Naranjo v. Doctors Medical Center of Modesto, Inc.

Naranjo v. Doctors Medical Center of Modesto, Inc. (May 23, 2025, F083197) ___ Cal.App.5th___ [2025 WL 1482842]

Patient billed by hospital for EMS fee may assert a breach of contract claim where the admissions form required payment only for “services.”

After emergency treatment at Doctors Medical Center of Modesto (the Hospital), Joshua Naranjo filed a class action alleging that the Hospital’s failure to disclose its emergency room evaluation and management service (EMS) fee violated the Consumer Legal Remedies Act (CLRA) and the unfair competition law (UCL). The trial court sustained the Hospital’s demurrer, and Naranjo appealed. The Court of Appeal reversed and remanded so the trial court could decide whether to allow Naranjo to assert a breach of contract claim. The California Supreme Court granted the Hospital’s petition for review and transferred the case back to the Court of Appeal with directions to reconsider its decision in light of Capito v. San Jose Healthcare Systems, LP (2024) 17 Cal.5th 273, which held that hospitals have no duty to disclose to patients EMS fees other than those specified by statute.

On remand, the Court of Appeal adhered to its earlier disposition. The court held that Capito bars UCL and CLRA claims, but does not bar causes of action that are not premised on an alleged duty to disclose fees before providing emergency treatment. Thus, the court concluded that Capito did not bar Naranjo’s potential breach of contract claim based on events that arose after the Hospital completed its emergency care. Naranjo argued that the Conditions of Admission (COA) obligate him to pay only for “services” and that the EMS fee is not a charge for any services he received. The court concluded that, because the term “services” is reasonably susceptible to the meaning ascribed to it by Naranjo, he could state a viable contract-based cause of action to determine whether the Hospital billed him for more than the COA obligated him to pay by charging the EMS Fee, and he should be given leave to amend his complaint to state that claim.

The bulletin describing this appellate decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson, Peder K. Batalden, and Lacey Estudillo at the appellate firm Horvitz & Levy LLP, and is republished with permission.

For more information regarding this bulletin, please contact H. Thomas Watson, Horvitz & Levy LLP, at 818-995-0800.

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