California Procedure,  Declaratory Relief,  Demurrer

You Might Be an Appellate Lawyer and Not Even Know it

At least, that’s one lesson you can take away from Lee v. Blue Shield of California, case no. B190441 (2d Dist. Sept. 7, 2007).

Lee alleged that Blue Shield wrongfully suspended him from its network of medical providers for medical incompetence and then illegally terminated his provider contract for failing to cooperate in the administrative process.  His suit alleged tort, contract, and declaratory relief theories.  The trial court sustained a demurrer brought on the ground that Lee did not exhaust his administrative remedies because the hearing process (commonly called an “809 hearing” because it is set out at Business and Professions Code sections 809-809.9) was terminated by Blue Shield for Lee’s failure to cooperate with discovery.

The court of appeal upholds the demurrer as to the tort and contract claims, but reverses on the declaratory relief claim.  It holds that the superior court should have treated the declaratory relief claim

as a petition requesting the court to issue a writ of mandate ordering Blue Shield to vacate its decision terminating his provider status for failure to cooperate with the 809 hearing and to reinstate the 809 proceedings.

The court has great discretion in how to construe pleadings (citations omitted):

A complainant’s remedy for the arbitrary or improper refusal by an organization to hold a hearing is an order directing the organization to do so.  Such an order is usually obtained through a petition for a writ of mandate. But not always. Regardless of how a pleading is labeled or a prayer is framed, “[a] court may grant any relief consistent with the case made by the petitioner and embraced within the issue.”

A complaint for declaratory relief “may be regarded as a petition for a writ of mandate.”

Since the allegations of the complaint, if true, would entitle Lee to a writ of mandate, the court holds that the trial court should have interpreted his declaratory relief claim as a mandate petition.  It remands to the trial court with directions to so treat it.