APPEAL from a judgment of the Superior Court of San Diego County, Timothy B. Taylor, Judge. Affirmed. (Super. Ct. No. 37-2009-00096167-CU-BT-CTL).
The opinion of the court was delivered by: Aaron, J.
CERTIFIED FOR PUBLICATION
Michael L. Levine (Michael) and his wife Victoria Levine (Victoria) (collectively the Levines) filed this action on their own behalf, and on behalf of a putative class, against Blue Shield of California (Blue Shield). In five causes of action in their first amended complaint, the Levines brought claims for fraudulent concealment, negligent misrepresentation, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and unfair competition (Bus. & Prof. Code, § 17200 et seq.). All of the Levines' causes of action were based on their contention that Blue Shield had a duty to disclose to the Levines that their monthly health care premiums would have been lower if they had designated Victoria, rather than Michael, as the primary insured, and had added Michael's two minor dependents to a single family plan, rather than having one dependent covered under a separate health care plan and the second dependent covered under a separate health insurance policy.
Blue Shield filed a joint demurrer and motion to strike the class action allegations in the Levines' complaint. In an accompanying brief, Blue Shield maintained that all of the Levines' claims failed because Blue Shield had no duty to disclose information concerning how the Levines could have structured their health coverage so as to lower their monthly health care premiums. Blue Shield also argued that the action could not proceed as a putative class action because Michael was improperly acting as both class counsel and as a class representative. The trial court sustained Blue Shield's demurrer to the complaint, without leave to amend. The court noted that its ruling on the demurrer rendered Blue Shield's motion moot, and proceeded to enter a judgment of dismissal.
On appeal, the Levines renew their contention that Blue Shield owed them a duty to disclose that they could have lowered their health care premiums by designating Victoria as the primary insured, and by including Michael's dependents on a single family health plan.*fn1 We conclude that the Levines have not demonstrated that Blue Shield owed them any such duty, and that the trial court therefore properly sustained Blue Shield's demurrer without leave to amend.*fn2
II. FACTUAL AND PROCEDURAL BACKGROUND
A. The Levines' First Amended Complaint
In October 2008, the Levines filed a first amended complaint against Blue Shield alleging five causes of action for fraudulent concealment, negligent misrepresentation, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and unfair competition (Bus. & Prof. Code, § 17200 et seq.).
The Levines alleged that in November 2004, Michael submitted an application to Blue Shield for an "Individual and Family Health Plan" for himself and two minor dependents. At the time he submitted the application, Michael was 40 years old and was unmarried. In December 2004, Blue Shield issued a health plan for Michael; a separate health plan for one of Michael's dependents; and a health insurance policy for the second of Michael's dependents.*fn3
In July 2007, Michael married Victoria, who was then 25 years old. In August 2007, Victoria submitted an application to Blue Shield seeking to be added to Michael's health plan. In December 2007, Blue Shield added Victoria to Michael's health plan as a dependent. Michael remained the primary insured on the health plan.
With respect to Blue Shield adding Victoria to Michael's plan, the Levines alleged:
"Blue Shield failed to inform Michael Levine that if Victoria Levine was named the primary insured or that if he were to purchase a family plan Michael Levine and Victoria Levine would save substantial sums of money, despite the fact that the risks to the insurer and the benefits to the insureds would remain exactly the same. The Blue Shield underwriting department set the new premium for health coverage for Michael Levine and Victoria Levine and continued the children on individual polices at the higher rates."
The Levines claimed that Blue Shield knew that the Levines' rates would be lower if the Levines were to make those changes to their policies. The Levines alleged that "Blue Shield knew ─ based upon all of the medical information available regarding each of the insureds ─ what they were willing to accept in premiums to insure the identical risks in reverse," and that the Levines did not, and could not have, known this. The Levines asserted that neither "Michael Levine nor Victoria Levine knew, or in the exercise of reasonable diligence could have known that the premiums for the exact same coverage would have been approximately $500.00 less per month if Victoria Levine had been made the primary insured."
In August 2009, after Blue Shield raised the premiums for the Levines' health plans and policy by 30 percent, Michael contacted Blue Shield to inquire about his monthly premiums. After "extensive inquiry," Michael learned that the monthly premiums that he had been paying since adding Victoria to his plan would have been substantially lower if Victoria, rather than Michael, had been named as the primary insured, and if Michael had added his dependents to a single health plan rather than maintaining a separate health plan for one and a separate insurance policy for the other. Michael requested that effective September 1, 2009, Victoria be named as the primary insured, and that both of Michael's dependents be added to the Levines' family health plan. Michael also requested a refund of all "overpayments of premiums." Blue Shield refused to provide a refund.
The Levines filed a lawsuit against Blue Shield claiming fraudulent concealment. They alleged that Blue Shield failed to disclose to them that "the same benefits and coverage are available... for lesser premiums by designating a different party as the primary insured or adding minor dependents to a family plan." The Levines claimed that Blue Shield owed them a duty to disclose such information pursuant to Insurance Code section 332 (section 332).*fn4 In addition to the fraudulent concealment claim, the Levines brought claims for negligent misrepresentation, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and unfair competition (Bus. & Prof. Code, § 17200 et seq.), based on the same alleged failure to disclose.
The Levines sought to bring this action as a class action on behalf of a proposed class, defined as follows:
"[A]ll California residents who are currently insureds and former insureds since September 1, 2005 on Individual and Family Health Plans issued by Defendant Blue Shield and [who] were overcharged premiums due to Blue Shield's failure to inform them that the same coverage and benefits were available for lesser premiums by (1) designating a different spouse or domestic partner as the primary insured; or (2) covering each dependent under a family policy or plan."
B. Blue Shield's Demurrer and Motion to Strike
Blue Shield filed a demurrer to the Levines' first amended complaint. In its demurrer, Blue Shield contended that all of the Levines' claims failed because Blue Shield had no duty to disclose to the Levines that "their monthly premium payments could have been lowered if they (1) designated the younger spouse as the primary insured; or (2) converted to a family plan."
Blue Shield claimed that section 332 did not apply in this case because Blue Shield is a health plan regulated by the Department of Managed Health Care, not an insurance company regulated by the Department of Insurance, and that the Insurance Code applies only to insurance policies, not to health plans. In addition, Blue Shield "dispute[d] [the Levines'] interpretation of [s]section 332," arguing that the "[Levines] theory would effectively turn Blue Shield into an insurance broker, acting on behalf of each of its members to advise them on how to maximize their health care dollars. No authority supports such an expansion of Blue Shield's duties and obligations." In the alternative, Blue Shield contended that it had provided the Levines with the information that the Levines claimed it had concealed, noting that the following notice was printed on Victoria's application: "Indicating the younger spouse/domestic partner as the primary applicant may reduce your monthly dues/payments."*fn5
In its motion to strike, Blue Shield requested that the trial court strike the class allegations in the complaint on the ground that Michael could not act as both class counsel and as a class representative.
In their opposition, the Levines argued that the substantive provisions of the Insurance Code, including section 332, applied to Blue Shield, even if Blue Shield was subject to the regulatory jurisdiction of the Department of Managed Care. The Levines argued that, pursuant to section 332, Blue Shield had a duty to disclose "the existence or amount of overcharges which could be avoided merely by (1) designating a different spouse or partner as the primary insured; or (2) covering any or all dependents under a single family plan."
The Levines also argued that the notice contained in Victoria's application -- which stated, "Indicating the younger spouse/domestic partner as the primary applicant may reduce your monthly dues/payments." -- did not satisfy Blue Shield's duty of disclosure. Among other arguments, the Levines noted that the statement was contained in the application, but that the amount of savings in premiums that they could achieve if they were to change the designation of the primary insured would not be known until much later in the process, after underwriting was complete.*fn6
Finally, the Levines argued that Blue Shield's motion to strike the class allegations was premature, and stated that they would substitute in unaffiliated counsel to avoid any ...