Judge Virginia Keeny, Case Number: 24STCV09690, Date: 2025-03-27 Tentative Ruling

Judge: Virginia Keeny, Case: 24STCV09690, Date: 2025-03-27 Tentative Ruling

Case Number: 24STCV09690 Hearing Date: March 27, 2025 Dept: 45

PEOPLE OF THE STATE OF CALIFORNIA, ET AL. V. PLUS IMAGING LLC

DEMURRER to DEFENDANTS’ FIRST AMENDED ANSWER

Date of Hearing: March 27, 2025 Trial Date: None set.

Department: 45 Case No.: 24STCV09690

Moving Party: Plaintiff-Realtor Allstate Insurance Company

Responding Party: Defendants Plus Imaging LLC and Poya Yaghoubian

Meet and Confer: Reichmuth Decl. ¶ 2

BACKGROUND

On April 17, 2024, Plaintiff People of the State of California, ex rel., Allstate Insurance Company (“Plaintiff”) filed this action against Defendants Plus Imaging LLC and Poya Yaghoubian (collectively “Defendants”), and Does 1 through 200. The Complaint alleges that Defendant Plus Imaging LLC, which is owned and controlled by Defendant Poya Yaghoubian, was illegally masquerading as a licensed medical provider. Plus Imaging performed diagnostic imaging (MRIs) on patients who were making claims under auto insurance policies issued by Allstate and others. Defendants allegedly prepared fraudulent bills that were submitted to Allstate and other insurers for the diagnostic imaging.

The Complaint alleges causes of action for (1) Violation of California Insurance Code § 1871.7; and (2) Violation of California and Professions Code § 17200 et seq.

Defendants filed their original answer to the complaint on October 1, 2024. On October 29, 2024, Defendants filed their First Amended Answer (“FAA”). The FAA contains eighteen affirmative defenses.

On November 13, 2024, Plaintiff-Realtor Allstate (“Allstate”) filed a demurrer to Defendants’ FAA. Allstate demurs to Defendants’ Third Affirmative Defense of Recovery Barred by Plaintiff’s Own Conduct; Fourth Affirmative Defense of Consent; Sixth Affirmative Defense of Privilege; Seventh Affirmative Defense of Business Judgment Rule; Eighth Affirmative Defense of Waiver; Ninth Affirmative Defense of Good Faith Action; Tenth Affirmative Defense of Laches of Acquiescence; Eleventh Affirmative Defense of Unclean Hands; Twelfth Affirmative Defense of Actions of Third Parties; Fourteenth Affirmative Defense of Ratification; Fifteenth Affirmative Defense of No Reliance; Sixteenth Affirmative Defense of Public Disclosure Bar; Seventeenth Affirmative Defense of Public Policy; and Eighteenth Affirmative Defense of Lack of Knowledge. Allstate demurs on the basis that these affirmative defenses fail to state facts sufficient to constitute a defense and are uncertain, ambiguous, and/or unintelligible.

In their opposition, Defendants argue that the demurrer was untimely filed and that the Court should not exercise its discretion to consider the untimely demurrer.

In its reply filed on March 20, 2025, Plaintiff argues that its demurrer was timely filed and that the demurrer should be sustained.

[Tentative] Ruling

Allstate’s Demurrer to the First Amended Answer is sustained with leave to amend.

ANALYSIS

Timeliness of Demurrer

Defendants argue that Allstate’s demurrer was not timely filed. Code of Civ. Proc. Section 430.40(b) requires that a demurrer to an answer be filed “within 10 days after service of the answer to his pleading.” Defendants filed and served their First Amended Answer on October 29, 2024. Allstate did not file its demurrer until November 13, 2024, which was fifteen days after service of the FAA.

Defendants argue that the Court should not exercise its discretion to consider the untimely demurrer because Allstate made no showing in its moving papers to explain the late filing.

However, Allstate argues in its reply that the demurrer was timely filed. Defendants served their answer electronically, so Allstate argues that this extends the time in which it could serve its demurrer by two court days. Code of Civ. Proc. Section 1010.6(a)(3)(B) states that “[a]ny period of notice, or any right or duty to do any act or make any response within any period or date certain after the service of the document, which time period or date is prescribed by statute or rule of court, shall be extended after service by electronic means by two court days…” There are exceptions to this, but they do not apply in this case.

Ten days after the filing of the FAA was Friday, November 8, 2024. The next two days were the weekend, and Monday, November 11, 2024, was Veterans Day, a court holiday. Therefore, two court days after November 8 would have been Wednesday, November 13, 2024, which was the date that Allstate filed its demurrer.

Therefore, the demurrer was timely filed.

Legal Standard

Code of Civ. Proc. Section 430.20 authorizes a demurrer to an answer where (a) the answer does not state facts sufficient to constitute a defense or (b) the answer is “uncertain,” which includes an answer that is “ambiguous and unintelligible.” A demurrer to an answer raises an inquiry into whether the answer states a defense to the plaintiff’s cause of action. (Timberidge Enterprises, Inc. v. City of Santa Rosa (1978) 86 Cal.App.3d 873, 880.)

Affirmative defenses cannot be “proffered in the form of terse legal conclusions”; instead, affirmative defenses pled in an answer must aver facts “as carefully and with as much detail as the facts which constitute the cause of action and which are alleged in the complaint.” (FPI Dev. Inc v. A1 Nakashima (1991) 231 Cal.App.3d 367, 384.)

Demurrer to the Third, Fourth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, Fourteenth, Sixteenth, Seventeenth, and Eighteenth Affirmative Defenses

Allstate argues that all of the challenged defenses are proffered as terse legal conclusions because there are no facts alleged, or “essential facts” of the affirmative defenses “sufficient to acquaint [plaintiff] with the nature, source and extent” of the defenses. (Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 608.) With each of the challenged affirmative defenses, Defendants simply make a broad conclusory statement that lacks any facts.

Defendants argue in their opposition that Allstate’s discovery conducted to date (i.e., the discovery requests made by Allstate) demonstrates that Allstate is sufficiently acquainted with the nature, source, and extent of Defendants’ affirmative defenses. Defendants argue that Allstate’s discovery requests were specifically targeted to the topics raised in Defendants’ affirmative defenses, which would not have been possible if Allstate did not understand the bases of Defendants’ defenses.

Allstate argues in its reply that challenging deficiencies in a pleading does not stay discovery. (See Mattco Forge, Inc. v. Arthur Young & Co. (1990) 223 Cal.App.3d 1429, 1436, fn.3; Budget Fin. Plan v. Superior Ct. (1973) 34 Cal.App.3d 794, 797.) Therefore, any arguments that Defendants have made concerning the nature and extent of Allstate’s discovery requests are unavailing.

Furthermore, a demurrer challenges the sufficiency of a pleading, not what may be gleaned during discovery. (CCP § 430.20(a-b).) Defendants’ FAA is completely devoid of any facts related to the challenged affirmative defenses. Accordingly, it is proper to sustain the demurrer to the affirmative defenses on the basis that they lack sufficient facts to constitute a defense.

Because the challenged defenses lack any facts, they were also uncertain and ambiguous.

Allstate’s demurrer to Defendants’ Third, Fourth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, Fourteenth, Sixteenth, Seventeenth, and Eighteenth Affirmative Defenses is sustained. Leave to amend shall be given.

CONCLUSION

Defendants are given 20 days to file an amended answer.