Docket No. S274927
County of Santa Clara v. Superior Court
IN THE SUPREME COURT OF
CALIFORNIA
COUNTY OF SANTA CLARA,
Petitioner,
v.
THE SUPERIOR COURT OF SANTA CLARA,
Respondent;
DOCTORS MEDICAL CENTER OF MODESTO, INC., et al.,
Real Parties in Interest.
S274927
Sixth Appellate District
H048486
Santa Clara County Superior Court
19CV349757
July 10, 2023
Chief Justice Guerrero authored the opinion of the Court, in
which Justices Corrigan, Liu, Kruger, Groban, Jenkins, and
Evans concurred.
COUNTY OF SANTA CLARA v. SUPERIOR COURT
S274927
Opinion of the Court by Guerrero, C. J.
Hospitals and other medical providers are required by law
to provide emergency medical services without regard to the
patient’s insurance status or ability to pay. (42 U.S.C.
§ 1395dd(b) & (h); Health & Saf. Code, § 1317, subds. (a) & (b).
If the patient is enrolled in a health care service plan, by statute
the plan must reimburse the medical provider for providing such
emergency care under the Knox-Keene Health Care Service
Plan Act of 1975. (Health & Saf. Code, § 1340 et seq.;
hereinafter Knox-Keene Act; id., § 1371.4, subd. (b).) If the plan
does not have a contract with the medical provider addressing
the reimbursement rate, the plan must pay the provider the
“reasonable and customary value” of the emergency care
provided. (Cal. Code Regs., tit. 28, § 1300.71, subd. (a)(3)(B).) If
the plan fails to pay the reasonable and customary value of such
services, the medical provider may sue the plan directly for
reimbursement under a quantum meruit theory. (Prospect
Medical Group, Inc. v. Northridge Emergency Medical Group
(2009) 45 Cal.4th 497, 506 (Prospect Medical Group); Bell v. Blue
Cross of California (2005) 131 Cal.App.4th 211, 216–217 (Bell).
We granted review to decide whether a similar claim for
reimbursement of emergency medical services may be
maintained against a health care service plan when the plan is
operated by a public entity, or whether the Government Claims
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Opinion of the Court by Guerrero, C. J.
Act (Gov. Code, § 810 et seq.) immunizes a public entity from
such a claim.
In this case, Doctors Medical Center of Modesto, Inc., and
Doctors Hospital of Manteca, Inc., (collectively, the Hospitals
provided emergency medical services to three individuals
enrolled in a health care service plan operated by the County of
Santa Clara (the County). The Hospitals submitted
reimbursement claims to the County, but the County paid only
a portion of the claimed amounts. The Hospitals sued the
County for the remaining amounts based on the Knox-Keene
Act’s reimbursement provision. The trial court found that the
Hospitals could state a quantum meruit claim against the
County. On petition for writ of mandate, the Court of Appeal
disagreed, holding that the County is immune from suit under
the Government Claims Act and that no exception to immunity
applies.
We conclude that the Government Claims Act does not bar
the Hospitals’ action against the County. The immunity
provisions of the Government Claims Act are directed toward
tort claims; they do not foreclose liability based on contract or
the right to obtain relief other than money or damages. (Gov.
Code, § 814.) The Hospitals have not alleged a conventional
common law tort claim seeking money damages. Instead, they
have alleged an implied-in-law contract claim based on the
reimbursement provision of the Knox-Keene Act, and seek only
to compel the County to comply with its statutory duty.
Accordingly, the County is not immune from suit under the
circumstances and the Hospitals’ claim may proceed.
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Opinion of the Court by Guerrero, C. J.
I. FACTUAL AND PROCEDURAL BACKGROUND
The County operates a health care service plan called
Valley Health Plan, which is licensed and regulated by the
Department of Managed Health Care (DMHC) under the Knox-
Keene Act. (Health & Saf. Code, §§ 1341, 1345, subds. (f)(1) &
(j), 1349.) The Knox-Keene Act applies to private and public
entities that operate health care service plans. (Id., § 1399.5.
The Hospitals are licensed acute care hospitals in the Central
Valley. The Hospitals do not have a contract with the County
governing the rates payable for medical services provided to
Valley Health Plan enrollees.
As previously explained, state and federal laws require
hospitals and other medical providers to provide emergency
medical services regardless of the patient’s insurance status or
ability to pay. (42 U.S.C. § 1395dd(b) & (h); Health & Saf. Code,
§ 1317, subds. (a) & (b).) If the patient is enrolled in a health
care service plan, the Knox-Keene Act requires the plan to
reimburse the medical provider for providing such emergency
care. (Health & Saf. Code, § 1371.4, subd. (b).) If no contract
exists between the plan and medical provider, the plan must pay
the “reasonable and customary value” of the emergency care
provided. (Cal. Code Regs., tit. 28, § 1300.71, subd. (a)(3)(B).
In 2016 and 2017, the Hospitals provided emergency
medical services to three patients enrolled in Valley Health
Plan. The Hospitals submitted to the County claims for
reimbursement totaling approximately $144,000 for the services
provided. The County paid the Hospitals approximately
$28,500. The Hospitals challenged the reimbursement decisions
by submitting written administrative appeals, which the
County denied.
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Opinion of the Court by Guerrero, C. J.
The Hospitals then sued the County, alleging they are
entitled to the entire amount claimed for the emergency services
provided to the three patients enrolled in Valley Health Plan.
The Hospitals’ operative complaint alleged a single cause of
action for breach of implied contract. In that complaint, the
Hospitals alleged that the Knox-Keene Act imposes a
mandatory duty on health care service plans to reimburse
noncontracted providers for emergency medical services and
that, pursuant to the Act, the Hospitals are entitled to
reimbursement at a reasonable and customary rate for the
services provided to the patients enrolled in Valley Health Plan.
The Hospitals further alleged that the Knox-Keene Act and the
DMHC’s implementing regulations gave rise to implied-in-law
agreements between the Hospitals and the County, obligating
the County to pay for the emergency care provided by the
Hospitals at a reasonable and customary rate. The Hospitals
maintained the reasonable and customary rate for the services
provided to Valley Health Plan’s enrollees was the $144,000
claimed by the Hospitals, rather than the $28,500 reimbursed
by the County. They also alleged that the County’s conduct,
including its partial reimbursement for care provided by the
Hospitals, gave rise to implied-in-fact agreements between the
Hospitals and the County.
The County demurred, asserting that the Hospitals’
implied contract claim is based on a quantum meruit theory that
cannot be maintained against the County as a public entity. The
trial court overruled the demurrer. It found that the Hospitals
had stated facts sufficient to constitute a cause of action,
“whether fashioned as a cause of action for breach of an implied
in fact contract or one for quantum meruit.” The court resolved
that “the public policy to promote the delivery and the quality of
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Opinion of the Court by Guerrero, C. J.
health and medical care to the people of the State of California
outweighs the policy to limit common law, or implied contract
claims against public entities.” It further determined that in
entering the regulated health care plan market, the County
“cannot expect to rely on a public policy regarding contracts as
to public entities so that it can be exempted from those
regulations.”
The County sought review through a petition for writ of
mandate, and the Court of Appeal granted relief. (County of
Santa Clara v. Superior Court (2022) 77 Cal.App.5th 1018
(Santa Clara).) The Court of Appeal concluded that the
Government Claims Act immunized the County from the
Hospitals’ implied-in-law contract claim. (Santa Clara, at
pp. 1024–1025.) The court first construed the Hospitals’ claim
as seeking relief under a quantum meruit theory. (Ibid.) In the
court’s view, this theory was foreclosed by the immunity
conferred by Government Code section 815, which provides
generally that a public entity is not liable for an injury except as
otherwise provided by statute. (Santa Clara, at pp. 1028–1029.
The Court of Appeal held that Government Code section 815.6’s
mandatory duty exception to the general rule of immunity did
not apply because the County retains discretion in determining
the reasonable and customary value of the Hospitals’ services to
Valley Health Plan enrollees. (Santa Clara, at pp. 1029–1032.
Having also concluded that the Hospitals could not state a claim
for breach of an implied-in-fact contract (id. at pp. 1033–1034),
the appellate court issued a peremptory writ directing the trial
court to vacate its order overruling the County’s demurrer and
to enter a new order sustaining the demurrer without leave to
amend (id. at pp. 1035–1036).
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Opinion of the Court by Guerrero, C. J.
The Court of Appeal acknowledged that under its
interpretation of the relevant statutes, “a provider has greater
remedies against a private health care service plan than it does
against a public entity health care service plan.” (Santa Clara,
supra, 77 Cal.App.5th at p. 1032.) The court viewed that result
as being “driven by the Legislature broadly immunizing public
entities from common law claims and electing not to abrogate
that immunity in the context presented here.” (Id. at p. 1032,
fn. omitted.
We granted the Hospitals’ petition for review.
II. DISCUSSION
A. Standard of Review
When the Court of Appeal grants a writ petition
challenging the trial court’s order overruling a demurrer and
directs it to sustain the demurrer, “the ordinary standards of
demurrer review still apply.” (City of Stockton v. Superior Court
(2007) 42 Cal.4th 730, 747 (City of Stockton).) “We give the
complaint a reasonable interpretation, reading it as a whole and
its parts in their context. [Citation.] Further, we treat the
demurrer as admitting all material facts properly pleaded, but
do not assume the truth of contentions, deductions or
conclusions of law. [Citations.] When a demurrer is sustained,
we determine whether the complaint states facts sufficient to
constitute a cause of action. [Citation.] And when it is sustained
without leave to amend, we decide whether there is a reasonable
possibility that the defect can be cured by amendment: if it can
be, the trial court has abused its discretion and we reverse.”
(City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865
(City of Dinuba); see also Aubry v. Tri-City Hospital Dist. (1992
2 Cal.4th 962, 966–967.
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Opinion of the Court by Guerrero, C. J.
B. The Knox-Keene Act and Implementing
Regulations
“ ‘The Knox-Keene Act is a comprehensive system of
licensing and regulation under the jurisdiction of the
Department of Managed Health Care.’ ” (Prospect Medical
Group, supra, 45 Cal.4th at p. 504.) The Knox-Keene Act
requires every health care service plan to be licensed by the
DMHC. (Health & Saf. Code, § 1349.) By its terms, the Knox-
Keene Act applies to “any private or public entity” operating a
licensed health care service plan, subject to narrow exceptions
not relevant here. (Id., § 1399.5; see id., § 1345, subds. (f)(1),
(j).) The County-operated Valley Health Plan is a licensed
health care service plan.
The purpose of the Knox-Keene Act is “to promote the
delivery and the quality of health and medical care to the people
of the State of California who enroll in, or subscribe for the
services rendered by, a health care service plan or specialized
health care service plan.” (Health & Saf. Code, § 1342.) “The
Legislature sought to accomplish this purpose by, among other
things, (1) ‘transferring the financial risk of health care from
patients to providers’ in order to ‘[h]elp . . . ensure the best
possible health care for the public at the lowest possible cost,’
(2) imposing ‘proper regulatory procedures’ in order to
‘[e]nsur[e] the financial stability’ of the system, and
(3) establishing a system that ensures health care service plan
‘subscribers and enrollees receive available and accessible
health and medical services rendered in a manner providing
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continuity of care.’ ”1 (Centinela Freeman Emergency Medical
Associates v. Health Net of California, Inc. (2016) 1 Cal.5th 994,
1005 (Centinela), quoting Gov. Code, § 1342, subds. (d), (f), &
(g).
In 1994, the Legislature amended the Knox-Keene Act to
require health care service plans to “reimburse providers for
emergency services and care provided to its enrollees, until the
care results in stabilization of the enrollee.” (Health & Saf.
Code, § 1371.4, subd. (b), added by Stats. 1994, ch. 614, § 4.
According to one legislative analysis, the purpose of Health and
Safety Code section 1371.4 is to eliminate “incentives for
carriers to deny care to patients and reduce payments to
physicians.” (Sen. Rules Com., Off. of Sen. Floor Analyses,
Analysis of Sen. Bill No. 1832 (1993–1994 Reg. Sess.) as
amended May 4, 1994, p. 3.) As the County acknowledges, the
Knox-Keene Act imposes a duty on health care service plans to
reimburse medical providers for the reasonable and customary
value of the emergency service and care provided.
The Knox-Keene Act assigns a significant implementation
role to the DMHC. “The [DMHC] is charged with the
administration and enforcement of the laws relating to health
care service plans. [Citation.] To carry out its duties, the
DMHC is authorized to promulgate regulations.” (Children’s
1
In furtherance of its intent “to ensure that the citizens of
this state receive high-quality health care coverage in the most
efficient and cost-effective manner possible,” in enacting the
Knox-Keene Act the Legislature also found and declared “that it
is in the public interest to promote various types of contracts
between public or private payers of health care coverage, and
institutional or professional providers of health care services.”
(Health & Saf. Code, § 1342.6.
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Opinion of the Court by Guerrero, C. J.
Hospital Central California v. Blue Cross of California (2014
226 Cal.App.4th 1260, 1271 (Children’s Hospital).
Following the Legislature’s enactment of Health and
Safety Code section 1371.4, the DMHC promulgated
section 1300.71 of title 28 of the California Code of Regulations
(hereinafter Regulation 1300.71). Regulation 1300.71 sets forth
the
reimbursement
standards
for
contracting
and
noncontracting emergency medical providers. “The amount of
reimbursement depends upon whether the hospital and plan
already have a contract in place . . . .” (Long Beach Memorial
Medical Center v. Kaiser Foundation Health Plan, Inc. (2021
71 Cal.App.5th 323, 329 (Long Beach Memorial).) If the hospital
and plan already have a contract, the plan must pay the “agreed
upon” contractual rate. (Regulation 1300.71, subd. (a)(3)(A); see
also Long Beach Memorial, at p. 329.) If the hospital and plan
have not entered into a contract, the plan must pay the
“reasonable and customary value for the [emergency] health
care services rendered.” (Regulation 1300.71, subd. (a)(3)(B);
see also Long Beach Memorial, at p. 329.
Regulation 1300.71, subdivision (a)(3)(B) specifies that the
“reasonable and customary value for the health care services”
provided by a noncontracted emergency medical provider must
be “based upon statistically credible information that is updated
at least annually and takes into consideration: (i) the provider’s
training, qualifications, and length of time in practice; (ii) the
nature of the services provided; (iii) the fees usually charged by
the provider; (iv) prevailing provider rates charged in the
general geographic area in which the services were rendered;
(v) other aspects of the economics of the medical provider’s
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Opinion of the Court by Guerrero, C. J.
practice that are relevant; and (vi) any unusual circumstances
in the case.”2
These factors provide a framework for reimbursement, but
do not necessarily resolve every dispute regarding the proper
amount of payment. “In the final statement of reasons for
[Regulation 1300.71], the DMHC explained that the intent was
to establish a methodology for determining the reasonable value
of health care services by noncontracted providers but that the
criteria specified do not dictate a specific payment rate. Rather,
the payor is required to calculate the appropriate
reimbursement based on statistically credible information that
takes the [specified] factors into consideration. If a payor fulfills
its claims payment obligation using these criteria, the DMHC
will consider the payor compliant with Health and Safety Code
sections 1371 and 1371.35, i.e., the reimbursement of the claim
will be deemed timely. ‘However, the definition is not a
substitute for traditional forums for contract dispute resolution.
If a provider disputes the payor’s calculation of the fair and
reasonable value of the health care services he has rendered, the
2
“In defining ‘reasonable and customary value,’ the DMHC
incorporated language from Gould v. Workers’ Comp. Appeals
Bd. (1992) 4 Cal.App.4th 1059.” (Children’s Hospital, supra,
226 Cal.App.4th at p. 1272.) In Gould, the Court of Appeal held
that in deciding whether a medical provider’s fees for treating
employment-related injuries was reasonable, the Workers’
Compensation Appeals Board “may consider evidence regarding
the medical provider’s training, qualifications, and length of
time in practice; the nature of the services provided; the fees
usually charged by the medical provider; the fees usually
charged in the general geographical area in which the services
were rendered; other aspects of the economics of the medical
provider’s practice that are relevant; and any unusual
circumstances in the case.” (Gould, at p. 1071, fn. omitted.
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Opinion of the Court by Guerrero, C. J.
provider is free to seek resolution of that dispute in a court of
law or through any other available civil remedy.’ ” (Children’s
Hospital, supra, 226 Cal.App.4th at p. 1273.
In this respect, Children’s Hospital further explained that
in adopting Regulation 1300.71, subdivision (a)(3)(B), “the
DMHC intended that reasonable value be based on the concept
of quantum meruit and that value disputes be resolved by the
courts. In fact, the DMHC has acknowledged that, unlike the
courts, it ‘ “lacks the authority to set specific reimbursement
rates under theories of quantum meruit and the jurisdiction to
enforce a reimbursement determination on both the provider
and the health plan.” ’ ” (Children’s Hospital, supra,
226 Cal.App.4th at p. 1273.) In a letter brief filed in Bell, the
DMHC elaborated on the limits of its authority.3 It explained
that although it may direct a health care service plan to modify
its reimbursement methodology if it finds a demonstrable and
unjust payment pattern (Health & Saf. Code, § 1371.37;
Regulation 1300.71), “this authority is not equivalent to
rendering a judicial determination between two parties
disputing over what constitutes the reasonable and customary
value of a specific physician’s services. [¶] . . . [¶] . . . [T]he
Knox-Keene Act does not authorize the [DMHC] to set specific
reimbursement levels or to exercise jurisdiction over providers
by adjudicating individual payment disputes that arise between
providers and health plans. Should the [DMHC] attempt to
adjudicate such claims, its decisions would not be binding upon
3
Prior to oral argument, we granted Santa Clara’s request
to take judicial notice of the DMHC’s amicus letter brief filed in
the Court of Appeal in Bell, supra, 131 Cal.App.4th 211.
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Opinion of the Court by Guerrero, C. J.
the individual providers or upon health plans that contest the
[DMHC]’s authority to set reimbursement rates.”
Thus, as this court and others have previously observed,
the Knox-Keene Act’s statutory and regulatory scheme
contemplates that private actions under a quantum meruit
theory may be used to recoup appropriate reimbursement for
services rendered.4 (E.g., Prospect Medical Group, supra,
45 Cal.4th at pp. 505–507; Long Beach Memorial, supra,
71 Cal.App.5th at p. 329; Bell, supra, 131 Cal.App.4th at
pp. 216–217; California Emergency Physicians Medical Group v.
PacifiCare of California (2003) 111 Cal.App.4th 1127, 1134
(California Emergency Physicians); Health & Saf. Code,
§ 1371.37, subd. (f) [specifying that the DMHC’s imposition of
sanctions for unfair payment patterns “shall not preclude,
suspend, affect, or impact any other duty, right, responsibility,
or obligation under a statute or under a contract between a
health care service plan and a provider”].) With this statutory
4
Although we assume for purposes of this case that the
Knox-Keene Act does not create a private right of action for
violations of its provisions, we reaffirm that the absence of a
private right of action does not foreclose the availability of other
remedies, such as an action for quantum meruit, brought by
medical providers. (See Lu v. Hawaiian Gardens Casino, Inc.
(2010) 50 Cal.4th 592, 603 [determination that statute “does not
provide a private cause of action does not necessarily foreclose
the availability of other remedies”]; Coast Plaza Doctors
Hospital v. UHP Healthcare (2002) 105 Cal.App.4th 693, 706
[concluding that the DMHC does not have exclusive jurisdiction
to enforce the Knox-Keene Act, and that medical providers may
bring common law and other statutory causes of action]; see id.
at p. 707 [“The Knox-Keene Act itself contemplates that a
provider may have a cause of action under a statutory or
common law theory”].
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Opinion of the Court by Guerrero, C. J.
and regulatory scheme in mind, we next consider the scope of
governmental immunity under the Government Claims Act and
whether it bars the Hospitals’ implied-in-law contract claim
based on section 1371.4 of the Knox-Keene Act.
C. The Government Claims Act Does Not Bar the
Hospitals’ Implied-In-Law Contract Cause of
Action Based on the Knox-Keene Act
Government Code section 815 sets forth the general rule
of immunity for public entities under the Government Claims
Act. Government Code section 815 provides that “[e]xcept as
otherwise provided by statute” “[a] public entity is not liable for
an injury, whether such injury arises out of an act or omission
of the public entity or any other person.” However, another
provision within the Government Claims Act, Government Code
section 814, makes clear that “[n]othing in this part affects
liability based on contract or the right to obtain relief other than
money or damages against a public entity or public employee.”
The legislative committee comments to Government Code
section 815 explain that “[t]his section abolishes all common law
or judicially declared forms of liability for public entities, except
for such liability as may be required by the state or federal
constitution, e.g., inverse condemnation. In the absence of a
constitutional requirement, public entities may be held liable
only if a statute (not including a charter provision, ordinance or
regulation) is found declaring them to be liable.” (Legis. Com.
com., 32 pt. 1, West’s Ann. Gov. Code (2012 ed.) foll. § 815,
pp. 215–216.) The comments also state: “Because of the
limitations contained in Section 814, which declares that this
part does not affect liability arising out of contract or the right
to obtain specific relief against public entities and employees,
the practical effect of this section is to eliminate any common
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Opinion of the Court by Guerrero, C. J.
law governmental liability for damages arising out of torts. The
use of the word ‘tort’ has been avoided, however, to prevent the
imposition of liability by the courts by reclassifying the act
causing the injury.” (Id. at p. 216.) Likewise, the legislative
committee comments to Government Code section 814 declare
that “[t]he various provisions of this part determine only
whether a public entity or public employee is liable for money or
damages. These provisions do not create any right to any other
type of relief, nor do they have any effect on any other type of
relief that may be available against a public entity or public
employee.” (Legis. Com. com., 32 pt. 1, West’s Ann. Gov. Code
(2012 ed.) foll. § 814, p. 208.
The County argues that the immunity conferred under
Government Code section 815 extends to the Hospitals’
quantum meruit claim. The County takes the position that the
Government Claims Act’s immunity provisions apply broadly to
all “non-contractual” claims for money or damages, and it
maintains that the Hospitals’ quantum meruit claim does not
sound in contract. The Hospitals counter that the Government
Claims Act applies only to torts, and thus it does not bar their
cause of action involving what they characterize as an implied-
in-law contract. They also maintain that their claim for
reimbursement, as mandated by statute, is not a claim for
“money or damages” under Government Code section 814.5
5
The County urges us to not consider various arguments
made by the Hospitals regarding the limited nature of the
Government Claims Act because they did not raise these specific
contentions below. The County cites California Rules of Court,
rule 8.500(c)(1), which provides that “[a]s a policy matter, on
petition for review the Supreme Court normally will not
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Opinion of the Court by Guerrero, C. J.
The impetus for the Government Claims Act and its
general aims are well understood. In Quigley v. Garden Valley
Fire Protection Dist. (2019) 7 Cal.5th 798, 803 (Quigley), we
recounted that “[f]or many decades before the Act, tort liability
for public entity defendants was barred by a common law rule of
governmental immunity. Over time, however, the common law
rule became ‘riddled with exceptions,’ both legislative and judge
made, and in 1961 this court abolished the rule altogether.
(Muskopf v. Corning Hospital Dist. (1961) 55 Cal.2d 211, 216
(Muskopf).) In response to Muskopf, the Legislature
temporarily suspended the decision’s effect [citation] and
directed the California Law Revision Commission to complete a
study of the issue it had begun some years earlier [citations].
The end product of the commission’s study was a series of
recommendations [citation], on which the Legislature relied in
enacting the [Government Claims Act].” (Quigley, at p. 803,
fn. omitted.) “The basic architecture of the [Government Claims
Act] is encapsulated in Government Code section 815.
consider an issue that the petitioner failed to timely raise in the
Court of Appeal.” However, the Hospitals included these
arguments in their petition for review, and we “may decide any
issues that are raised or fairly included in the petition or
answer.” (Id., rule 8.516(b)(1).) Moreover, “[i]n a number of
cases, this court has decided issues raised for the first time
before us, where those issues were pure questions of law, not
turning upon disputed facts, and were pertinent to a proper
disposition of the cause or involved matters of particular public
importance.” (People v. Superior Court (Ghilotti) (2002
27 Cal.4th 888, 901, fn. 5; see also Today’s Fresh Start, Inc. v.
Los Angeles County Office of Education (2013) 57 Cal.4th 197,
215 [“we have discretion to consider on appeal purely legal
issues raised in a petition for review or answer”].) Assuming
that the Hospitals did not specifically raise these arguments in
the courts below, we exercise our discretion to address them.
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Opinion of the Court by Guerrero, C. J.
Subdivision (a) of that section makes clear that under the [Act],
there is no such thing as common law tort liability for public
entities; a public entity is not liable for an injury ‘[e]xcept as
otherwise provided by statute.’ ” (Ibid.
This history has informed our repeated characterization of
the Government Claims Act as concerned with common law
torts, as opposed to different claims.6 The Government Claims
Act, we have said, was designed to “govern[] . . . liabilities and
immunities of public entities and public employees for torts.”
(Quigley, supra, 7 Cal.5th at p. 803, italics added; see also Kizer
v. County of San Mateo (1991) 53 Cal.3d 139, 145 (Kizer
[explaining that the Government Claims Act “is a
comprehensive statutory scheme that sets forth the liabilities
and immunities of public entities and public employees for
torts”], overruled on another ground in Los Angeles Unified
School District v. Superior Court (2023) 14 Cal.5th 758.
In Kizer, supra, 53 Cal.3d 139, we rejected an expansive
interpretation of the Tort Claims Act, as the statute was then
called, similar to the one advanced by the County in this case.
The defendant in Kizer, also a county, was licensed to operate a
long-term health care facility but failed to comply with the
statutory scheme regulating such facilities. (Kizer, at pp. 141–
6
Indeed, when first enacted, and for decades afterward,
“the statute was known as the Tort Claims Act.” (Quigley,
supra, 7 Cal.5th at p. 803, fn. 1.) In 2012, the Legislature
renamed the statute the Government Claims Act (Stats. 2012,
ch. 759), a title that accounts for the fact that its claims
presentation requirements, included in part 3 of the Act, sweep
more broadly than do part 2’s provisions regarding public entity
liability and immunity. (Quigley, at p. 803, fn. 1; see City of
Stockton, supra, 42 Cal.4th at pp. 740–742.
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144.) The county asserted that the Act shielded it from statutory
penalties sought by the state. (Kizer, at p. 144.) We held
otherwise, explaining: “The County argues that the Legislature
intended to cover a wider range of liabilities than torts. The
County points to the comment to Government Code section 815,
emphasizing this passage: ‘the use of the word “tort” has been
avoided . . . to prevent the imposition of liability by the courts by
reclassifying the act causing the injury.’ The comment,
however, also states that ‘the practical effect of this section is to
eliminate any common law governmental liability for damages
arising out of torts.’ [Citation.] Moreover, the introductory
comment to the Tort Claims Act as a whole states that ‘a statute
should be enacted providing that public entities are not liable
for torts unless they are declared to be liable by an enactment.’
[Citation.] Clearly, the emphasis of the Tort Claims Act is on
torts.” (Kizer, at p. 145, fn. 4.) Read against the background of
general tort law, we concluded that the Act was intended to limit
the state’s “exposure to liability for actual compensatory
damages in tort cases.” (Kizer, at p. 146.
More recently, in City of Dinuba, supra, 41 Cal.4th 859,
we rejected the County of Tulare’s claim that the Government
Claims Act immunized it from an action to recover misallocated
tax revenue, which the county was obligated by statute to
allocate and distribute. (City of Dinuba, at pp. 865–868.) We
held that the Government Claims Act did not foreclose the
plaintiffs’ claim for reimbursement, both because the injury
alleged did not come within the Act’s definition of “ ‘injury’ ”
(City of Dinuba, at p. 867, citing Gov. Code, § 810.8), and
because the plaintiffs were not seeking money damages (City of
Dinuba, at p. 867). Regarding the latter ground, we explained:
“[T]he immunity provisions of the Act are only concerned with
17
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
shielding public entities from having to pay money damages for
torts. [Citation.] Section 814 explicitly provides that liability
based on contract or the right to obtain relief other than money
damages is unaffected by the Act. Plaintiffs do not seek
damages; they seek only to compel defendants to perform their
express statutory duty. While compliance with the duty may
result in the payment of money, that is distinct from seeking
damages.” (Ibid.) Having also determined that “mandamus
provides an appropriate remedy for defendants’ failure to
comply with their statutory duty” (id. at p. 868), we declined to
resolve “whether plaintiffs could have maintained claims for
quasi-contract or constructive trust had mandamus not been
available” (id. at p. 870).
The Courts of Appeal have likewise recognized that the
Government Claims Act’s immunity and liability provisions are
aimed at common law tort claims for money damages. (See, e.g.,
Schooler v. State of California (2000) 85 Cal.App.4th 1004, 1013
[“Courts have determined that under section 814, Government
Code immunities extend only to tort actions that seek money
damages”]; Cavey v. Tualla (2021) 69 Cal.App.5th 310, 326
[“The Government Claims Act was enacted in 1963 to provide a
comprehensive statutory scheme governing the liabilities and
immunities of public entities and public employees for torts”];
Nealy v. County of Orange (2020) 54 Cal.App.5th 594, 601
[same].) In various circumstances, the appellate courts have
construed equitable claims for payment related to statutory
obligations as not being subject to the Government Claims Act.
(See, e.g., Piccinini v. California Emergency Management
Agency (2014) 226 Cal.App.4th 685, 689 [promissory estoppel
theory against state agency allowed to proceed where statute
expresses a legislative policy in favor of allowing cause of
18
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
action]; Utility Audit Co., Inc. v. City of Los Angeles (2003
112 Cal.App.4th 950, 958 (Utility Audit) [common count seeking
refund of overcharges, based on statute, sounded in contract and
was not prohibited by the Government Claims Act]; Gonzales v.
State of California (1977) 68 Cal.App.3d 621, 628 [cause of
action for breach of an implied contract under an unjust
enrichment theory supported by statute allowed to go forward
against state as not subject to Government Claims Act]; see also
Kajima/Ray Wilson v. Los Angeles County Metropolitan
Transportation Authority (2000) 23 Cal.4th 305, 315 [lowest
bidding contractor could recover bid preparation costs against a
public entity for the misaward of a public contract under a
theory of promissory estoppel; court could use “promissory
estoppel primarily to further certain public policies by creating
a damages remedy for a public entity’s statutory violation”].
In short, our case law and well-reasoned holdings from the
Courts of Appeal confirm that the Government Claims Act is
concerned with shielding public entities from tort claims seeking
money damages, and not with every conceivable claim that
might be pressed against a public entity.
Notwithstanding this authority demonstrating that the
Legislature was primarily focused on common law tort claims
when it enacted the Act’s immunity and liability provisions, the
County maintains that the Government Claims Act forecloses
the Hospitals’ quantum meruit cause of action. The County
argues, first, that the Hospitals’ compliance with the
Government Claims Act’s claims presentation requirements
establishes that they seek money or damages covered by the
Act’s immunity provisions. We reject this argument. As noted
in footnote 6, ante, the claims presentation requirements of the
Government Claims Act are broader in scope than the Act’s
19
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
public entity immunity or liability provisions. (City of Stockton,
supra, 42 Cal.4th at pp. 738, 741 [a public entity is not immune
from liability on its contracts, but the claims presentation
requirements nonetheless apply to such contract actions]; see
Hart v. County of Alameda (1999) 76 Cal.App.4th 766, 779 [“the
Legislature intended the claims presentation statutes to broadly
apply to ‘ “ ‘all forms of monetary demands . . . ,’ ” ’ and the
earlier conclusion that the Claims Act was limited to tort claims
was based on the government immunity statutes, which contain
different statutory language”].)7 The Hospitals’ mere
compliance with the Act’s claims presentation requirements
does not control or determine the nature of their action.
The County also argues that the Government Claims Act’s
immunity provisions apply broadly to any common law claim,
other than a claim alleging an express contract, seeking “money
or damages” (Gov. Code, § 814). It asserts that “to the extent
the Legislature considered the existence of a quantum meruit
claim brought against [a public entity] when drafting the
Government Claims Act, it would have understood such a claim
as a non-contractual action for money or damages, and thus a
‘tort.’ ” Yet, even if we were to assume that the Government
Claims Act’s immunity provisions might apply to some claims
that are not obviously tortious in nature, the contours of which
we need not delve into here, we are confident that the Act does
7
The County’s reliance on Canova v. Trustees of Imperial
Irrigation Dist. Employee Pension Plan (2007) 150 Cal.App.4th
1487, 1493, is equally unpersuasive because that case also
concerns the Government Claims Act’s claims presentation
requirements, and not its immunity and liability provisions.
20
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
not immunize the County from the Hospitals’ quantum meruit
claim to enforce a statutory duty of reimbursement.
“Quantum meruit refers to the well-established principle
that ‘the law implies a promise to pay for services performed
under circumstances disclosing that they were not gratuitously
rendered.’ [Citation.] To recover in quantum meruit, a party
need not prove the existence of a contract [citations], but it must
show the circumstances were such that ‘the services were
rendered under some understanding or expectation of both
parties that compensation therefor was to be made.’ ”
(Huskinson & Brown v. Wolf (2004) 32 Cal.4th 453, 458
(Huskinson & Brown).) The doctrine manifests “ ‘ “a general
principle, underlying various legal doctrines and remedies, that
one person should not be permitted unjustly to enrich himself at
the expense of another, but should be required to make
restitution of or for property or benefits received, retained, or
appropriated, where it is just and equitable that such restitution
be made, where such action involves no violation or frustration
of law or opposition to public policy, either directly or
indirectly.” ’ ” (Dinosaur Development, Inc. v. White (1989
216 Cal.App.3d 1310, 1315; see Rest., Restitution, §§ 113, 114.
“In interpreting statutes dealing with claims ‘arising upon
contract’ to cover quasi-contractual obligations, the term ‘quasi-
contract’ is sometimes applied to statutory obligations that
cannot be accurately classified as strictly contractual or subject
to tort liability.” (1 Witkin, Summary of Cal. Law (11th ed.
2017) Contracts, § 104, pp. 148–149.
In this respect, the Court of Appeal below applied a rubric
whereby “[w]hether an action sounds in contract or tort for
purposes of governmental immunity ‘ “ ‘depends upon the
nature of the right sued upon, not the form of the pleading or
21
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
relief demanded. If based on breach of promise it is contractual;
if based on breach of a noncontractual duty it is tortious.’ ” ’ ”
(Santa Clara, supra, 77 Cal.App.5th at p. 1033, quoting Roe v.
State of California (2001) 94 Cal.App.4th 64, 69.) Although this
distinguishing principle may be useful in other contexts, we
regard it as unhelpful in ascertaining the nature of the
Hospitals’ quantum meruit claim, which is premised on a theory
of a promise implied in law (see Huskinson & Brown, supra,
32 Cal.4th at p. 458), and, more specifically, on a
reimbursement duty imposed by statute. Instead, we draw
support from our decisions in City of Dinuba and Kizer, which
share sufficient commonalities with this matter to lead us to
conclude that the Government Claims Act does not immunize
the County from the Hospitals’ action.
In City of Dinuba, the plaintiffs sought to recover
misallocated tax revenue, which the defendant county was
obligated by statute to distribute to the plaintiffs. (City of
Dinuba, supra, 41 Cal.4th at p. 863.) We held that the
Government Claims Act’s immunity provisions did not apply to
the plaintiffs’ action, in part because we determined that the
plaintiffs did not seek money damages. (City of Dinuba, at
p. 867, citing Gov. Code, § 814.) We concluded that the plaintiffs
instead sought “only to compel defendants to perform their
express statutory duty. While compliance with the duty may
result in the payment of money, that is distinct from seeking
damages.” (City of Dinuba, at p. 867.
Here too, the Hospitals do not seek money damages. They
seek to compel the County to comply with its mandatory duty
under the Knox-Keene Act and its implementing regulations to
reimburse the Hospitals for the reasonable and customary value
of their emergency services and care. Although some differences
22
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
exist between the claims in City of Dinuba and this matter, the
nature of the right sued upon — the statutory right to receive
funds — is analogous. As we noted in City of Dinuba,
“Section 814 explicitly provides that liability based on contract
or the right to obtain relief other than money damages is
unaffected by the Act.” (City of Dinuba, supra, 41 Cal.4th at
p. 867.) This provision applies with equal force here. (See Kizer,
supra, 53 Cal.3d at p. 146 [Government Claims Act was
intended to limit government “exposure to liability for actual
compensatory damages in tort cases”]; Utility Audit, supra,
112 Cal.App.4th at p. 958 [“A claim for refund of overcharges,
without more, appears to be based upon breach of a contractual
duty”]; see also Bowen v. Massachusetts (1988) 487 U.S. 879, 893
[action for reimbursement of withheld Medicaid payments
federal agency was statutorily obligated to provide is not an
action for “ ‘money damages’ as that term is used in the
[Administrative Procedure Act]”].)8
Certain aspects of our decision in Kizer are also on point.
In determining that the state’s enforcement action in Kizer did
not fall within the purview of the Government Claims Act’s
immunity provisions, we first emphasized that this particular
action “lies outside the perimeters of a tort action and therefore
does not readily lend itself to a liability analysis based on tort
8
As previously noted, in City of Dinuba, supra, 41 Cal.4th
at page 868, we concluded that the defendants’ failure to comply
with their statutory duty gave rise to mandamus relief. The fact
that an additional form of mandamus relief was appropriate in
City of Dinuba does not alter our view regarding the nature of
the underlying claims in this case. As in City of Dinuba, we are
persuaded that the action in this case seeks relief other than
money damages.
23
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
principles.” (Kizer, supra, 53 Cal.3d at p. 146.) Based on the
detailed statutory scheme regulating long-term health care
facilities, we concluded that “[g]ranting immunity to public
entities from the [statutory] penalties would be contrary to the
intent of the Legislature to provide a citation system for the
imposition of prompt and effective civil sanctions against long-
term health care facilities in violation of the laws and
regulations of this state.” (Ibid.) We also emphasized that
“nothing in the statutory scheme . . . suggests that state and
other government health facilities should be treated differently
than private facilities” (id. at p. 148), and we perceived “ ‘no
significant public policy reason to exempt a state licensed
health-care facility from liability for penalties under the [Act]
simply because it is operated by a public rather than a private
entity’ ” (ibid.).
Like the defendant in Kizer, the County is subject to the
terms of the Knox-Keene Act, a detailed regulatory scheme,
because it chose to enter the health care plan market and
operate a licensed health care service plan. As has been
discussed, the Knox-Keene Act applies to “any private or public
entity” operating a licensed health care service plan, subject to
narrow exceptions not applicable here. (Health & Saf. Code,
§ 1399.5; see id., § 1345, subds. (f)(1), (j).) The statutory and
regulatory scheme explicitly provides for mandatory
reimbursement (id., § 1371.4, subd. (b); Centinela, supra,
1 Cal.5th at p. 1001; Prospect Medical Group, supra, 45 Cal.4th
at pp. 501, 504, 507; Long Beach Memorial, supra,
71 Cal.App.5th at p. 329; Bell, supra, 131 Cal.App.4th at p. 216;
California Emergency Physicians, supra, 111 Cal.App.4th at
p. 1131) and specifies, in general but comprehensive terms, how
to calculate that reimbursement amount (Regulation 1300.71).
24
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
(See Long Beach Memorial, at p. 338 [“The underlying duty to
repay [emergency medical services] is established by the Knox-
Keene Act, . . . while the amount of repayment is governed
either by contract (when the parties have a preexisting contract
or by the quasi-contractual remedy of quantum meruit (when
they do not)”].
As in Kizer, we see “nothing in the statutory scheme that
suggests that state and other government health [care service
plans] should be treated differently than private [health plans],”
nor do we perceive any “ ‘significant public policy reason to
exempt a state licensed [health care service plan] from
liability . . . under the [Knox-Keene] Act simply because it is
operated by a public rather than a private entity . . . .” (Kizer,
supra, 53 Cal.3d at p. 148.) To the contrary, disallowing such a
claim against the County would undermine an important
purpose of the Knox-Keene Act, as we and others have
interpreted it. As the DMHC, appearing as amicus curiae in
Bell,
emphasized,
“ ‘The
prompt
and
appropriate
reimbursement of emergency providers ensures the continued
financial viability of California’s health care delivery
system. . . . [D]enying emergency providers judicial recourse to
challenge the fairness of a health plan’s reimbursement
determination[] allows a health plan to systematically underpay
California’s safety-net providers . . . .’ ” (Bell, supra,
131 Cal.App.4th at p. 218.) The Legislature’s purpose in
enacting section 1371.4 of the Knox-Keene Act would be ill-
served by a rule immunizing public entities that operate
licensed health care service plans from emergency services
25
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
reimbursement claims, thus reintroducing the very risk of
systematic underpayment the Legislature sought to eliminate.9
Moreover, and as noted ante, the DMHC “ ‘lacks the
authority to set specific reimbursement rates under theories of
quantum meruit and the jurisdiction to enforce a
reimbursement determination on both the provider and the
health plan. Because the [DMHC] cannot provide an adequate
forum, health care providers must be allowed to maintain a
cause of action in court to resolve individual claims-payment
disputes over the reasonable value of their services.’ ” (Bell,
supra, 131 Cal.App.4th at p. 218.) Under the County’s
interpretation of the Government Claims Act, emergency
medical providers without a contract in place with a health care
service plan could resolve individual disputes over
reimbursement only if that plan were operated by a private,
rather than public, entity. Again, we find this proposed two-tier
system “contradicts the very public policy that the Legislature
sought to implement” with the reimbursement provision of the
Knox-Keene Act.10 (Kizer, supra, 53 Cal.3d at p. 148.
9
Indeed, more than a decade after the Legislature enacted
the Knox-Keene Act’s reimbursement provision, former
Governor Arnold Schwarzenegger issued an executive order
reaffirming the public policy in favor of requiring all health care
service plans to reimburse emergency medical providers at the
reasonable and customary value. (Governor’s Exec. Order No.
S-13-06 (July 25, 2006).
10
Given the DMHC’s express acknowledgment that it
cannot set specific reimbursement levels or adjudicate
individual payment disputes between health plans and
emergency physicians, we also reject the County’s argument
that a quantum meruit action is unnecessary because the Knox-
26
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
We conclude from the foregoing that allowing the
Hospitals to proceed with their quantum meruit claim premised
on the County’s statutory obligation of reimbursement violates
neither the letter nor the spirit of the Government Claims Act.
It also furthers a fundamental purpose of the Knox-Keene Act,
protecting the continued financial viability of California’s health
care delivery system, by ensuring that all emergency medical
providers have an adequate remedy if there are disputes over
payment, either by alleging breach of contract (if there is a
contract between the provider and health care plan), or by
raising a quantum meruit claim based on the Knox-Keene Act’s
reimbursement obligation (if there is no contract in place).
In arguing that the Government Claims Act’s immunity
provisions extend to quantum meruit claims, the County cites
three decisions by this court predating the Act in which we
discussed the availability of quantum meruit claims against
government entities: Miller v. McKinnon (1942) 20 Cal.2d 83
(Miller), Los Angeles Dredging Co. v. Long Beach (1930) 210 Cal.
348 (Los Angeles Dredging Co.), and Zottman v. San Francisco
(1862) 20 Cal. 96 (Zottman). The County asserts that these
decisions convey a general hostility toward quantum meruit
claims against the government that was then maintained under
the Act.
We draw a more limited rule from these cases. Each of
these decisions involved express contracts entered into by public
entities that were found to be void and unenforceable because
they were made in violation of a statute or municipal charter.
(Miller, supra, 20 Cal.2d at p. 86 [contract between county and
Keene Act provides adequate alternative mechanisms for
resolving reimbursement disputes.
27
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
contractor held illegal because it did not comply with statute
requiring public agencies to let competitive bidding before
entering into certain contracts]; Los Angeles Dredging Co.,
supra, 210 Cal. at p. 354 [contract entered into by city without
letting of bids rendered void because it violated city charter];
Zottman, supra, 20 Cal. at pp. 102–103 [same].) It was in this
context, of considering contracts entered into by public entities
in a manner not authorized by statute or charter, that we stated:
“ ‘[C]ontracts wholly beyond the powers of a municipality are
void. They cannot be ratified; no estoppel to deny their validity
can be invoked against the municipality; and ordinarily no
recovery in quasi contract can be had for work performed under
them. It is also settled that the mode of contracting, as
prescribed by the municipal charter, is the measure of the power
to contract; and a contract made in disregard of the prescribed
mode is unenforceable.’ [Citations.] And even though the
person with whom the contract was made has supplied labor and
materials in the performance of the contract and the public
agency has received the benefits thereof, he has no right of
action to recover in quantum meruit the reasonable value
thereof.” (Miller, at p. 88, quoting Los Angeles Dredging Co., at
p. 353.
Read together and as relevant here, Miller, Los Angeles
Dredging Co., and Zottman stand for the narrow principle that
if a contractor enters into an express contract with a public
entity, and the contract is later found to be in violation of an
applicable statute or charter and therefore deemed void, the
contractor has no right to recover the reasonable value of
services in quantum meruit. These decisions are readily
distinguishable from the Hospitals’ quantum meruit claim
against the County, which concerns no express contract and is
28
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
instead based on a statutorily mandated reimbursement
provision. We are doubtful that the Legislature understood
these decisions to mean that a quantum meruit claim for
payment required by statute and otherwise resembling the claim
pursued here is “a non-contractual action for money or damages,
and thus a ‘tort,’ ” as the County asserts it must have.11
Although other Court of Appeal decisions have broadly
held that quantum meruit claims may not proceed against
public entities, those decisions contain thin analyses and are
distinguishable on their facts. It has been said, for example,
that “[a]s a general rule, a public entity cannot be sued on an
implied-in-law or quasi-contract theory, because such a theory
is based on quantum meruit or restitution considerations which
are outweighed by the need to protect and limit a public entity’s
contractual obligations.” (Lundeen Coatings Corp. v.
Department of Water & Power (1991) 232 Cal.App.3d 816, 831,
fn. 9; see also Janis v. California State Lottery Com. (1998
68 Cal.App.4th 824, 830; Los Angeles Equestrian Center, Inc. v.
11
Indeed, several other states allowed quasi-contractual
claims to proceed against public entities under appropriate
circumstances at the time the Legislature enacted the
Government Claims Act. (See, e.g., Hailey v. King County
(Wash. 1944) 149 P.2d 823, 825 [“the doctrine of implied contract
has been applied with respect to municipal corporations under
circumstances where ‘equity and good conscience’ have seemed
to require it”]; Annot., Liability of Municipality or Other
Governmental Body on Implied or Quasi Contract for Value of
Property or Work (1945) 154 A.L.R. 356, 357 [“the rule is well
settled in most jurisdictions that a municipality or other
political subdivision may become obligated upon implied or
quasi contract to pay the reasonable value of benefits accepted
or appropriated by it as to which it has the general power to
contract”].
29
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
City of Los Angeles (1993) 17 Cal.App.4th 432, 448–449.) But
these cases either directly or indirectly rely on Miller, supra,
20 Cal.2d 83 for this principle, and as has been explained, Miller
does not stand for such a broad proposition. And even this
principle is explicitly premised on “the need to protect and limit
a public entity’s contractual obligations” (Lundeen, at p. 831,
fn. 9), which is not a consideration for all quantum meruit
claims — the instant claim against the County being just one
example, since it is based on the County’s statutory duty, not its
contractual obligation.
In concluding that Government Code section 815 bars a
quantum meruit action, the Court of Appeal below relied
primarily on Sheppard v. North Orange County Regional
Occupational Program (2010) 191 Cal.App.4th 289. (See Santa
Clara, supra, 77 Cal.App.5th at p. 1028.) The plaintiff in
Sheppard, a part-time public school instructor, sought
reimbursement from a public agency for his unpaid time spent
preparing for teaching. (Sheppard, at pp. 293–294.) Notably,
an express contract existed between the plaintiff and the
agency. (Id. at pp. 295, 314.) The plaintiff’s complaint alleged
causes of action for violation of the minimum wage law, breach
of contract, and quantum meruit. (Id. at p. 294.) The appellate
court held that the trial court erred when it sustained the
agency’s demurrer to the breach of contract claim (id. at p. 313),
but that it properly sustained the demurrer to the plaintiff’s
quantum meruit claim because “such a claim cannot be asserted
against a public entity” (id. at p. 314). Sheppard cited
Government Code section 815 and the Legislative Committee
Comment accompanying that section, which states that this
section “ ‘abolishes all common law or judicially declared forms
of liability for public entities, except for such liability as may be
30
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
required by the state or federal constitution.’ ” (Sheppard, at
p. 314.) The Sheppard court also determined that the plaintiff’s
quantum meruit claim failed on the additional ground that such
recovery is unavailable when the parties have an actual
agreement covering compensation. (Ibid.
Without calling the result in Sheppard into question, to
the extent it relied on the Government Claims Act, its analysis
failed to undertake a careful review of the claim before it,
comparable to our inquiries in City of Dinuba, supra, 41 Cal.4th
859 and Kizer, supra, 53 Cal.3d 139, before determining
whether such claim fell within or outside the purview of the
Government Claims Act’s immunity provisions. To the extent it
held that a quantum meruit claim against the public agency was
unavailable more generally, Sheppard is plainly distinguishable
because an express contract existed between the parties.
To summarize, we are not persuaded that the Legislature
intended to foreclose all quantum meruit claims against public
entities when it drafted the Government Claims Act’s immunity
and liability provisions, and certainly not the claim at issue in
this case.
In light of our holding that the Government Claims Act
does not immunize the County from the Hospitals’ action for
reimbursement as mandated by section 1371.4 of the Knox-
Keene Act, we need not address the Hospitals’ alternative
argument that the mandatory duty exception to governmental
immunity under Government Code section 815.6 also applies.
31
COUNTY OF SANTA CLARA v. SUPERIOR COURT
Opinion of the Court by Guerrero, C. J.
III. DISPOSITION
We reverse the judgment of the Court of Appeal and
remand the matter for further proceedings consistent with this
opinion.
GUERRERO, C. J.
We Concur:
CORRIGAN, J.
LIU, J.
KRUGER, J.
GROBAN, J.
JENKINS, J.
EVANS, J.
32
See next page for addresses and telephone numbers for counsel who
argued in Supreme Court.
Name of Opinion County of Santa Clara v. Superior Court
Procedural Posture (see XX below
Original Appeal
Original Proceeding
Review Granted (published) XX 77 Cal.App.5th 1018
Review Granted (unpublished)
Rehearing Granted
Opinion No. S274927
Date Filed: July 10, 2023
Court: Superior
County: Santa Clara
Judge: Maureen A. Folan
Counsel:
James R. Williams, County Counsel, Douglas M. Press, Assistant
County Counsel, Melissa R. Kiniyalocts, Susan P. Greenberg, David P.
McDonough and Hannah M. Begley, Deputy County Counsel, for
Petitioner.
Aurelia M. Razo, Deputy County Counsel (San Diego); and Jennifer B.
Henning for California State Association of Counties as Amicus Curiae
on behalf of Petitioner.
Olson Remcho, Margaret R. Prinzing and Ilan Zur for National Health
Economics and Policy Scholars as Amici Curiae on behalf of Petitioner.
Daponde Simpson Rowe, Michael J. Daponde and Darcy L. Muilenburg
for Local Health Plans of California as Amicus Curiae on behalf of
Petitioner.
No appearance for Respondent.
Helton Law Group, Edward Stumpp, Mikaela Grace Cox, Casey E.
Mitchnick, Faatima Seedat; Horvitz & Levy, Mitchell C. Tilner, Peder
K. Batalden and Beth J. Jay for Real Parties in Interest.
Athene Law, Long X. Do, Felicia Y. Sze, Eric D. Chan; King &
Spalding, Glenn Solomon, Paul R. Johnson and Jonathan Shin for the
California Medical Association and the California Hospital Association
as Amici Curiae on behalf of Real Parties in Interest.
King & Spalding, Glenn Solomon, Paul R. Johnson and Jonathan Shin
for San Jose Healthcare System, L.P., and Good Samaritan Hospital,
L.P., as Amici Curiae on behalf of Real Parties in Interest.
Counsel who argued in Supreme Court (not intended for
publication with opinion):
Susan P. Greenberg
Deputy County Counsel
70 West Hedding Street, East Wing, 9th Floor
San Jose, CA 95110
(408) 299-5900
Mitchell C. Tilmer
Horvitz & Levy LLP
3601 West Olive Avenue, 8th Floor
Burbank, CA 91505-4681
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Opinion Information
| Date: | Docket Number: |
| Mon, 07/10/2023 | S274927 |
