Judge Michael Shultz, Case Number: 22STCV02147, Date: 2024-12-03 Tentative Ruling

DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call.

22STCV02147 Mission City Community Network, Inc. v. California Department of Health Care, et al.

[TENTATIVE] ORDER SUSTAINING DEMURRER IN PART AND OVERRULING IN PART AND GRANTING THE MOTION TO STRIKE PUNITIVE DAMAGES

On July 10, 2024, the Hon. Anne Richardson, sustained the California Department of Health Care’s (“DHCS”) demurrer to the third amended complaint as to the first cause of action for violation of a federal payment right under Section 1902(bb) of the Social Security Act and the third cause of action for unjust enrichment. The court overruled demurrer to the second cause of action for negligence. Plaintiff filed a fourth amended complaint (“4AC”) against new individual defendants as well as DHCS.

Plaintiff alleges that DHCS is an agency that administers California’s Medi-Cal program, which provides health care insurance to the state’s low-income and other eligible populations. (4AC ¶ 7.) Defendant Bruce Lim (“Lim”) is the Deputy Director of DHCS’s Audits and Investigations Division, whose responsibilities are to establish Medi-Cal polices and procedures within the division, coordinating Medi-Cal antifraud efforts, and placing, monitoring, and lifting temporary Medi-Cal sanctions, such as suspensions. (4AC ¶ 9.) Defendant, Deborah Manduca, (“Manduca”) was the Branch Chief of the DHCS Special Investigation Unit and regularly imposed sanctions like the suspension issued here against Plaintiff, a Medi-Cal provider. (4AC ¶ 10.) Lim and Manduca demur to the 8^th, 9^th and 10^th causes of action. DHCS demur to the following causes of action:

A demurrer tests the sufficiency of a complaint as a matter of law and raises only questions of law. (Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706.) In testing the complaint’s sufficiency, the court must assume the truth of the properly pleaded factual allegations as well as facts that can be reasonably inferred from those expressly pleaded facts. The court may also consider matters properly subject to judicial notice. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Sufficient facts are the essential facts of the case "with reasonable precision and with particularity that is sufficiently specific to acquaint the defendant with the nature, source, and extent of his cause of action.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 643-644.) Whether the Plaintiff will be able to prove the pleaded facts is irrelevant. (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609–610.)

A demurrer may also be sustained if a complaint is “uncertain.” Uncertainty exists where a complaint’s factual allegations are so confusing, they do not sufficiently apprise a defendant of the issues it is being asked to meet. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2; Code Civ. Proc., § 430.10(f).)

A pleading is required to assert general allegations of ultimate fact. Evidentiary facts are not required. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal. 4th 26, 47; Lim v. The.TV Corp. Internat. (2002) 99 Cal. App. 4th 684, 690.) However, unlike federal courts, California state courts are not a notice pleading jurisdiction, and notice alone is not a sufficient basis for any pleading. California is a fact pleading jurisdiction. Merely putting an opposing party on notice is not sufficient. (Bach v. County of Butte (1983) 147 Cal.App.3d 554, 561; see Diodes, Inc. v. Franzen (1968) 260 Cal.App.2d 244, 250.)

A. Demurrer to the 4^th cause of action for breach of written contract is OVERRULED.

Plaintiff alleges that it was a party to a written contract (the “Provider Agreement”) with Defendants DHCS wherein Plaintiff agreed to provide services to Medi-Cal beneficiaries in exchange for payment. Plaintiff alleges Defendant breached the agreement by suspending Plaintiff’s from payment and deactivating its provider numbers resulting in Plaintiff’s inability to obtain payment for services that it was still required by statute to provide. (4AC ¶¶ 170-172.)

Defendant argues that Plaintiff failed to set out the terms of the agreement verbatim in the complaint or attach a copy of the agreement. Defendant argues that Plaintiff cannot recover payment for services that Defendant prohibited Plaintiff from providing services. Plaintiff failed to allege a mutual understanding or expectation between the parties that Defendant would pay Plaintiff for services rendered during the period of Plaintiff’s suspension.

Contrary to DCHS’ argument, the contract claim is adequately alleged. To state a cause of action for breach of contract, the plaintiff must allege and prove facts showing (1) the existence of the contract, (2) the plaintiff's performance or excuse for nonperformance, (3) the defendant's breach, and (4) resulting damages to the plaintiff. (Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, 97–98.) Plaintiff may also allege the legal effect of the contract rather than its precise language. Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 199. Alleging the legal effect means alleging the making and the substance of the relevant terms. (Perry v. Robertson (1988) 201 Cal.App.3d 333, 341.) Plaintiff may also attach a copy of the written contract to the complaint. (Id.)

Plaintiff has alleged the contract based on legal effect by alleging its material terms. (4AC ¶¶ 170-172.)

B. DHCS and the individual Defendants have not alleged immunity from liability as to the 8^th, 9^th, and 10th causes of action for intentional and negligent interference with contract and negligence

The 4AC alleges that DCHS breach its statutory duty to Plaintiff to “carefully consider” any allegations of fraud before imposing a suspension, ignored all evidence demonstrating that Plaintiff was not engaged in fraud and often failed to consider any evidence related to its own allegations of fraud in violation of Welfare and Institutions Code § 14107.11(d)[1]. (4AC ¶¶ 231-239.) DCH argues that Plaintiff did not allege a statutory basis for liability which is contrary to the express allegations. (Id.)

Defendants argue that they are immune from suit because the alleged wrongful acts were the result of an exercise of discretion. (Gov. Code, § 820.2 ["Except as otherwise provided by statute, a public employee is not liable for an injury resulting from his act or omission where the act or omission was the result of the exercise of the discretion vested in him, whether or not such discretion be abused."].)

Discretionary immunity is reserved for “those ‘basic policy decisions [which have] been [expressly] committed to coordinate branches of government,’ and as to which judicial interference would thus be ‘unseemly.’" (Barner v. Leeds (2000) 24 Cal.4th 676, 685.) The scope of the immunity "should be no greater than is required to give legislative and executive policymakers sufficient breathing space in which to perform their vital policymaking functions.” (Id. at 685). However, "there is no basis for immunizing lower-level decisions that merely implement a basic policy already formulated." (Id.) In government tort cases, “the rule is liability, immunity is the exception.” (Taylor v. City of Los Angeles Dept. of Water & Power (2006) 144 Cal.App.4th 1216, 1239.)

Policy-making decisions which are immunized from liability are distinguished from “operational” decision making that “implement” a basic policy. The operational implementation is not entitled to discretionary immunity. (Cleveland v. Taft Union High School Dist. (2022) 76 Cal.App.5th 776, 801 ["subsequent ministerial actions in the implementation of that basic decision still must face case-by-case adjudication on the question of negligence."].) However, where a public entity is under a mandatory duty imposed by an enactment designed to protect against the risk of a particular injury, "the public entity is liable for an injury of that kind proximately caused by its failure to discharge the duty unless the public entity establishes that it exercised reasonable diligence to discharge the duty." (Gov. Code, § 815.6.)

Defendant, Daniel Ibarra, allegedly prepared affidavits to support the issuance of search warrants based on false or misleading information provided by Manduca that Plaintiff was involved in a federal False Claims Act lawsuit (“FCA”) although that litigation had been resolved in Plaintiff’s favor a year before the affidavit was signed which a “quick PACER records search” would have shown. (4AC ¶¶ 29-32.) Plaintiff alleges that Defendant Lim approved of Plaintiff’s suspension with knowledge that there was no factual support for the allegations to make the referral to DOJ. (4AC ¶ 39. He failed to take any corrective action, to supervise or provide guidance to Manduca, knew the consequences of an unlawful suspension but did nothing to prevent it, and therefore participated in depriving Plaintiff of its constitutional rights for 18 months at which time the temporary suspension was lifted. (4AC ¶ 38-41.)

Defendants argue that they were not discharging a mandatory duty, and therefore, the actions Defendants undertook were discretionary and subject to immunity. To be mandatory, the enactment at issue must be obligatory, not "merely discretionary or permissive, in its directions to the public entity; it must require, rather than merely authorize or permit, that a particular action be taken or not taken.” (Danielson v. County of Humboldt (2024) 103 Cal.App.5th 1, 14.)

Section 14017.11 subd. (d) provides for that mandatory obligation stating that with respect to the department’s “credible” allegation of fraud for which an investigation is pending or the commencement of suspension, the department “shall carefully consider the allegations, facts, data, and evidence with the same thoroughness as a state or federal court would use in approving a warrant for a search or seizure." (Welf. & Inst. Code, § 14107.11 subd. (d).)

To establish the application of discretionary immunity, Defendants must show "that the decisions in question are properly considered as ‘basic policy decisions’ made at the ‘planning stage of [the entity's] operations,’ rather than ‘routine duties incident to the normal operations of the employee's office or position.’" (Taylor at 1238–1239.) The statute at issue requires constitutional level scrutiny in assessing the evidence and does not amount to discretionary acts and are not immunized "because they entail the fulfillment of enacted requirements." (Danielson at 14.)

The claims for negligence and intentional contract interference flow from the conduct alleging Defendants failed to exercise their mandatory, statutory obligations and are not subject to immunity based on the alleged facts.

"On the contrary, while the Permit mandates that ‘Operators shall remove electric scooters from the public right-of-way on a daily basis,’ it stipulates that ‘[a]ny Vehicle that is parked in one location for more than 5 consecutive days without moving may be removed by the City's Bureau of Sanitation and taken to a City facility for storage at the expense of the Operator. (Italics added.) Consistent with this discretionary language, the Permit provides that ‘[i]f Vehicle parking standards are not met on a monthly basis, the City reserves the right to revoke the Program permit.’ (Italics added.) Construing these terms ‘in a reasonable fashion and attributing to [them their] ordinary and proper meaning’ (Posey v. State of California (1986) 180 Cal.App.3d 836, 850, 225 Cal.Rptr. 830), we conclude the City had the discretion—but was not under a mandatory duty—to remove improperly parked scooters or to revoke Bird's permit for noncompliance." (Hacala at 306.)

2) Defendants have not established that licensing immunity applies to shield them from liability.

Defendants next argue that licensing immunity bars the tort claims alleged against them as a public entity is not liable "for an injury caused by the issuance, denial, suspension or revocation of, … any permit, license, certificate, approval, order, or similar authorization where the public entity or an employee of the public entity is authorized by enactment to determine whether or not such authorization should be issued, denied, suspended or revoked." (Gov. Code, § 818.4.)

Plaintiff alleges that in late 2018, DHCS decided to internally suspend Plaintiff’s Medi-Cal billing numbers as well as Medi-Cal payments to Plaintiff. (4AC ¶ 58.) Plaintiff alleges that it was subject to an internally “temporary payment suspension” because of alleged double billing and false claims by Plaintiff. (4AC ¶ 60, 63.) Plaintiff alleges that the planned suspension related solely to Plaintiff’s ability to bill, and there was no direction that Plaintiff should shut its doors or “go away.” (4AC ¶ 65, 70). Only payments to Plaintiff were suspended; a provider such as Plaintiff could continue to bill for its services. Plaintiff was informed that that Medi-Cal payments were suspended as well as suspension of its 33 National Provider Identifier Numbers. (4AC ¶ 72, 79). Plaintiff was still required to continue to see and treat Medi-Cal beneficiaries regardless of ability to pay; Plaintiff was prohibited from submitting billing and collecting payment for those services for 18 months. (4AC ¶¶ 98-100.)

However, as to the individual defendants, the interference claims (8^th and 9^th causes of action) alleged against the individual Defendants fail for other reasons as explained below.

3) DHCS has not established that Plaintiff failed to file the action against it within the limitations period after rejection of Plaintiff’s claim against DHCS.

A plaintiff cannot file a civil action unless all claims filing requirements are satisfied. Plaintiff must generally file suit within six months “after the date such notice is personally delivered or deposited in the mail.” If the entity does not serve a notice of rejection, suit must be filed within two years from accrual of the cause of action. (Gov. Code, § 945.6 subd. (a).)

Plaintiff alleges that its claim was rejected by letter dated December 30, 2021. (4AC ¶ 140.) Plaintiff argues in opposition that statute of limitations issues are factual and cannot be determined at the pleading stage. Plaintiff argues that period for filing suit after rejection of a government claim was extended to 120 days by virtue of Executive Orders N-35-20 and N-71-20 extended the government’s time to respond by 120 days. (Id.) Defendant’s reply brief does not respond to these contentions.

The 120^th day expired on April 29, 2022. Plaintiff filed this action against DCHS on January 19, 2022.

4) Demurrer to the claims against the individual defendants (8^TH cause of action for intentional interference, 9^th cause of action for negligent interference, and 10^th cause of action for negligence) is SUSTAINED. The claims are barred for failure to file suit within the limitations period after Plaintiff’s DHCS government claim was rejected; relation back does not apply to avoid the bar.

The causes of action against Lim and Manduca were alleged for the first time in the Fourth Amended Complaint, which was not filed until January 24, 2024, long after the 120 days expired. Plaintiff argues that a claim need not be presented against a public employee as a prerequisite to maintaining a civil action. (Gov. Code, § 950.) This code section does not address whether Plaintiff’s suit against the employees was required to be filed 120 days from notice of rejection of DHCS’s government claim.

Relation back does not apply to avoid the statute of limitations in this context. The principle of “relation back” avoids the statute of limitations where the plaintiff amends the complaint to substitute a named defendant for a fictitiously named defendant if the plaintiff was truly ignorant of that defendant’s identity at the time the complaint was filed. (Code Civ. Proc., § 474.) An amended complaint that adds new defendants does not relate back to the date of filing the original complaint, and the statute of limitations is applied as of the date the amended complaint is filed, not the date the original complaint is filed. (Woo v. Superior Court (1999) 75 Cal.App.4th 169, 176).

5) Demurrer to the 9^th cause of action for negligent interference of contract against the Individual Defendants is SUSTAINED. Defendants correctly argue that such a claim does not exist.

Defendants’ case authority establishes the principle that "[i]n California there is no cause of action for negligent interference with contractual relations. While there exists a cause of action for negligent interference with prospective economic advantage.” (Davis v. Nadrich (2009) 174 Cal.App.4th 1, 9.”)

6) Demurrer to the fifth, sixth, and seventh causes of action alleged against DCHS is SUSTAINED. These claims are precluded by claim preclusion.

DCHS argues that these claims are barred because Judge Richardson sustained demurrer to the claim for unjust enrichment without leave to amend since Plaintiff failed to allege a federal basis for entitlement to Medi-Cal/Medicare reimbursement for services provided during the 18-month payment suspension. Defendant argues that the unjust enrichment claim depended on the Plaintiff’s claims for reimbursement under the Social Security Act and the Public Health Service Act. (Dem. 16:20-17:6). Defendant argues that Plaintiff has restyled the same unjust enrichment claim as claims for breach of implied in fact and law contracts and for quantum meruit.

In its primary aspect, res judicata, or “claim preclusion” prevents relitigation of the same cause of action in a second suit between the same parties or their privities where the claim was finally litigated. (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 824.) The second aspect of res judicata known as collateral estoppel, or issue preclusion, prohibits the relitigation of issues decided in a prior proceeding. Issue preclusion applies "(1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party." (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 825.) Collateral estoppel applies even if the second lawsuit alleges different causes of action. (Id.)

Plaintiff does not allege any facts demonstrating a contract that can be implied by the parties’ conduct, nor does Plaintiff describe the conduct. Plaintiff alleges in a conclusory manner that through their conduct, Plaintiff and DCHS knew or had reason to know that Plaintiff would continue to provide services to Medi-Cal beneficiaries. (4AC ¶ 191.) The court does not consider contentions, deductions, or conclusions of fact or law. (Moore v. Conliffe (1994) 7 Cal.4th 634, 638.) Plaintiff is required to allege facts sufficient to establish every element of each cause of action. (Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43.) Where the complaint fails to state facts sufficient to constitute a cause of action, courts should sustain the demurrer. Code Civ. Proc., § 430.10(e); (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)

Instead, Plaintiff continues to rely on DHCS’ awareness that “federal law requires [Plaintiff] to provide services to beneficiaries regardless of ability to pay.” (4AC ¶ 192.) The court may take judicial notice of court records. (Evid. Code, §452 subp. (d). The court also has discretion to take judicial notice of documents absent Defendant’s formal request and “on its own volition.” (Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 752.)

In the operative pleading, Plaintiff dispenses with alleging any basis for entitlement to reimbursement for services under a specific federal law but alleges an amorphous and uncertain “federal law.” Whatever that federal law may be, Plaintiff could have asserted these claims now relabeled as breach of implied-in-fact contract at the time Judge Richardson considered Plaintiff’s arguments before sustaining demurrer without leave to amend to the unjust enrichment claim for reimbursements under federal law. (Min. Ord. 7/10/23, p. 8.)

An “implied-law-contract” is a “quasi contract” that implies is an “obligation ... created by the law without regard to the intention of the parties and is designed to restore the aggrieved party to [its] former position by return of the thing or its equivalent in money. [Citations.]’ The doctrine focuses on equitable principles; its key phrase is ‘unjust enrichment,’ which is used to identify the ‘transfer of money or other valuable assets to an individual or a company that is not entitled to them.” (Welborne v. Ryman-Carroll Foundation (2018) 22 Cal.App.5th 719, 725.) “’Quasi-contract’ is simply another way of describing the basis for the equitable remedy of restitution when an unjust enrichment has occurred. Often called quantum meruit, it applies ‘w]here one obtains a benefit which he may not justly retain.... The quasi-contract, or contract ‘implied in law,’ is an obligation created by the law without regard to the intention of the parties and is designed to restore the aggrieved party to his former position by return of the thing or its equivalent in money.’ (1 Witkin, Summary of Cal. Law, supra, Contracts, § 91, p. 122, italics omitted.) “’The so-called ‘contract implied in law’ in reality is not a contract. [Citations.] ‘Quasi-contracts, unlike true contracts, are not based on the apparent intention of the parties to undertake the performances in question, nor are they promises. They are obligations created by law for reasons of justice.’ [Citation.]” (Weitzenkorn v. Lesser (1953) 40 Cal.2d 778, 794, 256 P.2d 947.)" (McBride v. Boughton (2004) 123 Cal.App.4th 379, 388, fn 6.)

Thus, the claim for quantum meruit, or unjust enrichment, predicated on an obligation implied by law is no different than the claim for unjust enrichment to which Judge Richardson sustained demurrer without leave to amend. Re-casting the claims under different names contravenes the order denying leave to amend.

7) Demurrer to the claim for declaratory relief is SUSTAINED for failure to state a claim.

A claim for declaratory relief is adequately stated where it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the respective parties under a contract or written instrument and requests that the rights and duties be adjudged. (Condor Ins. Co. v. Williamsburg Nat. Ins. Co. (1996) 49 Cal.App.4th 554, 565; Code Civ. Proc., § 1060.) Plaintiff alleges that DHCS’ temporary suspension and refusal to pay was invalid and unlawful in violation of federal law, federal regulations, the “State Plan” the U.S. and California Constitutions, and California laws. (4AC ¶ 253.) More specifically, Plaintiff alleges that the dispute with DHCS concerns the validity of DHCS’ suspension of payments and uncompensated care under Welfare and Institutions Code § 14043.36 which should not have been applied. (4AC ¶ 254.)

As to Plaintiff’s constitutional argument based on a lack of due process, neither party addressed Mednik v. State Dept. of Health Care Services (2009) 175 Cal.App.4th 631, 642 which determined that "[t]he Department is authorized by statute to temporarily suspend a Medi–Cal provider ‘[i]f it is discovered that a provider is under investigation by the department or any state, local, or federal government law enforcement agency for fraud or abuse.” (§ 14043.36, subd. (a); see also Cal.Code Regs., tit. 22, § 51200, subd. (c).) A temporary suspension generally does not implicate the same liberty interest as debarment [which is permanent]." Moreover, Plaintiff does not allege the contract or written instrument entitling Plaintiff to such a declaration.

Plaintiff claims that suspension may not be imposed under section 14043.36 in circumstances where DHCS begins its fraud investigation rather than “learning of an investigation for fraud or abuse by another entity from another entity. (4AC ¶ 255; § 14043.36 ["If it is discovered that a provider is under investigation by the department or any state, local, or federal government law enforcement agency for fraud or abuse, that provider shall be subject to temporary suspension from the Medi-Cal program, which shall include temporary deactivation of the provider's number, including all business addresses used by the provider to obtain reimbursement from the Medi-Cal program.”].)

DHCS’ explanation of these convoluted allegations is that DHCS did not “learn of the investigation;” rather DHCS initiated the investigation process by referring the matter to DOJ. The statute does not impose the limitation that Plaintiff implies. It does not carve out suspensions for fraud investigations that DHCS itself initiates.

Additionally, as Defendant observes, the claim for a declaration that section 14043.36 is unconstitutional or wrongfully applied is a new claim and was not asserted in the original or amended complaints.

The statute of limitations for a declaratory relief claim depends on the underlying allegations. (Snyder v. California Ins. Guarantee Assn. (2014) 229 Cal.App.4th 1196, 1208.) Defendant contends that the parties always agreed that a two-year statute of limitations applied, but if a declaratory relief claim was never previously alleged, it is not clear how the parties could make such an agreement.

Claims for liability based on statute is three years from the date of accrual. (Code Civ. Proc., § 338.) Plaintiff alleges that it learned of its suspension (both temporary payment suspension under section 14107.11 and temporary deactivation of provider identification numbers under 14043.36) on June 14, 2019. (4AC ¶ 57, 67.) Two years from that date was June 14, 2021. Plaintiff filed the 4AC asserting this new claim on June 24, 2024.

Notwithstanding the foregoing, Plaintiff can assert a new claim that relates back to the original filing date if the new claim is based on the same general set of facts. (Espinosa v. Superior Court (1988) 202 Cal.App.3d 409, 414.) Plaintiff has alleged the same general set of facts arising from DCHS’ suspension of Plaintiff’s payment and provider number numbers (albeit with alternating remedies) in all iterations of the complaint. The claim, however, remains defective as alleged because it fails to state a cause of action.

Defendant separately moved to strike the prayer for punitive damages, which Plaintiff did not oppose. Plaintiff cannot recover punitive damages against a public entity. (Gov Code § 818.) The claims against the Individual Defendants do not survive and cannot provide a predicate for imposition of punitive damages against them.

Accordingly, demurrer to the 4^th cause of action for breach of contract against DHCS is OVERRULED. Demurrer to the 5^th cause of action for breach of implied-in-fact contract, 6^th cause of action for quantum meruit, and the 7^th cause of action for breach of implied-law-contract against DHCS is SUSTAINED without leave to amend as they are barred by issue preclusion, and the court did not permit leave to amend the claims.

Demurrer to the claims against the individual defendants (8^TH cause of action for intentional interference, 9^th cause of action for negligent interference, and 10^th cause of action for negligence) is SUSTAINED without leave to amend. The claims are barred for failure to file suit within the limitations period after Plaintiff’s DHCS government claim was rejected; relation back does not apply to avoid the bar. The 9^th cause of action is not a recognized claim.

Demurrer to the 10 cause of action for negligence against DHCS is OVERRULED. None of the immunities raised by DHCS apply. The claim is statutorily based.

Demurrer to the 11^th cause of action for declaratory relief is SUSTAINED for failure to state a claim and Plaintiff did not demonstrate how the claim can be cured.

The motion to strike the prayer for punitive damages against DHCS and the individual defendants is GRANTED. (Code Civ. Proc., § 436.)

[1] "An allegation of fraud shall be considered credible if it exhibits indicia of reliability as recognized by state or federal courts or by other law sufficient to meet the constitutional prerequisite to a law enforcement search or seizure of comparable business assets. The department shall carefully consider the allegations, facts, data, and evidence with the same thoroughness as a state or federal court would use in approving a warrant for a search or seizure." (Welf. & Inst. Code, § 14107.11 subd. (d).)