Filed 8/31/16
                           CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                            SECOND APPELLATE DISTRICT

                                    DIVISION ONE


VISHVA DEV, M.D., INC.,                          B270094

        Plaintiff and Appellant,                 (Los Angeles County
                                                 Super. Ct. No. BC559891)
        v.

BLUE SHIELD OF CALIFORNIA
LIFE & HEALTH INSURANCE
COMPANY et al.,

        Defendants and Respondents.




        APPEAL from a judgment of the Superior Court of Los Angeles County, Susan
Bryant-Deason, Judge. Affirmed.


        Pick & Boydston and Brian D. Boydston for Plaintiff and Appellant.
        Manatt, Phelps & Phillips, John M. LeBlanc, Jeffrey J. Maurer, and Joanna S.
McCallum for Defendants and Respondents.
                                       __________
       Vishva Dev, M.D., Inc. (Dev) provided emergency medical services to two
individuals who had health care coverage through Blue Shield of California Life
Insurance Company (Blue Shield Life) and one individual who had health care coverage
through California Physicians Services, also known as Blue Shield of California (Blue
Shield California). Dev submitted bills for its services for each of the individuals to their
respective insurers. Blue Shield Life and Blue Shield California refused to pay or agreed
to pay only a fraction of the amount billed, informing Dev of their decisions regarding
each bill in written Explanation of Benefits (EOB) letters. Dev appealed each of those
decisions, seeking to increase Blue Shield Life’s and Blue Shield California’s payments
through those entities’ internal review processes.
       Blue Shield Life and Blue Shield California, however, continued to refuse to pay
Dev’s bills fully, and Dev filed a complaint asserting breach of contract and quantum
meruit, the latter of which is at issue in this appeal. In response, Blue Shield Life and
Blue Shield California filed a joint motion for summary judgment or summary
adjudication on the ground that the two-year statute of limitations applicable to claims
for quantum meruit began to run when Dev received the EOB letters, which were
an unequivocal denial of payment. Because Dev filed suit more than two years after
receiving those letters, Blue Shield Life and Blue Shield California argued, its claims for
quantum meruit were time-barred. The trial court agreed, and granted the joint motion
for summary adjudication. Dev contests the judgment on appeal. We affirm.

                  FACTUAL AND PROCEDURAL BACKGROUND
       A.     The Parties
       Blue Shield Life is an insurance company licensed and regulated by the California
Department of Insurance and subject to the Insurance Code. It offers life and health
insurance policies to residents of California.
       Blue Shield California is a health care service plan, which is licensed and
regulated by the California Department of Managed Health Care, and offers health care
coverage to California residents under managed care plans.


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        Dev is a California professional corporation owned by Dr. Vishva Dev, M.D.,
a cardiologist who renders emergency care to patients who present with an emergency
medical condition at an emergency room where he practices. During the relevant time
period, Dev did not have a contract with either Blue Shield Life or Blue Shield
California.
        B.     Services Provided
        On February 14, 2011, Dev provided emergency services to patient 8982, who
was insured under a policy issued by Blue Shield Life. On June 11, 2012, Dev provided
emergency services to patient 9025, who was also insured by Blue Shield Life. On
August 5, 2012, Dev provided emergency services to patient 10481, who had coverage
under a managed care plan issued by Blue Shield California.
        C.     Billings & Internal Appeals
        Dev submitted bills to Blue Shield Life for its treatment of Patients 8982 and
9025.
               1.     Patient 8982
        On March 8, 2011, Blue Shield Life sent Dev a written EOB explaining the
amount Blue Shield Life would pay Dev for the services rendered to patient 8982. The
EOB reflected that Dev billed $24,610 for services and that Blue Shield Life’s allowed
amount was $1,775.90, which would be applied to the patient’s deductible with no
remainder left to be paid by Blue Shield Life to Dev. On June 27, 2012, Dev filed an
appeal to Blue Shield Life, demanding that the reductions “be reversed and an additional
payment be made.”
        In response, Blue Shield Life sent Dev a form letter, dated July 5, 2012,
acknowledging receipt of the appeal, and stating “[w]e will research your appeal
and issue a written determination, including the pertinent facts and an explanation of
the determination, within 45 working days of the date the appeal was received.” On
August 31, 2012, Blue Shield Life sent Dev a letter denying the appeal on the ground that
it had been submitted after the 365-day filing limit set forth in Blue Shield Life’s appeal
guidelines. Dev submitted a second appeal on January 15, 2013. On March 26, 2013,

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Blue Shield Life sent Dev a letter indicating that the review department had determined
that Dev rendered emergency services, and, therefore, Dev would receive an amended
EOB and payment of $4,892.79, which was significantly less than the bill Dev submitted.
              2.     Patient 9025
       On June 22, 2012, Blue Shield Life sent Dev a written EOB explaining the amount
Blue Shield Life would pay Dev for the services rendered to patient 9025. The EOB
reflected that Dev billed $44,000 for the services rendered on June 11, 2012. Blue Shield
Life’s allowed amount for emergency services was $5,207, and $1,648.78 would be
applied to the patient’s deductible. The patient’s co-pay was $1,245.38, and Blue Shield
Life would pay Dev the remaining amount, $2,312.04. On August 21, 2012, Dev
submitted an appeal to Blue Shield Life. On October 2, 2012, Blue Shield Life denied
the appeal and stated that it had paid the appropriate amount to Dev. Dev filed a second
appeal on January 15, 2013. On March 26, 2013, Blue Shield Life denied the second
appeal on the ground that it had been submitted more than 65 days after the initial denial.
On August 14, 2013, Dev filed a third appeal. On August 20, 2013, Blue Shield Life sent
a form letter acknowledging receipt and stating it would issue a written determination in
45 days. On October 10, 2013, Blue Shield Life upheld the denial.
              3.     Patient 10481
       Dev submitted a bill for $18,000 to Blue Shield California for its treatment of
patient 10481. On August 5, 2012, Blue Shield California sent Dev an EOB for services
rendered, which reflected that its allowed amount was $2,034, and that the entire
amount would be applied to the patient’s deductible with no remainder left for Blue
Shield California to pay Dev. On September 11, 2012, Dev submitted an appeal. On
December 6, 2012, Blue Shield California sent a form letter acknowledging the appeal
and stating that it would issue a determination within 45 days. On January 15, 2013,
Dev submitted a second appeal. Blue Shield California sent Dev a denial letter on
March 26, 2013, stating that it upheld its denial.




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        D.    Proceedings Below
        Dev filed this action on October 7, 2014 and a first amended complaint on
March 12, 2015. On August 21, 2015, Blue Shield Life and Blue Shield California filed
a joint motion for summary judgment or summary adjudication alleging that Dev’s claims
for quantum meruit were barred by the two-year statute of limitations.1 The trial court
granted the motion on November 5, 2015, and subsequently entered judgment against
Dev and in favor of Blue Shield Life and Blue Shield California. Dev timely appealed.
                                       DISCUSSION
        The statute of limitations for quantum meruit claims is two years. (Code Civ.
Proc., § 339.) Generally, the statute of limitations commences when a party knows
or should know the facts essential to the claim. (Gutierrez v. Mofid (1985) 39 Cal.3d
892, 896-897.) The sole issue in this case is when Dev knew or should have known
the facts essential to its quantum meruit claim—that Blue Shield Life and Blue Shield
California denied payment of Dev’s medical bills for the emergency services it performed
for their insureds. Dev argues that the limitations period began to run at the end of the
insurers’ optional appeals process. Blue Shield Life and Blue Shield California argue
that it began to run when they formally denied Dev’s claims in writing in the original
EOBs.
        California courts have taken the latter approach in the case of homeowner’s
insurance. For example, in Prudential-LMI Com. Insurance v. Superior Court (1990)
51 Cal.3d 674, 678, the California Supreme Court held that the statute of limitations
begins to run once the insurer has issued an unequivocal denial of payment in writing.
In that case, the insured brought an action against the insurer for bad faith denial of


        1  Blue Shield Life and Blue Shield California also argued two alternative grounds
for summary judgment or summary adjudication in their joint motion, which the trial
court did not address in its judgment. Specifically they argued: (1) Dev could not
establish the elements of quantum meruit and (2) Dev had no right to payment in excess
of amounts set forth in Blue Shield Life’s contracts with its members. Because we affirm
the trial court’s judgment that Dev’s claims for quantum meruit are time-barred, we need
not address these alternative grounds.

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coverage of losses resulting from damage to the insured’s property. The court reasoned
that an unequivocal denial of payment in writing gave the insured knowledge of the facts
essential to the insured’s claim—bad faith denial of coverage—and, therefore, started the
limitations period. (Ibid.)
       Here, Dev received a written EOB notice for patient 8982 on March 8, 2011,
which unequivocally stated that Blue Shield Life would not pay Dev’s bill. Dev received
a written EOB notice for patient 9025 on June 22, 2012, which unequivocally stated that
Blue Shield Life would pay only a small portion of Dev’s bill. Dev received a written
EOB notice for patient 10481 on August 15, 2012, which stated that Blue Shield
California would not pay Dev’s bill. These EOBs all put Dev on notice that its claim for
payments were being denied in part or in whole, which was the essential fact of Dev’s
quantum meruit claims. Dev filed this lawsuit on October 7, 2014, more than two years
after receiving these notices. Its claims are, therefore, time-barred.
       Dev argues, however, that its claims are not time-barred because its causes of
action for quantum meruit did not accrue until the conclusion of its communications
regarding its appeals of the EOBs with Blue Shield Life and Blue Shield California—
March 26, 2013 as to patient 8982, August 20, 2013 as to patient 9025, and December 6,
2012 as to patient 10481. Dev also argues that even if they were time-barred, the
insurers should be estopped from raising the statute of limitations defense because
Dev reasonably relied on the appeals process to resolve any payment issues. Dev claims
that the subsequent correspondence between the parties created an “expectation for
compensation,” which undercut the denials contained in the EOBs, or rendered them
equivocal.
       Although there is no case regarding the effects of an internal, voluntary appeal
process on the statute of limitations in the context of an insurer’s denial of a medical
provider’s claims for payment, there are several cases in the home insurance context
holding that an insurer’s willingness to consider additional evidence, or provide a
voluntary appeal process, after it had given unequivocal notice that a claim was rejected
did not toll the limitations period. (See, e.g., Singh v. Allstate Ins. Co. (1998)

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63 Cal.App.4th 135, 143–144 (Singh) [fire insurance]; Migliore v. Mid-Century Ins. Co.
(2002) 97 Cal.App.4th 592, 605 (Migliore) [earthquake insurance].)2
       For example, in Singh, the insureds (homeowners) argued that “there was a . . .
period of equitable tolling because [the insurer] reconsidered their claim [of loss from
fire damage].” (Singh, supra, 63 Cal.App.4th at p. 137.) The appellate court disagreed,
concluding that “[t]he justifications for equitable tolling are absent, once the carrier has
initially denied the claim. The policies supporting the shortened limitation period are
then fully applicable, and no reason for further tolling exists.” (Id. at p. 142.)
       Similarly, in Migliore, supra, 97 Cal.App.4th at p. 605, the appellate court held
that the insurer’s letter refusing further payment on the homeowner insured’s claim
for earthquake damage was an “unequivocal denial” and, thus, began the statute of
limitations period for suing under the policy, even though the letter invited the insured
to submit additional information relevant to the claim and stated its “willingness to
reconsider” based on new information.
       Importantly, the language of the denial letter in Singh, which the plaintiffs claimed
made it equivocal, is precisely the language used in Blue Shield Life and Blue Shield
California’s EOBs, which Dev claims created an “expectation for compensation.”
Specifically, the Singh court noted that “[insurer’s] letter told plaintiffs their claim
was denied, but stated that, if plaintiffs had any further information they would like
[the insurer] to consider, to bring the information to [its] attention.” (Singh, supra,
63 Cal.App.4th at p. 143.) Blue Shield Life’s and Blue Shield of California’s EOBs
stated that “[i]f you have questions about your claim or your claim has been denied and
you believe that additional information will affect the processing of your claim, you
should contact [the] Customer Service Department. . . . [¶] [¶] If you are not satisfied
with [its] response to your inquiry, you may initiate an appeal in writing.” In Singh, the


       2  There are also cases in the employment context holding that when an internal
appeal process of employment termination is optional, it will not toll the statute of
limitations for a wrongful termination claim. (See, e.g., Williams v. Housing Authority of
Los Angeles (2004) 121 Cal.App.4th 708, 737-738.)

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court concluded that “[t]he extension of a courtesy, to look at anything else that plaintiffs
might have to offer, did not render the denial equivocal.” (Ibid.) That conclusion applies
with equal force here where the plaintiff was a medical provider rather than the insured.
The fact that Blue Shield Life and Blue Shield California provided an optional appeals
process does not change the finality of their denial of Dev’s claims. Just as with the
denial in Singh, the EOBs “could hardly be . . . more unequivocal denial[s]. There was
nothing tentative or conditional about [them].” (Ibid.)
       Moreover, under Dev’s theory, any party engaging in an insurance company’s
optional appeal process could continuously toll the statute of limitations, thereby
rendering it a nullity. (Singh, supra, 63 Cal.App.4th at p. 145 [“By the simple expedient
of making many requests for reconsideration, claimants could extend the [limitations
period] at will with successive periods of tolling.”].) As the Ninth Circuit explained:
“Holding that [the insurer] may inadvertently extend the limitations period by answering
claimants’ inquiries or by considering new information ‘would contravene a strong public
policy to encourage an insurance company to reconsider its original denial when
confronted with potentially new facts. If insurance companies were saddled with the
situation that whenever [they] reconsidered an earlier decision it would inaugurate a new
limitations period, companies would be reluctant to offer policy holders the luxury of a
second evaluation.’ ” (Wagner v. Director, Federal Emergency Mgmt. Agency (9th Cir.
1988) 847 F.2d 515, 521.)
       Finally, as to Dev’s argument that applying the statute of limitations to its case
permits the “callous dumping of responsibility,” we note that California courts have
consistently acknowledged both the harshness and the necessity of the bar of the
statute of limitations. As a matter of policy, this defense “operates conclusively
across-the-board. It does so with respect to all causes of action, both those that do not
have merit and also those that do. That it may bar meritorious causes of action as well
as unmeritorious ones is the ‘price of the orderly and timely processing of litigation’
[citation]—a price that may be high, but one that must nevertheless be paid.” (Norgart v.
Upjohn Co. (1999) 21 Cal.4th 383, 410, fn. omitted.)

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       In sum, Dev had knowledge of the facts giving rise to its claim of quantum meruit
when it received the EOBs, with their unequivocal denial of its bills, more than two years
prior to filing this lawsuit. Dev engaged in a voluntary appeals process with Blue Shield
Life and Blue Shield California, which did not change or undercut the EOBs’ denials of
Dev’s claims. Accordingly, Dev’s quantum meruit claims are time-barred, and the trial
court correctly entered judgment on that basis.
                                     DISPOSITION
       The judgment is affirmed. Each party shall bear its own costs on appeal.
       CERTIFIED FOR PUBLICATION.




                                                       ROTHSCHILD, P. J.
We concur:




                     JOHNSON, J.




                     LUI, J.




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