California Court of Appeal

Sustaining of demurrers on emotional distress claims, summary judgment for defendants on contract claims, and award of damages to defendants on cross-complaint for rescission, are reversed as Health and Safety Code section 1389.3 precludes a health services plan from rescinding a contract for a material misrepresentation or omission unless the plan can demonstrate: 1) the misrepresentation or omission was willful; or 2) it had made reasonable efforts to ensure the subscriber's application was accurate and complete as part of the precontract underwriting process. Triable issues remain under section 1389.3, and on whether defendant engaged in bad faith. Moreover, plaintiffs adequately alleged a cause of action for intentional infliction of emotional distress.

Appellate Information

• Decided 12/24/2007
• Published 12/24/2007

Judges

Court

• California Court of Appeal

Counsel

• For Appellant:
  
• Jeffrey L. Garland, San Diego, and Michael G. Nutter, for Plaintiffs and Appellants., Amy L. Dobberteen, Patricia T. Sturdevant and Lotte Colbert, for California Department of Managed Health Care, as amicus curiae on behalf of Plaintiffs and Appellants., Arkin & Glovsky and Sharon J. Arkin, Pasadena, for United Policyholders, as amicus curiae on behalf of Plaintiffs and Appellants., Hooper, Lundy & Bookman, Daron L. Tooch, Glenn E. Solomon and Suzanne S. Chou, Los Angeles, for California Medical Association, as amicus curiae on behalf of Plaintiffs and Appellants., Shernoff Bidart & Darras, William M. Shernoff and Joel A. Cohen, Claremont, as amici curiae on behalf of Plaintiffs and Appellants., Gary Cohen and Andrea Rosen, West Sacramento, for California Department of Insurance, as amicus curiae on behalf of Plaintiffs and Appellants.


• For Appellees:
  
• Barger & Wolen, John M. LeBlanc, Los Angeles, Andrew S. Williams;  Mayer, Brown, Rowe & Maw, Andrew L. Frey and Donald M. Falk, Palo Alto, for Defendant and Respondent., Manatt, Phelps & Phillips, Gregory N. Pimstone and Joanna S. McCallum, Los Angeles, for California Life and Health Insurance Companies, as amicus curiae on behalf of Defendant and Respondent., Epstein Becker & Green, William A. Helvestine, Damian D. Capozzola and Rhea G. Mariano, Los Angeles, for California Association of Health Plans, as amicus curiae on behalf of Defendant and Respondent.