Worldwide Aircraft Servs. v. Fresno Unified Sch. Dist.

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WORLDWIDE AIRCRAFT SERVICES, INC., Plaintiff and Appellant, v. FRESNO UNIFIED SCHOOL DISTRICT, Defendant and Respondent.

F084741

California Court of Appeals, Fifth District

September 11, 2023

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Fresno County, No 20CECG00607 D. Tyler Tharpe, Judge.

Law Office of Robert F. Keehn, Robert F. Keehn; Law Office of Josiah Young, Josiah Young and Michael D. McClelland, for Plaintiff and Appellant.

Klein Hockel, Iezza &Patel, Jonathan Allan Klein and Sweta H Patel, for Defendant and Respondent.

OPINION

SNAUFFER, J.

Fresno Unified School District ("FUSD") operates an employee healthcare plan ("the Plan"). While C.H.-an enrollee in the Plan-was traveling abroad, she fell critically ill. Her husband arranged an emergency medical flight back to California through Worldwide Aircraft Services, Inc. ("Worldwide").

The Plan authorized the flight and agreed it was medically necessary.^[1] After Worldwide completed its service, it billed the Plan approximately $1.3 million for the flight. The Plan paid Worldwide approximately $115,000, an amount Worldwide found unsatisfactory.

Worldwide sued the Plan, alleging claims for breaching an implied contract, quantum meruit, and unjust enrichment. FUSD appeared on the Plan's behalf and demurred to the complaint.

Ultimately, the trial court sustained the demurrer, finding FUSD and the Plan were separate entities, but the Plan was nonetheless immune under the Government Claims Act. (Gov. Code, § 810 et seq.) The court alternatively concluded Worldwide otherwise failed to state a proper claim, and judgment was entered in the Plan's favor.

On appeal, Worldwide argues (1) it properly asserted claims and (2) the Plan is not entitled to immunity because it is not a government entity as defined by statute. For purposes of demurrer only, we agree and reverse the judgment.

BACKGROUND

The following pertinent facts and claims are based on the complaint^[2] Worldwide filed against the Plan and reflect the fact that, "[b]ecause this case comes to us on demurrer, we have assumed the facts pleaded as true _." (Mathews v. Becerra (2019) 8 Cal.5th 756, 787 (Mathews).) Our summary also includes some facts gleaned from the Plan's comprehensive booklet, of which the trial court took judicial notice.

Factual Allegations

The Plan is "a self-insured, non-federal governmental plan providing certain benefits to eligible employees (current and retired) of the Fresno Unified School District and their dependents." It is "contracted with Anthem Blue Cross, an organization providing [a] [n]etwork of health care providers." The Plan "expressly contemplates that legal action may be commenced against the" Plan. It is "neither a 'public entity' nor a 'local public entity,'" as defined in the Government Code.

C.H., a beneficiary under the Plan, "was afflicted with a life-threatening infection while visiting Switzerland" and "required immediate air medical transportation." The Plan "issued [a] written pre-authorization" to Worldwide "for air medical transportation," "acknowledg[ing] that such transport was medically necessary." Worldwide "did not have a pre-negotiated contract with" the Plan "and was not part of [its] provider network." The Plan "knew or should have known" Worldwide "would charge its usual and customary rate for [air-medical-transportation] services ...."

When Worldwide billed the Plan, the Plan "proceeded to assess, process, negotiate, and remit partial payment"-"a fraction of the amount billed . . .." The partial payment did not satisfy either Worldwide's "own usual and customary rate or '100% of Usual, Customary and Reasonable Charges'" under the Plan. The Plan's" 'Usual, Customary and Reasonable Charges'" include the fact "[t]he amount . . . shall be determined by the Plan."

The Plan "benefitted" from Worldwide's transportation by "effectively fulfill[ing] [its] obligation to provide medically necessary care . . .." The Plan, however, "grossly underpaid . . . for the services rendered."

Causes of Action

Worldwide alleged three causes of action. First, it claimed "damages pursuant to breach of an implied-in-fact contract inferred from" the parties' conduct. It asserted the Plan was "obligated ... to pay '100% of Usual, Customary and Reasonable Charges'" "for air ambulance transportation."

"In consideration for [Worldwide's] agreement to provide air medical transportation . . ., [the Plan] agreed to reimburse [Worldwide] for the expenses [it] incurred for transport . . .." "[T]he appropriate level of reimbursement could be less than, equivalent to, or even more than [Worldwide's] own usual and customary rate." Both Worldwide and the Plan "intended and assented" to receive and pay, respectively, compensation "for the services rendered." The Plan "breached the implied-in-fact contract . . . by remitting only a fraction of the billed charges . . .."

Second, Worldwide alleged it was entitled to recover in quantum meruit. It claimed it expected to receive compensation and its services benefited the Plan by "fulfill[ing]" an "obligation[] to provide medically necessary care to" an enrollee. But the Plan "failed and refused" to properly compensate Worldwide.

Last, Worldwide believed the Plan "would be unjustly enriched by failing to pay [Worldwide] the difference between the[] partial payment . . . and '100% of Usual, Customary and Reasonable charges' for the benefit conferred upon" the Plan. All told, Worldwide sought "$1,348,247.12 or ... an amount determined by [a] trier of fact . . .."

Demurrer

FUSD, appearing on the Plan's behalf, demurred to the complaint. The trial court sustained the demurrer, ruling the Plan was immune under the Government Claims Act. The court held "the Plan may be sued in its own right and is . . . a proper defendant," but "[g]iven the extensive control and involvement of . . . FUSD in the Plan's administration and affairs, and the Plan's inseparable affiliation with ... FUSD, it is imbued with the character of a public entity."

Alternatively, the court held Worldwide failed to adequately state a claim. Judgment was subsequently entered on the Plan's behalf.

DISCUSSION

This appeal presents a deceptively simple question: did Worldwide state a claim sufficient to survive a demurrer? We hold that it did.

Worldwide adequately alleged the Plan was both its own entity and not a public entity as defined by the Government Code. It also properly pleaded both entitlement to reasonable compensation in quantum meruit and an unreasonable payment. Accordingly we reverse the judgment.

I. Standard of Review

"[T]he standard of review is well settled. We give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] Further, we treat the demurrer as admitting all material facts properly pleaded, but do not assume the truth of contentions, deductions or conclusions of law. [Citations.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action." (City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865.)"' "[A] complaint otherwise good on its face is subject to demurrer when facts judicially noticed render it defective." '" (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.)

"[T]he complaint ordinarily is sufficient if it alleges ultimate rather than evidentiary facts." (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550 (Doe).)"' "While it is true that pleading conclusions of law does not fulfill this requirement, it has long been recognized that '[t]he distinction between conclusions of law and ultimate facts is not at all clear and involves at most a matter of degree. [Citations.] For example, the courts have permitted allegations which obviously included conclusions of law and have termed them "ultimate facts" or "conclusions of fact."' [Citations.] What is important is that the complaint as a whole contain sufficient facts to apprise the defendant of the basis upon which the plaintiff is seeking relief." '" (Thompson v. Spitzer (2023) 90 Cal.App.5th 436, 452 (Thompson).)

"Likewise,' "[t]he particularity required in pleading facts depends on the extent to which the defendant in fairness needs detailed information that can be conveniently provided by the plaintiff; less particularity is required where the defendant may be assumed to have knowledge of the facts equal to that possessed by the plaintiff. [Citation.]" [Citation.] There is no need to require specificity in the pleadings because "modern discovery procedures necessarily affect the amount of detail that should be required in a pleading." '" (Thompson, supra, 90 Cal.App.5th at p. 452.)

II. Public Entity

Worldwide argues the trial court incorrectly ruled the Plan was a public entity. FUSD argues the Plan is "indisputabl[y] ... a public entity" because school districts are public entities. We conclude Worldwide, under the prevailing standards of review, has the better argument.

In the complaint, Worldwide alleged the Plan was its own entity, "contemplat[ing] that legal action may be commenced [directly] against" itself. Worldwide also alleged the Plan was "neither a 'public entity' nor a 'local public entity'" under the Government Code. This is an ultimate fact, not a legal conclusion. (Esparza v. Kaweah Delta Dist. Hospital (2016) 3 Cal.App.5th 547, 552, fn. 4 [pleading compliance with the "claims statute" is "an ultimate fact," "not a conclusion of law."]; Code Civ. Proc., § 452 [complaint's "allegations must be liberally construed, with a view to substantial justice between the parties"]; see Doe, supra, 42 Cal.4th at p. 550 [complaint need not allege "evidentiary facts"].)

The trial court...