Goodsell v. Bakersfield Memorial Hospital CA5 filed 8/19/26

Filed 8/19/26 Goodsell v. Bakersfield Memorial Hospital CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT

GREGORY GOODSELL,

Plaintiff and Appellant,

v.

BAKERSFIELD MEMORIAL HOSPITAL,

Defendant and Respondent.

F089911

(Super. Ct. No. BCV-24-101941)

OPINION
APPEAL from a judgment of the Superior Court of Kern County. Bernard C. Barmann, Jr., Judge.
Carpenter Law and Gretchen Carpenter; Law Office of Barry Kramer and Barry L. Kramer for Plaintiff and Appellant.
Manatt, Phelps & Phillips, Barry S. Landsberg, Harvey L. Rochman and Joanna S. McCallum for Defendant and Respondent.
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INTRODUCTION
Appellant Gregory Goodsell appeals from a judgment of dismissal entered in favor of respondent Bakersfield Memorial Hospital (Hospital) and against Goodsell after the trial court sustained Hospital’s demurrer to Goodsell’s first amended class action complaint (FAC) without leave to amend.
Goodsell brought suit against Hospital challenging its “practice of charging emergency room patients a separate Emergency Room Visitation Fee” (hereafter, ER Visitation Fee). Goodsell alleges the ER Visitation Fee “is billed on top of the charges for the individual items of treatment and services provided, when there is no right to charge such a fee and no agreement to pay such a fee in [Hospital] Conditions of Admission agreement or similarly named form contract” (hereafter, COA), which is “provided to emergency room patients for signature.”
The case comes to this court after the California Supreme Court held “Hospitals do not have a duty under the [unfair competition law (Bus. & Prof. Code, § 17200 et seq.)] or [Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.)], beyond their obligations under the relevant statutory and regulatory scheme, to disclose EMS fees[]prior to treating emergency room patients.” (Capito,supra, 17 Cal.5th at p. 278, italics added.) On appeal, Goodsell states, “The Fees at issue on this appeal have been referred to by some plaintiffs and courts in other cases … as ‘EMS Fees,’ but these are the same fees referenced in Goodsell’s FAC as ‘ER Visitation Fees.’ ”
The case also follows this court’s ruling in Naranjo v. Doctors Medical Center of Modesto, Inc. (2025) 111 Cal.App.5th 408 (Naranjo II)(appeal of dismissal following demurrer sustained without leave to amend), in which we acknowledged that to the extent the plaintiff therein “stated (or is able to state) otherwise valid contract-based claims based on events that arose after [the defendant hospital] completed its emergency care treatment and not based on an alleged duty of disclosure prior to that treatment, such claims would remain actionable and not barred under the holding in Capito.” (NaranjoII, at p. 424.) We also concluded that Capito did not bar claims under unfair competition law (UCL) and the Consumers Legal Remedies Act (CLRA) to the extent they were based “solely on [the defendant hospital’s] posttreatment billing practices.” (Naranjo II, at p. 434; see id. at pp. 434–435, 438.)
On appeal, Goodsell argues, among other things, that Naranjo II is “virtually identical” to his case, that the allegations of his FAC are virtually identical to those in Naranjo II, and that the judgment of dismissal should be reversed, as it was in Naranjo II.
Hospital contends, among other things, “good reason exists for this [c]ourt not simply to apply Naranjo [II] here, but rather to analyze this case based on arguments and authorities discussed herein that were not presented to this [c]ourt in the Naranjo [II] briefing and thus were not considered or explored in the Naranjo [II] decision.” Based on those newly submitted authorities, Hospital argues that “Goodsell’s construction of the COA is erroneous as a matter of law,” “is not a construction to which the COA is reasonably susceptible,” and that the trial court’s “dismissal of the contract and related declaratory relief claims should be affirmed.”
We conclude Goodsell has stated a valid cause of action for breach of contract and, accordingly, reverse the judgment of dismissal. However, we affirm the trial court’s order sustaining the demurrer as to Goodsell’s cause of action for declaratory and injunctive relief. We also conclude Goodsell should be permitted to amend the FAC to state causes of action under the UCL and CLRA.
FACTUAL AND PROCEDURAL BACKGROUND
I.Factual Background
“In reviewing a judgment of dismissal entered after the sustaining of a demurrer,we accept as true the factual allegations of the complaint” (Whittemore v. OwensHealthcare-Retail Pharmacy, Inc. (2010) 185 Cal.App.4th 1194, 1197) and “‘“considermatters which may be judicially noticed”’”(Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6). The facts recited below are alleged in Goodsell’s complaint, or are judicially noticeable. We also set forth some of Goodsell’s related contentions for context. However, we do not assume the truth of those contentions. (People ex rel. Lungren v. Superior Court (1996) 14 Cal.4th 294, 300–301.)
A.The FAC
On April 25, 2023, Goodsell “presented at [Hospital’s] emergency room in Bakersfield, California for treatment.” Hospital presented Goodsell with the COA during his emergency room visit and Goodsell signed it. The COA was the same form contract that Hospital provides to all its emergency room patients.
Goodsell contends the COA does not “contain a promise or agreement” for an emergency room patient to pay the ER Visitation Fee. The COA only obligates a patient to pay for services actually rendered to him or her. Goodsell alleges the “ER Visitation Fee is not disclosed to patients in [the COA].” Notwithstanding, Hospital charged Goodsell an ER Visitation Fee in the amount of $1,588.
Goodsell alleges the ER Visitation Fee is “billed to emergency room patients simply for seeking treatment.” It is charged to all emergency room patients “regardless of what services and treatment” are actually provided to the patient.
The “ER Visitation Fee is set at one of five levels, determined after discharge” and each level has a corresponding Current Procedural Terminology (CPT) code. “The current amounts [as of the FAC filing date] of [Hospital’s] ER Visitation Fees are as follows: Level 1: $435.00; Level 2: $1,271.00; Level 3: $1,707.00; Level 4: $2,749.00; and Level 5: $5,829.00.” The amount of the ER Visitation Fee is “based on an internally developed formula known exclusively to [Hospital].”
Goodsell alleges that he was billed a “gross amount (before discounts)” of $1,639, which he alleged included a “surprise Level 3 ER Visitation Fee of $1,588.00,” and that “[a]fter deducting adjustments and discounts, … the amount billed to [Goodsell] was $383.90, which … included a portion of the ER Visitation Fee.”
Goodsell alleged a cause of action for breach of contract on grounds the COA “included a provision or provisions permitting [Hospital] to charge only for services actually rendered to the patient, and requiring a patient to pay only for services actually provided to the patient, and not ER Visitation Fees, which are not fees for services rendered, but rather, are fees designed to cover the overhead, operating, and administrative costs of operating an emergency room on a 24 hour, 7 day a week basis.” As a result, Goodsell contends Hospital breached the COA and overbilled him by charging him for the ER Visitation Fee.
Goodsell also alleged a single cause of action for declaratory and injunctive relief. Goodsell contends “[a]n actual controversy exists between [Goodsell] and [Hospital] relating to their respective legal rights and duties under the [COA]” because he contends he is not required to pay the ER Visitation Fee, in whole or in part, whereas Hospital contends the COA entitles it to charge the ER Visitation Fee.
B.The COA
At Hospital’s request, the trial court took judicial notice of the COA that Goodsell signed during his emergency room visit. Goodsell did not oppose the court taking judicial notice of the COA, has referred to it as “the Conditions of Admission contract [i.e., COA] signed by Plaintiff Gregory Goodsell” and other words to that effect, and has treated the COA as the applicable contract that Goodsell signed.
The COA contained the following consent: “You consent to the procedures that may be performed during the Patient’s Hospital stay …. These procedures may include emergency treatment or services, laboratory procedures, X-ray examinations, medical or surgical treatment or procedures, anesthesia, or other hospital services provided to the Patient under the general and special instructions of the Patient’s doctor.”
The COA also stated that “[d]octors are not employees or agents of the Hospital. They are independent practitioners who have been granted the privilege of using the Hospital for the care and treatment of their patients. You may receive a separate bill from these independent practitioners for their services.” (Boldface & italics omitted.)
The following provisions are particularly relevant to Goodsell’s contention that the COA did not obligate him to pay, and did not authorize Hospital to charge, an ER Visitation Fee:
“Subject to the limitations described below, the Patient … must pay the Hospital’s Full Charges for items, services and supplies provided to the Patient,” (italics added).
“ ‘Full Charges’ means the charges for items, services and supplies used in patient care listed in the Hospital’s Charge Description Master[] rates, prior to any discounts or reductions. The Hospital’s Charge Description Master is available … for review at the Hospital Facility (and for hospitals located in California may be viewed at http://www.oshpd.ca.gov/chargemaster).” (Boldface omitted.)
“If Patient has provided Hospital with information regarding the Patient’s Payor, the Hospital will bill or submit a claim to the Patient’s Payor for all the items, services and supplies provided by the Hospital to the Patient.” (Italics added.)
“If the Payor denies payment for all or part of the Hospital’s bill, the Patient … will be required to pay any amounts due the Hospital.”
“You authorize and direct the Payor to make direct payments to us for such items, services and supplies provided to the Patient….” (Italics added.)
“A Patient who does not have coverage through a Payor must pay the Full Charges of the Hospital for items, services and supplies provided to the Patient, unless the Patient received financial assistance or another discount ….” (Italics added.)
II.Procedural Background
Goodsell filed his original complaint in this matter on June 10, 2024. On July 22, 2024, Goodsell filed his FAC. On September 12, 2024, Hospital filed a demurrer to the FAC and, in connection therewith, a request for judicial notice.
On October 8, 2024, Hospital submitted a joint stipulation between it and Goodsell to stay the action pending disposition of the Capito case. On October 16, 2024, the trial court accepted the parties’ stipulation, ordered the matter stayed, and vacated the demurrer hearing date.
Capito was decided on December 23, 2024. (Capito, supra, 17 Cal.5th at p. 273.) On January 7, 2025, Goodsell filed a notice with the trial court that, with the issuance of the Capito decision, the stay of the case lifted. In that notice, Goodsell also requested, in light of the Capito decision, that the court dismiss his causes of action for violations of the CLRA and UCL without prejudice. On January 14, 2025, the trial court acknowledged that the stay of the case was lifted and granted Goodsell’s request to dismiss his UCL and CLRA causes of action.
On February 21, 2025, Hospital filed (or refiled) its demurrer and associated request that the court judicially notice three documents: (1) the COA signed by Goodsell when he was seen at Hospital’s emergency room;(2) Hospital’s “Chargemaster for July 2022–June 2023 downloaded from the website of … the Department of Health Care Access and Information at https://data.chhs.ca.gov/dataset/chargemasters”; and “[e]xcerpts from Current Procedural Terminology (2023) [i.e., CPT] published by the American Medical Association” (hereafter, CPT Codebook).
On March 11, 2025, Goodsell filed his opposition to the demurrer, and also argued he should be granted leave to amend “to add a claim for violation of the [UCL] … based on the lack of any mention or agreement to pay an ER Visitation Fee in [Hospital’s COA],” which Goodsell observed was “different from the [dismissed] UCL claim asserted in the FAC….”
Also on March 11, 2025, Goodsell filed an opposition to Hospital’s request for judicial notice. In it, Goodsell objected to the trial court taking judicial notice of the chargemaster and CPT documents. However, as previously mentioned, Goodsell stated he did “not oppose [Hospital’s] request for judicial notice of Exhibit 1, the Conditions of Admission contract signed by … Goodsell.”
On March 17, 2025, Hospital filed its replies in support of its demurrer and request for judicial notice.
On March 24, 2025, the hearing on Hospital’s demurrer went forward. The trial court, in open court, announced its tentative ruling to sustain Hospital’s demurrer, without leave to amend, and to grant Hospital’s request for judicial notice as to each of the submitted exhibits. As to the latter grant, the court stated it “may take notice of the existence of this information but not for the truth of the factual matters in the documents.” A minute order issued on that same date stated that the court “is satisfied with its tentative as the ruling of the court and adopts its tentative as stated.” The court likewise denied Goodsell’s request for leave “to amend to allege a UCL claim based on the lack of any mention or agreement to pay an ER Visitation Fee in [Hospital’s COA].” The court concluded the proposed UCL claim “is no different from the one disallowed by Capito.” (Italics added.) On April 1, 2025, Hospital filed and served notice of the trial court’s ruling.
On April 3, 2025, the trial court entered judgment dismissing the FAC “in its entirety with prejudice.” On April 16, 2025, Hospital filed and served a notice of entry of judgment.
On May 23, 2025, this court issued its decision in Naranjo II.
On June 3, 2025, Goodsell timely filed his notice of appeal.
DISCUSSION
I.Standard of Review
“In an appeal from a judgment dismissing an action after a general demurrer is sustained without leave to amend, our Supreme Court has imposed the following standard of review. ‘The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.] The judgment must be affirmed “if any one of the several grounds of demurrer is well taken. [Citations.]” [Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment.’ ” (Genesis Environmental Services v. San Joaquin Valley Unified Air Pollution Control Dist. (2003) 113 Cal.App.4th 597, 603.) “We construe the allegations of the complaint liberally ‘ “with a view to substantial justice between the parties.” ’ ” (Schnall v. Hertz Corp. (2000) 78 Cal.App.4th1144, 1152; see Code Civ. Proc., § 452.)
“‘“[W]e do not review the validity of the trial court’s reasoning but only the propriety of the ruling itself.” ’ ” (Limon v. Circle K Stores Inc. (2022) 84 Cal.App.5th 671, 688.) “ ‘In order to prevail on appeal from an order sustaining a demurrer, the appellant must affirmatively demonstrate error. Specifically, the appellant must show that the facts pleaded are sufficient to establish every element of a cause of action and overcome all legal grounds on which the trial court sustained the demurrer.’ ” (Save Lafayette Trees v. East Bay Regional Park Dist. (2021) 66 Cal.App.5th 21, 35.) To affirmatively demonstrate error, “plaintiffs must do more than draw our attention to asserted errors in the trial court’s reasoning—they must affirmatively demonstrate that they have adequately stated a claim for relief.” (Marzec v. Public Employees’ Retirement System (2015) 236 Cal.App.4th 889, 902.)
II.Hospital’s Request for Judicial Notice on Appeal
In this appeal, Hospital filed a motion for judicial notice of an amici curiae brief filed by the American Medical Association (AMA) and other medical societies and associations, which was filed in Peters v. Aetna Inc. (4th Cir. 2021) 2 F.4th 199 (Peters). Goodsell opposed the motion and we deferred ruling on the motion “pending consideration of the appeal on the merits.” We now deny the motion.
In its motion, Hospital contends the amici curiae brief “is pertinent to the Hospital’s discussion in its Respondent’s Brief regarding statements by the [AMA] with respect to usage of [CPT] codes” and acknowledges “[t]he document was not provided to the trial court.” Hospital contends the brief meets Evidence Code section 452, subdivision (d) because it is a record of “any court of record of the United States or of any state of the United States.” Hospital further relies on subdivision (h) of said statute which allows a court to judicially notice “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Id., subd. (h).)
Goodsell opposes the motion for judicial notice on several grounds: (1) Hospital did not seek judicial notice of the amici curiae brief at the trial court level; (2) no explanation is provided as to why the brief was not presented to the trial court; (3) it is not appropriate for the trial court to take judicial notice of the truth of statements made in the brief; (4) no explanation is provided to show how Evidence Code section 452, subdivision (h) is met; and (5) the brief is not relevant to the appeal. Goodsell has the better argument.
“Reviewing courts generally do not take judicial notice of evidence not presented to the trial court. Rather, normally ‘when reviewing the correctness of a trial court’s judgment, an appellate court will consider only matters which were part of the record at the time the judgment was entered.’ ” (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3.) Hospital has not provided this court with any reason as to why the amici curiae brief was not presented to the trial court.
In addition, Hospital makes no effort to identify which facts or propositions within the amici curiae brief are not reasonably subject to dispute, why such facts are not reasonably subject to dispute, or how such facts may be accurately determined by resort to “sources of reasonably indisputable accuracy.” (Evid. Code, § 452, subd. (h).)
We agree with Goodsell that Hospital has not sufficiently demonstrated the relevance of the amici curiae brief to the issues before this court. Moreover, any arguable relevance the brief may have to the issues on appeal would depend upon this court taking judicial notice of the truth of factual statements therein, which we will not do. (See Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 483.)
Hospital’s motion for judicial notice on appeal is denied.
III.Hospital’s Demurrer and the Parties’ Contentions
Hospital demurred to Goodsell’s causes of action for breach of contract and declaratory/injunctive relief “on the ground that [each] fails to state facts sufficient to constitute a cause of action.” (See Code Civ. Proc., § 430.10, subd. (e).)
Goodsell contends the COA “provides for payment only for services actually rendered to a patient by the Hospital” and “does not include an agreement by patient to pay … a separate ER Visitation Fee, which is not a fee for services rendered … but rather, is a separate fee designed to cover the administrative and overhead expenses of operating an emergency room on a 24-hour a day, 7-day a week basis.” (Fn. omitted.) Goodsell seeks a declaration of his rights and obligations under the COA. Goodsell argues that Hospital breached the COA by charging him fees that he did not agree to pay. Goodsell contends he only agreed to pay for items, services and supplies “ ‘provided [to him] by the Hospital’ ” and the ER Visitation Fee is not such an item, service, or supply. Goodsell argues this case presents “[v]irtually identical allegations” to those alleged in Naranjo II, and that “[a]ny argument by Hospital that its COA is not reasonably susceptible to Goodsell’s interpretation should be rejected here, just as the same argument was rejected … in Naranjo[II].”
Hospital contends Goodsell provides “no substantive arguments about contract interpretation and … no legal or promised evidentiary support for his view that ‘services’ as used in the COA does not include basic evaluation and management services provided in the Hospital’s emergency room.” Noting Goodsell’s reliance on Naranjo II, Hospital contends “good reason exists for this Court not simply to apply Naranjo [II] here, but rather to analyze this case based on argument and authorities” not presented or considered in Naranjo II. Hospital contends the “ER Visitation Fee” is an evaluation and management (E/M) service and “E/M services are by definition services provided to patients.” Hospital contends “law and pronouncements from federal and state regulators … establish as a matter of law that the E/M services charges at issue are charges for services provided to patients” (italics added). Hospital argues “Goodsell’s construction of the COA is erroneous as a matter of law and is not a construction to which the COA is reasonably susceptible.”
Hospital further argues that “[t]he Capito decision necessarily depended on the fact that charges for E/M services are charges for ‘services’ because it held that a hospital is only required to disclose its charges for E/M services in accordance with the federal and state legal requirements for disclosure of charges for ‘services.’ ”
IV.Capito and Naranjo II
A.Capito
The trial court sustained Hospital’s demurrer without leave to amend and denied Goodsell’s request for “leave to amend to allege a UCL claim based on the lack of any mention or agreement to pay an ER Visitation Fee in [Hospital’s] [COA],” concluding that “the proposed UCL claim is no different from the one disallowed by Capito, where the plaintiff alleged the hospital violated the UCL by, among other things, failing to disclose the EMS Fee in the patient’s COA” (underscoring omitted, italics added), citing Capito, supra, 17 Cal.5th at page 281.
Although the Capito court observed that the conditions of admission signed by the Capito plaintiff “did not specifically reference the EMS fee” (Capito, supra, 17 Cal.5th at p. 281), the plaintiff’s case did not involve a breach of contract cause of action, as is the case here. Rather, the claim in Capito was that the defendant hospital “ha[d] a duty not only to disclose EMS fees in the chargemaster,” which the parties agreed was done, “but also to provide notice of those fees before services are provided to emergency room patients.” (Id. at p. 278, italics added.) This was the issue that was evaluated and decided in Capito. (See id. at pp. 283, 287; Naranjo II, supra, 111 Cal.App.5th at pp.419–420, fn. 5 [observing that the Capito holding “was limited to whether hospitals have a duty to disclose such fees prior to providing emergency care to a patient…. [T]he statutory and regulatory scheme, and the underlying policies upon which the Capito court based its decision, concerned only information that a hospital may, and may not, discuss with patients prior to administering treatment.”].)
This court discussed the Capito case in depth in Naranjo II. That discussion is relevant for context, and we quote from it extensively.
“The Capito plaintiff had been an emergency room patient at defendant hospital and sued the hospital for violations of the UCL and CLRA, and for declaratory and injunctive relief, in connection with the hospital’s practice of charging emergency room patients a separate EMS Fee without notification or warning. (Capito, supra, 17 Cal.5th at p.282.) After two rounds of demurrers, the trial court sustained a demurrer to the plaintiffs’ second amended complaint without leave to amend. (Ibid.) The Court of Appeal affirmed.
“On review, the Supreme Court upheld the Court of Appeal’s judgment, basing its decision on what it described as ‘[a]n extensive scheme of state and federal law’ that ‘obligates hospitals to make specific disclosures about the prices of medical services, including fees for evaluation and management services (EMS) for emergency room patients.’ (Capito, supra, 17 Cal.5th at p. 277 [considering the Payers’ Bill of Rights (Health & Saf. Code, § 1339.50 et seq.); Health & Saf. Code, § 1317; Medicare requirements (42 U.S.C. § 300gg–18(e)); the federal Emergency Medical Treatment and Labor Act (42 U.S.C. §1395dd); and related regulations].) The court remarked, ‘The “California Legislature, the United States Congress, and numerous rulemaking bodies have already decided what pricing information to make available in a hospital’s emergency room. Just as importantly, they have decided what not to include in those requirements. The reason for this extensive statutory and regulatory scheme is to strike a balance between price transparency and dissuading patients from avoiding potentially life-saving care due to cost.” ’ (Capito, supra, at p. 283.)
“The Capito court stated the UCL ‘“‘establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent’ ” ’ (Capito, supra, 17 Cal.5th at p. 284) and went on to consider whether the plaintiff’s allegations, accepted as true for purposes of demurrer, established that the hospital’s conduct met any of those three types of ‘unfair’ competition. (Id. at pp. 283–292.) It first considered whether the hospital’s ‘failure to inform patients of the EMS fee in the emergency room before services are provided is “unfair” under the UCL.’ (Id. at p. 283.) In doing so, it rejected the plaintiff’s contention that the hospital’s ‘“practices offend established public policies, and are immoral, unethical, oppressive, and unscrupulous.” ’ (Id. at p. 284.) It held ‘that where a hospital has complied with state and federal disclosure requirements, including listing EMS fees in the chargemaster and informing emergency room patients of the availability of the chargemaster, the lack of further disclosure of EMS fees to such patients in the emergency room before treatment is not “unfair” under the UCL.’ (Id. at p. 287.)
“Next, the Capito court considered the plaintiff’s claim that the hospital ‘violated the CLRA because it has “exclusive knowledge” of the material fact that an EMS fee would be charged to her, and that she had no way of knowing about that fact’—which the plaintiff argued ‘forms the basis for an “unlawful” UCL claim.’ (Capito, supra, 17 Cal.5th at p. 288.) The court assumed, without deciding, that liability under the CLRA may be triggered by a failure to disclose material facts and concluded the plaintiff’s allegations failed to establish that the hospital’s conduct was unlawful ‘by virtue of [the hospital] having exclusive knowledge of the EMS fee or [the plaintiff] lacking reasonable access to the information.’ (Capito, supra, at pp. 289, 291.) It rejected the allegation that the hospital had exclusive knowledge of the EMS Fee or that it ‘“actively conceal[ed]” that fact’ because the hospital (1) disclosed EMS Fees in its chargemaster and list of 25 common procedures, (2) submitted those pricelists to the HCAI [i.e., the Department of Health Care Access and Information], which published them on its website, (3) used industry-standardized billing codes in describing its fees in those lists, (4) referred to the chargemaster in the admissions form signed by the plaintiff and provided her an opportunity to inquire about costs of treatment at the time of registration, and (5) made the chargemaster available at the emergency room and posted conspicuous signs advising of its availability. (Id. at p.289.)
“Finally, the high court considered whether the hospital’s nondisclosure of the EMS Fee prior to emergency room treatment was fraudulent or deceptive under the UCL. (Capito, supra, 17 Cal.5th at p.291.) The court concluded the hospital’s conduct was not fraudulent or likely to deceive the public for the same reasons it concluded the hospital’s conduct was not unfair or unlawful. (Ibid.) It wrote, ‘[the hospital’s] compliance with the regulatory scheme promotes price transparency for consumers to the extent contemplated by state and federal authorities, who sought to balance that concern against the risk of dissuading patients from seeking emergency care.’ (Ibid.)
“Ultimately, the Capito court held ‘hospitals do not have a duty under the UCL or CLRA, beyond what is required by the statutory and regulatory scheme, to disclose emergency room EMS fees’ prior to treating emergency room patients ….’ ” (Naranjo II, supra, 111 Cal.App.5th at pp.417–420, fns. omitted.)
As the foregoing discussion illustrates, the issue in Capito was whether hospitals owed a duty to its emergency room patients to disclose to them the hospital’s intent to charge an EMS fee (or, as used in this matter, an ER Visitation Fee) prior to providing them emergency care or treatment. Goodsell argues Capito does not bar his causes of action for breach of contract and declaratory/injunctive relief (and the UCL and CLRA causes of action that he seeks leave to add to his complaint) because those causes of action are not premised on an alleged duty owed by Hospital to disclose the ER Visitation Fee prior to treatment.
Hospital contends Capito’s holding “necessarily depended on the fact that charges for E/M services are charges for ‘services’ because it held that a hospital is only required to disclose its charges for E/M services in accordance with the federal and state legal requirements for disclosure of charges for ‘services.’ ” Hospital argues “[i]f charges for E/M services in fact were charges for administrative overhead … the court could not have concluded that a hospital’s compliance with laws requiring disclosure of the price of ‘services’ was sufficient disclosure of such ‘overhead’ fees.” We do not agree.
The Capito court accepted review of the case to resolve a split among the Courts of Appeal concerning whether hospitals had a duty to disclose EMS fees beyond what is required by the statutory and regulatory scheme. (Capito, supra, 17 Cal.5th at p. 277 [“The question here is whether hospitals have a duty, beyond what is required by the relevant statutory and regulatory scheme, to notify emergency room patients that they will be charged EMS fees.”]; id. at p. 283 [the court “granted review in light of a split among the Courts of Appeal” on the question of whether there is a “duty to disclose EMS fees beyond what is required by the statutory and regulatory scheme”].) Moreover, the Capito plaintiff did not assert a claim for breach of contract. (See id. at p. 282.) The only claims asserted by the plaintiff were claims under the UCL (Bus. & Prof. Code, § 17200 et seq.), the CLRA (Civ. Code, § 1750 et seq.), and claims for declaratory and injunctive relief under Code of Civil Procedure section1060, and were premised on the contention that the defendant hospital did not provide prospective patients “sufficient notice of the EMS fee,” and that the hospital had a duty to notify prospective patients that the hospital would charge an EMS fee prior to treatment. (Capito, at pp. 278, 281, 282.) That the Capito court may have assumed, for purposes of its decision, that the EMS fee charged in that case was actually a fee for evaluation and management services (see id. at pp. 277, 279–280, 290) does not equate to a holding that any time a hospital charges an EMS fee or ER Visitation Fee, it is, as a matter of law, for services provided to a patient.
We agree that Capito will not bar Goodsell’s claims to the extent those claims are not premised on an alleged pretreatment duty of disclosure. That conclusion alone, however, does not entitle Goodsell to reversal of the judgment. We must still determine whether Goodsell has “affirmatively demonstrate[d] that [he] [has] adequately stated a claim for relief.” (Marzec v. Public Employees’ Retirement System, supra, 236 Cal.App.4th at p. 902.)
B.Naranjo II
The plaintiff in Naranjo I and Naranjo II, like Goodsell in the matter before us, originally brought causes of action premised in part on an alleged duty on the part of the defendant hospital to notify its emergency room patients, prior to treatment, of its intent to charge those patients an EMS fee, which Goodsell contends is the same as Hospital’s ER Visitation Fee. (See Naranjo II, supra, 111 Cal.App.5th at p. 413 [claims were premised on “alleged failure to apprise prospective emergency room patients of the EMS Fee” (italics added)].) Following the decision in Capito, the Naranjo plaintiff, conceded “‘the Capito decision effectively resolve[d] [his] prior claims … based on [the defendant hospital’s] alleged “duty to disclose” its intent to charge EMS Fees.’ ” (Naranjo II, at p.423.)
Following Capito, the Naranjo plaintiff contended that his first amended complaint had, nevertheless, stated valid contract-based claims that were not premised on a duty to disclose the EMS fees prior to emergency care treatment. (Naranjo II, supra, 111 Cal.App.5th at p. 423.) The Naranjo plaintiff argued that “‘[b]ecause hospitals do not present their COA contract to emergency room patients until after services are provided, the Capito[c]ourt’s “duty to disclose” holding does not apply with respect to disclosure in a hospital’s COA.’ ” (Ibid.) In considering the argument, we observed that “Health and Safety Code section 1317 provides, in part: ‘Emergency services and care shall be rendered without first questioning the patient or any other person as to his or her ability to pay therefor. However, the patient or his or her legally responsible relative or guardian shall execute an agreement to pay thereforor otherwise supply insurance or credit information promptly after the services are rendered.’ ” (Id. at pp. 423–424, original italics.) We concluded that “the law allows a hospital and its emergency room patients to discuss payment issues following treatment, and requires those patients to execute an agreement to pay for emergency services rendered,” and that “to the extent [the Naranjo plaintiff] has stated (or is able to state) otherwise valid contract-based claims based on events that arose after [the defendanthospital] completed its emergency care treatment and not based on an alleged duty of disclosure prior to thattreatment, such claims would remain actionable and not barred under the holding in Capito.” (Id. at p.424.) We then considered whether any valid contract-based claims had been stated by the Naranjo plaintiff and whether he should be granted further leave to amend. (Id. at pp.426–437.) We perform a similar analysis of Goodsell’s FAC, post.
V.CPT Codes
Under California law, a “health facility licensed under [chapter 2 of division 2 of the Health and Safety Code] that maintains and operates an emergency department” and that has “appropriate facilities and qualified personnel” has a legal duty to provide “[e]mergency services and care” “to any person requesting the services or care … for any condition in which the person is in danger of loss of life, or serious injury or illness.” (Health & Saf. Code, § 1317, subd. (a).) “‘Emergency services and care’ means medical screening, examination, and evaluation by a physician and surgeon, or, to the extent permitted by applicable law, by other appropriate licensed persons under the supervision of a physician and surgeon, to determine if an emergency medical condition … exists and, if it does, the care, treatment, and surgery, if within the scope of that person’s license, necessary to relieve or eliminate the emergency medical condition, within the capability of the facility.” (Id., § 1317.1, subd. (a)(1).) Federal law has similar requirements. (See 42 U.S.C. § 1395dd.)
Goodsell has alleged that the ER Visitation Fees at issue “are billed using one of five [CPT] codes: 99281, 99282, 99283, 99284, and 99285.” Hospital contends “[t]hose codes were created and defined by the AMA, which is the owner of the codes and the sole determiner of their meaning.” (See YDM Management, supra, 16 Cal.App.5th at p.617, fn. 1 [“‘CPT codes’ are published annually by the [AMA] and comprise a comprehensive list of medical, surgical, and diagnostic services that is widely used in the healthcare industry.”]; People ex rel. Government Employees Ins. Co. v. Cruz (2016) 244 Cal.App.4th 1184, 1187, fn. 5 [“CPT codes ‘were jointly developed by the [AMA] and the Health Care Financing Administration and are the standardized nomenclature for use in insurance claims.”]; 72 Fed.Reg. 66580-01, 66727 (Nov. 27, 2007) [“The CPT codes, including the short descriptors, are owned by the AMA and any change to them … should be addressed to the AMA CPT Editorial Board.”].)
The trial court took judicial notice of the CPT Codebook, an AMA publication. The CPT Codebook provides the following descriptions for CPT codes 99281 through 99285: “99281[:] Emergency department visit for the evaluation and management of a patient that may not require the presence of a physician or other qualified health care professional”; “99282[:] Emergency department visit for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and straightforward medical decision making”; “99283[:] Emergency department visit for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and low level of medical decision making”; “99284[:] Emergency department visit for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making”; and “99285[:] Emergency department visit for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and high level of medical decision making.” Hospital contends the above “definitions confirm that the charges are not for generalized hospital overhead or administration, but rather are charges for services specific to each patient.”
According to the CPT Codebook, “[medical decision making] includes establishing diagnoses, assessing the status of a condition, and/or selecting a management option. [Medical decision making] is defined by three elements. The elements are: [¶] … The number and complexity of problem(s) that are addressed during the encounter. [¶] … The amount and/or complexity of data to be reviewed and analyzed…. [¶] … [¶][and] The risk of complications and/or morbidity or mortality of patient management.” (Boldface & italics omitted.) Hospital contends “[t]he CPT Codebook’s discussion of these factors leaves no doubt that the exercise of ‘medical decision making’ relevant to choosing a level code is a patient service specific to each patient.”
Hospital correctly observes that “[t]he federal government requires providers, including hospitals, to submit claims for Medicare reimbursement for services using CPT codes where, as here, the AMA has created a CPT code for the service.” (See <https://www.cms.gov/medicare/coding-billing/healthcare-common-procedure-system> [as of Aug. 19, 2026], archived at <https://perma.cc/84XW-D29E> [“Standardized coding systems are essential so Medicare and other health insurance programs can process claims in an orderly and consistent manner” and identifying CPT codes as one of the two coding subsystems used].) According to the AMA’s website, the CPT coding system has been adopted for use by Centers for Medicare and Medicaid Services in the administration of Part B of the Medicare program, and for Medicaid, and the Department of Health and Human Services adopted it “as the national coding standard for physician and other health care professional services and procedure under the Health Insurance Portability and Accountability Act.” (<https://www.ama-assn.org/about/cpt-editorial-panel/purpose-cpt-coding-system-cpt-editorial-panel#:~:text=In%201983%20CPT%20was%20adopted,B%20of%20the%20Medicare%20Program> [as of Aug. 19, 2026], archived at <https://perma.cc/SEA4-M9CQ>.)
Hospital has cited additional authorities that adequately demonstrate the widespread use and adoption of CPT codes in the American healthcare industry and, specifically, the use of CPT codes 99281 through 99285 to document the evaluation and management of an emergency room patient. (E.g., Cal. Code Regs., tit. 22, § 51050 [acknowledging nationwide use of CPT by all Medicare and Medicaid programs]; 45C.F.R. § 162.1002(a)(5), (c) [Department of Health and Human Services’ adoption ofCPT codes and other code sets as “standard medical data code sets”]; 80 Fed.Reg. 70298-01, 70448 (Nov. 13, 2015) [“we have instructed hospitals to report facility resources for clinic and emergency department (ED) hospital outpatient visits using the CPT E/M codes and to develop internal hospital guidelines for reporting the appropriate visit level”]; 72 Fed.Reg. 66580-01, 66789 (Nov. 27, 2007) [acknowledging the use of CPT codes 99281 through 99285 for “Emergency department visit for the evaluation and management of a patient,” levels 1 through 5]; Capito, supra, 17 Cal.5th at p. 280 [“Each [CPT] code [for evaluation and management services provided in the emergency department] ‘reflect[s] the activities of physicians and do[es] not … fully describe the range and mix of services provided by hospitals during visits of clinic and emergency department patients[,]’ ” and “must be medically necessary and can include preparing ‘to see the patient (like review of tests),’ reviewing medical history, ‘[o]rdering medications, tests, or procedures,’ ‘[r]eferring and communicating with other health care professionals,’ ‘[d]ocumenting clinical information in the electronic or other health record,’ and engaging in various levels of medical decision-making.”]; YDM Management, supra, 16 Cal.App.5th at p. 627 [“[M]edical providers use CPT codes to describe and communicate the nature of the medical services that have been provided to a patient” and “are the standardized nomenclature for use in insurance claims”].)
VI.Contract Interpretation
Hospital argues “CPT codes have a definitive and well-established meaning as articulated and adopted by the federal and state hospital regulators” and that “[t]he AMA has made clear that ‘CPT codes only describe health care procedures and services.” Hospital contends the “meaning adopted and relied upon by state and federal regulators precludes any interpretation of the COA as excluding E/M services charges” and that “E/M services are by definition services provided to patients.” As a result, Hospital argues this court should determine that the ER Visitation Fee is, as a matter of law, a charge for services provided by Hospital to a patient.
In response, Goodsell argues Hospital is effectively arguing that “the ‘industry standard’ makes clear that ER Visitation Fees are fees for services provided to individual patients.” Goodsell contends this is not the correct standard to apply and that the “applicable standard for interpreting a consumer contract is to determine whether the COA is ‘reasonably susceptible’ to Goodsell’s interpretation, and to then determine the question of what both parties, including the consumer, intended the language to mean.” Goodsell goes on to state that “in interpreting the COA at issue in Naranjo [II], and finding that it was ‘reasonably susceptible’ to [the plaintiff’s] interpretation, this [c]ourt properly cited to dictionary definitions of the word ‘services.’ ” Goodsell then contends, with little substantive analysis, that “[t]he same definitions apply in this case and support the same result.”
“‘“‘When a dispute arises over the meaning of contract language, the first question to be decided is whether the language is “reasonably susceptible” to the interpretation urged by the party. If it is not, the case is over. [Citation.] If the court decides the language is reasonably susceptible to the interpretation urged, the court moves to the second question: what did the parties intend the language to mean?’”’” (Hartzheim v. Valley Land & Cattle Co. (2007) 153 Cal.App.4th 383, 389–390.) Whether language is reasonably susceptible to a given interpretation is a question of law. (Curry v. Moody (1995) 40 Cal.App.4th 1547, 1552.)
“The fundamental goal of contract interpretation is ‘to give effect to the mutual intention of the parties as it existed at the time of contracting.’ (Civ. Code, § 1636.) To interpret a contract, we look to its language ([id.,] § 1638) and ascertain the intent of the parties, if possible, based solely on the contract’s written provisions ([id.,] § 1639). In doing so, we apply the ‘ “clear and explicit” meaning of these provisions, interpreted in their “ordinary and popular sense,” unless “used by the parties in a technical sense or a special meaning is given to them by usage” [citation] …. Thus, if the meaning a layperson would ascribe to contract language is not ambiguous, we apply that meaning.’ [Citation.] At the same time, we ‘recognize the “interpretational principle that a contract must be understood with reference to the circumstances under which it was made and the matter to which it relates. (Civ. Code, § 1647.)” ’ ” (Hewlett-Packard Co. v. Oracle Corp. (2021) 65 Cal.App.5th 506, 530–531, fn. omitted.)
With this backdrop, we now go on to consider whether Goodsell has stated viable claims for breach of contract and declaratory/injunctive relief, and whether and to what extent Goodsell should be permitted leave to amend his FAC.
VII.The Breach of Contract Cause of Action
“The elements of a breach of contract claim are: ‘(1) [the] existence of the contract; (2)[the] plaintiff’s performance or excuse for nonperformance; (3) [the] defendant’s breach; and (4) damages to [the] plaintiff as a result of the breach.’ ” (Naranjo II, supra, 111 Cal.App.5th at p. 430.)
Goodsell has alleged the existence of a contract between Hospital and him—i.e., the COA. With regard to performance, Goodsell alleges he and prospective class members have “either performed their obligations under their Contracts [i.e., the COA’s] or were excused for non-performance by [Hospital’s] conduct.” He alleges he made “a payment to [Hospital], a portion of which is due to … Hospital’s ER Visitation Fee.” These allegations of performance are uncertain as to whether Goodsell fully or adequately performed his payment obligations under the COA. However, Goodsell states in his opening brief on appeal that he performed his payment obligations in full, and correctly observes that Hospital admitted this in its motion to stay proceedings. Given that Hospital has admitted Goodsell’s performance under the COA, this element appears satisfied. Goodsell further alleges that “in breach of its express contractual agreement to charge emergency room patients only for services actually rendered to the patient, [Hospital] charged [Goodsell] and other emergency room patients ER Visitation Fees, which are not fees for services actually rendered to the patient.” Goodsell further alleges he and prospective class members “are entitled to damages in accordance with proof at trial.”
Because Hospital submitted Goodsell’s COA for consideration by the trial court and the court took judicial notice of the COA without objection from Goodsell, we need not rely solely on the bare allegations of the FAC to address the parties’ contentions.
In his breach of contract cause of action, Goodsell alleges the COA “included a provision or provisions permitting [Hospital] to charge only for services actually rendered to the patient, and requiring a patient to pay only for services actually provided to the patient, and not ER Visitation Fees, which are not fees for services rendered, but rather, are fees designed to cover the overhead, operating, and administrative costs of operating an emergency room on a 24 hour, 7 day a week basis.” Goodsell alleges the Hospital breached the COA by charging him “ER Visitation Fees, which are not fees for services actually rendered to the patient.”
The COA signed by Goodsell states, “ ‘Subject to the limitations described below, the Patient … must pay the Hospital’s Full Charges for items, services and supplies provided to the Patient’ ” (italics added). The term “Full Charges” was defined in the COA to “mean[] the charges for items, services and supplies used in patient care listed in the Hospital’s Charge Description Master rates, prior to any discounts or reductions. The Hospital’s Charge Description Master is available … for review at the Hospital Facility (and for hospitals located in California may be viewed at http://www.oshpd.ca.gov/chargemaster).”
The trial court took judicial notice of thechargemaster that was in place at the time of Goodsell’s emergency room visit. Among the items listed on the chargemaster was an “ER LEVEL 3” billing description in the amount of $1,588, an “ER LEVEL 3 W/PROCEDURE” billing description in the same amount. In addition, and specifically under the heading “Evaluation & Management Services (CPT Codes 99201–99499)” (boldface omitted) the chargemaster listed an “Emergency Room Visit, Level 3 (moderate severity)” using the CPT code 99283 and listing the average charge as $1,588.
The COA plainly and unambiguously provides notice to an emergency room patient that his or her obligation to pay “Hospital’s Full Charges for items, services and supplies provided to the Patient” and “Full Charges” is defined as “charges for items, services and supplies used in patient care listed in the Hospital’s [chargemaster] rates, prior to any discounts or reductions.” As discussed, Hospital’s chargemaster expressly includes a fee for an “Emergency Room Visit, Level 3 (moderate severity)” with CPT code 99283. Based on the ample authorities set forth by Hospital, we have no difficulty in concluding that an ER Visitation Fee with CPT code 99283, when properly coded in accordance with AMA guidelines, is a fee charged for services rendered to an emergency room patient.
Hospital contends “‘CPT codes are not properly used to identify or facilitate the billing of insurance companies’ overhead charges, separate from health care service providers’ charges.’ ” In partial support, of this contention, Hospital cites to Young v. Community Health Systems, Inc. (M.D.Fla. Sept. 16, 2022, No. 8:22-cv-329-SCB-AEP) 2022 U.S.Dist. Lexis 237079 (Young), a case in which the plaintiff challenged a hospital charge for an ER Visitation Fee.
In Young, the plaintiff brought a cause of action for breach of contract and other causes of action against the defendant hospital and health care providers. (Young, supra, 2022 U.S.Dist. Lexis 237079 at pp. *2–*3.) As in this case, the plaintiff contended the contract she signed with the defendant hospital “[did] not contain a specific contractual authorization or agreement for the ER patient to pay the subject ER [visitation] fee.” (Id. at p. *3.) The contract provided, “I [the Patient] understand I am responsible to pay any account balance not covered by my insurance company in accordance with the regular rates and terms of the Facility.” (Id. at pp. *3–*4.)
As in this case, the defendant hospital in Young listed the ER Visitation Fees and the corresponding CPT codes (i.e., 99281–99285) on its chargemaster. (Young, supra, 2022 U.S.Dist. Lexis 237079 at p. *5.) The district court observed that the plaintiff failed to identify any provision of the contract between her and the defendant hospital that was breached. (Id. at p. *21.) The plaintiff argued, in part, the ER Visitation Fee was “purely administrative” (id. at p. *22) and that the contract only “addresses ‘medical treatment’ or ‘medical services’ ” and not “‘general overhead, operational, and administrative expenses’” (id. at p. *21). The court rejected the contention stating that “[a] review of the [h]ospital’s chargemaster shows that each ER [visitation] fee has a specific [CPT] code associated with it. The CPT billing guidelines are published in the [AMA’s] CPT Manual. [Citation.] And the exact CPT codes for the ER Visitation Fee at issue in this case have been held not to be administrative fees, but rather, ‘service’ fees.” (Id. at pp.*22–*23,citing U.S. ex rel. Trim v. McKean (W.D.Okla.1998) 31 F.Supp.2d 1308 (McKean).)
Young is distinguishable from the case before us. In Young, the patient agreed to be “‘responsible to pay any account balance not covered by [her] insurance company in accordance with the regular rates and terms of the Facility.’ ” (Young, supra, 2022 U.S.Dist. Lexis 237079 at p. *23.) Based on that provision, the Young court concluded that, even if the ER Visitation Fee was “purely administrative,” the patient was obligated to pay the fee because the patient’s contract did not exclude administrative fees and there was no contention that the fee was not in accordance with the facility’s regular rates and terms. (Ibid.) Arguably, in the case at bar, overhead and administrative fees are excluded because the COA limits Goodsell’s obligation to pay to “items, services and supplies provided to the Patient.” (Italics added.)
In addition, we are of the opinion that the Young court overstated the holding in McKean. InMcKean, the court observed that “[p]hysicians claiming a right to payment from Medicaid or Medicare must comply with the requirements established by Health Care Financing Authority …. Physicians’ claims are submitted by codes, which are based on criteria established by the [AMA] in the Physicians’ [CPT]…. [T]he CPT established new codes for emergency medicine, known as evaluation and management services (E/M). The new codes defined five levels of services—99281 [through] 99285—usually referred to as Levels 1 (lowest) through 5 (highest). [¶] To be reimbursed under the 1992 CPT, an emergency physician must document performance of certain work in three areas: history, examination, and medical decision-making.” (McKean, supra, 31 F.Supp.2d at p. 1310.) We have no qualm with the foregoing discussion in McKean.
Notably, McKean recognized that “[t]he system relies on the honesty and good faith of both physicians and coders, as the reimbursement code is assigned based on the services noted in the chart” (McKean, supra, 31 F.Supp.2d at p. 1312) and concluded that many of the claims for medical reimbursement at issue in the case, and for which CPT codes were used, were actually false claims under the False Claims Act, title 31 of the United States Codesections 3729 through 3733. (McKean, at pp. 1313, 1314, 1316.) This illustrates the folly in concluding that the mere use of a CPT code establishes, as a matter of law, that the service described by the CPT was actually performed.
Peters, supra, 2 F.4th 199, a case also relied on by Hospital, likewise demonstrates the possibility that a hospital might improperly utilize a CPT code in order to obtain reimbursement for things outside the CPT code definition. In Peters, the court found that Aetna Inc. (Aetna) served as a claims administrator for Mars, Inc., a self-funded health care plan (the Plan), and subcontracted with Optumhealth Care Solutions, Inc. (Optum) “to provide [health-related] services to the Plan participants.” (Id. at p. 210.) In return, Optum was to receive a fee from Aetna. (Ibid.) Under its contract with the Plan, Aetna was “ ‘solely responsible for payments due such subcontractors’ ” but “Aetna did not wish to pay Optum out of the fees it received from Mars[, Inc.] through the Plan. Instead, Aetna requested that Optum ‘bury’ its fee within the claims submitted by Optum’s downstream providers.” (Ibid.) “By doing so, the Plan and its participants effectively would pay part or all of Optum’s administrative fee notwithstanding the contrary terms” of Aetna’s contract with the Plan. (Ibid.) The plaintiff produced evidence that demonstrated “Aetna and Optum scouted for a usable CPT code [i.e., an ‘ “infrequently billed CPT code” that was “still … considered valid” ’] that could operate as the ‘dummy code’ ” within which to bury the fee. (Id. at p. 231.)
The Peters court determined the district court had erred in granting summary judgment in favor of Aetna on the plaintiff’s breach of fiduciary duty claims because “a reasonable factfinder could conclude that Aetna breached its duties based on the following four actions regarding the [explanation of benefits]: (1) referring to Optum, and not the actual health care provider, as the ‘provider’ of the medical services; (2) using ‘dummy codes’ that did not represent actual medical services; (3) misrepresenting the ‘amount billed’ as including Optum’s administrative fee; and (4) describing the Optum rate, which included its administrative fee, as the amount that the Plan and its participants, like [the plaintiff], owed for their claim.” (Peters, supra, 2 F.4th at p. 232, italics added.) The court further stated that “a reasonable factfinder could plausibly infer that Aetna … misused the ‘dummy’ CPT code” and that the plaintiff “produced sufficient evidence to create a genuine issue of material fact as to whether Aetna utilized a dummy CPT code in direct contravention of the recognized purpose of the CPT code.” (Id. at p.235.) Thus, Peters recognizes that a health care provider may indeed misuse CPT codes to charge for items that are not within the definition provided for that CPT code. (Ibid.)
In YDM Management, another case relied on by Hospital, the plaintiff was the assignee of urgent care facility’s claims against a defendant medical group that allegedly failed to pay the doctors for emergency medical services at their “ ‘usual, customary, and reasonable rates’ ” in accordance with California law. (YDM Management, supra, 16 Cal.App.5th at p. 618.) The medical group submitted a declaration from the medical group’s vice-president of post-acute patient financial services and managed care operations, in which she stated, “providers follow ‘standard billing procedures that are set forth by the [AMA]’ which ‘require the use of [CPT] codes and other codes that identify, among other things, the type of services provided, and where the services are provided.’” (Ibid.) The trial court granted summary judgment in favor of the medical group after determining that the medical group “presented undisputed evidence that [the plaintiff’s assignor] submitted no claims to [medical group] indicating that it provided emergency services to [medical group] members.” (Id. at p. 627.) The YDM Management court determined that the assignor’s “claims for payment are concessions about the nature of the services that were provided” and a concession that the assignor “had not provided ‘emergency services’ to [medical group] members.” (Id. at p. 628.)
Hospital contends that “had the [YDM Management] court found a triable dispute, it would have centered on whether the services in question met the definition of emergency services but had been miscoded.” Hospital contends, “Goodsell has never alleged or suggested that the Hospital used the 99281 [through] 99285 CPT codes to report charges in a manner different from their stated meaning.” Absent a concession to that effect from Goodsell, we cannot agree.
None of the authorities cited by Hospital preclude the possibility that a hospital may improperly use an ER Visitation Fee to charge a patient for things other than the actual emergency care and treatment services provided to a patient. A liberal construction of Goodsell’s FAC suggests that Goodsell’s claim is that the ER Visitation Fee he was charged with was not for such services rendered but, rather, was utilized in this case (and in the case of prospective class members) to recoup overhead, administrative, and operational expenses. To the extent the ER Visitation Fee may have been used by Hospital to charge for expenses that do not comprise “items, services and supplies provided to the Patient” (italics added), as alleged by Goodsell, Goodsell’s interpretation of the COA as not imposing a financial obligation upon him to pay the ER Visitation Fee is an interpretation to which the COA is reasonably susceptible.
Hospital contends Goodsell did not allege “any extrinsic evidence that might support his view that ‘services provided … to the Patient’ does not include E/M services provided to the patient.” In our view, Hospital misstates the issue. Goodsell is not alleging that E/M services provided to the patient are not “services provided to the patient.” Rather, interpreting Goodsell’s FAC liberally, Goodsell appears to be alleging that the ER Visitation Fee charged by Hospital is not an E/M service because the ER Visitation Fee is not being used by Hospital to charge for E/M services.
Hospital cites to George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112 (George), contending “the court explained how extrinsic evidence of a particular meaning comes into play in the context of a pleadings challenge.”George involved an insured’s claim under a policy of car insurance after the insured’s vehicle was declared a total loss. (Id. at p. 1117.) The dispute in George was whether the insurance policy obligated the insurer to pay the full amount of the “ ‘Actual Cash Value’ ” stated in the policy, i.e., $25,000, or the fair market value of the vehicle. (Ibid.)
The trial court in George sustained a demurrer to the insured’s original complaint with leave to amend. (George, supra, 201 Cal.App.4th at p. 1120, fn. 2.) Upon amending the complaint, the insured added allegations of the extrinsic evidence it was relying on in arguing the insurance policy was ambiguous, and in advancing his preferred interpretation of the insurance policy. (Id. at p. 1120 & fn. 2.) The defendant demurred to the amended complaint and the trial court sustained the demurrer without leave to amend, finding the insurance policy “‘was clear on its face that the limit on insurer liability is the actual cash value of the vehicle unless otherwise stated. And it’s clear and unambiguous that one is paid the actual cash value up to a limit of 25 thousand dollars.” (Id. at p. 1120.) The court entered judgment in favor of the defendant insurer. (Ibid.)
On appeal, the insured argued, “[T]he trial court erred when it concluded the insurance contract was ‘clear on its face’ ” and that “the court was required, as a matter of law, to credit his allegations that extrinsic evidence ‘render[ed] the insurance contract at issue … ambiguous’—that is, his ‘allegation that extrinsic evidence supports his construction of the Policy … is enough, by itself, to require that [the] Defendants’ demurrer be overruled.’ ” (George, supra, 201 Cal.App.4th at p. 1120.) In addressing the insured’s contention, the George court wrote: “In the context of a demurrer, the court must conditionally consider the parol evidence alleged in the complaint, to determine if it would be relevant to prove a meaning to which the language of the instrument is reasonably susceptible. Thus, trial courts err if they refuse to consider the alleged parol evidence on the ground that no parol evidence of any sort is pertinent because the particular contract in dispute is unambiguous. But there may be no error if the trial court conditionally accepts as true that [the] plaintiff can proffer specified parol evidence and, having considered the parol evidence allegations, then determines as a matter of law that the parol evidence alleged must be disregarded because, for whatever reason, the contract is not reasonably susceptible of the interpretation [the] plaintiff alleged.” (Id. at p. 1122.)
It is true that Goodsell does not allege any extrinsic evidence by which he may ultimately seek to prove that the ER Visitation Fee is not being used by Hospital to charge for E/M services. Had he alleged the extrinsic evidence upon which he intended to rely in his FAC, we have no doubt that the holding in George would support this court considering such alleged evidence in ruling on the demurrer. However, since he did not allege such extrinsic evidence, the George case is inapposite.
Goodsell, in addressing the contention that he has not pleaded the extrinsic evidence upon which he will rely to support his contention that the ER Visitation Fee is not a fee for “items, services [or] supplies provided to the Patient,” cites to Southern Pacific Land Co. v. Westlake Farms, Inc., supra, 188 Cal.App.3d 807, wherein this court stated, “[w]here an ambiguous contract is attached and incorporated into the complaint, the party pleading is only required to allege in a complaint the meaning which the party ascribes to that contract.” (Id. at p. 817.) Goodsell has done this.
The following passage from Fremont, supra, 148 Cal.App.4th 97 is also instructive: “The proper interpretation of a contract is disputable if the contract is susceptible of more than one reasonable interpretation, that is, if the contract is ambiguous. An ambiguity may appear on the face of a contract, or extrinsic evidence may reveal a latent ambiguity. [Citation.] A court determining whether a contract is ambiguous must first consider extrinsic evidence offered to prove the parties’ mutual intention. If the court determines that the contract is reasonably susceptible of an interpretation supported by extrinsic evidence, the court must admit that evidence for purposes of interpreting the contract. [Citation.] A court cannot determine based on only the four corners of a document, without provisionally considering any extrinsic evidence offered by the parties, that the meaning of the document is clear and unambiguous.” (Id. at p. 114, italics added.) “For a court to take judicial notice of the meaning of a document submitted by a demurring party based on the document alone, without allowing the parties an opportunity to present extrinsic evidence of the meaning of the document, would be improper.” (Id. at pp. 114–115, italics added.) “In short, a court cannot by means of judicial notice convert a demurrer into an incomplete evidentiary hearing in which the demurring party can present documentary evidence and the opposing party is bound by what that evidence appears to show.” (Id. at p. 115.) A “hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable.” (Id. at p. 114; see Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374 [same].)
Hospital also contends that “a plaintiff cannot ascribe to contract terms a meaning different from their statutory definition,” citing California Traditions, Inc. v. Claremont Liability Ins. Co. (2011) 197 Cal.App.4th 410, 419 (California Traditions).) In that case, a contractor cross-complained against its subcontractor’s insurer under a comprehensive general liability policy after it was sued for defective construction. (Id. at p. 413.) The trial court granted insurer’s summary judgment motion on grounds that the insurance policy contained an exclusion for work performed as part of a condominium project. (Ibid.) In affirming the resulting judgment, the Court of Appeal relied, in large part, on a statute that “meticulously defined” the terms “ ‘condominium’ ” and “ ‘condominium project.’ ” (Id. at p. 419.)
California Traditions is not dispositive because the court determined, based upon evidence submitted to the trial court, that the project at issue was a condominium project as that term is defined by statute and that, as a result, the policy exclusion applied and barred coverage. (California Traditions, supra, 197 Cal.App.4th at pp. 418–423; id.at p.418 [“The undisputed facts … show the unit was one of numerous units developed and constructed by California Traditions as part of a ‘condominium project,’ and was marketed and conveyed by California Traditions as a condominium.”].) Here, we are limited to the facts alleged in the FAC and facts that are judicially noticeable—none of which demonstrate as a matter of law that the ER Visitation Fee as charged by Hospital constitute items, supplies, or services provided to Goodsell.
Here, although the AMA has defined the meaning of CPT codes that are to be used by hospitals to reference E/M services, we cannot conclude, as a matter of law, that Hospital’s use of a CPT code for its ER Visitation Fee is a fee for E/M services. It may turn out that the ER Visitation Fee is exactly that and was appropriately charged to Goodsell by Hospital—or, it may turn out that the ER Visitation Fee was used by Hospital in the manner alleged by Goodsell. Whether Goodsell will ultimately be able to prove the latter is not an issue before this court. (Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706 [“In reviewing the legal sufficiency of a demurrer, we are not concerned with [the] plaintiff’s ability to prove the allegations of the complaint, or the possible difficulties in making such proof.”].)
We conclude Goodsell stated sufficient facts to constitute a cause of action for breach of contract.
VIII.The Cause of Action for Declaratory and Injunctive Relief
Hospital argues that, for the same reasons it advanced on appeal and discussed above, Goodsell “cannot state a claim for declaratory relief.” In light of our determinations thus far in this appeal, this particular contention lacks merit.
Hospital further argues that “‘[a] request for declaratory relief is not “proper” under [Code of Civil Procedure sections] 1060 and 1061 and may be dismissed on demurrer [if] it would provide no more relief than that sought by other claims, such as breach of contract,” quoting Weil and Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group 2025) paragraph 7:42.12a, at page 25,and citing other authority. This contention was raised by Hospital in its demurrer to the trial court and went unaddressed by Goodsell in his opposition to the demurrer. Similarly, this contention was raised by Hospital on appeal, and, again, went unaddressed by Goodsell in both his opening and reply briefs on appeal.
“ ‘Declaratory relief operates prospectively, serving to set controversies at rest. If there is a controversy that calls for a declaration of rights, it is no objection that past wrongs are also to be redressed; but there is no basis for declaratory relief where only past wrongs are involved. Hence, where there is an accrued cause of action for an actual breach of contract or other wrongful act, declaratory relief may be denied.’ ” (Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 366, italics added (Osseous), quoting 5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 869, p. 284; accord, California Union Ins. Co. v. Trinity River Land Co. (1980) 105 Cal.App.3d 104, 110.)
In Osseous, the court wrote, “ ‘ “ ‘The purpose of a declaratory judgment is to “serve some practical end in quieting or stabilizing an uncertain or disputed jural relation.” ’ [Citation.] ‘Another purpose is to liquidate doubts with respect to uncertainties or controversies which might otherwise result in subsequent litigation.’ ” ’ ” (Osseous, supra, 191 Cal.App.4th at p. 364; accord, In re Claudia E. (2008) 163Cal.App.4th 627, 633.) “ ‘ “ ‘One test of the right to institute proceedings for declaratory judgment is the necessity of present adjudication as a guide for[the] plaintiff’s future conduct in order to preserve his legal rights.’ ” ’ ” (Osseous, at pp. 364–365, italics added.)
“A controversy is ripe when it has reached, but has not passed, the point that the facts sufficiently have congealed to permit the court to issue a useful decision. [Citation.] The purpose of the declaration is to allow the parties to shape their conduct to avoid a breach. [Citation.] There is no basis for declaratory relief where only past wrongs are involved.” (Cordoba Corp. v. City of Industry (2023) 87Cal.App.5th 145, 157.) “The purpose of a judicial declaration of rights in advance of an actual tortious incident is to enable the parties to shape their conduct so as to avoid a breach. ‘[D]eclaratory procedure operates prospectively, and not merely for the redress of past wrongs. It serves to set controversies at rest before they lead to repudiation of obligations, invasion of rights or commission of wrongs; in short, the remedy is to be used in the interests of preventive justice, to declare rights rather than execute them.’ ” (Babb v. Superior Court (1971) 3Cal.3d 841, 848; accord, SJJC Aviation Services, LLC v. City of San Jose (2017) 12Cal.App.5th 1043, 1062.)
We conclude Hospital’s argument with regard to Goodsell’s declaratory relief cause of action has merit. Consequently, we will not disturb the trial court’s decision to sustain the demurrer to Goodsell’s cause of action for declaratory/injunctive relief.
IX.Leave To Amend To State UCL and CLRA Claims Must Be Granted
Goodsell argues he should be given leave to amend his FAC “to allege UCL and CLRA claims based on Hospital’s post-treatment practices (including Hospital’s COA), as opposed to the pre-treatment disclosures sought in Capito (and now dismissed from this case).” (Fn. & some italics omitted.)
Hospital argues Goodsell should not be granted leave to state UCL and CLRA claims because the claims “would depend on [Goodsell’s] legally erroneous interpretation of the contract.” This contention is without merit. We have already expressed our opinion that Goodsell’s breach of contract cause of action is not precluded under Capito and that Goodsell has sufficiently stated a cause of action for breach of contract.
“‘The purpose of the UCL [citation] “is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services. [Citation.]” [Citation.] It “defines ‘unfair competition’ to mean and include ‘any unlawful, unfair or fraudulent business act or practice ….’ ” ’ ” (Naranjo II, supra, 111 Cal.App.5th at p. 434.) “‘[A] business practice need only meet one of [those] three criteria to be considered unfair competition.’ ” (Id. at pp. 434–435.)
“‘A fraudulent business practice is one which is likely to deceive the public. [Citations.] It may be based on representations to the public which are untrue, and “‘also those which may be accurate on some level, but will nonetheless tend to mislead or deceive….’ ”… The determination as to whether a business practice is deceptive is based on the likely effect such practice would have on a reasonable consumer.’ ” (Naranjo II, supra, 111 Cal.App.5th at p. 435.) “‘Whether a practice is deceptive or fraudulent “cannot be mechanistically determined under the relatively rigid legal rules applicable to the sustaining or overruling of a demurrer.” [Citation.] Rather, the determination is one question of fact, requiring consideration and weighing of evidence from both sides before it can be resolved.’ ” (Ibid.)
“‘Unlawful business acts or practices within the meaning of the UCL include “ ‘ “ ‘anything that can properly be called a business practice and that at the same time is forbidden by law.’ ” ’ ” ’ [Citation.] ‘By prescribing “ ‘any unlawful’ ” business practice, the UCL borrows violations of other laws and treats them as unlawful practices that the UCL makes independently actionable. [Citation.] Virtually any statute or regulation (federal or state) can serve as a predicate for a UCL unlawful practice cause of action. [Citation.] … [A] violation of the CLRA can serve as the predicate for a UCL cause of action.’ [Citation.] [¶] Courts have determined it is an unfair business practice for a business to assert a contractual right that it does not have. (People v. McKale (1979) 25 Cal.3d 626, 635[mobilehome park’s rules and regulation that included provisions barred by statute determined deceptive because tenants are likely to believe the rule enforceable]; cf. People v. Custom Craft Carpets, Inc. (1984) 159 Cal.App.3d 676, 683–684.)” (NaranjoII, supra, 111 Cal.App.5th at p. 436.)
“California courts have applied a variety of tests to determine whether a business practice is unfair under the UCL. ‘Under the UCL’s unfairness prong, courts consider either: (1) whether the challenged conduct is “tethered to any underlying constitutional, statutory or regulatory provision, or that it threatens an incipient violation of an antitrust law, or violates the policy or spirit of an antitrust law,” [citation]; (2) whether the practice is “immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers,” [citation]; or (3) whether the practice’s impact on the victim outweighs “the reasons, justifications and motives of the alleged wrongdoer.” ’ ” (Naranjo II, supra, 111 Cal.App.5th at p. 437.)
Assuming the truth of Goodsell’s allegations for purposes of the demurrer, a jury could reasonably find that, where a hospital’s standard contract between it and its emergency room patients provides that the patient agrees to pay only for “items, services and supplies provided to” him or her, a practice whereby the hospital charges the patient fees unrelated to such “items, services and supplies” using a CPT code designated for evaluation and management services, is a fraudulent, unfair or unlawful business practice.
To the extent Goodsell alleges that Hospital charges its patients an “ER Visitation Fee” for the “general operating, administrative, and overhead costs” of Hospital “in operating an emergency room on a 24-hour, 7 day a week basis,” and that such fees “are not fees for services actually rendered to the patient,” Goodsell should be allowed to amend his FAC to state UCL and CLRA causes of action. Leave to amend must be granted.
DISPOSITION
We reverse the judgment of dismissal. The order sustaining the demurrer with respect to Goodsell’s cause of action for declaratory and injunctive relief is affirmed. Goodsell is entitled to amend his FAC to state causes of action under the UCL and CLRA in accordance with this opinion. We remand the case to the trial court for further proceedings not inconsistent with this opinion. Goodsell is entitled to his costs on appeal. (Cal. Rules of Court, rule 8.278(a)(3).)

DETJEN, Acting P. J.
WE CONCUR:

MEEHAN, J.

SNAUFFER, J.