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Filed 5/19/16 Tenet HealthSystem Desert v. Blue Cross of CA CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication 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

FOURTH APPELLATE DISTRICT

DIVISION TWO

TENET HEALTHSYSTEM DESERT, 

INC.,

Plaintiff and Appellant,

v.

BLUE CROSS OF CALIFORNIA et al.,

Defendants and Respondents.

E062425

(Super.Ct.No. INC1304739)

OPINION

APPEAL from the Superior Court of Riverside County. John G. Evans, judge. 

Reversed with directions.

Helton Law Group, Carrie McLain and Kim Worobec for Plaintiff and Appellant.

Morgan, Lewis and Bockius, Lisa Veasman and Molly Moriarty Lane for 

Defendants and Respondents.

Plaintiff Tenet HealthSystem Desert, Inc. appeals from the judgment entered in 

favor of defendants Blue Cross of California et al. after the court sustained demurrers to 

the third amended complaint without leave to amend. The judgment reflected the trial 
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court’s determination that the third amended complaint failed to allege facts to support its 

causes of action against defendants. The complaint sought damages arising from 

defendants’ alleged misrepresentations relating to whether medical services provided by 

plaintiff to a patient were covered under the patient’s health insurance plan. Defendants 

provided the utilization management services regarding the patient’s health insurance.

The parties reached a settlement after filing of the record on appeal, but before the 

briefs had been filed. They submitted their stipulation after the settlement agreement had 

been executed. The request filed on February 5, 2016, requests this court to reverse the 

underlying judgment and remand to the superior court with directions to dismiss the 

action as to defendants with prejudice. The stay order filed in this appeal on July 31, 

2015, is hereby lifted.

Assuming the necessary findings for accepting a stipulation to reverse (Code Civ. 

Proc., § 128, subd. (a)(8)—hereafter § 128(a)(8)), which we discuss below, we have the 

grounds to render this disposition because of the settlement by the parties. The 

settlement has rendered the superior court action moot, making dismissal by the superior 

court the appropriate disposition of that action. (Paul v. Milk Depots, Inc. (1964) 62 

Cal.2d 129, 134-135.) Reversal vacates the judgment and restores jurisdiction to the trial 

court so that it may dismiss the action. The reversal of the judgment does not indicate a 

ruling by the appellate court on the merits of the order, but does avoid any implication 

that the judgment remains in effect. (Ibid.)
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Having discussed the character of the proposed stipulated reversal, we reach the 

critical issue. Do we have the authority to dispose of this case by a stipulated reversal of 

this character? We find that we do.

Under § 128(a)(8), implementation of a stipulated reversal requires the appellate 

court to make two findings: (1) that no reasonable possibility exists of adversely 

affecting the interests of nonparties or the public (§ 128(a)(8)(A)); and (2) that the 

parties’ reasons for requesting reversal outweigh (a) the erosion of public trust that may 

result from reversing the judgment and (b) the reduced incentive to settle pretrial that 

may result from the availability of post judgment stipulated reversal (§ 128(a)(8)(B)).

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The second finding involves two factors, resulting in a discussion of three factors in the 

making of the two findings: (1) nonparty or public adverse effect, (2) public trust 

erosion, and (3) reduced pretrial settlement incentive.

This case involves the trial court’s finding that insufficient facts were alleged in 

this particular complaint. It concerned whether services provided by plaintiff should be 

covered, and the court made no public policy determinations in its ruling. We find no 

 

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 Code of Civil Procedure section 128, subdivision (a)(8) provides in full: “An 

appellate court shall not reverse or vacate a duly entered judgment upon an agreement or 

stipulation of the parties unless the court finds both of the following: [¶] (A) There is no 

reasonable possibility that the interests of nonparties or the public will be adversely 

affected by the reversal. [¶] (B) The reasons of the parties for requesting reversal 

outweigh the erosion of public trust that may result from the nullification of a judgment 

and the risk that the availability of stipulated reversal will reduce the incentive for pretrial 

settlement.”
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reasonable possibility that the stipulated reversal will adversely affect the interests of 

nonparties or the public. (§ 128(a)(8)(A).) 

Making the second finding required by § 128(a)(8) entails balancing of (a) the 

erosion of public trust that may result from reversing the judgment and (b) the reduced 

incentive to settle pretrial that may result against the reasons for the parties agreeing to a 

stipulated reversal. Here the motivation for settlement includes a desire to end several 

years of court proceedings and avoid the expense of filing briefs on appeal. Thus, the 

motivations for a stipulated reversal in this case appear honorable, and the settlement 

would conserve court resources.

Little potential for erosion of public trust exists in this case because of the 

reasonable and good faith character of the appeal and the potential issues to be raised, 

i.e., whether the trial court erred in determining insufficient facts were alleged in the 

complaint that concerned payment to plaintiff for services rendered to one patient. There 

were no findings in this case of misdeeds or professional misconduct, nor does the case 

involve the interests of any government body or regulatory agency that would invoke the 

public’s interest. (Contra, Muccianti v. Willow Creek Care Center (2003) 108 

Cal.App.4th 13, 22 [stipulated reversal would expunge long term care facility’s misdeeds 

against elderly patients from public record]; Hardisty v. Hinton & Alfert (2004) 124 

Cal.App.4th 999, 1011-1012 [stipulated reversal would allow attorneys to avoid potential 

professional discipline].) We additionally note that this stipulated reversal makes clear 

that the reversal does not imply a ruling that the judgment was reversibly erroneous, but 

rather that the settlement has rendered the dispute moot and that the reversal serves only 
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to vacate the judgment so that the trial court may dismiss the underlying action as moot. 

We find that the motivations of the parties for stipulating to reverse outweigh the 

negligible risk that public trust would be eroded. (§ 128 (a)(8)(B).)

The third and final factor for consideration is the extent to which the availability of 

a post judgment stipulated reversal reduced the incentive in this case to a pretrial 

settlement, which factor is also to be weighed against the parties’ reasons for stipulating 

to the reversal. Because the plaintiff could have reasonably believed that it would have 

prevailed at trial, there was little incentive in this case to settle before trial. Thus, the 

possibility of stipulating to a reversal on appeal likely did not occur to plaintiff prior to 

trial and, thus, did not likely act as a disincentive to pretrial settlement. We find that the 

parties’ reasons for stipulating to this reversal outweigh the unlikely disincentive of a 

stipulated reversal to pretrial settlement. (§ 128 (a)(8)(B).)

DISPOSITION

Pursuant to the stipulation of the parties, the judgment is reversed. This reversal of 

the judgment does not indicate a ruling on the merits of the judgment, but serves only to 

vacate the judgment and restore jurisdiction to the trial court so that it may dismiss the 

action. The trial court is directed to dismiss the action as to defendants as moot due to 

the parties’ settlement. In the interests of justice, the parties shall bear their own costs on 

appeal. (Cal. Rules of Court, rule 8.278(a)(3).) Because the parties stipulated to the 
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immediate issuance of the remittitur, the clerk of this court is directed to issue the 

remittitur forthwith. (Cal. Rules of Court, rule8.272(c)(1).)

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

RAMIREZ

P. J.

We concur:

HOLLENHORST

J.

McKINSTER

J.