Case 3:21-cv-00550 Document 1 Filed 01/22/21 Page 1 of 9
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`LAW OFFICES OF STEPHENSON, ACQUISTO & COLMAN, INC.
`JOY STEPHENSON-LAWS, ESQ.
` (SBN 113755)
`RICHARD A. LOVICH, ESQ. (SBN 113472)
`KARLENE J. ROGERS-ABERMAN, ESQ. (SBN 237883)
`DAVID F. MASTAN, ESQ. (SBN 152109)
`JENNIFER JIAO, ESQ. (SBN 292205)
`303 N. Glenoaks Blvd., Suite 700
`Burbank, CA 91502
`Telephone: (818) 559-4477
`Facsimile:
`(818) 559-5484
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`Attorneys for Plaintiff,
`STANFORD HEALTH CARE
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`IN THE UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN JOSE DIVISION
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`STANFORD HEALTH CARE, a
`California nonprofit corporation;
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`Plaintiff,
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`v.
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`Case No.:
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`COMPLAINT FOR DAMAGES FOR:
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`1.
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`BREACH OF IMPLIED IN FACT
`CONTRACT; AND
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`QUANTUM MERUIT
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`USABLE MUTUAL INSURANCE
`COMPANY d/b/a/ ARKANSAS BLUE
`CROSS AND BLUE SHIELD, an
`Arkansas insurance company; and DOES
`1 THROUGH 25, inclusive,
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`2.
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`Defendants.
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`27519
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`- 1 - COMPLAINT FOR 1. BREACH OF IMPLIED-IN-
`FACT CONTRACT; AND 2. QUANTUM MERUIT
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`Case 3:21-cv-00550 Document 1 Filed 01/22/21 Page 2 of 9
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`COMPLAINT FOR DAMAGES
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`PARTIES
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`1.
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`Plaintiff STANFORD HEALTH CARE ("STANFORD
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`HOSPITAL") is a nonprofit corporation organized and existing pursuant to the
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`laws of the State of California. STANFORD HOSPITAL has its principal place of
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`business in the County of Santa Clara, State of California. STANFORD
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`HOSPITAL renders medically necessary services (including emergency services),
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`supplies and/or equipment to patients.
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`2.
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`Defendant USABLE MUTUAL INSURANCE COMPANY
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`d/b/a/ ARKANSAS BLUE CROSS AND BLUE SHIELD (“ARKANSAS BCBS”)
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`is an insurance company that is organized and existing pursuant to the laws of the
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`State of Arkansas. ARKANSAS BCBS has its principal place of business in the
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`City of Little Rock, State of Arkansas. ARKANSAS BCBS arranges for the
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`provision of health care services to its enrollees and/or pays for or reimburses part
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`or all of the costs for those services.
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`3.
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`STANFORD HOSPITAL is unaware of the true names and
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`capacities, whether corporate, associate, individual, partnership or otherwise of
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`defendants Does 1 through 25, inclusive, and therefore sues such defendants by
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`such fictitious names. STANFORD HOSPITAL will seek leave of the Court to
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`amend this complaint to allege their true names and capacities when ascertained.
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`4.
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`Defendant ARKANSAS BCBS and Does 1 through 25,
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`inclusive, shall be collectively referred to as "Defendants."
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`27519
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`- 2 - COMPLAINT FOR 1. BREACH OF IMPLIED-IN-
`FACT CONTRACT; AND 2. QUANTUM MERUIT
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`Case 3:21-cv-00550 Document 1 Filed 01/22/21 Page 3 of 9
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`5.
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`Defendants, and each of them, at all relevant times, have
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`transacted business in the State of California.
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`6.
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`STANFORD HOSPITAL is informed, believes, and thereon
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`alleges that at all relevant times, each of the defendants, including the defendants
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`named "Doe" were and are the agent, employee, employer, joint venturer,
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`representative, alter ego, subsidiary, and/or partner of one or more of the other
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`defendants, and were, in performing the acts complained of herein, acting within
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`the scope of such agency, employment, joint venture, or partnership authority,
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`and/or are in some other way responsible for the acts of one or more of the other
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`defendants.
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`JURISDICTION AND VENUE
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`7.
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`Federal diversity jurisdiction exists pursuant to 28 U.S.C.
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`Section 1332. Plaintiff is a California nonprofit corporation with its principal place
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`of business in Santa Clara, California. Defendant ARKANSAS BCBS is an
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`insurance company that is organized and existing pursuant to the laws of the State
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`of Arkansas. Therefore, complete diversity of citizenship exists. The amount in
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`controversy, exclusive of interest and costs, exceeds the sum or value of $75,000.
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`8.
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`Venue in the Norther District of California is proper pursuant to
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`28 U.S.C. Section 1391 because a substantial part of the events or omissions on
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`which the claims asserted herein are based in this District.
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`COMMON FACTUAL BACKGROUND
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`9.
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`From November 6, 2018 through November 27, 2018,
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`- 3 - COMPLAINT FOR 1. BREACH OF IMPLIED-IN-
`FACT CONTRACT; AND 2. QUANTUM MERUIT
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`27519
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`Case 3:21-cv-00550 Document 1 Filed 01/22/21 Page 4 of 9
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`STANFORD HOSPITAL provided medically necessary services, supplies and/or
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`equipment to Patient T.H. (“Patient T.H.”)1
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`10. STANFORD HOSPITAL is informed and believes and thereon
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`alleges that at all relevant times, Patient T.H. was an enrolled beneficiary and/or
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`member of a health plan sponsored, administered and/or funded by ARKANSAS
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`BCBS.
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`11. STANFORD HOSPITAL’s usual and customary total billed
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`charges for the medically necessary care rendered to Patient T.H. from November
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`6, 2018 through November 27, 2018, amounted to $227,905.61.
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`12. STANFORD HOSPITAL timely and properly submitted the
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`bill for payment for the medically necessary care rendered to Patient T.H.
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`13. To date, ARKANSAS BCBS and/or its agents have issued no
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`payment for the medically necessary services rendered to Patient T.H.
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`COUNT ONE
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`(BREACH OF IMPLIED-IN-FACT CONTRACT)
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`14. STANFORD HOSPITAL incorporates by reference the
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`allegations contained in paragraphs 1-13 as if fully set forth herein.
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`15. At all relevant times, Anthem Blue Cross was a party to a
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`1 Hospitals have limited disclosure of patient identification here pursuant to the privacy
`provisions of the Health Insurance Portability & Accountability Act (“HIPAA”), 42 U.S.C. §§
`1320d et seq.
`27519
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`- 4 - COMPLAINT FOR 1. BREACH OF IMPLIED-IN-
`FACT CONTRACT; AND 2. QUANTUM MERUIT
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`Case 3:21-cv-00550 Document 1 Filed 01/22/21 Page 5 of 9
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`written contract with STANFORD HOSPITAL (the “STANFORD HOSPITAL /
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`Anthem Contract”). According to the STANFORD HOSPITAL / Anthem
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`Contract, STANFORD HOSPITAL agreed to render medically necessary care to
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`individual enrollees of Anthem Blue Cross health plans, including out-of-state
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`affiliates of Anthem Blue Cross as part of the Blue Card Program. In exchange for
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`access to the discounted rates at STANFORD HOSPITAL called for in the
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`contract, each such affiliate was to pay such hospitals and/or physicians for the
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`medically necessary care rendered to the individual enrollees of that affiliate's
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`health plan.
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`16. At all relevant times, ARKANSAS BCBS was an out-of-state
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`affiliate of Anthem Blue Cross subject to the STANFORD HOSPITAL / Anthem
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`Contract and hence agreed to pay hospitals and/or physicians for the medically
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`necessary care rendered to the individual enrollees of ARKANSAS BCBS
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`pursuant to the terms of the STANFORD HOSPITAL / Anthem Contract.
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`17. At all relevant times, STANFORD HOSPITAL was a party to
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`the STANFORD HOSPITAL / Anthem Contract as a provider of medically
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`necessary care for the benefit of all individual enrollees of Anthem Blue Cross and
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`out-of-state Anthem Blue Cross affiliates' health plans. Thus, under the
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`STANFORD HOSPITAL / Anthem Contract, STANFORD HOSPITAL agreed to
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`render medically necessary care to the individual enrollees of ARKANSAS BCBS;
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`in exchange, ARKANSAS BCBS agreed to pay STANFORD HOSPITAL the
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`negotiated rates pursuant to the terms of the STANFORD HOSPITAL / Anthem
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`Contract for that care. In general, the negotiated rates under the STANFORD
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`HOSPITAL / Anthem Contract provided for medically necessary care to be paid at
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`a discount off of STANFORD HOSPITAL's usual and customary total billed
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`charges.
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`27519
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`- 5 - COMPLAINT FOR 1. BREACH OF IMPLIED-IN-
`FACT CONTRACT; AND 2. QUANTUM MERUIT
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`Case 3:21-cv-00550 Document 1 Filed 01/22/21 Page 6 of 9
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`18. Under the STANFORD HOSPITAL / Anthem Contract,
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`STANFORD HOSPITAL agreed to submit bills, through Anthem Blue Cross, to
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`ARKANSAS BCBS reflecting STANFORD HOSPITAL’s usual and customary
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`total billed charges associated with rendering medically necessary care to the
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`individual enrollees of ARKANSAS BCBS. In exchange, ARKANSAS BCBS
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`agreed to process and pay such claims according to the STANFORD HOSPITAL /
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`Anthem Contract (i.e., STANFORD HOSPITAL’s usual and customary total billed
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`charges less a specified discount).
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`charges for rendering the medically necessary care to Patient T.H. from November
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`6, 2018 through November 27, 2018 amounted to $227,905.61. According to the
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`STANFORD HOSPITAL / Anthem Contract, ARKANSAS BCBS owed
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`STANFORD HOSPITAL a balance of $106,785.00, after application of the
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`STANFORD HOSPITAL / Anthem Contract discount.
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`20. To date, ARKANSAS BCBS has not made any payment for the
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`medically necessary services rendered to Patient T.H. As a result of the breach by
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`ARKANSAS BCBS, STANFORD HOSPITAL suffered damages in the sum of
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`$106,785.00, the amount due pursuant to the STANFORD HOSPITAL / Anthem
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`Contract.
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`COUNT TWO
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`(QUANTUM MERUIT)
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`21. STANFORD HOSPITAL incorporates by reference the
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`allegations contained in paragraphs 1-13 as if fully set forth herein.
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`27519
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`- 6 - COMPLAINT FOR 1. BREACH OF IMPLIED-IN-
`FACT CONTRACT; AND 2. QUANTUM MERUIT
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`Case 3:21-cv-00550 Document 1 Filed 01/22/21 Page 7 of 9
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`22.
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`In the alternative, should it be found no contractual relationship
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`exists between STANFORD HOSPITAL and ARKANSAS BCBS and/or its agents
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`should nevertheless be fully paid under the theory of quantum meruit.
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`23. STANFORD HOSPITAL is informed and believes and thereon
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`alleges that ARKANSAS BCBS and/or its agents promised its beneficiaries
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`(including Patient T.H.) it would arrange for and/or pay for medically necessary
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`care needed by them. Accordingly, when STANFORD HOSPITAL rendered
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`medically necessary care to Patient T.H., ARKANSAS BCBS benefited because
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`obligation to arrange for and/or pay for medically necessary care to its enrollees,
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`including Patient T.H.
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`24. By its words and/or conduct, ARKANSAS BCBS and/or its
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`agent requested that STANFORD HOSPITAL provide Patient T.H. with medically
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`necessary care.
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`25. Acting pursuant to ARKANSAS BCBS’s implied and/or
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`express request, STANFORD HOSPITAL provided medically necessary care to
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`Patient T.H.
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`26. STANFORD HOSPITAL’s rendering of medically necessary
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`care to Patient T.H. was intended to, and did, benefit Patient T.H., and therefore
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`ARKANSAS BCBS.
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`27. For rendering the medically necessary care to Patient M.S.,
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`STANFORD HOSPITAL reasonably expected ARKANSAS BCBS to fully
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`reimburse STANFORD HOSPITAL its billed rate of $227,905.61.
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`27519
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`- 7 - COMPLAINT FOR 1. BREACH OF IMPLIED-IN-
`FACT CONTRACT; AND 2. QUANTUM MERUIT
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`Case 3:21-cv-00550 Document 1 Filed 01/22/21 Page 8 of 9
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`28. ARKANSAS BCBS has not made any payment and continues
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`to leave an outstanding balance of $227,905.61, despite demands thereof.
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`29. Within the past two years, STANFORD HOSPITAL demanded
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`ARKANSAS BCBS and/or its agents to pay for the medically necessary care
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`rendered to Patient T.H. but ARKANSAS BCBS and/or its agents have refused.
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`30. As a result of ARKANSAS BCBS’s misconduct and/or the
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`misconduct of its agents, STANFORD HOSPITAL has suffered damages in the
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`amount of $227,905.61.
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`- 8 - COMPLAINT FOR 1. BREACH OF IMPLIED-IN-
`FACT CONTRACT; AND 2. QUANTUM MERUIT
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`Case 3:21-cv-00550 Document 1 Filed 01/22/21 Page 9 of 9
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`WHEREFORE, STANFORD HOSPITAL prays for judgment as follows:
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`PRAYER FOR RELIEF
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`For the First Cause of Action:
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`1.
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`for the principal sum of $106,785.00 and for interest on such
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`principal sum at the rate of 15% per annum, pursuant to Cal. Health & Safety Code
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`§ 1371; or, in the alternative, for interest on such principal sum at the rate of 10%
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`per annum, pursuant to Cal. Civ. Code § 3289;
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`For the Second Cause of Action (in the alternative):
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`1.
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`for the principal sum of $227,905 and for interest on such
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`principal sum at the rate of 15% per annum, pursuant to Cal. Health & Safety Code
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`§ 1371; or, in the alternative, for interest on such principal sum at the rate of 10%
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`per annum, pursuant to Cal. Civ. Code § 3289;
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`For all Causes of Action:
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`for all costs of suit incurred herein; and,
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`for such other and further relief as the Court deems just and
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`2.
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`3.
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`proper.
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`Dated: 22 January 2021
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`27519
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`LAW OFFICES OF STEPHENSON,
`ACQUISTO & COLMAN, INC.
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`/s/ Jennifer Jiao
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`JENNIFER JIAO
`Attorneys for
`STANFORD HEALTH CARE
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`- 9 - COMPLAINT FOR 1. BREACH OF IMPLIED-IN-
`FACT CONTRACT; AND 2. QUANTUM MERUIT
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