Opinion
D071966
07-20-2018
JAMES OCHI, Plaintiff and Appellant, v. ANTHEM BLUE CROSS et al., Defendants and Respondents.
Barta Law and Theresa J. Barta for Plaintiff and Appellant. Hogan Lovells, Michael M. Maddigan and Poopak Nourafchan for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2014-00033861-CT-FR-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Joel M. Pressman, Judge. Affirmed. Barta Law and Theresa J. Barta for Plaintiff and Appellant. Hogan Lovells, Michael M. Maddigan and Poopak Nourafchan for Defendants and Respondents.
Plaintiff James Ochi appeals the judgment entered in favor of defendants Blue Cross of California dba Anthem Blue Cross and Anthem Blue Cross Life and Health Insurance Company (collectively, Anthem), after the court granted Anthem's motion for summary judgment/adjudication in connection with plaintiff's fourth amended complaint (FAC). We affirm.
OVERVIEW
At all times relevant, plaintiff was a noncontracted, otherwise known as a "[nonparticipating]," provider of nonemergency medical services for Anthem members. Plaintiff thus had no contractual relationship with Anthem or its members.
Plaintiff's FAC alleged causes of action against Anthem for fraud, conversion, quantum meruit, and unlawful business practices (UCL) in violation of Business and Professions Code section 17200. Plaintiff's claims turned on the distinction between a "participating" and "[nonparticipating]" provider.
Anthem's moving papers in support of summary judgment provided the framework for understanding the parties' dispute. It noted a " 'participating' provider is a health care professional who contracts with a managed care organization such as Anthem to be part of a 'preferred provider organization,' or 'PPO.' [¶] A PPO is a network of medical doctors, hospitals, and other health care providers who have contracted to provide health care services to a managed care organization's members at agreed-upon rates. A health care professional who is not contracted to be part of a PPO network is known as a '[nonparticipating]' or '[noncontracted]' provider.
"PPO products offered by managed care organizations such as Anthem usually allow a member to receive health care services from either a participating or [nonparticipating] provider. A common difference in the benefits provided under PPO plans is that if a member receives services from a participating or 'in network' provider, then Anthem will make full payment for those services at the rate specified in the contract between Anthem and the provider and the member will not be responsible for any of the service's cost. By contrast, if a member chooses to receive services from a [nonparticipating] or 'out-of-network' provider, then Anthem will pay for those services as described in the member's coverage documents, with the member himself or herself being responsible to pay some or all of the [nonparticipating] provider's charges for his or her services.
"The document setting forth the coverage Anthem provides to its members is commonly referred to as the 'Evidence of Coverage' or 'EOC.' The EOC for each member sets forth Anthem's obligation, if any, to pay [nonparticipating] or out-of[-]network physicians for services rendered to that member." (Italics added.)
Plaintiff's causes of action were premised on claims records he attached as an exhibit to his FAC, which he alleged were evidence of Anthem's wrongful conduct. Those records in turn involved two separate EOC contracts governing Anthem's obligation to pay nonparticipating providers. "Under the first provision, contained in the EOC[']s for Anthem's Individual PPO coverage at issue, Anthem promise[d] to pay 'Covered Expenses' for services rendered by both participating and [nonparticipating] providers. The Individual PPO EOC further provide[d] that 'in no event' [would] the Covered Expenses for the services of a [nonparticipating] provider exceed the Negotiated Fee Rate. The 'Negotiated Fee Rate,' in turn, [was] defined as the Negotiated Fee Rate that Anthem would pay participating providers for rendering those same services. [Citation.] Thus, under the Individual PPO coverage at issue, Anthem's obligation to pay for services rendered by [nonparticipating] providers [was] expressly limited and [could] never exceed the amount it would pay a participating provider for those same services.
"Under the second type of language, contained in Anthem's Small Group PPO coverage at issue, Anthem promise[d] to pay [nonparticipating] doctors at the fee schedule associated with the member's plan. [Citation.] The Small Group PPO EOC [did] not contain any identification of or limitation on which of Anthem's various fee schedules [would] be associated with a particular Small Group Plan, as that varie[d] from group-to-group, depending on the type and level of benefits the small group want[ed] to offer. In some instances, the fee schedule associated with [nonpar] providers under a small group plan, as with the Individual PPO coverage at issue, [was] the same fee schedule used to pay participating providers. [Citation.]
"In other words, under both versions of the EOC language at issue, Anthem agree[d] to pay [nonparticipating] providers on its member's behalf the same amounts that it would pay participating providers for rendering the same services to its members. . . . [H]owever, . . . the EOC[']s [did] not limit the amounts that [nonparticipating] providers [could] charge or be paid for their services. Rather, under both versions of the EOC language at issue, Anthem members who choose to use an out-of-network doctor [were] responsible for paying the difference between the amount of an out-of-network doctor's charges and the amount of Anthem's payment to that doctor."
Each of plaintiff's claims in his FAC was based on the allegation that Anthem unlawfully represented in the "Explanation of Benefits" (EOB), which Anthem issued after plaintiff treated an Anthem member out-of-network, that it was paying plaintiff at the nonparticipating provider rates, when in fact it was secretly/fraudulently paying him at a lower rate, equivalent to its " ' "Blue Cross Network" Participating Provider rates' "; and, therefore, that plaintiff was entitled to damages equal to the difference between what he should have been paid as a nonparticipating provider, and what he was paid at the lower participating-provider rate.
Anthem in its motion for summary judgment/adjudication argued plaintiff's causes of action failed as a matter of law because Anthem paid plaintiff in a manner consistent with its obligations under the EOC's, including the Individual PPO and Small Group PPO covered policies that were the subject of the claims records plaintiff attached to his FAC. As such, Anthem argued that there was no evidence to show that it made any representation to plaintiff about the amount he would be paid before he provided services to Anthem members, or that plaintiff relied on any such representation, in connection with his fraud cause of action; that, because Anthem paid plaintiff in a manner consistent with the EOC's, Anthem had neither converted any money plaintiff claimed was owed, for purposes of his conversion claim, nor retained any benefit rightfully belonging to him, as he also alleged under a quantum meruit theory; and that Anthem therefore had not acted unlawfully, unfairly, or fraudulently in connection with his UCL cause of action.
After considering the parties' papers and argument of counsel, and after overruling plaintiff's evidentiary objections, the court granted summary judgment. In so doing, the court found the gravamen of plaintiff's FAC was the allegation that "Anthem misrepresented to him, specifically in the written statements on the [EOB's] provided to plaintiff that Anthem was paying plaintiff as a '[nonparticipating provider],' when in fact it was paying him at lower 'Blue Cross Network' Participating Provider Rates. (FAC [¶] 8[.])" The court found plaintiff's theory of relying on the EOB's to establish his causes of action insufficient as a matter of law because it was "undisputed that [the] EOB[']s [were] provided after plaintiff ha[d] provided the medical service to Anthem's members. Thus, no representation in the EOB['s] . . . could have caused plaintiff to provide services."
Plaintiff has not challenged on appeal the court's decision overruling his evidentiary objections.
However, the court did not stop there. It also found Anthem "acted in accordance with the terms of the [EOC's], which determine[d] Anthem's obligations to plaintiff for rendering out-of-network services to Anthem's members," inasmuch as "Anthem and plaintiff ha[d] no direct contractual relationship." The court recognized the Individual PPO policy stated that "Anthem will pay 'Covered Expenses' and 'in no event will covered expenses exceed . . . any charge for services of [a nonparticipating] physician in excess of the Negotiated Fee Rate,' " which as noted, was " 'the rate of payment that Anthem has negotiated with the Participating Provider.' "
The court found the Small Group PPO policy was similar, noting "the maximum amount that will be paid to [nonparticipating] provide[r]s is based on the applicable fee schedule for [nonparticipating] providers under the member's plan." As such, the court further found there was no "basis for fraud or unfair business practices. See Van Ness v. Blue Cross of California (2001) 87 Cal.App.4th 364 [(Van Ness)] [the language in the insurance contract regarding payment to nonparticipating provide[r]s did not support any reasonable expectation that Blue Cross would pay for any services by [nonparticipating] provide[r]s beyond what was limited by the insurance contract][.]"
Finally, the court found there was no basis for conversion or quantum meruit because "there [was] no right to payment of the difference between Anthem's payment [to plaintiff] and plaintiff's actual billed charges."
DISCUSSION
A. Guiding Principles
A trial court should grant summary judgment "if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Code Civ. Proc., § 437c, subd. (c).) A defendant may establish a right to summary judgment by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to the cause of action. (Id., subd. (p)(2); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar).)
"[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if [that party] carries his [or her] burden of production, he [or she] causes a shift, and the opposing party is then subjected to a burden of production of his [or her] own to make a prima facie showing of the existence of a triable issue of material fact." (Aguilar, supra, 25 Cal.4th at p. 850.)
"We review the trial court's decision de novo, considering all the evidence set forth in the moving and opposition papers except that to which objections were made and sustained." (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 65-66.) We view the evidence and the inferences reasonably drawn from the evidence "in the light most favorable to the opposing party." (Aguilar, supra, 25 Cal.4th at p. 843.)
"Although insurance contracts have special features, they nonetheless are contracts governed by the ordinary rules of contract interpretation. (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264.) . . . [Citation.] Where contract language is clear and explicit and does not lead to an absurd result, we ascertain this intent from the written provisions and go no further. (Civ. Code, §§ 1638, 1639; AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 822.) 'The words of a contract generally are to be understood in their ordinary and popular sense unless the parties use them in a technical sense or "a special meaning is given to them by usage. . . ." (Civ. Code, § 1644.)' (Helfand v. National Union Fire Ins. Co. (1992) 10 Cal.App.4th 869, 879.) Moreover, we read a contract as a whole in order to 'give effect to every part, if reasonably practicable, each clause helping to interpret the other.' (Civ. Code, § 1641.)" (Van Ness, supra, 87 Cal.App.4th at p. 372.)
B. Analysis
As noted, in the Individual PPO EOC at issue in this case, Anthem was contractually obligated to pay "Covered Expenses" for services rendered by both participating and nonparticipating providers. The EOC further provided, "In no event will Covered Expenses exceed . . . [any] charge for services of a [Nonparticipating] Physician in excess of the Negotiated Fee Rate," which rate, as further noted, was defined as the fee that Anthem would pay participating providers for rendering those same services. Thus, under this policy, Anthem's contractual obligation to pay for services rendered by nonparticipating providers such as plaintiff was expressly limited to the amount it paid a participating provider for the same services. (See Van Ness, supra, 87 Cal.App.4th at pp. 372, 375 [noting when contract language is clear and explicit, a reviewing court ascertains the parties' intent only from the written provisions, and further noting the unambiguous language in the insurance contract regarding payment to nonparticipating providers did not support any reasonable expectation of the insured that the defendant insurer would pay for any services by nonparticipating providers beyond what was limited by the insurance contract].)
Similarly, in the Small Group PPO policy, Anthem was contractually obligated to pay nonparticipating providers based on the fee schedule associated with its members' plans, which varied from group-to-group. The undisputed evidence in the record shows that with respect to the EOB claims records plaintiff attached to his FAC, the fee schedule associated with the Small Group PPO for nonparticipating providers was the same fee schedule used to pay participating providers. (See Van Ness, supra, 87 Cal.App.4th at pp. 372, 375.)
Plaintiff nonetheless contends Anthem had an obligation to pay him more than participating providers because he specifically chose not to be a participating provider. At deposition, plaintiff testified under penalty of perjury that he "felt" and "thought" he should be paid more than a participating provider. When asked what he based this expectation on, plaintiff replied he relied on the "materials that Anthem produced." When asked what "materials" he was referring to, plaintiff testified he did not have them with him and then stated he needed to speak with counsel. When asked if he could answer the question first, plaintiff stated, "I can't."
Plaintiff also testified he never reviewed an Anthem member's EOC either before or after he provided services to that member. As noted, however, those records unambiguously provided the fees Anthem was to pay plaintiff, which at least for the claims records he attached to the FAC, was the same amount it was paying its participating providers.
Plaintiff over objection further testified that his "practice" was to bill Anthem members for the difference between what he received from Anthem as a nonparticipating provider and the total amount he charged such members for his services; and that one of the reasons he became a nonparticipating provider was so that he could in fact recoup this difference from Anthem members who were willing to be treated out-of-network.
The record shows about a week after his deposition, plaintiff submitted a declaration in support of his opposition to defendants' motion for summary judgment/adjudication. Plaintiff therein made the following one-sentence statement with respect to this issue: "Anthem provided information to me, before and during 2012, that said Anthem pays its Participating (Network) Providers lower, negotiated fees." Although plaintiff lodged various exhibits in support of his declaration, he did not include or otherwise specify what "information" Anthem (allegedly) had provided him to support this statement and his belief that participating providers were paid lower fees than nonparticipating providers.
We note plaintiff's one-sentence statement in his declaration is devoid of any detail, lacks any supporting documentation and, thus, when viewed in light of his deposition testimony that he "felt" and "thought" he would be paid more out-of-network than in-network, is unparticularized and conjectural. On a motion for summary judgment, a lay witness's declaration must cite evidentiary facts, not legal conclusions or ultimate facts. (See Guthrey v. State of California (1998) 63 Cal.App.4th 1108, 1120; see also Hayman v. Block (1986) 176 Cal.App.3d 629, 639 [noting "[m]atters which would be excluded under the rules of evidence if proffered by a witness in a trial as hearsay, conclusions or impermissible opinions, must be disregarded in supporting affidavits"].)
We thus conclude plaintiff's generalized statement and unilateral assumptions regarding how he came to believe he should be paid more than a participating provider is wholly insufficient to create a triable issue of material fact that Anthem (allegedly) represented that, as a nonparticipating provider, he would always be paid more than a participating provider. (See Lineaweaver v. Plant Insulation Co. (1995) 31 Cal.App.4th 1409, 1421 [noting a plaintiff does not meet his burden of demonstrating a triable issue where his evidence merely provides "a dwindling stream of probabilities that narrow into conjecture"]; see also Van Ness, supra, 87 Cal.App.4th at p. 376 [finding an insured's fraud cause of action failed as a matter of law because the insured's "expectations of enhanced benefits did not stem from any representation of (the defendant insurer) to him, either orally or in the policy or promotional brochure, but rather from assumptions based on his wife's experience with another policy altogether"].)
Here, there is no dispute that each of plaintiff's causes of action in his FAC was based on the allegation that plaintiff, as a nonparticipating provider, was entitled to be paid more than a participating provider (although it was not clear how much more). However, the undisputed evidence showed that Anthem paid plaintiff in accordance with its contractual obligations to its members, expressed in the EOC's including the two at issue in this case (see Van Ness, supra, 87 Cal.App.4th at p. 372); that, because he was out-of-network, plaintiff billed, or could have billed if he had chosen to, Anthem members for the difference between the amount he received from Anthem and the total cost he billed a member for his services; and that his unilateral belief that he should be paid more as a nonparticipating provider than a participating provider for his services did not establish a triable issue of material fact regarding any alleged misrepresentation/wrongdoing on the part of Anthem (see id. at p. 375). We thus independently conclude the court properly granted summary judgment in this case.
Although our conclusion resolves this case in its entirety, we further note there are additional reasons each of plaintiff's causes of action fail as a matter of law.
As to his fraud claim, plaintiff alleged the EOB's attached to his FAC showed Anthem falsely misrepresented he was being paid as "a [nonparticipating] provider," when in fact he was being paid the same as a participating provider, as noted. However, the undisputed evidence in the record shows that plaintiff was paid as a nonproviding provider based on the unambiguous fee schedules in the contracts between Anthem and its members, which in some cases, meant he was paid the same as a participating provider. As such, plaintiff cannot meet his burden to establish a triable issue of material fact that Anthem (mis)represented he always would be paid more for providing services out-of-network than an in-network provider. (See West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 792 (West) [noting the elements of a fraud claim include among others a "false representation as to a past or existing material fact"].)
Plaintiff also could not meet his burden to make a prima facie showing of a triable issue of material fact that he relied on any alleged misrepresentation by Anthem, inasmuch as there is no dispute that the EOB's were issued by Anthem after plaintiff had provided out-of-network services to its members. (See West, supra, 214 Cal.App.4th at p. 792 [noting a fraud claim also requires a plaintiff to show justifiable reliance on the misrepresentation]; see also In re Tobacco II Cases (2009) 46 Cal.4th 298, 326 [recognizing that "reliance is the causal mechanism of fraud . . . [¶] [and] is proved by showing that the defendant's misrepresentation or nondisclosure was 'an immediate cause' of the plaintiff's injury-producing conduct"], citations omitted.)
To the extent plaintiff's fraud cause of action was based on concealment, as opposed to affirmative misrepresentation, we independently conclude he cannot make a prima facie showing of the existence of a triable issue of material fact that Anthem "conceal[ed] or suppress[ed] a material fact." (See Knox v. Dean (2012) 205 Cal.App.4th 417, 433 [noting the elements of fraud based on concealment includes a showing that the defendant "concealed or suppressed a material fact"].)
Anthem argues in its response brief that plaintiff's fraud cause of action, at least with respect to concealment, was not specifically pleaded. We note that plaintiff's FAC alleged only a single cause of action for fraud, and that his fraud by concealment "claim" appears to be based on the following one-sentence allegation in the FAC: "Anthem also deceived [plaintiff] when it concealed that the amounts set forth, and paid, per the 'Allowed Amounts' on the EOB[']s were the rates of a 'Blue Cross Network' Participating Provider." Because we conclude plaintiff did not proffer sufficient evidence to establish a triable issue showing Anthem concealed or suppressed a material fact, we need not decide whether plaintiff specifically pleaded this subspecies of fraud. (See Lazar v. Superior Court (1996) 12 Cal.4th 631, 645 [noting that fraud must be pleaded specifically, and further noting that when the fraud is alleged against a corporate defendant, a "plaintiff must 'allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written' "].)
That the claims records identified plaintiff as a nonparticipating provider—which in fact he was at all times relevant, does not, ipso facto, create a triable issue of fact to show Anthem suppressed the fact that plaintiff was not being paid more than, or the same as, an in-network provider when he provided services to Anthem members out-of-network, as the issue of payment was determined solely from the members' contracts. (Cf. Tenet Healthsystem Desert, Inc. v. Blue Cross of California (2016) 245 Cal.App.4th 821, 844-845 [finding trial court erred in sustaining a demurrer without leave to amend on the hospital plaintiff's fraud/concealment cause of action because hospital pleaded with sufficient particularity facts showing "that over a period of almost two months, representatives of [the defendant] repeatedly 'authorized' the medical services that Hospital provided to Patient X, despite [the defendant] possessing knowledge that his care would not be covered by the insurance policy because his injuries were sustained as a result of his driving with a blood-alcohol level in excess of the legal limit"].)
Plaintiff's conversion and quantum meruit causes of action fail as a matter of law for the same reason: there is insufficient admissible evidence to create a triable issue of material fact that Anthem underpaid plaintiff for services he provided to Anthem members out-of-network (see Los Angeles Federal Credit Union v. Madatyan (2012) 209 Cal.App.4th 1383, 1387 [noting the elements of a conversion claim include " 'the plaintiff's ownership or right to possession of the property' " and " 'the defendant's conversion by a wrongful act or disposition' " of such rights]); or that Anthem was unjustly enriched by retaining for itself benefits that plaintiff instead should have received. (See McBride v. Boughton (2004) 123 Cal.App.4th 379, 388, fn. 6 [noting quantum meruit applies " '[w]here one obtains a benefit which he (or she or it) may not justly retain' "].)
Finally, we also conclude plaintiff's UCL cause of action fails as a matter of law. To defeat summary judgment, plaintiff was required to produce sufficient evidence to show Anthem engaged in a business act that was fraudulent, unlawful, or unfair. (See Levine v. Blue Shield of California (2010) 189 Cal.App.4th 1117, 1136.) We note, however, that plaintiff's claim for violation of the UCL was based on the same allegations as his failed fraud, conversion, and quantum meruit causes of action and, thus, is derivative of those claims. Because his underlying causes of action fail as a matter of law, so too does his UCL claim. (See Price v. Starbucks Corp. (2011) 192 Cal.App.4th 1136, 1147 [concluding that, because a former employee's underlying causes of action to recover additional reporting time pay and additional wage payments for untimely payment upon discharge "fail, the derivative UCL . . . claim[] also fail[s]"].)
In any event, we further independently conclude plaintiff's UCL claim separately fails as a matter of law because the undisputed evidence shows he lacked standing to bring a private UCL action. (See Camp v. Jeffer, Mangels, Butler & Marmaro (1995) 35 Cal.App.4th 620, 629 [noting because a reviewing court independently reviews the result of the trial court's determination on questions of law, it is not bound by the trial court's stated reasons, as it reviews the court's ruling and not its rationale], superseded by statute on another ground as stated in Salas v. Sierra Chemical Co. (2014) 59 Cal.4th 407, 427.)
To have standing, a plaintiff must produce evidence to show not only that plaintiff suffered economic injury, but also that such injury was caused by the unfair business practice of defendants. (See Bus. & Prof. Code, § 17204; Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322-323 (Kwikset); see also Daro v. Superior Court (2007) 151 Cal.App.4th 1079, 1098 [noting a private person such as plaintiff "has standing to sue under the UCL only if that person has suffered injury and lost money or property 'as a result of such unfair competition' "].)
Here, as noted, the undisputed facts show that Anthem paid plaintiff in accordance with the fee schedules set forth in the EOC's, leaving plaintiff to recoup directly from Anthem members he treated out-of-network any additional amounts he billed for his services. As such, plaintiff cannot make a prima facie showing of a triable issue of material fact that he suffered an economic injury or that Anthem was the cause of such (alleged) injury. (See Kwikset, supra, 51 Cal.4th at pp. 322-323.)
DISPOSITION
The judgment in favor of defendants is affirmed. Defendants to recover their costs of appeal.
BENKE, J. WE CONCUR: McCONNELL, P. J. AARON, J.