Judge Lynette Gridiron Winston, Case Number: 24PSCV01625, Date: 2024-10-03 Tentative Ruling

Judge: Lynette Gridiron Winston, Case: 24PSCV01625, Date: 2024-10-03 Tentative Ruling

Case Number: 24PSCV01625 Hearing Date: October 3, 2024 Dept: 6

CASE NAME: Ning Sun v. Allied Physicians of California IPA (DBA Allied Pacific IPA)

1 – Defendant Allied Physicians of California IPA’s Demurrer to Plaintiff’s Complaint;

2 – Defendant Allied Physicians of California IPA Motion to Strike; and

3 – Plaintiff Ning Sun’s Motion for Leave to Amend Complaint to Ratify Punitive Damages Claim Against Defendant Allied Physicians of California IPA

TENTATIVE RULING

The Court SUSTAINS Defendant Allied Physicians of California IPA’s demurrer to Plaintiff’s complaint with 30 days’ leave to amend.

The Court GRANTS Defendant Allied Physicians of California IPA’s motion to strike as to the following portions of the complaint, without prejudice to Plaintiff seeking leave to amend:

1. The following language at Prayer for Relief, item a. 3, page 7, lines 6 to 7, in its entirety: “Punitive damages for wrongfully delayed and denied cancer treatment second times, but certainly in excess of $8.8 million.”;

2. The following references to “punitive damages” at page 1, line 25; page 5, line 18, and page 6, line 3;

3. The following language at page 4, line 24: “with deliberated malice.”; and

4. The following language at page 4, lines 25-26: “This not only shows a profound disregard for human life but also constitutes torture with malice and intentional harm.”

The Court DENIES Plaintiff Ning Sun’s motion for leave to amend regarding punitive damages as moot, without prejudice.

Defendant is ordered to give notice of the Court’s ruling within five calendar days of this order.

BACKGROUND

This is a bad faith insurance action. On May 20, 2024, plaintiff Ning Sun (Plaintiff) filed this action against defendant Allied Physicians of California IPA (DBA Allied Pacific IPA) (Defendant), alleging causes of action for insurance bad faith – breach of the implied covenant of good faith and fair dealing, intentional infliction of emotional distress, and negligent infliction of emotional distress.

On August 30, 2024, Defendant demurred to and moved to strike the complaint. On September 18, 2024, Plaintiff opposed the demurrer and motion to strike. On September 25, 2024, Defendant replied.

On September 12, 2024, Plaintiff moved for leave to amend the complaint to ratify the punitive damages claim against Defendant. The motion is unopposed.

LEGAL STANDARD – Demurrer

A demurrer is a pleading used to test the legal sufficiency of other pleadings. It raises issues of law, not fact, regarding the form or content of the opposing party's pleading (complaint, answer or cross-complaint). (Code Civ. Proc., § 422.10; see Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 (Donabedian).) It is not the function of the demurrer to challenge the truthfulness of the complaint; and for purposes of ruling on the demurrer, all facts pleaded in the complaint are assumed to be true. (Ibid.)

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian, supra, 116 Cal.App.4th at p. 994.) No other extrinsic evidence can be considered. (Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881 [error for court to consider facts asserted in memorandum supporting demurrer]; see also Afuso v. United States Fid. & Guar. Co. (1985) 169 Cal.App.3d 859, 862, disapproved on other grounds in Moradi-Shalal v. Fireman’s Fund Ins. Cos. (1988) 46 Cal.3d 287 [error to consider contents of release not part of court record].)

A demurrer can be utilized where the “face of the complaint” itself is incomplete or discloses some defense that would bar recovery. (Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971-972.) The “face of the complaint” includes material contained in attached exhibits that are incorporated by reference into the complaint, or in a superseded complaint in the same action. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94; see also Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 [“[W]e rely on and accept as true the contents of the exhibits and treat as surplusage the pleader’s allegations as to the legal effect of the exhibits.”])

A demurrer can only be sustained when it disposes of an entire cause of action. (Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119; Kong v. City of Hawaiian Gardens Redev. Agency (2003) 108 Cal.App.4th 1028, 1046.)

DISCUSSION

Meet and Confer

Per Code of Civil Procedure section 430.41, subdivision (a), Defendant was required to meet and confer in person, by telephone, or by video conference before bringing this demurrer. (Code Civ. Proc., § 430.41, subd. (a).) The Court finds Defendant’s efforts to meet and confer sufficient. (Pancer Decl., ¶¶ 4-7.)

First Cause of Action – Insurance Bad Faith-Breach of the Implied Covenant of Good Faith and Fair Dealing

To allege a breach of the implied covenant of good faith and fair dealing, the plaintiff must allege, “something beyond breach of the contractual duty itself and it has been held that [b]ad faith implies unfair dealing rather than mistaken judgment .... [Citations.]” (Careau & Co. v. Sec. Pac. Bus. Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394.) “There is no obligation to deal fairly or in good faith absent an existing contract. [Citation.]” (Racine & Laramie, Ltd. v. Dep't of Parks & Recreation (1992) 11 Cal.App.4th 1026, 1032.)

Defendant demurs to the First Cause of Action for insurance bad faith-breach of the implied covenant of good faith and fair dealing on the grounds that it fails to allege sufficient facts to state a cause of action against Defendant because Plaintiff has not alleged the existence of any contract between the parties. Defendant contends there is no obligation to deal fairly or in good faith absent an existing contract. Defendant notes that the complaint at most alleges Plaintiff was enrolled under Health Net’s Medi-Cal health plan administered by Defendant, but contends this is insufficient to establish any legal agreement between Plaintiff and Defendant. Defendant further contends Plaintiff fails to allege the necessary elements of a contract, such as offer, acceptance, and consideration, as well as the terms of the purported contract between Plaintiff and Defendant.

In opposition, Plaintiff contends he is a third-party beneficiary of the contract between Health Net and Defendant, which was made expressly for the benefit of insured individuals like Plaintiff. Plaintiff contends he benefits from that contract, as it is Defendant’s responsibility to locate physicians or healthcare providers for Plaintiff, Plaintiff could show that a motivating purpose was to benefit him because of Defendant’s assignment to administer medical referral services for Plaintiff, and because enforcement of this cause of action would fulfill the objectives of the insurance contract to provide services to insured individuals like Plaintiff. Plaintiff contends he has alleged that Defendant, as the entity responsible for managing Plaintiff’s medical referrals, failed to act in good faith by wrongfully delaying and denying necessary cancer treatment.

The Court agrees with Defendant. The complaint does not allege the existence of a contract between Plaintiff and Defendant, which is necessary for a claim for breach of the implied covenant of good faith and fair dealing. (Racine & Laramie, Ltd. v. Dep't of Parks & Recreation, supra, 11 Cal.App.4th at p. 1032.) “A written contract may be pleaded either by its terms—set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference—or by its legal effect. [Citation.]” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.) The complaint did not attach a copy of a written agreement, set out the terms verbatim, or plead their legal effect. The complaint does not allege the terms of any contract between Plaintiff and Defendant, or even Defendant and Health Net for that matter. The Complaint also does not allege the terms of a contract between Plaintiff and Health Net. Nor does it allege facts showing that Defendant was acting as the agent of Health Net as the administrator of Plaintiff’s health plan with Health Net.

To the extent Plaintiff contends he is a third-party beneficiary of an agreement between Defendant and Health Net, that argument is unavailing because Plaintiff has not alleged what the terms of the purported agreement between Health Net and Defendant are. The Court therefore is unable to determine whether Plaintiff was an intended or incidental beneficiary of any such agreement. (See Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 830 [“our court has carefully examined the express provisions of the contract at issue…”]; Lucas v. Hamm (1961) 56 Cal.2d 583, 590 [Civil Code section 1559 excludes incidental beneficiaries from enforcing contracts as third parties]; see also Moncada v. West Coast Corp. (2013) 221 Cal.App.4th 768, 777 [a contract is void if it the parties’ intent cannot be ascertained].)

Based on the foregoing, the Court SUSTAINS the demurrer to the First Cause of Action with 30 days’ leave to amend.

Second Cause of Action – Intentional Infliction of Emotional Distress

To state a cause of action for intentional infliction of emotional distress, the plaintiff must allege facts demonstrating, “(1) defendant engaged in extreme and outrageous conduct (conduct so extreme as to exceed all bounds of decency in a civilized community) with the intent to cause, or with reckless disregard to the probability of causing, emotional distress; and (2) as a result, plaintiff suffered extreme or severe emotional distress.” (Berry v. Frazier (2023) 90 Cal.App.5th 1258, 1273 (Berry).) “Whether a defendant's conduct can reasonably be found to be outrageous is a question of law that must initially be determined by the court; if reasonable persons may differ, it is for the jury to determine whether the conduct was, in fact, outrageous. [Citation.]” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 534; but see Berry, supra, 90 Cal.App.5th at p. 1273 [“’[W]hether conduct is ‘outrageous’ is usually a question of fact.’ [Citation]”)

Defendant demurs to the Second Cause of Action for intentional infliction of emotional distress on the grounds that it fails to allege facts demonstrating extreme and outrageous conduct or severe emotional distress. Defendant contends that its alleged delay and denial of medical treatment are conclusory allegations without factual support that demonstrate conduct exceeding all bounds of decency. Defendant contends the mere delay or denial of medical treatment, even if intentional, does not rise to the level of extreme and outrageous conduct necessary to sustain a claim for intentional infliction of emotional distress. Defendant further contends Plaintiff’s allegations of extreme emotional distress, pain, and suffering are vague and lack any concrete examples or medical evidence of emotional distress.

In opposition, Plaintiff contends he has sufficiently alleged facts to state a cause of action for intentional infliction of emotional distress. Plaintiff contends the allegations of the complaint demonstrate extreme and outrageous conduct by Defendant deliberately disregarding Plaintiff’s urgent medical needs for life preserving treatment. Plaintiff also contends the complaint does not need to allege concrete examples or medical evidence of emotional distress.

Under some circumstances, “a health care plan's conduct in handling a claim may result in liability for intentional infliction of emotional distress. However, courts have rejected liability where the insurer ‘simply delayed or denied insurance benefits’.” (Mintz v. Blue Cross of California (2009) 172 Cal.App.4th 1594, 1608.) Here, the Court agrees with Defendant. The facts as presently alleged in the complaint do not rise to the level of extreme and outrageous conduct necessary to state a cause of action for intentional infliction of emotional distress. “Ordinarily, a medical diagnosis and treatment advice will not be considered outrageous unless they are false and given in bad faith. [Citation.]” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 534.) The most Plaintiff has alleged here is a disagreement over referrals for Plaintiff’s cancer treatments, which is effectively treatment advice from Defendant. (See Ibid.) Plaintiff also has not alleged any facts demonstrating that Defendant’s denials of referrals were made in bad faith.

Moreover, the Court also agrees with Defendant that the complaint does not allege facts demonstrating Plaintiff suffered severe emotional distress. It is not enough for Plaintiff to allege that he suffered extreme emotional distress. (Compl., pp. 4-6.) That is a conclusory allegation which the Court disregards on a demurrer. (Serrano v. Priest (1971) 5 Cal.3d 584, 591.)

Accordingly, the Court SUSTAINS the demurrer to the Second Cause of Action with 30 days’ leave to amend.

Third Cause of Action – Negligent Infliction of Emotional Distress

To state a cause of action for negligent infliction of emotional distress, the plaintiff must allege facts that would otherwise support a claim for negligence, such as duty, breach, causation, and damages. (Eriksson v. Nunnink (2015) 233 Cal.App.4th 708, 729.)

Defendant demurs to the Third Cause of Action for negligent infliction of emotional distress on the grounds that it is not a valid cause of action in California and Plaintiff has not alleged a claim under general negligence principals. Defendant contends Plaintiff has not adequately alleged that Defendant breached a specific duty owed to Plaintiff. Defendant contends the allegations of the complaint are vague and fail to specify the applicable standard of care to Defendant or how Defendant’s actions deviated from that standard. Defendant contends Plaintiff has not alleged any special relationship with Defendant that would give rise to a duty to avoid causing emotional distress.

In opposition, Plaintiff acknowledges that negligent infliction of emotional distress is not an independent tort, but contends that it can be brought under negligence principles. Plaintiff contends Defendant owed Plaintiff a duty of care as the entity responsible for managing his healthcare referrals service, and that Defendant breached this duty by delaying and denying necessary treatment.

The Court disagrees with Defendant regarding the issue of duty because healthcare providers do owe a duty of care to patients. (Aguirre-Alvarez v. Regents of Univ. of California (1998) 67 Cal.App.4th 1058, 1067.) Nevertheless, whether Defendant owes a duty does not change the Court’s finding that the complaint fails to state a cause of action for negligent infliction of emotional distress. First, the complaint is devoid of facts demonstrating that Defendant breached any duty of care to Plaintiff by not providing the referrals Plaintiff contend are necessary. Second, as noted above, Plaintiff has not alleged facts demonstrating emotional distress suffered as a result of Defendant’s alleged actions. It is not enough to just allege that Plaintiff suffered significant emotional and physical distress. (Compl., p. 6.) That is a conclusory allegation which the Court disregards on a demurrer. (Serrano v. Priest, supra, 5 Cal.3d at p. 591.)

Based on the foregoing, the Court SUSTAINS the demurrer to the Third Cause of Action with 30 days’ leave to amend.

Punitive Damages

“A demurrer does not lie to a portion of a cause of action.” (Cnty. of El Dorado v. Superior Ct. (2019) 42 Cal.App.5th 620, 624, internal quotation marks and citation omitted.) The Court declines to consider Defendant’s demurrer with respect to punitive damages in the complaint, as punitive damages are not a cause of action. (See ibid.; Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 164 [punitive damages are only incidental to a cause of action, not the basis for a cause of action].)

LEGAL STANDARD – Motion to Strike

“Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof, but this time limitation shall not apply to motions specified in subdivision (e).” (Code Civ. Proc., § 435, subd. (b)(2).) “The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (Id., § 436.)

REQUESTS FOR JUDICIAL NOTICE – Motion to Strike

The Court GRANTS Defendant’s request for judicial notice. (Evid. Code, § 452, subd. (c); Friends of Shingle Springs Interchange, Inc. v. County of El Dorado (2011) 200 Cal.App.4th 1470, 1483-1484 [court may take judicial notice of certificate of corporate defendant's status from Secretary of State]; see Baldwin v. AAA N. California, Nevada & Utah Ins. Exch. (2016) 1 Cal.App.5th 545, 553 [court may take judicial notice of meaning of document where there is only one reasonable interpretation]; Fremont Indem. Co. v. Fremont Gen. Corp. (2007)148 Cal.App.4th 97, 114 [same].)

DISCUSSION – Motion to Strike

Meet and Confer

Per Code of Civil Procedure section 435.5, subdivision (a), Defendant was required to meet and confer in person, by telephone, or by video conference before bringing this motion to strike. (Code Civ. Proc., § 435.5, subd. (a).) The Court finds Defendant’s efforts to meet and confer sufficient. (Pancer Decl., ¶¶ 4-7.)

Punitive Damages

A claim for punitive damages is subject to a motion to strike when the allegations fail to rise to the level of malice, oppression, or fraud necessary under Civil Code section 3294. (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 64.)

Defendant seeks to strike Plaintiff’s punitive damages requests from the complaint on the grounds that the only allegations supporting Plaintiff’s punitive damages claims are conclusory and devoid of factual support. Defendant also seeks to strike Plaintiff’s punitive damages claims per Code of Civil Procedure section 425.13, which prohibits punitive damages claims against health care providers without prior leave of court. Defendant contends it is a health care provider as it is a professional corporation of physicians licensed to practice medicine in the State of California and its Articles of Incorporation indicate its purpose is to engage in the profession of medicine. Defendant contends Plaintiff’s claims arose out of the alleged professional negligence of a health care provider because it is based on the exercise of medical judgment conducted by medical professionals in administering Plaintiff’s medical referral services.

In opposition, Plaintiff contends he has alleged specific instances of intentional misconduct by Defendant that warrants the claim for punitive damages, namely the substantial delays and denials in cancer treatment. Plaintiff contends the complaint provides sufficient factual allegations to meet the threshold for malice and oppression. Plaintiff further contends that Defendant is a managed care facility under Civil Code section 3248 and is therefore not a health care provider for purposes of Code of Civil Procedure section 425.13, as Defendant’s primary function is to manage and administer health care referrals, and its involvement in patient care does not extend to direct medical treatment.

The Court agrees with Defendant. Given the Court’s sustaining of the demurrer to the First through Third Causes of Action in the complaint, there are currently no causes of action of remaining that would support a claim for punitive damages. The Court also agrees the complaint is generally devoid of factual allegations demonstrating any conduct on the part of Defendant that would justify a claim for punitive damages. (Turman v. Turning Point of Central California, Inc., supra, 191 Cal.App.4th at p. 64.)

The Court further agrees that the punitive damages claims are subject to a motion to strike under Code of Civil Procedure section 425.13. Defendant’s Articles of Incorporation expressly state that its purpose is the profession of medicine. (Request for Judicial Notice, Ex. 1.) The Complaint does not clearly allege the services Defendant provides. The Court finds this sufficient at this stage of the litigation to bring Defendant within the scope of Code of Civil Procedure section 425.13. (Palmer v. Superior Ct. (2002) 103 Cal.App.4th 953, 966-967 [medical group comprised of licensed medical practitioners who provide direct medical services to patients found to be “health care providers” for purposes of Code of Civil Procedure section 425.13, even if the complaint characterized the medical group as a “subscriber agreement administrator”].) As such, Plaintiff should have first requested leave to amend to add a punitive damages claim before including them in the complaint.

Based on the foregoing, the Court GRANTS Defendant’s motion to strike the following portions of the complaint, without prejudice to Plaintiff seeking leave to amend:

2. The following references to “punitive damages” at page 1, line 25; page 5, line 18, and page 6, line 3;

3. The following language at page 4, line 24: “with deliberated malice.”; and

4. The following language at page 4, lines 25-26: “This not only shows a profound disregard for human life but also constitutes torture with malice and intentional harm.”

LEGAL STANDARD – Motion for Leave to Amend re Punitive Damages

The trial court has discretion to allow amendments to pleadings in the furtherance of justice. (Code Civ. Proc., § 473, subd. (a)(1).) “Any judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading.” (Code Civ. Proc., § 576.) “There is a policy of great liberality in permitting amendments to the pleadings at any stage of the proceeding.” (Berman v. Bromberg (1997) 56 Cal.App.4th 936, 945, citation omitted.) “An application to amend a pleading is addressed to the trial judge’s sound discretion.” (Ibid., citation omitted.) “In any action for damages arising out of the professional negligence of a health care provider, no claim for punitive damages shall be included in a complaint or other pleading unless the court enters an order allowing an amended pleading that includes a claim for punitive damages to be filed. The court may allow the filing of an amended pleading claiming punitive damages on a motion by the party seeking the amended pleading and on the basis of the supporting and opposing affidavits presented that the plaintiff has established that there is a substantial probability that the plaintiff will prevail on the claim pursuant to Section 3294 of the Civil Code.” (Code Civ. Proc., § 425.13, subd. (a).)

A party seeking leave to amend must attach a copy of the proposed pleading to the motion for leave to amend. (Cal. Rules of Court, rule 3.1324, subd. (a)(1).) A motion for leave to amend must also state what allegations are proposed to be added or deleted to the previous pleading, if any, and where, by page, paragraph, and line number the additional or deleted allegations or located. (Cal. Rules of Court, rule 3.1324, subd. (a)(2)-(3).) Under Rule 3.1324, subdivision (b) of the California Rules of Court, a separate declaration must accompany a motion for leave to amend and must specify: (1) the effect of the amendment; (2) why the amendment is necessary and proper; (3) when the facts giving rise to the amended allegations were discovered; and (4) the reasons why the request for amendment was not made earlier. (Cal. Rules of Court, rule 3.1324, subd. (b).)

DISCUSSION – Motion for Leave to Amend re Punitive Damages

Plaintiff seeks leave of the Court to maintain his punitive damages claim against Defendant. In light of the Court granting Defendant’s motion to strike Plaintiff’s punitive damages claims, the Court finds this motion moot and will deny it as such, without prejudice. Even if the Court were to consider the merits of the motion, the Court notes that the motion has numerous defects, such as failing to attach a copy of the proposed amended complaint, identifying the locations of the proposed changes, as well as a declaration that satisfies the requirements of Rule 3.1324, subdivision (b). (Cal. Rules of Court, rule 3.1324.)

Based on the foregoing, the Court DENIES the motion for leave to amend regarding punitive damages as moot, without prejudice.

CONCLUSION

The Court SUSTAINS Defendant Allied Physicians of California IPA’s demurrer to Plaintiff’s complaint with 30 days’ leave to amend.

The Court GRANTS Defendant Allied Physicians of California IPA’s motion to strike as to the following portions of the complaint, without prejudice to Plaintiff seeking leave to amend:

5. The following language at Prayer for Relief, item a. 3, page 7, lines 6 to 7, in its entirety: “Punitive damages for wrongfully delayed and denied cancer treatment second times, but certainly in excess of $8.8 million.”;

6. The following references to “punitive damages” at page 1, line 25; page 5, line 18, and page 6, line 3;

7. The following language at page 4, line 24: “with deliberated malice.”; and

8. The following language at page 4, lines 25-26: “This not only shows a profound disregard for human life but also constitutes torture with malice and intentional harm.”

The Court DENIES Plaintiff Ning Sun’s motion for leave to amend regarding punitive damages as moot, without prejudice.

Defendant is ordered to give notice of the Court’s ruling within five calendar days of this order.