Goel v. Private Healthcare Systems CA2/3 ( 2014 )

Filed 4/15/14 Goel v. Private Healthcare Systems CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
SANJIV GOEL, M.D., B248153
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC489137)
v.
PRIVATE HEALTHCARE SYSTEMS,
INC., et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los Angeles County,
Joanne O’Donnell, Judge. Affirmed.
Pick & Boydston and Brian D. Boydston for Plaintiff and Appellant.
Spile, Leff & Goor, Ari L. Markow and Michael J.T. Wilson; Baker Donelson
Bearman Caldwell & Berkowitz and Errol J. King for Defendants and Respondents.
_______________________________________
Plaintiff and appellant Dr. Sanjiv Goel appeals from the judgment entered in
favor of defendants and respondents Private Healthcare Systems, Inc. and Benefit Panel
Service, Inc. after the trial court sustained the defendants’ demurrer to the cause of
action for unfair business practices and granted their motion to strike the cause of action
for quantum meruit without leave to amend. On appeal, Goel contends that the causes
of action for unfair business practices and quantum meruit were adequately alleged. We
disagree and affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The trial court proceedings as evidenced by the limited record before this court
are as follows. On July 26, 2012, Goel filed a complaint alleging that the defendants
administrate “preferred provider” networks for participating doctors and insurers, and
had “fraudulently forged plaintiff’s signature” onto a “preferred provider agreement
(Agreement).” Pursuant to the Agreement, “plaintiff would provide medical services to
defendants’ patients at discounted rates,” and, in exchange, the defendants would
“increase the volume of business plaintiff would receive.”
The complaint asserted causes of action for intentional interference with contract
and prospective business advantage, “fraud-forgery,” unfair business practices and
unjust enrichment. On July 31, 2012, Goel filed a first amended complaint re-asserting
the same causes of action. According to the docket, a demurrer was filed as to the first
amended complaint.1 The parties claim that the trial court sustained the demurrer,
1
Neither the demurrer nor the trial court’s ruling thereon are part of the record.
2
denied leave to amend the unjust enrichment claim, granted leave to amend as to the
remaining causes of action, and allowed Goel to add a new cause of action for breach of
contract.
On December 10, 2012, Goel filed a second amended complaint adding causes of
action for quantum meruit and breach of contract, and removing his cause of action for
unjust enrichment. Goel repeated the allegation that the defendants had forged his
signature on the Agreement, and further alleged that he had not received the “ ‘benefit
of the bargain’ ” under the contract because the defendants had not sent him an
“increased volume of patients.” He also alleged that “because [the defendants] ha[ve]
contracts with forgeries with Goel’s signature which [they] supplied to the major health
plan, the major health plan” paid Goel reduced rates for medical care he provided to
certain patients “and instead paid [the defendants] a commission.”
The unfair business practices cause of action was based on the alleged
“fraudulent forgery of documents with the intent to damage [Goel].” With respect to
the quantum meruit cause of action, Goel alleged that “[b]y [d]efendants’
misappropriation of [Goel’s] signature for their own use, [Goel] conferred a benefit
upon defendants by allowing money to be deducted from his bill for medical services he
performed.”
The defendants raised a general demurrer to each cause of action, and moved to
strike the quantum meruit claim on the grounds that Goel had not been granted leave to
amend to allege this. In Goel’s opposition, he explicitly did not oppose the demurrer to
the causes of action for intentional interference, “fraud-forgery” and breach of contract.
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He argued only that (1) he had adequately stated a claim for unfair business practices
based on the allegation that the defendants’ “forged agreements with Goel” caused him
to lose money (2) the quantum meruit cause of action was adequately based on the
allegation that he “was not paid the full amount he charged for his medical services.”
On March 22, 2013, the trial court sustained the demurrer without leave to
amend as to each cause of action except for the quantum meruit claim which it struck
“with prejudice.” Goel timely appealed.
CONTENTIONS
Goel contend that the second amended complaint adequately alleged facts stating
causes of action for quantum meruit and unfair business practices.2
DISCUSSION
1. Standard of Review
“On appeal from a judgment dismissing an action after sustaining a demurrer
without leave to amend, the standard of review is well settled. The reviewing court
2
Goel also contends that the trial court erred in striking the quantum meruit cause
of action because the trial court’s order sustaining the demurrer to the first amended
complaint allowed him to amend the complaint to allege this claim. Although Goel
acknowledges that he was not explicitly granted leave to allege this cause of action, he
contends that this claim “directly responds” to the court’s reason for sustaining the
demurrer to the unjust enrichment cause of action. As we have already noted, neither
the demurrer to the first amended complaint nor the court’s order sustaining that
demurrer is in the record before us. It is the appellant’s burden to provide an adequate
record on appeal. (Amato v. Mercury Casualty Co. (1993) 18 Cal. App. 4th 1784, 1794.)
To the extent the record is inadequate, we make all reasonable inferences in favor of the
judgment. (Ibid.) Here, the trial court struck the quantum meruit cause of action on the
grounds that Goel had not sought leave to amend to add this to the complaint. We must
assume, given the inadequate record before us, that the order sustaining the demurrer to
the first amended complaint did not grant such leave.
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gives the complaint a reasonable interpretation, and treats the demurrer as admitting all
material facts properly pleaded. [Citations.] . . . [I]t 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, 966-967.)
We review the trial court’s decision to strike an improper pleading under Code of
Civil Procedure section 436 and its denial of leave to amend under the abuse of
discretion standard. (Leader v. Health Industries of America, Inc. (2001)
89 Cal. App. 4th 603, 612 [order striking pleading]; Branick v. Downey Savings & Loan
Assn. (2006) 39 Cal. 4th 235, 242 [denial of leave to amend].)
2. The Quantum Meruit Cause of Action
Goel contends that the defendants’ demurrer to the quantum meruit cause of
action was without merit because the second amended complaint adequately alleged
facts in support of this claim. However, the trial court did not sustain the demurrer as to
the quantum meruit cause of action; the court struck it from the pleading on the grounds
that Goel had not properly sought leave to amend to add this claim.
Furthermore, Goel has not shown that he could allege sufficient facts to state this
claim. The requisite elements of quantum meruit are (1) the plaintiff acted pursuant to
“an explicit or implicit request for the services” by the defendant, and (2) the services
conferred a benefit on the defendant. (Day v. Alta Bates Medical Center (2002)
98 Cal. App. 4th 243, 248-249.) Here, the second amended complaint alleged that “[b]y
[d]efendants’ misappropriation of [Goel’s] signature for their own use, [Goel] had
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conferred a benefit upon defendants . . . . ” There are no facts suggesting that the
defendants explicitly or implicitly requested that Goel perform medical services on
certain patients. The complaint alleges only that the defendants forged Goel’s signature
on a contract. This is a claim for fraud, not quantum meruit.3
3. The Unfair Business Practices Cause of Action
Goel contends that the trial court erred in sustaining the demurrer to the unfair
business practices cause of action because the second amended complaint adequately
alleged facts showing that the defendants’ forgery violated Business and Professions
Code section 17200. However, under Business and Professions Code section 17200,
“ ‘[p]revailing plaintiffs are generally limited to injunctive relief and restitution,’ ” and
here, the second amended complaint did not seek injunctive relief and did not allege
3
Goel also argues that quantum meruit is appropriate because emergency room
doctors’ remedy “in this situation lies in a quantum meruit claim directly against insured
patients’ insurers.” Perhaps so, but Goel has not sued his patients’ insurers; he sued the
defendants who allegedly manage “preferred provider networks” for participating
physicians and “major health plans.” For the first time, in Goel’s reply, he argues that
the defendants are liable for their “insurer clients” because the defendants were “the
agent[s] of [their] insurer clients, and where a principal is unknown, i.e., if an agent
acting for his principal is bound in contract, the result will ordinarily be that either the
principal or the agent may be held liable on it by the third party.” First, the second
amended complaint does not allege that the defendants were acting as agents for health
care plans. Rather, the second amended complaint alleges that the forged Agreement
“obligated defendants to only enter into payor agreements with payors who, among
other things, sponsored preferred provider or exclusive provider health care coverage
plans . . . . ” This does not suggest that the defendants forged the Agreement as
insurers’ agents, but that the Agreement provided that the defendants would contract
with insurers pursuant to certain terms articulated in the Agreement. Second, Goel is
not seeking to enforce the contract which the defendants supposedly signed as agents of
the insurers. Indeed, he affirmatively denies that he is a party to any such contract.
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facts showing that Goel was entitled to restitution. (Zhang v. Superior Court (2013)
57 Cal. 4th 364, 371.)
“ ‘Restitution under [Business and Professions Code] section 17203 is confined
to restoration of any interest in “money or property, real or personal, which may have
been acquired by means of such unfair competition.” (Italics added.) A restitution
order against a defendant thus requires both that money or property have been lost by
a plaintiff, on the one hand, and that it have been acquired by a defendant, on the other.’
[Citation.]” (Zhang v. Superior Court, supra, 57 Cal.4th at p. 371.)
Goel argues that the second amended complaint adequately alleged that the
defendants relied on the forged Agreement “to induce their insurer clients to reduce the
amounts they paid Goel, and turn around and pay [the defendants] a commission . . . . ”
However, these allegations only show that Goel suffered damages, not that he is entitled
to restitution. Goel did not allege facts showing that he lost money which was then
acquired by the defendants, but, rather, that he was never adequately compensated by
his patients’ health care plans for the medical services he provided to those patients.
This is a claim for compensatory damages, and “compensatory damages are not
recoverable as restitution.” (Pineda v. Bank of America, N.A. (2010) 50 Cal. 4th 1389,
1402, fn. 14.) Therefore, the demurrer was properly sustained as to the unfair
competition cause of action as the second amended complaint failed to allege facts
showing that Goel was entitled to any relief under Business and Professions Code
section 17200.
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DISPOSITION
The judgment is affirmed. The defendants are awarded their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
CROSKEY, J.
WE CONCUR:
KLEIN, P. J.
KITCHING, J.
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