Judge Upinder S. Kalra, Case Number: 23STCV27110, Date: 2025-02-19 Tentative Ruling

RESPONDING PARTY(S): Plaintiffs Liam Norman, a minor, by and through his Guardian ad Litem Katie Frederick, and Katie Frederick

1. An Order striking various portions of the First Amended Complaint pertaining to punitive damages as to Defendant Preferred IPA of California, Inc.

On November 3, 2023, Plaintiffs Liam Norman, a minor by and through his Guardian ad Litem Katie Frederick and Katie Frederick (Plaintiffs) filed a Complaint against Defendants Health Net of California and Alpha Care Medical Group (Defendants) with causes of action for: (1) Breach of the Implied Covenant of Good Faith and Fair Dealing; (2) Breach of Contract, (3) Violations of Business & Professions Code sec. 17200; and (4) Negligence.

According to the Complaint, Plaintiffs have medical insurance with Defendants who wrongfully denied valid treatment requests for Plaintiff Liam resulting in significant disability and pain.

On September 6, 2024, Plaintiffs filed a fictitious name amendment replacing Preferred IPA of California as DOE 1.

On September 6, 2024, Plaintiffs filed the operative First Amended Complaint (FAC).

On October 7, 2024, Defendant Alpha Care Medical Group (Alpha Care) filed a Motion to Strike which the court DENIED.

On October 8, 2024, Defendant Health Net of California (Health Net) filed an Answer.

On November 21, 2024, Defendant Preferred IPA of California (Preferred IPA) filed the instant Motion to Strike. On February 4, 2025, Plaintiffs filed an opposition. On February 10, 2025, Preferred IPA filed a reply.

The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc., (CCP) § 436, subds. (a)-(b).)

“Before filing a motion to strike …, the moving party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to the motion to strike for the purpose of determining if an agreement can be reached that resolves the objections to be raised in the motion to strike.” (CCP § 435.5, subd. (a).) Here, there is no meet and confer declaration. Still, failure to meet and confer is insufficient to dent a motion to strike. (CCP § 435.5(a)(4).)

The court GRANTS Preferred IPA’s request for judicial notice as to Exhibit 1 (also labeled as Exhibit A). (Evid. Code, § 452, subd. (c) [providing that a court may take judicial notice of official acts of the government departments]; Jones v. Goodman (2020) 57 Cal.App.5th 521, 529 [“We take judicial notice of the articles of incorporation for Creative Genius, Inc., from the California Secretary of State's website. (Evid. Code, § 452, subd. (c); [Friends of Shingle Springs Interchange, Inc. v. County of El Dorado (2011) 200 Cal.App.4th 1470, 1484, fn. 12] [taking judicial notice of articles of incorporation filed with California Secretary of State on appellate court’s own motion])”].) However, the court only takes judicial notice of the foregoing documents only as to “the existence, content and authenticity of public records and other specified documents”; it does not take judicial notice of the truth of the factual matters asserted in those documents. (Dominguez v. Bonta (2022) 87 Cal. App. 5th 389, 400.)[1]¿¿

1. Page 14:26-15:2, “49. As alleged herein, in breaching their duty, Defendants engaged in despicable conduct carried out with a willful and conscious disregard of Liam’s rights or safety, or subjected Liam to cruel and unjust hardship in conscious disregard of his rights. Defendants’ conduct constitutes malice, oppression, or fraud under California Civil Code § 3294, entitling Liam to punitive damages in an amount appropriate to punish and set an example of Defendants.”

Preferred IPA contends Plaintiffs failed to sufficiently allege facts supporting malice, oppression, or fraud by Preferred IPA. Alternatively, Preferred IPA contends that Plaintiffs failed to request leave of court to pursue punitive damages against them pursuant to CCP § 425.13.

Plaintiffs argue that they did sufficiently allege malice, oppression, or fraud at this stage and that Preferred IPA is not a medical provider subject to the protections of CCP § 425.13. Plaintiffs also argue that this motion, as admitted by Preferred IPA, is identical to co-defendant Alpha Care’s motion to strike which the court denied.

Preferred IPA replies that Plaintiffs incorrectly interpret the law and rely on inapposite authority to support their position. Preferred IPA further replies that the FAC unequivocally alleges that it was Health Net’s clerical error alone.

“Following the enactment of [the Medical Injury Compensation Reform Act of 1975 (“MICRA”)] in 1975, the Legislature added section 425.13 in 1987 due to related policy concerns ‘“that unsubstantiated claims for punitive damages were being included in complaints against health care providers.”’ [Citation.]” (Palmer v. Superior Court (2002) 103 Cal.App.4th 953, 961 (“Palmer”).) Section 425.13 states: “In any action for damages arising out of the professional negligence of a health care provider, no claim for punitive damages shall be included in a complaint or other pleading unless the court enters an order allowing an amended pleading that includes a claim for punitive damages to be filed.” “When section 425.13 does apply, ‘no claim for punitive damages shall be included in a complaint’ unless a court order is first obtained on motion.” (Cooper v. Superior Court (1997) 56 Cal.App.4th 744, 748 (“Cooper.) “‘[A]n action for damages arises out of the professional negligence of a health care provider if the injury for which damages are sought is directly related to the professional services provided by the health care provider.’ [Citation.]” (Cooper, supra, 56 Cal.App.4th at p. 748 [italics removed].) “Thus if a claim is ‘directly related’ to the professional services rendered by a health care provider, section 425.13 applies.” (Ibid.)

As a threshold matter, the court must determine whether Preferred IPA was a health care services provider and engaged in the health care when the alleged injurious deeds occurred such that the conduct was “arising out of professional negligence,” and thus falling under the provisions of CCP § 425.13 or were the misdeeds unrelated to providing health care but rather like actions of a health care service plan and thus falling outside the scope of section 425.13. In reviewing the analysis and holding of Palmer v. Superior Ct (2002) 103 Cal.App.4th 953 (Palmer) and Kaiser Found. Health Plan, Inc. v. Superior Ct (2012) 203 Cal.App.4th 696, and upon studying “the nature of [Preferred IPA’s] conduct that allegedly gave rise to the injury here” (Palmer at p. 965) in the pleadings, even assuming that Preferred IPA was a health care provider for purposes of section 425.13, the complained about conduct did not involve Preferred IPA providing health care. Instead, the essence of the case alleges a clerical error. Unlike Palmer, where the Court found that “the allegedly injurious utilization review, conducted by SRS medical director, amounted to a medical clinical judgment such as would arguable arise out of professional negligence” (Palmer, supra, 103 Cal.App.4th at p. 972), the alleged mistake here did not involve the exercise of medical judgment or application of clinical standards.

The court rejects Preferred IPA’s remaining argument that Plaintiffs did not plead any conduct specifically committed by them that would be oppressive, malicious, or fraudulent to support punitive damages.[2] Plaintiffs allege that the clerical error resulting in repeated rejections “to get critically necessary care” and despite repeated complaints to Preferred IPA of the errors and the impact the wrongful rejection of referrals was having on the proper diagnosis and treatment of a child with a severe disability, the error went uncorrected for years. (FAC ¶¶ 1, 2, 3, 4.) To be clear, the cycle of rejections founded on a simple clerical error was repeated for three years as Plaintiff Liam’s medical condition “continued to deteriorate” before a Healthnet employee discovered that a simpler clerical error was causing rejected authorizations. (FAC ¶¶ 17, 18.) Moreover, as Plaintiffs allege, one or more actors – Healthnet, Alpha Care, or Preferred IPA – wrongfully identified Plaintiff Liam, a minor, in all referrals as an adult resulting in years of service denials. (FAC ¶ 4.) Thus, Plaintiffs sufficiently allege that Preferred IPA had knowledge of the wrongfully denied referrals and were unwilling or unable to discover and correct the clerical error in a timely fashion which resulted in delayed diagnosis and treatment of a disability. (FAC ¶¶ 17, 19.) In sum, this conduct, repeated over years, is not simply ordinary negligence but rather, if believed by a trier of fact, could support a finding by clear and convincing evidence that Preferred IPA’s conduct was willful, oppressive, and malicious.

[1] Thus, the court cannot accept for the truth the portion of Preferred IPA’s Articles of Incorporation which purport to state that its purpose is the profession of medicine. (RJN, Exhibit 1.)

[2] To obtain punitive damages, a plaintiff must plead sufficient facts in support of punitive damages. (See Hilliard v. A.H. Robins Co. (1983) 148 Cal.App.3d 374, 391-92.) In addition, punitive damages are allowed only where “it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice.” (Civ. Code § 3294(a).) Courts have viewed despicable conduct as conduct “so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.” (Scott v. Phoenix Schools, Inc. (2009) 175 Cal.App.4th 702, 715.) Further, Civil Code § 3294(c) provides the definition of malice, oppression, and fraud. Malice is “conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” Oppression is “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” Fraud is “an intentional misrepresentation, deceit, or concealment of a material fac known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.”