Nolte v. Cedars Sinai Medical Center
236 Cal. App. 4th 1401
| Cal. Ct. App. | 2015Background
- Plaintiff Justin Nolte visited a physician at Beverly Hills Spine Center, located in a Cedars-Sinai facility, and brought his own x‑rays for a second opinion.
- At the visit Nolte signed a three‑page "Cedars‑Sinai Medical Center Conditions of Admission" (COA) stating patients must pay the hospital’s regular rates and that physicians are independent contractors who may bill separately.
- After paying the physician, Nolte received a separate Cedars bill (~$78.49 after a discount) for creating a patient account in Cedars’ computerized records system (a "facility fee").
- Nolte sued as a class action alleging the facility fee was charged without notice or informed consent, asserting UCL (Bus. & Prof. Code §17200) and CLRA claims, plus unjust enrichment, restitution, and declaratory relief.
- The trial court sustained Cedars’ demurrer without leave to amend, concluding Nolte had contracted to pay Cedars’ charges by signing the COA and failed to plead the COA was unenforceable.
- On appeal the Court of Appeal affirmed, holding the complaint failed to state a UCL claim and Nolte forfeited other issues by not arguing them on appeal or showing how amendment could cure defects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether charging an undisclosed "facility fee" states a UCL claim (unlawful, unfair, fraudulent) | Nolte: Fee was charged without his informed consent or specific notice; practice is deceptive/cramming‑like | Cedars: Nolte agreed in COA to pay hospital charges and could be billed separately; no statutory violation alleged; not an unaffiliated third‑party cramming | Court: Demurrer properly sustained. No unlawful prong (no statute violated alleged); unfair/fraudulent prongs fail because charge disclosure obligations were met by statute and COA bound Nolte. |
| Whether nondisclosure of the fee constitutes "cramming" analogous to telephone billing cases | Nolte: Analogy to cramming—third‑party charges slipped onto bills | Cedars: Not cramming—Cedars is the facility/hospital with contract role for billing; not an unaffiliated third party | Court: Analogy fails; relationship and COA consent distinguish this from cramming cases. |
| Whether the complaint could survive demurrer because adequacy of notice/fairness is a merits (fact) issue | Nolte: Opacity and lack of specific disclosure render the practice unfair/fraudulent; merits require factual inquiry | Cedars: COA expressly permits separate billing; legal bar apparent on pleadings | Court: Even accepting facts, complaint alleges COA consent and statutory charge‑master availability; unfairness/fraud require more than novelty and cannot be resolved in plaintiff’s favor on these pleadings. |
| Whether other claims (CLRA, unjust enrichment) survive or were forfeited | Nolte: Asserted CLRA and restitution claims below | Cedars: Argued defensively; on appeal noted plaintiff failed to brief these issues | Court: Nolte forfeited appellate review by failing to address these claims in opening brief; also failed to show how amendment could cure defects. |
Key Cases Cited
- Cel‑Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (1999) (defines the three prongs of the UCL: unlawful, unfair, fraudulent)
- McKell v. Washington Mutual, Inc., 142 Cal.App.4th 1457 (2006) (test for "unfair" under UCL requires balancing utility and consumer harm and is typically a fact issue)
- Elder v. Pacific Bell Telephone Co., 205 Cal.App.4th 841 (2012) (cramming claims in billing context can support UCL unlawful prong when third‑party charges are unauthorized)
- Coast Plaza Doctors Hospital v. Blue Cross of California, 173 Cal.App.4th 1179 (2009) (standard of review for demurrer dismissal)
- Plotkin v. Sajahtera, Inc., 106 Cal.App.4th 953 (2003) (UCL notice need not be the best possible notice; reasonableness suffices)
- Searle v. Wyndham Internat., Inc., 102 Cal.App.4th 1327 (2002) (courts may not use UCL to rewrite or broadly police contract bargains)
- Tiernan v. Trustees of California State University & Colleges, 33 Cal.3d 211 (1982) (issues not raised in appellant’s opening brief are forfeited on appeal)