United States District Court, E.D. California
SAN JOAQUIN GENERAL HOSPITAL, a department of the County of San Joaquin, a political subdivision of the State of California, Plaintiff,
UNITED HEALTHCARE INSURANCE CO., a Connecticut for-profit corporation, Defendant.
dispute over insurance payments comes before the court on
defendant United Healthcare Insurance Co.'s motion to
dismiss. ECF No. 11. Plaintiff San Joaquin General Hospital
opposes. The court held a hearing on December 2, 2016, at
which Jennifer Jiao appeared for plaintiff, and Edward Stumpp
appeared for defendant.
reasons stated below, the court DENIES defendant's
January 1, 2014, San Joaquin General Hospital (“the
Hospital”) began treating patients who had health plans
with United Healthcare Insurance Co. (“United
Insurance”). Compl. ¶ 7, ECF No. 1-1. At some
point in time not specified by the complaint, in response to
an inquest by the Hospital, United Insurance informed the
Hospital that patients covered by United Insurance's
plans were eligible for treatment at the Hospital.
Id. ¶ 8. At all relevant times, United
Insurance authorized the medical services rendered by the
hospital, id. ¶ 11, verified the existence of
the patients' eligibility for benefits, id., and
held itself out as being responsible for paying for the
services provided by the Hospital, id. ¶ 9. The
Hospital subsequently submitted to United Insurance bills for
its services, which United Insurance has refused to pay in
full. Id. ¶¶ 13-15. As a result, the
Hospital has suffered damages in excess of $3.7 million.
Id. ¶ 15.
5, 2016, the Hospital filed a complaint for damages in the
Superior Court of California, County of San Joaquin,
claiming: (1) breach of implied in fact contract; (2)
quantum meruit; and (3) breach of oral contract.
See Id. On August 11, 2016, United Insurance removed
the case to this court. ECF No. 1. On September 20, United
Insurance filed the pending motion to dismiss, alleging the
Hospital failed to allege elements essential to all three
claims. See Def.'s Mot. to Dismiss
(“MTD”), ECF No. 11. The Hospital opposes United
Insurance's motion, Pl.'s Opp'n, ECF No. 16, and
United Insurance has replied, Def.'s Reply, ECF No. 18.
may move to dismiss for “failure to state a claim upon
which relief can be granted.” Fed.R.Civ.P. 12(b)(6).
The motion may be granted only if the complaint lacks a
“cognizable legal theory” or if its factual
allegations do not support a cognizable legal theory.
Hartmann v. Cal. Dep't of Corr. & Rehab.,
707 F.3d 1114, 1122 (9th Cir. 2013). The court assumes these
factual allegations are true and draws reasonable inferences
from them. Ashcroft v. Iqbal, 556 U.S. 662, 678
complaint need contain only a “short and plain
statement of the claim showing that the pleader is entitled
to relief, ” Fed.R.Civ.P. 8(a)(2), not “detailed
factual allegations, ” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). But this rule demands
more than unadorned accusations; “sufficient factual
matter” must make the claim at least plausible.
Iqbal, 556 U.S. at 678. In the same vein, conclusory
or formulaic recitations of a cause's elements do not
alone suffice. Id. (quoting Twombly, 550
U.S. at 555). Evaluation under Rule 12(b)(6) is a
context-specific task drawing on “judicial experience
and common sense.” Id. at 679.
ruling on a motion to dismiss, the court is not limited by
the plaintiff's allegations if the complaint, as here, is
accompanied by attached documents. Knievel v. ESPN,
393 F.3d 1068, 1076 (9th Cir. 2005). Such documents become a
part of the complaint and may be considered in considering
the defendant's motion to dismiss. Id.
Claims for Breach of Oral and Implied-in-Fact
California law, “the elements of a cause of action for
breach of contract are (1) the existence of the contract, (2)
plaintiff's performance or excuse for nonperformance, (3)
defendant's breach, and (4) the resulting damages to the
plaintiff.” Oasis W. Realty, LLC v. Goldman,
51 Cal.4th 811, 821 (2011). United Insurance challenges only
the first element, whether there exists an enforceable
contract. See Def.'s MTD at 4.
contract is “an agreement to do or not to do a certain
thing, ” and a contract can only exist if the parties
are capable of contracting, they manifest objective consent,
the contract has a lawful object, and there is sufficient
consideration. Cal. Civ. Code §§ 1549-1550. There
is no general requirement that the contract be written, and
oral contracts are enforceable. See Cal. Civ. Code
§ 1622; Simmons v. Ghaderi, 49 Cal.Rptr.3d 342,
348 (Cal.Ct.App. 2006), rev'd on other grounds,
44 Cal.4th 570 (2008); Engleman v. Gen. Acc., Fire &
Life Assur. Corp., 250 F.2d 202, 204 (9th Cir. 1957). An
implied-in-fact contract also is enforceable, and
“differs from an express contract only in that the
promise is not expressed in language but implied from the
promisor's conduct.” Rokos v. Peck, 182
Cal.App.3d 604, 614 (1986) (quoting Stanley v. Columbia
Broad. Sys., 35 Cal. 2d 653, 674 (1950)).
Insurance contends the parties did not form a valid contract,
either oral or implied-in-fact, because they never agreed on
the price of the Hospital's services. Def.'s MTD at
4. Without facts alleging a meeting of the minds on the
material issue of price, United Insurance posits, the
Hospital has insufficiently pled mutual consent, an essential
element in contract formation. Id. at 4-6. Mutual
consent “cannot exist unless the parties ‘agree
upon the ...