Torres v. Adventist Health System/West

Case Number: F081415

Court: Cal. Ct. App.

Date Filed: 2022-04-14

Case Brief – Torres v. Adventist Health System/West

Court: COURT OF APPEAL OF THE STATE OF CALIFORNIA
Date: 2025-09-03
Case Number: F081415
Disposition: Judgment of the Superior Court affirmed; parties each bear their own costs on appeal.

Holding

The court held that the plaintiff’s complaint did not state a viable cause of action under the Consumer Legal Remedies Act (CLRA) or for declaratory relief because it failed to plead, with reasonable particularity, the requisite elements of (1) a duty to disclose the emergency‑room evaluation and management services (EMS) fee, (2) materiality and reliance on the nondisclosure, and (3) active concealment. Accordingly, the trial court’s grant of judgment on the pleadings was affirmed, and the plaintiff’s request for leave to amend was denied.

Narrative

Lead – In a decision that sharpens the pleading standards for CLRA claims rooted in nondisclosure, the Fifth Appellate District affirmed a judgment dismissing a class‑action suit alleging that Adventist Health System/West and its Hanford Community Hospital failed to disclose a “surprise” emergency‑room evaluation and management services (EMS) fee. The ruling underscores that a hospital’s statutory compliance with the Payers’ Bill of Rights does not, by itself, satisfy a CLRA duty to disclose material fee structures, and that plaintiffs must allege concrete reliance to survive a judgment‑on‑the‑pleadings challenge.

Procedural History – Kasondra Torres filed a class‑action complaint in February 2019 in the Superior Court of Kings County, asserting violations of the Unfair Competition Law and the Consumer Legal Remedies Act (CLRA), together with a declaratory‑relief claim that the hospital owed a duty to disclose its EMS fee. After a series of amended complaints, the hospital moved for judgment on the pleadings. The trial court, after taking judicial notice of the hospital’s chargemaster and the OSHPD‑posted list of 25 common outpatient procedures, granted the motion and denied leave to amend. Torres appealed, arguing that the court erred in finding her pleading insufficient to state a CLRA claim and that leave to amend should be open on appeal.

Facts – In January 2018 Torres received emergency care at the hospital’s ER. The hospital presented a “Conditions of Registration” form that required patients to accept financial responsibility for all services but made no mention of an EMS fee. Torres was later billed $23,455.73, of which $3,206.34 appeared on the itemized statement as “ED LEVEL 5 89,” a charge that corresponded to the highest‑level EMS fee in the hospital’s chargemaster. The chargemaster, required by Health & Safety Code §§ 1339.51, 1339.55, listed five EMS fee levels (ED LEVEL 1–5) with corresponding amounts ranging from $773.12 to $3,206.34, but the hospital posted no clear, patient‑facing notice of these fees in the ER or on its website beyond the statutory requirement that the chargemaster be “available” online.

Issues – The appellate court addressed three intertwined issues: (1) whether Torres sufficiently pleaded a CLRA violation based on a duty to disclose a material fact that the hospital possessed exclusively; (2) whether the pleading satisfied the CLRA’s materiality, causation, and reliance requirements; and (3) whether the trial court erred in denying leave to amend.

Analysis – Duty to Disclose – The court applied the standard for reviewing a judgment‑on‑the‑pleadings motion—identical to that for a demurrer—requiring an independent determination of whether the allegations, taken as true, state a cause of action. Citing Gutierrez v. Carmax Auto Superstores (2018) 19 Cal.App.5th 1234, the court reiterated that a CLRA claim must allege a deceptive omission with “reasonable particularity.” Torres alleged that the hospital had exclusive knowledge of (i) the existence of an EMS fee, (ii) the five‑level structure, (iii) an internal formula determining the level, and (iv) the dollar amounts. The court accepted that these facts were alleged.

However, the court found that the statutory disclosure requirements—posting the chargemaster online and making it available at the hospital—did not equate to a “reasonable” means for a lay consumer to understand when and how the fee would be imposed. The chargemaster’s cryptic codes (“ED LEVEL 5 89”) and lack of plain‑language explanations rendered it “unusable” for pricing transparency, a point Torres raised. Yet, the court concluded that even assuming the chargemaster was opaque, the pleading still failed to establish a duty to disclose beyond the statutory posting requirement. The court distinguished Nolte v. Cedars‑Sinai (2015) 236 Cal.App.4th 1401, which held that a facility fee need not be disclosed before treatment, noting that Nolte did not address exclusive knowledge or the reasonableness of access.

Analysis – Materiality, Reliance, and Active Concealment – The court emphasized that CLRA liability hinges on a plaintiff’s reliance on the omitted fact. Torres alleged she “relied on not being billed” an EMS fee, but the court held that this bare allegation is insufficient. Under Mirkin v. Wasserman (1993) 5 Cal.4th 1082, reliance requires a factual showing that the plaintiff would have acted differently had the information been disclosed. Torres offered no evidence that she would have sought care elsewhere or declined treatment. The court therefore found the reliance element unpleaded.

Regarding active concealment, the court noted that an omission is not an affirmative act. Torres’s complaint did not allege specific steps the hospital took to hide the fee (e.g., refusing to answer inquiries), so the active‑concealment prong of Gutierrez was likewise unsatisfied.

Leave to Amend – The appellate panel applied the standard that leave to amend is always open on appeal if the plaintiff can demonstrate a reasonable possibility of curing the defect. Torres failed to articulate how an amended pleading would overcome the reliance deficiency or establish a contractual breach claim, having abandoned the contract theory in earlier amendments. Consequently, the court affirmed the trial court’s denial of leave to amend.

Disposition – The judgment of the Superior Court granting the hospital’s motion for judgment on the pleadings and denying leave to amend was affirmed. Each party bears its own costs.

Impact – This decision clarifies that compliance with the Payers’ Bill of Rights—merely making a chargemaster available—does not create a CLRA duty to disclose fee structures in a consumer‑friendly manner. Plaintiffs asserting CLRA claims based on nondisclosure must allege specific reliance and, where possible, concrete concealment tactics. The ruling also reinforces the high bar for pleading reliance in omission‑based CLRA actions, echoing Mirkin and Gutierrez.

Unresolved Questions – The opinion leaves open whether a hospital could be deemed to have a CLRA duty to provide a plain‑language summary of fees in addition to the statutory chargemaster posting. Moreover, the court did not address whether a plaintiff could survive a CLRA claim by pleading that the opaque chargemaster itself is a deceptive practice under § 1770(a)(5). Future litigants may test the limits of “reasonable access” and “materiality” in the context of increasingly complex hospital billing.

Referenced Statutes and Doctrines

Consumer Legal Remedies Act (CLRA), Cal. Civ. Code §§ 1750‑1785 – particularly §§ 1770(a)(5) and (a)(14) (unfair or deceptive acts).
Unfair Competition Law (UCL), Bus. & Prof. Code §§ 17200‑17210 – cited but not decisive.
Health & Safety Code §§ 1339.51, 1339.55, 1339.56, 1339.585 – Payers’ Bill of Rights requirements for chargemaster posting and fee disclosure.
California Rules of Court, rule 8.1105(b) & 8.1110 – certification for partial publication.

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