Judge: Theodore R. Howard, Case: 21-1225344, Date: 2022-08-25 Tentative Ruling

The Demurrer filed on 2/28/22 by Defendant Windsor Capital Group (“Windsor”), as to the First Amended Complaint (the “FAC”) filed by Plaintiffs St. Joseph Hospital of Orange dba Providence St. Joseph Hospital Orange and St. Jude Hospital, Inc. dba Providence St. Jude Medical Center (“Hospitals”) on 1/28/22, is SUSTAINED for the First, Second, Third and Fourth Causes of Action (each a “COA”), with 20 days leave to amend, but otherwise OVERRULED.

For COA 1, the FAC fails to adequately state the factual basis for and terms of the alleged implied contract, including what Windsor would be obligated to pay based on the referenced “authorizations and representations” allegedly made, and why that was so.  Assertions in the Opposition which were not pled do not suffice to cure the pleading defect.  The Demurrer is therefore SUSTAINED on COA 1.

For COA 2, the claim is not clearly preempted under ERISA, as preemption does not apply where a third-party provider sues an ERISA plan as an independent entity claiming damages. (See The Meadows v. Employers Health Ins. (9th Cir. 1995) 47 F.3d 1006, 1008; Port Medical Wellness, Inc. v. Connecticut General Life Insurance Company (2018) 24 Cal.App.5th 153, 176-180, and Morris B. Silver M.D., Inc. v. International Longshore & Warehouse etc. (2016) 2 Cal.App.5th 793, 802-803.)  However, the factual basis for COA 2 is not adequately pled.  The FAC asserts in ¶ 120 that “Defendants …  routinely and systematically underpay claims for noncontracted health care services, like those the Hospitals provided to the Patients,” but fails to articulate what Windsor was required to pay and why, or how the conduct alleged was “unfair and deceptive” or otherwise states a UCL violation. The Demurrer is therefore SUSTAINED on COA 2.

For COA 3, Hospitals have failed to allege whether all of the treatment rendered was requested, and on what terms. Greater clarification as to the nature of and basis for the claim is needed to state the claim. The Demurrer is therefore SUSTAINED on COA 3.

For COA 4, the claim is subject to demurrer. (Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544, 1560.) And here, COA 4 appears to be based on factual assertions contrary to those stated elsewhere in the FAC. (See e.g. ¶¶ 23 and 147.) Greater clarification as to the nature of and basis for the claim is thus needed to state the claim. The Demurrer is therefore SUSTAINED on COA 4.

For COA 5, the demurrer is OVERRULED.  (See Peterson v. Cellco Partnership (2008) 164 Cal.App.4th 1583, 1593 [elements of the COA are receipt of a benefit and unjust retention of the benefit at the expense of another].) And Hospitals have adequately shown how this claim differs from COA 3.

Counsel for Windsor is to give notice of this ruling.