Motion for Judgment on the Pleadings (Judge Ralph C. Hofer)


Case Number: BC533748 Hearing Date: June 17, 2016 Dept: NCD
TENTATIVE RULING

JUDGMENT ON THE PLEADINGS
[CCP ? 438]

Calendar: 10
Date: 6/17/16
Case No: BC 533748 Trial Date: October 24, 2016
Case Name: Sarkisyan, et al. v. Care 1st Health Plan, et al.

Moving Party: Defendant Care 1st Health Plan
Responding Party: Plaintiffs Justine Ismailyan, individually, Robert Ismailyan, Vick Ismailyan and Rubina Ismailyan

Relief Requested:
Judgment in favor of defendant Care 1st Health Plan as to plaintiffs Justine Ismailyan individually, Vick Ismailyan, Rubina Ismailyan and Robert Ismailyan on their causes of action for breach of implied covenant of good faith and fair dealing and fraud/false promise.

RULING:
Defendant Care 1st Health Plan?s Motion for Judgment on the Pleadings is GRANTED, without leave to amend. The TAC fails to allege facts supporting the first or second cause of action as brought by plaintiffs Justine Ismailyan, individually, Vick Ismailyan, Rubina Ismailyan and Robert Ismailyan. Instead, these claims appear to be causes of action properly asserted only by the decedent, through her successor in interest, as noted in previous rulings. The court cannot from the pleading or the opposition ascertain a basis for these claims being asserted by the individual non-decedent plaintiffs, or any facts which could be alleged to cure this obvious defect, and so grants the motion without leave to amend. The first two causes of action will proceed to trial only as asserted by decedent Maryam Sarkisyan, through her Successor in Interest, Justine Ismailyan, in her capacity as the estates?s representative.

CAUSES OF ACTION FROM THE Third Amended Complaint
1) Breach of the Implied Covenant of Good Faith and Fair Dealing v. Care 1st
2) Fraud/False Promise v. Care 1st
3) Fraud/Concealment v. Glendale Adventist *
4) Intentional Misrepresentation v. Care 1st **
5) Medical Malpractice/Wrongful Death v. Dr. Roberts, Dr. Janoian, Dr. Berger, All For Health, Glendale Adventist
6) Negligence/Wrongful Death v. Care 1st, EHS, Synermed

*Request for Dismissal of this cause of action filed and dismissal entered 9/3/15
** Demurrer sustained to this cause of action without leave to amend on September 29, 2015

FACTUAL AND PROCEDURAL BACKGROUND;
This action is brought on behalf of decedent Maryam Sarkisyan by her successor in interest Justine Ismailyan, the daughter of decedent, and by decedent?s spouse Robert Ismailyan and natural children Vick Ismailyan and Rubina Ismailyan. The complaint alleges that from before April of 2012 through September of 2012, decedent Sarkisyan was required to seek out all of her health care from defendant Noobar Janoian, M.D., and All for Health, Health For All (?Clinic?), who were in turn contractors of defendants Care 1st and Employee Health Systems Medical Group. The complaint alleges that defendants Dr. Janoian and Clinic were the ?Gatekeepers,? and primary care providers delegated by Care 1st and Employee Health Systems to make health care decisions about decedent, including whether she could see a specialist, and that Care 1st and Employee Health Systems knew that Dr. Janoian was not board certified in anything, but his practice was generally limited to preventative medicine.

During the six month time period, the complaint alleges that decedent repeatedly sought treatment for escalating problems with uncontrolled high blood pressure, shortness of breath and chest pain, but instead of referring plaintiff to a specialist, defendants Dr. Janoian and Clinic repeatedly prescribed antihypertensive drugs that were ineffective, and diagnosed decedent with ?mitral valve disease? without conducting proper examination, tests or studies. Decedent?s condition continued to worsen, and on October 31, 2012 she was taken to the emergency room at defendant Glendale Adventist Medical Center (?Hospital?). Decedent was diagnosed with severe aortic stenosis, admitted to the Hospital for evaluation, and was diagnosed by defendants Dr. Berger and Dr. Roberts with critical aortic stenosis and advised that she required urgent and immediate aortic valve replacement surgery and that she was at risk of sudden death at any time if she did not have this surgery. Decedent consented to the surgery, but Dr. Roberts and Dr. Berger would not consent to perform the surgery unless they obtained authorization from Care 1st, Employee Health Systems and defendant Synermed, which defendants did not give such authorization. The complaint alleges that withholding authorization and the failure of Hospital to advocate for decedent violated various regulations and the law. Decedent was then discharged home to her own care on November 2, 2012 with no provision for monitoring or schedule for the surgery, which the complaint alleges violated the law and regulations governing Medicare and Medical patients. Decedent died suddenly, approximately seven days after discharge.

Various defendants filed challenges to the original complaint, which were heard on January 16, 2015. Plaintiffs were permitted twenty days leave to amend.

A First Amended Complaint was filed on February 5, 2015. Two of the previous demurring defendant and one other defendant then filed demurrers and motions to strike in response to the First Amended Complaint.

Plaintiffs in response to the demurrers and motions to strike filed a motion for leave to file a Second Amended Complaint, which was granted on May 15, 2015.

Various defendants then challenged the sufficiency of the Second Amended Complaint. The demurrers and motions to strike were heard on July 10, 2015, and were sustained in part, overruled in part and granted and denied in part. Plaintiff was permitted leave to amend.

Defendants then challenged the sufficiency of the Third Amended Complaint, with various motions heard on September 29, 2015. The demurrer of the moving defendant, Care 1st was overruled as to the first, second and sixth causes of action and sustained as to the fourth cause of action without leave to amend.

ANALYSIS:
Procedural
The opposition argues that the motion should be denied on the ground that the court has already overruled a demurrer brought by the moving party on the ground that plaintiffs lacked standing to assert the first cause of action and had failed to sufficiently allege reliance in connection with the second cause of action. As noted above, the court on September 29, 2015 overruled a demurrer by this defendant to the first and second causes of action in the Third Amended Complaint. The file also shows that the court had overruled a demurrer by Care 1st to the first cause of action in the Second Amended Complaint on July 10, 2015. Under CCP section 438(g), with respect to a motion for judgment on the pleadings:
?The motion provided for in this section may be made even though either of the following conditions exist:
(1) The moving party has already demurred to the complaint or answer, as the case may be, on the same grounds as is the basis for the motion provided for in this section and the demurrer has been overruled, provided that there has been a material change in applicable case law or statute since the ruling on the demurrer.?
(Emphasis added).

Here, the motion does not even mention this issue, and none of the law cited appears to be new or recently changed.

The reply argues for the first time that the previous demurrers were not brought on the same grounds as the basis for the current motion. Defendant argues that as to the first cause of action for breach of implied covenant, defendant had previously made other arguments, and also argued that plaintiffs lacked standing because they were not decedent?s personal representative nor successor in interest, but that subsequently Justine Ismailyan submitted a declaration as decedent?s successor in interest. Defendant argues that the demurrer to the SAC was overruled on the ground that at least one plaintiff, Justine Ismailyan as decedent?s successor in interest, had properly alleged this cause of action. The minute order from July 10, 2015 noted that the pleading was somewhat confusing, as it did not specify which plaintiff or plaintiffs were bringing each cause of action, and stated, ?Here, since there is more than one plaintiff, this engenders a lack of clarity. However, the pleading states that at least one plaintiff, Justine Ismaelyan [sic] is suing as decedent?s Successor in Interest, and has filed the required Successor in Interest Declaration. [Para. 1]. Accordingly, at least one appropriate plaintiff is asserting this claim and the demurrer on this ground is overruled.? [See Reply, Ex. A].

The argument then is that this motion is brought only as to the other plaintiffs, the plaintiffs who are not decedent, so the lack of standing argument is actually a different ground. Similarly, the argument as to the second cause of action for fraud is that the previous argument had been that the fraud had not sufficiently stated reliance because there had been no allegations that decedent read the Care 1st Member Handbook or that her reliance on the statements resulted in her death. The court found such allegations are not necessary to state a claim by decedent. The argument now is that Care 1st had not previously argued that the other plaintiffs cannot support this claim because they were not members of Care 1st and no representations were made to them, and there is no reliance or causation alleged as to those parties.

This argument in the reply can be viewed as too little, too late, as there is no explanation why this was not clearly explained in the moving papers, resulting in court staff having to cull through multiple files and minute orders to determine why this pleading, which was long ago settled after multiple demurrers and motions to strike, is many months later being challenged anew. In addition, the motion appears to violate the spirit of the newly enacted statutes applicable to demurrers, which now provide:
?(b) A party demurring to a pleading that has been amended after a demurrer to an earlier version of the pleading was sustained shall not demur to any portion of the amended complaint, cross-complaint, or answer on grounds that could have been raised by demurrer to the earlier version of the complaint, cross-complaint, or answer.?
CCP ? 430.41(b).

Here, the arguments were available and could have been made by this defendant (Care 1st) in separate demurrers from the joint demurrer in response to any of the previous pleadings, but the reply argues that these grounds were not raised in those pleadings at that time. Nevertheless, the Court notes the substantial inefficiencies Care 1st generated by not raising these arguments initially.

CCP ? 438 establishes the procedures for moving for judgment on the pleadings, and provides, in pertinent part:
?(c)(1) The motion provided for in this section may only be made on one of the following
grounds:…
(B) If the moving party is a defendant, that either of the following conditions exist:
(i) The court has no jurisdiction of the subject of the cause of action alleged in the complaint
(ii) The complaint does not state facts sufficient to constitute a cause of action against that defendant.?
(emphasis added).

Here, the court has already found that the complaint states facts sufficient to constitute a cause of action against Care 1st as to at least one plaintiff, the decedent. The current motion as brought against the other plaintiffs at this late stage does not appear to be proper in that it has created additional litigation which could have been avoided by an earlier adjudication.

Therefore, the Court could deny the motion on the ground that the court has previously overruled demurrers to the same causes of action on the same basis, but in fact Care 1st presents the new argument in its Reply that it previously had never presented, namely: Care 1st is now advocating that the non-decedent plaintiffs are barred because they are not members (subscribers) of Care 1st, or that there is no contractual relationship between the non-decedent plaintiffs and Care 1st.

In other words, it appears that these exact arguments limited to the individual plaintiffs have not previously been asserted by Care 1st and the court is interested in ensuring the pleadings are properly joined before trial and summary judgment motions are considered. The Summary Judgment Motions of all three defendants are set for hearings in August and September 2016.

Substantive
CCP ? 438 establishes the procedures for moving for judgment on the pleadings, and provides, in pertinent part:
?(c)(1) The motion provided for in this section may only be made on one of the following
grounds:…
(B) If the moving party is a defendant, that either of the following conditions exist:
(i) The court has no jurisdiction of the subject of the cause of action alleged in the complaint
(ii) The complaint does not state facts sufficient to constitute a cause of action against that defendant.?

Subdivision (d) provides that ?the grounds for the motion provided for in this section shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.?

The motion may be granted with leave to file an amended complaint, or without leave to amend, in which case, judgment may be entered in favor of the moving defendant. CCP ? 438 (h).

First Cause of Action?Breach of Implied Covenant of Good Faith and Fair Dealing
It is recognized that ?Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.? Carma Developers (Cal.), Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 373, quoting Restatement 2nd Contracts, ?205.

It is recognized that the covenant is implied ?as a supplement to the express terms of the contractual covenants, to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenants) frustrates the other party?s rights to the benefits of the contract.? Racine & Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4th 1026, 1031-1032.

To establish breach of such a covenant/bad faith against an insurer defendant, plaintiff must plead the following elements:
?(1) Benefits due under the policy must have been withheld, and
(2) the reason for withholding benefits must have been unreasonable or without proper cause.?
Love v. Fire Insurance Exchange (1990) 221 Cal.App.3d 1136, 1151.

Defendant Care 1st argues that the pleading is insufficient as brought by the individual plaintiffs because there are no allegations that they were members of Care 1st, or that a contractual relationship exists between them, or that benefits due to them under the policy were withheld, with the result being that only the decedent?s successor in interest can state such a claim.

The TAC alleges that Maryam Sarkisyan was contractually promised coverage or was a an intended third party beneficiary of the contracts between Care 1st and Synermed. [Paras. 33-36]. It is alleged that specific benefits were withheld, including providing a prompt response to her request for care through a timely utilization review process, and benefits set forth in the Evidence of Coverage Member Handbook. [Paras. 38-43]. The duties owed and benefits withheld are alleged to have been owed to Sarkisyan, not to the other plaintiffs. The motion will be granted on the ground these plaintiffs have not clearly stated the requisite element that benefits due under a policy issued by Care 1st were withheld as to those individual plaintiffs.

The opposition does not address this argument, but argues that the court?s previous rulings overruling demurrers as to decedent were based on established law. There is no indication how the other plaintiffs can state such a claim based on these facts, and no explanation why plaintiff seeks to keep them in this cause of action which clearly applies only to decedent. These plaintiffs appear appropriately included in the wrongful death/negligence cause of action, which is not challenged here.

Although the opposition requests leave to amend, it is not explained how this obvious defect can be remedied on amendment. Unless at the hearing plaintiffs can articulate some reason why this claim is being pursued by these plaintiffs, the motion will be granted without leave to amend. Plaintiffs have not stated in their opposition any new facts plaintiffs could allege giving rise to causes of action for these individual, non-decedent plaintiffs.

Second Cause of Action?Fraud/False Promise
To state a cause of action for fraud, plaintiff must plead the following elements: A false representation, actual or implied, or concealment of a matter of fact material to the transaction which defendant had a duty to disclose, or defendant?s promise made without intention to perform; defendant?s knowledge of the falsity; defendant?s intent to deceive; plaintiff?s justifiable reliance thereon; and resulting damage to plaintiff. Pearson v. Norton (1964) 230 Cal.App.2d 1.

Defendant again argues that the individual plaintiffs have not sufficiently alleged that any representation was made to them or that they relied to their detriment on any promise. It does appear that the pleading alleges that defendant Care 1st ?owed a fiduciary duty to Maryam Sarkisyan,? not the other plaintiffs, and that promises and representations were made to its ?members,? and directly to Sarkisyan and that Sarkisyan relied on defendants and as a result died. [Paras. 47, 49, 52-56]. No mention is made of representations being made to the other individual non-decedent plaintiffs. The opposition does not address this argument, or explain why these plaintiffs should be included as parties to this cause of action or how on amendment a proper claim can be stated. The motion accordingly will be granted, unless plaintiffs attorney at the hearing can make a proffer of specific facts he would allege upon amendment giving rise to a cause of action for these individual plaintiffs.