Shuts v. Covenant Holdco LLCShuts v. Covenant Holdco LLC
I.
INTRODUCTION
Appellants Cameron Shuts and Gary Sterling represent a putative class of former and current residents of 16 separately licensed skilled nursing facilities that are in the business of providing long-term, 24-hour care for the elderly and disabled (hereafter plaintiffs).
Plaintiffs alleged that the inadequacy of the staffing levels at Covenant’s facilities was demonstrated by its noncompliance with the statutory mandate that a skilled nursing facility maintain a minimum numeric ratio of 3.2 nursing hours per patient per day (NHPPD). (See § 1276.5, subd. (a).) Covenant filed a demurrer, urging the court to dismiss this dispute because a skilled nursing facility’s obligation to provide its residents care at a level of 3.2 NHPPD is not enforceable by a private right of action. It argued that
In the published portion of this opinion we first conclude that while section 1276.5, subdivision (a), may not create a private right of action,
II.
FACTS AND PROCEDURAL HISTORY
The crux of plaintiffs’ FAC was their allegation that Covenant had a “duty under California law to provide sufficient nursing staff and related services.” Notwithstanding this duty, plaintiffs claimed that Covenant “persisted in [its] practice of understaffing their skilled nursing facilities throughout the Class Period,” which plaintiffs defined as December 15, 2006, through December 16, 2010. Plaintiffs alleged that Covenant’s “pattern and practice of systematically understaffing their facilities violates California law . . . .”
As noted, plaintiffs asserted three causes of action. The first cause of action was based on
Plaintiffs’
The allegations of the first cause of action also supported plaintiffs’ second and third causes of action based on violations of the UCL (
Plaintiffs purported to bring these claims on behalf of themselves and a putative class comprised of all persons who resided in one of Covenant’s facilities for “at least one day during which the respective facility did not provide at least 3.2 hours of direct nursing care per patient day.” Plaintiffs sought injunctive relief as well as statutory damages, restitution, and attorney fees. The FAC expressly disclaimed any intention to “seek damages for personal injuries, wrongful death or other resident-specific harm that may have been caused by inadequate staff.”
Covenant filed a demurrer. Covenant argued that each cause of action alleged in plaintiffs’ lawsuit was premised on a theory of noncompliance with the 3.2 NHPPD standard set out in section 1276.5, subdivision (a)—a
The trial court agreed with Covenant’s arguments and dismissed plaintiffs’ entire case without leave to amend on both grounds. The court’s judgment of dismissal was filed on June 13, 2011. This appeal followed.
III.
DISCUSSION
A. Standard of Review
As this division held in Paragon Real Estate Group of San Francisco, Inc. v. Hansen (2009) 178 Cal.App.4th 177 [
Plaintiffs suggest that this court should apply a de novo standard of review to the superior court’s discretionary dismissal under the equitable abstention doctrine. Normally, this court reviews a trial court’s exercise of its discretion to abstain from deciding a plaintiffs’ claims only for abuse of that discretion. (Klein v. Chevron U.S.A., Inc. (2012)
We emphasize the limited scope of the issues before us on appeal. Based on arguments made by Covenant in its demurrer, the trial court dismissed plaintiffs’ lawsuit without leave to amend based on two independent grounds: (1) no private right of action was created by section 1276.5, subdivision (a), to enforce the statute’s 3.2 NHPPD minimum staffing requirements and (2) the court found it “proper to exercise its discretion and abstain from adjudicating this alleged controversy.”
Given the bases for the court’s dismissal of plaintiffs’ FAC, we emphasize at the outset that we do not intend to decide whether the complaint fails to allege facts sufficient to state a cause of action for reasons that were not raised in Covenant’s demurrer or decided by the trial court. (See City of Industry v. City of Fillmore (2011)
B. Plaintiffs’ First Cause of Action Under
In support of its demurrer to plaintiffs’ first cause of action, Covenant relied heavily on Alvarado, supra,
On appeal, the Alvarado court generally held that courts have the discretion to abstain from providing equitable relief, such as restitution and injunctions, in cases requiring them to assume or interfere with an administrative agency’s function or to take on an unnecessary burden in monitoring or enforcing injunctive relief, where other, more effective remedies exist. (Alvarado, supra, 153 Cal.App.4th at pp. 1297-1298.) Thus, in Alvarado, the trial court acted within its discretion in abstaining from adjudicating the case because CDPH’s predecessor agency “has the power, expertise and statutory mandate to regulate and enforce” the 3.2 NHPPD staffing requirement set out in section 1276.5, subdivision (a). (
The trial court in this case acknowledged “that
In arguing that the court erred in sustaining Covenant’s demurrer, plaintiffs emphasize that their first cause of action was based on the private right of action created by
On this point we find Wehlage v. EmpRes Healthcare, Inc. (N.D.Cal. 2011)
The Wehlage court rejected the argument (made by Covenant in this case and found persuasive by the trial court) “that Plaintiff’s
We agree with this analytical framework. As Wehlage makes clear, in order to bring a cause of action as provided by
Covenant argues that “the Legislature did not intend the nurse staffing mínimums set forth in [s]ection 1276.5[, subdivision ](a) to be among the rights enforceable under [s]ection 1430[, subdivision ](b)” because section 1276.5, subdivision (a) has “an aggregate, facility-wide focus” as opposed to an individual focus. This argument ignores the fact that
The Wehlage court also considered and rejected Covenant’s alternate argument that abstention was appropriate because plaintiffs have asserted claims involving complex issues that only CDPH has the expertise to address. We agree with the assessment in Wehlage, supra,
To be sure, courts are hesitant to intervene in the absence of any legislative or regulatory guidance when a plaintiff essentially is asking the court to make an economic or policy judgment. (See, e.g., California Grocers Assn. v. Bank of America (1994)
Section 1276.5, subdivision (a) speaks in terms that are clearly mandatory, and states that notwithstanding “any other provision of law, commencing January 1, 2000, the minimum number of actual nursing hours per patient required in a skilled nursing facility shall be 3.2 hours . . . .” Consequently, the Legislature already has made the necessary policy judgment that is relevant to plaintiffs’ claims; and a skilled nursing facility’s obligation under section 1276.5, subdivision (a) is sufficiently specific for a court to competently determine whether such statutory guidance is being followed. (McKell v. Washington Mutual, Inc. (2006)
In upholding the use of the abstention doctrine, the Alvarado court concluded that compliance with the 3.2 NHPPD minimum staffing standard would require the court to make a series of factual findings that would be a “task better accomplished by an administrative agency than by trial courts.” (Alvarado, supra,
Importantly, since Alvarado was decided in 2007, the CDPH has made significant progress in providing administrative guidance on the 3.2 NHPPD standard, and how it should be calculated.
We note this will not be the first time courts have been called upon to adjudicate whether skilled nursing facilities have violated applicable staffing standards. In Conservatorship of Gregory (2000)
Here, the trial court clearly believed the proper recourse for residents of an understaffed skilled nursing facility was to seek “appropriate writ relief ... to compel the Department of Health Services to enforce section 1276.5.” Along these same lines, Covenant proposes that we stay plaintiffs’ action under the doctrine of primary jurisdiction for the purpose of allowing CDPH to decide whether Covenant is meeting the 3.2 NHPPD standard; and if a violation is found, CDPH can impose administrative penalties. (See Wolfe v. State Farm Fire & Casualty Ins. Co. (1996)
However, by enacting
We also find it significant that when the Legislature amended
Furthermore, because the Legislature has made the remedies prescribed by
In any event, plaintiffs also note that unlike Alvarado, where the plaintiff solely sought equitable remedies under the UCL, their first cause of action seeks monetary damages and attorney fees, as well as equitable relief, as authorized by
In the end, given the “ ‘ “clear, understandable, unmistakable terms” ’ ” of
C. Plaintiffs’ Second and Third Causes of Action under the UCL and CLRA
DISPOSITION
The judgment dismissing this action without leave to amend is reversed. The matter is remanded to the trial court for further proceedings consistent with this opinion. Costs on appeal are awarded to plaintiffs.
Reardon, J., and Rivera, J., concurred.
Respondents’ petition for review by the Supreme Court was denied November 14, 2012, S205528.
Notes
The first amended complaint indicates that Cameron Shuts brings this action in his capacity as “successor-in-interest and personal/Iegal representative” of Charles Shuts, deceased, a former resident of one of the skilled nursing facilities during the relevant time period. The other named plaintiff in the first amended complaint, Kent Sterling, is described as a conservatee and current resident of one of the skilled nursing facilities during the relevant time period, bringing this action by and through his conservator, Gary Sterling. We have adjusted the title used in this opinion in accordance with these undisputed facts and the corresponding relevant provisions of the California Style Manual.
Plaintiffs claim that the named defendants fit into two general categories: the licensees which purportedly own and operate the skilled nursing facilities, and the companies which own and control those licensees, directly or indirectly. Plaintiffs allege that there exists an “alter ego relationship between and among each of the Covenant Care Defendants” and “each of the acts attributable” to one facility “is also, as a matter of law, legally attributable” to all defendants.
All subsequent undesignated statutory references are to the Health and Safety Code.
Nursing hours, as used in section 1276.5, subdivision (a), is defined to mean “the number of hours of work performed per patient day by aides, nursing assistants, or orderlies plus two times the number of hours worked per patient day by registered nurses and licensed vocational nurses (except directors of nursing in facilities of 60 or larger capacity) . . . .” (§ 1276.5, subd. (b)(1).)
We have received numerous amicus curiae briefs to assist this court in deciding the issues presented by this appeal. Specifically, we have granted permission for the California Nurses Association, the AARP, the National Senior Citizens Law Center, and the California Association of Health Facilities to file amicus curiae briefs in support of-plaintiffs. We have also granted permission for EHC Management, LLC, and Beverly Healthcare-California, Inc., and related entities to file amicus curiae briefs in support of Covenant.
See 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 507, pp. 571-572 [federal decisions on questions of state law can be persuasive authority].)
We consider the documents promulgated by the CDPH which were before the trial court when it made its ruling. In determining whether plaintiffs’ complaint plead a viable cause of action, we may “ ‘consider evidence outside the pleadings which the trial court considered without objection. [Citation.]’ [Citation.]” (Burnett v. Chimney Sweep (2004)
In fact, it is well settled that if a jury finds that a skilled nursing facility has violated applicable regulations, such determination entitles the plaintiff to a negligence per se jury instruction and it is an abuse of discretion for a trial court to refuse such an instruction. (See, e.g., Norman v. Life Care Centers of America, Inc. (2003)
See footnote, ante, page 609.