Martin v. PacifiCare of California
198 Cal. App. 4th 1390
Cal. Ct. App.2011Background
- PacifiCare operates Secure Horizons as a Knox–Keene health care service plan under California law.
- Bright Medical Group contracts with PacifiCare to provide care and to perform utilization review for Secure Horizons subscribers.
- Elsie enrolled in Secure Horizons and designated Bright’s physician as her PCP; Bright delegated utilization review but PacifiCare retained final authority on approval/referral decisions.
- Bright denied Elsie’s request for coil embolization/angiogram, later adjusted the plan’s referral; PacifiCare had not been notified of delays by Elsie or her representatives.
- Elsie’s aneurysm treatment was delayed; she ultimately died after a delay in treatment; Martins sued PacifiCare for insurance bad faith and sought damages for Elsie’s wrongful death.
- The trial court granted PacifiCare’s nonsuit under Health & Safety Code § 1371.25 after Watanabe held the statute bars vicarious liability; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1371.25 bars vicarious liability for Bright’s acts | Martins contend § 1371.25 bars only hold-harmless clauses, not vicarious liability | PacifiCare argues § 1371.25 precludes vicarious liability for provider acts | Yes; § 1371.25 bars vicarious liability of plans for provider acts. |
| Whether Watanabe correctly interpreted § 1371.25 | Watanabe misreads history to bar only hold-harmless provisions | Watanabe correctly precludes vicarious liability | Yes; Watanabe correctly precludes vicarious liability under § 1371.25. |
| Whether Martins’ claims can proceed as direct liability | Claims are direct liability against PacifiCare | Claims are inherently vicarious via Bright’s actions | No; claims are vicarious, not direct, under § 1371.25. |
| Whether Medicare Act preemption affects § 1371.25 here | Current preemption provision may preempt § 1371.25 | Preemption does not apply; prior version governs | Prior version governs; Medicare Act does not preempt § 1371.25. |
Key Cases Cited
- Watanabe v. California Physicians’ Service, 169 Cal.App.4th 56 (Cal. Ct. App. 2008) (held § 1371.25 bars vicarious liability for utilization review decisions)
- Hughes v. Blue Cross of Northern California, 215 Cal.App.3d 832 (Cal. App. 1989) (insurer’s nondelegable duty; pre‑ § 1371.25 context)
- Gruenberg v. Aetna Ins. Co., 9 Cal.3d 566 (Cal. 1973) (adjuster not liable to insured in absence of privity)
- Sanchez v. Lindsey Morden Claims Services, Inc., 72 Cal.App.4th 249 (Cal. App. 1999) (independent adjuster liability to insured limited)
- Elsner v. Uveges, 34 Cal.4th 915 (Cal. 2004) (legislative history aid in interpreting statutes)
- Zolezzi v. PacifiCare of California, 105 Cal.App.4th 573 (Cal. App. 2003) (preemption provision timing in Medicare Act)
- Pagarigan v. Superior Court, 102 Cal.App.4th 1121 (Cal. App. 2002) (preemption provision timing)
- Robinzine v. Vicory, 143 Cal.App.4th 1416 (Cal. App. 2006) (preemption argument waived on appeal)