and negligent representation is three years.
(See Broberg v. The Guardian Life Ins. Co. of America (2009) 171
Cal.App.4th 912, 920; see CCP, § 338(b).)
The Complaint alleges that medical services were rendered by
Plaintiff from 2019 to 2022. (FAC, ¶ 29.) However, as this action was not filed
until February 8, 2024, Plaintiff can only recover for misrepresentations made
on or after February 8, 2021. “The limitations period begins to run only when
the aggrieved party discovers “ ‘the facts constituting the fraud.’ ” (Broberg,
at p. 920.) Furthermore, the FAC fails state when Plaintiff discovered he would
not be paid full price for medical services rendered.
As the statute of limitations only bars some of Plaintiff’s
damages claim but does not fully bar Plaintiff’s negligent misrepresentation
claim, the demurrer on this basis is overruled. (See Fremont Indemnity Co.
v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119 [“A demurrer must
dispose of an entire cause of action to be sustained.”].)
Defendant LAFRA also demurs to the first cause of action on the
basis the FAC fails to allege who and what specific representations Defendant
made about payment to Plaintiff. The FAC alleges that “DEFENDANT’s
representative, Katie, and Janet” made unspecified representations to Plaintiff
about payment for out of network services but fails to state what those
specific representations were or what authority “Katie” and “Janet” had to
speak on Defendants’ behalf.
Moreover, Plaintiff alleges various other representations made by
“Administrators” about the rate of payment but Plaintiff fails to allege what
authority HCIS and ABCLH had to speak on behalf of Defendant. An agency
relationship “cannot be created by the conduct of the agent alone; rather conduct
by the principal is essential to create the agency.” (Flores v.
Evergreen at San Diego, LLC (2007) 148 Cal.App.4th 581, 587–588 [italics original].)
An agency “can be established either by agreement between the agent and the
principal, that is, a true agency [citation], or it can be founded on
ostensible authority, that is, some intentional conduct or neglect on the part
of the alleged principal creating a belief in the minds of third persons that
an agency exists, and a reasonable reliance thereon by such third
persons.” (Lovetro v. Steers (1965) 234 Cal.App.2d 461,
474–475.) The FAC fails to allege what conduct by Defendant LAFRA led Plaintiff
to believe that Administrators were agents of Defendant LAFRA such that Administrators
representations about the rate of payment were binding on Defendant.
Without specificity as to which agent of Defendant made the
misrepresentations about payment, Plaintiff fails to allege reasonable reliance
on correct payment by Defendant. (See Tenet Healthsystem Desert, Inc. v.
Blue Cross of California (2016) 245 Cal.App.4th 821, 839 [Health insurer
agent’s representation to pay for service were sufficiently alleged because
“Hospital alleged the identities of certain individuals acting as the agents of
Anthem, and further provided the basis for the allegation that such individuals
had the authority to act on Anthem's behalf, including the fact that these
individuals were originally reached through Hospital's call to the number
provided on Patient X's member identification card, and that these individuals
possessed private health and identifying information about Patient X that they
would not have been in possession of absent their employment/agency
relationship with Anthem.”].) Here, Plaintiff alleged that he has the
information about who made the misrepresentations because they were documented
as part of Plaintiff’s office policy and practice. (FAC, ¶ 39.)
The demurrer to the first cause of action is sustained.
C. Second Cause of Action – Promissory Estoppel
“ ‘The elements of a promissory estoppel claim are ‘(1) a promise
clear and unambiguous in its terms; (2) reliance by the party to whom the
promise is made; (3)[the] reliance must be both reasonable and foreseeable; and
(4) the party asserting the estoppel must be injured by his reliance.’
[Citation.]” (Advanced Choices, Inc. v. State Dept. of Health Services (2010)
182 Cal.App.4th 1661, 1672, citing US Ecology, Inc. v. State of California (2005)
129 Cal.App.4th 887, 901.)
Defendant LAFRA demurs to the second cause of action because the
FAC fails to allege that Defendant promised to pay for Plaintiff’s services in
full. “Administrators on behalf of Defendant represented to Medical Provider
that it pays 100%.” (FAC, ¶ 33.) As stated above, the FAC fails to explain what
led Plaintiff to believe that Administrators were agents of Defendant LAFRA and
had the authority to make representations of LAFRA’s behalf. On a claim for
promissory estoppel, the plaintiff “must prove that the defendant caused his or
her damages, as is required in contract actions.” (US Ecology, Inc. v. State
of California (2005) 129 Cal.App.4th 887, 902.) “Thus, in a promissory
estoppel case where the actions of a third party, not the breaching party,
cause a plaintiff's damages, a court acts well within its discretion in denying
the promissory estoppel claim.” (Id. at p. 905.)
The demurrer to the second cause of action is sustained.
D. Third Cause of Action – Breach of Contract
The elements of a claim for breach of contract are: “(1) the
existence of the contract, (2) plaintiff’s performance or excuse for nonperformance,
(3) defendant's breach, and (4) the resulting damages to the plaintiff.” (Oasis
West Realty, LLC v. Goldman (2011) 51 Cal. 4th 811, 821.) In addition, the
complaint must demonstrate damages proximately caused by the breach. (St.
Paul Ins. v. American Dynasty (2002) 101 Cal.App.4th 1038, 1060.)
Furthermore, “the complaint must [also] indicate on its face whether the
contract is written, oral, or implied by conduct.” (Otworth v. Southern Pac.
Transportation Co. (1985) 166 Cal.App.3d 452, 458-59 citing CCP, §
430.10(g).)
“If the action is based on alleged breach of written contract, the
terms must be set out verbatim in the body of the complaint or a copy of the
written agreement must be attached and incorporated by reference.” (Harris
v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 308.)
Alternatively, “a plaintiff may plead the legal effect of the contract rather
than its precise language.”¿ (Construction Protective Services, Inc. v. TIG
Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199.)¿¿“[A]ll essential
elements of a breach of contract cause of action [] must be pleaded with
specificity.”¿(Levy v. State Farm Mutual Automobile Ins. Co. (2007) 150
Cal.App.4th 1, 5.)
“If the action is based on an alleged breach of a written
contract, the terms must be set out verbatim in the body of the complaint or a
copy of the written instrument must be attached and incorporated by
reference." (Otworth v. Southern Pac. Transportation Co. (1985) 16
Cal.App.3d 452, 459 [internal citations omitted].)
Defendant LAFRA demurs to the third cause of action on the basis
that Plaintiff cannot plead inconsistent causes of action or allegations. “When
a pleader is in doubt about what actually occurred or what can be established
by the evidence, the modern practice allows that party to plead in the
alternative and make inconsistent allegations.” (Mendoza v. Continental
Sales Co. (2006) 140 Cal.App.4th 1395, 1402.) Plaintiff has the right to plead
breach of contract as an alternative theory of recovery.
However, the court agrees with Defendant LAFRA that the breach of
contract claim is insufficiently pled.
Plaintiff’s breach of contract claim asserts that “Patient had a
valid insurance agreement with Defendant which provided that Defendant would
pay for the medical services received by Patient” and Plaintiff has a right to
payment “based on assignment from Patient.” (FAC, ¶¶ 24, 78, 79.) However,
Plaintiff admits there was “an anti-assignment provision in Patient’s Plan.” (Id.
¶ 50.)
The FAC fails to explain why Defendant LAFRA waiver or is estopped
from asserting the anti-assignment provision in Patient’s insurance agreement.
(FAC, ¶ 25.) Moreover, the terms that insurance agreement entitling the Patient
to payment for medical services received is not attached nor alleged in the
FAC. The FAC admits that the Patient’s insurance stated, “payment is ‘based on
UCR unless otherwise noted.’ ” Without the contract, the court cannot determine
if payment for Plaintiff’s services should have been based on the UCR value or
if it was except.
The demurrer to the third cause of action is sustained.
Conclusion
Defendant LAFRA’s demurrer is sustained
with leave to amend. Plaintiff is granted 10 days
leave to amend. The court sets the OSC
RE: Amended Complaint for February 25, 2025, at 8:30
a.m.