UNIVERSITY OF SOUTHERN CALIFORNIA ON BEHALF OF ITS VERDUGO HILLS HOSPITAL VS 1 SOURCE BUSINESS SOLUTIONS, LLC

Tentative Rulings

Case Number: *******1659 Hearing Date: March 17, 2023 Dept: 54

Hearing Date: March 17, 2023

Department 54, Judge Maurice A. Leiter

Demurrer to Complaint

Moving Party: Defendant 1 Source Business Solutions, LLC

Responding Party: Plaintiff University of Southern CA on behalf of its Verdugo Hills Hospital

T/R: DEFENDANT’S DEMURRER IS OVERRULED.

DEFENDANT TO FILE AND SERVE AN ANSWER TO THE COMPLAINT WITHIN 20 DAYS OF NOTICE OF RULING.

DEFENDANT TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

BACKGROUND

On September 28, 2022, Plaintiff University of Southern CA on behalf of its Verdugo Hills Hospital filed a complaint against Defendant 1 Source Business Solutions, LLC, asserting causes of action for (1) breach of implied-in-fact contract; (2) UCL violations; (3) quantum meruit; (4) accounts stated; and (5) unjust enrichment. Plaintiff alleges Defendant authorized Plaintiff to perform medically necessary services on Patient 1, a member beneficiary of Defendant. Plaintiff alleges Defendant now refuses to pay the reasonable value of the services provided.

ANALYSIS

A demurrer to a complaint may be taken to the whole complaint or to any of the causes of action in it. (CCP 430.50(a).) A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff's ability to prove those allegations. (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.) The court must treat as true the complaint's material factual allegations, but not contentions, deductions or conclusions of fact or law. (Id. at 732-33.) The complaint is to be construed liberally to determine whether a cause of action has been stated. (Id. at 733.)

Defendant demurs to the complaint on the ground that Defendant did not agree to pay for the services rendered by Plaintiff on behalf of its member Patient 1. “The standard elements of a claim for breach of contract are: ‘(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.’” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.) “A cause of action for breach of implied contract has the same elements as does a cause of action for breach of contract, except that the promise is not expressed in words but is implied from the promisor’s conduct.” (Yari v. Producers Guild of America, Inc. (2008) 161 Cal.App.4th 172, 182.)

Plaintiff alleges Defendant provided authorization for medical services on March 1, 2021, impliedly agreeing to pay for the services. (Compl. 20.) Plaintiff alleges it relied on this authorization and provided the services. This is sufficient to allege an implied-in-fact contract.

Defendant asserts it is not obligated to pay for the services because the authorization explicitly stated that it was not a guarantee of payment. First, this authorization is not attached to the complaint and Defendant has not requested judicial notice of it; it is simply attached to the demurrer. The Court cannot consider extrinsic evidence on demurrer. Second, the Court is not persuaded that this language unequivocally absolves Defendant of any obligation to pay for services. Whether an obligation to pay exists cannot be resolved on demurrer.

Defendant also argues that Plaintiff does not have standing to bring its claims and instead must seek payment from the Patient. As stated, Plaintiff alleges Defendant authorized Plaintiff to perform services on the Patient. This is sufficient to confer standing on Plaintiff.

As Plaintiff has alleged Defendant had an obligation to pay for services rendered, Plaintiff’s claims for UCL violations and common counts are sufficiently pled.

Defendant’s demurrer is OVERRULED.