Younan v. Equifax Inc.

• Citation: 169 Cal.Rptr. 478,111 Cal.App.3d 498
• Parties: Michael R. YOUNAN, Plaintiff and Appellant, v. EQUIFAX INC., a corporation, and William A. Black, Defendants and Respondents. Civ. 58796.
• Decision Date: 30 October 1980
• Court: California Court of Appeals

Page 478

169 Cal.Rptr. 478

111 Cal.App.3d 498

Michael R. YOUNAN, Plaintiff and Appellant, v. EQUIFAX INC., a corporation, and William A. Black, Defendants and Respondents.

Civ. 58796.

Court of Appeal, Second District, Division 1, California.

Oct. 30, 1980.

Hearing Denied December 24, 1980.

G. Dana Hobart, Los Angeles, for plaintiff and appellant

Cosgrove, Cramer, Rindge & Barnum, J. D. Barnum, L. P. McElhaney, Los Angeles, for defendants and respondents.

ROBERSON, ^* Associate Justice.

INTRODUCTION

I

Appellant Michael R. Younan (hereinafter referred to as plaintiff), appeals from an order of the superior court dismissing four of his alleged causes of action as to the defendants Equifax Inc. and William A. Black, respondents herein (hereinafter referred to as Equifax and Black) ¹ following orders sustaining the demurrers of Equifax and Black to the third, fourth, fifth and sixth causes of action of plaintiff's third amended complaint without leave to amend.

Plaintiff's suit against defendants ² arose from a denial of plaintiff's claim under an insurance contract providing benefits in event of "Permanent Total Disability" from accidental "injury."

Generally, plaintiff alleges that defendants set up a "medical examination" of plaintiff, which was by agreement among defendants, predetermined to provide defendant American Home Assurance Company (hereinafter referred to as American Home) with a false report thereby providing that defendant with a false but plausible sounding excuse to deny plaintiff's claim for disability benefits.

The third amended complaint designates the following causes of action and parties thereto: 1. First cause of action: "Bad Faith" (naming defendant American Home only). 2. Second cause of action: "Breach of Contract" (naming defendant American Home only). Third cause of action: "Conspiracy to defraud" (naming all defendants). 4. Fourth cause of action: "Intentional Infliction of Emotional Distress" (naming all defendants). 5. Fifth cause of action: "Fraud" (naming defendants Equifax and Black only). 6. Sixth cause of action: "Constructive Fraud" (naming defendants Equifax and Black only). 7. Seventh cause of action: "Fraud" (naming defendant Packer only). 8. Eighth cause of action: "Constructive Fraud" (naming defendant Packer only). 9. Ninth cause of action: "Negligence" (naming defendant Packer only).

Plaintiff made no request below for permission to amend the third amended complaint; rather plaintiff's appeal urges that the third amended complaint, as framed, sets forth facts sufficient to state each cause of action alleged therein.

II STATEMENT OF ALLEGED FACTS

So far as pertinent to this appeal the facts alleged by plaintiff in his third amended complaint are summarized as follows:

A. THIRD CAUSE OF ACTION ("Conspiring to Defraud.")

The insurer American Home originated a scheme and plan to wrongly deny plaintiff's insurance claim. Defendants Equifax and Black conspired with American Home, and agreed to locate and persuade the defendant Dr. Jordan Packer (hereinafter referred to as Packer) to examine plaintiff and prepare a false report which provided American Home a false but plausible sounding excuse to deny plaintiff's claim for disability benefits.

Equifax and Black advised plaintiff that he was to submit to a medical examination. Plaintiff expected to receive a physical examination (but, instead) was referred to several psychological clinicians (none of whom were medical doctors) where each conducted various psychological tests ³ upon plaintiff. In his report thereon, Packer (a licensed psychologist) omitted certain of the results of said tests.

Shortly after receipt of Packer's false report, American Home denied plaintiff's claim for disability benefits. ⁴B. FOURTH CAUSE OF ACTION (intentional infliction of emotional distress).

"The aforesaid outrageous conduct by defendants, and each of them, was done intentionally for the purpose of depriving plaintiff of money due him and to inflict upon him emotional distress at a time when he was incapable of earning a living with which to support himself and his family.

"As a direct and proximate result of said outrageous conduct by defendants, and each of them, plaintiff has suffered severe emotional distress, all to plaintiff's general damages "

C. THE FIFTH CAUSE OF ACTION (fraud).

"Although EQUIFAX INC., EQUIFAX SERVICES, WILLIAM BLACK had entered into the aforesaid scheme and fraudulent agreement to deny plaintiff's claim and to have plaintiff examined for fraudulent and wrongful purposes as aforesaid, said defendants did nevertheless make certain material misrepresentations to plaintiff:

"A. Said defendants falsely represented to plaintiff that he would be examined by JORDAN PACKER a medical doctor; said representation was known to be false when it was made in that the true fact was that PACKER was a clinical psychologist.

"B. Said defendants falsely represented to plaintiff that said examination was being requested in order that AMERICAN HOME have sufficient medical information to objectively and fairly consider plaintiff's claim for disability benefits; said representation was known to be false when it was made in that the true fact was that said examination was, by prior agreement among all defendants herein, a sham and a ruse designed only to provide AMERICAN HOME with a false medical report that could be used to deny plaintiff's claim rather than to be used to objectively review and consider plaintiff's claim.

"C. Said defendants falsely represented to plaintiff that following said medical examination DR. PACKER would write a fair and objective report of his findings to AMERICAN HOME in order that plaintiff's claim could be honestly evaluated; said representation was known to be false when it was made in that the true fact was that said report was, by prior agreement among all defendants herein, to be written in such a manner that it would state that plaintiff was not totally and permanently disabled when in fact he was.

"The foregoing false representations were known by said defendants to be false when they were made but were made nevertheless in order to induce plaintiff to attend and submit to the aforesaid examination.

"At all times relevant plaintiff was unaware of the falsity of said representations inasmuch as plaintiff reposed trust and confidence in said defendants as they represented themselves to be agents of AMERICAN HOME.

"Said false representations were made to induce plaintiff to submit to said examination, and in reliance on said representations plaintiff was so induced and did submit to said examination.

"Because of plaintiff's fiduciary relationship with AMERICAN HOME plaintiff justifiably believed that the agents and representatives of AMERICAN HOME would likewise conduct themselves with honesty and integrity commensurate with the obligations of a fiduciary when dealing with plaintiff; and, in justifiable reliance on the truth of said representations plaintiff did submit to said examination believing he would be fairly and objectively examined by a medical doctor who would thereafter report his findings truthfully, objectively and completely.

"Had plaintiff been informed of the agreement and scheme between AMERICAN HOME, EQUIFAX, BLACK and PACKER plaintiff would not have submitted to said examination; but for the aforesaid misrepresentations plaintiff would not have attended said examination.

"As a direct and proximate result of said false representations plaintiff did submit to said examination and AMERICAN HOME D. THE SIXTH CAUSE OF ACTION (constructive fraud).

thereupon received the aforesaid false report prepared by DR. PACKER and using it as its basis, AMERICAN HOME denied plaintiff's claim all to plaintiff's general damages "

"Because plaintiff had a fiduciary relationship with AMERICAN HOME and because defendants EQUIFAX, INC., EQUIFAX SERVICES, WILLIAM BLACK represented to plaintiff that they were the local representatives of AMERICAN HOME plaintiff was induced to and did repose trust and confidence in said defendants in all matters connected with his claim for disability benefits including any examination of plaintiff which said defendants were trying to arrange; as a consequence of said confidential relationship said defendants had the duty and obligation to fully and fairly disclose to plaintiff herein which would materially affect plaintiff's right to have a fair and impartial evaluation of his claim for disability benefits.

"Although EQUIFAX INC., EQUIFAX SERVICES, WILLIAM BLACK had entered into the aforesaid scheme and agreement to deny plaintiff's claim and to have plaintiff examined for fraudulent and wrongful purposes, as aforesaid, said defendants did nevertheless withhold said facts and did fail to disclose said relevant matters in communicating with plaintiff for the purpose of arranging and inducing plaintiff to submit to said examination at the offices of PACKER.

"In connection with their acts in sending plaintiff to PACKER's office said defendants intentionally failed to disclose to plaintiff that:

"A. AMERICAN HOME had engaged each and all of the other defendants herein to arrange for AMERICAN HOME to receive a false report to plaintiff's condition for the purpose of denying plaintiff's claim for disability benefits;

"B. EQUIFAX INC., EQUIFAX SERVICES, WILLIAM BLACK agreed to locate a doctor willing to write a false report, as aforesaid;

"C. EQUIFAX INC., EQUIFAX SERVICES, WILLIAM BLACK sought out and induced DR. PACKER to agree to writing a false report, as aforesaid;

"D. The examination was to be a ruse and a sham and conducted only to give PACKER the opportunity to write said false report to be used by AMERICAN HOME to deny plaintiff's claim.

"The aforesaid omissions and failures to disclose to plaintiff were done for the purpose of inducing plaintiff to submit to an examination by a doctor who had no intention of examining or reporting...