Levine v. Blue Shield of California
117 Cal. Rptr. 3d 262
Cal. Ct. App.2010Background
- Levines sue Blue Shield on five claims (fraudulent concealment, negligent misrepresentation, implied covenant, unjust enrichment, UCL) based on alleged duty to disclose cheaper premium options by redesigning primary insured and family plans.
- Blue Shield demurs and moves to strike class allegations; trial court sustains without leave to amend and dismisses.
- Levines allege Victoria as primary insured or single-family plan would have reduced premiums by about $500 monthly; Michael remained primary initially.
- Issue centers on whether Blue Shield owed any common law or statutory duty to disclose lower premium options to be considered at contract formation.
- Court reviews demurrer de novo, treating pleaded facts as true and evaluating reasonable amendability to state a claim.
- Appellate court affirms, concluding no duty exists—common law or §332—so claims fail and demurrer was proper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Blue Shield owe a duty to disclose cheaper premium options? | Levines: Blue Shield owed duty under common law to reveal lower-cost structuring. | Blue Shield: no such duty; pricing is arm's-length and not a required disclosure. | No duty; demurrer sustained without leave to amend. |
| Does Insurance Code section 332 apply to Blue Shield and require disclosure of lower premiums? | Levines: §332 applies and requires disclosure of such pricing options. | Blue Shield: §332 not applicable or does not require this disclosure. | Section 332 does not impose that disclosure; no duty. |
| Can the complaint state a UCL or negligent-enrichment claim without such duty? | Levines rely on alleged duty to disclose; failure to disclose supports UCL/Unjust Enrichment. | Without duty, no predicate for fraudulent/prior conduct; unlawful or unfair conduct not shown. | Absent duty, UCL and unjust enrichment claims fail. |
| Was the class-action claim properly stricken or remediable on amendment? | Levines could substitute counsel; amend to cure adequacy. | Premature or futile; no viable duty to disclose to state a claim. | Court affirmed demurrer without leave to amend; class issue moot. |
Key Cases Cited
- California Service Station etc. Assn. v. American Home Assurance Co., 62 Cal. App. 4th 1166 (Cal. Ct. App. 1998) (insurer not liable to disclose premium pricing during arm's-length negotiations)
- Pastoria v. Nationwide Ins., 112 Cal. App. 4th 1490 (Cal. Ct. App. 2003) (duty to disclose impending amendments vs. price disclosure held distinguishable)
- Jonathan Neil & Assocs., Inc. v. Jones, 33 Cal.4th 917 (Cal. 2004) (insurer's excessive pricing discipline via competition, not broad duties)
- Love v. Fire Ins. Exchange, 221 Cal. App. 3d 1136 (Cal. Ct. App. 1990) (insurer-insured fiduciary duties limited; not an overarching pricing duty)
- Durell v. Sharp Healthcare, 183 Cal. App. 4th 1350 (Cal. Ct. App. 2010) (no unjust enrichment separate cause of action; restitution principles apply)
- BullER v. Sutter Health, 160 Cal. App. 4th 981 (Cal. Ct. App. 2008) (UCL framework requires a predicate duty; absence defeats claim)
- California Service Station etc. Assn. v. American Home Assurance Co. (revisited), 62 Cal. App. 4th 1166 (Cal. Ct. App. 1998) (duty to disclose pricing in insurance context not supported; final price not disclosed)