Judge Robert B. Broadbelt, Case Number: 24STCV17723, Date: 2025-02-07 Tentative Ruling

Judge: Robert B. Broadbelt, Case: 24STCV17723, Date: 2025-02-07 Tentative Ruling

MOVING PARTIES: Defendants Kaiser Permanente Insurance Company, Kaiser Foundation Health Plan, Inc., and Kaiser Foundation Hospitals

The court considered the moving, opposition, and reply papers filed in connection with the demurrer and motion to strike.

The court denies defendants Kaiser Permanente Insurance Company, Kaiser Foundation Health Plan, Inc., and Kaiser Foundation Hospitals’ request for judicial notice, filed on September 5, 2024, because the results of online searches do not constitute an official act of the executive department of the United States or any state of the United States and therefore are not proper subjects for judicial notice. (Evid. Code, § 452, subd. (c).)

The court denies plaintiff DoctorNow’s request for judicial notice, filed on December 27, 2024, because a ruling from another trial court does not have binding or precedential value on the court. (Bolanos v. Superior Court (2008) 169 Cal.App.4th 744, 761 [“a written trial court ruling has no precedential value”].)

Plaintiff DoctorNow, Inc. (“Plaintiff”) filed this action on July 17, 2024, alleging 14 causes of action for (1) unfair competition; (2) negligence; (3) fraud; (4) negligent misrepresentation; (5) quantum meruit; (6) goods and services rendered; (7) money had and received; (8) open book account; (9) account stated; (10) violation of Health and Safety Code section 1342.2; (11) unjust enrichment;[1] (12) promissory estoppel; (13) equitable estoppel; and (14) declaratory and injunctive relief.

Defendants Kaiser Permanente Insurance Company, Kaiser Foundation Health Plan, Inc., and Kaiser Foundation Hospitals (“Kaiser Hospitals”) (collectively, “Defendants”) now move the court for an order (1) sustaining their demurrer to Plaintiff’s second, third, fourth, seventh, eighth, ninth, 10th, 11th, 12th, 13th, and 14th causes of action, and (2) striking from the Complaint the requests for injunctive relief.

The court overrules Defendants’ demurrer to the Complaint, as alleged against defendant Kaiser Hospitals, because they have not shown that the Complaint does not state facts sufficient to constitute causes of action against that defendant since Defendants (1) contend that Kaiser Hospitals is not a proper defendant on the ground that it is not an insurer or health care service plan, but (2) have not supported that argument with citation to the allegations in the Complaint or matters of which the court may properly take judicial notice.

The court sustains Defendants’ demurrer to the second cause of action for negligence because it does not state facts sufficient to constitute a cause of action since (1) Plaintiff has alleged that Defendants owed a duty of care to properly reimburse Plaintiff in the correct amounts (Compl., ¶¶ 103-108 and 113), but (2) “there is no legal duty not to negligently or intentionally underreimburse a hospital or other medical provider,” such that Plaintiff has not alleged facts to establish the element of duty. (Code Civ. Proc., § 430.10, subd. (e); Peredia v. HR Mobile Services, Inc. (2018) 25 Cal.App.5th 680, 687 [elements of negligence]; Long Beach Memorial Medical Center v. Kaiser Foundation Health Plan, Inc. (2021) 71 Cal.App.5th 323, 341.) The court notes that the authority relied on in Plaintiff’s opposition papers, Centinela Freeman Emergency Medical Associates v. Health Net of California, Inc. (2016) 1 Cal.5th 994, does not support a finding of a general duty not to underreimburse hospitals. Instead, the California Supreme Court recognized only a limited duty of a health care service plan to reassume delegated financial responsibilities in certain circumstances. (Centinela Freeman Emergency Medical Associates, supra, 1 Cal.5th at pp. 1019, 1022; Long Beach Memorial Medical Center, supra, 71 Cal.App.5th at p. 340 [summarizing duties created by Centinela Freeman Emergency Medical Associates].)

The court overrules Defendants’ demurrer to the third cause of action for fraud because it states facts sufficient to constitute a cause of action since Plaintiff has alleged facts establishing that (1) Defendants, through Alfred Wynn, made a false representation as to an existing material fact concerning Defendants’ alleged approval of Plaintiff’s published cash prices following its request for reprocessing of claims (Compl., ¶ 119); (2) Defendants knew that representation was false when it was made (Compl., ¶ 127); (3) in making the representation, Defendants intended that Plaintiff rely on it so that Plaintiff would continue to test Defendants’ insureds for COVID-19 (Compl., ¶ 127); (4) Plaintiff justifiably relied on the representation by continuing to provide COVID-19 testing and services to Defendants’ insureds (Compl., ¶¶ 119, 128); and (5) Plaintiff suffered resulting damages based on Defendants’ later refusal to reimburse Plaintiff pursuant to that representation (Compl., ¶ 128). (Code Civ. Proc., § 430.10, subd. (e); West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 792 [elements of fraud].)

The court notes that Defendants have argued that the representation that Plaintiff “should expect to see adjusted cash payments for cash price this week” does not constitute the misrepresentation of a past or existing material fact on which the fraud causes of action may be based. (Dem., pp. 13:25-14:6; Reply, p. 6:14-19.) However, Plaintiff has alleged that, in making the subject representation, Wynn stated that Defendants “approved” the reprocessing of its claims, thus suggesting that Defendants had already acted to reprocess the claims. (Compl., ¶ 119). Wynn’s subsequent statement that Plaintiff “should expect to see adjusted payments for cash price this week” does not appear to indicate that Defendants were making a future promise, but rather that Plaintiff would see the effect of the past approval that week. (Ibid.)

The court overrules Defendants’ demurrer to the fourth cause of action for negligent misrepresentation because it states facts sufficient to constitute a cause of action since Plaintiff has alleged (1) that Defendants made a false representation as to a past or existing material fact, (Compl., ¶ 132) which (2) they had no reasonable ground for believing to be true (Compl., ¶ 134), (3) Defendants intended Plaintiff rely on that representation (Compl., ¶ 135), and (4) Plaintiff justifiably relied on that representation (Compl., ¶ 136) (5) to its detriment (Compl., ¶¶ 136-137). (West, supra, 214 Cal.App.4th at p. 792 [elements of negligent misrepresentation].)

The court overrules Defendants’ demurrer to the seventh cause of action for money had and received because it states facts sufficient to constitute a cause of action since Plaintiff has alleged that (1) Defendants received money, through payments made by their insureds, that was intended to be used for the benefit of Plaintiff (Compl., ¶ 149), (2) that money was not used for the benefit of Plaintiff (Compl., ¶ 151), and (3) Defendants have not given the money to Plaintiff (Compl., ¶ 152). (Code Civ. Proc., § 430.10, subd. (e); Avidor v. Sutter’s Place, Inc. (2013) 212 Cal.App.4th 1439, 1454 [for an action for money had and received, “the plaintiff must prove that the defendant received money ‘intended to be used for the benefit of [the plaintiff],’ that the money was not used for the plaintiff’s benefit, and that the defendant has not given the money to the plaintiff”].) While Defendants have argued that dues or premiums collected by an insurance company or health plan cannot support a money had and received claim by a medical provider, Defendants did not cite authority or present argument and analysis in support of that contention. (Dem., p. 15:15-17.)

The court sustains Defendants’ demurrer to the eighth cause of action for open book account because it does not facts sufficient to constitute a cause of action since, although Plaintiff has alleged that the parties had financial transactions with each other involving payment for health services and that Defendants kept an electronic account of those debits and credits (Compl., ¶¶ 156-157), Plaintiff did not allege that it and Defendants (1) entered into a contract, or (2) had some fiduciary relation, as required for a book account cause of action. (Code Civ. Proc., § 430.10, subd. (e); Eloquence Corporation v. Home Consignment Center (2020) 49 Cal.App.5th 655, 664 [“The term ‘book account’ is defined by statute to mean ‘a detailed statement which constitutes the principal record of one or more transactions between a debtor and a creditor arising out of a contract or some fiduciary relation, and shows the debts and credits in connection therewith . . . .”] [emphasis added].)

The court overrules Defendants’ demurrer to the ninth cause of action for account stated because it states facts sufficient to constitute a cause of action since Plaintiff has alleged that (1) Defendants owe Plaintiff money from previous financial transactions (Compl., ¶ 159), which the court finds is sufficient, at the pleading stage, to allege that the previous transactions created “the relationship of debtor and creditor;” (2) Defendants, by words and conduct, agreed that the amount that Plaintiff claimed to be due from Defendants in this action is the correct amount owed for each claim (Compl., ¶ 160); and (3) Defendants, through its conduct, promised to pay Plaintiff the amounts due (Compl., ¶ 161). (Code Civ. Proc., § 403.10, subd. (e); Leighton v. Forster (2017) 8 Cal.App.5th 467, 491 [elements of account stated].)

The court sustains Defendants’ demurrer to the 10th cause of action for violation of Health and Safety Code section 1342.2 because it does not state facts sufficient to constitute a cause of action since (1) section 1342.2 is part of the Knox Keene Health Care Service Plan Act of 1975 (Health & Safety Code, § 1340 et seq.) (the “Knox-Keene Act”), and (2) the Knox-Keene Act “expressly authorizes the [Department of Managed Health Care] to enforce the statute and does not include a parallel authorization for suits by private individuals,” although private individuals may bring suit under the unfair competition law for violations of the Knox-Keene Act. (Code Civ. Proc., § 430.10, subd. (e); Blue Cross of California, Inc. v. Superior Court (2009) 180 Cal.App.4th 1237, 1250; California Medical Ass’n Inc. v. Aetna U.S. Healthcare of California, Inc. (2001) 94 Cal.App.4th 151, 161 [the power to enforce the Knox-Keene Act “‘has been entrusted exclusively’ to the DOC and now to the DMHC”].)

The court overrules Defendants’ demurrer to the 11th cause of action for unjust enrichment because (1) there is a split in authority regarding whether unjust enrichment is a separate cause of action, and (2) the court finds that Plaintiff may plead such a theory for relief. (Code Civ. Proc., § 430.10, subd. (e); Levine v. Blue Shield of California (2010) 189 Cal.App.4th 1117, 1138 [“Although some California courts have suggested the existence of a separate cause of action for unjust enrichment [citation], this court has recently held that [t]here is no cause of action in California for unjust enrichment”] [internal quotation marks and citation omitted]; (Lyles v. Sangadeo-Patel (2014) 225 Cal.App.4th 759, 769 [setting forth the elements of a claim for unjust enrichment].)

The court overrules Defendants’ demurrer to the 12th cause of action for promissory estoppel because it states facts sufficient to constitute a cause of action since (1) Plaintiff alleged facts establishing that (i) Defendants made a clear and unambiguous promise “that they would cover and pay in full the costs for COVID-19 Testing and Services” (Compl., ¶ 175), (ii) Plaintiff reasonably and foreseeably relied on that promise (Compl., ¶¶ 175-177), and (iii) Plaintiff was injured by its reliance on that promise (Compl., ¶ 181), and (2) Plaintiff does not appear to allege that it provided consideration to Defendants in connection with this promise, which could bar such a claim.[2] (Code Civ. Proc., § 430.10, subd. (e); Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935, 945 [elements of promissory estoppel]; Fleet v. Bank of America, N.A. (2014) 229 Cal.App.4th 1403, 1413 [“If actual consideration was given by the promisee, promissory estoppel does not apply”].)

The court sustains Defendants’ demurrer to the 13th cause of action for equitable estoppel because it does not state facts sufficient to constitute a cause of action since equitable estoppel is a defense and not an affirmative cause of action. (Code Civ. Proc., § 430.10, subd. (e); Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 782 [“estoppel in pais cannot be stated as an independent cause of action in California”]; Behnke v. State Farm General Ins. Co. (2011) 196 Cal.App.4th 1443, 1463 [“a stand-alone cause of action for equitable estoppel will not lie as a matter of law”].)

The court overrules Defendants’ demurrer to the 14th cause of action for declaratory and injunctive relief because (1) although declarations and injunctions are remedies, the court finds that Plaintiff may plead such requests for relief in this manner, and (2) Plaintiff has alleged facts establishing that there exists a controversy between it and Defendants regarding Defendants’ duties to reimburse claims for COVID-19 testing (Compl., ¶ 194). (Code Civ. Proc., §§ 430.10, subd. (e), 1060.)

The burden is on the plaintiff “to articulate how it could amend its pleading to render it sufficient.”¿ (Palm Springs Villas II Homeowners Assn., Inc. v. Parth (2016) 248 Cal.App.4th 268, 290.)¿ To satisfy that burden, a plaintiff “must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading.”¿ (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) The court finds that Plaintiff has not met its burden to articulate how it could amend its second, eighth, 10th, and 13th causes of action to render them sufficient against Defendants. The court therefore sustains the demurrer to those causes of action without leave to amend.

Defendants move the court for an order striking Plaintiff’s requests for injunctive relief, as set forth in (1) paragraphs 101 and 190-198, and (2) paragraphs 5, 6, and 7 of the prayer.

The court denies Defendants’ motion to strike (1) paragraphs 190, 191, 192, 193, and 194, because those paragraphs (i) contain factual allegations, or (ii) request declaratory relief, which Defendants did not move to strike in their notice of motion, and (2) paragraphs 101, 195-196, 197, and 198, and paragraphs 5-7 of the prayer because the court finds that Defendants have not shown that, on the face of the Complaint, Plaintiff’s requests for injunctive relief are improper. (Code Civ. Proc., § 436, subd. (a); Notice of Mot., p. 2:6-13 [moving to strike claims for injunctions].)

The court notes that Defendants have argued that the CARES Act and Families First Coronavirus Act contain a sunset provision that is tied to the expiration of the federal public health emergency, which expired in May 2023, such that Plaintiff seeks injunctive relief compelling compliance with statutory obligations no longer exist. (See Compl., ¶ 101 [seeking injunctive relief that Defendants, inter alia, cease unfair competition].) However, Defendants have not cited law establishing that they are no longer required to pay Plaintiff the amounts that became due and owing during the relevant period (i.e., the public health emergency).

The court further notes that it is not clear, from the face of the Complaint, that the requested injunction that would enjoin Defendants “from improperly denying claims” on the ground that they were not timely filed would prohibit Defendants from conducting statutorily authorized bill evaluations that would otherwise allow Defendants to properly deny claims on the ground that they are untimely. (Mot., p. 8:17-27; Compl., ¶ 195 [emphasis added].)

The court sustains defendants Kaiser Permanente Insurance Company, Kaiser Foundation Health Plan, Inc., and Kaiser Foundation Hospitals’ demurrer to plaintiff DoctorNow, Inc.’s second, eighth, 10th, and 13th causes of action without leave to amend.

The court overrules defendants Kaiser Permanente Insurance Company, Kaiser Foundation Health Plan, Inc., and Kaiser Foundation Hospitals’ demurrer to plaintiff DoctorNow, Inc.’s third, fourth, ninth, 11th, 12th, and 14th causes of action.

The court denies defendants Kaiser Permanente Insurance Company, Kaiser Foundation Health Plan, Inc., and Kaiser Foundation Hospitals’ motion to strike.

[1] The court notes that the cause of action for unjust enrichment is erroneously labeled the 10th cause of action in the body of the Complaint. (Compl., p. 31:22.) The subsequent causes of action are similarly misnumbered. The court has referred to the causes of action in numerical order despite these mistakes.

[2] To the extent that Plaintiff has alleged facts establishing consideration in support of other causes of action, the court notes that Plaintiff is permitted to plead in the alternative and make inconsistent allegations. (Fleet, supra, 229 Cal.App.4th at p. 1413 [“‘[w]hen a pleader is in doubt about what actually occurred or what can be established by the evidence, the modern practice allows that party to plead in the alternative and make inconsistent allegations’”].)

doctornow, inc. ; Plaintiff, vs. kaiser permanente insurance company , et al.; Defendants.	Case No.:	24STCV17723

	Hearing Date:	February 7, 2025

	Time:	10:00 a.m.

	[tentative] Order RE: (1) defendants’ demurrer to complaint (2) defendants’ motion to strike claim for injunctive relief