Appellate Updates

Zaragoza v. Adam (Jan. 31, 2025, A168100) ___ Cal.App.5th ___ [2025 WL 630923], ordered published Feb. 27, 2025

Sabrina Zaragoza was admitted to Mercy Medical Center Merced with abdominal pain and later diagnosed with a bile leak. Dr. Nadir Adam performed surgery to remove her gall bladder. Following complications, including a bile leak and additional surgeries, Zaragoza sued Dr. Adam for medical malpractice. Dr. Adam filed a motion for summary judgment, which was supported by a medical expert declaration stating that Dr. Adam performed the surgery within the standard of care and that Zaragoza’s complications were caused by a subsequent surgery performed by another doctor. Zaragoza did not file an opposing medical expert declaration but argued that Dr. Adam’s supporting declaration was inadequate. The trial court granted summary judgment for Dr. Adam, and Zaragoza appealed.

The Court of Appeal reversed, holding that Dr. Adam failed to meet his initial burden of showing the absence of a triable issue of fact and directed the trial court to deny the summary judgment motion. The court found that the medical expert’s declaration was too conclusory because it lacked factual details and a reasoned explanation for his opinions. For example, the medical expert failed to explain what acts constitute due care when performing gallbladder removal surgery, how they are related to preventing a bile leak, or how he determined that the bile leak was not due to surgical error. The court also rejected Dr. Adam’s argument that the expert declaration was adequate in light of Zaragoza’s failure to articulate any specific factual basis for her claim that Dr. Adams was negligent, explaining that plaintiffs need not allege negligence claims with particularity. 

Lin v. Board of Directors of PrimeCare Medical Network, Inc. (Feb. 19, 2025, D084821) __ Cal.App.5th __ [2025 WL 544022]

PrimeCare, a private corporation licensed as a healthcare service plan under the Knox-Keene Act, contracts with full-service health plans (such as Blue Shield and Blue Cross) to provide medical care to health plan enrollees. It also contracted to conduct peer review for the medical group that employed Dr. Jason Lin. After a patient and her son complained to the medical group about Lin grabbing and shaking hitting the patient’s wrist during an argument, PrimeCare’s chief medical officer summarily suspended Dr. Lin’s privileges pending an investigation. He specified that the suspension took effect immediately under the statutory exception to the notice requirement for situations where the failure to take immediate action may result in “ ‘imminent danger to the health of any individual.’ ” When Dr. Lin was informed of the suspension, he stated he would have “slapped [the patient] across the face” if he could have. PrimeCare maintained Dr. Lin’s suspension pending completion of an anger management course and specified that he would be chaperoned for six months when he returned to work. Dr. Lin requested that a judicial hearing committee (JHC) review the disciplinary action.

The JHC found PrimeCare failed to prove the immediate summary suspension was justified. But PrimeCare’s board of directors (the Board) reversed the JHC pursuant to a Fair Hearing Plan provision that allowed the Board to make the final disciplinary decision when the JHC’s decision was inconsistent with the applicable burden of proof, which the Board construed as authorizing its independent review. Dr. Lin filed a petition for writ of administrative mandamus seeking reinstatement of his credentials and privileges. The trial court granted the petition, finding the Board did not have authority to independently review the JHC’s decision. The Board appealed.

The Court of Appeal affirmed. It explained that, as an entity licensed under the Knox-Keene Act, PrimeCare is a peer review body and its chief medical officer had authority to suspend Dr. Lin. However, the court construed the Fair Hearing Plan as limiting the Board’s authority to decide whether the JHC had identified and applied the applicable burden of proof. Construing the Fair Hearing Plan to authorize the Board, whose members included non-licentiates, to perform medical peer review itself was inconsistent with the statutory requirement that peer review be conducted by licentiates. The only exception to that requirement did not apply to PrimeCare because it is not an acute care hospital. Accordingly, the Board exceeded its authority when it reversed the JHC’s peer review decision.

Nissanoff v. UnitedHealthcare Ins. Co (2024) 108 Cal.App.5th Supp. 1

Dr. Jonathan Nissanoff sued UnitedHealthcare Insurance Company (UHC) under the Knox-Keene Act, seeking to recover the difference between his “usual and customary” fee and the much lower amount UHC paid Dr. Nissanoff to provide emergent medical care to UHC policyholders. The trial court sustained UHC’s demurrer without leave to amend, ruling that UHC was not subject to Knox-Keene Act claims because it was regulated by the California Department of Insurance (CDI), not the Department of Managed Healthcare (DMHC). Dr. Nissanoff appealed from the ensuing judgment of dismissal. 

The Court of Appeal affirmed, explaining that managed health care service plans are regulated by the DMHC and are therefore subject to the Knox-Keene Act provision compelling them to reimburse emergency healthcare providers at the “reasonable and customary value” for their services. However, insurance companies are regulated by the CDI, and are subject to the Knox-Keene Act only if they directly provide health care services through entity-owned or contracting health facilities and providers. Because UHC was regulated by the CDI, and because Dr. Nissanoff’s complaint failed to allege that UHC directly provided health services, Dr. Nissanoff could not recover damages based on UHC’s failure to pay fees required by the Knox-Keene Act.

Ng v. Superior Court (Jan. 29, 2025, G064257) ___ Cal.App.5th ___, 2025 WL 323098

Joely Ng’s husband died from sepsis after doctors at Los Alamitos Medical Center improperly placed his feeding tube.  Ng sued the doctors and the Medical Center for (1) wrongful death in her individual capacity, and (2) medical malpractice as her husband’s successor-in-interest (a survival claim).  She sought economic damages and noneconomic damages up to the relevant statutory caps. (See Civ. Code, § 3333.2, subd. (b) & (c) [capping noneconomic damages in medical malpractice actions]; see also Code Civ. Proc., § 377.34, subd. (b) [allowing recovery of noneconomic damages in survival actions].) The Medical Center conceded that Ng could recover noneconomic damages for both wrongful death and survival claims, but moved to strike portions of her complaint alleging that a separate MICRA cap applied to each claim.  The trial court granted the motion, reasoning that “ ‘the wrongful death claim is not separate and distinct from a medical negligence claim, it cannot be . . . subject to a separate MICRA cap.’ ”  Ng sought writ relief.

The Court of Appeal granted Ng’s writ petition, holding that plaintiffs who bring both wrongful death and survival claims may recover non-economic damages up to the MICRA cap for each claim.  The court explained that recent amendments to Code of Civil Procedure section 377.34, subdivision (b), now “allow for the recovery of damages for a decedent’s ‘pain, suffering, or disfigurement’ in survival actions ‘filed on or after January 1, 2022, and before January 1, 2026.’ ”  The court further explained that separate MICRA caps are allowed for separate injuries, and the survival and wrongful death claims seek compensation for separate injuries.  The survival claim seeks compensation for damages to the decedent, while the wrongful death claim seeks compensation for damages to the heirs of the decedent “ ‘ “based upon their own independent pecuniary injury suffered by loss of a relative.” ’ ” Since the survival and wrongful death claims remedy distinct injuries suffered by distinct persons separate MICRA damages caps apply, and Ng was therefore entitled to writ relief.

Charlie L. v. Kangavari (Jan. 2, 2025, B327714) __ Cal.App.5th __, 2025 WL 23756

Charlie L. was brought to a hospital’s emergency department, where the attending physician issued “stat” orders for an X-ray and ultrasound of Charlie’s abdomen. Dr. Peyman Kangavari, an on-call radiologist working remotely, promptly reviewed the images and reported his conclusions to the attending physician, who then discharged Charlie with follow-up instructions. When Charlie’s condition worsened, he returned to the ER and was transported to another hospital for emergency surgery, which was not entirely successful. Charlie filed a medical malpractice lawsuit against numerous healthcare defendants including Dr. Kangavari, whom he claimed had negligently failed to timely diagnose bowel obstructions. Dr. Kangavari moved for summary judgment contending he adhered to the standard of care and did not cause any harm. His motion was supported by the declaration of Dr. John Lieu, a diagnostic radiologist. Charlie’s opposition was supported by declaration of Dr. Ravi Srinivasa, a medical school professor of clinical radiology. The trial court ruled that Health and Safety Code section 1799.110 applied, sustained Dr. Kangavari’s objection that Professor Srinivasa was unqualified under that statute, and granted summary judgment because Charlie lacked a standard-of-care expert. Charlie appealed.

The Court of Appeal reversed the summary judgment but accepted some of the trial court’s reasoning. Charlie had argued that section 1799.110 did not apply because Dr. Kangavari was working remotely and on call. The trial court disagreed, ruling that section 1799.110 applies to malpractice actions against physicians who remotely provide medical expertise on an expedited basis as part of an emergency department’s treatment of an emergency department patient. The Court of Appeal agreed: “this is the only conclusion consonant with section 1799.110’s purpose” of “ ‘promot[ing] “the development, accessibility and provision of emergency medical services.” ’ ” The Court of Appeal explained that section 1799.110 relaxed the standard of care for emergency physicians who face unique challenges when making urgent diagnosis and treatment decisions, often without time to review the patient’s medical history, seek consultations, study current medical literature, or reflect on their decisions. The Legislature did not want physicians to be discouraged from taking on emergency posts due to the cost of malpractice insurance based on malpractice claims supported by experts who had no familiarity with providing emergency care. The Court of Appeal concluded that section 1799.110 applies to on-call physicians remotely providing expertise as part of an emergency department because they operate under the same time pressures as emergency physicians and face the same threat of malpractice liability, and expressly disagreed with the contrary holding in Miranda v. National Services, Inc. (1995) 35 Cal.App.4th 894, which the court believed was based on a flawed Legislative history analysis and disregard for the statute’s intended purpose. 

Having established that section 1799.110 applied, the Court of Appeal held that neither side had proffered an admissible expert declaration because Drs. Lieu and Srinivasa had failed to attest to substantial professional experience providing emergency medical coverage during the five years preceding the alleged malpractice as required by section 1799.110(c). That holding precluded summary judgment for Dr. Kangavari.

Capito v. San Jose Healthcare System, LP (Dec. 23, 2024, S280018) ___ Cal.5th ___, 2024 WL 5196670

Taylor Capito filed a class action lawsuit against Regional Medical Center San Jose (Regional) after receiving emergency room services. She alleged that Regional violated the Unfair Competition Law (UCL) and the Consumer Legal Remedies Act by failing to give her sufficient notice of an Evaluation and Management Services (EMS) fee that it charged. The trial court sustained Regional’s demurrer without leave to amend. Capito appealed the judgment of dismissal. The Court of Appeal affirmed, and then the California Supreme Court granted review.

The Supreme Court also affirmed, holding that hospitals “do not have a duty under the UCL or CLRA, beyond their obligations under the relevant statutory and regulatory scheme, to disclose EMS fees prior to treating emergency room patients.”  The court reasoned that imposing such a duty would upset “the careful balance of competing interests, including price transparency and provision of emergency care without regard to cost, reflected in the multifaceted scheme developed by state and federal authorities” and thwart the “strong legislative policy to ensure that emergency medical care is provided immediately to those who need it[] and that billing disclosure requirements are not to stand in the way of this paramount objective.” Moreover, requiring hospitals to disclose the wide range of EMS fees that could potentially apply depending on the severity of the patient’s condition probably would not “provide reliable notice of actual costs” and “would be misleading because virtually no patients are required to pay the full amount of the EMS Fee.” Finally, provided that hospitals comply with statutory disclosure requirements, their failure to provide potential fee range information to ER patients “is unlikely to deceive the public.” 

The Court approved the decisions in Gray v. Dignity Health (2021) 70 Cal.App.5th 225, Saini v. Sutter Health (2022) 80 Cal.App.5th 105, and Moran v. Prime Healthcare Management, Inc. (2023) 94 Cal.App.5th 166, and disapproved the decisions in Torres v. Adventist Health System/West (2022) 77 Cal.App.5th 500 and Naranjo v. Doctors Medical Center of Modesto, Inc. (2023) 90 Cal.App.5th 1193, many of which were addressed in prior CSHA case bulletins.

Kaweah Delta Health Care District v. Becerra, __ F.4th __, Nos. 22-55157 & 23-55209, 2024 WL 5063933 (9th Cir. Dec. 11, 2024)

A group of California hospitals sued the Secretary of Health and Human Services (HHS) challenging a policy designed to increase Medicare reimbursements to hospitals operating in geographic areas (primarily rural) where wages are generally low (so-called “low-wage hospitals”). The Medicare Act requires HHS to establish and use a wage index to adjust the national average cost of treatment to reflect actual costs in different localities. HHS’s new policy increased the lowest quartile of wage index values, which had the effect of increasing reimbursements to low-wage hospitals to improve their ability to recruit and retain medical staff. To maintain budget neutrality, the policy reduced payments to all other hospitals. A federal district court granted summary judgment for the California hospitals, ruling HHS did not have authority to implement the new policy. HHS appealed and the California hospitals cross-appealed.

The Ninth Circuit affirmed in a split decision. The majority held HHS’s new policy violated the Medicare Act’s Wage Index Provision, which requires that hospital reimbursement adjustments “reflect” the regional wage level, because the policy intentionally deviated from actual wage-level differences to boost payments to low-wage hospitals. The court rejected HHS’s arguments that adjusting the wage index reflects a predictive judgment of regional wage differences that accounts for the time lag in collecting actual wage data, since this data lag would necessarily exist for all hospitals, not just low-wage hospitals. The court further held that the new HHS policy violated the statutory requirement that HHS apply a single wage index equally to all hospitals. The court rejected the Secretary’s argument that the new policy was authorized by Medicare Act’s Exceptions and Adjustments provision—it would violate the nondelegation doctrine to construe that provision to give the Secretary unconstrained authority to sweep aside the reimbursement scheme approved by Congress.

Yaffee v. Skeen (Nov. 25, 2024, C097746, C097988) __Cal.App.5th __ [2024 WL 4887969]

David Yaffee sued Joseph Skeen and his employer, KLS Transportation, Inc., for personal injury stemming from a motor vehicle accident. Overruling a defense objection based on Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541 and its progeny, the trial court permitted Yaffee’s expert to opine on the reasonable value of his past and future medical services based on typical charged amounts without regard to the amounts his health insurer actually paid for that care. The jury returned a verdict in Yaffee’s favor, accepting his medical expense damage expert’s testimony in full. The trial court then entered a judgment for $3 million in compensatory damages (past and future medical damages, lost income, and noneconomic damages), and $1.6 million in costs and interest. Defendants appealed, contesting the awards.

The Court of Appeal affirmed in part and reversed in part. The court ordered a new trial on past medical damages, rejecting Yaffee’s argument that the Hospital Lien Act (HLA), Civil Code section 3045.1, permitted his expert to disregard the limits imposed by Howell and its progeny. The court explained that the HLA allows hospitals to assert liens for the value of required emergency services that are unpaid by uninsured patients. And while Hospitals cannot assert liens absent an unpaid debt, they may contract with health insurers to preserve their right to assert liens against tort recoveries for the difference between the reasonable value of services and lower negotiated payments. However, the lien must relate to “emergency services,” as defined by Health and Safety Code section 1317.1, and cannot include services provided after patients are discharged. The court held that, while Yaffee’s hospital had preserved its right to assert an HLA lien in excess of the negotiated payments it received, the trial court committed prejudicial error by allowing Yaffee to recover past medical expense damages measured by the reasonable value of post-discharge services, rather than limiting the damages to amounts actually paid—as Howell requires. The court also reversed the future medical damages award because there was no evidence that Yaffee would probably incur some of those future expenses.

Murphy v. City of Petaluma (Nov. 25, 2024, A168012) __ Cal.App.5th __ [2024 WL 4880016]

Marites Murphy was involved in a head-on car crash. When paramedics arrived, both Murphy and the other driver were out of their vehicles walking around.  Paramedics observed and repeatedly questioned Murphy. They observed no signs of injury, pain, or cognitive impairment, and determined that she was fully responsive and alert. Murphy insisted she was uninjured and did not want or need medical assistance or transportation to a hospital. She continued to refuse treatment even after the paramedics recommended transportation to a hospital for examination by a physician as a precautionary measure. Paramedics concluded that Murphy had the capacity to refuse medical treatment and was exercising her right to do so. Murphy was taken home by her boyfriend, and she later suffered a debilitating stroke while sleeping due to a hypertensive crisis caused by the collision. She sued the city for medical negligence based on the alleged gross negligence of the paramedics who failed to provide her with needed medical treatment and transportation to the hospital. The trial court granted the city’s motion for summary judgment, ruling that the paramedics did not have a duty to provide Murphy with any medical care or transportation to a hospital. Murphy appealed.

The Court of Appeal affirmed. The court explained that paramedics, like others, may be liable when their actions increase the risk of harm or when they undertake tasks and perform them negligently. However, the scope of any assumed duty is measured by the nature of the undertaking. Here, the paramedics undertook to assess whether Murphy exhibited an obvious injury and whether she was competent to refuse medical care. Because there was no evidence that the paramedics negligently performed that assessment, and Murphy repeatedly refused medical treatment, the paramedics never assumed any duty to provide Murphy with medical care or transportation to a hospital. Rather, they left Murphy in the same position as they found her. 

People v. Kaiser Foundation Health Plan, Inc. (Sept. 30, 2024, D081262) __ Cal.App.5th __, 2024 WL 4351122, ordered published Oct. 22, 2024

The People (acting through the San Diego City Attorney) filed a complaint against Kaiser Foundation Health Plan alleging it violated the unfair competition law (UCL) and false advertising law (FAL) by failing to maintain and update accurate provider directories (PDs) as required by Health and Safety Code section 1367.27. The People sought civil penalties, restitution, and provisional and final remedies against Kaiser, including an injunction prohibiting further unlawful activities. The trial court found that, in enacting section 1367.27, “the Legislature opted not to impose accuracy requirements,” but instead established a procedure for ensuring accurate and up-to-date PDs. The court therefore abstained from adjudicating the People’s claims and granted Kaiser’s motion for summary judgment. The People appealed.

The Court of Appeal reversed, holding that the trial court erred in abstaining.  The appellate court explained that section 1367.27 contains clear statutory requirements regarding PD accuracy, in addition to the process requirements cited by the trial court, and that trial courts have authority to adjudicate UCL claims based on alleged violations of these accuracy requirements. Evaluating the factors for judicial abstention, the court found the People’s enforcement action would complement, not assume or interfere with, the regulatory functions of the California Department of Managed Health Care. The court then found that adjudicating the UCL claim did not require the trial court to evaluate and determine complex economic policy best left to the Legislature. The trial court simply had to enforce clear statutory provisions reflecting policy decisions the Legislature had already made. Finally, the court concluded that the requested relief would not unnecessarily burden the trial court since it did not require continuous monitoring, and there was no other effective means of redress. The abstention decision on the FAL cause of action was based on the same faulty premise as the UCL abstention decision, and was therefore reversed as well.