Case Number: BC510814 Hearing Date: May 07, 2014 Dept: 34

Moving Party: Defendant County of Los Angeles, erroneously sued as Community Health Plan Los Angeles (“defendant”)

Resp. Party: Plaintiffs St. Francis Medical Center (“plaintiff”)

Defendant’s demurrer is OVERRULED.

BACKGROUND:

Plaintiff commenced this action on 6/3/13, against defendants for quantum meruit and breach of statutory duty. Plaintiff alleges defendant failed to sufficiently reimburse plaintiff for medically necessary services provided to a patient who was a member of defendant’s health plan. Plaintiff filed a first amended complaint on 6/7/13, alleging the same two causes of action. Plaintiff filed a second amended complaint on 11/17/13, alleging the same two causes of action.

On 3/5/14, the Court sustained defendant’s demurrer to the first cause of action, without leave to amend, and to the second cause of action, with leave to amend.

Plaintiff filed a third amended complaint (“TAC”) on 3/20/14. The TAC contains a single cause of action for breach of statutory duty. Plaintiff alleges that it presented a claim to defendant no later than one year after the cause of action accrued, and that the claim was denied.

ANALYSIS:

Defendant demurs to the TAC on the the grounds that the causes of action are uncertain and fail to state sufficient facts.

Defendant’s primary argument is that plaintiff did not properly present a claim to defendant before filing the instant action. A plaintiff may not bring an action for money or damages against a public entity on a cause of action for which a claim is required to be presented until a written claim has been presented to the entity and has been acted upon or deemed to have been rejected. (Gov. Code, § 945.4.) “Timely claim presentation is not merely a procedural requirement, but rather, a condition precedent to plaintiff’s maintaining an action against defendant, and thus, an element of the plaintiff’s cause of action. [Citation.] A complaint which fails to allege facts demonstrating either that a claim was timely presented or that compliance with the claims statute is excused is subject to a general demurrer for failure to state facts sufficient to constitute a cause of action. [Citation.]” (K.J. v. Arcadia Unified School Dist. (2009) 172 Cal.App.4th 1229, 1238.)

Plaintiff alleges that defendant “falls under the Government Claims Act” and that plaintiff has exhausted all available administrative remedies. (TAC ¶ 19.) Plaintiff alleges that it substantially complied with the applicable provisions of the Government Code. (Id., ¶ 20.)

A claim, other than for death or injury to a person or personal property (governed by a six-month limitations period), must be presented no later than one year after the accrual of the cause of action. (Gov. Code, § 911.2.(a).) Plaintiff alleges that, within a year of the accrual of the cause of action, it presented a claim to Community Health Plan’s principal office and that the claim was denied. (TAC, ¶¶ 21-22.)

A claim must contain the following information:

(a) The name and post office address of the claimant. [¶] (b) The post office address to which the person presenting the claim desires notices to be sent. [¶] (c) The date, place and other circumstances of the occurrence or transaction which gave rise to the claim asserted. [¶] (d) A general description of the indebtedness, obligation, injury, damage or loss incurred so far as it may be known at the time of presentation of the claim. [¶] (e) The name or names of the public employee or employees causing the injury, damage, or loss, if known. [¶] (f) The amount claimed if it totals less than ten thousand dollars ($10,000) as of the date of presentation of the claim, including the estimated amount of any prospective injury, damage, or loss, insofar as it may be known at the time of the presentation of the claim, together with the basis of computation of the amount claimed. If the amount claimed exceeds ten thousand dollars ($10,000), no dollar amount shall be included in the claim. However, it shall indicate whether the claim would be a limited civil case.

(Gov. Code, § 910.) Plaintiff alleges that the claim letter contained this information. (See TAC ¶ 22.)

The claim may be presented by “[m]ailing it to the clerk, secretary auditor, or the governing body at its principal office.” (Gov. Code, § 915(a)(2).) Plaintiff alleges that it presented the claim to Community Health Plan’s (CHP) principal office. (TAC ¶ 21.)

Defendant argues that these allegations are insufficient.

Defendant first argues that plaintiff’s letter merely showed that it participated in the administrative process, and that pursuing an administrative remedy through CHP’s payment dispute process was not sufficient to comply with the Government Claims Act. As an initial matter, there is nothing in the TAC or a judicially noticed item which establishes that CHP had an administrative dispute process or that plaintiff’s letter was only made pursuant to that process.

Moreover, defendant does not provide authority to support its assertion that compliance with an administrative process cannot satisfy the Government Claims Act. In support of this argument, defendant cites to State Board of Chiropractic Examiners v. Superior Court (2007) 148 Cal.App.4th 142 and Richards v. Department of Alcoholic Beverage Control (2006) 139 Cal.App.4th 304.) First of all, State Board of Chiropractic Examiners v. Superior Court is not citable: review was granted and the holding was reversed by the California Supreme Court in State Board of Chiropractic Examiners v. Superior Court (2009) 45 Cal.4th 963. Even if it had not been reversed, it would nonetheless be inapplicable because the court did not decide whether compliance with an administrative remedy is sufficient to present a claim. Instead, it addressed the opposite – whether filing a tort claim was sufficient to comply with the administrative remedy. (See Chiropractic Examiners, 55 Cal.Rptr.3d 374, 385-386.)

The same is true for Richards. “Richards cites no authority to support his contention that the presentation of a claim under the California Tort Claims Act (Gov.Code, § 810 et seq.) in lieu of pursuing an administrative remedy established by the Department satisfied the exhaustion requirement. The presentation of a claim pursuant to the Tort Claims Act is a separate, additional prerequisite to commencing an action against the state or a local public entity and is not a substitute for the exhaustion of an administrative remedy.” Richards v. Department of Alcoholic Beverages Control (2006) 139 Cal.App.4th 304, 315.)

(The Court also notes that there are several typographical errors in Defendant’s quotation from Richards. According to Defendant, the Richards court stated, “The presentation of a claim pursuant to the Tort Claims Art [sic] is a separate, additional prerequisite to commencing an action against the slate [sic] or a local public entity.” (See Demurrer, p. 8:16-17.) This isn’t quite what the Richards Court stated.)

Thus, of the two cases cited by Defendant in both its Motion and in its Reply as authority for its proposition that compliance with an administrative process cannot satisfy the Government Claims Act, one is uncitable; the other is simply inapposite. (See Marriage of Cornejo (1996) 13 Cal.4th 381, 388 [a decision is not authority for what it does not consider].)

Defendant next argues that plaintiff did not present a claim because the letter was sent to CHP and not to one of the persons specified in Government Code section 915(a). Defendant cites to DiCampli-Mintz v. County of Santa Clara (2012) 55 Cal.4th 983 in support of this argument. In that case, the plaintiff personally delivered a claim to an employee in the administrative building of a hospital owned and operated by the defendant county. (Id. at p. 987.) It was undisputed that the plaintiff knew that the hospital was owned and operated by the county. (Id. at p. 988.) The trial court granted the county’s motion for summary judgment on the ground that the claim was never presented to or received by a statutorily designated recipient. (Id. at p. 989.) The appellate court reversed, finding that the plaintiff had substantially complied with the presentation requirements. (Ibid.) The Supreme Court found that the determination that there was substantial compliance was erroneous and that the appellate court failed to adhere to the plain language of section 915. (Id. at p. 992.)

Section 915(a)(1) reflects the Legislature’s intent to precisely identify those who may receive claims on behalf of a local public entity. Section 915(e)(1) reflects the Legislature’s intent that a misdirected claim will satisfy the presentation requirement if the claim is ‘actually received’ by a statutorily designated recipient. Thus, compliance with section 915(e)(1) requires actual receipt of the misdirected claim by one of the designated recipients. If an appropriate public employee or board never receives the claim, an undelivered or misdirected claim fails to comply with the statute. [Citation.] This straightforward construction honors the statutory language and is consistent with the purpose of the claims statutes.

(Id. at pp. 992-993.)

As stated above, a claim may be presented to “the governing body at its principal office.” (Gov. Code, § 915(a)(2).) Plaintiff alleges that it presented the claim to CHP’s principal office. (TAC ¶ 21.) Nothing in the TAC or a judicially noticed item establishes that this was not the proper place to send the claim or, more importantly, that plaintiff knew that CHP was operated by defendant at the time the claim was made.

Therefore, based on the allegations in the TAC, plaintiff has sufficiently alleged compliance with the Government Claims Act.

Plaintiff alleges that defendant should be estopped from arguing that plaintiff failed to comply with the Government Claims Act because plaintiff reasonably relied on CHP’s representation that plaintiff could present its claim directly to CHP. (TAC ¶¶ 23-24.)

“A public entity may be estopped from asserting noncompliance with the claims statutes where its agents or employees have deterred the filing of a timely claim by some ‘affirmative act.’ [Citation.] Estoppel as a bar to a public entity’s assertion of the defense of noncompliance arises when the plaintiff establishes by a preponderance of the evidence: (1) the public entity was apprised of the facts, (2) it intended its conduct to be acted upon, (3) plaintiff was ignorant of the true state of facts, and (4) relied upon the conduct to his detriment. [Citations.]

Estoppel most commonly results from misleading statements about the need for or advisability of a claim. [Citations.] Estoppel may also be invoked where conduct on behalf of the public entity induces a reasonably prudent person to avoid seeking legal advice or commencing litigation. [Citation.] Finally, acts of violence or intimidation on the part of the public entity that are intended to prevent the filing of a claim may create an estoppel. [Citation.]”

(Christopher P. v. Mojave Unified School Dist. (1993) 19 Cal.App.4th 165, 170.) Equitable estoppel is based on the principle that “[o]ne cannot justly or equitably lull his adversary into a false sense of security, and thereby cause his adversary to subject his claim to the bar of the statute of limitations, and then be permitted to plead the very delay caused by his course of conduct as a defense to the action when brought.” (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 383.)

Defendant also argues that the TAC is uncertain. Demurrers for uncertainty are strictly construed, because discovery can be used for clarification, and apply where defendants cannot reasonably determine what issues or claims are stated. (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616; Weil & Brown, Civ. Pro. Before Trial (The Rutter Group 2013) ¶ 7:85.) “Demurrer for uncertainty will be sustained only where the complaint is so bad that the defendant cannot reasonably respond; i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her.” (Weil & Brown, ¶ 7:85 [citing Khoury, 14 Cal.App.4th at p. 616].) Here, the TAC is not so uncertain that defendant cannot reasonably determine the issues to be admitted or denied. Any failure to allege certain facts may be remedied during discovery. The Court rejects defendant’s argument that the TAC is uncertain.

Defendant’s demurrer is OVERRULED. Defendant to answer within 10 days.