Judge: Michelle Williams Court, Case: 22STCV08880, Date: 2022-09-20 Tentative Ruling

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Case Number: 22STCV08880    Hearing Date: September 20, 2022    Dept: 74

22STCV08880           GRACE ANNE STERN vs KAISER PERMANENTE

Defendants Southern California Permanente Medical Group; Kaiser Foundation Health Plan Inc.; Kaiser Foundation Hospitals; and AMN Healthcare, Inc’s Demurrer to Plaintiff Grace Anne Stern’s First Amended Complaint

TENTATIVE RULING:  Defendants Southern California Permanente Medical Group; Kaiser Foundation Health Plan Inc.; Kaiser Foundation Hospitals; and AMN Healthcare, Inc’s Demurrer to Plaintiff Grace Anne Stern’s First Amended Complaint is OVERRULED.

Defendants shall have 20 days to file an answer.

Background

On March 11, 2022, Plaintiff Grace Anne Stern filed this action. The complaint asserted causes of action for breach of contract and declaratory relief.

On June 28, 2022, the Court issued an order on Defendants Kaiser Permanente, Medipro Medical Staffing, Southern California Permanente Medical Group, Kaiser Foundation Health Plan, Inc., and Kaiser Foundation Hospitals’ demurrer to the complaint. The Court overruled the demurrer as to Medipro Medical Staffing and sustained the demurrer with leave to amend as to all other moving defendants.

On July 11, 2022, Plaintiff filed the First Amended Complaint asserting causes of action for breach of employment agreement and declaratory relief against Defendants Southern California Permanente Medical Group, Kaiser Foundation Health Plan Inc., Kaiser Foundation Hospitals, AMN Healthcare, Inc., and Medipro Medical Staffing, LLC. Plaintiff alleges she is a Registered Nurse, immediately employed by Medipro, who entered into a written employment contract with the other Defendants through Medipro. Plaintiff alleges she had a long-term contract to work three twelve-hour shifts a week, including every other weekend, but Defendants had her work an 8-hour, 5-day a week sales job instead. Plaintiff alleges she was terminated when she demanded the contract be followed.

Demurrer

Defendants Southern California Permanente Medical Group, Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and AMN Healthcare, Inc. demur to each of the causes of action asserted in the FAC arguing Plaintiff fails to allege facts demonstrating the moving defendants can be liable under Plaintiff’s agreement with Medipro.

Opposition

In opposition, Plaintiff contends the FAC alleges facts demonstrating Medipro was the agent of the moving Defendants, and therefore they may be held liable under the contract.

Reply

In reply, Defendants contend the FAC fails to allege sufficient facts to demonstrate ostensible agency or that Defendants can be held liable under the contract.

Meet and Confer

Defendants submitted the declaration of Amy V. Bianchini, which satisfies the requirements of Code of Civil Procedure sections 430.41.

Demurrer

Standard

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Proc., §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A complaint need not allege evidentiary facts noting plaintiff’s proof. (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732.)

A special demurrer to a complaint is appropriate when the grounds of the pleading are uncertain, ambiguous, or unintelligible. (Code Civ. Proc. § 430.10(f); Beresford Neighborhood Assn. v. City of San Mateo (1989) 207 Cal.App.3d 1180, 1191.) Courts typically disfavor demurrers based on uncertainty, which the court strictly construes even when the pleading is uncertain in some respects. (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

If the demurrer is sustained, plaintiff must prove the possibility of cure by amendment. (Czajkowski v. Haskell & White, LLP (2012) 208 Cal.App.4th 166, 173.)

Causes of Action at Issue

The first cause of action for breach of contract is asserted against all Defendants and specifically alleges “[i]n material breach of her Contract, GRACE was wrongfully terminated” and “In material breach of her Contract, Defendants, and each of them, willfully, intentionally, and/or negligently breached the Contract when GRACE was willfully, intentionally, and/or negligently relegated from the registered nurse position to a salesperson position and from working three (3) twelve (12) hour shifts three (3) days per week, which took approximately four (4) months to negotiate to having to work five days a week as a salesperson.” (FAC ¶¶ 54-55.)

The second cause of action for declaratory relief is derivative of the first cause of action, incorporating the prior allegations. (FAC ¶ 60-62.) Plaintiff’s prayer for relief requests “a declaration of rights that the written Contract hereinabove described is valid, and was breached by Defendants, and each of them, not Plaintiff.” (FAC at 10 ¶ 1.)

The FAC States Sufficient Facts to Support a Claim against the Moving Defendants

The Kaiser Defendants and AMN argue they are not parties to the agreement and Plaintiff has not alleged sufficient facts to hold them liable under its terms. (Dem. at 4:13-8:16.) Generally, a plaintiff “cannot assert a claim for breach of contract against one who is not a party to the contract.” (Tri-Continent Internat. Corp. v. Paris Savings & Loan Assn. (1993) 12 Cal.App.4th 1354, 1359.)

The FAC attaches the Assignment Confirmation Agreement between Plaintiff and Defendant Medipro, which is referred to as the “Contract.” (FAC ¶ 10, Ex. 1.) Defendants note the Contract contains no reference to AMN and only identifies a Kaiser location as the “hospital/facility” Medipro and Plaintiff agreed would be the location of her placement.  Plaintiff generally alleges, on information and belief, that Defendants had separate agreements to which she was a third-party beneficiary. (FAC ¶¶ 28, 31.) As argued by Defendants, Plaintiff fails to allege sufficient facts to establish she is a third-party beneficiary to any such contract. (See Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 837; Martinez v. Combs (2010) 49 Cal.4th 35, 77.)

In opposition, Plaintiff argues the Kaiser Defendants and AMN are bound to the terms of the contract by virtue of the Defendants’ principal-agent relationship. (Opp. at 4:12-7:6.) The FAC alleges:

MEDIPRO, as an ostensible agent of KAISER and AMN, had authority, that authority being, actual express, actual implied, apparent and ostensible to make, enter, and be a party to this subject Contract (Exhibit #1) on behalf of KAISER and AMN. By way of this relationship between all Defendants, and each of them, wherein all of the named KAISER entities are principals of AMN and MEDIPRO, and wherein AMN is a subagent of KAISER, and where MEDIPRO is a sub agent of both KASIER and AMN each with actual express authority, actual implied authority, apparent authority, and ostensible authority to enter into and bind all DEFENDANTS, including KAISER and AMN to the MEDIPRO/GRACE Contract.

(FAC ¶ 34.) The FAC also alleges “each Defendant was the agent . . . of each of the other Defendants herein” and contains allegations asserting both actual and ostensible agency. (FAC ¶¶ 7, 23, 33.)

In reply, Defendants contend other facts in the FAC do not support the existence of ostensible agency because ostensible agency can only be created by actions of the principals. (Reply at 3:9-5:20.) However, the FAC does not solely rely upon ostensible agency. As argued by Plaintiff, “[a]n allegation of agency is an allegation of ultimate fact that must be accepted as true for purposes of ruling on demurrer.” (Dones v. Life Insurance Company of North America (2020) 55 Cal.App.5th 665, 685.) “An undisclosed principal is liable for the contractual obligations incurred by his agent in the course of the agency [Citations], even though the obligee did not know there was a principal at the time the obligations were incurred.” (Nichols v. Arthur Murray, Inc. (1967) 248 Cal.App.2d 610, 612.)

The Court must accept Plaintiff’s agency allegations as true and therefore the FAC states sufficient facts to hold the moving Defendants liable under the contract. (Aluma Systems Concrete Construction of California v. Nibbi Bros. Inc. (2016) 2 Cal.App.5th 620, 628 (“complaint alleges that each defendant ‘was the agent, servant and/or employee’ of each of the other defendants. We assume this allegation to be true. [Citation.] Principals may be liable for contracts executed by agents, even where the principal is not disclosed in the contract.”).)

The demurrer is OVERRULED.