Court Opinion

ID: 4614285
Source: CourtListenerOpinion
Date Created: 2020-11-20 22:03:55.846365+00
Date Added: 2024-06-11T07:54:45.324886
License: Public Domain

Filed 11/20/20 Namdy Consulting v. UnitedHealthcare etc. CA2/4
         NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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   IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
              SECOND APPELLATE DISTRICT
                     DIVISION FOUR

NAMDY CONSULTING, INC.,                                        B301865

       Plaintiff and Appellant,                                Los Angeles County
                                                               Super. Ct. No. BC685324
       v.

UNITEDHEALTHCARE
INSURANCE COMPANY,

       Defendant and Respondent.

     APPEAL from a judgment of the Superior Court of Los
Angeles County, Lia Martin, Judge. Affirmed.
     Gerald P. Peters and Alan Nesbit for Plaintiff and
Appellant.
     Reed Smith, Amir Shlesinger and Kasey J. Curtis, for
Defendant and Respondent.
                        INTRODUCTION
      Plaintiff and appellant Namdy Consulting, Inc. appeals
from a judgment entered after the trial court sustained defendant
and respondent UnitedHealthcare Insurance Company’s
unopposed demurrer to its first amended complaint. The
complaint asserted nine causes of action seeking to recover
payments allegedly due for orthopedic services rendered by
Namdy-associated physicians to UnitedHealthcare policyholders.
In sustaining the demurrer, the trial court found Namdy failed to
allege it had standing to bring its claims, or that it was entitled
to the payments sought under California law.
      On appeal, Namdy contends the trial court erred by
sustaining the demurrer and refusing to grant leave to amend.
We conclude that, by failing to raise them before the trial court,
Namdy forfeited its contentions challenging the trial court’s order
sustaining the demurrer. We further conclude Namdy has not
demonstrated the trial court abused its discretion by declining
leave to amend. Accordingly, we affirm.

         FACTS AND PROCEDURAL BACKGROUND
       “In considering whether [a] demurrer should have been
sustained, we treat the demurrer as an admission by defendant[]
of all material facts properly pled in plaintiff[’s] first amended
complaint—but not logical inferences, contentions, or conclusions
of fact or law. [Citation.]” (Winn v. Pioneer Medical Group, Inc.
(2016) 63 Cal.4th 148, 152.)
       Namdy alleges it is “a professional group of orthopedists
and health care providers who were fully licensed, certificated,
and in good standing under the laws of the State of California.”
Physicians “associated with N[amdy]” do not have any “preferred

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provider contracts or other . . . written contracts with
[UnitedHealthcare] setting their rates of pay for services
rendered[.]” They are therefore considered “out-of-network
providers or non-participating providers” for UnitedHealthcare
insurance policyholders. Nevertheless, these physicians have
provided medical treatment and services to patients insured by
UnitedHealthcare.
       Namdy also alleges that before those services were
rendered, its representatives contacted UnitedHealthcare “to
verify that each patient was insured, covered, or otherwise had
rights of indemnification and insurance through
[UnitedHealthcare]” and to “obtain prior authorization, pre-
certification and consent” to perform the requested services. In
response, UnitedHealthcare representatives allegedly informed
Namdy the patients at issue were covered under their respective
insurance policies for the requested services; Namdy was
authorized to provide the services; and Namdy would be paid for
the services performed “at usual, customary and reasonable
rates[.]” Despite these representations, UnitedHealthcare
allegedly has “refused to pay usual, customary and reasonable
rates for the services rendered by N[amdy.]”
       Based on these allegations, Namdy’s operative complaint
asserts nine causes of action against UnitedHealthcare: (1)
recovery of payment for services rendered; (2) recovery of
payment on an open book account; (3) quantum meruit; (4)
breach of implied-in-fact contract; (5) declaratory relief; (6)
breach of oral contract; (7) estoppel; (8) violations of Health and
Safety Code section 1371.8, Insurance Code section 796.04, and
California Code of Regulations, title 28, section 1300.71; and (9)
breach of contract.

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       UnitedHealthcare demurred to the first amended complaint
on the grounds that: (1) Namdy lacked standing to pursue claims
arising from the non-party physicians’ performance of services;
(2) the complaint failed for lack of certainty; and (3) Namdy failed
to state sufficient facts to constitute a cause of action. Namdy did
not oppose the demurrer. Instead, without first obtaining leave of
court, Namdy filed a second amended complaint.
       At the hearing on the demurrer, Namdy did not assert the
demurrer should not be sustained. Rather, Namdy first
contended it was entitled to file a second amended complaint as a
matter of right. After the trial court rejected that argument,
Namdy requested leave to amend, arguing its second amended
complaint “cure[d] a number of the defects” present in the first
amended complaint and “could be amended further . . . to [cure]
the remainder of [the] defects[.]”
       In response to Namdy’s request, the trial court asked
Namdy for an offer of proof regarding how it could further amend
the complaint. Namdy stated it could plead additional facts
illustrating its third-party beneficiary status under a written
agreement between its physicians and Integrated Health Plan,
which formed the basis of its breach of contract claim. Namdy
also contended it could plead more facts showing entitlement to
relief on a promissory estoppel claim.
       Following the hearing, the trial court struck Namdy’s
second amended complaint, reasoning “the right to amend a
complaint once without seeking leave to amend has been held to
be limited to the original complaint.” Thereafter, the trial court
sustained the demurrer without leave to amend. In support of its
ruling, the trial court found “[t]he complaint does not allege that
[Namdy] has standing,” as “[t]he claims belong to its members

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and no assignment of the claims is alleged.” The trial court
further found Namdy failed to plead facts demonstrating
entitlement to the payments alleged. Specifically, relying on
Orthopedic Specialists of Southern California v. Public
Employees’ Retirement System (2014) 228 Cal.App.4th 644
(Orthopedic Specialists) and Pacific Bay Recovery, Inc. v.
California Physicians’ Services, Inc. (2017) 12 Cal.App.5th 200
(Pacific Bay), which were discussed at length in
UnitedHealthcare’s memorandum in support of its demurrer, the
trial court found: (1) “[t]he issue of payment for nonemergency
services provided by out-of-network providers appears to be
governed by the contract between the insured and the insurer”
but “[t]hose contracts are not pleaded”; and (2) “[v]erifying
coverage and that payment will be made is not sufficient to
support a cause of action for payment of a specific amount of
money.”
       The trial court entered a judgment of dismissal in favor of
UnitedHealthcare. Namdy appealed.

                           DISCUSSION
I.     Namdy forfeited its contentions challenging the trial
       court’s order sustaining the demurrer.
       Namdy contends the trial court erred by sustaining the
demurrer to its first amended complaint. In support of this
position, Namdy advances several arguments defending the
complaint’s sufficiency, apparently in direct response to the
contentions raised in the demurrer. Specifically, Namdy argues:
(1) it was not required to allege the physicians who performed the
services for which payment is due had assigned their claims to
Namdy; (2) Health and Safety Code section 1371.8 and Insurance

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Code section 796.04 authorize a private right of action; (3) the
first amended complaint is not uncertain; and (4) it pled
sufficient facts to state a claim on its causes of action for recovery
on open book account, quantum meruit, declaratory relief, breach
of oral contract, estoppel, and breach of contract. None of these
arguments, however, were raised before the trial court.
       “As a general rule, a party is precluded from urging on
appeal any point not raised in the trial court. [Citation.]” (In re
Riva M. (1991) 235 Cal.App.3d 403, 411-412.) “‘The rule that
contentions not raised in the trial court will not be considered on
appeal is founded on considerations of fairness to the court and
opposing party, and on the practical need for an orderly and
efficient administration of the law.’ [Citations.]” (In re S.C. (2006)
138 Cal.App.4th 396, 406.) “Any other rule would ‘“‘permit a
party to play fast and loose with the administration of justice by
deliberately standing by without making an objection of which he
is aware and thereby permitting the proceedings to go to a
conclusion which he may acquiesce in, if favorable, and which he
may avoid, if not.’” [Citations.]’ [Citation.]” (In re Riva M., supra,
235 Cal.App.3d at p. 412.)
       Of course, “application of the forfeiture rule is not
automatic,” and appellate courts have the discretion to consider
some issues raised for the first time on appeal. (In re S.B. (2004)
32 Cal.4th 1287, 1293.) Nevertheless, “the appellate court’s
discretion to excuse forfeiture should be exercised rarely and only
in cases presenting an important legal issue. [Citations.]” (Ibid.)
Indeed, “[a]ppellate courts are loath to reverse a judgment on
grounds that the opposing party did not have an opportunity to
argue and the trial court did not have the opportunity to
consider. [Citation.]” (JRS Products, Inc. v. Matsushita Electric

                                  6
Corp. of America (2004) 115 Cal.App.4th 168, 178 (JRS
Products).)
        For the reasons discussed below, we conclude application of
the forfeiture rule is appropriate in this case.
        UnitedHealthcare originally filed its demurrer to Namdy’s
first amended complaint in June 2018. In December 2018,
however, before the demurrer was heard, the case was removed
to federal court. In March 2019, about a month after the parties
stipulated to remand the case, UnitedHealthcare re-filed the
exact same demurrer and set it for hearing in August 2019.
        As noted above, Namdy did not file any opposition to the
demurrer. Instead, Namdy filed a second amended complaint
without first seeking leave of court. Subsequently, at the hearing
on the demurrer, the trial court informed Namdy it was not
entitled to file a second amended complaint as a matter of right
and afforded Namdy an additional opportunity to be heard. At
that point, Namdy did not contend the demurrer should not be
sustained or otherwise defend the sufficiency of the first amended
complaint. Nor did Namdy request a continuance to file written
opposition to the demurrer. Rather, Namdy essentially conceded
its first amended complaint was deficient as pled and requested
leave to amend.
        In sum, the record reflects Namdy was aware of the
demurrer and the arguments in support of it for well over a year
before the demurrer was heard. Nevertheless, it did not advance
any arguments whatsoever in opposition to the demurrer during
the trial court proceedings, despite having ample time and
opportunity to do so. Moreover, Namdy has not shown this case
presents any “important legal issue[s]” warranting a “rare[]”
departure from the forfeiture rule. (In re S.B., supra, 32 Cal.4th

                                7
at p. 1293.) Consequently, by raising a number of arguments
contesting the demurrer for the first time on appeal, Namdy
unjustifiably asks us to “reverse a judgment on grounds that
[UnitedHealthcare] did not have an opportunity to argue and the
trial court did not have an opportunity to consider. [Citation.]”
(JRS Products, supra, 115 Cal.App.4th at p. 178.) This we will
not do.
       In addition, we note the arguments in Namdy’s opening
brief do not address the primary ground on which the demurrer
was sustained. Specifically, the brief does not discuss the trial
court’s reliance on Orthopedic Specialists, supra, 228 Cal.App.4th
644, and Pacific Bay, supra, 12 Cal.App.5th 200, to find Namdy’s
allegations did not establish entitlement to the payments sought.
Rather, Namdy’s reply brief on appeal is the first and only
instance in this entire litigation when Namdy argues those
opinions are distinguishable from this case and do not apply.1 It

1      At oral argument, Namdy argued that although its opening
brief did not reference Pacific Bay or Orthopedic Specialists, it
effectively rebutted UnitedHealthcare’s contention that it was not
entitled to the payments sought under those cases on pages 23
through 30 of the brief. We disagree. In the cited portions of its
opening brief, Namdy argues: (1) a private right of action exists
under Health and Safety Code section 1371.8 and Insurance Code
section 796.04; (2) the demurrer improperly relied on information
outside the complaint to challenge Namdy’s statutory claims; (3)
the documents pertaining to Namdy’s other lawsuits against
UnitedHealthcare filed in federal court, which UnitedHealthcare
had asked the trial court to take judicial notice of in connection
with its demurrer, are irrelevant to this case; and (4) the Knox-
Kneene Act does not bar Namdy’s common law claims. None of
these points, however, addresses the purported inapplicability of
Pacific Bay or Orthopedic Specialists. By contrast, in its reply

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is well-settled, however, that “‘[p]oints raised for the first time in
a reply brief will ordinarily not be considered, because such
consideration would deprive the respondent of an opportunity to
counter the argument.’ [Citation.]” (Reichardt v. Hoffman (1997)
52 Cal.App.4th 754, 764.) Given that Namdy undoubtedly could
have raised this argument before the trial court and in its
opening brief on appeal, we decline to consider it.
       Accordingly, we conclude Namdy’s arguments challenging
the trial court’s order sustaining the demurrer have been
forfeited. We therefore need not resolve them on the merits.

II.    Namdy has not shown the trial court abused its
       discretion by denying leave to amend.
       “‘When a demurrer is sustained without leave to amend,
the reviewing court must determine whether there is a
reasonable possibility that the complaint could have been
amended to cure the defect . . . .’ [Citation.] The abuse of
discretion standard governs our review of that question.
[Citation.]” (Rosen v. St. Joseph Hospital of Orange County (2011)
193 Cal.App.4th 453, 458.) “The burden of showing that a
reasonable possibility exists that amendment can cure the defects
remains with the plaintiff; neither the trial court nor this court
will rewrite a complaint. [Citation.]” (Rakestraw v. California
Physicians’ Service (2000) 81 Cal.App.4th 39, 44 (Rakestraw).)
       “To satisfy that burden on appeal, a plaintiff must ‘show in
what manner he [or she] can amend [the] complaint and how that
amendment will change the legal effect of [the] pleading.’
[Citation.] The assertion of an abstract right to amend does not

brief, Namdy expressly attempts to distinguish those cases from
this case.

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satisfy this burden. [Citation.]” (Rakestraw, supra, 81
Cal.App.4th at p. 43.) “Where the appellant offers no allegations
to support the possibility of amendment and no legal authority
showing the viability of new causes of action, there is no basis for
finding the trial court abused its discretion when it sustained the
demurrer without leave to amend. [Citations.]” (Id. at p. 44.)
      As noted above, Namdy contends the trial court abused its
discretion by refusing to grant leave to amend. In support of this
position, Namdy does not ask us to consider its second amended
complaint to determine whether the first amended complaint can
be amended to state a valid cause of action.2 Instead, Namdy
asserts “[t]here are no ‘unfixable’ defects in Namdy’s claims, as
alleged.” In so arguing, however, Namdy does not identify with
specificity the additional allegations and/or causes of action it
would plead if given leave to amend.3 Namdy has therefore failed

2    Indeed, on appeal, Namdy appears to abandon its second
amended complaint altogether, as its opening brief instead
defends the viability of several claims asserted in the first
amended complaint but omitted from the second amended
complaint.

3      In its reply brief, Namdy argues it should have been given
leave to amend because it “could have clarified the terms of any
oral agreement with [UnitedHealthcare] regarding payment,”
“clarified statements made by [UnitedHealthcare] which gave
rise to an estoppel,” and “alleged additional facts regarding the
contract with Integrated Health Plan.” Even if we found it
appropriate to consider these contentions, which were not
presented in Namdy’s opening brief, we would nevertheless
conclude they are insufficient to satisfy Namdy’s burden, as a
party must offer allegations that are “factual and specific, not
vague or conclusionary” to show entitlement to leave to amend.

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to satisfy its burden of establishing the trial court abused its
discretion by denying leave to amend. (Rakestraw, supra, 81
Cal.App.4th at p. 44.)

                         DISPOSITION
       The judgment is affirmed. UnitedHealthcare shall recover
its costs on appeal.

 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

      CURREY, J.

      We concur:

      WILLHITE, Acting P.J.

      COLLINS, J.

(Rakestraw, supra, 81 Cal.App.4th at p. 44.) All Namdy did was
assert it could clarify its claims without doing so or proffering
additional facts.

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