Dameron Hospital Assn. v. AAA Northern Cal. etc. CA3

Filed 1/5/22 Dameron Hospital Assn. v. AAA Northern Cal. etc. CA3
NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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
THIRD APPELLATE DISTRICT
(San Joaquin)
----

DAMERON HOSPITAL ASSOCIATION, C086518

Plaintiff and Appellant, (Super. Ct. No.
STKCVUOCT20110006939)
v.

AAA NORTHERN CALIFORNIA, NEVADA &
UTAH INSURANCE EXCHANGE,

Defendant and Respondent.

SUMMARY OF THE APPEAL
Appellant Dameron Hospital Association (Dameron) requires patients or their
family members to sign Conditions of Admissions (COAs) when Dameron provides the
patients’ medical care. The COAs at issue in this action contain language that assigns to
Dameron direct payment of uninsured and underinsured motorist (UM) benefits and
medical payment (MP) benefits that would otherwise be payable to those patients under

1
their automobile insurance policies. Here, Dameron treated five of AAA Northern
California, Nevada & Utah Insurance Exchange’s (also known as California State
Automobile Association Inter-Insurance Bureau, here CSAA) insureds for injuries
following automobile accidents. Those patients had UM and/or MP coverage as part of
their CSAA coverage, and Dameron sought to collect payment for those services from the
patients’ UM and/or MP benefits at Dameron’s full rates. Instead of paying to Dameron
the lesser of either all benefits due to the patients under their UM and MP coverage, or
Dameron’s full charges, CSAA paid portions of those benefits directly to the patients
which left balances owing on some of Dameron’s bills. Dameron sued CSAA to collect
UM and MP benefits it maintains CSAA owed Dameron under the assignments contained
in the COAs.
The trial court concluded that Dameron could not enforce any of the assignments
contained in the COAs and entered judgment in CSAA’s favor following CSAA’s
successful motion for summary judgment.
Here, we hold Dameron cannot collect payment for emergency services from the
UM or MP benefits due to patients that were covered under health insurance policies.
Additionally, we find (1) the COA forms are contracts of adhesion; (2) it is not within the
reasonable possible expectations of patients that a hospital would collect payments for
emergency care directly out of their UM benefits; and (3) a trier of fact might find it is
within the reasonable expectations of patients that a hospital would collect payments for
emergency care directly out of their MP benefits. Finally, we find that the parent of a
minor lacked the authority to assign UM or MP benefits payable to that minor under a
policy taken out by his nonparent legal guardian. Accordingly, we conclude that
Dameron could not maintain causes of action to collect MP or UM benefits due to four of
the five patients directly from CSAA. However, consistent with this opinion, the trial
court can consider whether an enforceable assignment of MP benefits was made by one
adult patient.

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 FACTS AND HISTORY OF THE PROCEEDINGS

General Factual Background

O.N., P.F., Stephen L., R.D., and D.W. were each in separate vehicle accidents.
All of the patients were treated for injuries at Dameron following their accidents.
At the time of the patients’ respective accidents and treatment at Dameron, they
were covered by CSAA automobile insurance policies that included UM coverage and/or
MP coverage. CSAA’s policies described its MP coverage as follows: “We will pay
reasonable expenses incurred within one year from the date of accident by an insured
person who sustains bodily injury as a result of an accident covered under this Part for
necessary medical, surgical, X-ray, and dental treatment, including prosthetic devices,
eyeglasses, and hearing aids and necessary ambulance, hospital, professional nursing, and
funeral costs.” It indicated, with respect to MP benefits, “[w]e may pay the insured
person or the person(s) providing the necessary services, or the person(s) responsible for
payment of expenses incurred under this Part, as we deem appropriate.”
CSAA described its UM coverage for bodily injury as follows: “COVERAGE D1
- UNINSURED MOTORISTS BODILY INJURY COVERAGE [¶] We will pay
damages, other than punitive or exemplary damages, for bodily injury to an insured
person, which an insured person is legally entitled to recover from the owner or operator
of an uninsured motor vehicle. The bodily injury must be caused by accident and arise
out of the ownership, maintenance or use of the uninsured motor vehicle. [¶]
Determination whether an insured person is legally entitled to recover damages or the
amount of damages shall be made by agreement between the insured person and us. If no
agreement is reached, the decision will be made by arbitration.”
At the time of the accidents, O.N. and P.F. had health care insurance coverage.
This record does not tell us if any of the other patients had health insurance.

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 Before they left the hospital, each patient or a member of their family signed a
COA, that included the following paragraph numbered 11 regarding an assignment of
insurance benefits and third party billing:
“The undersigned (for him or herself and the patient) assigns to the hospital, and
to the physician(s), and to the other health care professionals providing services to the
patient during this hospitalization (or on an outpatient basis) all insurance benefits of any
kind that are, or that might be owed, or otherwise due for hospital and/or health care
services of any kind provided to the patient. This assignment includes, but is not limited
to, all health plan and health insurance benefits, all medical payments coverage under any
policy of insurance, and all uninsured and underinsured motorist insurance benefits
payable to or on behalf of the patient.
“The undersigned (for him or herself and the patient) authorizes direct payment to
the hospital (and [to the] physicians specifically associated with the patient’s medical
care, and to any other health care professionals specifically associated with the patient’s
medical care) of any insurance benefits otherwise payable to or on behalf of the patient
and/or the undersigned for this hospitalization, or for outpatient services or outpatient
observation care, and for any emergency services rendered, at a rate not to exceed the
hospital’s, physician’s, or health care professional’s regular billed charges.
“Payment to the hospital pursuant to this assignment shall discharge an insurance
company and/or health plan of its obligations to the patient, but only to the extent of such
payment. The undersigned and the patient remain at all times financially responsible for
all charges of the hospital, and for all charges of all physicians and health care
professionals specifically associated with the patient’s medical care, to the extent that the
charges are not paid or otherwise resolved with finality by the patient’s insurer and/or
health plan.
“Payment of the hospital’s charges by the patient’s insurer or health plan may not
eliminate the hospital’s right to collect its charges from third parties or their liability

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insurers in cases where a third party is legally responsible for causing an injury, illness,
or other condition treated by the hospital. In some cases, the hospital’s right to collect its
charges from responsible third parties and their liability insurers under California’s
Hospital Lien Act may be governed by a contract between the hospital and the patient’s
health plan or insurer. Under no circumstances shall the total amount collected and
retained by the hospital for treating an injury, illness or condition caused by a third party
exceed the billed charges of the hospital.”
According to Craig Haupt, the Credit & Collection Manager for Dameron, who
has had that position since 1989, “[a]ll patients are required to sign the COA, or to have
the COA signed on their behalf, before the patient leaves the hospital. In rare cases,
injured patients may leave the hospital without signing the COA, and without a family
member signing on their behalf. This oversight does not excuse patients from signing the
COA, and their failure to sign the COA does not change the terms and conditions under
which all patients at Dameron are treated.” Haupt believes COAs are “contracts of
necessity.”
Additional factual background will be provided as to specific patients in the
discussion below.

Procedural Background

Dameron filed this action on May 11, 2011. The First Amended Complaint
contains two causes of action. In the first cause of action, Dameron seeks an injunction
prohibiting CSAA from engaging in “unfair business practices” in violation of Business
and Professions Code section 17200 et seq. (the Unfair Competition Law). The second
cause of action seeks damages and declaratory relief to remedy CSAA’s alleged breach
of contract in failing to honor the patients’ purported assignments of their UM and/or MP
benefits to Dameron. Both causes of action hinge on Dameron’s position that, in failing
to honor the purported assignments and pay UM and MP benefits to Dameron, CSAA

5
acted unfairly and/or unlawfully. The trial court sustained CSAA’s demurrer to the first
cause of action without leave to amend.
CSAA brought a motion for summary judgment on the first amended complaint
and the trial court entered a judgment in CSAA’s favor.
Dameron appeals.

DISCUSSION

I

The First Cause of Action Under the Unfair Business Practices Act

In its opening brief, Dameron does not mention, let alone ask for relief from, the
trial court’s ruling on the demurrer. Dameron also makes no argument as to the proper
standard of review for this court to apply when reviewing rulings on demurrer. Dameron
also made no argument as to why, specifically, CSAA violated the Unfair Competition
Law in its opening brief. Dameron also did not include a copy of the ruling on the
demurrer with its appendix. Instead, the demurrer is first addressed in CSAA’s filings
where CSAA, (1) included the ruling on the demurrer with a supplemental appendix it
filed with its response; and (2) described the ruling and stated the only cause of action
remaining when the motion for summary judgment was considered and on appeal is the
claim for damages and declaratory relief based on CSAA’s alleged failure to honor the
assignments.
Presumably realizing it had forgotten about the ruling on the demurrer and
wanting to at least give it a passing acknowledgment, in its reply Dameron asks this court
to “reinstate Dameron’s unfair competition law . . . claims against [CSAA].” However,
Dameron still does not make an argument about the proper standard of review when
considering a ruling on a demurrer or the application of the Unfair Competition Law.
“An appellant . . . forfeits an issue by failing to raise it in his or her opening brief.”
(Doe v. California Dept. of Justice (2009) 173 Cal.App.4th 1095, 1115.) “ ‘Obvious

6
considerations of fairness in argument demand that the appellant present all of his points
in the opening brief. To withhold a point until the closing brief would deprive the
respondent of his opportunity to answer it or require the effort and delay of an additional
brief by permission. Hence the rule is that points raised in the reply brief for the first
time will not be considered, unless good reason is shown for failure to present them
before.[] [Citations.]’ (9 Witkin, Cal. Procedure (3d ed. 1985) § 496, p. 484, italics
omitted.)” (Neighbours v. Buzz Oates Enterprises (1990) 217 Cal.App.3d 325, 335,
fn. 8.)
Dameron forfeited its right to argue its first cause of action should be reinstated by
failing to raise that argument in its opening brief.

II

Standard of Review Related to Motions for Summary Judgment

A court must grant a motion for summary judgment when “all the papers
submitted show that there is no triable issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).)
In moving for summary judgment, defendants had the burden to show that the cause of
action has no merit because an essential element cannot be established or there is a
complete defense. (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar v. Atlantic Richfield
Co. (2001) 25 Cal.4th 826, 850, 861.)
On appeal, we review the record and the determination of the trial court de novo,
viewing the evidence in the light most favorable to plaintiffs as the losing parties. (Kahn
v. East Side Union High School Dist. (2003) 31 Cal.4th 990, 1003.) We apply de novo
review to questions of law regarding statutory interpretation. (Earl v. State Personnel Bd.
(2014) 231 Cal.App.4th 459, 462.) “We also independently review contractual
agreements, including the question of whether the language used in a contract is
ambiguous. (American Alternative Ins. Corp. v. Superior Court (2006) 135 Cal.App.4th

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1239, 1245.)” (Dameron Hospital Assn. v. AAA Northern California, Nevada & Utah
Ins. Exchange (2014) 229 Cal.App.4th 549, 558 (Dameron).) “We are not bound by the
trial court’s reasons for granting summary judgment because we review the trial court’s
ruling, and not its rationale. (Kids’ Universe v. In2Labs (2002) 95 Cal.App.4th 870, 878
[].)” (Avidity Partners, LLC v. State of California (2013) 221 Cal.App.4th 1180, 1192.)

III

An Assignment of O.N.’s and P.F.’s UM and MP Benefits to Pay for Emergency Care Is
Contrary to Public Policy

“The consideration of a contract must be lawful within the meaning of [Civil
Code] Section 1667.” (Civ. Code, § 1607.) Under Civil Code section 1667, “[t]hat is not
lawful which is . . . [c]ontrary to the policy of express law, though not expressly
prohibited.” Here, we find that assignment of O.N.’s MP benefits and P.F.’s UM benefits
to pay for emergency care would be unlawful within the meaning of Civil Code sections
1607 and 1667, and, therefore, void, since the patients had health insurance. (Civ. Code,
§ 1608.)

A. Additional Facts

1. O.N.’s Benefits and Payment for His Treatment

O.N. was injured on April 16, 2010, and Dameron’s emergency department treated
him for injuries the same day. According to a letter from CSAA to O.N., he had MP
coverage with a cap of $25,000.
On May 14, 2010, CSAA sent $1,214.14 in MP benefits to American Medical
Response West and $145 in MP benefits to Dr. Aziz Kamal to cover services provided to
O.N. after the accident. On May 27, 2010, CSAA sent Dameron Emergency Physicians a
payment of $596 from MP benefits.

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 Later, in July 2010, Dameron sent CSAA additional billing totaling $28,577.31,
for services it rendered to O.N. following the accident, along with the COA signed by
O.N.’s wife. O.N. then forwarded CSAA copies of explanations of benefits that he
received from his health insurance provider, Keenan HealthCare, that indicated Dameron
had charged the $28,577.31 for the services, and, applying a negotiated discount, the
health insurer had paid Dameron $630 for those services.
CSAA responded to Dameron’s bill for $28,577.31 with a letter in which CSAA
stated it had received information that “this billing has been paid for by [the] insured’s
health carrier” and it “issued payment to our insured directly for the amount of the
accepted payment for his treatment.” CSAA then sent O.N. $660 in MP benefits to cover
Dameron hospital emergency charges.

2. P.F.’s Benefits and Payment for Her Treatment

P.F. was in an accident on June 27, 2010, and Dameron provided emergency
services for her injuries the same day. The driver of the other car involved in the accident
fled the scene. A letter to William F. from CSAA regarding the family’s automobile
insurance coverage does not indicate that the policy included MP or UM coverage in any
specific amount, but P.F. later entered a settlement with CSAA under which she collected
UM benefits.
On September 1, 2010, Haupt sent a letter to CSAA in which he advised CSAA
that P.F. had assigned her UM and/or MP benefits to Dameron. Dameron included a
notice of lien and a statement indicating it had provided P.F. with $8,902.28 worth of
medical services. According to an explanation of benefits, Kaiser paid Dameron a
negotiated rate of $957 for those services.
CSAA and P.F. settled her claim for UM benefits with CSAA for an undisclosed
amount in December 2010.

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 B. Laws Governing Health Insurance Plan Payment of Medical Care
California Health and Safety Code section 1317, subdivision (a), requires hospitals
that render emergency services to any person suffering a condition “in which the person
is in danger of loss of life, or serious injury or illness” upon request. The emergency
service provider must provide the services regardless of the patient’s, “insurance status,
economic status, [or] ability to pay for medical services,” and, “without first questioning
the patient or any other person as to his or her ability to pay therefor.” (Health & Saf.
Code, § 1317, subs. (b) & (d).) However, “the patient or his or her legally responsible
relative or guardian shall execute an agreement to pay therefor or otherwise supply
insurance or credit information promptly after the services are rendered.” (Health & Saf.
Code, § 1317, subd. (d).)
Under the Knox-Keene Health Care Services Plan Act of 1975 (Health & Saf.
Code, §§ 1340-1399.864 (Knox-Keene))--which exists, in part “to ensure the best
possible health care for the public at the lowest possible cost by transferring the financial
risk of health care from patients to providers” (Health & Saf. Code, § 1342, subd. (d))--
health care service plans, or their contracting medical providers, must “reimburse
providers for emergency services and care provided to its enrollees, until the care results
in stabilization of the enrollee, except” as not relevant here (Health & Saf. Code,
§ 1371.4, subd. (b)). Also under Knox-Keene, contracts between health care service
plans and health care providers must be in writing, and “shall set forth that in the event
the plan fails to pay for health care services as set forth in the subscriber contract, the
subscriber or enrollee shall not be liable to the provider for any sums owed by the plan.”
(Health & Saf. Code, § 1379, subd. (a).) When a contract has not been reduced to
writing, or if a written contract does not have the “required prohibition, the contracting
provider shall not collect or attempt to collect from the subscriber or enrollee sums owed
by the plan.” (Health & Saf. Code, § 1379, subd. (b).)

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 In Prospect Medical Group, Inc. v. Northridge Emergency Group (2009)
45 Cal.4th 497, 502 (Prospect) our Supreme Court examined this statutory scheme and
considered if, when a health care service plan “submits a payment lower than the amount
billed,” by the emergency room service provider, “can the emergency room doctors
directly bill the patient for the difference between the bill submitted and the payment
received—i.e., engage in the practice called ‘balance billing’?” The Court concluded
that, “billing disputes over emergency medical care must be resolved solely between the
emergency room doctors, who are entitled to a reasonable payment for their services, and
the [health care service plan], which is obligated to make that payment. A patient who is
a member of [a health care service plan] may not be injected into the dispute. Emergency
room doctors may not bill the patient for the disputed amount.” (Ibid., italics added.)
Hence, it is worth observing, that if there was no assignment of O.N.’s and P.F.’s
UM and MP benefits, Dameron would be prohibited from reaching the funds paid
directly to the patients under their policies to recoup the difference between the rates
Dameron has negotiated with their health insurers and its regular rates, or to demand they
pay to Dameron anything other than their deductible and copayments for that care.

C. The Hospital Lien Act

With the Hospital Lien Act (Civil Code, § 3045.1 et seq., HLA), the Legislature
established one mechanism through which hospitals that provide emergency services can
recoup costs from an entity other than a patient’s health care service plan.
Civil Code section 3045.1 states, “[e]very person, partnership, association,
corporation, public entity, or other institution or body maintaining a hospital licensed
under the laws of this state which furnishes emergency and ongoing medical or other
services to any person injured by reason of an accident or negligent or other wrongful act
not covered by” sections not applicable here, “shall, if the person has a claim against
another for damages on account of his or her injuries, have a lien upon the damages

11
recovered, or to be recovered, by the person, or by his or her heirs or personal
representative in case of his or her death to the extent of the amount of the reasonable and
necessary charges of the hospital and any hospital affiliated health facility, . . . in which
services are provided for the treatment, care, and maintenance of the person in the
hospital or health facility affiliated with the hospital resulting from that accident or
negligent or other wrongful act.” An HLA lien, “shall apply whether the damages are
recovered, or are to be recovered, by judgment, settlement, or compromise.” (Civ. Code,
§ 3045.2.) The amount a hospital can collect under an HLA lien is limited to “so much
thereof as can be satisfied out of 50 percent of the moneys due under any final
judgment.” (Civ. Code, § 3045.4.)
The ability of an emergency service provider to collect payment for its services
under the HLA “requires the existence of an underlying debt owed by the patient to the
hospital . . . , absent such a debt, no lien may attach.” (Parnell v. Adventist Health
System/West (2005) 35 Cal.4th 595, 609.) Thus, when an emergency service provider
enters into an agreement with a health care service plan and agrees to accept a specified
amount from the plan as “ ‘payment in full,’ ” and then the health care plan provides it
with a payment in the amount specified under the agreement, the emergency care
provider “may not assert a lien under the HLA against [the patient’s] recovery from the
third party tortfeasor.” (Ibid.) This is so, because, under the terms of the agreement, the
patient’s “entire debt to the hospital has therefore been extinguished.” (Ibid.)
However, emergency care providers do not have to choose between the ability to
contract with health care service plans and the ability to collect higher rates for care using
the HLA. As this court concluded in Dameron, supra, 229 Cal.App.4th at page 554, if,
“hospitals wish to preserve their right to recover the difference between usual and
customary charges and the negotiated rate through a lien under the HLA, they are free to
contract for this right” when negotiating their contracts with health care service
providers.

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 In Dameron we “reject[ed] the contentions . . . that [Health and Safety Code]
section 1379 insulates,” tortfeasors’ automobile insurers, “from balance billing by
hospitals. Section 1379 does not mention balance billing, third party tortfeasors, or
liability insurance companies. Instead, the statute mentions only health care service
plans, providers of medical care, and patients. The clear import of section 1379 is to
protect patients with health care service plan coverage from any collection attempts by
providers of such medical care as emergency room services.” (Id., 229 Cal.App.4th at
p. 563.)

D. Uninsured and Underinsured Motorist Coverage

UM policies are governed generally by Insurance Code section 11580.2, “which
requires automobile liability insurers to offer insurance for damages or wrongful death
caused by both uninsured and underinsured motorists.” (Quintano v. Mercury Casualty
Co. (1995) 11 Cal.4th 1049, 1053 (Quintano); see also Ins. Code, § 11580.2, subds. (a)(1)
& (p)(7).) As used in Insurance Code section 11580.2, “the term ‘uninsured motor
vehicle’ generally includes ‘underinsured motor vehicle.’ ” (Quintano, supra, 11 Cal.4th
at p. 1053.) “Underinsured motorist coverage was created to provide additional coverage
for the insured who is injured by a tortfeasor who has minimal liability insurance.”
(Ibid.)
Though UM policies exist to assure persons injured in automobile accidents a
minimum level of payment when their injuries are the fault of uninsured or underinsured
motorists, courts have emphasized that the UM insurance provider “is the insurer of the
. . . patient,” not the tortfeasor or the tortfeasor’s insurer. (Weston Reid, LLC v. American
Insurance Group, Inc. (2009) 174 Cal.App.4th 940, 948-949 (Weston); Haering v. Topa
Ins. Co. (2016) 244 Cal.App.4th 725, 733.) UM policies, “ ‘are not “third party”
coverages. They are strictly “first party” coverages because the insurer’s duty is to

13
compensate its own insured for his or her losses, rather than to indemnify against liability
claims from others.’ ” (Weston, supra, 174 Cal.App.4th at p. 950.)

E. Med-Pay Benefits

“Automobile med-pay insurance provides first party coverage on a no-fault basis
for relatively low policy limits (generally ranging from $ 5,000 to $ 10,000) at relatively
low premiums. (Jones v. California Casualty Indem. Exch. (1970) 13 Cal.App.3d
Supp. 1, 3 [91 Cal. Rptr. 726] [‘There is no fault or liability connected with this
provision’]; see Croskey et al., Cal. Practice Guide: Insurance Litigation (The Rutter
Group 1999) P 6:708, p. 6E-2 [‘ . . . coverage does not depend on the insured’s liability
. . . benefits are payable regardless of whether the insured was at fault’].) The coverage is
primarily designed to provide an additional source of funds for medical expenses for
injured automobile occupants without all the burdens of a fault-based payment system.
(Croskey et al., Cal. Practice Guide: Insurance Litigation, supra, P 6:1221, p. 6G-4.)
There is no statutory obligation for med-pay benefits.” (Nager v. Allstate Ins. Co. (2000)
83 Cal.App.4th 284, 289-290.)

F. An Assignment of the O.N. ’s and P.F. ’s UM and/or MP Benefits for
Emergency Care Would Be Contrary to Law

Here, Dameron is attempting to collect more for emergency medical services than
the payments it negotiated with O.N.’s and P.F.’s health insurance providers by claiming
funds that would come from the patients’ first party UM and MP benefits. And, as part
of this effort, Dameron brought the patients into a fee dispute by asking them or their
family members to sign COAs that purport to give Dameron permission to make a claim
on those funds. That is, Dameron asked the patients to give Dameron the authority to
secure from the patients’ first party benefits something in addition to or in lieu of what
the patients’ health insurers would provide for medical services. This effort is contrary to
the statutory policy of protecting patients, “with health care service plan coverage from

14
any collection attempts by providers of such medical care as emergency room services.”
(Dameron, supra, 229 Cal.App.4th at p. 563.) For the same reason an emergency room
provider cannot interject a patient into a dispute with a medical insurance provider over
the reasonableness of its rates by billing the patient for the disputed amount (see
Prospect, supra, 45 Cal.4th at p. 502), it cannot attempt to avoid this prohibition by
instead claiming UM or MP benefits using a patient assignment. Patients with medical
insurance coverage expect that coverage will “insulate [them] from any monetary
obligation for such medical care.” (Whiteside v. Tenet Healthcare Corp. (2002)
101 Cal.App.4th 693, 705 (Whiteside).) When a medical care provider pursues a
patient’s UM and MP benefits to recoup more than what the health insurance company
would otherwise pay for the patient, they are attempting to reduce a capped amount of
funds that are intended to compensate the patient for the patient’s losses and expenses.
Dameron’s efforts to secure O.N.’s MP benefits and P.F.’s UM benefits to pay for
emergency services through an assignment contained in the COAs is contrary to patient
protections created by Knox-Keene and statutes related to the provision of emergency
care as summarized in Prospect and cannot be allowed.

IV

D.W.’s Mother Lacked Authority to Assign His MP Benefits

A. Additional Facts

D.W. was injured on May 13, 2011, and Dameron’s emergency department treated
him for injuries the same day. D.W. was a minor and lived with his grandmother,
Sandra M., who claimed to be his guardian and who held the CSAA policy that covered
D.W. According to a letter from CSAA to Sandra M., D.W. had MP coverage with a cap
of $1,000. It appears D.W.’s mother and not his grandmother--or even D.W.--signed his
COA.

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 One health insurance claim form indicates D.W. received $426 worth of
emergency services from Dameron on May 13, 2011. On June 11, 2011, CSAA sent his
grandmother $426 in MP benefits to pay for D.W.’s “ER bill.”
On June 16, 2011, Dameron sent a letter to CSAA in which Dameron indicated
D.W.’s MP and UM benefits had been assigned to Dameron. Dameron enclosed a bill
indicating it had provided D.W. with $12,662.40 worth of services, and stated in the letter
that payment for those services might be recoverable as UM or MP costs. In response, on
June 27, 2011, CSAA sent D.W.’s grandmother a letter indicating “medical bills relating
to [D.W.’s] claim have reached your Medical Payments Coverage policy limit . . . .
Please note that this means we cannot pay for any additional medical payments benefits
for this claim, and any additional bills received will be forwarded to your attention for
handling.” On June 28, 2011, CSAA sent D.W.’s grandmother $574 in MP benefits as
payment towards a “Medical Bill.”
On July 18, 2011, Haupt sent a letter to CSAA in which he stated that Dameron
provided CSAA with notice of the purported assignment on June 16, 2011, and
demanded that CSAA remit the lesser of either the $12,662.40 billed for Dameron service
or the amount of MP benefits CSAA had paid to the patient. CSAA responded to Haupt
with a letter stating, “[w]e received the hospital bill 2 weeks after receiving the
physician’s bill. After paying the physician’s bill, only $574 was left over. The $574
balance was paid to the patient’s guardian, Sandra M., with instructions to pay the
hospital. This payment was made in accordance with our policies and procedures. ¶
Please contact Ms. M. for restitution.”

B. D.W.’s Mother Did Not Create an Assignment of MP Benefits Secured by
D.W.’s Grandmother and Guardian

“[An] assignment, to be effectual, must be a manifestation to another person by
the owner of the right indicating his intention to transfer . . . the right to such other

16
person, or to a third person.” (Cockerell v. Title Ins. & Trust Co. (1954) 42 Cal.2d 284,
291.) One means of determining if a party has made an assignment is by looking at the
written instrument in which the assignment was made. (See California Ins. Guarantee
Assn. v. Workers’ Comp. Appeals Bd. (2012) 203 Cal.App.4th 1328, 1335 [“In
determining whether an assignment has been made, ‘the intention of the parties as
manifested in the instrument is controlling.’ [Citation.]”].)
Here, the individual who took out and paid for the policy at issue—D.W.’s
grandmother--did not sign the COA. His mother signed it. As such, we ask if D.W.’s
mother was an authorized agent to sign an agreement that assigned the MP benefits under
the grandmother’s insurance policy.
“[A]n agency cannot be created by the conduct of the agent alone; rather, conduct
by the principal is essential to create the agency. Agency ‘can be established either by
agreement between the agent and the principal, that is, a true agency [citation], or it can
be founded on ostensible authority, that is, some intentional conduct or neglect on the
part of the alleged principal creating a belief in the minds of third persons that an agency
exists, and a reasonable reliance thereon by such third persons.’ (Lovetro v. Steers (1965)
234 Cal.App.2d 461, 474–475 [44 Cal. Rptr. 604]; see Civ. Code, §§ 2298, 2300.)
‘ “ ‘The principal must in some manner indicate that the agent is to act for him, and the
agent must act or agree to act on his behalf and subject to his control.’ . . .” [Citations.]
Thus, the “formation of an agency relationship is a bilateral matter. Words or conduct by
both principal and agent are necessary to create the relationship . . . .” ’ (van’t Rood[ v.
County of Santa Clara (2003)] 113 Cal.App.4th [549, 571,] italics added.)” (Flores v.
Evergreen at San Diego, LLC (2007) 148 Cal.App.4th 581, 587-588.)
Here, D.W.’s grandmother did nothing to suggest she had granted his mother the
authority to assign to Dameron direct payment of the MP benefits she had secured by
paying for D.W. to have this coverage. Quite the contrary, she collected those benefits

17
herself. D.W.’s mother’s signature on the form did not create an assignment of the MP
benefits.
Similarly, while in some cases courts have recognized equitable assignments, no
such assignment occurred here. “ ‘Evidence of an equitable assignment must be clear
and specific, [and] the assignor must not retain any control over the fund or any authority
to collect.’ (Iriart v. Southwest Fertilizer etc. Co. (1958) 51 Cal.2d 270, 275 [332 P.2d
285].) It has also been said that an equitable assignment ‘is implied from the conduct of
the parties rather than established by express words of formal assignment.’ (First Nat.
Bank v. Pomona Tile Mfg. Co. (1947) 82 Cal.App.2d 592, 606 [186 P.2d 693].) The
doctrine of equitable assignments is typically used to enforce an attempted assignment of
rights that is technically defective or to create a right of subrogation. (See, e.g., Kelly v.
Kelly (1938) 11 Cal.2d 356, 364 [79 P.2d 1059, 119 A.L.R. 71] [‘ “equity will uphold
assignments[] not valid at law” ’] . . . .)” (Recorded Picture Co. (productions) Ltd v.
Nelson Entm’t (1997) 53 Cal.App.4th 350, 368.) Nothing D.W. or his grandmother did
suggests they intended to assign direct payment of his MP benefits to Dameron.
Dameron cannot claim it possessed a valid assignment of direct payment of MP
benefits payable for treatment of D.W.’s injuries. Family code statutes cited by Dameron
do nothing to change our conclusion. Family Code section 4053 sets out the obligation of
parents to provide financial support to their children, and section 6701 identifies forms of
contracts minors cannot make. Neither of them indicates that a parent can assign away
benefits due to their child under an insurance policy taken out by a non-parent legal
guardian.

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 V

Dameron Cannot Rely on the COA’s to Collect Stephen L.’s UM Benefits, but It Might Be
Able to Collect R.D.’s MP Benefits
A. Additional Facts
1. Stephen L.’s Benefits and Payment for His Treatment
Stephen L. was in an automobile accident on August 29, 2010, and Dameron
provided him medical services that day. According to a letter CSAA sent to Stephen L.,
at the time of the accident, he had UM coverage with a cap of $30,000 and MP coverage
with a cap of $5,000.
In October 2010, CSAA sent Stephen L. a statement indicating there was a
balance owing of $8,051 for Dameron’s medical services following the accident. CSAA
indicated in the letter that Stephen L. had reached his MP policy limit of $5,000, and all
further bills would be forwarded to Stephen L. for handling. CSAA also sent Stephen
$5,000 in MP benefits, payable to Dameron.
In December 2010, Dameron sent CSAA a letter indicating Stephen L. had
assigned both his MP and UM benefits to Dameron. The header of the letter Dameron
sent CSAA indicated $3,051 was still due for services Dameron provided Stephen L.
In March 2011, CSAA paid Stephen L. an undisclosed amount of UM benefits to
settle any UM claim he might have with them as a result of the August 2010 automobile
accident. On May 4, 2011, Dameron sent CSAA a letter demanding AAA pay it the
lesser of $3,051 or what it had paid to Stephen L. in UM benefits. Dameron is not here
seeking to collect further amounts from Stephen L.’s MP benefits, but is only claiming
UM benefits.
2. R.D.’s Benefits and Payment for His Treatment
R.D. was in an accident on December 31, 2010, and Dameron treated him for
related injuries on January 4, 2011. According to a letter to him from CSAA, R.D. had
MP coverage with a $5,000 cap. According to Haupt, on January 26, 2011, Dameron

19
informed CSAA that R.D. had assigned all of his insurance benefits directly to Dameron.
It appears R.D. signed his COA.
On February 18, 2011, AAA sent R.D. a payment of $147 in MP benefits to cover
medical expenses incurred for services provided by Radiology Consultants on January 4,
2011. Also on February 18, 2011, AAA sent R.D. a payment of $4,853 as partial
payment for services received from Dameron on January 4, 2011. In a letter sent to R.D.
on the same day, AAA explained, “[w]e recently received the enclosed medical bill” for
services from Dameron. “However--as we previously advised you--your policy[]
provides coverage up to the policy limits. As you have reached your policy limits, we
cannot pay for this bill, so we are forwarding it on to you. The total bill was $6,110.23.
We paid $4,853.00. The unpaid amount is $1,257.23. [¶] We have sent this payment to
you directly. Please forward it to the hospital.”
On March 16, 2011, Haupt sent CSAA a letter demanding CSAA forward
Dameron a payment of $4,853.

B. The COAs Are Adhesion Contracts

“The term ‘adhesion contract’ refers to standardized contract forms offered to
consumers of goods and services on essentially a ‘take it or leave it’ basis without
affording the consumer a realistic opportunity to bargain and under such conditions that
the consumer cannot obtain the desired product or services except by acquiescing in the
form contract.” (Wheeler v. St. Joseph Hospital (1976) 63 Cal.App.3d 345, 356
(Wheeler).) “The distinctive feature of a contract of adhesion is that the weaker party has
no realistic choice as to its terms. [Citations.] [¶] A hospital’s standard printed
‘Conditions of Admission’ form possesses all the characteristics of a contract of
adhesion. [Citations.] As the court stated in Tunkl v. Regents of University of California
[(1963)] 60 Cal.2d [92], 102: ‘The would-be patient is in no position to reject the
proffered agreement, to bargain with the hospital, or in lieu of agreement to find another

20
hospital. The admission room of a hospital contains no bargaining table where, as in a
private business transaction, the parties can debate the terms of their contract. As a
result, we cannot but conclude that the instant agreement manifested the characteristics of
the so-called adhesion contract. . . .’ ” (Wheeler, 63 Cal.App.3d at pp. 356-357.)
Here, Haupt admits Dameron requires all patients it treats--or their family
members--to sign the COAs. Thus, the COAs are adhesion contracts.

C. Enforceability of Adhesion Contracts

With contracts of adhesion, “[e]nforceability depends upon whether the terms of
which the adherent was unaware are beyond the reasonable expectations of an ordinary
person or are oppressive or unconscionable. ‘ “In dealing with standardized contracts,
courts have to determine what the weaker contracting party could legitimately expect by
way of services according to the enterpriser’s ‘calling’ and to what extent the stronger
party disappointed reasonable expectations based on the typical life situation.” ’
[Citations.]” (Wheeler, 63 Cal.App.3d at pp. 356-357.)
Though it did not consider this precise issue, the analysis in Whiteside, supra,
101 Cal.App.4th 693 informs our analysis of the assignment here and the extent it is
enforceable.
In Whiteside, the Second District Court of Appeal considered whether a hospital
breached its admissions agreements with a patient and his individual health insurer when,
after the individual health insurer paid for the patient’s service according to its agreement
with the hospital, the hospital accepted an additional payment from another insurer with
whom the patient held a group health insurance policy. (See id., 101 Cal.App.4th at
pp. 698 & 700.) The court held that both the contracts and California law permitted the
hospital to collect the additional payment from the group insurer. (Id. at p. 698.) The
court reasoned, “[e]ven viewing the Conditions of Services agreement as a contract of
adhesion, and subjecting it to close scrutiny, we reach the same result. The assignment

21
clause, and the applicable contracts taken as a whole, do not defeat the reasonable
expectation of insureds who choose to use preferred providers. Such insureds benefit
substantially when using a preferred provider. Under the Blue Shield policy here, if an
insured uses a nonpreferred provider, he or she would be obligated to pay the difference
between the rate Blue Shield specifies it will pay for nonpreferred provider’s services and
the amount of the hospital’s customary charges; some nonpreferred providers’ services
are not covered at all; and use of nonpreferred providers substantially increases the
calendar year deductible. Whiteside’s notion that by having dual coverage he could
‘pocket’ the money from his group policy every time he had a claim that was covered by
his personal insurer is simply not a reasonable expectation. He either ignores or
misapprehends the provisions of his insurance policies regarding the payment of claims.
The basic obligation of the medical insurers is to pay the medical providers directly for
their services and to insulate the insured from any monetary obligation for such medical
care. Whiteside is entitled to no more than that under the terms of his coverage.” (Id. at
p. 705, italics added.)

D. The COA Did Not Create an Assignment of UM Benefits but May Have
Created an Assignment of MP Benefits

In contrast to the health insurance benefits at issue in Whiteside, persons with UM
policies expect benefits to be paid directly to them to compensate them for their bodily
injuries. It simply isn’t within the reasonable expectation of a patient to expect it will be
made to assign its UM benefits under an automobile insurance policy. This is
particularly true when, as here, the automobile insurer offers UM coverage to “pay
damages, other than punitive or exemplary damages, for bodily injury,” as opposed to the
distinct category of MP coverage to pay “reasonable expenses incurred within one year
from the date of [the] accident by an insured person who sustains bodily injury as a result
of an accident covered under this Part for necessary medical, surgical, X-ray, and dental

22
treatment . . . .” A patient, like Stephen L., who has secured both UM and MP benefits,
would not expect a hospital to rely on benefits he is owed in damages as a result of his
bodily injury when there is a separate category of benefits he secured to pay for medical
expenses.
However, the same clear conclusion cannot be said with respect to R.D.’s MP
benefits. Given this record, it is possible a trier of fact might conclude it was within his
reasonable expectations that Dameron would seek to collect direct payments from CSAA
out of R.D.’s MP benefits. First, the benefits exist to cover medical expenses, not
damages for bodily injuries suffered. Second, the CSAA policy indicates that MP
benefits may be paid to “person(s) providing the necessary services, . . . as we deem
appropriate.” Third, the record suggest that, at least with respect to one other patient,
CSAA did send some payments from MP benefits directly to a medical care provider
instead of the patient. Though the fact that the MP coverage is imbedded in an
automobile insurance policy suggests that perhaps, a patient would not expect a hospital
to collect payments from MP benefits directly from his MP provider, there remains a
factual question as to whether, under these facts, it was within the reasonable
expectations of R.D. that Dameron could also collect directly from CSAA payment for
his medical treatment out of his MP benefits based on an agreement he signed when he
sought treatment from Dameron.
CSAA’s brief contains various arguments as to why Dameron might, ultimately,
not be able to succeed in its claim that CSAA improperly refused to acknowledge and
make a payment to Dameron under R.D.’s assignment of MP benefits, but none
persuades us that CSAA has demonstrated Dameron cannot show an assignment was
properly made and CSAA improperly ignored it.
For example, as reflected in its summary of issues regarding R.D., CSAA takes the
position that all R.D.’s MP benefits were exhausted before Dameron informed CSAA that
there was an assignment. But (1) Haupt declared that Dameron advised CSAA of its

23
claims on January 26, 2011; (2) in a March 16, 2011, letter to CSAA that CSAA included
with its exhibits to the trial court, Haupt indicates he sent a notice of the assignment to
CSAA along with bills January 26, 2011; and (3) CSAA did not remit payments to R.D.
until February 18, 2011.
Under these facts, CSAA cannot with certainty negate the fact that it is possible
CSAA received a notice of assignment before it made payments that exhausted all of
R.D.’s MP benefits. Similarly, CSAA argues that because none of the signatures to the
COAs have been authenticated, they are inadmissible. But, Haupt declares that the
records, which include R.D.’s COA, are true and correct copies of records from patient
files, and CSAA points to no evidence that suggests Dameron will be unable to
authenticate the signatures to the COAs should the case go to trial.
As a second example, contrary to CSAA’s suggestion, in sustaining CSAA’s
objections to Dameron’s evidence below, the trial court does not appear to sustain
objections as to the foundation of the documents themselves. Rather, the court appears to
(1) sustain objections about how Haupt interprets the import of the COAs; and (2) agree
with CSAA regarding arguments made about the authority of family members, instead of
the patients, to sign COAs making the assignments. Thus, CSAA’s position that
Dameron, on this record, will be unable to authenticate the COAs is misplaced.

VI

Insurance Code Section 520 and Fluor Corp. v. Superior Court (2015) 61 Cal.4th 1175
Do Not Change Our Conclusion

Dameron argues that Insurance Code section 520; Fluor Corp. v. Superior Court
(2015) 61 Cal.4th 1175 (Fluor); and, to a lesser extent, Henkel Corp. v. Hartford
Accident and Indemnity Company (2003) 29 Cal.4th 934 (Henkel), require CSAA to
accept the purported assignment of benefits contained in all the COAs the patients signed.
We disagree.

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 Insurance Code section 520 states that, “[a]n agreement not to transfer the claim of
the insured against the insurer after a loss has happened, is void if made before the loss
except as” not relevant here.
In Henkel, our Supreme Court considered whether a corporate entity that had
acquired the product line of another corporate entity had “acquired the benefits of the
insurance policies issued by” an insurer to the original owner of the product line “to
cover lawsuits based on injuries sustained during the policy period.” The Court reached
its decision without considering Insurance Code section 520, and concluded “that under
the circumstances of this case any assignment of benefits does require the consent of the
insurers.” (Henkel, supra, 29 Cal.4th at p. 938; see Fluor, supra, 61 Cal.4th at p. 1180
[noting Insurance Code section 520 was not cited in Henkel].) As part of its analysis, the
Court observed that, “each of the [insurance] policies [at issue] contained clauses
providing that there could be no ‘[a]ssignment of interest under this policy’ without the
insurer’s consent endorsed on the policy,” and that, “[s]uch clauses are generally valid
and enforceable.” (Henkel, supra, 29 Cal.4th at p. 943.)
In Fluor, our Supreme Court revisited its Henkel “determination . . . regarding the
enforceability of ‘consent-to-assignment’ clauses in third party liability insurance
policies” in light of Insurance Code section 520 and concluded it “dictates a result
different from that reached in Henkel.” (Fluor, supra, 61 Cal.4th at p. 1180.)
Accordingly, the Court held that a consent-to-assignment clause that read, “[a]ssignment
of interest under this policy shall not bind the Company until its consent is endorsed
hereon,” could not operate to allow a third party liability insurer to refuse “to honor an
insured’s assignment of the right to invoke defense or indemnification coverage
regarding” a loss that occurs within the time limits of the policy. (Id. at pp. 1183 &
1224.)
The issues raised here are distinguishable from the issues considered by Henkel,
Fluor, and Insurance Code section 520. Here, we are not considering a scenario in which

25
CSAA relies upon an anti-assignment provision in its policies with its insureds to refuse
to honor otherwise lawful assignments. We are dealing with an insurer that, with respect
to O.N. and P.F., has refused to accept assignments that are, by their very nature, contrary
to public policy and unlawful. With respect to Stephen L., we are dealing with an
assignment that is not enforceable due to the adhesive nature of the COAs and the
reasonable expectations of a patient signing a COA. With respect to D.W., we are
dealing with a situation where the owner of the rights to insurance benefits never
approved the assignment. “It is axiomatic that cases are not authority for propositions not
considered.” (People v. Ault (2004) 33 Cal.4th 1250, 1275, fn. 10.)

VII

Dameron Forfeited Any Possible ERISA Arguments

In its reply brief, Dameron indicates that O.N.’s health insurer is Dameron’s self-
funded plan under the Employee Retirement Income Security Act of 1974 (ERISA;
29 U.S.C. 1001 et seq.), without referring to the significance of or citing specific
provisions of ERISA. At oral argument, Dameron argued that ERISA requirements allow
it to collect O.N.’s MP benefits here. “ ‘We do not consider arguments that are raised for
the first time at oral argument.’ (Haight Ashbury Free Clinics, Inc. v. Happening House
Ventures (2010) 184 Cal.App.4th 1539, 1554, fn. 9 [ ].)” (Rosen v. St. Joseph Hospital of
Orange County (2011) 193 Cal.App.4th 453, 465, fn. 4.) Additionally, to the extent
Dameron maintains stating in its reply brief that O.N.’s insurer was an ERISA plan raised
an ERISA issue, Dameron forfeited any argument regarding ERISA by failing to include
it in the opening brief. (Garcia v. McCutchen (1997) 16 Cal.4th 469, 482, fn. 10
[appellant may not raise new argument in reply brief].)

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 DISPOSITION
We remand to the trial court to allow the case to proceed on the second cause of
action consistent with this opinion as to R.D. The judgment is otherwise affirmed.

HULL, J.

We concur:

RAYE, P. J.

MAURO, J.

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