Rakestraw v. California Physicians' Service
| Decision Date | 31 May 2000 |
| Docket Number | No. B115766.,B115766. |
| Citation | 81 Cal.App.4th 39,96 Cal.Rptr.2d 354 |
| Parties | Melissa RAKESTRAW et al., Plaintiffs and Appellants, v. CALIFORNIA PHYSICIANS' SERVICE, Defendant and Respondent. |
| Court | California Court of Appeals Court of Appeals |
Hassard Bonnington, Rick C. Zimmerman and B. Thomas French, San Francisco, for Defendant and Respondent.
Epstein Becker & Green and William A. Helvestine, San Francisco, for The California Association of Health Plans as Amicus Curiae on behalf of Defendant and Respondent.
This appeal presents the issue whether a private health care service plan contract requiring a $1,000 copayment for inpatient hospital services in connection with pregnancy and child delivery violates the prohibition against the use of copayments "because of sex" in the Knox-Keene Health Care Service Plan Act of 1975 (the Knox-Keene Act). (Health & Saf.Code, § 1340 et seq.)1 We find it does not. The Knox-Keene Act allows health care service plans to limit coverage for pregnancy-related services and also generally allows copayments, subject to some exceptions. Furthermore, since this health care service plan was not part of plaintiffs' employment compensation and because the Knox-Keene Act specifically governs health care service plans, cases prohibiting employment discrimination because of pregnancy have no relevance to this appeal. We conclude that the trial court correctly sustained a demurrer to the third amended complaint, and that plaintiffs have not met their burden of showing they can amend to cure the defect in their complaint. We therefore affirm the judgment.
A demurrer tests the legal sufficiency of factual allegations in a complaint. (Title Ins. Co. v. Comerica Bank-California (1994) 27 Cal.App.4th 800, 807, 32 Cal.Rptr.2d 735.) In reviewing the sufficiency of a complaint against a general demurrer, this court treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions, or conclusions of fact or law. This court also considers matters that may be judicially noticed. When a demurrer is sustained, this court determines whether the complaint states facts sufficient to constitute a cause of action. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58.)
On appeal, a plaintiff bears the burden of demonstrating that the trial court erroneously sustained the demurrer as a matter of law. This court thus reviews the complaint de novo to determine whether it alleges facts stating a cause of action under any legal theory. Because a demurrer tests the legal sufficiency of a complaint, the plaintiff must show the complaint alleges facts sufficient to establish every element of each cause of action. If the complaint fails to plead, or if the defendant negates, any essential element of a particular cause of action, this court should affirm the sustaining of a demurrer. (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879-880, 6 Cal.Rptr.2d 151.)
When a demurrer is sustained without leave to amend, this court decides whether a reasonable possibility exists that amendment may cure the defect; if it can we reverse, but if not we affirm. The plaintiff bears the burden of proving there is a reasonable possibility of amendment. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318, 216 Cal.Rptr. 718, 703 P.2d 58.) Plaintiff may make this showing for the first time on appeal. (Schultz v. Harney (1994) 27 Cal.App.4th 1611, 1623, 33 Cal. Rptr.2d 276; Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1386-1388, 272 Cal.Rptr. 387.)
To satisfy that burden on appeal, a plaintiff "must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading." (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349, 134 Cal.Rptr. 375, 556 P.2d 737.) The assertion of an abstract right to amend does not satisfy this burden. (McKelvey v. Boeing North American, Inc. (1999) 74 Cal.App.4th 151, 161, 86 Cal.Rptr.2d 645.) Plaintiff must clearly and specifically set forth the "applicable substantive law" (Community Cause v. Boaturright (1981) 124 Cal.App.3d 888, 897, 177 Cal.Rptr. 657) and the legal basis for amendment, i.e., the elements of the cause of action and authority for it. Further, plaintiff must set forth factual allegations that sufficiently state all required elements of that cause of action. (McMartin v. Children's Institute International (1989) 212 Cal.App.3d 1393, 1408, 261 Cal.Rptr. 437; McGettigan v. Bay Area Rapid Transit Dist. (1997) 57 Cal.App.4th 1011, 1024, 67 Cal.Rptr.2d 516.) Allegations must be factual and specific, not vague or conclusionary. (Cooper v. Equity Gen. Insurance (1990) 219 Cal.App.3d 1252, 1263-1264, 268 Cal.Rptr. 692.)
The burden of showing that a reasonable possibility exists that amendment can cure the defects remains with the plaintiff; neither the trial court nor this court will rewrite a complaint. (Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1153, 37 Cal.Rptr.2d 718.) Where the appellant offers no allegations to support the possibility of amendment and no legal authority showing the viability of new causes of action, there is no basis for finding the trial court abused its discretion when it sustained the demurrer without leave to amend. (New Plumbing Contractors, Inc. v. Nationwide Mutual Ins. Co. (1992) 7 Cal.App.4th 1088, 1098, 9 Cal.Rptr.2d 469; HFH, Ltd. v. Superior Court (1975) 15 Cal.3d 508, 513, fn. 3, 125 Cal.Rptr. 365, 542 P.2d 237.)
Defendant California Physicians' Service, doing business as Blue Shield of California (Blue Shield) filed a demurrer to the third amended complaint filed by plaintiffs Melissa Rakestraw and Thomas Rakestraw (the Rakestraws) and other plaintiffs not parties to this appeal. The Rakestraws' breach of contract cause of action alleged that Blue Shield violated several statutes in the Knox-Keene Act. The complaint alleged the following facts.
Thomas and Melissa Rakestraw are husband and wife. They paid premiums for continuous coverage under a "Personal HMO Individual and Family Health Plan" issued by Blue Shield. Jointly insured under the policy, they share a single subscriber/certificate number. Their plan was a "health care service plan" subject to regulation under the Knox-Keene Act. Blue Shield, a joint venture of California Physicians Insurance Corporation and California Physicians' Insurance, offers prospective insureds numerous health insurance plans. Blue Shield operates as a health care service plan regulated by the Department of Corporations under the Knox-Keene Act.
The third amended complaint attached a copy of the health care service plan contract. The complaint alleged that commissioners of the Department of Insurance and Department of Corporations reviewed and approved the policy forms and evidence of coverage, and have issued notices and undertaken various enforcement actions to compel compliance with California statutes and regulations.
The complaint does not state when the Blue Shield contract began to provide health insurance for plaintiffs, but coverage began before the Rakestraws' son was born on July 26, 1995.
The "Pregnancy, Maternity Care and Family Planning" portion of the Rakestraws' contract required a $1,000 copayment for each inpatient hospital admission that resulted in a delivery of a child. This part of the contract stated: "Effective on or after April 1, 1993, for each Hospital admission that results in delivery, there is a $1,000.00 Copayment applicable to the Inpatient Hospital Services (not applicable to Inpatient Physician Services)." A schedule of charges for services associated with pregnancy, maternity care, and family planning included no charge for prenatal & postnatal physician office visits, and no charge for inpatient physician services for normal delivery, cesarean section, and complications of pregnancy. For "[a]U necessary Inpatient Hospital and ancillary Services," the contract described the charges as: "After $1,000.00 Copayment, 20% of Allowed Charges."
St. Joseph Hospital, where Melissa Rakestraw was hospitalized during her delivery, provided $3,648.95 in hospital services. Blue Shield allowed $897 for inpatient hospital services. Because this amount was less than the $1,000 copayment, Blue Shield disclaimed any obligation to pay for those services.
IV
The main issue in this appeal is whether a health care service plan contract, which is not part of an employment relationship and which requires a $1,000 copayment for inpatient hospitalization that results in a delivery of a child, violates the prohibition against subjecting contractual benefits or coverage to copayments "because of sex" in section 1365.5, subdivision (b) of the Knox-Keene Act.
The unpublished portion of this opinion addresses other issues raised by the Rakestraws.
V
The Rakestraws contend that Blue Shield's policy discriminates on the basis of sex by requiring a $1,000 copayment for maternity care in violation of the Knox-Keene Act. We first analyze relevant statutes in the Knox-Keene Act, and then address whether a copayment for pregnancy-related medical care violates the prohibition in the Knox-Keene Act against subjecting contractual benefits or coverage to copayments "because of sex."
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