Judge: Maurice A. Leiter, Case: 23STCV19725, Date: 2024-08-08 Tentative Ruling

Case Number: 23STCV19725    Hearing Date: August 8, 2024    Dept: 54

Hearing Date: August 8, 2024

Department 54, Judge Maurice Leiter

Demurrer to First Amended Complaint

Moving Parties:

Defendants United Airlines, Inc. and Aetna Life Insurance Company

Responding Party:

Plaintiff Beach District Surgery Center

T/R:     The demurrer is overruled.

Defendant to give notice.

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing. 

            The Court considers the moving papers, opposition, and reply.

BACKGROUND

            Plaintiff Beach District Surgery Center sued defendants United Airlines, Inc. and Aetna Life Insurance Company on August 17, 2023. Plaintiff filed its operative first amended complaint (“FAC”) on February 26, 2024, asserting causes of action for negligent misrepresentation and promissory estoppel.

            As alleged in the FAC, Plaintiff is a California-based medical provider. (FAC, ¶ 1.) Two of its patients, designated “GA” and “VM” in the FAC, receive health insurance through United’s employee benefit plan. (Id., ¶ 20.) Aetna acts as United’s agent “in connection with stating the manner of payment for medical services and providing other administrative services relating to the Patient’s and [United’s] health plan.” (Id., ¶ 3.)

            GA and VM received services from Plaintiff in 2022. (Id., ¶¶ 20, 39.) Prior to their appointments, Plaintiff verified with Aetna that their insurance would reimburse for services provided. (Id., ¶¶ 21-30, 40-49.) After confirming its patients’ coverage, Plaintiff billed $28,050.00 and $13,200.00, respectively, to Defendants for reimbursement. (Id., ¶¶ 37, 56.) Defendants paid $0.00 in the first instance, and slightly more than $2,000.00 in the second. (Ibid.)

ANALYSIS

When considering a demurrer, a court reads the allegations stated in the challenged pleading liberally and in context, and “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Serrano v. Priest (1971) 5 Cal.3d 584, 591.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) The court treats all facts alleged in the complaint as true. (Picton v. Anderson Union High School District (1996) 50 Cal.App.4th 726, 732.)

A.    ERISA Preemption

            Defendants argue that Plaintiff’s claims are preempted by the federal Employee Retirement Securities Act of 1974 (“ERISA”). They are not.

            Morris B. Silver M.D., Inc. v. International Longshore & Warehouse Union (2016) 2 Cal.App.5th 793 (Silver) controls. Where, as here, a plan administrator promises payments to a third party, then fails to make them, the dispute does not arise from the terms of the relevant benefit plan, and it is not preempted by ERISA. (Id., at pp. 802-803 [surveying precedent].)

            Defendant attempts to distinguish Silver by arguing that the defendant in that case had promised payment in a certain amount, while Defendant’s promise here depended on the terms of Plaintiff’s patients’ benefit plans. That is not what is pleaded. Plaintiff’s FAC is on all fours with Silver, where the plaintiff-provider stated a claim based on the defendant’s statements that it would pay according to the usual terms of the plan (a certain percentage of UCR, up to an out-of-pocket maximum, and less a deductible). (See id., at p. 796, fn. 2.)

            Plaintiff’s claims are not preempted.

B.        Negligent Misrepresentation

            The elements of a claim for negligent misrepresentation are “‘[M]isrepresentation 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… [citation omitted]” (Hydro-Mill Co. Inc. v. Hayward, Tilton & RolappIns. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154 [citation omitted].)

            Defendant argues Plaintiff has not specifically pleaded the elements of its negligent misrepresentation claim. The Court disagrees. Plaintiff alleges Aetna employees, who spoke on behalf of United, at various times misrepresented that GA and VM’s claims would be paid. Plaintiff alleges Defendant should have known the terms of its own coverage (see FAC, ¶¶ 60-61). And Plaintiff alleges Defendant intended to induce Plaintiff’s reliance on its statements.

            The demurrer to the first cause of action is overruled.

C.        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.]’ [Citation.]” (Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935, 945.)

            Plaintiff has stated a claim for promissory estoppel. It alleges it spoke with Defendant’s representatives, who promised Plaintiff that if they provided medical services they would be paid a certain amount. Plaintiff provided services in reasonable reliance on this promise, and Plaintiff was not repaid.

            The demurrer to the second cause of action is overruled.