Rume Medical Group, Inc. v. Aetna Health of California, Inc.

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This cause of action fails to allege sufficient facts. (Code Civ. Proc., § 430.10, subd. (e).) There is no private right of action for violation of 18 U.S.C. § 1701. (Woods v. McGuire (6th Cir. 1992) 954 F.2d 388, 391.)

Limited leave to amend is granted, to allege some other common law tort, if available. (See Opposition at 2:24-3:5.)

The court observes that the facts alleged could potentially support claims for some other common law tort. (See Quelimane Co., Inc. v. Stewart Title Guar. Co. (1998) 19 Cal.4th 26, 38-39 [a complaint is good against a general demurrer if it states a cause of action on any theory].) However, as currently alleged, there are insufficient facts pled to show the nature of the tort, and how plaintiff was damaged by defendant’s conduct.

Plaintiff shall file a First Amended Complaint, if at all, within 15 days.

The case management conference is continued to February 1, 2027 at 9:00 a.m. in Department C28.

Moving party shall give notice of this ruling.

55. Rume Defendants Aetna Health of California, Inc.; Aetna Life Medical Insurance Co.; Aetna Better Health of California, Inc.; Aetna Group, Inc. Health and Life Insurance Co.’s demurrer to Plaintiff Rume v. Aetna Medical Group, Inc.’s Complaint is SUSTAINED WITHOUT Health of LEAVE TO AMEND as to Cause of Action 9 and otherwise California, OVERRULED. (Code Civ. Proc. §430.10, subd. (e).) Inc. Defendants shall file an Answer to the Complaint within 20 2026- days of this ruling. 01550393 General Legal Standard on Demurrer

In ruling on a demurrer, a court must accept as true all allegations of fact contained in the complaint. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations. (Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404-05.)

Questions of fact cannot be decided on demurrer. (Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556.) Because a demurrer tests only the sufficiency of the complaint, a court will not consider facts that have not been alleged in the complaint unless they may be reasonably inferred from the matters alleged or are proper subjects of

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judicial notice. (Hall v. Great W. Bank (1991) 231 Cal.App.3d 713, 718 fn.7.)

COA 9: Violation of Health & Saf. Code §1342.2 and Ins. Code §10110.7

Defendants argue this cause of action fails because there is no private right to action to enforce violations of H&C Code §1342.2, nor Ins. Code §10110.7.

Defendants are correct. H&S Code §1342.2 is part of the Knox-Keene Healthcare Services Plan Act, which expressly authorizes The California Department of Managed Health Care to enforce its provisions and does not include an express private right of action. (See Blue Cross of California, Inc. v. Superior Court (2009) 180 Cal.App.4th 1237, 1250.)

With respect to Ins. Code §10110.7, “neither the insurance code nor regulations adopted under its authority provide a private right of action.” (Rattan v. United Services Automobile Association (2000) 84 Cal.App.4th 715, 724.)

Since there is no basis for a cause of action that directly enforces violations of these provisions, the demurrer is SUSTAINED. The court finds that leave to amend would be futile, as there is clearly no private right of action contemplated to enforce the Knox-Keene Act or the Insurance Code. Accordingly, leave to amend is denied.

COA 1: Violations of Bus. & Prof. Code §17200

Bus. & Prof. Code §17200 prohibits “unfair competition” which means “any unlawful, unfair or fraudulent business act or practice”. Bus. & Prof. Code §17200, et seq. (“UCL”). “A claim made under section 17200 is not confined to anticompetitive business practices, but is also directed toward the public's right to protection from fraud, deceit, and unlawful conduct. Thus, California courts have consistently interpreted the language of section 17200 broadly. [S]ection 17200 definition is disjunctive, the statute is violated where a defendant's act or practice is unlawful, unfair, fraudulent or in violation of section 17200.” (Wilson v.

Hynek (2012) 207 Cal.App.4th 999, 1007) (internal citations and quotation marks omitted).) Additionally, a cause of action under the UCL must be pleaded with reasonable particularity, “which is a more lenient pleading standard than is applied to common law fraud claims.” (See Gutierrez v. Carmax Auto Superstores California.)

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To state a cause of action for violation of Bus. & Prof. Code §17200, a private party plaintiff must allege (1) an injury in fact; (2) a loss of money and/or property; (3) as a result of; (4) an unfair, unlawful or fraudulent business practice. (See Kwikset Corp. v. Superior Court (51 Cal.4th 310, 322-327.)

Here, the Complaint sufficiently alleges these elements. Plaintiffs allege they have suffered an injury in fact because they have expended resources providing Defendants’ members with COVID-19 testing and have lost money and/or property when Defendants refused to reimburse Plaintiff the reasonable value of these services. Plaintiff has alleged that the failure to reimburse is the result of an unlawful business practice – the failure to comply with the requirements of Health & Saf Code §1342.2 and Ins. Code §10110.7.

Defendant argues that this claim fails as a matter of law because Plaintiff has no remedy under the UCL. Defendants argue that the monetary relief sought here is not restitutionary because the money Defendants received in the form of premium payments came from their subscribers rather than from Plaintiff. Thus, Defendants reason that the prohibition on nonrestitutionary disgorgement under the UCL stated in Korea Supply Company v. Lockheed Martin Corporation (2003) 29 Cal.4th 1134, 1152.

But the relief sought here is not a nonrestitutionary disgorgement of profits, such as what was before the court in Korea Supply. Rather, the disgorgement here would be purely restitutionary, as the disgorgement would only be the money obtained as a result of the unfair business practice of unlawfully withholding reimbursement of the reasonable value of the services Plaintiff provided to Defendants’ subscribers. A remedy providing that a healthcare provider be reimbursed the reasonable value for services provided to a subscriber has been recognized as restitution within the meaning of the UCL. (See Long Beach Memorial v.

Kaiser Foundation Health Plan, Inc. (2021) 71 Cal.App.5th 323, 344 [holding that it was error for court to dismiss a UCL restitution claim for reimbursement under Knox-Keene, but finding the error harmless because the same relief could be obtained through a quantum meruit claim that was not summarily adjudicated].)

Accordingly, the demurrer to this cause of action is OVERRULED. In light of the findings above regarding restitution, the court need not reach Defendants’ arguments concerning the availability of injunctive relief for purposes of assessing the Complaint against general demurrer.

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COA 6: IMPLIED IN LAW CONTRACT

Defendants argue that a demurrer lies as to this cause of action because this cause of action seeks to directly enforce Health and Safety Code §1342.2 and Insurance Code §10110.7, which do not provide a private right of action.

“The existence of a contract implied in law under a quantum valebant count depends upon whether the defendant ‘has used for its benefit and property of (plaintiff) in such manner and under such circumstances that the law will impose a duty of compensation therefor.’” (Weitzenkorn v. Lesser (1953) 40 Cal.2d 778, 794.)

Even if there is no private right to directly enforce Health and Safety Code §1342.2 and Insurance Code §10110.7, these provisions do not preclude a private action based upon their violation under another statutory (UCL) or common law theory. (See, e.g. Bell v. Blue Cross of California (2005) 131 Cal.App.4th 211 [finding that UCL unlawful and quantum meruit claims could be based upon violation of Knox-Keene Healthcare Services Plan Act notwithstanding the lack of private right to enforce violation of the same]; see also Health & Saf Code §1371.25 [“Nothing in this section shall preclude a finding of liability on the part of a plan, any entity contracting with a plan, or a provider, based on the doctrines of equitable indemnity, comparative negligence, contribution, or other statutory or common law bases for liability.”].)

Here, the Complaint asserts Defendants had an implied contractual duty to reimburse Plaintiff for the COVID-19 testing provided to Defendants’ subscribers arises out of the duties created under Health & Saf Code §1342.2 and Ins. Code §10110.7. Defendants have used Plaintiff’s services for their benefit by permitting their subscribers to obtain healthcare services from Plaintiff and the law has established an explicit duty for Defendants to reimburse Plaintiff for the reasonable value of such services.

Accordingly, the demurrer to this cause of action is OVERRULED.

COA 7: IMPLIED IN FACT CONTRACT

“As to the basic elements, there is no difference between an express and implied contract. While an express contract is defined as one, the terms of which are stated in words (Civ. Code, § 1620), an implied contract is an agreement, the existence and terms of which are manifested by conduct (Civ. Code, § 1621). ... [B]oth types of contracts are identical in

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that they require a meeting of minds or an agreement [citation]. Thus, it is evident that both the express contract and contract implied in fact are founded upon an ascertained agreement or, in other words, are consensual in nature, the substantial difference being in the mode of proof by which they are established.” (Allied Anesthesia Medical Group, Inc. v. Inland Empire Health Plan (2022) 80 Cal.App.5th 794, 815.)

Here, Plaitniff alleges that a contractual relationship had been formed through conduct. Plaintiff provided services to Defendants’ subscribers with the expectation that Defendants would reimburse Plaintiff for the reasonable value of the services. Defendants permitted their subscribers to obtain services from Plaintiff. Defendants agreed to reimburse Plaintiff for some, but not all, of the services rendered. This is sufficient for the purposes of a challenge to the pleadings. Accordingly, the demurrer to this cause of action is OVERRULED.

COA 8: QUANTUM MERUIT

The elements of a cause of action for quantum meruit are: (1) the plaintiff acted pursuant to an express or implied request for services by the defendant, and (2) the services rendered benefited the defendant. (Day v. Alta Bates Medical Center (2002) 98 Cal.App.4th 243, 248.)

Quantum meruit claims by a healthcare provider against an insurer for services rendered to an insurer’s subscribers are recognized in California. (See, e.g. Long Beach Memorial Medical Center v. Kaiser Foundation Health Plan, Inc. (2021) 71 Cal.App.5th 323, 335 [“If a hospital or other medical provider believes that the amount of reimbursement it has received from a health plan is below the “reasonable and customary value” of the emergency services it has provided, the hospital or provider may assert a quantum meruit claim against the plan to recover the shortfall.”].)

The Complaint sufficiently alleges a quantum meruit cause of action. The facts here align well with the facts of Long Beach Memorial. Accordingly, the demurrer to this cause of action is OVERRULED.

COA 2-5: Common Counts

“A common count claim broadly applies wherever one person has received money which belongs to another, and which in equity and good conscience, or in other words, in justice and

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right, should be returned” (Rubinstein v. Fakheri (2020) 49 Cal.App.4th 797, 809-811.)

Common counts are “a simplified form of pleading normally used to aver the existence of various forms of monetary indebtedness...” (Korchemny v. Piterman (2021) 68 Cal.App.5th 1032, 1047.)

All that must be alleged to state a cause of action for a common count is (1) statement of indebtedness; (2) consideration (services rendered, money received, etc.); and (3) nonpayment. (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.) Common Counts are generally not subject to demurrer. (Id.)

However, “[w]hen a common count is used as an alternative way of seeking the same recovery demanded in a specific cause of action, and is based on the same facts, the common count is demurrable if the cause of action is demurrable.” (Korchemny, supra. 68 Cal.App.5th at 1048.)

In sum, common counts may be pleaded entirely with legal conclusions, and thus are not appropriately challenged on demurrer except to the extent the common counts are derivative of an underlying claim that is found to be legally insufficient. Here, since the demurrer is OVERRULED as to the quantum meruit, implied contract, and UCL claims, the demurrer must also be OVERRULED as to each of the common counts.

The case management conference is continued to February 1, 2027 at 9:00 a.m. in Department C28.

Plaintiff shall provide notice of this ruling.

56. Gallagher- Defendant Superior Loan Servicing, LLC’s (“SLS”) Demurrer to Renta v. the Complaint is SUSTAINED. Superior Defendant’s Request for Judicial Notice is GRANTED as to Loan Exhibits 1-4. (Evid. Code § 452(c).) Servicing, LLC First Cause of Action – Violation of HBOR 2026- Plaintiffs allege violations of Sections 2923.5 and 2923.55 01569564 alleging SLS: (1) failed to comply with contact Plaintiffs in a “meaningful or legally complaint manner” to assess their financial circumstances; (2) failed to provide accurate information regarding how to make payments; and (3) because of the lack of meaningful contact prior to the notice of