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California Supreme Court:
County Not Immune in Lawsuit Based on Quantum Meruit
By a MetNews Staff Writer
The Government Claims Act does not bar a lawsuit against a county based on quantum merit, the California Supreme Court held yesterday in a unanimous opinion that comes close to saying that immunity provisions of the act relate only to torts.
Associate Justice Patricia Guerrero authored the opinion which reverses a decision by the Sixth District Court of Appeal. That court on April 26, 2022, granted a writ petition by the County of Santa Clara directing that demurrers be sustained without leave to amend to complaints brought by two hospitals that claim they were underpaid for emergency services provided to subscribers to a county health care plan.
The hospitals sued under the Knox-Keene Act which provides that where emergency care is provided to an enrollee under a health care plan, the plan “shall reimburse providers for emergency services and care provided to its enrollees, until the care results in stabilization of the enrollee.” Where there is no contract between the hospitals and the plan setting rates, the plan must pay, under a regulation implementing the act, the “reasonable and customary value” of the services.
Grover’s Opinion
Sixth District Acting Presiding Justice Adrienne Grover, in concluding that an action did not lie against the county, wrote:
“Because the county is immune from common law claims under the Government Claims Act and the Hospitals do not state a claim for breach of an implied-in-fact contract, we will issue a writ of mandate instructing the trial court to enter a new order sustaining the demurrer without leave to amend.”
Grover pointed to Government Code §815 which sets forth, in part:
“Except as otherwise provided by statute: [¶] (a) A public entity is not liable for an injury, whether such injury arises out of an act or omission of the public entity or a public employee or any other person.”
High Court’s Decision
In her opinion reversing the Court of Appeal, Guerrero made note of Government Code §814, which says:
“Nothing in this part affects liability based on contract or the right to obtain relief other than money or damages against a public entity or public employee.”
The chief justice wrote:
“We conclude that the Government Claims Act does not bar the Hospitals’ action against the County. The immunity provisions of the Government Claims Act are directed toward tort claims; they do not foreclose liability based on contract or the right to obtain relief other than money or damages. (Gov. Code, § 814.) The Hospitals have not alleged a conventional common law tort claim seeking money damages. Instead, they have alleged an implied-in-law contract claim based on the reimbursement provision of the Knox-Keene Act, and seek only to compel the County to comply with its statutory duty. Accordingly, the County is not immune from suit under the circumstances and the Hospitals’ claim may proceed.”
Claims Presentation Requirement
The state Supreme Court in 2007 declared, in City of Stockton v. Superior Court, that the presentation of a claim to a governmental entity as a prerequisite to suing it, contained in Government Code § 905 and §945.4. was “always intended” to apply to “contract as well as tort claims.” What had been known as the Tort Claims Act since its created in 1963 was retitled the Government Claims Act by legislation in 2012.
Rejecting the county’s contrary contention, the chief justice said the fact that the hospitals’ claims come under the act’s provisions relating to claim presentation does not mean that they are covered by the act’s immunity provision, explaining:
“[T]he claims presentation requirements of the Government Claims Act are broader in scope than the Act’s public entity immunity or liability provisions….The Hospitals’ mere compliance with the Act’s claims presentation requirements does not control or determine the nature of their action.”
Tort Claims
Guerrero wrote:
“[O]ur case law and well-reasoned holdings from the Courts of Appeal confirm that the Government Claims Act is concerned with shielding public entities from tort claims seeking money damages, and not with every conceivable claim that might be pressed against a public entity.”
However, she avoided a flat-out pronouncement that the immunity provided by §815 applies only to torts, saying:
“[E]ven if we were to assume that the Government Claims Act’s immunity provisions might apply to some claims that are not obviously tortious in nature, the contours of which we need not delve into here, we are confident that the Act does not immunize the County from the Hospitals’ quantum meruit claim to enforce a statutory duty of reimbursement.”
The case is County of Santa Clara v. Superior Court (Doctors Medical Center of Modesto), 2023 S.O.S. 2368.
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