Archive for May, 2010

Insurance

(Insurance)  Uninsured patient sufficiently alleges that hospital unfairly charged fees that exceeded fees accepted from patients covered by Medicare or private insurance. Dagmar Hale v. Sharp Healthcare,  2010 DJDAR  5730  (April 19, 2010).

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(Insurance)  Uninsured patient must show actual reliance on alleged misrepresentations to have standing under unfair competition. Daniel Durell v. Sharp Healthcare,  2010 DJDAR  5722  (April 19, 2010).

Dagmar Hale v. Sharp Healthcare and Daniel Durell v. Sharp Healthcare concern putative class actions related to billing practices related to the “regular” billing rate of defendant healthcare system.    Both cases involve trial court orders sustaining demurrers to Unfair Competition Law claims.     The outcomes differ based upon how the plaintiffs pled the allegations concerning the “reliance” element. 

The cases concern the basic theory that defendant engaged in deceptive and unfair practices by billing uninsured patients its full standardized rates for services, when it substantially discounts those rates for patients covered by Medicare or private insurance.  Both cases questioned, in slightly different ways, what actually constitutes the “regular rates” charged to patients. 

In the Durell opinion, the Court focused on the causation aspect of standing.  The court sustained the demurrer to the UCL cause of action based on the ground that the plaintiff lacked standing to pursue the claim.    The complaint did not allege that the plaintiff “relied on [defendant] charging its ‘usual and customary rates’ in receiving treatment.”  

The Court found the absence of allegations of “reliance” to be the key defect in plaintiff’s pleading.   The complaint did not allege that the plaintiff relied on either the defendant’s web site representations or on the language in the Agreement for Services in going to defendant’s hospital or in seeking or accepting services once he was transported there.  

The plaintiff in Dagmar Hale v. Sharp Healthcare, on the other hand, alleged facts that satisfied the Court’s examination of “injury in fact” and standing based on pleading related to the Admission Agreement.    Though thin, the Court agreed that Hale did plead a form of “reliance” sufficient to withstand demurrer.

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Hiring party’s knowledge of landscaper’s unlicensed contractor status does not bar reimbursement claim

(Unlicensed Contractors)  Hiring party’s knowledge of landscaper’s unlicensed contractor status does not bar reimbursement claim.

Esaul Alatriste v. Cesar’s Exterior Designs, Inc.,  2010 DJDAR  3763  (April 6, 2010). 

Plaintiff paid defendant a sum of money for a landscaping design at plaintiff’s home.  Plaintiff then sued the defendant landscape design company seeking reimbursement for the sums paid under the statute which allows a party to recover “all compensation paid to [an] unlicensed contractor.”  Business and Professions Code Section 7031 (sub b).  The plaintiff successfully moved for summary adjudication of this claim.  After the plaintiff dismissed his remaining claims the court entered judgement in the plaintiff’s favor for the sum paid. 

The defendant conceded that it was unlicensed when it began the landscape work, but contended that the court erred in granting the summary adjudication because it presented facts supporting its defenses and/or offsets to plaintiff’s section 7031 (sub b) claim.  The appeals court found this contention to be without merit.  The facts did not support a viable defense or offset to the reimbursement claim under section 7031 (sub b).  Specifically, the appeals court held that 1) plaintiff’s prior knowledge of the defendant’s unlicensed status did not bar recovery under section 7031 (sub b) reimbursement claim, 2)  plaintiff was entitled to recover the total amount paid even though the defendant was licensed during a portion of the work and 3)  plaintiff was entitled to recover payments from materials retained by him in addition to payments for labor.

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Award of punitive damages against insurer for bad faith, which is 10 times amount of compensatory damages, is constitutionally excessive

(Punitive Damages)  Award of punitive damages against insurer for bad faith, which is 10 times amount of compensatory damages, is constitutionally excessive.  Amerigraphics, Inc. v. Mercury Casualty Company,  2010 DJDAR  4326  (March 23, 2010). 

In this matter, the court was asked to consider whether an award of punitive damages that was ten times the amount of compensatory damages and prejudgment interest was correctly calculated and comports with due process.  The court found that substantial evidence supported  an amount of punitive damages not to exceed compensatory damages by more than 3.8 to 1 ratio.  

The court stated that courts examine reprehensibility of the defendant’s conduct and the disparity between the harm suffered by the plaintiff and the award in determining the amount of punitive damages.  Here, the matter involved a claim for insurance related to  flooding of a business premises.  The harm caused by the defendant was not physical and did not involve a disregard of another’s safety.  Thus, the degree of reprehensibility was low.  The court found that the single digit ratio between punitive and compensatory damages was therefore proper.

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Counsel does not make actionable representation to opposing counsel when he signs agreement approved as to form and content

(Attorney Representation)  Counsel does not make actionable representation to opposing counsel when he signs agreement approved as to form and content.  Gary A. Freedman v. Mark Brutzkus,  2010 DJDAR  3763  (March 11, 2010). 

This California appeals court was asked to decide whether or not the signature block on a contract which bears an attorney signature under the legend “Approved as to Form and Content” may amount to an actionable representation to an opposing party’s attorney.  The appeals court concluded that it did not.  It found that the recital indicated that an attorney has advised or is advising his or her own client of the attorney’s approval of a document’s form and content, it is not, by itself, operate as a representation to an opposing party’s attorney that can provide a basis for tort liability against an attorney. 

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Communications between attorney and client during mediation are not protected by mediation confidentiality

(Admissions)  Communications between attorney and client during mediation are not protected by mediation confidentiality and are thus admissible. John Porter v. Steven Wyner,  2010 DJDAR  5312  (April 8, 2010). 

Evidence Code Section 1119 (sub a) provides that evidence of anything said or admissions made for the purpose of or in the course  of the mediation process is not admissible in any civil action.  In this case, the court found that the above Evidence Code Section did not extend to communication between a lawyer and his client during the mediation process.  To apply such confidentiality would create a chilling effect on the use of mediation.  Thus, communications between an attorney and his client cannot be considered in “the course of” a mediation.  The confidentiality that is accorded mediation was never intended to protect communications or agreements between a client and his own counsel should a conflict arise between them.  The attorney-client privilege, codified in Evidence Code Section 954 provides the necessary protection.

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