Judge Olivia Rosales, Case 22NWCV00410 2022-09-08 Tentative Ruling

Judge: Olivia Rosales, Case: 22NWCV00410, Date: 2022-09-08 Tentative Ruling

Case Number: 22NWCV00410 Hearing Date: September 8, 2022 Dept: C

PIH HEALTH WHITTIER HOSPITAL v. CIGNA HEALTHCARE OF CALIFORNIA, INC.

CASE NO.: 22NWCV00410

HEARING: 09/08/22

TENTATIVE ORDER

I. Defendants’ CCP §128.7 motion for sanctions is GRANTED.

II. Defendants’ Demurrer to Plaintiff’s Complaint is SUSTAINED. This action (Case No. 22NWCV00410) is STAYED in abatement pending disposition of Plaintiffs’ claims in the earlier-filed related action (Case No. 20NWCV00666).

Moving Party to give Notice.

The parties’ Requests for Judicial Notice are GRANTED as to the existence of the documents, but not as to any hearsay statements contained therein. (Cal. Ev. Code §452.)

Motion for Sanctions

Defendants CIGNA HEALTHCARE OF CALIFORNIA, INC.; CIGNA HEALTH AND LIFE INSURANCE COMPANY; and CONNECTICUT GENERAL LIFE INSURANCE COMPANY (collectively “Defendants”) move for sanctions pursuant to CCP §128.7 on the grounds that Plaintiff’s action is being prosecuted primarily for an improper purpose, such as to harass or cause unnecessary delay or needlessly increase the cost of litigation. Defendants argue that Plaintiffs already tendered their claims for resolution in a related case involving the same parties, and that the Complaint in this action is virtually identical to the operative First Amended Complaint in the related case (Case No. 20NWCV00666). Defendants maintain that the underlying injuries to Defendants are the same in both cases, and that Plaintiffs are improperly seeking to litigate the same primary rights contained in their proposed First Amended Complaint in the related case, here.

In Opposition, Plaintiffs PIH HEALTH WHITTIER HOSPITAL and PIH HEALTH DOWNEY HOSPITAL (“Plaintiffs”) argue that 128.7 sanctions are not warranted because Plaintiffs filed the instant second lawsuit on a different set of transactions that didn’t even arise yet at the time the Complaint in the first action was filed. Plaintiff indicates that the First Amended Complaint in the first action was never filed—a hearing on a Motion for Leave to File the First Amended Complaint was vacated by this Court on June 21, 2022 after Defendants’ Motion to Compel Arbitration was DENIED, and the first action was STAYED pending appeal on April 27, 2022.

“By presenting to the court, whether by signing, filing, submitting, or later advocating, a pleading, petition, written notice of motion, or other similar paper, an attorney…is certifying to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, all of the following conditions are met: (1) It is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. (2) The claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law. (3) The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery. (4) The denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.” (CCP §128.7(b). CCP §128.7(c) provides: “If, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may…impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation.”

“Code of Civil Procedure section 128.7 imposes a lower threshold for sanctions than is required under Code of Civil Procedure section 128.5. This is because Code of Civil Procedure section 128.7 requires only that conduct be ‘objectively unreasonable,’ while Code of Civil Procedure section 128.5 also requires a showing of subjective bad faith. [Internal Citation.]” (Gullemin v. Stein (2002) 104 Cal.App.4th 156, 167.)

California adheres to a ‘primary rights’ theory in determining whether the claims or causes of action are the same. The significant factor is whether the claim or cause of action is for invasion of a single primary right. Whether the same facts are involved in both suits is not conclusive. Moreover, more than one act may constitute a single cause of action. Under Pomeroy’s primary rights theory, ‘…a cause of action consists of 1) a primary right possessed by the plaintiff, 2) a correspondent primary duty devolving upon the defendant, and 3) a delict or wrong done by the defendant which consist in a breach of such primary right and duty. Thus, two actions constitute a single cause of action if they both affect the same primary right.” (Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 1668, 1685.)

The Motion for 128.7 sanctions is GRANTED. Here, the underlying injury to Plaintiffs is essentially the same in both cases—that Defendants engaged in an alleged series of acts of improper out-of-network payment determinations and made false statements to prevent Plaintiffs from obtaining the reasonable value for their out-of-network services. Nevertheless, Plaintiffs filed a new action alleging separate claims for the same injuries in an attempt to circumvent the stay in the related action rather than waiting until the stay is lifted, and then seeking leave to amend their causes of action.

Defendants seek $31,714.00 in sanctions against Plaintiffs and their counsel for the cost of opposing Plaintiffs’ second action. Section 128.7 only authorizes an amount of sanctions that are necessary to deter repetition of the offensive conduct, or comparable conduct by others similarly situation. (CCP §128.7(d).) Thus, the Court has great discretion in determining the amount of attorney’s fees to award. Here, a sanction of over $31,000.00 would be excessive. The Court intends to award $5,050.00 ($404 x 12.5 hrs.).

Defendants’ Evidentiary Objections to the Declaration of Damon Rubin are OVERRULED.

Demurrer

A special demurrer to a complaint may be brought on the ground that another action is pending between the same parties on the same causes of action. (CCP § 430.10(c); see also People ex rel. Garamendi v. American Autoplan, Inc. (1993) 20 Cal.App.4th 760, 770 [“plea in abatement”].) The other pending action must involve the same parties in the same relationship, i.e., as plaintiff or defendant (Plant Insulation Co. v. Fibreboard Corp. (1990) 224 Cal.App.3d 781, 789), and must involve the identical cause of action in both suits such that a judgment in the first would be res judicata on the claim in the second (Bush v. Superior Court (1992) 10 Cal.App.4th 1374, 1384). “Under the statutory plea in abatement, ‘[t]he pendency of another earlier action growing out of the same transaction and between the same parties is a ground for abatement of the second action.’ A statutory plea in abatement requires that the prior pending action be ‘between the same parties on the same cause of action.’” (emphasis added.) (People ex rel. Garamendi v. American Autoplan, Inc. (1993) 20 Cal.App.4th 760, 770.)

The demurrer on the basis of another action pending is SUSTAINED Plaintiffs’ claims in the instant action involve the same exact parties and same exact causes of action and primary rights as those asserted in the second instant action.

This action (Case No. 22NWCV00410) is STAYED in abatement pending disposition of Plaintiffs’ claims in the earlier-filed related action (Case No. 20NWCV00666).