Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County. Malcom H. Mackey, Judge. Los Angeles County Super. Ct. No. BC357266.
Daniel U.Smith; Bourhis & Mann, Ray Bourhis and Lawrence Mann for Plaintiff and Appellant.
Barger & Wolen, Robert J. McKennon and Scott E. Calvert for Defendants and Respondents UnumProvident Corporation and Unum Life Insurance Company of America.
Ryan, Datomi & Mosely, Richard J. Ryan and Dawn Cushman for Defendant and Respondent Norman J. Kachuck.
CHAVEZ, J.
Laura Torrance-Nesbitt (appellant) appeals from a judgment entered after the trial court sustained a demurrer without leave to amend in favor of UnumProvident Corporation (UnumProvident), Unum Life Insurance Company of America (Unum Life), and Norman J. Kachuck, M.D. (Kachuck). Appellant’s sole contention on appeal is that the trial court erred in determining that English law, rather than California law, applies to all causes of action arising from the allegations of appellant’s complaint. We affirm.
UnumProvident and Unum Life will be collectively referred to as “the Unum respondents.” UnumProvident, Unum Life, and Kachuck will be collectively referred to as “respondents.” The relevant Unum entities are described in appellant’s complaint as follows: UnumProvident, the parent corporation of Unum Limited and Unum Life, is a corporation organized and existing under the laws of the State of Delaware and headquartered in Tennessee; Unum Limited is a subsidiary of UnumProvident organized and existing under the laws of Surrey, England; and Unum Life is a subsidiary of UnumProvident organized and existing under the laws of the State of Delaware and headquartered in Maine.
FACTUAL BACKGROUND
The following facts are taken from the allegations of appellant’s original complaint. For the purposes of this appeal, we assume the truth of these factual allegations. Because the appeal arises from the trial court’s determination that English law applies, we also include facts considered by the trial court in granting the Unum respondents’ motion to apply English law.
This appeal was taken after the trial court sustained a demurrer to appellant’s second amended complaint (SAC). However, the parties have referred to allegations in appellant’s original complaint in describing the factual background of this matter. Appellant explains that “[t]hese allegations did not vary in [appellant’s] later complaints.”
1. The Disability Insurance Policy
In February 2001, appellant’s employer, Merit International, which subsequently changed its name to Business Agility, obtained a Group Long Term Disability Insurance Policy (policy) from Unum Limited. Merit International/Business Agility is an English corporation domiciled in England with its principal place of business in England. The policy, which was attached to the complaint, describes Unum Limited as a company “incorporated under the laws of England and Wales, with its registered and head office at Milton Court, Dorking, Surrey, RH4 3LZ.” The sole policyholder is “Merit International.” Section 10.8 of the policy specifies that “The policy is to be construed and governed in accordance with the Law of England and Wales.” The policy, which constituted a contract between Unum Limited and Merit International/Business Agility, also specifies that “no term or provision of this policy may be enforced in any circumstances by any third party.”
Neither Merit International/Business Agility nor Unum Limited is a party to this lawsuit.
This page of the policy was not attached to appellant’s original complaint. However, in support of their motion to apply English law, the Unum respondents provided the trial court with a copy of the relevant page.
2. Appellant’s Disability
Appellant is a citizen of the United Kingdom who was, at all relevant times, employed as Merit International/Business Agility’s president of North America. In February 2003, appellant became a resident of Los Angeles, California.
In May 2003, appellant began experiencing pain and numbness in both legs. Dr. Bennett Frank performed an MRI, which showed three lesions on appellant’s brain and one lesion on her spine. Dr. Frank concluded that appellant was suffering early signs of Multiple Sclerosis (MS). In June 2003, appellant attempted to return to work but was unable to do so. She suffered daily numbness in her legs, arms and stomach, severe pain above her left eye and on various parts of her head. She also began to have sweat attacks, exhaustion, and decreased memory.
In September 2003, Dr. Frank officially diagnosed appellant with MS, after another MRI scan showed additional lesions. Appellant was instructed to limit her exercise and was prescribed Beta Interferon to slow the progression of the MS.
In November 2003, a second doctor, Dr. Paul Moluneux in Cambridge, confirmed the diagnosis of MS. Despite medical treatment, appellant could not return to her occupation. In December 2003, she resigned and applied for benefits under the policy. In December 2003, appellant started to receive benefits under the policy.
3. The Medical Exam
In connection with her claim for benefits, appellant submitted to a medical examination with Kachuck at the USC Keck School of Medicine in Los Angeles. The examination took place in February 2006.
Appellant alleges that the Unum respondents retained the services of Kachuck knowing that Kachuck would write a report disavowing appellant’s disability; that the Unum respondents retained the services of defendant Kachuck with the agreement that he would write a false, nonobjective medical report to justify denial of appellant’s disability benefits; that Kachuck submitted his report knowing that the Unum respondents would rely on it as a pretext for denying appellant’s incapacity benefits; and that, relying on Kachuck’s report, on or about April 12, 2006, UnumProvident terminated appellant’s disability payments.
Although Unum Limited was the party which had contracted with appellant’s employer to pay disability benefits, appellant alleges that UnumProvident, the parent corporation of Unum Life and Unum Limited, acted as Unum Limited’s claims administrator in making the decision to deny appellant’s claim. Appellant further alleged that Unum Life arranged the biased medical examination.
PROCEDURAL HISTORY
1. The Original Complaint and Respondents’ Demurrer
On August 18, 2006, appellant filed her original verified complaint for damages. The named defendants were UnumProvident, Unum Life, Unum Limited, and Kachuck. The complaint alleged: (1) breach of contract against Unum Limited and UnumProvident; (2) breach of the covenant of good faith and fair dealing against UnumProvident, Unum Limited, and Unum Life; (3) intentional misrepresentation against UnumProvident and Unum Limited; (4) conspiracy to defraud against all defendants; and (5) intentional infliction of emotional distress against all defendants.
The Unum respondents filed a demurrer to appellant’s original complaint. They argued that under either English law or California law, appellant had no standing to enforce the contract terms or recover related tort damages for the alleged withholding of benefits because she was not a party to the policy. Kachuck filed a notice of joinder.
On December 14, 2006, appellant served a Doe amendment adding Business Agility as a Doe defendant. Appellant also filed a first amended complaint (FAC). Respondents’ demurrer to the original complaint became moot.
2. Unum Limited’s Motion to Quash
In response to the original complaint, Unum Limited, an insurer domiciled in England and incorporated under the laws of England and Wales, filed a motion to quash service for lack of personal jurisdiction. In connection with the motion to quash, Unum Limited filed declarations which set forth evidence that Unum Limited transacts business under the laws of England and Wales and does not solicit, advertise, or do business in the United States. All business of Unum Limited is conducted in the United Kingdom. Unum Limited also provided evidence that it is a separate legal entity from UnumProvident, and any reference to UnumProvident in correspondence with Business Agility did not refer to the separate legal entity but was used as a trade name of Unum Limited.
On January 23, 2007, the trial court granted Unum Limited’s motion to quash and dismissed Unum Limited from the case. Appellant does not appeal this ruling.
3. Motion to Apply English Law
Concurrently with the filing of Unum Limited’s motion to quash and the demurrer to appellant’s original complaint, the Unum respondents filed a motion asking the trial court to apply English law. Kachuck filed a notice of joinder.
The Unum defendants provided evidence that the policy was issued by Unum Limited, a company “incorporated under the laws of England and Wales, with its registered and head office at Milton Court, Dorking, Surrey, RH4 3LZ.” Merit International/Business Agility was the sole “policyholder” identified within the policy and was also an English corporation domiciled in England, with its principal place of business in England. The policy was issued in England, negotiated in England, signed in England, and under the express terms of the policy, all premium payments were to be made by Merit International/Business Agility to Unum Limited at its head office in England, payable “in pounds sterling” or the lawful currency of the United Kingdom. Merit International/Business Agility’s claim related to appellant was handled almost exclusively by employees of Unum Limited in the United Kingdom. The single exception related to the use of employees from UnumProvident who assisted Unum Limited in obtaining the medical examination of appellant in Los Angeles. In addition, the policy contained a choice of law provision stating that “The policy is to be construed and governed in accordance with the Law of England and Wales.”
Appellant opposed the motion. She argued that the parties who arranged the medical examination were a United States corporation and its wholly owned subsidiary, that Kachuck was domiciled in California, and that the termination of benefits was based on an exam which occurred in California. In support of her opposition, appellant submitted evidence, including a letter dated November 29, 2005, from Unum Limited to Merit International/Business Agility’s agent, TBO Corporate Benefit Consultants Ltd. in York, England, expressing Unum Limited’s intention to arrange for a medical examination of appellant with an independent specialist. The letter specified that Unum Limited was arranging to have appellant seen by a specialist in the United States “so that she does not have to travel to the UK.”
The letter used a letterhead logo which read “UnumProvident.” However, the bottom of the letter explains, “UnumProvident is the trading name of Unum Limited.”
Hearing on the motion took place on January 23, 2007. The trial court made the following findings: (1) Unum Limited could have forced appellant to return to England for the medical examination. Instead, it “assisted her in setting up a medical here”; (2) all of the claims handling occurred in England; (3) the court did not have jurisdiction over Unum Limited; (4) English law should apply to appellant’s claims, all of which arose out of her “main cause of action” for breach of contract; and (5) that the law of England did not violate any fundamental policy of California.
4. The FAC and Respondents’ Demurrer
Appellant’s verified FAC, filed December 14, 2006, contained 12 causes of action. Appellant added separate causes of action against Merit International/Business Agility, alleging breach of her employment contract due to failure to pay benefits, as well as failure to appeal Unum Limited’s termination of her benefits. She also added causes of action against Merit International/Business Agility for breach of the covenant of good faith and fair dealing, and intentional and negligent misrepresentation. Against Unum Limited, UnumProvident, and Unum Life, appellant continued to allege causes of action for breach of contract, breach of implied covenant of good faith and fair dealing, and intentional misrepresentation. Appellant also added a cause of action for interference with prospective economic advantage. Against Kachuck, appellant continued to allege causes of action for conspiracy to defraud and intentional infliction of emotional distress. She added a cause of action for inducing breach of contract and for “conspiracy to commit all causes of action.”
On February 1, 2007, the Unum respondents filed their demurrer to all causes of action in the FAC. The Unum respondents argued that because appellant was neither a party to, nor an intended beneficiary of, the policy, no duty was owed to her by any respondent and she lacked standing to sue. In addition, the Unum respondents argued that none of them had a contractual relationship with appellant, therefore they could not be liable for breach of contract or related torts. The Unum respondents also argued that appellant had failed to exhaust the administrative remedies required by section 10.1.1 of the policy. Kachuck joined the motion.
The trial court held a hearing on respondents’ demurrer on March 13, 2007. The court sustained the demurrer without leave to amend as to appellant’s causes of action for breach of contract; breach of the implied covenant of good faith and fair dealing; inducing breach of contract; interference with prospective economic advantage; and intentional infliction of emotional distress. The court sustained the demurrer with leave to amend as to appellant’s causes of action for intentional misrepresentation; conspiracy to defraud; and conspiracy to commit all causes of action.
5. The SAC and Respondents’ Demurrer
Appellant filed her SAC on April 13, 2007. The SAC named as defendants UnumProvident, Unum Life, and Kachuck, and alleged four causes of action: (1) deceit; (2) interference with contractual or legal duties; (3) conspiracy to deceive; and (4) conspiracy to commit all causes of action.
The Unum respondents filed a demurrer to all causes of action in the SAC. They cited English law in support of their position that appellant’s claims were not viable because the employee of an employer/policyholder is not owed any duty from an insurer. Because appellant is neither a beneficiary of, nor a party to, the policy, she cannot have been damaged by the Unum defendants’ alleged actions. In sum, the Unum respondents noted in their reply brief, “if there is a dispute, Business Agility should bring a suit against Unum Limited.” The Unum respondents reiterated their position that neither appellant nor Merit International/Business Agility had exhausted the administrative remedies required under the policy. Kachuck filed a joinder to the Unum respondents’ demurrer.
See Briscoe v. Lubrizol Ltd ICR 694 (2000).
A hearing on respondents’ demurrer to the SAC was held on July 17, 2007. The court announced that its tentative decision was to sustain the demurrer. “The parties subject to the policy are Unum Limited, which is no longer a party to this action, and Business Agility, which is not a party to the lawsuit, neither plaintiff, UnumProvident or Unum Life are parties to the insurance policy.” After hearing argument, the court noted that the language of the policy prevented its enforcement by any third party. The court concluded that “plaintiff did not undergo Unum Limited’s claims and appeals, as required under that section; therefore, plaintiff has no standing to enforce the policy.” The court continued, “[a]ssuming that plaintiff could enforce the policy, she could not enforce them against the defendants, UnumProvident and Unum Life, as neither company is a party to the insurance policy.” The court sustained the Unum respondents’ demurrer and indicated that its ruling sustaining the demurrer also applied to Kachuck.
On August 3, 2007, the trial court dismissed appellant’s causes of action and entered judgment in favor of respondents. Notice of entry of judgment was served on August 31, 2007. On September 14, 2007, appellant filed a notice of appeal.
DISCUSSION
I. Standard of Review
In reviewing a judgment of dismissal after a demurrer is sustained without leave to amend, we must assume the truth of all facts properly pleaded by the appellant. (Black v. Dep’t of Mental Health (2000) 83 Cal.App.4th 739, 745.) We will not, however, assume the truth of contentions, deductions, or conclusions of fact or law, and may disregard allegations that are contrary to the law or to a fact which may be judicially noticed. (Ibid.)
Normally, on appeal from a demurrer, we must examine the complaint’s factual allegations to determine whether they state a cause of action on any available legal theory. The decision to sustain or overrule a demurrer is a legal ruling subject to de novo review on appeal. (Balikov v. S. Cal. Gas Co. (2001) 94 Cal.App.4th 816, 819 (Balikov).) If no liability exists as a matter of law, we must affirm that part of the judgment sustaining the demurrer. (Ibid.)
While the decision to sustain or overrule a demurrer is a legal ruling subject to de novo review on appeal, the granting of leave to amend involves an exercise of the trial court’s discretion. When the trial court sustains a demurrer without leave to amend, we must also consider whether the complaint might state a cause of action if a defect could reasonably be cured by amendment. If the defect can be cured, then the judgment of dismissal must be reversed to allow the appellant an opportunity to do so. The appellant bears the burden of demonstrating a reasonable possibility to cure any defect by amendment. (Balikov, supra, 94 Cal.App.4th at pp. 819-820.)
This matter arises from the trial court’s sustaining of a demurrer without leave to amend. However, appellant’s arguments to this court do not focus on the viability of her causes of action as currently alleged, nor does she attempt to demonstrate how the complaint might be amended to cure the complaint’s defects. Instead, appellant asks this court to review and reverse one ruling: the trial court’s determination that English law applies to this dispute.
II. Appellant Has Waived Any Challenge to the Trial Court’s Ruling That Her Causes of Action are Not Viable
The trial court’s rulings and determinations which are not challenged in appellant’s opening brief are deemed abandoned or waived and are not subject to review. (Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 607, fn. 1.) Appellant does not specifically challenge the trial court’s ruling that her causes of action are not viable because (1) appellant failed to undergo the claims process set forth in the policy; (2) appellant had no standing to enforce the policy; and (3) even if appellant could enforce the policy, she could not enforce it against the defendants, UnumProvident and Unum Life, as neither company is a party to the insurance policy. This ruling is presumed on appeal to be correct, and it is appellant’s burden to demonstrate error. (People v. Seneca Ins. Co. (2004) 116 Cal.App.4th 75, 80.)
Appellant emphasizes that her current claims are tort claims, not contract claims. She declares that “the claims before this Court are not contract claims and do not arise from the contractual relationship that existed between the British entities that signed the disability policy.” Preliminarily, we reject appellant’s attempt to characterize these tort claims as entirely unrelated to the policy. Each cause of action is premised on the wrongful denial of benefits under the policy, thus the defects highlighted by the trial court -- i.e., appellant’s standing to enforce the policy and the proper defendants under the policy -- are significant to the necessary elements of causation and damages in any related tort claim.
Further, appellant’s citation to California law does not assist in showing that she has a viable claim under the facts alleged. She cites to case law supporting “California’s interest in preventing biased medical exams that wrongfully deny policy benefits.” However, appellant provides no analysis of this case law as it relates to her causes of action against these defendants, nor any explanation as to how the cases cure the defects described by the trial court.
Our review of the case law cited by appellant does not lead us to conclude that the causes of action alleged in the SAC are viable under California law. The cases are factually distinguishable in that they involve the parties to the policies at issue. (See Sprague v. Equifax (1985) 166 Cal.App.3d 1012 [conspiracy to fraudulently deny insurance benefits brought against insurance company from which plaintiff had obtained a personal disability insurance policy, thus plaintiff was a party to, and beneficiary of, the policy]; Moore v. Am. United Life Ins. Co. (1984) 150 Cal.App.3d 610 [involving plaintiff’s claims of breach of contract to provide disability benefits and “bad faith” denial of benefits against the insurer that issued a group disability policy under which plaintiff was an insured]; Little v. Stuyvesant Life Ins. Co. (1977) 67 Cal.App.3d 451, 457-458 [action against disability insurer for intentional infliction of severe emotional distress arising from denial of benefits where plaintiff directly purchased the disability insurance policy available to her as a member of a trade group].)
Vacanti v. State Comp. Insurance Fund (2001) 24 Cal.4th 800, is not helpful to appellant either. The case discusses whether certain medical providers’ claims against workers’ compensation insurers for abuse of process, fraud, interference with ongoing business and with contractual and prospective economic relations, among other things, were barred by the exclusive remedy provisions of the Workers’ Compensation Act. The court specified that its decision was limited to application of those exclusivity provisions and that the court made “no judgment as to the viability of these claims.” (Id. at p. 828.) In sum, the California case law cited by appellant does not support a determination that the trial court’s decision to sustain respondents’ demurrer should be reversed.
Appellant also cites Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 415 [permitting liability for an auditor’s intentional misrepresentation to third parties] for the general proposition that there is “no reason why ‘independent’ medical examiners and their co-conspirators should not be liable, as are auditors, for intentional misrepresentations.” This general statement is insufficient to support a determination that any of appellant’s claims are viable.
Appellant refers to Hangarter v. Provident Life and Accident Ins. Co. (9th Cir. 2004) 373 F.3d 998 in support of her claim that “[t]his is not the only case where UnumProvident and its subsidiaries have adopted a scheme to use biased medical examiners to deny valid disability claims.” Hangarter involved a plaintiff who had purchased “an individual ‘own occupation’ disability insurance policy” from an American subsidiary of UnumProvident, Paul Revere Life Insurance Company (Paul Revere). (Id. at pp. 1003-1004). The plaintiff became disabled and started receiving benefits, which were terminated after Paul Revere claimed that she was ineligible under the policy because she was not totally disabled. (Id. at p. 1005.) The plaintiff brought a diversity action against Paul Revere alleging violation of the Unfair Competition Act, breach of contract, breach of the covenant of good faith and fair dealing, and intentional misrepresentation. While the jury’s award of damages in favor of the plaintiff was affirmed, the case does not support appellant’s causes of action against these respondents, none of whom were parties to the policy. (See also Merrick v. Paul Revere Life Ins. Co. (9th Cir. 2007) 500 F.3d 1007 [owner of “own occupation” disability insurance policy brought suit against disability insurer for breach of contract and breach of duty of good faith and fair dealing after it denied his total disability claim].)
Appellant acknowledges that the argument in her appeal diverges from the arguments made below as to the viability of her complaint. However, appellant argues that she may advance a new legal theory on appeal, and that she is “entitled on remand to amend the complaint to allege such additional facts or causes of action as this Court rules are required under California law.” We reiterate that it is appellant’s burden to demonstrate to this court what additional facts or causes of action present a reasonable possibility to cure the defects in appellant’s complaint. (Balikov, supra, 94 Cal.App.4th at pp. 819-820.) Appellant has failed to meet this burden.
Appellant sets forth the elements of intentional interference with contractual and prospective economic relations under California law, and makes a blanket statement that her allegations meet these elements. This is insufficient to meet her burden of showing that the trial court erred or that there is a reasonable possibility that she can cure the defects articulated by the trial court.
Appellant has failed to address any errors in the trial court’s ruling that the tort claims set forth in her complaint, all of which relate to the alleged wrongful denial of benefits under the policy, are not viable because (1) she failed to undergo Unum Limited’s claims and appeals process; (2) she had no standing to enforce the policy; and (3) she could not enforce the policy against these respondents. Therefore, any potential claim that such ruling was in error is deemed waived and the ruling affirmed. (See Humes v. Margil Ventures, Inc. (1985) 174 Cal.App.3d 486, 493.)
We have concluded that the trial court’s ruling sustaining the demurrer to the SAC must be affirmed. This ruling is dispositive of the appeal. Because appellant has failed to adequately address the viability of her causes of action under either California law or English law, we decline to address appellant’s arguments that the trial court erred in determining that English law applies to this dispute.
DISPOSITION
The trial court’s order and judgment granting respondents’ demurrer to all causes of action without leave to amend is affirmed.
We concur:, BORENP. J., ASHMANN-GERST, J.