Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Hale v. Sharp Healthcare

April 19, 2010

DAGMAR HALE, PLAINTIFF AND APPELLANT,
v.
SHARP HEALTHCARE ET AL., DEFENDANTS AND RESPONDENTS.



APPEAL from a judgment of the Superior Court of San Diego County, Luis R. Vargas, Judge. Reversed in part; affirmed in part. (Super. Ct. No. 37-2007-00060598-CU-BT-CTL).

The opinion of the court was delivered by: McCONNELL, P. J.

CERTIFIED FOR PUBLICATION

This is a putative class action by Dagmar Hale against Sharp Healthcare and Sharp Grossmont Hospital (together Sharp) for violation of the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.), violation of the Consumers Legal Remedies Act (CLRA) (Civ. Code, § 1750 et seq.), breach of contract and breach of the implied covenant of good faith and fair dealing. Hale's theory is that Sharp deceptively and unfairly charged her and other uninsured patients fees for medical services that substantially exceeded the fees it accepted from patients covered by Medicare or private insurance. Hale appeals a judgment of dismissal entered after the court sustained without leave to amend Sharp's demurrer to her second amended complaint (SAC). We conclude the court erred by sustaining the demurrer to the UCL and CLRA causes of action, as the SAC sufficiently alleges Hale's standing, but properly sustained the demurrer to the contract causes of action. Further, the court did not abuse its discretion by denying Hale's motion for reconsideration or leave to amend the contract causes of action. We reverse the judgment insofar as it pertains to the UCL and CLRA causes of action. We affirm the judgment in all other respects.

COMPLAINT ALLEGATIONS AND FACTUAL BACKGROUND

On January 25, 2007, Hale was admitted to Sharp Grossmont Hospital. She was uninsured at the time, and on her admittance Sharp required her to sign a form entitled "Admission Agreement for Inpatient and Outpatient Services" (hereafter Admission Agreement). The Admission Agreement provided, "you hereby individually obligate yourself to pay the account of the hospital in accordance with the regular rates and terms of the hospital." Sharp discharged Hale the following day. During her stay, Sharp provided her with "medical treatment, central services, lab work, medication, emergency hospital care, and C.T. scans." Sharp billed her $14,447.65 for the services.

In August 2007 Hale filed a putative class action against Sharp for violation of the UCL, violation of the CLRA, breach of contract and breach of the implied covenant of good faith and fair dealing. In September 2007 Hale filed a first amended complaint (FAC) with the same causes of action.

Sharp successfully demurred to the FAC, and in May 2008 Hale filed the SAC, which contains the same causes of action and is the subject of this appeal.*fn1 The SAC alleges that contrary to Sharp's promise in its Admission Agreement to charge uninsured patients its "regular rates," it engaged in an unfair and unreasonable pricing practice by charging them "exponentially more" for the same services than it accepted from patients covered by Medicare or private insurance. The SAC also alleges Sharp's practice has "a significant detrimental impact on the large population of uninsured persons, who are generally the least able to afford medical care."

Additionally, the SAC alleges that hospitals, including Sharp, "maintain documents called Chargemasters, which are spreadsheets that list the gross charge for each product and service provided by the hospital. Plaintiff is informed and believes . . . that these gross charges rarely, if ever, bear any relation to the hospital's costs for providing treatment and differ from the actual, lower charges assessed against the overwhelming majority of patients who participate in Medicare or private insurance programs." The SAC alleges the "Chargemaster rates often form the starting point for negotiations with insurance companies and managed care organizations to determine reasonable (and lower) reimbursement rates, or for determining Medicare outlier payments to hospitals." Further, the SAC alleges that when Sharp admitted Hale to its hospital, she made a down payment of $500.

Sharp demurred to the SAC. In a tentative ruling, the court sustained the demurrer to the UCL claim with leave to amend. The ruling states the SAC sufficiently pleads injury in fact, but it is insufficient because it does not allege she "relied on Sharp charging its 'regular rates' in receiving treatment." The ruling also sustained the demurrer to the CLRA claim with leave to amend, again on the ground the SAC does not plead reliance on an alleged misrepresentation. The ruling overruled the demurrer to the breach of contract and implied covenant claims, explaining the SAC sufficiently alleges Hale's performance or excuse for nonperformance.

After a hearing, the court took the matter under submission. The court later sustained the demurrer to all causes of action, without leave to amend on the ground the SAC was Hale's third attempt to plead a valid cause of action.

Hale moved for reconsideration and submitted a proposed third amended complaint (TAC). The court denied the motion. Sharp then moved ex parte for dismissal of the SAC, and the court granted the motion. A judgment was entered on January 5, 2009.

DISCUSSION

I. Standard of Review

"A demurrer tests the sufficiency of a complaint as a matter of law." (City of Chula Vista v. County of San Diego (1994) 23 Cal.App.4th 1713, 1718.) In reviewing the propriety of the sustaining of a demurrer, the "court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.] The judgment must be affirmed 'if any one of the several grounds of demurrer is well taken. [Citations.]' [Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment." (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.)

We review the trial court's ruling independently. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415.) We uphold the court's ruling "on any sufficient ground, whether relied on by the court below or not." (Wheeler v. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.