Judge: Robert B. Broadbelt, Case: 24STCV31844, Date: 2025-03-18 Tentative Ruling

Case Number: 24STCV31844    Hearing Date: March 18, 2025    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:              Defendants Aetna Better Health of California, Inc., Aetna Health of California, Inc., Aetna Life Insurance Company, Aetna Health, Inc., Aetna Health Insurance Company, and Aetna Health Management, LLC                  

RESPONDING PARTY:       Plaintiff DoctorNow, Inc.

Demurrer to Complaint

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

DISCUSSION

Defendants Aetna Better Health of California, Inc., Aetna Health of California, Inc., Aetna Life Insurance Company, Aetna Health, Inc., Aetna Health Insurance Company, and Aetna Health Management, LLC (“Defendants”) move the court for an order sustaining their demurrer to each cause of action alleged in the Complaint filed in this action by plaintiff DoctorNow, Inc. (“Plaintiff”).

The court overrules Defendants’ demurrer to Plaintiff’s Complaint on the ground that it does not state facts sufficient to constitute a cause of action against them because Plaintiff did not identify the specific claims or denials at issue since the court finds that Plaintiff was not required to allege each claim or denial in its Complaint.  (Code Civ. Proc., § 430.10, subd. (e).)

The court overrules Defendants’ demurrer to Plaintiff’s Complaint on the ground that it does not state facts sufficient to constitute causes of action against Defendants as preempted by the Employment Retirement Income Security Act of 1974 (29 U.S.C. § 1001 et seq.) (“ERISA”) because Defendants have not shown that each cause of action alleged in the Complaint is preempted by ERISA.   (Code Civ. Proc., § 430.10, subd. (e); Dem., p. 3:3-7 [demurring to all causes of action on ground of preemption].)

“‘ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans.’  [Citation.]  It contains expansive preemption provisions, designed to ensure employee benefit plan regulation is an exclusively federal concern.”  (In re Essure Product Cases (2023) 98 Cal.App.5th 228, 233 [internal citation omitted].)  Except as otherwise provided, the provisions of ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under 1003(b) of this title.”  (29 U.S.C. § 1144, subd. (a).)  Thus, “[a]ny state-law claim that falls within the scope of ERISA’s remedies ‘is preempted as conflicting with the intended exclusivity of the ERISA remedial scheme.’  [Citation.]  There are two categories of state laws conflict-preempted under ERISA: if it has a ‘reference to’ an ERISA plan, or ‘if it has a connection with’ such a plan.”  (In re Essure Product Cases, supra, 98 Cal.App.5th at p. 234.)

First, the court acknowledges that federal courts have explained that the CARES Act and Families First Coronavirus Response Act (“FFCRA”), pursuant to which Plaintiff alleges that Defendants were required to pay it (Compl., ¶¶ 55, 60), “effectively amended all ERISA plans” “by requiring reimbursement of Covid-19 testing charges . . . .”  (Diagnostic Affiliates of Northeast Hou, LLC v. Aetna, Inc. (S.D. Tex., Feb. 1, 2023) 654 F.Supp.3d 595, 610; Saloojas, Inc. v. Aetna Health of California, Inc. (N.D. Cal., Sep. 30, 2022) 2022 WL 4775877 [the references to ERISA in the CARES Act and FFCRA suggest that those statutes “incorporate and harmonize with ERISA’s enforcement scheme”].)  Thus, courts have concluded that “there is a right of action under ERISA for the remedy granted in the FFCRA/CARES Act.”  (Diagnostic Affiliates of Northeast Hou, LLC, supra, 654 F.Supp.3d at p. 611.)  However, Defendants have not cited authority establishing that the obligation to pay for COVID-19 testing charges under the FFCRA and CARES Act apply only to plans covered by ERISA.  The federal cases cited by Defendants do not state that the FFCRA and CARES Act do not apply to plans that are not governed by ERISA.  Instead, the cases appear to conclude that certain state law claims (as alleged by Plaintiff here) may properly be alleged to recover remedies based on an insurance plan’s failure to pay for COVID-19 testing under plans not governed by ERISA.  (Diagnostic Affiliates of Northeast Hou, LLC, supra, 654 F.Supp.3d at p. 611 [“there appears to be a consensus that state law causes of action provide redress for non-ERISA plans pursuant to the mandated modification of all insurance plans to include full coverage for Covid-19 testing”] [emphasis added]; Murphy Medical Associates, LLC v. Cigna Health and Life Insurance Company (D. Conn., Oct. 18, 2022) 2022 WL 10560321 at pp. **1-2 [granting leave to amend claims for unfair competition and unjust enrichment for non-ERISA plans]; Epochal Enterprises, Inc. v. LF Encinitas Properties, LLC (2024) 99 Cal.App.5th 44, 62, n. 7 [unpublished federal district court cases are citable as persuasive authority].)  

Defendants have not cited any allegations or matters of which the court has taken judicial notice to establish that Plaintiff’s claims are based solely on plans governed by ERISA.  Thus, even if Plaintiff’s claims, to the extent that they are based on plans governed by ERISA, may be preempted, any of its claims relating to non-ERISA plans would not be preempted.

Second, the court acknowledges that (1) Plaintiff has alleged that Defendants are a group health plan and/or health insurance issuer offering group or individual health insurance coverage (Compl., ¶ 10), and (2) the FFCRA provides that the terms group health plan, health insurance issuer, group health insurance coverage, and individual health insurance coverage have the same meanings given in ERISA and other statutes.  (Pub.L. No. 116-127, § 6001, sec. (d).)  However, as set forth above, Defendants have not cited authority establishing that the FFCRA and CARES Act, by referencing ERISA, permit the recovery of COVID-19 testing charges solely for plans governed by ERISA, such that all of Plaintiff’s claims must be, as a matter of law, based on the recovery of benefits owed under ERISA.[1]  

Third, Plaintiff has also based certain of its claims on Defendants’ alleged failure to make payments pursuant to promises made by Defendants (See, e.g., Compl., ¶¶ 121, 140), which are not preempted by ERISA.  (Morris B. Silver M.D., Inc. v. International Longshore & Warehouse etc. (2016) 2 Cal.App.5th 793, 807 [“the claims are predicated on a garden-variety failure to make payment as promised for services rendered.  To be sure, the claims would not exist but for an ERISA plan and are predicated on somebody’s interpretation of the plan.  But the fact that an ERISA plan is an initial step in the causation chain, without more, is too remote of a relationship with a covered plan to support a finding of preemption”].)

Thus, the court finds that Defendants have not met their burden to show that Plaintiff’s Complaint, in its entirety, is preempted by ERISA.

The court overrules Defendants’ demurrer to the first cause of action for unfair competition because Defendants have not shown that it does not state facts sufficient to constitute a cause of action since (1) Plaintiff may bring a cause of action for unfair competition based on a violation of Health and Safety Code section 1342.2, which is part of the Knox-Keene Health Care Service Plan Act of 1975 (Health & Safety Code, § 1340, et seq.) (“Knox-Keene Act”), and (2) although “the general principle of equity [is] that equitable relief will not be afforded when the plaintiff’s remedies at law are adequate to redress his or her injury[,]” Plaintiff is not required to allege that its remedies at law are inadequate.  (Code Civ. Proc., § 430.10, subd. (e); Health & Safety Code, § 1342.2, subd. (a)(4); Long Beach Memorial Medical Center v. Kaiser Foundation Health Plan, Inc. (2021) 71 Cal.App.5th 323, 342 [“a plaintiff may as a general matter state a claim under the unfair competition law for a violation of the Knox-Keene Act”]; Ramona Manor Convalescent Hospital v. Care Enterprises (1986) 177 Cal.App.3d 1120, 1140.)  Further, to the extent that Defendants take issue with Plaintiff’s requesting damages in connection with other causes of action and restitution in connection with this cause of action, the court notes that Plaintiff is permitted to plead alternate theories of relief.  (Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2016) 6 Cal.App.5th 1207, 1222-1223 [plaintiffs may plead in the alternative and make inconsistent allegations].)

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 based this cause of action on its allegations that Defendants had a duty not to improperly deny claims “by paying zero on claims for COVID-19 Testing and Services” and violated that duty by denying payment and underpaying those claims (Compl., ¶¶ 107, 109), but (2) “there is no legal duty not to negligently or intentionally underreimburse a hospital or other medical provider,” and (3) Plaintiff has stated that it “is not opposing Defendants’ demurrer as to” this cause of action and therefore concedes that it does not state facts sufficient to constitute a cause of action.  (Code Civ. Proc., § 430.10, subd. (e); Long Beach Memorial Medical Center, supra, 71 Cal.App.5th at p. 341; Opp., p. 1, n. 1.)

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, with sufficient particularity, the misrepresentations at issue by alleging that Christina Wu (“Wu”)—who was assigned to the matter in June 2022 (Compl., ¶ 123) and made some of the subject misrepresentations “on behalf of Defendants” (Compl., ¶ 131)—stated, in an email dated October 16, 2022, that (1) Defendants would reprocess Plaintiff’s claims at the posted cash price (Compl., ¶ 125), and (2) “any claims from January 1, 2022 onwards were Defendants’ ‘financial responsibility’” (Ibid.), on which Plaintiff relied (Compl., ¶ 126).  (Code Civ. Proc., § 430.10, subd. (e); Berry v. Frazier (2023) 90 Cal.App.5th 1258, 1268 [elements of fraud].)  

The court notes that Defendants appear to rely on extrinsic evidence, of which Defendants have not requested the court take judicial notice, to argue that the statements alleged in the Complaint were not accurately described.  (See, e.g., p. 9:19-22.)  However, such arguments are improper, and the court has not considered the content of the exhibits attached to the declaration of Defendants’ counsel.[2]  (Code Civ. Proc., § 430.30, subd. (a) [“When any ground for objection to a complaint . . . appears on the face thereof, or from any matter of which the court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading”] [emphasis added].)

The court sustains Defendants’ demurrer to the fourth cause of action for negligent misrepresentation because it does not state facts sufficient to constitute a cause of action since Plaintiff has not alleged the element of a misrepresentation of a past or existing material fact.  (Code Civ. Proc., § 430.10, subd. (e); Borman v. Brown (2021) 59 Cal.App.5th 1048, 1060 [elements of negligent misrepresentation].)

First, the allegations that Defendants would cover the cost of COVID-19 testing (Compl., ¶¶ 138, 140) establish that Defendants made a future promise, not a misrepresentation of past or existing material fact.  (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158 [“The critical alleged misrepresentation as to immediate payment upon completion did not involve a past or existing material fact.  Rather, it involved a promise to perform at some future time”]; Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437, 458 [“Although a false promise to perform in the future can support an intentional misrepresentation claim, it does not support a claim for negligent misrepresentation”] [emphasis in original].)

Second, the court acknowledges, as Plaintiff points out, that Plaintiff has alleged that Wu represented to it that certain of its claims “were ‘in [their] queue for claims reprocessing’” (Compl., ¶ 140.)  However, Plaintiff did not allege that (1) those claims were not in Defendants’ queue for claims reprocessing and therefore is the misrepresentation of an existing material fact that is the subject of this cause of action, or (2) Wu represented that, because those claims were in the queue for reprocessing, Defendants were then in the process of reimbursing Plaintiff at its cash price.  Thus, this allegation does not allege the existence of a past or existing material fact.

Third, the court agrees that it must overrule the demurrer if it states a cause of action under any legal theory.  (Thompson v. Spitzer (2023) 90 Cal.App.5th 436, 452 [“a court must overrule a demurrer if it is based on at least one viable theory of liability”].)  However, although Plaintiff argues that it has alleged facts sufficient to state a cause of action for promissory fraud, the court disagrees, because Plaintiff did not allege, in connection with this cause of action, that Defendants did not have “any intention of performing” their promise that they would pay Plaintiff its cash rate pursuant to the CARES Act.  (Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1498 [elements of promissory fraud].)

The court overrules Defendants’ demurrer to the fifth cause of action for unjust enrichment because (1) there is a split in authority regarding whether unjust enrichment is a separate cause of action, (2) the court finds that Plaintiff may plead such a theory for relief, and (3) Plaintiff has alleged that, by providing COVID-19 testing to patients insured by Defendants, Plaintiff “conferr[ed] a benefit to Defendants” (Compl., ¶ 148).[3]  (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 sixth cause of action for quantum meruit because it states facts sufficient to constitute a cause of action since Plaintiff has sufficiently alleged, for purposes of demurrer, that Defendants, “through their conduct . . . requested that [Plaintiff] perform and continue to perform COVID-19 Testing and Services for Defendants’ benefit” (Compl., ¶ 153).  (Code Civ. Proc., § 430.10, subd. (e); Port Medical Wellness, Inc. v. Connecticut General Life Insurance Company (2018) 24 Cal.App.5th 153, 180 [“The requisite elements of quantum meruit are (1) the plaintiff acted pursuant to ‘an explicit or implicit request for the services’ by the defendant, and (2) the services conferred a benefit on the defendant’”].)

The court overrules Defendants’ demurrer to the seventh cause of action for goods and services rendered because it states facts sufficient to constitute a cause of action since Plaintiff has sufficiently alleged, for purposes of demurrer, that Defendants owe Plaintiff approximately $7,535,240.51 for testing and services that Plaintiff administered for the benefit of Defendants and pursuant to the parties implied-in-fact contract (Compl., ¶¶ 157-158).  (Code Civ. Proc., § 430.10, subd. (e); Utility Audit Co., Inc. v. City of Los Angeles (2003) 112 Cal.App.4th 950, 958 [“A common count is proper whenever the plaintiff claims a sum of money due, either as an indebtedness in a sum certain, or for the reasonable value of services, goods, etc., furnished.  It makes no difference in such a case that the proof shows the original transaction to be an express contract, a contract implied in fact, or a quasi-contract”] [internal quotation marks omitted].)

The court overrules Defendants’ demurrer to the eighth cause of action money had and received because it states facts sufficient to constitute a cause of action since Plaintiff has sufficiently alleged, for purposes of demurrer, that Defendants are indebted to Plaintiff in a certain sum for money received by Defendants, from its insureds, for the use of Plaintiff, the out-of-network healthcare provider that provided COVID-19 testing to their insureds (Compl., ¶¶ 162-163).  (Code Civ. Proc., § 430.10, subd. (e); Avidor v. Sutter’s Place, Inc. (2013) 212 Cal.App.4th 1439, 1454 [“‘A cause of action for money had and received is stated if it is alleged [that] the defendant “is indebted to the plaintiff in a certain sum ‘for money had and received by the defendant for the use of the plaintiff’”’”].)

The court sustains Defendants’ demurrer to the ninth cause of action for violation of Health and Safety Code section 1342.2 because (1) it does not state facts sufficient to constitute a cause of action since (i) that statute is part of the Knox-Keene Act, and (ii) the Knox-Keene Act does not authorize suits by private individuals, and (2) Plaintiff has expressly stated that it is “not opposing” the demurrer to this cause of action and therefore has conceded that it does not state facts sufficient to constitute a cause of action.  (Code Civ. Proc., § 430.10, subd. (e); Blue Cross of California, Inc. v. Superior Court (2009) 180 Cal.App.4th 1237, 1250 [“the Knox-Keene Act expressly authorizes the DMHC to enforce the statute and does not include a parallel authorization for suits by private individuals,” though private individuals can bring suit under the unfair competition law for violations thereof]; Opp., p. 1, n. 1.)

The court overrules Defendants’ demurrer to the 10th cause of action for promissory estoppel because it states facts sufficient to constitute a cause of action since Plaintiff has alleged that (1) Defendants promised Plaintiff that they would pay the full costs for COVID-19 testing and services, which is a promise that is clear and unambiguous in its terms (Compl., ¶¶ 121, 176), (2) Plaintiff reasonably and justifiably relied on those promises (Compl., ¶ 176), and (3) Plaintiff was injured by its reliance thereon (Compl., ¶ 182).  (Code Civ. Proc., § 430.10, subd. (e); Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935, 945 [elements of promissory estoppel].)  Further, although Defendants have argued that Plaintiff “does not allege that the specific representations to it were not fulfilled[,]”Plaintiff expressly alleged that Defendants “did not pay [Plaintiff] in full for the COVID-19 Testing and Services” (Compl., ¶ 180), which is the promise on which this cause of action is based.

            The court sustains Defendants’ demurrer to the 11th cause of action for declaratory and injunctive relief because it does not state facts sufficient to constitute a cause of action.  (Code Civ. Proc., § 430.10, subd. (e).)

            First, the court finds that Plaintiff has not alleged facts sufficient to state a cause of action for declaratory relief because (1) “[d]eclaratory relief generally operates prospectively to declare future rights, rather than to redress past wrongs[,]” but (2) Plaintiff’s requests for declaratory relief seek to redress the alleged past wrongs of Defendants in failing to pay the full costs to Plaintiff for COVID-19 testing (Compl., ¶¶ 187-188), which is not a proper subject of declaratory relief.  (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909.)  

Second, “‘[i]njunctive relief is a remedy, not a cause of action.’”  (Ivanoff v. Bank of America, N.A. (2017) 9 Cal.App.5th 719, 734.)  Although injunctive relief is a remedy that may be recovered under the unfair competition law, the injunctive relief that Plaintiff requests would not be enforceable by the court.  (Long Beach Memorial Medical Center, supra, 71 Cal.App.5th at p. 343; People ex rel. Gascon v. HomeAdvisor, Inc. (2020) 49 Cal.App.5th 1073, 1082-1083 [“‘An injunction which forbids an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application exceeds the power of the court’”].)

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 can amend its second, fourth, ninth, and 11th causes of action to render them sufficient against Defendants.  The court therefore sustains Defendants’ demurrer to those causes of action without leave to amend. 

ORDER

            The court overrules defendants Aetna Better Health of California, Inc., Aetna Health of California, Inc., Aetna Life Insurance Company, Aetna Health, Inc., Aetna Health Insurance Company, and Aetna Health Management, LLC’s demurrer to plaintiff DoctorNow, Inc.’s first, third, fifth through eighth, and 10th causes of action.  

            The court sustains defendants Aetna Better Health of California, Inc., Aetna Health of California, Inc., Aetna Life Insurance Company, Aetna Health, Inc., Aetna Health Insurance Company, and Aetna Health Management, LLC’s demurrer to plaintiff DoctorNow, Inc.’s second cause of action for negligence, fourth cause of action for negligent misrepresentation, ninth cause of action for violation of Health and Safety Code section 1342.2, and 11th cause of action for declaratory and injunctive relief without leave to amend.  

            The court orders defendants Aetna Better Health of California, Inc., Aetna Health of California, Inc., Aetna Life Insurance Company, Aetna Health, Inc., Aetna Health Insurance Company, and Aetna Health Management, LLC to file an answer to plaintiff DoctorNow, Inc.’s Complaint within 10 days of the date of this order.

            The court orders plaintiff DoctorNow, Inc. to give notice of this ruling.

IT IS SO ORDERED.

DATED:  March 18, 2025

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court