Court Opinion

ID: 2741745
Source: CourtListenerOpinion
Date Created: 2014-10-10 20:01:55.349204+00
Date Added: 2024-06-11T09:55:05.190353
License: Public Domain

FILED
                           NOT FOR PUBLICATION                             OCT 10 2014

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

ST. VINCENT MEDICAL CENTER, a                    No. 12-56678
California non-profit religious corporation,
                                                 D.C. No. 2:12-cv-02694-SVW-
              Plaintiff - Appellant,             CW

  v.
                                                 MEMORANDUM*
MEGA LIFE AND HEALTH
INSURANCE COMPANY, an Oklahoma
for profit corporation,

              Defendant - Appellee.

                    Appeal from the United States District Court
                        for the Central District of California
                    Stephen V. Wilson, District Judge, Presiding

                      Argued and Submitted August 27, 2014
                              Pasadena, California

Before: O’SCANNLAIN and RAWLINSON, Circuit Judges, and RAKOFF,
Senior District Judge.**

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable Jed S. Rakoff, Senior District Judge for the U.S.
District Court for the Southern District of New York, sitting by designation.
      Plaintiff-Appellant St. Vincent Medical Center (“St. Vincent”) appeals from

the district court’s grant of summary judgment in favor of The MEGA Life and

Health Insurance Company (“MEGA Life”). In the district court, St. Vincent

unsuccessfully argued that MEGA Life breached a contract with it and, in the

alternative, that MEGA Life was estopped from failing to pay for care received by

two of its insureds.

      The general rule in California is that “only a signatory to a contract may be

liable for any breach.” Clemens v. Am. Warranty Corp., 193 Cal. App. 3d 444, 452

(1987); see also Jones v. AIG Risk Mgmt., Inc., 726 F. Supp. 2d 1049, 1055 (N.D.

Cal. 2010) (dismissing, under California law, claim for breach of contract against

defendant not party to the contract); Tri-Continent Int’l Corp. v. Paris Sav. & Loan

Assoc., 12 Cal. App. 4th 1354, 1359 (1993) (explaining that “[plaintiff] cannot

assert a claim for breach of contract against one who is not a party to the

contract”). The parties do not dispute that there is no written agreement between

St. Vincent and MEGA Life.

      St. Vincent seeks to avoid the general rule by arguing that a series of

agreements between it and First Health Group, which in turn contracted with

MEGA Life, must be read as one contract. St. Vincent’s position relies principally

on some similar language contained in the two contracts, but St. Vincent admits

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that it has found no authority for the proposition that the similar language gives

rise to a contract in these circumstances. Moreover, St. Vincent fails to give effect

to the integration clause contained in the agreement between St. Vincent and First

Health Group, the integration clause contained in the agreement between First

Health Group and MEGA Life, and the disclaimer of any third party rights in the

contract between First Health Group and MEGA Life.

      Nor do the two agreements incorporate each other by reference. California

law requires that incorporation by reference be “clear and unequivocal.” Avery v.

Integrated Healthcare Holdings, Inc., 218 Cal. App. 4th 50, 66 (2013) (citations

omitted). The agreements between St. Vincent and First Health Group and First

Health Group and MEGA Life do not contain such clear and unequivocal

language. In sum, St. Vincent has failed to explain why it should be excepted from

the California rule that only a party to a contract may be sued on that contract.

      St. Vincent also argues that principles of estoppel save its claims. Under the

doctrine of equitable estoppel, “‘[w]henever a party has, by his own statement or

conduct, intentionally and deliberately led another to believe a particular thing true

and to act upon such belief, he is not, in any litigation arising out of such statement

or conduct, permitted to contradict it.’” Honeywell v. Workers’ Comp. Appeals

Bd., 35 Cal. 4th 24, 37 (2005) (quoting Cal. Evid. Code § 623). But four elements

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must be satisfied for the doctrine to apply: “‘(1) the party to be estopped must be

apprised of the facts; (2) he must intend that his conduct shall be acted upon, or

must so act that the party asserting the estoppel had a right to believe it was so

intended; (3) the other party must be ignorant of the true state of the facts; and (4)

he must rely upon the conduct to his injury.’” Id. (quoting City of Long Beach v.

Mansell, 3 Cal.3d 462, 489 (1970)). At most, St. Vincent has established that

MEGA Life’s agreement with First Health Group secured specific reimbursement

rates to network care providers. But that does not show that MEGA Life intended

St. Vincent would act upon that language. Indeed, the text of the same agreement

explains that there are no third party beneficiaries to the contract.

      Finally, St. Vincent argues that its claims should proceed based on estoppel

by ratification. But there is no indication that MEGA Life either “accept[ed]

performance” under any contract with St. Vincent or that it “ma[de] payment on

account” with St. Vincent. Gaillard v. Natomas Co., 208 Cal. App. 3d. 1250, 1273-

74 (1989).

      AFFIRMED.

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