Elevated Health, Inc vs. UHC of California

TENTATIVE RULINGS

Date: August 27, 2026

# Case Name Tentative

1. 30-2025-01507508 1. Case Management Conference 2. Demurrer to Amended Complaint Elevated Health, Inc vs. UHC of California Plaintiff Elevated Health, Inc.’s (“Plaintiff”) First Amended Complaint contains eight causes of action: (1) breach of implied contract, (2) goods and services rendered – quantum meruit, (3) statutory liability for violation of Senate Bill 510, The Cares Act and Insurance Code section 10110.7, (4) violation of California Business and Professions Code sections 17200 et seq., (5) open book account, (6) account stated, (7) unjust enrichment, and (8) declaratory relief. (ROA 29.)

Defendant UHC of California (“Defendant”) demurs to all eight causes of action.

“A complaint, with certain exceptions, need only contain a ‘statement of the facts constituting the cause of action, in ordinary and concise language’ (Code Civ. Proc., § 425.10, subd. (a)(1)) and will be upheld ‘ “so long as [it] gives notice of the issues sufficient to enable preparation of a defense.” ’ [Citation.]” (Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 292.)

“[T]o withstand a demurrer, a complaint must allege ultimate facts, not evidentiary facts or conclusions of law.’ [Citation.]” (Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 292.) “However, ‘ “[t]he fact that a party has alleged more than is required to justify his right does not obligate him to prove more than is essential, and the unnecessary allegations will be treated as surplusage unless the opposing party would be prejudiced.”” (Ibid.)

“No error or defect in a pleading is to be regarded unless it affects substantial rights.” (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 240.) “The primary function of a pleading is to give the other party notice so that it may prepare its case [Citation], and a defect in a pleading that otherwise properly notifies a party cannot be said to affect substantial rights.” (Ibid.)

1. First Cause of Action: Breach of Implied Contract Plaintiff’s first cause of action is for breach of implied contract. Defendant argues that this cause of action is barred by the applicable statute of limitations pursuant to Code of Civil Procedure section 339(1), is preempted by ERISA pursuant to 29 U.S.C. § 1144(a), and fails to state facts sufficient to constitute the cause of action.

a. Statute of Limitations Code of Civil Procedure section 339(1) states:

“Within two years: 1. An action upon a contract, obligation or liability not founded upon an instrument of writing, except as provided in Section 2725 of the Commercial Code or subdivision 2 of Section 337 of this code; or an action founded upon a contract, obligation or liability, evidenced by a certificate, or abstract or guaranty of title of real property, or by

a policy of title insurance; provided, that the cause of action upon a contract, obligation or liability evidenced by a certificate, or abstract or guaranty of title of real property or policy of title insurance shall not be deemed to have accrued until the discovery of the loss or damage suffered by the aggrieved party thereunder.” (Code Civ. Proc., § 339(1).)

Here, the Court finds that at least some of the wrongful actions alleged in support of the first cause of action for breach of implied contract are barred by the applicable statute of limitations. Still, Plaintiff has alleged contract that falls within the statute of limitations and therefore the Court will not sustain the demurrer to this cause of action based on the statute of limitations.

This analysis applies to the other causes of action for which this argument is raised as well.

b. ERISA 29 U.S.C. § 1144(a) states:

“Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title. This section shall take effect on January 1, 1975.” (29 U.S.C.A. § 1144.)

Here, the Court cannot determine whether 29 U.S.C. § 1144(a) bars all of Plaintiff’s claims at this time as Plaintiff alleges multiple options regarding the health plans at issue. For example, Defendant argues that because “UHCCA is ‘a group health plan and/or health insurance issuer offering group or individual health insurance coverage as referend in Section 6001(a) of the [FFCRA] and Section 3202(a) of the [CARES Act]’” then ERISA preempts Plaintiff’s claim. Even if the Court were to find in favor of Defendant on this argument, Plaintiff also alleges – and Defendant does not address – the option that the plans at issue were provided “as defined in Health and Safety Code §1342.2, subdivision (h)(6) and licensed by DMHC, or a disability provider under Insurance Code §106, et.seq., Insurance Code §10110.7(a) and licensed by CDI.”

For this reasons, the Demurrer does not dispose of this cause of action pursuant to its ERISA theory. Moreover, there are no allegations that expressly state that all of the coverage at issue in this case was provided by Defendant pursuant to Section 6001(a) of the Families First Coronavirus Response Act (“FFCRA”) and Section 3202(a) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).

Therefore, the Court finds this argument too attenuated to dispose of the cause of action at this stage in the litigation.

This analysis applies to the other causes of action for which this argument is raised as well.

c. Facts alleged in Support of the Cause of Action “[T]he complaint must indicate on its face whether the contract is written, oral, or implied by conduct.” (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 458–459.) Here, Plaintiff alleges an implied contract by conduct. In paragraph 25, Plaintiff alleges:

“Plaintiff alleges that by the conduct of the parties, a contract was created between Plaintiff and Defendants. Plaintiff’s and Defendants’ conduct was intentional, and both Plaintiff and Defendants knew, or had reason to know, that the other would interpret their conduct as an agreement to enter into a contract. The terms of the contract were that Plaintiff would provide Defendants’ insureds with COVID-19 diagnostic screening and testing and

Defendants would pay $125 for each COVID-19 diagnostic screening and testing, and if additional COVID-19 services were required Defendants would also pay for those services.” (First Amended Complaint, ¶ 25.)

“[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) “[T]he complaint must indicate on its face whether the contract is written, oral, or implied by conduct.” (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 458–459.)

Express and implied “contract[s] are identical in that they require a meeting of minds or an agreement [citation].” (Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1230; Allied Anesthesia Medical Group, Inc. v. Inland Empire Health Plan (2022) 80 Cal.App.5th 794, 808 [“the vital elements of a cause of action based on contract are mutual assent (usually accomplished through the medium of an offer and acceptance) and consideration.”].) “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.” (Ibid.; Allied Anesthesia Medical Group, Inc. v.

Inland Empire Health Plan (2022) 80 Cal.App.5th 794, 808 [“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.”].)

“An implied contract is one, the existence and terms of which are manifested by conduct.” (Nissanoff v. UnitedHealthcare Ins. Co. (2024) 108 Cal.App.5th Supp. 1 [citing Civ. Code, § 1621].) “Agreement may be shown by the acts and conduct of the parties, interpreted in the light of the subject matter and of the surrounding circumstances.” (Ibid.) “[P]laintiff must allege the substance of its relevant terms.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.) “This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.” (Ibid.)

Plaintiff must also “allege facts that demonstrate the parties, even if through their conduct and not their words, reached an actual agreement that defendant would pay the usual, customary and reasonable rate.” (Nissanoff v. UnitedHealthcare Ins. Co. (2024) 108 Cal.App.5th Supp. 1; Pacific Bay, supra, 12 Cal.App.5th at p. 216, 218 Cal.Rptr.3d 562 [a defendant's conduct of paying only part of what a plaintiff claims shows that the defendant never agreed to pay more].)

Here, the Court finds that Plaintiff has not sufficiently alleged a contractual relationship between Plaintiff and Defendant. The allegations lack the requisite information regarding the terms of the contract and Defendant’s consent thereto.

The demurrer to the first cause of action for breach of implied contract is SUSTAINED WITH LEAVE TO AMEND.

2. Second Cause of Action: Goods and Services Rendered – Quantum Meruit

Plaintiff’s second cause of action is for goods and services rendered – quantum meruit. Defendant argues that this cause of action is barred by the applicable statute of limitations pursuant to Code of Civil Procedure section 339(1), is preempted by ERISA pursuant to 29 U.S.C. § 1144(a), and fails to state facts sufficient to constitute the cause of action.

“[I]n order to recover under a quantum meruit theory, a plaintiff must establish both that he or she was acting pursuant to either an express or implied request for such services from the defendant and that the services rendered were intended to and did benefit the defendant.” (Day v. Alta Bates Medical Center (2002) 98 Cal.App.4th 243, 248; Nissanoff v. UnitedHealthcare Ins. Co. (2024) 108 Cal.App.5th Supp. 1.) “Quantum meruit refers to the well-established principle that ‘the law implies a promise to pay for services performed under circumstances disclosing that they were not gratuitously rendered.” (Miller v. Campbell, Warburton, Fitzsimmons, Smith, Mendel & Pastore (2008) 162 Cal.App.4th 1331, 1344.)

“One court summarized the rule as follows: ‘The theory of quasi-contractual recovery is that one party has accepted and retained a benefit with full appreciation of the facts, under circumstances making it inequitable for him to retain the benefit without payment of its reasonable value.” (Nissanoff v. UnitedHealthcare Ins. Co. (2024) 108 Cal.App.5th Supp. 1.) “[W]hen the services are rendered by the plaintiff to a third person, the courts have required that there be a specific request therefor from the defendant[.].” (Ibid.)

“ To recover in quantum meruit, a party need not prove the existence of a contract [citations], but it must show the circumstances were such that ‘the services were rendered under some understanding or expectation of both parties that compensation therefor was to be made.’ ” (Miller v. Campbell, Warburton, Fitzsimmons, Smith, Mendel & Pastore (2008) 162 Cal.App.4th 1331, 1344.)

The first element requires “that the plaintiff have bestowed some benefit on the defendant.” (Day v. Alta Bates Medical Center (2002) 98 Cal.App.4th 243, 249.) “The measure of recovery in quantum meruit is the reasonable value of the services rendered provided they were of direct benefit to the defendant.” (Ibid.)

The second element requires “either an explicit or implicit request for the services.” (Day v. Alta Bates Medical Center (2002) 98 Cal.App.4th 243, 249.) Put another way, “a recipient of services performed either requested or acquiesced in them ....” (Ibid.) “[C]ompensation for a party's performance should be paid by the person whose request induced the performance.” (Ibid.)

“Plaintiff cannot recover under a quantum meruit theory based on services rendered by plaintiff to a third party, because there was no “specific request therefor from the defendant[.]” (Nissanoff v. UnitedHealthcare Ins. Co. (2024) 108 Cal.App.5th Supp. 1 [citing Day, supra, 98 Cal.App.4th at p. 249, 119 Cal.Rptr.2d 606].) “Moreover, plaintiff cannot demonstrate that the services rendered ‘were intended to and did benefit the defendant.’” (Ibid.)

Here, there are no allegations regarding and express or implied request for services from the defendant and that the services rendered were intended to and did benefit the defendant. Moreover, caselaw expressly establishes that Plaintiff cannot recover under a quantum meruit theory based on services rendered by plaintiff to a third party.

The demurrer to the second cause of action is for goods and services rendered – quantum meruit is SUSTAINED WITHOUT LEAVE TO AMEND.

3. Third Cause of Action: Statutory Liability for Violation of Senate Bill 510, The Cares Act and Insurance Code section 10110.7

Plaintiff’s third cause of action is for statutory liability for violation of Senate Bill 510, The Cares Act, and Insurance Code section 10110.7.

Here, the Court finds that the allegations lack the requisite factual specificity and are too uncertain to survive a demurrer. For example, the allegations are uncertain because the Plaintiff does not provide which section of The Cares Act that Defendant allegedly violated. Likewise, it appears that SB 510 has since been amended and no longer deals with COVID and therefore Defendant has not clearly set forth its claim as to SB 510. In addition, Plaintiff has not alleged fact allegation as to how Defendant violates these statutes. The cause of action is generally uncertain and lacks factual allegations support its legal conclusions.

The demurrer to the third cause of action for Statutory Liability for Violation of Senate Bill 510, The Cares Act and Insurance Code section 10110.7 is SUSTAINED WITH LEAVE TO AMEND.

4. Fourth Cause of Action: Violation of California Business and Professions Code sections 17200 et seq.

Plaintiff’s fourth cause of action is for violation of California Business and Professions Code sections 17200 et seq.

“Business and Professions Code section 17200 et seq. prohibits unfair competition, including unlawful, unfair, and fraudulent business acts.” (Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1247.) “The UCL covers a wide range of conduct.” (Ibid.) “It embraces anything that can properly be called a business practice and that at the same time is forbidden by law.” (Ibid.)

“An act can be alleged to violate any or all of the three prongs of the UCL—unlawful, unfair, or fraudulent.” (Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1248.) “However, the remedies available for violation of the UCL are limited.” (Ibid.) “Only equitable remedies can be obtained; damages cannot be recovered.” (Ibid.)

Here, Plaintiff alleges that Defendant violated the UCL because they have: (1) engaged in unfair and unlawful business practices that are designed to destroy and subvert their responsibility to properly pay for COVID-19 testing and services, FAC, ¶ 41, (2) engaged in unlawful business practices by, including without limitation, refusing to comply with California Health & Safety Code §1342.2, California Insurance Code §10110.7, and the CARES Act payment provisions, FAC, ¶ 42, (3) engaged in unfair business practices by refusing to properly pay Plaintiff for critical COVID-19 testing and services and in turn retaining monies intended to provide medical services for their members, in a manner that is unethical and contrary to public policy, FAC, ¶ 43, and (4) implemented practices and procedures that resulted in Defendants’ refusal to pay or underpay Plaintiff for COVID-19 testing and services, in violation of the FFCRA, the CARES Act, the California Health & Safety Code, and the California Insurance Code, FAC, ¶ 45.

The Complaint does not, however, allege that these statutes required defendants to pay a specific price for the COVID testing performed by providers like itself. Moreover, Plaintiff has not alleged how Defendant violates these statutes. The cause of action generally uncertain and lack factual allegations support its legal conclusions.

The Demurrer to the fourth cause of action is for violation of California Business and Professions Code sections 17200 et seq. is SUSTAINED WITH LEAVE TO AMEND.

5. Fifth Cause of Action: Open Book Account

Plaintiff’s fifth cause of action is for open book account.

The elements of an open book account cause of action are: (1) plaintiff and defendant had financial transactions, (2) plaintiff kept an account of the debits and credits involved in the transactions, (3) defendant owes plaintiff money on the account, and (4) the amount of money that defendant owes plaintiff. (State Compensation Insurance Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal.App.5th 422, 449; see also Code of Civ. Proc., § 334, subd. (b).)

“A book account is a written record of the credits and debts between parties to a contract/in a fiduciary relationship.” (CACI 372.) “The contract may be oral, in writing, or implied by the parties’ words and conduct.” (CACI 372.) “A book account is ‘open’ if entries can be added to it from time to time.” (Ibid.)

Here, the Court finds that Plaintiff is not entitled to an open book account from Defendant because Plaintiff has not alleged the requisite contractual or fiduciary relationship that would entitled it to an open book account. Moreover,

The demurrer to the fifth cause of action for open book account is SUSTAINED WITH LEAVE TO AMEND.

6. Sixth Cause of Action: Account Stated

Plaintiff’s sixth cause of action is for account stated.

“An account stated is ‘an agreement, based on prior transactions between the parties, that the items of an account are true and that the balance struck is due and owing.’” (Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958, 968 [citing Maggio, Inc. v. Neal (1987) 196 Cal.App.3d 745, 752].) “[A]n element essential to render the account stated is that it receive the assent of both parties, but the assent of the party sought to be charged may be implied from his conduct.” (Ibid.)

“When an account stated is ‘assented to, either expressly or impliedly, it becomes a new contract.’ ” (Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958, 968 [citing Gardner v. Watson (1915) 170 Cal. 570, 574].) “The theory of an account stated is that it becomes a contract between the parties for payment of the amount computed to be due without proof of the specific items included therein.” (Id.) “Accordingly, an action on an account stated is not based on the parties’ original transactions, but on the new contract under which the parties have agreed to the balance due.” (Id.)

Here, the Court finds that Plaintiff has not alleged the requisite contractual relationship or agreement/meeting of the minds with Defendant in order to assert an account stated cause of action.

The Demurrer to the sixth cause of action is SUSTAINED WITH LEAVE TO AMEND.

7. Seventh Cause of Action: Unjust Enrichment

Plaintiff’s seventh cause of action is for unjust enrichment.

“There is no cause of action in California labeled ‘unjust enrichment.’ ” (City of Oakland v. Oakland Raiders (2022) 83 Cal.App.5th 458, 477.)

“Common law principles of restitution require a party to return a benefit when the retention of such benefit would unjustly enrich the recipient; a typical cause of action involving such remedy is ‘quasi-contract.’ ” (City of Oakland v. Oakland Raiders (2022) 83 Cal.App.5th 458, 477-478.)

“The equitable doctrine of unjust enrichment “is based on the idea that ‘one person should not be permitted unjustly to enrich himself at the expense of another, but should be required to make restitution of or for property or benefits received, retained, or appropriated, where it is just and equitable that such restitution be made, and where such action involves no violation or frustration of law or opposition to public policy, either directly or indirectly.’ ” (City of Oakland v. Oakland Raiders (2022) 83 Cal.App.5th 458, 478.)

“Typically, the defendant’s benefit and the plaintiff's loss are the same, and restitution requires the defendant to restore the plaintiff to his or her original position.” (City of Oakland v. Oakland Raiders (2022) 83 Cal.App.5th 458, 478.) “To confer a benefit,” however, “it is not essential that money be paid directly to the recipient by the party seeking restitution.” (Ibid. [citations omitted].) “When a person has received a benefit from another, he or she is required to make restitution only if the circumstances of its receipt or retention are such that, as between the two persons, it is unjust for him [or her] to retain it.” (Ibid. [citations and quotations omitted].)

Here, Plaintiff expressly alleges that the benefit conferred was to Defendant’s members. In paragraph 61 of the FAC, Plaintiff alleges:

“Defendants knew, understood, and accepted that Plaintiff was undertaking to perform beneficial COVID-19 testing and services for their members and that such testing and services were not free.” (FAC, ¶ 61.)

As such, the Court finds that Plaintiff has not alleged the equitable remedy of unjust enrichment because Plaintiff as not alleged a benefit that Defendant received from Plaintiff.

The demurrer to the seventh cause of action for unjust enrichment is SUSTAINED WITH LEAVE TO AMEND.

8. Eighth Cause of Action: Declaratory Relief

Plaintiff’s eighth cause of action is for declaratory relief. For the reasons discussed above, the demurrer is SUSTAINED WITH LEAVE TO AMEND as to the eighth cause of action is for declaratory relief.

Leave to amend is within 20 days of this order.

Defendant to give notice.

2. 30-2025-01494594 1. Case Management Conference 2. Demurrer to Amended Complaint Ahrens vs. Innovative Health Management Defendants, Innovative Health Management Partners, LLC; Orthopedic Institute of Newport Beach, Partners, LLC Limited Partnership; Orthopedic Institute of Newport Beach General Partnership, PC; and Orthopedic Institute of Newport Beach Holding Company, PC (collectively, “Defendants”) move