Filed 8/19/26 Goodsell v. Bakersfield Memorial Hospital CA5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
GREGORY GOODSELL,
F089911
Plaintiff and Appellant,
(Super. Ct. No. BCV-24-101941)
v.
BAKERSFIELD MEMORIAL HOSPITAL, OPINION
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Kern County. Bernard C.
Barmann, Jr., Judge.
Carpenter Law and Gretchen Carpenter; Law Office of Barry Kramer and Barry L.
Kramer for Plaintiff and Appellant.
Manatt, Phelps & Phillips, Barry S. Landsberg, Harvey L. Rochman and Joanna S.
McCallum for Defendant and Respondent.
-ooOoo-
INTRODUCTION
Appellant Gregory Goodsell appeals from a judgment of dismissal entered in favor
of respondent Bakersfield Memorial Hospital (Hospital) and against Goodsell after the
trial court sustained Hospital’s demurrer to Goodsell’s first amended class action
complaint (FAC) without leave to amend.
Goodsell brought suit against Hospital1 challenging its “practice of charging
emergency room patients a separate Emergency Room Visitation Fee” (hereafter, ER
Visitation Fee). Goodsell alleges the ER Visitation Fee “is billed on top of the charges
for the individual items of treatment and services provided, when there is no right to
charge such a fee and no agreement to pay such a fee in [Hospital] Conditions of
Admission agreement or similarly named form contract” (hereafter, COA), which is
“provided to emergency room patients for signature.”
The case comes to this court after the California Supreme Court held “Hospitals
do not have a duty under the [unfair competition law (Bus. & Prof. Code, § 17200 et
seq.)] or [Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.)], beyond their
obligations under the relevant statutory and regulatory scheme, to disclose EMS fees[2]
prior to treating emergency room patients.” (Capito, supra, 17 Cal.5th at p. 278, italics
added.) On appeal, Goodsell states, “The Fees at issue on this appeal have been referred
to by some plaintiffs and courts in other cases … as ‘EMS Fees,’ but these are the same
fees referenced in Goodsell’s FAC as ‘ER Visitation Fees.’ ”
1 Goodsell also named as a defendant CommonSpirit Health, a Colorado nonprofit
corporation, which Goodsell alleged owned and operated Hospital. Subsequently,
Goodsell dismissed CommonSpirit Health from the litigation.
2 The term “EMS fees,” as used in Capito, refers to fees for “evaluation and
management services” provided to emergency room patients. (Capito v. San Jose
Healthcare System, LP (2024) 17 Cal.5th 273, 277 (Capito).)
2.
The case also follows this court’s ruling in Naranjo v. Doctors Medical Center of
Modesto, Inc. (2025) 111 Cal.App.5th 408 (Naranjo II)3 (appeal of dismissal following
demurrer sustained without leave to amend), in which we acknowledged that to the extent
the plaintiff therein “stated (or is able to state) otherwise valid contract-based claims
based on events that arose after [the defendant hospital] completed its emergency care
treatment and not based on an alleged duty of disclosure prior to that treatment, such
claims would remain actionable and not barred under the holding in Capito.”
(Naranjo II, at p. 424.) We also concluded that Capito did not bar claims under unfair
competition law (UCL) and the Consumers Legal Remedies Act (CLRA) to the extent
they were based “solely on [the defendant hospital’s] posttreatment billing practices.”
(Naranjo II, at p. 434; see id. at pp. 434–435, 438.)
On appeal, Goodsell argues, among other things, that Naranjo II is “virtually
identical” to his case, that the allegations of his FAC are virtually identical to those in
Naranjo II, and that the judgment of dismissal should be reversed, as it was in Naranjo II.
Hospital contends, among other things, “good reason exists for this [c]ourt not
simply to apply Naranjo [II] here, but rather to analyze this case based on arguments and
authorities discussed herein that were not presented to this [c]ourt in the Naranjo [II]
briefing and thus were not considered or explored in the Naranjo [II] decision.” Based
on those newly submitted authorities, Hospital argues that “Goodsell’s construction of the
COA is erroneous as a matter of law,” “is not a construction to which the COA is
reasonably susceptible,” and that the trial court’s “dismissal of the contract and related
declaratory relief claims should be affirmed.”
3 Naranjo II followed the Supreme Court’s decision in Capito, which required us
to vacate our prior opinion in Naranjo v. Doctors Medical Center of Modesto, Inc. (2023)
90 Cal.App.5th 1193, review granted July 26, 2023, and opinion vacated February 26,
2025, S280374 (Naranjo I).
3.
We conclude Goodsell has stated a valid cause of action for breach of contract
and, accordingly, reverse the judgment of dismissal. However, we affirm the trial court’s
order sustaining the demurrer as to Goodsell’s cause of action for declaratory and
injunctive relief. We also conclude Goodsell should be permitted to amend the FAC to
state causes of action under the UCL and CLRA.
FACTUAL AND PROCEDURAL BACKGROUND
I. Factual Background
“In reviewing a judgment of dismissal entered after the sustaining of a demurrer,
we accept as true the factual allegations of the complaint” (Whittemore v. Owens
Healthcare-Retail Pharmacy, Inc. (2010) 185 Cal.App.4th 1194, 1197) and “ ‘ “consider
matters which may be judicially noticed” ’ ” (Evans v. City of Berkeley (2006) 38 Cal.4th
1, 6). The facts recited below are alleged in Goodsell’s complaint, or are judicially
noticeable. We also set forth some of Goodsell’s related contentions for context.
However, we do not assume the truth of those contentions. (People ex rel. Lungren v.
Superior Court (1996) 14 Cal.4th 294, 300–301.)
A. The FAC
On April 25, 2023, Goodsell “presented at [Hospital’s] emergency room in
Bakersfield, California for treatment.” Hospital presented Goodsell with the COA during
his emergency room visit and Goodsell signed it. The COA was the same form contract
that Hospital provides to all its emergency room patients.4
Goodsell contends the COA does not “contain a promise or agreement” for an
emergency room patient to pay the ER Visitation Fee. The COA only obligates a patient
to pay for services actually rendered to him or her. Goodsell alleges the “ER Visitation
4 The FAC was filed as a class action complaint and includes allegations that
prospective class members were subject to the same acts and omissions that form the
basis of Goodsell’s allegations, and that Goodsell’s claims are typical of the prospective
class members’ claims. The register of actions does not indicate that a class was ever
certified in the matter.
4.
Fee is not disclosed to patients in [the COA].” Notwithstanding, Hospital charged
Goodsell an ER Visitation Fee in the amount of $1,588.
Goodsell alleges the ER Visitation Fee is “billed to emergency room patients
simply for seeking treatment.” It is charged to all emergency room patients “regardless
of what services and treatment” are actually provided to the patient.
The “ER Visitation Fee is set at one of five levels, determined after discharge” and
each level has a corresponding Current Procedural Terminology (CPT) code.5 “The
current amounts [as of the FAC filing date] of [Hospital’s] ER Visitation Fees are as
follows: Level 1: $435.00; Level 2: $1,271.00; Level 3: $1,707.00; Level 4:
$2,749.00; and Level 5: $5,829.00.” The amount of the ER Visitation Fee is “based on
an internally developed formula known exclusively to [Hospital].”
Goodsell alleges that he was billed a “gross amount (before discounts)” of $1,639,
which he alleged included a “surprise Level 3 ER Visitation Fee of $1,588.00,” and that
“[a]fter deducting adjustments and discounts, … the amount billed to [Goodsell] was
$383.90, which … included a portion of the ER Visitation Fee.”
Goodsell alleged a cause of action for breach of contract on grounds the COA
“included a provision or provisions permitting [Hospital] to charge only for services
actually rendered to the patient, and requiring a patient to pay only for services actually
provided to the patient, and not ER Visitation Fees, which are not fees for services
rendered, but rather, are fees designed to cover the overhead, operating, and
administrative costs of operating an emergency room on a 24 hour, 7 day a week basis.”
5 “ ‘CPT codes are standardized five-digit numeric codes established by the
American Medical Association. They are used by health care providers to quickly
describe to insurers the services for which the provider is billing.’ ” (Capito, supra, 17
Cal.5th at p. 279.) “By using particular codes in bills to insurance companies or patients,
a medical services provider represents that he/she/it has rendered the type of services
described by the codes used.” (YDM Management Co., Inc. v. Sharp Community Medical
Group, Inc. (2017) 16 Cal.App.5th 613, 617, fn. 1 (YDM Management).)
5.
As a result, Goodsell contends Hospital breached the COA and overbilled him by
charging him for the ER Visitation Fee.
Goodsell also alleged a single cause of action for declaratory and injunctive relief.
Goodsell contends “[a]n actual controversy exists between [Goodsell] and [Hospital]
relating to their respective legal rights and duties under the [COA]” because he contends
he is not required to pay the ER Visitation Fee, in whole or in part, whereas Hospital
contends the COA entitles it to charge the ER Visitation Fee.6
B. The COA
At Hospital’s request, the trial court took judicial notice of the COA that Goodsell
signed during his emergency room visit. Goodsell did not oppose the court taking
judicial notice of the COA, has referred to it as “the Conditions of Admission contract
[i.e., COA] signed by Plaintiff Gregory Goodsell” and other words to that effect, and has
treated the COA as the applicable contract that Goodsell signed.
The COA contained the following consent: “You consent to the procedures that
may be performed during the Patient’s Hospital stay …. These procedures may include
emergency treatment or services, laboratory procedures, X-ray examinations, medical or
surgical treatment or procedures, anesthesia, or other hospital services provided to the
Patient under the general and special instructions of the Patient’s doctor.”
6 Goodsell also sought declaratory and injunctive relief as to whether Hospital
owed him “a duty to disclose, in advance of providing treatment that would trigger an ER
Visitation Fee,” and alleged causes of action for violations of the CLRA and UCL based
on allegations that Hospital owed him such a duty. The holding in Capito effectively
resolved such claims by holding “[h]ospitals do not have a duty under the UCL or CLRA,
beyond their obligations under the relevant statutory and regulatory scheme, to disclose
EMS fees [i.e., fees for evaluation and management services] prior to treating emergency
room patients.” (Capito, supra, 17 Cal.5th at p. 278; see id. at p. 292.) Following
issuance of the Capito decision, Goodsell dismissed his UCL and CLRA causes of action
without prejudice and, on appeal, Goodsell has expressly abandoned that portion of his
declaratory and injunctive cause of action that was premised on the existence of such a
pretreatment duty of disclosure.
6.
The COA also stated that “[d]octors are not employees or agents of the Hospital.
They are independent practitioners who have been granted the privilege of using the
Hospital for the care and treatment of their patients. You may receive a separate bill
from these independent practitioners for their services.” (Boldface & italics omitted.)
The following provisions are particularly relevant to Goodsell’s contention that the
COA did not obligate him to pay, and did not authorize Hospital to charge, an ER
Visitation Fee:
“Subject to the limitations described below, the Patient … must pay the
Hospital’s Full Charges for items, services and supplies provided to the
Patient,” (italics added).
“ ‘Full Charges’ means the charges for items, services and supplies used in
patient care listed in the Hospital’s Charge Description Master[7] rates, prior
to any discounts or reductions. The Hospital’s Charge Description Master
is available … for review at the Hospital Facility (and for hospitals located
in California may be viewed at http://www.oshpd.ca.gov/chargemaster).”
(Boldface omitted.)
“If Patient has provided Hospital with information regarding the Patient’s
Payor, the Hospital will bill or submit a claim to the Patient’s Payor for all
the items, services and supplies provided by the Hospital to the Patient.”
(Italics added.)
“If the Payor denies payment for all or part of the Hospital’s bill, the
Patient … will be required to pay any amounts due the Hospital.”
“You authorize and direct the Payor to make direct payments to us for such
items, services and supplies provided to the Patient ….” (Italics added.)
7 “California’s Payers’ Bill of Rights (Health & Saf. Code, § 1339.50 et seq.)
requires most hospitals in the state to publish online or at the hospital a ‘chargemaster’
listing the uniform charges for its services. (See Health & Saf. Code, § 1339.51, subds.
(a)(1), (b)(1); see also 42 U.S.C. § 300gg–18(e) [imposing similar requirements for
Medicare participating hospitals].)” (Capito, supra, 17 Cal.5th at p. 277.)
7.
“A Patient who does not have coverage through a Payor must pay the Full
Charges of the Hospital for items, services and supplies provided to the
Patient, unless the Patient received financial assistance or another discount
….” (Italics added.)
II. Procedural Background
Goodsell filed his original complaint in this matter on June 10, 2024. On July 22,
2024, Goodsell filed his FAC. On September 12, 2024, Hospital filed a demurrer to the
FAC and, in connection therewith, a request for judicial notice.
On October 8, 2024, Hospital submitted a joint stipulation between it and Goodsell
to stay the action pending disposition of the Capito case. On October 16, 2024, the trial
court accepted the parties’ stipulation, ordered the matter stayed, and vacated the
demurrer hearing date.
Capito was decided on December 23, 2024. (Capito, supra, 17 Cal.5th at p. 273.)
On January 7, 2025, Goodsell filed a notice with the trial court that, with the issuance of
the Capito decision, the stay of the case lifted. In that notice, Goodsell also requested, in
light of the Capito decision, that the court dismiss his causes of action for violations of
the CLRA and UCL without prejudice. On January 14, 2025, the trial court
acknowledged that the stay of the case was lifted and granted Goodsell’s request to
dismiss his UCL and CLRA causes of action.
On February 21, 2025, Hospital filed (or refiled)8 its demurrer and associated
request that the court judicially notice three documents: (1) the COA signed by Goodsell
when he was seen at Hospital’s emergency room; (2) Hospital’s “Chargemaster for July
2022–June 2023 downloaded from the website of … the Department of Health Care
Access and Information at https://data.chhs.ca.gov/dataset/chargemasters”; and
8 The original demurrer papers filed on September 12, 2024, are not part of the
record on appeal.
8.
“[e]xcerpts from Current Procedural Terminology (2023) [i.e., CPT] published by the
American Medical Association” (hereafter, CPT Codebook).9
On March 11, 2025, Goodsell filed his opposition to the demurrer, and also argued
he should be granted leave to amend “to add a claim for violation of the [UCL] … based
on the lack of any mention or agreement to pay an ER Visitation Fee in [Hospital’s
COA],” which Goodsell observed was “different from the [dismissed] UCL claim
asserted in the FAC ….”
Also on March 11, 2025, Goodsell filed an opposition to Hospital’s request for
judicial notice. In it, Goodsell objected to the trial court taking judicial notice of the
chargemaster and CPT documents. However, as previously mentioned, Goodsell stated
he did “not oppose [Hospital’s] request for judicial notice of Exhibit 1, the Conditions of
Admission contract signed by … Goodsell.”
On March 17, 2025, Hospital filed its replies in support of its demurrer and request
for judicial notice.
On March 24, 2025, the hearing on Hospital’s demurrer went forward. The trial
court, in open court, announced its tentative ruling to sustain Hospital’s demurrer,
without leave to amend, and to grant Hospital’s request for judicial notice as to each of
the submitted exhibits. As to the latter grant, the court stated it “may take notice of the
existence of this information but not for the truth of the factual matters in the
documents.” A minute order issued on that same date stated that the court “is satisfied
with its tentative as the ruling of the court and adopts its tentative as stated.” The court
likewise denied Goodsell’s request for leave “to amend to allege a UCL claim based on
the lack of any mention or agreement to pay an ER Visitation Fee in [Hospital’s COA].”
9 The actual name of the publication that Hospital asked the trial court to judicially
notice was “CPT® 2023 Professional Edition” and includes the subtitle “The only official
CPT® codebook with rules and guidelines from the AMA’s CPT Editorial Panel.”
(Boldface, italics & some capitalization omitted.)
9.
The court concluded the proposed UCL claim “is no different from the one disallowed by
Capito.” (Italics added.) On April 1, 2025, Hospital filed and served notice of the trial
court’s ruling.
On April 3, 2025, the trial court entered judgment dismissing the FAC “in its
entirety with prejudice.” On April 16, 2025, Hospital filed and served a notice of entry of
judgment.
On May 23, 2025, this court issued its decision in Naranjo II.
On June 3, 2025, Goodsell timely filed his notice of appeal.
DISCUSSION
I. Standard of Review
“In an appeal from a judgment dismissing an action after a general demurrer is
sustained without leave to amend, our Supreme Court has imposed the following standard
of review. ‘The reviewing court gives the complaint a reasonable interpretation, and
treats the demurrer as admitting all material facts properly pleaded. [Citations.] The
court does not, however, assume the truth of contentions, deductions or conclusions of
law. [Citation.] The judgment must be affirmed “if any one of the several grounds of
demurrer is well taken. [Citations.]” [Citation.] However, it is error for a trial court to
sustain a demurrer when the plaintiff has stated a cause of action under any possible legal
theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to
amend if the plaintiff shows there is a reasonable possibility any defect identified by the
defendant can be cured by amendment.’ ” (Genesis Environmental Services v. San
Joaquin Valley Unified Air Pollution Control Dist. (2003) 113 Cal.App.4th 597, 603.)
“We construe the allegations of the complaint liberally ‘ “with a view to substantial
justice between the parties.” ’ ” (Schnall v. Hertz Corp. (2000) 78 Cal.App.4th 1144,
1152; see Code Civ. Proc., § 452.)
10.
“ ‘ “[W]e do not review the validity of the trial court’s reasoning but only the
propriety of the ruling itself.” ’ ” (Limon v. Circle K Stores Inc. (2022) 84 Cal.App.5th
671, 688.) “ ‘In order to prevail on appeal from an order sustaining a demurrer, the
appellant must affirmatively demonstrate error. Specifically, the appellant must show
that the facts pleaded are sufficient to establish every element of a cause of action and
overcome all legal grounds on which the trial court sustained the demurrer.’ ” (Save
Lafayette Trees v. East Bay Regional Park Dist. (2021) 66 Cal.App.5th 21, 35.) To
affirmatively demonstrate error, “plaintiffs must do more than draw our attention to
asserted errors in the trial court’s reasoning—they must affirmatively demonstrate that
they have adequately stated a claim for relief.” (Marzec v. Public Employees’ Retirement
System (2015) 236 Cal.App.4th 889, 902.)
II. Hospital’s Request for Judicial Notice on Appeal
In this appeal, Hospital filed a motion for judicial notice of an amici curiae brief
filed by the American Medical Association (AMA) and other medical societies and
associations,10 which was filed in Peters v. Aetna Inc. (4th Cir. 2021) 2 F.4th 199
(Peters). Goodsell opposed the motion and we deferred ruling on the motion “pending
consideration of the appeal on the merits.” We now deny the motion.
In its motion, Hospital contends the amici curiae brief “is pertinent to the
Hospital’s discussion in its Respondent’s Brief regarding statements by the [AMA] with
respect to usage of [CPT] codes” and acknowledges “[t]he document was not provided to
the trial court.” Hospital contends the brief meets Evidence Code section 452,
subdivision (d) because it is a record of “any court of record of the United States or of
any state of the United States.” Hospital further relies on subdivision (h) of said statute
which allows a court to judicially notice “[f]acts and propositions that are not reasonably
10 The other medical societies and associations are North Carolina Medical
Society, Maryland State Medical Society, South Carolina Medical Association, and
Medical Society of Virginia.
11.
subject to dispute and are capable of immediate and accurate determination by resort to
sources of reasonably indisputable accuracy.” (Id., subd. (h).)
Goodsell opposes the motion for judicial notice on several grounds: (1) Hospital
did not seek judicial notice of the amici curiae brief at the trial court level; (2) no
explanation is provided as to why the brief was not presented to the trial court; (3) it is
not appropriate for the trial court to take judicial notice of the truth of statements made in
the brief; (4) no explanation is provided to show how Evidence Code section 452,
subdivision (h) is met; and (5) the brief is not relevant to the appeal. Goodsell has the
better argument.
“Reviewing courts generally do not take judicial notice of evidence not presented
to the trial court. Rather, normally ‘when reviewing the correctness of a trial court’s
judgment, an appellate court will consider only matters which were part of the record at
the time the judgment was entered.’ ” (Vons Companies, Inc. v. Seabest Foods, Inc.
(1996) 14 Cal.4th 434, 444, fn. 3.) Hospital has not provided this court with any reason
as to why the amici curiae brief was not presented to the trial court.
In addition, Hospital makes no effort to identify which facts or propositions within
the amici curiae brief are not reasonably subject to dispute, why such facts are not
reasonably subject to dispute, or how such facts may be accurately determined by resort
to “sources of reasonably indisputable accuracy.” (Evid. Code, § 452, subd. (h).)
We agree with Goodsell that Hospital has not sufficiently demonstrated the
relevance of the amici curiae brief to the issues before this court. Moreover, any arguable
relevance the brief may have to the issues on appeal would depend upon this court taking
judicial notice of the truth of factual statements therein, which we will not do. (See Arce
v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 483.)
12.
Hospital’s motion for judicial notice on appeal is denied.11
III. Hospital’s Demurrer and the Parties’ Contentions
Hospital demurred to Goodsell’s causes of action for breach of contract and
declaratory/injunctive relief “on the ground that [each] fails to state facts sufficient to
constitute a cause of action.” (See Code Civ. Proc., § 430.10, subd. (e).)
Goodsell contends the COA “provides for payment only for services actually
rendered to a patient by the Hospital” and “does not include an agreement by patient to
pay … a separate ER Visitation Fee, which is not a fee for services rendered … but
rather, is a separate fee designed to cover the administrative and overhead expenses of
operating an emergency room on a 24-hour a day, 7-day a week basis.” (Fn. omitted.)
Goodsell seeks a declaration of his rights and obligations under the COA. Goodsell
argues that Hospital breached the COA by charging him fees that he did not agree to pay.
Goodsell contends he only agreed to pay for items, services and supplies “ ‘provided [to
him] by the Hospital’ ” and the ER Visitation Fee is not such an item, service, or supply.
Goodsell argues this case presents “[v]irtually identical allegations” to those alleged in
Naranjo II, and that “[a]ny argument by Hospital that its COA is not reasonably
susceptible to Goodsell’s interpretation should be rejected here, just as the same
argument was rejected … in Naranjo [II].”
Hospital contends Goodsell provides “no substantive arguments about contract
interpretation and … no legal or promised evidentiary support for his view that ‘services’
as used in the COA does not include basic evaluation and management services provided
11 Hospital applied for leave to file a reply in support of its motion for judicial
notice. The purpose of the reply appears to be to provide arguments in support of the
motion that should have been made in the motion itself. “ ‘ “[I]t is axiomatic that
arguments made for the first time in a reply brief will not be entertained because of the
unfairness to the other party.” ’ ” (Starr v. Mayhew (2022) 83 Cal.App.5th 842, 854.)
Hospital’s application for leave to file a reply in support of its motion for judicial notice
is denied.
13.
in the Hospital’s emergency room.” Noting Goodsell’s reliance on Naranjo II, Hospital
contends “good reason exists for this Court not simply to apply Naranjo [II] here, but
rather to analyze this case based on argument and authorities” not presented or
considered in Naranjo II. Hospital contends the “ER Visitation Fee” is an evaluation and
management (E/M) service and “E/M services are by definition services provided to
patients.” Hospital contends “law and pronouncements from federal and state regulators
… establish as a matter of law that the E/M services charges at issue are charges for
services provided to patients” (italics added). Hospital argues “Goodsell’s construction
of the COA is erroneous as a matter of law and is not a construction to which the COA is
reasonably susceptible.”
Hospital further argues that “[t]he Capito decision necessarily depended on the
fact that charges for E/M services are charges for ‘services’ because it held that a hospital
is only required to disclose its charges for E/M services in accordance with the federal
and state legal requirements for disclosure of charges for ‘services.’ ”
IV. Capito and Naranjo II
A. Capito
The trial court sustained Hospital’s demurrer without leave to amend and denied
Goodsell’s request for “leave to amend to allege a UCL claim based on the lack of any
mention or agreement to pay an ER Visitation Fee in [Hospital’s] [COA],” concluding
that “the proposed UCL claim is no different from the one disallowed by Capito, where
the plaintiff alleged the hospital violated the UCL by, among other things, failing to
disclose the EMS Fee in the patient’s COA” (underscoring omitted, italics added), citing
Capito, supra, 17 Cal.5th at page 281.
14.
Although the Capito court observed that the conditions of admission signed by the
Capito plaintiff “did not specifically reference the EMS fee” (Capito, supra, 17 Cal.5th at
p. 281), the plaintiff’s case did not involve a breach of contract cause of action, as is the
case here. Rather, the claim in Capito was that the defendant hospital “ha[d] a duty not
only to disclose EMS fees in the chargemaster,” which the parties agreed was done, “but
also to provide notice of those fees before services are provided to emergency room
patients.” (Id. at p. 278, italics added.) This was the issue that was evaluated and
decided in Capito. (See id. at pp. 283, 287; Naranjo II, supra, 111 Cal.App.5th at
pp. 419–420, fn. 5 [observing that the Capito holding “was limited to whether hospitals
have a duty to disclose such fees prior to providing emergency care to a patient…. [T]he
statutory and regulatory scheme, and the underlying policies upon which the Capito court
based its decision, concerned only information that a hospital may, and may not, discuss
with patients prior to administering treatment.”].)
This court discussed the Capito case in depth in Naranjo II. That discussion is
relevant for context, and we quote from it extensively.
“The Capito plaintiff had been an emergency room patient at
defendant hospital and sued the hospital for violations of the UCL and
CLRA, and for declaratory and injunctive relief, in connection with the
hospital’s practice of charging emergency room patients a separate EMS
Fee without notification or warning. (Capito, supra, 17 Cal.5th at p. 282.)
After two rounds of demurrers, the trial court sustained a demurrer to the
plaintiffs’ second amended complaint without leave to amend. (Ibid.) The
Court of Appeal affirmed.
“On review, the Supreme Court upheld the Court of Appeal’s
judgment, basing its decision on what it described as ‘[a]n extensive
scheme of state and federal law’ that ‘obligates hospitals to make specific
disclosures about the prices of medical services, including fees for
evaluation and management services (EMS) for emergency room patients.’
(Capito, supra, 17 Cal.5th at p. 277 [considering the Payers’ Bill of Rights
(Health & Saf. Code, § 1339.50 et seq.); Health & Saf. Code, § 1317;
Medicare requirements (42 U.S.C. § 300gg–18(e)); the federal Emergency
Medical Treatment and Labor Act (42 U.S.C. § 1395dd); and related
15.
regulations].) The court remarked, ‘The “California Legislature, the United
States Congress, and numerous rulemaking bodies have already decided
what pricing information to make available in a hospital’s emergency room.
Just as importantly, they have decided what not to include in those
requirements. The reason for this extensive statutory and regulatory
scheme is to strike a balance between price transparency and dissuading
patients from avoiding potentially life-saving care due to cost.” ’ (Capito,
supra, at p. 283.)
“The Capito court stated the UCL ‘ “ ‘establishes three varieties of
unfair competition—acts or practices which are unlawful, or unfair, or
fraudulent’ ” ’ (Capito, supra, 17 Cal.5th at p. 284) and went on to consider
whether the plaintiff’s allegations, accepted as true for purposes of
demurrer, established that the hospital’s conduct met any of those three
types of ‘unfair’ competition. (Id. at pp. 283–292.) It first considered
whether the hospital’s ‘failure to inform patients of the EMS fee in the
emergency room before services are provided is “unfair” under the UCL.’
(Id. at p. 283.) In doing so, it rejected the plaintiff’s contention that the
hospital’s ‘ “practices offend established public policies, and are immoral,
unethical, oppressive, and unscrupulous.” ’ (Id. at p. 284.) It held ‘that
where a hospital has complied with state and federal disclosure
requirements, including listing EMS fees in the chargemaster and informing
emergency room patients of the availability of the chargemaster, the lack of
further disclosure of EMS fees to such patients in the emergency room
before treatment is not “unfair” under the UCL.’ (Id. at p. 287.)
“Next, the Capito court considered the plaintiff’s claim that the
hospital ‘violated the CLRA because it has “exclusive knowledge” of the
material fact that an EMS fee would be charged to her, and that she had no
way of knowing about that fact’—which the plaintiff argued ‘forms the
basis for an “unlawful” UCL claim.’ (Capito, supra, 17 Cal.5th at p. 288.)
The court assumed, without deciding, that liability under the CLRA may be
triggered by a failure to disclose material facts and concluded the plaintiff’s
allegations failed to establish that the hospital’s conduct was unlawful ‘by
virtue of [the hospital] having exclusive knowledge of the EMS fee or [the
plaintiff] lacking reasonable access to the information.’ (Capito, supra, at
pp. 289, 291.) It rejected the allegation that the hospital had exclusive
knowledge of the EMS Fee or that it ‘ “actively conceal[ed]” that fact’
because the hospital (1) disclosed EMS Fees in its chargemaster and list of
25 common procedures, (2) submitted those pricelists to the HCAI [i.e., the
16.
Department of Health Care Access and Information12], which published
them on its website, (3) used industry-standardized billing codes in
describing its fees in those lists, (4) referred to the chargemaster in the
admissions form signed by the plaintiff and provided her an opportunity to
inquire about costs of treatment at the time of registration, and (5) made the
chargemaster available at the emergency room and posted conspicuous
signs advising of its availability. (Id. at p. 289.)
“Finally, the high court considered whether the hospital’s
nondisclosure of the EMS Fee prior to emergency room treatment was
fraudulent or deceptive under the UCL. (Capito, supra, 17 Cal.5th at
p. 291.) The court concluded the hospital’s conduct was not fraudulent or
likely to deceive the public for the same reasons it concluded the hospital’s
conduct was not unfair or unlawful. (Ibid.) It wrote, ‘[the hospital’s]
compliance with the regulatory scheme promotes price transparency for
consumers to the extent contemplated by state and federal authorities, who
sought to balance that concern against the risk of dissuading patients from
seeking emergency care.’ (Ibid.)
“Ultimately, the Capito court held ‘hospitals do not have a duty
under the UCL or CLRA, beyond what is required by the statutory and
regulatory scheme, to disclose emergency room EMS fees’ prior to treating
emergency room patients ….’ ” (Naranjo II, supra, 111 Cal.App.5th at
pp. 417–420, fns. omitted.)
As the foregoing discussion illustrates, the issue in Capito was whether hospitals
owed a duty to its emergency room patients to disclose to them the hospital’s intent to
charge an EMS fee (or, as used in this matter, an ER Visitation Fee) prior to providing
them emergency care or treatment. Goodsell argues Capito does not bar his causes of
action for breach of contract and declaratory/injunctive relief (and the UCL and CLRA
causes of action that he seeks leave to add to his complaint) because those causes of
action are not premised on an alleged duty owed by Hospital to disclose the ER Visitation
Fee prior to treatment.
12 The Department of Health Care Access and Information (HCAI) was formerly
known as the Office of Statewide Health Planning and Development. (Assembly Bill
No. 133 (2021–2022 Reg. Sess.) § 31.)
17.
Hospital contends Capito’s holding “necessarily depended on the fact that charges
for E/M services are charges for ‘services’ because it held that a hospital is only required
to disclose its charges for E/M services in accordance with the federal and state legal
requirements for disclosure of charges for ‘services.’ ” Hospital argues “[i]f charges for
E/M services in fact were charges for administrative overhead … the court could not have
concluded that a hospital’s compliance with laws requiring disclosure of the price of
‘services’ was sufficient disclosure of such ‘overhead’ fees.” We do not agree.
The Capito court accepted review of the case to resolve a split among the Courts
of Appeal concerning whether hospitals had a duty to disclose EMS fees beyond what is
required by the statutory and regulatory scheme. (Capito, supra, 17 Cal.5th at p. 277
[“The question here is whether hospitals have a duty, beyond what is required by the
relevant statutory and regulatory scheme, to notify emergency room patients that they
will be charged EMS fees.”]; id. at p. 283 [the court “granted review in light of a split
among the Courts of Appeal” on the question of whether there is a “duty to disclose EMS
fees beyond what is required by the statutory and regulatory scheme”].) Moreover, the
Capito plaintiff did not assert a claim for breach of contract. (See id. at p. 282.) The
only claims asserted by the plaintiff were claims under the UCL (Bus. & Prof. Code,
§ 17200 et seq.), the CLRA (Civ. Code, § 1750 et seq.), and claims for declaratory and
injunctive relief under Code of Civil Procedure section 1060, and were premised on the
contention that the defendant hospital did not provide prospective patients “sufficient
notice of the EMS fee,” and that the hospital had a duty to notify prospective patients that
the hospital would charge an EMS fee prior to treatment. (Capito, at pp. 278, 281, 282.)
That the Capito court may have assumed, for purposes of its decision, that the EMS fee
charged in that case was actually a fee for evaluation and management services (see id. at
pp. 277, 279–280, 290) does not equate to a holding that any time a hospital charges an
EMS fee or ER Visitation Fee, it is, as a matter of law, for services provided to a patient.
18.
We agree that Capito will not bar Goodsell’s claims to the extent those claims are
not premised on an alleged pretreatment duty of disclosure. That conclusion alone,
however, does not entitle Goodsell to reversal of the judgment. We must still determine
whether Goodsell has “affirmatively demonstrate[d] that [he] [has] adequately stated a
claim for relief.” (Marzec v. Public Employees’ Retirement System, supra, 236
Cal.App.4th at p. 902.)
B. Naranjo II
The plaintiff in Naranjo I and Naranjo II, like Goodsell in the matter before us,
originally brought causes of action premised in part on an alleged duty on the part of the
defendant hospital to notify its emergency room patients, prior to treatment, of its intent
to charge those patients an EMS fee, which Goodsell contends is the same as Hospital’s
ER Visitation Fee. (See Naranjo II, supra, 111 Cal.App.5th at p. 413 [claims were
premised on “alleged failure to apprise prospective emergency room patients of the EMS
Fee” (italics added)].) Following the decision in Capito, the Naranjo plaintiff, conceded
“ ‘the Capito decision effectively resolve[d] [his] prior claims … based on [the defendant
hospital’s] alleged “duty to disclose” its intent to charge EMS Fees.’ ” (Naranjo II, at
p. 423.)
Following Capito, the Naranjo plaintiff contended that his first amended
complaint had, nevertheless, stated valid contract-based claims that were not premised on
a duty to disclose the EMS fees prior to emergency care treatment. (Naranjo II, supra,
111 Cal.App.5th at p. 423.) The Naranjo plaintiff argued that “ ‘[b]ecause hospitals do
not present their COA contract to emergency room patients until after services are
provided, the Capito [c]ourt’s “duty to disclose” holding does not apply with respect to
disclosure in a hospital’s COA.’ ” (Ibid.) In considering the argument, we observed that
“Health and Safety Code section 1317 provides, in part: ‘Emergency services and care
shall be rendered without first questioning the patient or any other person as to his or her
ability to pay therefor. However, the patient or his or her legally responsible relative or
19.
guardian shall execute an agreement to pay therefor or otherwise supply insurance or
credit information promptly after the services are rendered.’ ” (Id. at pp. 423–424,
original italics.) We concluded that “the law allows a hospital and its emergency room
patients to discuss payment issues following treatment, and requires those patients to
execute an agreement to pay for emergency services rendered,” and that “to the extent
[the Naranjo plaintiff] has stated (or is able to state) otherwise valid contract-based
claims based on events that arose after [the defendant hospital] completed its emergency
care treatment and not based on an alleged duty of disclosure prior to that treatment, such
claims would remain actionable and not barred under the holding in Capito.” (Id. at
p. 424.) We then considered whether any valid contract-based claims had been stated by
the Naranjo plaintiff and whether he should be granted further leave to amend. (Id. at
pp. 426–437.) We perform a similar analysis of Goodsell’s FAC, post.
V. CPT Codes
Under California law, a “health facility licensed under [chapter 2 of division 2 of
the Health and Safety Code] that maintains and operates an emergency department” and
that has “appropriate facilities and qualified personnel” has a legal duty to provide
“[e]mergency services and care” “to any person requesting the services or care … for any
condition in which the person is in danger of loss of life, or serious injury or illness.”
(Health & Saf. Code, § 1317, subd. (a).) “ ‘Emergency services and care’ means medical
screening, examination, and evaluation by a physician and surgeon, or, to the extent
permitted by applicable law, by other appropriate licensed persons under the supervision
of a physician and surgeon, to determine if an emergency medical condition … exists
and, if it does, the care, treatment, and surgery, if within the scope of that person’s
license, necessary to relieve or eliminate the emergency medical condition, within the
capability of the facility.” (Id., § 1317.1, subd. (a)(1).) Federal law has similar
requirements. (See 42 U.S.C. § 1395dd.)
20.
Goodsell has alleged that the ER Visitation Fees at issue “are billed using one of
five [CPT] codes: 99281, 99282, 99283, 99284, and 99285.” Hospital contends “[t]hose
codes were created and defined by the AMA, which is the owner of the codes and the
sole determiner of their meaning.” (See YDM Management, supra, 16 Cal.App.5th at
p. 617, fn. 1 [“ ‘CPT codes’ are published annually by the [AMA] and comprise a
comprehensive list of medical, surgical, and diagnostic services that is widely used in the
healthcare industry.”]; People ex rel. Government Employees Ins. Co. v. Cruz (2016) 244
Cal.App.4th 1184, 1187, fn. 5 [“CPT codes ‘were jointly developed by the [AMA] and
the Health Care Financing Administration and are the standardized nomenclature for use
in insurance claims.”]; 72 Fed.Reg. 66580-01, 66727 (Nov. 27, 2007) [“The CPT codes,
including the short descriptors, are owned by the AMA and any change to them … should
be addressed to the AMA CPT Editorial Board.”].)
The trial court took judicial notice of the CPT Codebook, an AMA publication.
The CPT Codebook provides the following descriptions for CPT codes 99281 through
99285: “99281[:] Emergency department visit for the evaluation and management of a
patient that may not require the presence of a physician or other qualified health care
professional”; “99282[:] Emergency department visit for the evaluation and
management of a patient, which requires a medically appropriate history and/or
examination and straightforward medical decision making”; “99283[:] Emergency
department visit for the evaluation and management of a patient, which requires a
medically appropriate history and/or examination and low level of medical decision
making”; “99284[:] Emergency department visit for the evaluation and management of
a patient, which requires a medically appropriate history and/or examination and
moderate level of medical decision making”; and “99285[:] Emergency department
visit for the evaluation and management of a patient, which requires a medically
appropriate history and/or examination and high level of medical decision making.”
Hospital contends the above “definitions confirm that the charges are not for generalized
21.
hospital overhead or administration, but rather are charges for services specific to each
patient.”
According to the CPT Codebook, “[medical decision making] includes
establishing diagnoses, assessing the status of a condition, and/or selecting a management
option. [Medical decision making] is defined by three elements. The elements are:
[¶] … The number and complexity of problem(s) that are addressed during the
encounter. [¶] … The amount and/or complexity of data to be reviewed and analyzed….
[¶] … [¶] [and] The risk of complications and/or morbidity or mortality of patient
management.” (Boldface & italics omitted.) Hospital contends “[t]he CPT Codebook’s
discussion of these factors leaves no doubt that the exercise of ‘medical decision making’
relevant to choosing a level code is a patient service specific to each patient.”
Hospital correctly observes that “[t]he federal government requires providers,
including hospitals, to submit claims for Medicare reimbursement for services using CPT
codes where, as here, the AMA has created a CPT code for the service.” (See
<https://www.cms.gov/medicare/coding-billing/healthcare-common-procedure-system>
[as of Aug. 19, 2026], archived at <https://perma.cc/84XW-D29E> [“Standardized
coding systems are essential so Medicare and other health insurance programs can
process claims in an orderly and consistent manner” and identifying CPT codes as one of
the two coding subsystems used].) According to the AMA’s website, the CPT coding
system has been adopted for use by Centers for Medicare and Medicaid Services in the
administration of Part B of the Medicare program, and for Medicaid, and the Department
of Health and Human Services adopted it “as the national coding standard for physician
and other health care professional services and procedure under the Health Insurance
Portability and Accountability Act.” (<https://www.ama-assn.org/about/cpt-editorial-
panel/purpose-cpt-coding-system-cpt-editorial-
panel#:~:text=In%201983%20CPT%20was%20adopted,B%20of%20the%20Medicare%
20Program> [as of Aug. 19, 2026], archived at <https://perma.cc/SEA4-M9CQ>.)
22.
Hospital has cited additional authorities that adequately demonstrate the
widespread use and adoption of CPT codes in the American healthcare industry and,
specifically, the use of CPT codes 99281 through 99285 to document the evaluation and
management of an emergency room patient. (E.g., Cal. Code Regs., tit. 22, § 51050
[acknowledging nationwide use of CPT by all Medicare and Medicaid programs];
45 C.F.R. § 162.1002(a)(5), (c) [Department of Health and Human Services’ adoption
of CPT codes and other code sets as “standard medical data code sets”]; 80 Fed.Reg.
70298-01, 70448 (Nov. 13, 2015) [“we have instructed hospitals to report facility
resources for clinic and emergency department (ED) hospital outpatient visits using the
CPT E/M codes and to develop internal hospital guidelines for reporting the appropriate
visit level”]; 72 Fed.Reg. 66580-01, 66789 (Nov. 27, 2007) [acknowledging the use of
CPT codes 99281 through 99285 for “Emergency department visit for the evaluation and
management of a patient,” levels 1 through 5]; Capito, supra, 17 Cal.5th at p. 280 [“Each
[CPT] code [for evaluation and management services provided in the emergency
department] ‘reflect[s] the activities of physicians and do[es] not … fully describe the
range and mix of services provided by hospitals during visits of clinic and emergency
department patients[,]’ ” and “must be medically necessary and can include preparing ‘to
see the patient (like review of tests),’ reviewing medical history, ‘[o]rdering medications,
tests, or procedures,’ ‘[r]eferring and communicating with other health care
professionals,’ ‘[d]ocumenting clinical information in the electronic or other health
record,’ and engaging in various levels of medical decision-making.”]; YDM
Management, supra, 16 Cal.App.5th at p. 627 [“[M]edical providers use CPT codes to
describe and communicate the nature of the medical services that have been provided to a
patient” and “are the standardized nomenclature for use in insurance claims”].)
23.
VI. Contract Interpretation
Hospital argues “CPT codes have a definitive and well-established meaning as
articulated and adopted by the federal and state hospital regulators” and that “[t]he AMA
has made clear that ‘CPT codes only describe health care procedures and services.”
Hospital contends the “meaning adopted and relied upon by state and federal regulators
precludes any interpretation of the COA as excluding E/M services charges” and that
“E/M services are by definition services provided to patients.” As a result, Hospital
argues this court should determine that the ER Visitation Fee is, as a matter of law, a
charge for services provided by Hospital to a patient.
In response, Goodsell argues Hospital is effectively arguing that “the ‘industry
standard’ makes clear that ER Visitation Fees are fees for services provided to individual
patients.” Goodsell contends this is not the correct standard to apply and that the
“applicable standard for interpreting a consumer contract is to determine whether the
COA is ‘reasonably susceptible’ to Goodsell’s interpretation, and to then determine the
question of what both parties, including the consumer, intended the language to mean.”
Goodsell goes on to state that “in interpreting the COA at issue in Naranjo [II], and
finding that it was ‘reasonably susceptible’ to [the plaintiff’s] interpretation, this [c]ourt
properly cited to dictionary definitions of the word ‘services.’ ” Goodsell then contends,
with little substantive analysis, that “[t]he same definitions apply in this case and support
the same result.”
“ ‘ “ ‘When a dispute arises over the meaning of contract language, the first
question to be decided is whether the language is “reasonably susceptible” to the
interpretation urged by the party. If it is not, the case is over. [Citation.] If the court
decides the language is reasonably susceptible to the interpretation urged, the court
moves to the second question: what did the parties intend the language to mean?’ ” ’ ”
(Hartzheim v. Valley Land & Cattle Co. (2007) 153 Cal.App.4th 383, 389–390.)
24.
Whether language is reasonably susceptible to a given interpretation is a question of law.
(Curry v. Moody (1995) 40 Cal.App.4th 1547, 1552.)
“The fundamental goal of contract interpretation is ‘to give effect to the mutual
intention of the parties as it existed at the time of contracting.’ (Civ. Code, § 1636.) To
interpret a contract, we look to its language ([id.,] § 1638) and ascertain the intent of the
parties, if possible, based solely on the contract’s written provisions ([id.,] § 1639). In
doing so, we apply the ‘ “clear and explicit” meaning of these provisions, interpreted in
their “ordinary and popular sense,” unless “used by the parties in a technical sense or a
special meaning is given to them by usage” [citation] …. Thus, if the meaning a
layperson would ascribe to contract language is not ambiguous, we apply that meaning.’
[Citation.] At the same time, we ‘recognize the “interpretational principle that a contract
must be understood with reference to the circumstances under which it was made and the
matter to which it relates. (Civ. Code, § 1647.)” ’ ” (Hewlett-Packard Co. v. Oracle
Corp. (2021) 65 Cal.App.5th 506, 530–531, fn. omitted.)
With this backdrop, we now go on to consider whether Goodsell has stated viable
claims for breach of contract and declaratory/injunctive relief, and whether and to what
extent Goodsell should be permitted leave to amend his FAC.
VII. The Breach of Contract Cause of Action
“The elements of a breach of contract claim are: ‘(1) [the] existence of the
contract; (2) [the] plaintiff’s performance or excuse for nonperformance; (3) [the]
defendant’s breach; and (4) damages to [the] plaintiff as a result of the breach.’ ”
(Naranjo II, supra, 111 Cal.App.5th at p. 430.)
Goodsell has alleged the existence of a contract between Hospital and him—i.e.,
the COA. With regard to performance, Goodsell alleges he and prospective class
members have “either performed their obligations under their Contracts [i.e., the COA’s]
or were excused for non-performance by [Hospital’s] conduct.” He alleges he made “a
payment to [Hospital], a portion of which is due to … Hospital’s ER Visitation Fee.”
25.
These allegations of performance are uncertain as to whether Goodsell fully or
adequately performed his payment obligations under the COA. However, Goodsell states
in his opening brief on appeal that he performed his payment obligations in full, and
correctly observes that Hospital admitted this in its motion to stay proceedings.13 Given
that Hospital has admitted Goodsell’s performance under the COA, this element appears
satisfied. Goodsell further alleges that “in breach of its express contractual agreement to
charge emergency room patients only for services actually rendered to the patient,
[Hospital] charged [Goodsell] and other emergency room patients ER Visitation Fees,
which are not fees for services actually rendered to the patient.” Goodsell further alleges
he and prospective class members “are entitled to damages in accordance with proof at
trial.”
Because Hospital submitted Goodsell’s COA for consideration by the trial court
and the court took judicial notice of the COA without objection from Goodsell, we need
not rely solely on the bare allegations of the FAC to address the parties’ contentions.
In his breach of contract cause of action, Goodsell alleges the COA “included a
provision or provisions permitting [Hospital] to charge only for services actually
rendered to the patient, and requiring a patient to pay only for services actually provided
to the patient, and not ER Visitation Fees, which are not fees for services rendered, but
rather, are fees designed to cover the overhead, operating, and administrative costs of
operating an emergency room on a 24 hour, 7 day a week basis.” Goodsell alleges the
Hospital breached the COA by charging him “ER Visitation Fees, which are not fees for
services actually rendered to the patient.”
13 Prior to stipulating to stay this matter, Hospital had filed a motion to stay
proceedings pending the Capito disposition. In it, Hospital stated, “[t]he total cost to
Goodsell for services he received was $383.90. Goodsell paid this amount. He is not
being billed for any further costs of the services he received and is not subject to any
collection efforts.”
26.
The COA signed by Goodsell states, “ ‘Subject to the limitations described below,
the Patient … must pay the Hospital’s Full Charges for items, services and supplies
provided to the Patient’ ” (italics added). The term “Full Charges” was defined in the
COA to “mean[] the charges for items, services and supplies used in patient care listed in
the Hospital’s Charge Description Master rates, prior to any discounts or reductions. The
Hospital’s Charge Description Master is available … for review at the Hospital Facility
(and for hospitals located in California may be viewed at
http://www.oshpd.ca.gov/chargemaster).”
The trial court took judicial notice of the chargemaster that was in place at the
time of Goodsell’s emergency room visit. Among the items listed on the chargemaster
was an “ER LEVEL 3” billing description in the amount of $1,588, an “ER LEVEL 3
W/PROCEDURE” billing description in the same amount. In addition, and specifically
under the heading “Evaluation & Management Services (CPT Codes 99201–99499)”
(boldface omitted) the chargemaster listed an “Emergency Room Visit, Level 3
(moderate severity)” using the CPT code 99283 and listing the average charge as $1,588.
The COA plainly and unambiguously provides notice to an emergency room
patient that his or her obligation to pay “Hospital’s Full Charges for items, services and
supplies provided to the Patient” and “Full Charges” is defined as “charges for items,
services and supplies used in patient care listed in the Hospital’s [chargemaster] rates,
prior to any discounts or reductions.” As discussed, Hospital’s chargemaster expressly
includes a fee for an “Emergency Room Visit, Level 3 (moderate severity)” with CPT
code 99283. Based on the ample authorities set forth by Hospital, we have no difficulty
in concluding that an ER Visitation Fee with CPT code 99283, when properly coded in
accordance with AMA guidelines, is a fee charged for services rendered to an emergency
room patient.
27.
Hospital contends “ ‘CPT codes are not properly used to identify or facilitate the
billing of insurance companies’ overhead charges, separate from health care service
providers’ charges.’ ” In partial support,14 of this contention, Hospital cites to Young v.
Community Health Systems, Inc. (M.D.Fla. Sept. 16, 2022, No. 8:22-cv-329-SCB-AEP)
2022 U.S.Dist. Lexis 237079 (Young), a case in which the plaintiff challenged a hospital
charge for an ER Visitation Fee.
In Young, the plaintiff brought a cause of action for breach of contract and other
causes of action against the defendant hospital and health care providers. (Young, supra,
2022 U.S.Dist. Lexis 237079 at pp. *2–*3.) As in this case, the plaintiff contended the
contract she signed with the defendant hospital “[did] not contain a specific contractual
authorization or agreement for the ER patient to pay the subject ER [visitation] fee.” (Id.
at p. *3.) The contract provided, “I [the Patient] understand I am responsible to pay any
account balance not covered by my insurance company in accordance with the regular
rates and terms of the Facility.” (Id. at pp. *3–*4.)
As in this case, the defendant hospital in Young listed the ER Visitation Fees and
the corresponding CPT codes (i.e., 99281–99285) on its chargemaster. (Young, supra,
2022 U.S.Dist. Lexis 237079 at p. *5.) The district court observed that the plaintiff failed
to identify any provision of the contract between her and the defendant hospital that was
breached. (Id. at p. *21.) The plaintiff argued, in part, the ER Visitation Fee was “purely
administrative” (id. at p. *22) and that the contract only “addresses ‘medical treatment’ or
‘medical services’ ” and not “ ‘general overhead, operational, and administrative
expenses’ ” (id. at p. *21). The court rejected the contention stating that “[a] review of
the [h]ospital’s chargemaster shows that each ER [visitation] fee has a specific [CPT]
code associated with it. The CPT billing guidelines are published in the [AMA’s] CPT
14 Hospital also cites to the amici curiae brief filed in Peters, supra, 2 F.4th 199.
As previously stated, we decline to take judicial notice of the brief.
28.
Manual. [Citation.] And the exact CPT codes for the ER Visitation Fee at issue in this
case have been held not to be administrative fees, but rather, ‘service’ fees.” (Id. at
pp. *22–*23, citing U.S. ex rel. Trim v. McKean (W.D.Okla. 1998) 31 F.Supp.2d 1308
(McKean).)
Young is distinguishable from the case before us. In Young, the patient agreed to
be “ ‘responsible to pay any account balance not covered by [her] insurance company in
accordance with the regular rates and terms of the Facility.’ ” (Young, supra, 2022
U.S.Dist. Lexis 237079 at p. *23.) Based on that provision, the Young court concluded
that, even if the ER Visitation Fee was “purely administrative,” the patient was obligated
to pay the fee because the patient’s contract did not exclude administrative fees and there
was no contention that the fee was not in accordance with the facility’s regular rates and
terms. (Ibid.) Arguably, in the case at bar, overhead and administrative fees are
excluded because the COA limits Goodsell’s obligation to pay to “items, services and
supplies provided to the Patient.” (Italics added.)
In addition, we are of the opinion that the Young court overstated the holding in
McKean. In McKean, the court observed that “[p]hysicians claiming a right to payment
from Medicaid or Medicare must comply with the requirements established by Health
Care Financing Authority …. Physicians’ claims are submitted by codes, which are
based on criteria established by the [AMA] in the Physicians’ [CPT] …. [T]he CPT
established new codes for emergency medicine, known as evaluation and management
services (E/M). The new codes defined five levels of services—99281 [through]
99285—usually referred to as Levels 1 (lowest) through 5 (highest). [¶] To be
reimbursed under the 1992 CPT, an emergency physician must document performance of
certain work in three areas: history, examination, and medical decision-making.”
(McKean, supra, 31 F.Supp.2d at p. 1310.) We have no qualm with the foregoing
discussion in McKean.
29.
Notably, McKean recognized that “[t]he system relies on the honesty and good
faith of both physicians and coders, as the reimbursement code is assigned based on the
services noted in the chart” (McKean, supra, 31 F.Supp.2d at p. 1312) and concluded that
many of the claims for medical reimbursement at issue in the case, and for which CPT
codes were used, were actually false claims under the False Claims Act, title 31 of the
United States Code sections 3729 through 3733. (McKean, at pp. 1313, 1314, 1316.)
This illustrates the folly in concluding that the mere use of a CPT code establishes, as a
matter of law, that the service described by the CPT was actually performed.
Peters, supra, 2 F.4th 199, a case also relied on by Hospital, likewise demonstrates
the possibility that a hospital might improperly utilize a CPT code in order to obtain
reimbursement for things outside the CPT code definition. In Peters, the court found that
Aetna Inc. (Aetna) served as a claims administrator for Mars, Inc., a self-funded health
care plan (the Plan), and subcontracted with Optumhealth Care Solutions, Inc. (Optum)
“to provide [health-related] services to the Plan participants.” (Id. at p. 210.) In return,
Optum was to receive a fee from Aetna. (Ibid.) Under its contract with the Plan, Aetna
was “ ‘solely responsible for payments due such subcontractors’ ” but “Aetna did not
wish to pay Optum out of the fees it received from Mars[, Inc.] through the Plan. Instead,
Aetna requested that Optum ‘bury’ its fee within the claims submitted by Optum’s
downstream providers.” (Ibid.) “By doing so, the Plan and its participants effectively
would pay part or all of Optum’s administrative fee notwithstanding the contrary terms”
of Aetna’s contract with the Plan. (Ibid.) The plaintiff produced evidence that
demonstrated “Aetna and Optum scouted for a usable CPT code [i.e., an ‘ “infrequently
billed CPT code” that was “still … considered valid” ’] that could operate as the ‘dummy
code’ ” within which to bury the fee. (Id. at p. 231.)
The Peters court determined the district court had erred in granting summary
judgment in favor of Aetna on the plaintiff’s breach of fiduciary duty claims because “a
reasonable factfinder could conclude that Aetna breached its duties based on the
30.
following four actions regarding the [explanation of benefits]: (1) referring to Optum,
and not the actual health care provider, as the ‘provider’ of the medical services; (2) using
‘dummy codes’ that did not represent actual medical services; (3) misrepresenting the
‘amount billed’ as including Optum’s administrative fee; and (4) describing the Optum
rate, which included its administrative fee, as the amount that the Plan and its
participants, like [the plaintiff], owed for their claim.” (Peters, supra, 2 F.4th at p. 232,
italics added.) The court further stated that “a reasonable factfinder could plausibly infer
that Aetna … misused the ‘dummy’ CPT code” and that the plaintiff “produced sufficient
evidence to create a genuine issue of material fact as to whether Aetna utilized a dummy
CPT code in direct contravention of the recognized purpose of the CPT code.” (Id. at
p. 235.) Thus, Peters recognizes that a health care provider may indeed misuse CPT
codes to charge for items that are not within the definition provided for that CPT code.
(Ibid.)15
In YDM Management, another case relied on by Hospital, the plaintiff was the
assignee of urgent care facility’s claims against a defendant medical group that allegedly
failed to pay the doctors for emergency medical services at their “ ‘usual, customary, and
reasonable rates’ ” in accordance with California law. (YDM Management, supra, 16
Cal.App.5th at p. 618.) The medical group submitted a declaration from the medical
group’s vice-president of post-acute patient financial services and managed care
operations, in which she stated, “providers follow ‘standard billing procedures that are set
forth by the [AMA]’ which ‘require the use of [CPT] codes and other codes that identify,
among other things, the type of services provided, and where the services are provided.’ ”
(Ibid.) The trial court granted summary judgment in favor of the medical group after
15 To its credit, Hospital acknowledged that Peters “concerned … [a] plan
administrators’ improper use of CPT codes ‘to hide their administrative fees within the
patients’ bills, so that the patients and their insurance plans would pay those fees without
having contracted to do so.”
31.
determining that the medical group “presented undisputed evidence that [the plaintiff’s
assignor] submitted no claims to [medical group] indicating that it provided emergency
services to [medical group] members.” (Id. at p. 627.) The YDM Management court
determined that the assignor’s “claims for payment are concessions about the nature of
the services that were provided” and a concession that the assignor “had not provided
‘emergency services’ to [medical group] members.” (Id. at p. 628.)
Hospital contends that “had the [YDM Management] court found a triable dispute,
it would have centered on whether the services in question met the definition of
emergency services but had been miscoded.” Hospital contends, “Goodsell has never
alleged or suggested that the Hospital used the 99281 [through] 99285 CPT codes to
report charges in a manner different from their stated meaning.” Absent a concession to
that effect from Goodsell, we cannot agree.
None of the authorities cited by Hospital preclude the possibility that a hospital
may improperly use an ER Visitation Fee to charge a patient for things other than the
actual emergency care and treatment services provided to a patient. A liberal
construction of Goodsell’s FAC suggests that Goodsell’s claim is that the ER Visitation
Fee he was charged with was not for such services rendered but, rather, was utilized in
this case (and in the case of prospective class members) to recoup overhead,
administrative, and operational expenses. To the extent the ER Visitation Fee may have
been used by Hospital to charge for expenses that do not comprise “items, services and
supplies provided to the Patient” (italics added), as alleged by Goodsell, Goodsell’s
interpretation of the COA as not imposing a financial obligation upon him to pay the ER
Visitation Fee is an interpretation to which the COA is reasonably susceptible.
Hospital contends Goodsell did not allege “any extrinsic evidence that might
support his view that ‘services provided … to the Patient’ does not include E/M services
32.
provided to the patient.”16 In our view, Hospital misstates the issue. Goodsell is not
alleging that E/M services provided to the patient are not “services provided to the
patient.” Rather, interpreting Goodsell’s FAC liberally, Goodsell appears to be alleging
that the ER Visitation Fee charged by Hospital is not an E/M service because the ER
Visitation Fee is not being used by Hospital to charge for E/M services.17
16 Hospital argues that Goodsell has forfeited any argument that extrinsic evidence
will support his claims as to the nature of the ER Visitation Fee. We disagree. Goodsell
raised the issue before the trial court at pages 9 through 10 of its opposition to Hospital’s
demurrer and responded to Hospital’s contention in that regard in his reply brief on
appeal. In addition, Hospital has not provided any authority that demonstrates an
obligation on Goodsell’s part to allege the extrinsic evidence on which it may rely in its
FAC, and authority discussed herein suggests otherwise. (See discussion regarding
Southern Pacific Land Co. v. Westlake Farms, Inc. (1987) 188 Cal.App.3d 807, and
Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97 (Fremont),
post.)
17 Hospital argues that “E/M services, such as ‘chemotherapy, a diagnostic test, or
a surgical procedure,’ may include a component of the hospital’s operational costs in
providing those services,” and implies that the ER Visitation Fee in this case was “in no
manner overhead or general or administrative expenses for operating the emergency
room.” As to the first contention, Hospital cites to the Federal Register wherein it was
stated, “in general, billing a visit in addition to another service merely because the patient
interacted with hospital staff or spent time in a room for that service would be
inappropriate. If a visit and another service were both billed, such a chemotherapy, a
diagnostic test, or a surgical procedure, the visit should be separately identifiable from
the other service because the resources used to provide nonvisit services, including staff
time, equipment, and supplies, among others, were captured in the line item for that
service.” (72 Fed.Reg. 66580-01, 66803 (Nov. 27, 2007).)
We do not mean to suggest that a hospital may not, under any circumstances,
consider its administrative or overhead expenses in developing its rates for E/M services.
However, the above quoted section of the Federal Register supports the proposition that,
in some circumstances, it would be inappropriate to charge an ER Visitation Fee,
particularly where the services rendered to the patient are covered by other charges
incurred. That latter proposition further demonstrates that we may not conclude, as a
matter of law, that the ER Visitation Fee was a fee for “items, services [or] supplies
provided to the Patient” merely because Hospital charged it under a CPT code designated
for evaluation and management services.
33.
Hospital cites to George v. Automobile Club of Southern California (2011) 201
Cal.App.4th 1112 (George), contending “the court explained how extrinsic evidence of a
particular meaning comes into play in the context of a pleadings challenge.” George
involved an insured’s claim under a policy of car insurance after the insured’s vehicle
was declared a total loss. (Id. at p. 1117.) The dispute in George was whether the
insurance policy obligated the insurer to pay the full amount of the “ ‘Actual Cash
Value’ ” stated in the policy, i.e., $25,000, or the fair market value of the vehicle. (Ibid.)
The trial court in George sustained a demurrer to the insured’s original complaint
with leave to amend. (George, supra, 201 Cal.App.4th at p. 1120, fn. 2.) Upon
amending the complaint, the insured added allegations of the extrinsic evidence it was
relying on in arguing the insurance policy was ambiguous, and in advancing his preferred
interpretation of the insurance policy. (Id. at p. 1120 & fn. 2.) The defendant demurred
to the amended complaint and the trial court sustained the demurrer without leave to
amend, finding the insurance policy “ ‘was clear on its face that the limit on insurer
liability is the actual cash value of the vehicle unless otherwise stated. And it’s clear and
unambiguous that one is paid the actual cash value up to a limit of 25 thousand dollars.”
(Id. at p. 1120.) The court entered judgment in favor of the defendant insurer. (Ibid.)
On appeal, the insured argued, “[T]he trial court erred when it concluded the
insurance contract was ‘clear on its face’ ” and that “the court was required, as a matter of
law, to credit his allegations that extrinsic evidence ‘render[ed] the insurance contract at
issue … ambiguous’—that is, his ‘allegation that extrinsic evidence supports his
construction of the Policy … is enough, by itself, to require that [the] Defendants’
demurrer be overruled.’ ” (George, supra, 201 Cal.App.4th at p. 1120.) In addressing
the insured’s contention, the George court wrote: “In the context of a demurrer, the court
must conditionally consider the parol evidence alleged in the complaint, to determine if it
would be relevant to prove a meaning to which the language of the instrument is
reasonably susceptible. Thus, trial courts err if they refuse to consider the alleged parol
34.
evidence on the ground that no parol evidence of any sort is pertinent because the
particular contract in dispute is unambiguous. But there may be no error if the trial court
conditionally accepts as true that [the] plaintiff can proffer specified parol evidence and,
having considered the parol evidence allegations, then determines as a matter of law that
the parol evidence alleged must be disregarded because, for whatever reason, the contract
is not reasonably susceptible of the interpretation [the] plaintiff alleged.” (Id. at p. 1122.)
It is true that Goodsell does not allege any extrinsic evidence by which he may
ultimately seek to prove that the ER Visitation Fee is not being used by Hospital to
charge for E/M services. Had he alleged the extrinsic evidence upon which he intended
to rely in his FAC, we have no doubt that the holding in George would support this court
considering such alleged evidence in ruling on the demurrer. However, since he did not
allege such extrinsic evidence, the George case is inapposite.
Goodsell, in addressing the contention that he has not pleaded the extrinsic
evidence upon which he will rely to support his contention that the ER Visitation Fee is
not a fee for “items, services [or] supplies provided to the Patient,” cites to Southern
Pacific Land Co. v. Westlake Farms, Inc., supra, 188 Cal.App.3d 807, wherein this court
stated, “[w]here an ambiguous contract is attached and incorporated into the complaint,
the party pleading is only required to allege in a complaint the meaning which the party
ascribes to that contract.” (Id. at p. 817.) Goodsell has done this.
The following passage from Fremont, supra, 148 Cal.App.4th 97 is also
instructive: “The proper interpretation of a contract is disputable if the contract is
susceptible of more than one reasonable interpretation, that is, if the contract is
ambiguous. An ambiguity may appear on the face of a contract, or extrinsic evidence
may reveal a latent ambiguity. [Citation.] A court determining whether a contract is
ambiguous must first consider extrinsic evidence offered to prove the parties’ mutual
intention. If the court determines that the contract is reasonably susceptible of an
interpretation supported by extrinsic evidence, the court must admit that evidence for
35.
purposes of interpreting the contract. [Citation.] A court cannot determine based on only
the four corners of a document, without provisionally considering any extrinsic evidence
offered by the parties, that the meaning of the document is clear and unambiguous.” (Id.
at p. 114, italics added.) “For a court to take judicial notice of the meaning of a
document submitted by a demurring party based on the document alone, without allowing
the parties an opportunity to present extrinsic evidence of the meaning of the document,
would be improper.” (Id. at pp. 114–115, italics added.) “In short, a court cannot by
means of judicial notice convert a demurrer into an incomplete evidentiary hearing in
which the demurring party can present documentary evidence and the opposing party is
bound by what that evidence appears to show.” (Id. at p. 115.) A “hearing on demurrer
may not be turned into a contested evidentiary hearing through the guise of having the
court take judicial notice of documents whose truthfulness or proper interpretation are
disputable.” (Id. at p. 114; see Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d
369, 374 [same].)
Hospital also contends that “a plaintiff cannot ascribe to contract terms a meaning
different from their statutory definition,” citing California Traditions, Inc. v. Claremont
Liability Ins. Co. (2011) 197 Cal.App.4th 410, 419 (California Traditions).) In that case,
a contractor cross-complained against its subcontractor’s insurer under a comprehensive
general liability policy after it was sued for defective construction. (Id. at p. 413.) The
trial court granted insurer’s summary judgment motion on grounds that the insurance
policy contained an exclusion for work performed as part of a condominium project.
(Ibid.) In affirming the resulting judgment, the Court of Appeal relied, in large part, on a
statute that “meticulously defined” the terms “ ‘condominium’ ” and “ ‘condominium
project.’ ” (Id. at p. 419.)
36.
California Traditions is not dispositive because the court determined, based upon
evidence submitted to the trial court, that the project at issue was a condominium project
as that term is defined by statute and that, as a result, the policy exclusion applied and
barred coverage. (California Traditions, supra, 197 Cal.App.4th at pp. 418–423; id. at
p. 418 [“The undisputed facts … show the unit was one of numerous units developed and
constructed by California Traditions as part of a ‘condominium project,’ and was
marketed and conveyed by California Traditions as a condominium.”].) Here, we are
limited to the facts alleged in the FAC and facts that are judicially noticeable—none of
which demonstrate as a matter of law that the ER Visitation Fee as charged by Hospital
constitute items, supplies, or services provided to Goodsell.18
Here, although the AMA has defined the meaning of CPT codes that are to be used
by hospitals to reference E/M services, we cannot conclude, as a matter of law, that
Hospital’s use of a CPT code for its ER Visitation Fee is a fee for E/M services. It may
turn out that the ER Visitation Fee is exactly that and was appropriately charged to
Goodsell by Hospital—or, it may turn out that the ER Visitation Fee was used by
18 Hospital writes: “That the services billed using CPT codes must have been
‘provided to the patient’ is confirmed not only by the fact that each [E/M] services charge
is patient-specific, but also by the requirement that the services be documented in the
patient’s medical record.” As to the first of these contentions, Hospital points to no
allegations or judicially noticeable facts to support the contention that, in this case, the
ER Visitation Fee was a patient-specific charge. As to the second contention, we observe
that, with the exception of the COA, Goodsell’s medical records are not part of the record
on appeal. The mere fact that Hospital charged the ER Visitation Fee using a CPT code
designated for E/M services does not allow us to conclude, as a matter of law, that the
Hospital used the CPT code appropriately. (See Peters, supra, 2 F.4th at pp. 234–235.)
37.
Hospital in the manner alleged by Goodsell.19 Whether Goodsell will ultimately be able
to prove the latter is not an issue before this court. (Schmidt v. Foundation Health (1995)
19 At oral argument, Hospital’s counsel argued that CPT codes 99281 through
99285 can only refer to “services” provided to a patient because certain federal agencies
require the use of CPT codes and that is how the AMA, the developer of the CPT codes,
has defined those CPT codes. Counsel argued that the legal definition of a term used in a
contract is incorporated into the contract by operation of law, citing 1 Witkin, Summary
of California Law (11th ed. 2026) Contracts, section 775, for the proposition that
“applicable laws … in existence when a contract is formed become part of the contract as
if incorporated by reference.” Counsel cited to Klein v. Chevron U.S.A., Inc. (2012) 202
Cal.App.4th 1342 (Klein) as illustrating the principle.
In Klein, the plaintiffs sued Chevron U.S.A., Inc. (Chevron) for violation of the
UCL and CLRA, breach of contract, and unjust enrichment. (Klein, supra, 202
Cal.App.4th at p. 1348.) The plaintiffs’ claims were premised, in large part, on the fact
that Chevron purchased its gasoline “at a standardized temperature of 60 degrees
Fahrenheit” (ibid.) and paid taxes to the government on that same basis (id. at p. 1351)
but then sold the gas to customers at temperatures in excess of 70 degrees Fahrenheit, and
charged their customers taxes on the basis of gallonage sold at the higher temperatures.
(Id. at pp. 1348, 1351.) The reason this was an issue is that a given quantity of gas
expands at higher temperatures. (Id. at p. 1348.) As a result, a volumetric gallon of gas
at a higher temperature has less energy potential than a volumetric gallon of gas at a
lower temperature. (Ibid.) Moreover, the practice of purchasing gas at a lower
temperature and paying taxes based on that volume of gas and then selling the gas at a
higher temperature (with the resulting expanded volume) results in the seller being able
to collect more taxes from consumers than it paid to the government upon purchasing the
gas. (Id. at pp. 1350–1351.)
The Klein plaintiff argued that Chevron offered to sell gas at a particular price per
gallon and that “the term ‘gallon’ can be reasonably interpreted as an offer to sell 231
cubic inches of motor fuel at 60 degrees Fahrenheit.” (Klein, supra, 202 Cal.App.4th at
p. 1385, italics added.) The Klein court disagreed. (Id. at pp. 1385–1386.) It observed
that Webster’s Dictionary definition of “gallon” demonstrated that “in its normal usage,
the word ‘gallon’ reflects a volumetric measurement without reference to temperature.”
(Klein, at p. 1385.) The court also determined “[the p]laintiffs’ proposed construction of
the term ‘gallon’ also conflicts with the definition that has been assigned to that term
under state law”—i.e., California’s weight and measurement laws incorporate standards
in the “ ‘National Institute of Standards and Technology Handbook 44,’ ” which
“clarifies that a ‘gallon’ is a ‘unit’ of measurement that is ‘fixed by definition and is
independent of such physical conditions as temperature.’ ” (Id. at p. 1386.)
38.
35 Cal.App.4th 1702, 1706 [“In reviewing the legal sufficiency of a demurrer, we are not
concerned with [the] plaintiff’s ability to prove the allegations of the complaint, or the
possible difficulties in making such proof.”].)
We conclude Goodsell stated sufficient facts to constitute a cause of action for
breach of contract.
VIII. The Cause of Action for Declaratory and Injunctive Relief
Hospital argues that, for the same reasons it advanced on appeal and discussed
above, Goodsell “cannot state a claim for declaratory relief.” In light of our
determinations thus far in this appeal, this particular contention lacks merit.
Hospital further argues that “ ‘[a] request for declaratory relief is not “proper”
under [Code of Civil Procedure sections] 1060 and 1061 and may be dismissed on
demurrer [if] it would provide no more relief than that sought by other claims, such as
breach of contract,” quoting Weil and Brown, California Practice Guide: Civil Procedure
Before Trial (The Rutter Group 2025) paragraph 7:42.12a, at page 25, and citing other
authority. This contention was raised by Hospital in its demurrer to the trial court and
went unaddressed by Goodsell in his opposition to the demurrer. Similarly, this
contention was raised by Hospital on appeal, and, again, went unaddressed by Goodsell
in both his opening and reply briefs on appeal.
“ ‘Declaratory relief operates prospectively, serving to set controversies at rest. If
there is a controversy that calls for a declaration of rights, it is no objection that past
wrongs are also to be redressed; but there is no basis for declaratory relief where only
In our view, Klein is not applicable. In Klein, there was no dispute that the
product being purchased and delivered was gasoline. The only question was how it
should be measured. Here, there is a dispute as to what the patient is being charged for—
i.e., is it actually evaluation and management services provided by Hospital to the
patient? Or is it a fee that has no real relationship to services provided by Hospital, and is
only being charged as a matter of course, to recoup portions of its overhead expenses?
As previously stated, we are unable to conclude that, as a matter of law, the ER Visitation
Fee as charged by Hospital constitutes items, supplies, or services provided to Goodsell.
39.
past wrongs are involved. Hence, where there is an accrued cause of action for an actual
breach of contract or other wrongful act, declaratory relief may be denied.’ ” (Osseous
Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th
357, 366, italics added (Osseous), quoting 5 Witkin, Cal. Procedure (5th ed. 2008)
Pleading, § 869, p. 284; accord, California Union Ins. Co. v. Trinity River Land Co.
(1980) 105 Cal.App.3d 104, 110.)
In Osseous, the court wrote, “ ‘ “ ‘The purpose of a declaratory judgment is to
“serve some practical end in quieting or stabilizing an uncertain or disputed jural
relation.” ’ [Citation.] ‘Another purpose is to liquidate doubts with respect to
uncertainties or controversies which might otherwise result in subsequent litigation.’ ” ’ ”
(Osseous, supra, 191 Cal.App.4th at p. 364; accord, In re Claudia E. (2008) 163
Cal.App.4th 627, 633.) “ ‘ “ ‘One test of the right to institute proceedings for declaratory
judgment is the necessity of present adjudication as a guide for [the] plaintiff’s future
conduct in order to preserve his legal rights.’ ” ’ ” (Osseous, at pp. 364–365, italics
added.)
“A controversy is ripe when it has reached, but has not passed, the point that the
facts sufficiently have congealed to permit the court to issue a useful decision. [Citation.]
The purpose of the declaration is to allow the parties to shape their conduct to avoid a
breach. [Citation.] There is no basis for declaratory relief where only past wrongs are
involved.” (Cordoba Corp. v. City of Industry (2023) 87 Cal.App.5th 145, 157.) “The
purpose of a judicial declaration of rights in advance of an actual tortious incident is to
enable the parties to shape their conduct so as to avoid a breach. ‘[D]eclaratory
procedure operates prospectively, and not merely for the redress of past wrongs. It serves
to set controversies at rest before they lead to repudiation of obligations, invasion of
rights or commission of wrongs; in short, the remedy is to be used in the interests of
preventive justice, to declare rights rather than execute them.’ ” (Babb v. Superior Court
40.
(1971) 3 Cal.3d 841, 848; accord, SJJC Aviation Services, LLC v. City of San Jose (2017)
12 Cal.App.5th 1043, 1062.)
We conclude Hospital’s argument with regard to Goodsell’s declaratory relief
cause of action has merit. Consequently, we will not disturb the trial court’s decision to
sustain the demurrer to Goodsell’s cause of action for declaratory/injunctive relief.20
IX. Leave To Amend To State UCL and CLRA Claims Must Be Granted
Goodsell argues he should be given leave to amend his FAC “to allege UCL and
CLRA claims based on Hospital’s post-treatment practices (including Hospital’s COA),
as opposed to the pre-treatment disclosures sought in Capito (and now dismissed from
this case).” (Fn. & some italics omitted.)
Hospital argues Goodsell should not be granted leave to state UCL and CLRA
claims because the claims “would depend on [Goodsell’s] legally erroneous interpretation
of the contract.”21 This contention is without merit. We have already expressed our
opinion that Goodsell’s breach of contract cause of action is not precluded under Capito
and that Goodsell has sufficiently stated a cause of action for breach of contract.
20 Goodsell makes no argument in support of his claim for injunctive relief.
Injunctive relief has repeatedly been held to be a remedy and not a cause of action.
(Church Mutual Ins. Co., S.I. v. GuideOne Specialty Mutual Ins. Co. (2021) 72
Cal.App.5th 1042, 1051, fn. 1; Ortiz v. Dameron Hospital Assn. (2019) 37 Cal.App.5th
568, 572, fn. 2; McDowell v. Watson (1997) 59 Cal.App.4th 1155, 1159.) Although we
affirm the order sustaining the demurrer to Goodsell’s cause of action for
declaratory/injunctive relief, nothing in this opinion will preclude Goodsell from
obtaining injunctive relief if the necessary showing is made. (See Allen v. City of
Sacramento (2015) 234 Cal.App.4th 41, 65–66 [“order sustaining the demurrer was
proper because an injunction is not a cause of action, [but] [the] plaintiffs may still obtain
injunctive relief if they prevail on a cause of action”].)
21 In a footnote within Hospital’s respondent’s brief, Hospital correctly observes
that, at the trial court level, Goodsell only sought leave to amend to state a cause of action
under the UCL. Hospital does not argue, however, that Goodsell should be denied leave
to state a CLRA claim as a result of this deficiency.
41.
“ ‘The purpose of the UCL [citation] “is to protect both consumers and
competitors by promoting fair competition in commercial markets for goods and services.
[Citation.]” [Citation.] It “defines ‘unfair competition’ to mean and include ‘any
unlawful, unfair or fraudulent business act or practice ….’ ” ’ ” (Naranjo II, supra, 111
Cal.App.5th at p. 434.) “ ‘[A] business practice need only meet one of [those] three
criteria to be considered unfair competition.’ ” (Id. at pp. 434–435.)
“ ‘A fraudulent business practice is one which is likely to deceive the public.
[Citations.] It may be based on representations to the public which are untrue, and “ ‘also
those which may be accurate on some level, but will nonetheless tend to mislead or
deceive….’ ” … The determination as to whether a business practice is deceptive is
based on the likely effect such practice would have on a reasonable consumer.’ ”
(Naranjo II, supra, 111 Cal.App.5th at p. 435.) “ ‘Whether a practice is deceptive or
fraudulent “cannot be mechanistically determined under the relatively rigid legal rules
applicable to the sustaining or overruling of a demurrer.” [Citation.] Rather, the
determination is one question of fact, requiring consideration and weighing of evidence
from both sides before it can be resolved.’ ” (Ibid.)
“ ‘Unlawful business acts or practices within the meaning of the UCL include
“ ‘ “ ‘anything that can properly be called a business practice and that at the same time is
forbidden by law.’ ” ’ ” ’ [Citation.] ‘By prescribing “ ‘any unlawful’ ” business
practice, the UCL borrows violations of other laws and treats them as unlawful practices
that the UCL makes independently actionable. [Citation.] Virtually any statute or
regulation (federal or state) can serve as a predicate for a UCL unlawful practice cause of
action. [Citation.] … [A] violation of the CLRA can serve as the predicate for a UCL
cause of action.’ [Citation.] [¶] Courts have determined it is an unfair business practice
for a business to assert a contractual right that it does not have. (People v. McKale
(1979) 25 Cal.3d 626, 635 [mobilehome park’s rules and regulation that included
provisions barred by statute determined deceptive because tenants are likely to believe
42.
the rule enforceable]; cf. People v. Custom Craft Carpets, Inc. (1984) 159 Cal.App.3d
676, 683–684.)” (Naranjo II, supra, 111 Cal.App.5th at p. 436.)
“California courts have applied a variety of tests to determine whether a business
practice is unfair under the UCL. ‘Under the UCL’s unfairness prong, courts consider
either: (1) whether the challenged conduct is “tethered to any underlying constitutional,
statutory or regulatory provision, or that it threatens an incipient violation of an antitrust
law, or violates the policy or spirit of an antitrust law,” [citation]; (2) whether the practice
is “immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers,”
[citation]; or (3) whether the practice’s impact on the victim outweighs “the reasons,
justifications and motives of the alleged wrongdoer.” ’ ” (Naranjo II, supra, 111
Cal.App.5th at p. 437.)
Assuming the truth of Goodsell’s allegations for purposes of the demurrer, a jury
could reasonably find that, where a hospital’s standard contract between it and its
emergency room patients provides that the patient agrees to pay only for “items, services
and supplies provided to” him or her, a practice whereby the hospital charges the patient
fees unrelated to such “items, services and supplies” using a CPT code designated for
evaluation and management services, is a fraudulent, unfair or unlawful business practice.
To the extent Goodsell alleges that Hospital charges its patients an “ER Visitation
Fee” for the “general operating, administrative, and overhead costs” of Hospital “in
operating an emergency room on a 24-hour, 7 day a week basis,” and that such fees “are
not fees for services actually rendered to the patient,” Goodsell should be allowed to
amend his FAC to state UCL and CLRA causes of action. Leave to amend must be
granted.
DISPOSITION
We reverse the judgment of dismissal. The order sustaining the demurrer with
respect to Goodsell’s cause of action for declaratory and injunctive relief is affirmed.
Goodsell is entitled to amend his FAC to state causes of action under the UCL and CLRA
43.
in accordance with this opinion. We remand the case to the trial court for further
proceedings not inconsistent with this opinion. Goodsell is entitled to his costs on appeal.
(Cal. Rules of Court, rule 8.278(a)(3).)
DETJEN, Acting P. J.
WE CONCUR:
MEEHAN, J.
SNAUFFER, J.
44.