77 Cal.App.5th 971
Cal. Ct. App.2022Background
- Dameron Hospital requires patients (or family) to sign a Condition of Admission (COA) assigning "all insurance benefits," including uninsured/underinsured motorist (UM) and medical payment (MP) benefits, and authorizing direct payment to the hospital.
- Five CSAA‑insured patients treated after auto accidents; some had health insurance; CSAA paid portions of UM/MP benefits directly to patients or providers, leaving unpaid hospital balances.
- Dameron sued CSAA for unfair business practices (UCL) and breach/declaratory relief for refusing to honor the COA assignments; trial court sustained demurrer on UCL claim and granted summary judgment for CSAA.
- The Court of Appeal held: COAs are contracts of adhesion; assignments to collect emergency care from UM/MP benefits are generally unenforceable where patients had health plan coverage; a parent lacked authority to assign a minor’s benefits where the policyholder was a nonparent guardian.
- The case is remanded only to allow Dameron to pursue, if viable, an enforceable assignment of MP benefits for one adult patient (R.D.); judgment affirmed in all other respects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| UCL claim reinstatement | Dameron: UCL claim should proceed against CSAA | CSAA: Dameron forfeited issue by failing to brief it | Forfeited by Dameron for not raising in opening brief |
| Enforceability of COA assignments for patients with health coverage (O.N., P.F.) | COA assigns UM/MP benefits to hospital; CSAA must pay hospital | Assignment conflicts with Knox‑Keene, emergency‑care protections, and public policy | Assignments void as contrary to law; hospital cannot collect emergency services from UM/MP when patient has health plan coverage |
| Adhesion / reasonable expectations re UM vs MP (Stephen L., R.D.) | COA creates valid assignments of UM and/or MP | COAs are adhesion contracts; patients would not reasonably expect to assign UM; MP assignments may be different | COAs are adhesion contracts; UM assignments unenforceable as beyond expectations; MP assignment may be enforceable as to R.D. (triable issue) |
| Authority to assign minor’s benefits (D.W.) | Mother’s signature created assignment for minor | Policyholder (grandmother/guardian) did not authorize mother; only policyholder can assign | Mother lacked authority; no valid assignment of D.W.’s MP benefits |
| Applicability of Insurance Code §520 / Henkel / Fluor | Dameron: statutory/case law compels honoring assignments | CSAA: those authorities are distinguishable; this case involves public‑policy limits and adhesion issues | Fluor/Henkel/§520 do not change result here; they are inapplicable to assignments void or barred by expectations/authority |
| ERISA argument | Dameron (in reply/oral): ERISA plan permits recovery | CSAA: argument raised too late / forfeited | ERISA arguments forfeited for failure to brief in opening brief |
Key Cases Cited
- Prospect Medical Group, Inc. v. Northridge Emergency Group, 45 Cal.4th 497 (Cal. 2009) (emergency billing disputes are between provider and plan; patient insulated from balance billing)
- Whiteside v. Tenet Healthcare Corp., 101 Cal.App.4th 693 (Cal. Ct. App. 2002) (dual coverage and assignments analyzed; insureds expect to be insulated from monetary obligation)
- Parnell v. Adventist Health System/West, 35 Cal.4th 595 (Cal. 2005) (Hospital Lien Act requires underlying patient debt; lien unavailable if plan payment extinguishes debt)
- Quintano v. Mercury Casualty Co., 11 Cal.4th 1049 (Cal. 1995) (purpose and nature of UM/underinsured motorist coverage)
- Henkel Corp. v. Hartford Accident & Indem. Co., 29 Cal.4th 934 (Cal. 2003) (assignments of insurance benefits may require insurer consent under some circumstances)
- Fluor Corp. v. Superior Court, 61 Cal.4th 1175 (Cal. 2015) (Insurance Code §520 affects enforceability of consent‑to‑assignment clauses; Henkel revisited)
- Weston Reid, LLC v. American Ins. Group, Inc., 174 Cal.App.4th 940 (Cal. Ct. App. 2009) (UM coverage is first‑party coverage for the insured)
- Dameron Hospital Assn. v. AAA Northern Cal., Nev. & Utah Ins. Exch., 229 Cal.App.4th 549 (Cal. Ct. App. 2014) (prior discussion of H&S §1379, balance billing, and hospital lien issues)