CALIFORNIA EMERGENCY PHYSICIANS MEDICAL GROUP, Plaintiff and Appellant, v. PACIFICARE OF CALIFORNIA et al., Defendants and Respondents. , 111 Cal. App. 4th 1127

The medical provider went out of business owing the emergency care provider money that the plan then refused to pay. In affirming the decision in favor of the plan, the court held that Cal. Health & Safety Code § 1371.4(e) allowed plans to delegate the responsibility to pay for emergency medical services and therefore that the plan did not retain liability. The court reasoned that by using the term "delegate," the legislature unequivocally disclosed an intention to depart from the common law rule that licensees were liable for acts of agents. Therefore, to allow the emergency care provider to recover under contract principles would render § 1371.4(e) nugatory. Similarly, § 1371.4(e): (1) provided a safe harbor from an unfair competition action; (2) distinguished the action for implied contract from case law involving only two parties; (3) supported a policy-based decision that there was no duty for the plan to manage business affairs so as to prevent purely economic loss to third ...