Judge: Holly J. Fujie, Case: 23STCV15056, Date: 2024-02-08 Tentative Ruling

Case Number: 23STCV15056    Hearing Date: February 8, 2024    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

MOVING PARTY: Defendant United Airlines, Inc. (“Moving Defendant”)

RESPONDING PARTY: Plaintiff

The Court has considered the moving, opposition and reply papers.

BACKGROUND

            This action arises out of a dispute over the payment for medical services.  Plaintiff’s complaint (the “Complaint”) alleges: (1) negligent misrepresentation; (2) promissory estoppel; and (3) recovery of benefits under 29 U.S.C. section 1132, subdivision (a)(1)(B).^[1]

In relevant part, the Complaint alleges: on several dates in 2020 and 2021, Plaintiff provided medical services for a patient (“Patient”) employed by Moving Defendant.  (See Complaint ¶ 27.)  Before providing services, Plaintiff received an assignment granting him the right to step into Patient’s shoes with respect to the patient’s Employment Retirement Income Securities Act (“ERISA”) health plan.  (Complaint ¶ 22.)  Before Plaintiff agreed to provide Patient services, Plaintiff spoke with an agent of Moving Defendant and its insurer Aetna Life Insurance Company (“Aetna”) regarding the manner of payment.  (Complaint ¶ 28.)  Plaintiff was informed of Patient’s deductible, that Moving Defendant paid the customary rate (“UCR”) for services, and that payment was not based on the Medicare Fee Schedule.  (Complaint ¶¶ 31-35.)  Despite these representations, Moving Defendant’s insurer intended to compensate Plaintiff using a Medicare rate.  (See Complaint ¶ 41.) 

Moving Defendant filed a demurrer (the “Demurrer”) on the grounds that the Complaint fails to state facts sufficient to constitute a cause of action.

DISCUSSION

Meet and Confer

The meet and confer requirement has been met.

Legal Standard

A demurrer tests the sufficiency of a complaint as a matter of law.  (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.)  The court accepts as true all material factual allegations and affords them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts.  (Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.)  With respect to a demurrer, the complaint must be construed liberally by drawing reasonable inferences from the facts pleaded.  (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 517.)  A demurrer will be sustained without leave to amend if there exists no reasonable possibility that the defect can be cured by amendment.  (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) 

ERISA Preemption

Section 514 of ERISA provides, in relevant part, that ERISA supersedes any and all State laws insofar as they ... relate to any employee benefit plan.  (Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1221 n. 2.)  A law relates to an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan.  (Morris B. Silver M.D., Inc. v. International Longshore & Warehouse etc. (2016) 2 Cal.App.5th 793, 800 (“Morris”).)  With respect to preemption of state law claims, the Supreme Court has held common law causes of action based on alleged improper processing of a claim for benefits under an employee benefit plan, undoubtedly meet the criteria for pre-emption under section 514(a).  (Id. at 801.) 

ERISA pre-empts two categories of state laws.  (Gobeille v. Liberty Mut. Ins. Co. (2016) 577 U.S. 312, 319.)  First, ERISA pre-empts a state law if it has a “reference to” ERISA plans.  (Id.)  To be more precise, where a State's law acts immediately and exclusively upon ERISA plans ... or where the existence of ERISA plans is essential to the law's operation ..., that reference will result in pre-emption.  (Id. at 319-20.)  Second, ERISA pre-empts a state law that has an impermissible “connection with” ERISA plans, meaning a state law that “governs ... a central matter of plan administration” or “interferes with nationally uniform plan administration.”  (Id. at 320.)  A state law also might have an impermissible connection with ERISA plans if “acute, albeit indirect, economic effects” of the state law “force an ERISA plan to adopt a certain scheme of substantive coverage or effectively restrict its choice of insurers.”  (Id.)

            Moving Defendant argues that the first two causes of action alleging state law claims are preempted by ERISA because they arise out of and relate to the existence of an ERISA plan.  The Court agrees.  As alleged, Plaintiff is an assignee to the rights under Patient’s ERISA plan.  Plaintiff spoke to a representative of Patient’s plan before agreeing to provide services, and despite the Complaint’s conclusory allegations otherwise, as alleged, the conversation regarding payment was related to the terms of Patient’s ERISA plan.  (See Complaint ¶¶ 31-35, 40.)  The facts of the Complaint differ from those of Morris, where the plaintiff’s pleading alleged an ERISA plan’s broken promise to pay a specified amount.  (See Morris, supra, 2 Cal.App.5th at 806.)  Here, Plaintiff was explicitly assigned Patient’s rights under the ERISA plan, and the representative’s alleged promise regarding payment for services is general recitation of policy, rather than a specific amount related to specific services being provided by Plaintiff.  The Court therefore finds that the Complaint does not allege circumstances that would extricate Plaintiff’s claims from ERISA preemption.  The Court therefore SUSTAINS the Demurrer to the first and second causes of action with 20 days leave to amend.

Third Cause of Action

An ERISA civil action may be brought by a participant or beneficiary to recover benefits due under the terms of their plan.  (20 U.S.C § 1132, subd. (a)(1)(B).)

The Complaint sufficiently alleges that Plaintiff is a beneficiary of an ERISA plan and that Moving Defendant has failed to pay Plaintiff in accordance with the plan.  (See Complaint ¶ 54-55.)  The Court therefore OVERRULES the Demurrer to the third cause of action.

Moving party is ordered to give notice of this ruling. 

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org.  If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar. 

  Dated this 8th day of February 2024