Case Name: Qualium Corporation v. Blue Shield of California, et al.
Case No.: 2015-1-CV-282077

This action arises from a dispute over payment for medical services and equipment between Plaintiff Qualium Corporation (“Qualium”) and Defendant Blue Shield of California (“Blue Shield”). Currently before the Court is Blue Shield’s motion for summary judgment/adjudication directed at Qualium’s Second Amended Complaint (“SAC”). The SAC states five causes of action: 1) Breach of (oral) Contract; 2) Account Stated; 3) Unjust Enrichment; 4) Quantum Meruit, and; 5) Unfair Competition (violation of Bus. & Prof. Code §17200).

The pleadings limit the issues presented for summary judgment or adjudication. (See Government Employees Ins. Co. v. Sup. Ct. (2000) 79 Cal.App.4th 95, 98; Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258; Nieto v. Blue Shield of Calif. Life & Health Ins. (2010) 181 Cal.App.4th 60, 73 [“the pleadings determine the scope of relevant issues on a summary judgment motion.”].) The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an “issue of duty.” (See CCP §437c(f)(1); McClasky v. California State Auto. Ass’n (2010) 189 Cal.App.4th 947, 975 [“If a cause of action is not shown to be barred in its entirety, no order for summary judgment—or adjudication—can be entered.”]; Palm Spring Villas II Homeowners Association, Inc. v. Parth (2016) 248 Cal.App.4th 268, 288.) Summary adjudication of general “issues” or of facts is not permitted. (See Raghavan v. The Boeing Company (2005) 133 Cal.App.4th 1120, 1136.) CCP §437c(t) sets forth the only mechanism for seeking adjudication of a “legal issue” or “claim for damages” that does not completely dispose of a cause of action.

The moving party’s declarations and evidence will be strictly construed in determining whether they negate or disprove an essential element of a plaintiff’s claim “in order to resolve any evidentiary doubts or ambiguities in plaintiff’s (or opposing party’s) favor.” (Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, 64, parentheses added.) While the same standards of admissibility govern both, the opposition declarations are liberally construed while the moving party’s evidence is strictly scrutinized. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.) The evidence must be liberally construed in support of the opposing party, resolving any doubts in favor of that party. (Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037.) Neither party can rely on its own pleadings (even if verified) as evidence to support or oppose a motion for summary judgment or summary adjudication. (College Hospital, Inc. v. Sup Ct. (1994) 8 Cal.4th 704, 720.)

“A defendant seeking summary judgment must show that at least one element of the plaintiff’s cause of action cannot be established, or that there is a complete defense to the cause of action. … The burden then shifts to the plaintiff to show there is a triable issue of material fact on that issue.” (Alex R. Thomas & Co. v. Mutual Service Casualty Ins. Co. (2002) 98 Cal.App.4th 66, 72; internal citations omitted.) “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable finder of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar, supra, at p. 850.)

Judgment on the SAC’s first, second, third and fifth causes of action is GRANTED as unopposed by Qualium. As Qualium does not dispute judgment/adjudication of these claims the fact that Blue Shield’s “issues” for adjudication do not describe issues of duty and often do not wholly dispose of the targeted cause of action is moot.

As for the only opposed portion of the motion, judgment is GRANTED as to the SAC’s fourth cause of action for quantum meruit (“issue” no. 10) as, under the facts now admitted by Qualium, the claim fails as a matter of law.

The quantum meruit claim is alleged “only in the alternative to any contractual claim. . .. For the purposes of this cause of action for quantum meruit [Qualium]: 1) denies any such contract existed; and 2) denies the enforceability [of] any such contract.” (SAC at 50.) As Qualium is not a provider of emergency services and now concedes (by not disputing Blue Shield UMFs 5, 6, 10, 14 and 18 among others) that written contracts (the 2002 Agreement and the 2012 Agreement, Blue Shield exhibits 3 and 4) governed its dealings with Blue Shield from 2002 through April 2014, it has no quantum meruit claim for that time-period as a matter of law. The compensation it was entitled to was governed by the contracts and 28 Cal. Code Regs. §1300.71(a)(3). “Quantum meruit is an equitable theory which supplies, by implication and in furtherance of equity, implicitly missing contractual terms. Contractual terms regarding a subject are not implicitly missing when the parties have agreed on express terms regarding that subject. A quantum meruit analysis cannot supply “missing” terms that are not missing. ‘The reason for the rule is simply that where the parties have freely, fairly and voluntarily bargained for certain benefits in exchange for undertaking certain obligations, it would be inequitable to imply a different liability….’ The trial court violated the rule that equitable entitlement to a quantum meruit payment is not implied where the parties have actual contract terms covering payment.” (Hedging Concepts, In. v. First Alliance Mortgage Co. (1996) 41 Cal.App.4th 1410, 1419-1420.)

The relationship between Qualium and Blue Shield from April 2014 onward, when Qualium concedes (by not disputing UMF #21) Blue Shield changed its status to “non-participating provider” with or without its consent, is governed by the Knox-Keene Act, which also precludes quantum meruit recovery on these facts even in the absence of a written contract as Qualium is not an emergency services provider.

28 Cal. Code Regs. § 1300.71(a)(3) states “‘Reimbursement of a Claim’ means:
(A) For contracted providers with a written contract, including in-network point-of-service (POS) and preferred provider organizations (PPO): the agreed upon contract rate; (B) For contracted providers without a written contract and non-contracted providers, except those providing services described in paragraph (C) below: the payment of the reasonable and customary value for the health care services rendered based upon statistically credible information that is updated at least annually and takes into consideration: (i) the provider’s training, qualifications, and length of time in practice; (ii) the nature of the services provided; (iii) the fees usually charged by the provider; (iv) prevailing provider rates charged in the general geographic area in which the services were rendered; (v) other aspects of the economics of the medical provider’s practice that are relevant; and (vi) any unusual circumstances in the case; and (C) For non-emergency services provided by non-contracted providers to PPO and POS enrollees: the amount set forth in the enrollee’s Evidence of Coverage.” (Court’s emphasis.)

With Qualium having conceded the existence of written contracts, the quantum meruit claim fails as a matter of law as its compensation was governed by the terms of the contracts and/or 28 Cal. Code Regs. § 1300.71(a)(3)(C). (See Pacific Bay Recovery, Inc. v. California Physicians’ Service, Inc. (2017) 12 Cal.App.5th 200, 215-217 [a provider of non-emergency services cannot use a quantum meruit claim to recover something to which it is not entitled under the Knox-Keene Act or its applicable regulations].)