Judge Martha K. Gooding, Case 20-01127437 2023-08-28 Tentative Ruling

Judge: Martha K. Gooding, Case: 20-01127437, Date: 2023-08-28 Tentative Ruling

1) Demurrer to Amended Complaint – OVERRULED

2) Case Management Conference – parties to appear for trial setting

Defendant Rohrer Corporation’s Demurrer to Plaintiff St. Joseph Hospital of Orange’s First Amended Complaint (“FAC”) is OVERRULED.

Defendant is ordered to file and serve its answer to the FAC within 20 days. The parties shall appear at the CMC for trial setting.

Defendant’s original request for judicial notice [ROA #133] is granted as to Ex. 1. The request is unnecessary as to Exs. 2-3. Defendant’s supplemental request for judicial notice for Ex. 10 [ROA #159] is granted.

Demurrer Basic Rules

A demurrer can be used only to challenge defects that appear within the “four corners” of the pleading – which includes the pleading, any exhibits attached, and matters of which the court is permitted to take judicial notice. Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4^th 968, 994. Limited to the “four corners” as such, a pleading is adequate if it contains a reasonably precise statement of the ultimate facts, in ordinary and concise language, and with sufficient detail to acquaint a defendant with the nature, source and extent of the claim. Leek v. Cooper (2011) 194 Cal.App.4^th 399, 413.

On demurrer, a complaint must be liberally construed. Code Civ. Proc. § 452; Stevens v. Superior Court (1999) 75 Cal.App.4^th 594, 601. All material facts properly pleaded, and reasonable inferences drawn from them, must be accepted as true. Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4^th 962, 966-67.

A pleading is adequate if it contains a reasonably precise statement of the ultimate facts, in ordinary and concise language, and with sufficient detail to acquaint a defendant with the nature, source and extent of the claim. The degree of detail required depends on the extent to which the defendant in fairness needs such detail which can be conveniently provided by the plaintiff. Less particularity is required when the defendant ought to have co-extensive or superior knowledge of the facts. Under normal circumstances, there is no need for specificity in pleading evidentiary facts. However, bare conclusions of law are insufficient. Code Civ. Proc. §§ 425.10(a), 459; Doe v. City of Los Angeles (2007) 42 Cal.4^th 531, 549-50; Zelig v. County of Los Angeles (2002) 27 Cal.4^th 1112, 1126; Doheny Park Terrace HOA v. Truck Ins. Exchange (2005) 132 Cal.App.4^th 1076, 1098-99; Berger v. California Insurance Guarantee Assn (2005) 128 Cal.App.4^th 989, 1006.

Where the demurrer is based on a statute of limitations, the burden is on the defendant to establish the plaintiffs’ cause of action is necessarily timed barred, not that it may be time-barred. In Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403, the court explained that: “A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. (Citation omitted) In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred. (Mangini v. Aerojet-General Corp. (1991) 230 Cal.App.3d 1125, 1155 [281 Cal.Rptr. 827].)”

Merits

Statute of Limitations

The parties agree the applicable statute of limitations for Plaintiff’s claims is two years. [See Demurrer MPA (ROA #135) at 13:4-11; Opp. (ROA #150) at 7:7-16.]

At least for purposes of argument, Defendant accepts Plaintiff’s accrual date of 6/25/18. [Demurrer MPA 13:2-4.]

This action was commenced on 1/28/20 (within the two-year limitations period), but Rohrer was not added until the FAC was filed on 2/6/23. In its moving papers, Defendant argues there is no relation back because Plaintiff knew of Rohrer’s existence when it filed the original complaint, so a CCP 474 amendment would not be proper. Scherer v. Mark (1976) 64 Cal.App.3d 834, 840-841; Organizacion Comunidad De Alviso v. City of San Jose (2021) 60 Cal.App.5th 783, 794–795. [Demurrer MPA at 13.] In its reply, Rohrer contends that adding Rohrer as a Doe defendant in the FAC filed on 2/6/23 could not relate back to the original complaint because the Does in the original complaint were dismissed on 6/17/21.

In short, Defendant argues Rohrer was a new defendant added after the statute of limitations had run. Defendant contends that, as a result, Plaintiffs claims against Rohrer are time barred.

Plaintiff contends it added Rohrer within the “three year statute of limitations set out by Code Civ. Proc. § 582.210.” [Opp. at 7:25.] This statute sets three years as the limit for when the complaint and summons must be served. Plaintiff describes it as the “statute of limitations for amending the complaint with Doe Defendants.” [Id. 7:25-28.] Plaintiff further asserts that because “the complaint was filed on January 28, 2020, the statute of limitations for this action to amend the pleading with a Doe Defendant would have run until January 28, 2023.” [Id. 8:1-2.]

But the question is not whether Plaintiff added a Doe defendant within the time required for service of the summons and complaint; the question is whether Plaintiff named Rohrer as a defendant within the two-year statute of limitations.

If naming Rohrer as Doe 1 related back to the filing of the original complaint, as is often the case with Doe amendments, then the answer to that question would be yes. But by the time Rohrer was named as Doe 1 (as part of the FAC that included Does 1-10), the Does named in the original complaint had been dismissed for a year and a half.

In short, the Doe amendment on 2/6/23 could not relate back to the original complaint when Does in the Complaint had been dismissed on 6/17/21.

But that does not end the inquiry. The remaining question is whether Rohrer is indeed a new party or is simply the correct name for the Defendant already sued.

Plaintiff alleges, and Defendant acknowledges, that TCC merged into Rohrer, with Rohrer being the surviving corporation. [FAC ¶ 5; Demurrer MPA at 13:22-23, 15:1-7.] The two corporations became one, under the name of Rohrer Corporation.

Thus, when Plaintiff sued TCC, it sued the right entity but by the wrong name. See Most Worshipful Sons of Light Grand Lodge Ancient Free and Accepted Masons v. Sons of Light Lodge No. 9 (1958) 160 Cal.App.2d 560 (where plaintiffs moved to amend complaint, after statute of limitations had run, to include action against corporation to which new lodge had transferred property, amendment permitted because new lodge had assets, and was alter ego of, the original defendant).

In Mirabito v. San Francisco Dairy Co. (1935) 8 Cal.App.2d 54, the judgment was amended to add a successor corporation, which is essentially what Rohrer is here. “It appears without contradiction that San Francisco Dairy Company is a California corporation [the named defendant]. In July, 1927, said corporation conveyed all of its assets and property to Dairy Dale Company, a corporation, which in turn, for a consideration, in May, 1929, conveyed all of the said assets and property to Dairy Delivery Company, Inc., a Delaware corporation. The purpose of adding the name of Dairy Delivery Company, Inc., to the judgment herein was to enable respondent to collect his judgment, as there are no assets of San Francisco Dairy Company.” Id. at 57.

Indeed, under the circumstances alleged here, plaintiffs have been permitted to amend a judgment to add the successor corporation. See McClellan v. Northridge Park Townhome Owners Ass'n, Inc. (2001) 89 Cal.App.4th 746, 753–754.

In supplemental briefing requested by the Court, Defendant argues that a finding of alter ego or successor corporation liability would require a finding of fraud, which has not been alleged here. But a finding of a fraudulent transaction is an alternative basis for finding successor liability. See McClellan v. Northridge Park Townhome Owners Ass'n, Inc., supra, 89 Cal.App.4th at 753-754.

Defendant also argues California corporate law does not apply to either Transparent Container Co., Inc. (sometimes “TCC”) or Rohrer Corporation to determine if Rohrer is the successor corporation of Transparent Container Co., Inc., as they each are or were, respectively, an Ohio and an Illinois corporation. Defendant relies on law establishing that certain provisions of California’s Corporations Code do not apply to out-of-state corporations.

“Section 102(a) specifies that the provisions of division 1 (the General Corporation Law) apply to (1) all “corporations organized under this division”; (2) specified “domestic corporations”; and (3) “other” corporations only to the extent the provisions of the code “expressly include [ ]” them. . . . We conclude that California's survival statute, section 2010, does not apply to foreign corporations.
Greb v. Diamond Internat. Corp. (2013) 56 Cal.4th 243, 249, 272.

But the parties do not dispute that California procedural and substantive law generally applies to this dispute. [See Dem. at 12-24.] The Court’s equitable powers under Civil Procedure Code (“CCP”) section apply here.

Moreover, although Defendant asserts that Illinois and Ohio law allow for alter ego liability only upon a showing of fraud, Defendant does not cite cases addressing the issue of a successor corporation’s liability after a merger, as is alleged here by Plaintiff. On that point, there does not seem to be a conflict between California and Ohio (or Illinois) law. “A corporation that purchases the assets of another corporation is not liable for the contractual liabilities of its predecessor corporation unless (1) the buyer expressly or impliedly agrees to assume such liability; (2) the transaction amounts to a de facto consolidation or merger; (3) the buyer corporation is merely a continuation of the seller corporation; or (4) the transaction is entered into fraudulently for the purpose of escaping liability. Flaugher v. Cone Automatic Machine Co., 30 Ohio St.3d at 62, 30 OBR at 167, 507 N.E.2d at 334.” Welco Industries, Inc. v. Applied Cos. (1993) 67 Ohio St.3d 344, 349 [617 N.E.2d 1129, 1133] (emphasis added).

“The generally accepted rule is that a corporation which merges with another corporation takes on the latter corporation's obligations and liabilities while a successor corporation which purchases the business assets of another corporation does not become liable for the debts of the seller in the absence of an express agreement to assume the seller's debts. Illinois has long applied this rule, which is based upon Illinois corporate law rather than strict liability principles, to determine the liability of an asset purchaser in a products claim.”Myers v. Putzmeister, Inc. (Ill. App. Ct. 1992) 232 Ill.App.3d 419, 422 [596 N.E.2d 754, 755] (emphasis added).

Thus, there does not appear to be a conflict that would require this court to determine which law should apply to determine successor corporation liability for purpose of Defendant’s demurrer. See Blizzard Energy, Inc. v. Schaefers (2021) 71 Cal.App.5th 832, 856, review denied (Feb. 16, 2022) (applying California alter ego law to foreign corporation on domesticated judgment).

As a consequence, the Court applies California law regarding successor corporation liability after merger and finds that Plaintiff sued the correct entity but under the wrong name. This would permit a Code Civ. Proc. § 473 amendment, which Plaintiff submitted on 1/18/23. [ROA #116.]

The Court concludes that it should have granted the requested amendment to the Complaint to correct the name from Transparent Container Company Inc. to Rohrer Corporation—and it grants that amendment now, nunc pro tunc.

Defendant’s demurrer on statute of limitations grounds is OVERRULED.

ERISA Preemption

ERISA is a comprehensive federal law designed to promote the interests of employees and their beneficiaries in employee pension and benefit plans. Port Med. Wellness, Inc. v. Connecticut General Life Ins. Co. (2018) 24 Cal.App.5th 153, 171. As a part of this integrated regulatory system, Congress enacted various safeguards to preclude abuse and to secure the rights and expectations that ERISA brought into being. Ibid. Prominent among those safeguards is an expansive preemption provision, found at section 514 of ERISA (29 U.S.C. § 1144). Id.

ERISA has two distinct preemption provisions: Preemption under section 514 (29 U.S.C. § 1144), known as conflict or ordinary preemption; and so-called complete preemption under section 502(a) (29 U.S.C. § 1132(a)). Port Med. Wellness, Inc. v. Connecticut General Life Ins. Co., supra, 24 Cal.App.5th 153, 171. Complete preemption is a doctrine that recognizes federal jurisdiction over what would otherwise be a state law claim, an issue that typically arises when the defendant has removed the plaintiff's state court lawsuit to federal court. Id. Conflict preemption is an affirmative defense to a plaintiff's state law cause of action that entirely bars the claim, i.e., the particular claim involved cannot be pursued in either state or federal court. Id. at pp. 171-172.

Defendant asserts conflict preemption in this case. The purpose of this doctrine is to ensure that plans and plan sponsors are subject to a uniform body of benefits law, to minimize the administrative and financial burden of complying with conflicting directives among states or between states and the federal government, and to prevent the potential for conflict in substantive law. Port Med. Wellness, Inc. v. Connecticut General Life Ins. Co., supra, 24 Cal.App.5th 153, 172.

By its terms, section 1144(a) preempts “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” Roach v. Mail Handlers Benefit Plan (9th Cir. 2002) 298 F.3d 847, 849. But the words “relate to” should not be taken too literally because of the breadth of those words. Id. Instead, the United States Supreme Court has described two categories of state laws that section 1144(a) preempts: (1) where a state law has a “reference to” ERISA plans, i.e., 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, the “reference” will result in preemption; and (2) where a state law has an impermissible “connection with” ERISA plans, i.e., the state law governs a central matter of plan administration or interferes with nationally uniform plan administration. Gobeille v. Liberty Mut. Ins. Co. (2016) 577 U.S. 312, 320.

As to the “reference to” prong, claims under California contract and tort law do not act exclusively upon ERISA plans. See Summit Estate, Inc. v. Cigna Healthcare of California, Inc. (N.D. Cal., Oct. 10, 2017) 2017 WL 4517111, at *15. Nor is the existence of ERISA plans essential to their operation. Id. Rather, California contract and tort law are laws of general application and do not focus exclusively or primarily on ERISA plan administration. Id.

As to the “connection with” prong, the Ninth Circuit has used a relationship test in analyzing its applicability. Paulsen v. CNF Inc. (9th Cir. 2009) 559 F.3d 1061, 1082. Under this test, a state law claim is preempted when the claim bears on an ERISA-regulated relationship, e.g., the relationship between plan and plan member, between plan and employer, between employer and employee. Id.

The opinion in Port Medical Wellness, Inc. v. Connecticut General Life Insurance Company (2018) 24 Cal.App.5th 153 provides a thorough discussion of ERISA preemption. “State law causes of action seeking to recover unpaid benefits under a welfare benefit plan regulated under the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. §1001 et seq.) are generally conflict preempted.” Id. at 159.

“ERISA provides that civil actions may be brought by plan participants, beneficiaries, fiduciaries, and the United States Secretary of Labor.” Id. at 170 (citing 29 U.S.C. §1132(a). “Typically, a health care provider in Port Medical’s position would bring a claim for benefits under ERISA in a derivative capacity (standing in the shoes of the patient) under an assignment of reimbursement rights.” Id.

“[M]any courts have found preemption where the plaintiff’s claims, although formed under theories of state common-law, were really ways of restating claims for employee benefits governed by ERISA.” Id. at 171. “If ERISA claims are pleaded as state law claims, they must be tried under federal law ‘when stripped of their state law disguises.” Id.

“[C]ases holding state law claims conflict preempted under ERISA had ‘at least two unifying characteristics: (1) the state law claims address areas of exclusive federal concern, such as the right to receive benefits under the terms of an ERISA plan; and (2) the claims directly affect the relationship among the traditional ERISA entities – the employer, the plan and its fiduciaries, and the participants and beneficiaries.” Id. at 174, citing Memorial Hospital System v. Northbrook Life Ins. Co. (5th Cir. 1990) 904 F.3d 236, 244-245.

“[T]he most important factor for a court to consider in deciding whether a state law affects an employee benefit plan ‘in too tenuous, remote, or peripheral a manner to be preempted’ is whether the state law affects relations among ERISA’s named entities.” Port Medical, supra, 24 Cal.App.5th at 175.

As similarly explained by the 9th Circuit in Blue Cross of California v. Anesthesia Care Associates Medical Group, Inc. (9th Cir. 1999) 187 F.3d 1045 (cited and relied on by Port Medical), under the “relationship test” of preemption, “we look to whether the state law encroaches on relationships regulated by ERISA, such as between plan and plan member, plan and employer, and plan and trustee.” Id. at 1053.

“[A] healthcare provider that treats a beneficiary of a welfare benefit plan my assert a claim in state court against the plan if it is based on an obligation between the plan and the provider separate from the welfare benefit plan itself and does not inquire into entitlement to benefits under the plan.” Port Medical, supra, 24 Cal.App.5th at 176 (emphasis added). “[W]here a plan assures a provider that a proposed treatment is covered under the plan but later determines it is not covered, the provider may sue based upon the plan’s independent promise to the provider to pay for the services rendered.” Id. “And where a provider has an agreement with a welfare benefit plan directly, it may sue for breach of that agreement, notwithstanding the fact that it relates generally to the provision of services under an ERISA plan.” Id.

In Port Medical, the Court found Plaintiff’s claim for Breach of Implied-in-Fact was Contract preempted by ERISA, as it was “fundamentally a claim for unpaid ERISA plan benefits – the precise type of claim section 514(a) of ERISA preempts. Id. at 177. The Court noted that the Plan was obligated to pay Plaintiff “only because – it is obligated to reimburse Plan members for the cost of covered health care services.” Id. at 177-178.

Similarly, the Court in Port Medical found the claim for Quantum Meruit preempted, as the claim relied on the entitlement of members to Plan benefits: “Of all Port Medical’s causes of action, this one is most plainly preempted under ERISA. According to the operative complaint, Port Medical ‘provided medically necessary treatments and services to [Plan] members,’ the treatments were authorized by the Plan, ‘[a]s a result, the Plan became indebted to [Port Medical] for the services rendered by [Port Medical] to [Plan] members,’ and ‘the Plan unilaterally decided to deny payment’ to Port Medical.” (Id. at 180-181). “Port Medical seeks payment on claims for Plan benefits which Connecticut General rejected, but which Port Medical contends should have been paid because they concerned covered services.” Id. at 181. “[S]tate law claims creating an alternative enforcement mechanism to secure benefits under the terms of ERISA-covered plans are preempted.” Id.

In Morris B. Silver M.D., Inc. v. International Longshore & Warehouse etc. (2016) 2 Cal.App.5th 793, 802 (“Silver”), however, the court held the relationship between a health care provider and a third-party insurance plan is not an ERISA-regulated relationship, and claims by third-party medical providers to recover promised payment from an insurance plan is not preempted. In Silver, the medical provider sued the plan for services provided to policyholders whose care had been pre-verified by the plan. Id. at 797. The court of appeal held the medical provider’s claims for breach of oral contract, quantum meruit, and promissory estoppel were not preempted. Id. at 806-807.

The court in Silver further explained: “Silver's three contract/quasi-contract causes of action do not address an area of exclusive federal concern. Silver is not, as the Plan argues, seeking compensation for the Plan's decisions to deny coverage under the terms of an ERISA plan; its alleged right to reimbursement does not depend on the Plan's terms. Rather, the claims are predicated on a garden-variety failure to make payment as promised for services rendered. To be sure, the claims would not exist but for an ERISA plan and are predicated on somebody's interpretation of the plan. But the fact an ERISA plan is an initial step in the causation chain, without more, is too remote of a relationship with the covered plan to support a finding of preemption.” Id. at 806-807 (emphasis added).

The court concluded, “the fact an ERISA plan is an initial step in the causation chain, without more, is too remote of a relationship with the covered plan to support a finding of preemption.” Ibid. The court found unpersuasive several federal district court decisions to the contrary. Id. at 807-808. The court also rejected the plan’s reliance on Pilot Life Ins. Co. v. Dedeaux (1987) 481 U.S. 41, 57, which the court of appeal held “does not address the circumstances unique to third-party provider claims.”

Similarly, in Blue Cross of California v. Anesthesia Care Assoc. (9th Cir. 1999) 187 F.3d 1045 (“Blue Cross”) the court found no preemption, noting that “[t]he dispute here is not over the right to payment, which might be said to depend on the patients’ assignments to the Providers, but the amount, or level, of payment which depends on the terms of the provider agreements.” Id. at 1051. The court further explained: “The Providers’ claims do not involve construction of the terms of ERISA-covered benefit plans,” and “there is no claim the beneficiaries have not received their full benefits under the plans, or any argument that interpretation of the provider agreements will somehow work a change in the benefits to which beneficiaries will be entitled under ERISA-covered plans…” Blue Cross, supra, 187 F.3d at 1053-1054. Based on the same, the court found “the Providers’ claims do not encroach on the relationship between beneficiary and plan.” Id. at 1054. The court noted that “[t]he Providers’ claims concern only promises that Blue Cross made as a health care plan provider to its participating physicians.” Id. “They do not touch on Blue Cross’ fiduciary status, or any claims that a beneficiary may make against Blue Cross in that capacity.” Id.

Here, Plaintiff’s claims are closer to those in Silver and Blue Cross than the claims in Port Medical. Plaintiff alleges Defendant confirmed eligibility and authorized treatment, but has refused to pay the full amount due per the UC rate. As an out-of-network provider, Plaintiff is not asking the court to determine eligibility under the plan; Plaintiff is pursuing claims based on failure to pay for services as allegedly promised by Defendant. Therefore, preemption does not apply.

Causes of Action

First Cause of Action for Quantum Meruit

“The requisite elements of quantum meruit are (1) the plaintiff acted pursuant to ‘an explicit or implicit request for the services’ by the defendant, and (2) the services conferred a benefit on the defendant.” Port Medical Wellness, Inc. v. Connecticut General Life Insurance Company (2018) 24 Cal.App.5th 153, 180.

Here, Plaintiff adequately alleges an explicit or implicit request for services by Defendant by its allegations that Plaintiff contacted Defendant to verify eligibility and/or obtain authorization to treat the patients. For Patient 1 this was done telephonically. [FAC, ¶ 15.] Plaintiff’s provision of services conferred a benefit on Defendant by treating individuals covered under its plan.

The demurrer to this cause of action is overruled.

Second Cause of Action for Breach of Oral Contract

“The elements of a breach of oral contract claim are the same as those for a breach of written contract: a contract; its performance or excuse for nonperformance; breach; and damages.” Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437, 453.

Here, Plaintiff alleges an oral contract existed in which Defendant agreed to reimburse Plaintiff for its treatment of Patients 1 and 2. [FAC ¶ 27.] Plaintiff further alleges Defendant agreed to pay at Plaintiff’s UC rate. [Id.]

Defendant cites Pacific Bay Recovery, Inc. v. California Physicians' Services, Inc. (2017) 12 Cal.App.5th 200, 216, which held that in a dispute between a provider and insurer, the following allegations were insufficient to support claims for quantum meruit and breach of oral contract:

In paragraph 13, Pacific Bay alleged that it ‘contacted Blue Shield to obtain prior authorization, precertification and consent to render treatment and perform procedures upon’ the subscriber. “At all relevant times, [Pacific Bay] was advised by representatives of Blue Shield that the [subscriber] was insured, covered, and eligible for coverage under the respective Plan or Policy for the services to be rendered by [Pacific Bay], at facilities operated by [Pacific Bay] and that [Pacific Bay] would be paid for performance of the procedures, care, and/or treatment rendered by Blue Shield.’ In paragraph 14, Pacific Bay further averred that it “was led to believe that it would be paid a portion or percentage of its total billed charges, which charges correlated with usual, reasonable and customary charges.”

Id. at 216.

The Court in Pacific Bay concluded:

These allegations lack the specific facts required for us to determine there was any meeting of the minds between the parties. At best, Pacific Bay's allegations show that Blue Shield admitted that the subscriber was covered under one of its health plans and that it would pay something for Pacific Bay's treatment of the subscriber. What type of treatment or the extent of treatment is not described. In addition, it does not appear the parties reached any sort of agreement as to the rate Blue Shield would pay Pacific Bay. Indeed, Pacific Bay alleged it was led to believe Blue Shield would pay “a portion or percentage of its total billed charges, which charges correlated with usual, reasonable and customary charges.” Blue Shield did pay a portion of the billed charges, but Pacific Bay argues it was not enough. However, we cannot say Blue Shield's payments breached any implied contract because there is no indication in the FAC what exactly Blue Shield agreed to pay.

[¶]

In conclusion, as an out-of-network, nonemergency service provider, Pacific Bay was entitled to payment for treating Blue Shield's subscriber under the terms of the applicable EOC. (Cal. Code Regs., tit. 28, § 1300.71, subd. (a)(3)(B); Orthopedic Specialists, supra, 228 Cal.App.4th at p. 648, 175 Cal.Rptr.3d 295.) Pacific Bay has not alleged that Blue Shield paid it improperly under the EOC. Nor does Pacific Bay argue that it can allege additional facts to support such a claim. Against this backdrop, Pacific Bay's other allegations do not give rise to any valid cause of action. Put differently, Pacific Bay has not alleged any facts that remove this payment dispute from the confines of the Knox-Keene Act and/or the Claims Settlement Practices regulation. Moreover, it does not argue that it could do so if given another opportunity.

Id. at 216-217.

Under California law, contract terms may be implied based on custom and usage. See Varni Bros. Corp. v. Wine World, Inc. (1995) 35 Cal.App.4th 880, 889. “Generally, courts seek to enforce the actual understanding of the parties to a contract, and in so doing may inquire into the parties' conduct to determine if it demonstrates an implied contract. ‘[I]t must be determined, as a question of fact, whether the parties acted in such a manner as to provide the necessary foundation for [an implied contract], and evidence may be introduced to rebut the inferences and show that there is another explanation for the conduct.’ [Citations]” Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 677.

The court in Pacific Bay relied on the application of an EOC which governed reimbursement, and that is not an issue raised here.

Accordingly, the demurrer to this cause of action is overruled.

Third Cause of Action for 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].” Flintco Pacific, Inc. v. TEC Management Consultants, Inc. (2016) 1 Cal.App.5th 727, 734.

Here, the alleged promise was Defendant’s statement that Plaintiff’s services to Patient 1 was covered, authorized, and would be paid for. Plaintiff allegedly relied on these statements in providing services.

The analysis of this claim follows that for the second cause of action for breach of oral contract. Accordingly, the demurrer to this cause of action is overruled.

Fourth Cause of Action for Unjust Enrichment

Although some courts have previously treated unjust enrichment as a stand-alone cause of action (see Kruss v. Booth (2010) 185 Cal.App.4^th 699, 729; Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App 4^th 333, 347; County of San Bernardino v. Walsh (2007) 158 Cal.App.4^th 533, 537-38; Lectrodryer v. SeoulBank (2000) 77 Cal.App.4^th 723, 726), the majority of recent cases treat unjust enrichment as a remedy akin to restitution, not a separate cognizable cause of action. Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4^th 221, 231; Hill v. Roll Intern. Corp. (2011) 195 Cal.App.4^th 1295, 1307; Levine v. Blue Shield of Calif. (2010) 189 Cal.App.4^th 1117, 1138; Durell v. Sharp Healthcare (2010) 183 Cal.App.4^th 1350, 1370; Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4^th 779, 793.

Whether treated as a cause of action or remedy, the elements are (1) the receipt of a benefit and (2) the unjust retention of the benefit (3) at the expense of another. Peterson v. Cellco Partnership (2008) 164 Cal.App.4^th 1583, 1593.

Plaintiff has alleged these elements. It has also alleged causes of action for which unjust enrichment can be a remedy. For this reason, the demurrer to this cause of action is overruled.

Plaintiff is ordered to give notice.