Judge: Lynne M. Hobbs, Case: 24STCV28740, Date: 2025-05-21 Tentative Ruling
Case Number: 24STCV28740 Hearing Date: May 21, 2025 Dept: 61
EMANUEL AVALOS vs HEALTH NET COMMUNITY SOLUTIONS, INC., et al.
Tentative
Defendants Metropolitan IPA dba California Community Family care IPA and Astaa Health Management, Inc.’s Motion to Strike the Prayer for Punitive Damages from the Complaint is DENIED.
Plaintiff to give notice.
Analysis
I. 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. (Code Civ. Proc., § 435(b)(1)). The notice of motion to strike a portion of a pleading shall quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count or defense. (California Rules of Court Rule 3.1322.)
The grounds for a motion to strike shall appear on the face of the challenged pleading or form any matter of which the court is required to take judicial notice. (Code Civ. Proc., § 437(a)). The court then may strike out any irrelevant, false, or improper matter inserted in any pleading and 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. (Code Civ. Proc., § 436.) When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend. (Perlman v. Municipal Court (1979) 99 Cal.App.3d 568, 575.)
Defendants Metropolitan IPA dba Community Health Care IPA (CFC IPA) and Astrana Health Management, Inc. (Astrana, or collectively Defendants) move to strike the prayer for punitive damages contained in Plaintiff Emanuel Avalos’ Complaint. Defendants argue that Plaintiff has pleaded no facts establishing the existence of malice oppression, or fraud, and that Defendants are in any event protected from initial pleadings of punitive damages by the leave of court requirements enacted in Code of Civil Procedure § 425.13. (Motion at pp. 7–13.)
Punitive damages are allowed in non-contract cases when a defendant is guilty of “oppression, fraud, or malice . . . .” (Civ. Code § 3294, subd. (a).) The terms are defined as:
1. “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.
2. “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.
3. “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.
(Civ. Code § 3294, subd. (c).)
Something more than the mere commission of a tort is always required for punitive damages. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894.) Proof of negligence, gross negligence, or recklessness is insufficient to warrant an award of punitive damages. (Dawes v. Sup.Ct. (Mardian) (1980) 111 Cal.App.3d 82, 88–89.) Punitive damages may be recovered in an action for negligence or other nonintentional torts if the plaintiff pleads and proves that the defendant acted with the state of mind described as “conscious disregard” of the potential dangers to others. (Pfeifer v. John Crane, Inc. (2013) 220 Cal.App.4th 1270, 1299.) When malice is based on a defendant’s conscious disregard of Plaintiff’s rights, the conduct must be both despicable and willful. (College Hospital v. Superior Court (1994) 8 Cal.4th 794, 713 (“College Hospital”).)
Plaintiff’s allegations here are adequate to state the existence of malice and oppression. It is alleged that Plaintiff suffered from a tumorous growth in his mouth, which was gradually growing, causing him increasing pain loss of appetite, and weight loss. (Complaint ¶¶ 30, 51.) Plaintiff was informed by his providers from the outset that he would require surgery from an out-of-network provider, and requests for such a referral were made to Defendants. (Complaint ¶¶ 31–37.) Defendants instead referred Plaintiff first to an in-network provider, who told Plaintiff that he was unable to treat Plaintiff and “did not know why CFC IPA wasted time in sending Emanuel to see him” (Complaint ¶ 40); then to an out-of-network surgeon who was only authorized to provide a consultation — not the surgery itself (Complaint ¶ 46); and then to a third physician, who was once again only authorized to perform a consultation, not the necessary procedure. (FAC ¶¶ 52–54.) It is alleged that Defendants only delayed surgery in order to shop for a provider who would agree to their low rates, and that Defendants only authorized the surgery after being ordered to do so by the Department of Managed Health Care (DMHC). (Complaint ¶ 54.) These are allegations that Defendants deliberately or recklessly delayed Plaintiff’s treatment, causing him pain and discomfort, in order to spare themselves the cost of timely treatment. These allegations, if proved, would support a finding of malice or oppression.
Defendants next argue that the allegations are barred by Code of Civil Procedure § 425.13. The operative language of that section states:
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).)
Although directed toward claims arising out of “professional negligence,” the statute also applies to claims for intentional torts against medical providers. (See Country Villa Claremont Healthcare Center, Inc. v. Superior Court (2004) 120 Cal.App.4th 428, 431–32.)
“Health care provider” is defined as follows:
any person licensed or certified pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code, or licensed pursuant to the Osteopathic Initiative Act, or the Chiropractic Initiative Act, or licensed pursuant to Chapter 2.5 (commencing with Section 1440) of Division 2 of the Health and Safety Code; and any clinic, health dispensary, or health facility, licensed pursuant to Division 2 (commencing with Section 1200) of the Health and Safety Code. “Health care provider” includes the legal representatives of a health care provider.
(Code Civ. Proc. § 425.13, subd. (b).)
Defendants present CFC IPA’s Articles of Incorporation, filed with the California Secretary of State, which identify it as a professional corporation whose purpose is to “engage in the profession of medicine” under Corporations Code § 13400, et seq. (RJN Exh. A.) Defendants also cite the case Palmer v. Superior Court (2002) 103 Cal.App.4th 953, in which the court held that a “medical group made up of licensed physicians” could be a provider under this statute, even if not licensed itself. (Palmer, supra, 103 Cal.App.4th at p. 963.) The Palmer court also held that claims against the group arising from the group’s allegedly false and pretextual denial of the medical necessity of Plaintiff’s requested prosthetics fell within the scope of claims for “professional negligence” under Code of Civil Procedure § 425.13. (Id. at p. 972.)
CFC IPA is alleged to be an independent physician association in contract with Defendant Health Net to provide care to Health Net’s members through a network of providers.” (Complaint ¶ 15.) An IPA is defined as “an association of physicians that contracts to provide medical care to HMO members in the physicians' own offices.” (Inland Empire Health Plan v. Superior Court (2003) 108 Cal.App.4th 588, 590 disapproved on other grounds by Quigley v. Garden Valley Fire Protection Dist. (2019) 7 Cal.5th 798.) CFC IPA thus falls within the definition of health care provider described by Code of Civil Procedure § 425.13, as applied by the Palmer decision described above.
However, Defendants do not demonstrate that its decisions declining to refer Plaintiff to surgery to out-of-network physicians constitutes professional negligence within the meaning of the statute. Although they rely on Palmer, that case expressly addressed a medical group’s determinations as to whether a given prosthetic, made in a “utilization review,” was medically necessary. (Palmer, supra, 103 Cal.app.4th at p. 971–972.) The court determined that the medical director “who made the disputed “lack of medical necessity” decision was acting as a health care provider as to the medical aspects of that decision.” (Id. at p. 969.) The court reasoned that the utilization review decision “amounted to a medical clinical judgment such as would arguably arise out of professional negligence,” on the grounds that “the statutes require that utilization review be conducted by medical professionals, and they must carry out these functions by exercising medical judgment and applying clinical standards.” (Id. at p. 972.)
Defendants here argue that the present case “arises from the exercise of medical judgment conducted by medical professionals in the authorization of medically necessary procedures.” (Motion at p. 13.) But this is not a necessary implication of Plaintiff’s allegations, judicially noticeable matters, or the authority that Defendants present. Unlike Palmer, this case does not involve a determination as to medical necessity, or a utilization review, but to delays in authorizing Plaintiff’s referral to an out-of-network physician for a special procedure. Defendants do not identify medical aspects of the decisions at issue, or the statutes that prescribe them. Defendants’ argument that these decisions involved or required the exercise of “medical judgment” is entirely conclusory. (Motion at p. 13.) Thus there is no basis to conclude that section 425.13 applies.
The motion to strike is therefore DENIED.