Judge: Maurice A. Leiter, Case: 24STCV20244, Date: 2024-12-06 Tentative Ruling

Case Number: 24STCV20244    Hearing Date: December 6, 2024    Dept: 54

Hearing Date: December 6, 2024

Department 54, Judge Maurice Leiter

Demurrer to Complaint and Motion to Strike

Moving Party: Defendants Kaiser Foundation Health Plan, Inc., Kaiser Permanente Insurance Company and Kaiser Foundation Hospitals

Responding Party: Plaintiff CEP America-California

T/R:      THE DEMURRER IS OVERRULED.

THE MOTION TO STRIKE IS DENIED.

DEFENDANTS TO FILE AND SERVE ANSWERS TO THE COMPLAINT WITHIN 30 DAYS OF NOTICE OF RULING.

DEFENDANTS TO 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

On August 9, 2024, Plaintiff CEP America-California dba Vituity filed a complaint against Defendants Kaiser Foundation Health Plan, Inc., Kaiser Permanente Insurance Company, and Kaiser Foundation Hospitals, asserting causes of action for (1) quantum meruit; and (2) UCL violations. Plaintiff is a medical group of physicians who provided emergency medical services for Defendants. Plaintiff alleges Defendants wrongfully failed to pay the reasonable and customary value of services under the Knox-Keene Act.

ANALYSIS

A demurrer to a complaint may be taken to the whole complaint or to any of the causes of action in it.  (CCP § 430.50(a).)  A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff's ability to prove those allegations.  (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.)  The court must treat as true the complaint's material factual allegations, but not contentions, deductions or conclusions of fact or law.  (Id. at 732-33.)  The complaint is to be construed liberally to determine whether a cause of action has been stated.  (Id. at 733.)

A. Second Cause of Action for UCL Violations

California Business and Professions Code section 17200 prohibits “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code § 17200; see Clark v. Superior Court (2010) 50 Cal.4th 605, 610.) 

Defendants demur to the second cause of action for UCL violations on the grounds that Plaintiff has failed to allege Defendants engaged in unlawful, unfair, or fraudulent conduct and because the relief sought is either unavailable or duplicative of the relief sought for quantum meruit.

Plaintiff alleges Kaiser “has engaged in unfair competition by ignoring California regulations on reasonable and customary value. Kaiser fails to consider the criteria set forth in California at 28 C.C.R. Section 1300.71(b), which are the minimum criteria that a licensed health plan is legally required to consider when paying out-of-network providers, when paying claims pursuant to Section 1371.4 for emergency care.” California courts have held that non-contracting medical service providers may seek restitution under the UCL for underpayment of services. (Bell v. Blue Cross of California (2005) 131 Cal.App.4th 211, 215; see also Coast Plaza Doctors Hospital v. UHP Healthcare (2002) 105 Cal.App.4th 639, 651, 657-658.) Plaintiff has sufficiently alleged a claim for UCL violations.

The Court will not sustain the demurrer to the UCL claims on the ground that they seek duplicative relief of the quantum meruit claim. Plaintiff may allege alternative theories of liability for the same conduct.

The demurrer to the second cause of action is OVERRULED.

B. Claims Against Defendants KPIC and KFH

Defendants assert that Plaintiff has not alleged claims against KPIC and KFH because they are not “health care service plans” under the Knox-Keene Act. (Cal. Health & Safety Code § 1371.4(b).)

In opposition, Plaintiff argues that quantum meruit and UCL claims are broader than the Knox-Keene Act. Plaintiff alleges that the Kaiser Entities purposefully obscure “which Kaiser entity is providing health care coverage to the patients and which Kaiser entity is doing work for other Kaiser entities, either as independent contractors, or as agents, or on some other basis, so that Kaiser can present itself to members, providers, and the community as effectively being a single coordinated business.” Plaintiff alleges that a common law implied-in-fact contract exists between Plaintiff and the Kaiser Entities. Plaintiff alleges that all the Kaiser Entities engaged in unfair and unlawful business practices. This is sufficient to allege claims against all Defendants.

Defendants KPIC and KFH’s demurrer is OVERRULED.

C. Motion to Strike

“Any party, within the time allowed to response to a pleading, may serve and file a notice of motion to strike the whole or any part" of that pleading. (CCP § 435(b)(1).) “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 asserted 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." (CCP § 436.)

Defendants move to strike Plaintiff’s claim for injunctive relief under the UCL. As stated, Plaintiff has sufficiently alleged a claim for UCL violations. Plaintiff may seek injunctive relief under this statutory scheme.

The motion to strike is DENIED.