This case was last updated from Los Angeles County Superior Courts on 04/03/2019 at 21:24:21 (UTC).

RANDHIR S TULI VS SPECIALTY SURGICAL CENTER OF THOUSAND OAKS

Case Summary

On 04/11/2014 RANDHIR S TULI filed a Contract - Business lawsuit against SPECIALTY SURGICAL CENTER OF THOUSAND OAKS. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are ROBERT L. HESS and GAIL FEUER. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****2350

  • Filing Date:

    04/11/2014

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Business

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

ROBERT L. HESS

GAIL FEUER

 

Party Details

Plaintiff and Cross Defendant

TULI RANDHIR S.

Defendants and Respondents

BROOKS ANDREW A.

GOODWIN GEORGE

KEENEDY G. MILES

SMBISS THOUSAND OAKS LLC

SPECIALTY SURGERY CENTER OF WESTLAKE

SPECIALTY SURGICAL CENTER OF THOUSAND

SYMBION AMBULATORY RESOURCE CENTERS INC.

SYMBION INC.

SYMBIONARC MANAGEMENT SERVICES INC.

THOUSAND OAKS LLC A CALIFORNIA LIMITED

FARNUM MARC M.D.

COHEN GLENN M.D.

DOES 1 THROUGH 20

CHI DAVID M.D.

SPECIALTY SURGICAL CENTER OF THOUSAND OAKS LLC DBA SPECIALTY SURGERY CENTER OF WESTLAKE VILLAGE

BROOKS M.D. ANDREW A.

Defendants and Cross Plaintiffs

SPECIALTY SURGERY CENTER OF WESTLAKE

SPECIALTY SURGICAL CENTER OF THOUSAND

SYMBIONARC MANAGEMENT SERVICES INC.

SPECIALTY SURGICAL CENTER OF THOUSAND OAKS LLC DBA SPECIALTY SURGERY CENTER OF WESTLAKE VILLAGE

Attorney/Law Firm Details

Plaintiff Attorneys

LARSON | ALBERT LLP

POMERANCE DREW E. ESQ.

POMERANCE EDWARD DREW ESQ.

ALBERT MARK ANCHOR

ADELSTEIN BRUCE

POMERANCE DREW E.

Defendant and Respondent Attorneys

WEAVER JENNIFER W.

WEAVER JENNIFER LYN

WEAVER JENNIFER L.

Cross Defendant Attorney

PLATT DANIEL A.

 

Court Documents

Minute Order

8/16/2018: Minute Order

Motion for Leave

10/17/2018: Motion for Leave

Other -

12/20/2018: Other -

NOTICE OF UNOPPOSED APPLICATION AND MOTION FOR ADMISSION OF ATTORNEY PRO HAC VICE

6/5/2014: NOTICE OF UNOPPOSED APPLICATION AND MOTION FOR ADMISSION OF ATTORNEY PRO HAC VICE

ORDER REGARDING PRO HAC VICE APPLICATION FOR JESSICA R. SIEVERT

8/27/2014: ORDER REGARDING PRO HAC VICE APPLICATION FOR JESSICA R. SIEVERT

Minute Order

2/9/2015: Minute Order

NOTICE OF MOTION AND MOTION FOR SUMMARY ADJUDICATION OF PLAINTIFF'S EIGHTH AND NINTH CAUSES OF ACTION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

3/16/2015: NOTICE OF MOTION AND MOTION FOR SUMMARY ADJUDICATION OF PLAINTIFF'S EIGHTH AND NINTH CAUSES OF ACTION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

DEFENDANTS' NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

5/28/2015: DEFENDANTS' NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

ORDER RE: MOTION FOR SUMMARY ADJUDICATION OF ISSUES BY PLAINTIFF RANDHIR S. TULI

6/4/2015: ORDER RE: MOTION FOR SUMMARY ADJUDICATION OF ISSUES BY PLAINTIFF RANDHIR S. TULI

NOTICE OF CHARGING LIEN OF MARK ANCHOR ALBERT & ASSOCIATES, SUCCESSOR-IN-INTEREST TO LARSON / ALBERT LLP

6/10/2015: NOTICE OF CHARGING LIEN OF MARK ANCHOR ALBERT & ASSOCIATES, SUCCESSOR-IN-INTEREST TO LARSON / ALBERT LLP

DEFENDANTS' NOTICE OF MOTION AND MOTION FOR SANCTIONS AGAINST PLAINTIFF OR, IN THE ALTERNATIVE, AGAINST PLAINTIFF'S COUNSEL; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

8/31/2015: DEFENDANTS' NOTICE OF MOTION AND MOTION FOR SANCTIONS AGAINST PLAINTIFF OR, IN THE ALTERNATIVE, AGAINST PLAINTIFF'S COUNSEL; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

DECLARATION OF DREW E. POMERANCE IN OPPOSITION TO DEFENDANTS' MOTION FOR DISCOVERY SANCTIONS

12/9/2015: DECLARATION OF DREW E. POMERANCE IN OPPOSITION TO DEFENDANTS' MOTION FOR DISCOVERY SANCTIONS

ANSWER TO FIRST AMENDED COMPLAINT

1/20/2016: ANSWER TO FIRST AMENDED COMPLAINT

Minute Order

1/22/2016: Minute Order

EXHIBITS TO DECLARATION OF JENNIFER L. WEAVER IN SUPPORT OF DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

1/25/2016: EXHIBITS TO DECLARATION OF JENNIFER L. WEAVER IN SUPPORT OF DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

Minute Order

1/25/2016: Minute Order

RULING RE: DEFENDANTS? MOTION FOR SANCTIONS AGAINST PLAINTIFF.

1/29/2016: RULING RE: DEFENDANTS? MOTION FOR SANCTIONS AGAINST PLAINTIFF.

DECLARATION OF ANDREW J. DEMETRIOU IN OPPOSITION TO DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

2/16/2016: DECLARATION OF ANDREW J. DEMETRIOU IN OPPOSITION TO DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

125 More Documents Available

 

Docket Entries

  • 03/18/2019
  • Amended Complaint 3rd; Filed by Randhir S. Tuli (Plaintiff)

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  • 03/18/2019
  • Amended Complaint (Third); Filed by Randhir S. Tuli (Plaintiff); Randhir S. Tuli (Plaintiff)

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  • 03/11/2019
  • Notice of Ruling; Filed by Randhir S. Tuli (Cross-Defendant)

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  • 03/07/2019
  • at 10:23 AM in Department 78; Nunc Pro Tunc Order

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  • 03/07/2019
  • at 08:30 AM in Department 78; Hearing on Motion for Summary Judgment - Held

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  • 03/07/2019
  • at 08:30 AM in Department 78; Hearing on Demurrer - with Motion to Strike (CCP 430.10) - Held

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  • 03/07/2019
  • at 08:30 AM in Department 78; Hearing on Demurrer - without Motion to Strike - Not Held - Vacated by Court

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  • 03/07/2019
  • Minute Order ( (Nunc Pro Tunc Order)); Filed by Clerk

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  • 03/07/2019
  • Certificate of Mailing for (Minute Order (Nunc Pro Tunc Order) of 03/07/2019); Filed by Clerk

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  • 03/07/2019
  • Order (Ruling Re: Defendants Demurrer to the Second Amended Complaint and Cross-Complainant's Motion for Summary Judgment); Filed by Clerk

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263 More Docket Entries
  • 06/05/2014
  • Answer; Filed by Defendant/Respondent

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  • 06/03/2014
  • Notice of Case Management Conference; Filed by Clerk

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  • 06/03/2014
  • NOTICE OF CASE MANAGEMENT CONFERENCE

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  • 06/02/2014
  • Answer; Filed by Specialty Surgical Center of Thousand Oaks LLC (Defendant); Symbion, Inc. (Defendant); George Goodwin (Defendant) et al.

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  • 06/02/2014
  • CROSS-COMPLAINT

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  • 06/02/2014
  • Cross-Complaint; Filed by Specialty Surgical Center of Thousand Oaks LLC (Cross-Complainant)

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  • 06/02/2014
  • ANSWER TO COMPLAINT FOR DAMAGES, AND DECLARATORY AND INJUNCTIVE RELIEF

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  • 04/11/2014
  • SUMMONS

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  • 04/11/2014
  • COMPLAINT FOR: 1. BREACH OF FIDUCIARY DUTIES; ETC

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  • 04/11/2014
  • Complaint; Filed by null

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Tentative Rulings

Case Number: BC542350    Hearing Date: February 28, 2020    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

randhir s. tuli;

Plaintiff,

vs.

specialty surgical center of thousand oaks llc., et al.;

Defendants.

Case No.:

BC542350

Hearing Date:

February 28, 2020

[TENTATIVE] RULING RE:

plaintiff’s Motion for Summary Judgment

DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT ON THE THIRD AMENDED COMPLAINT

Plaintiff Randhir Tuli’s Motion for Summary Judgment is DENIED.

Defendants Specialty Surgery Center of Thousand Oaks, LLC, Symbion, Inc., Symbion Ambulatory Resource Centers, Inc., SymbionARC Management Services, Inc., SMBISS Thousand Oaks, LLC, George Goodwin, G. Miles Kennedy, Andrew A. Brooks, M.D., David Chi, M.D., Glenn Cohen, M.D., and Mark Farnum, M.D.’s Motion for Summary Judgment is DENIED.

Factual Background

Plaintiff Randhir Tuli (“Tuli”) asserts cause of action for breach of contract and fiduciary duties, as well as claims for unfair competition, and unjust enrichment. As will be set forth below, the single issue remaining to be tried is whether the decision by the Governing Board of defendant Specialty Surgical Center of Thousand Oaks (“SSC”) to redeem Tuli’s interest for $0 when it terminated Tuli’s membership interest was an illegal forfeiture.

The facts of this case are set forth in more detail in this court’s March 22, 2016 order granting summary judgment in favor of defendants.

procedural history

Tuli filed his original complaint on April 11, 2014. On June 4, 2015, this court denied a Motion for Summary Adjudication brought by Tuli.

Tule filed his FAC on December 11, 2015, alleging five causes of action:

  1. Breach of Fiduciary Duties;

  2. Breach of Written Operating Agreement;

  3. Breach of Written Consulting Agreement

  4. Breach of the Implied Covenant of Good Faith and Fair Dealing;

  5. Violation of Business and Professions Code § 17200 et. seq.

On January 21, 2016, Defendants SSC and SymbionARC Management Services field a Cross-Complaint against Tuli, alleging four causes of action:

  1. Breach of Consulting Agreement

  2. Breach of Operating Agreement

  3. Breach of Good Faith and Fair Dealing

  4. Breach of Fiduciary Duty

On March 22, 2016, this Court granted defendants’ Motion for Summary Judgment. On April 25, 2016, this court entered the following final judgment:

1. Judgment is entered in favor of Defendants and against Plaintiff on Plaintiff’s operative amended complaint and it is hereby dismissed with prejudice;

2. Plaintiff shall take nothing, and Defendants shall recover costs pursuant to Sections 1032 and 1033.5 of the California Code of Civil Procedure, and attorney’s fees as permitted by statute and/or by contract between Plaintiff and certain Defendants, in an amount, if any, to be determined by post-judgment motion;

After this ruling Cross-Complainants dismissed their Cross-Complaint without prejudice on April 7, 2016, pursuant to a tolling agreement with Tuli.

On July 5, 2016, this Court granted Defendants’ Motion for Attorneys’ Fees.

Tuli filed an appeal, which was rejected on April 18, 2018, as the premature appeal of a non-final judgment, given the parties’ agreement to pause litigation on the Cross-Complaint. The appeal was dismissed and the matter remanded for this Court to vacate the defective judgment and underlying stipulation and arrange to dispose of the Cross-Complaint.

On October 11, 2018, this Court vacated the judgment entered April 25, 2016, and the underlying stipulation.

On October 11, 2018, SymbionARC filed a First Amended Cross-Complaint.

On December 20, 2018, SymbionARC filed a Motion for Summary Judgment on the First Amended Cross-Complaint.

On January 31, 2019, this Court denied Tuli’s Motion for Leave to Amend to add a fraud or unjust enrichment cause of action, but granted leave to file a Second Amended Complaint (“SAC”) for relief from forfeiture.

On February 1, 2019, Tuli filed a SAC, alleging the same causes of action, and adding a Sixth for “Restitution / Unjust Enrichment.”

On February 11, 2019, Defendants filed a Demurrer to the SAC.

On March 7, 2019, this Court denied SymbionARC’s Motion for Summary Judgment. This Court also sustained Defendants’ Demurrer to the First through Fifth Causes of Action without leave to amend and sustained the Demurrer to the Sixth Cause of Action with leave to amend.

On March 18, 2019, Tuli filed a Third Amended Complaint (“TAC”) alleging the same six allegations as in the SAC (despite the above order on Demurrer).

On April 14, 2019, Defendants filed a Demurer to the TAC.

On July 11, 2019, the Court sustained the Demurrer to the First through Fifth Causes of Action in the TAC without leave to amend, and overruled the Demurrer to the Sixth Cause of Action in the TAC.

On July 16, 2019, Defendants filed a Petition for Writ of Mandate and/or Prohibition or Other Appropriate Relief with the Courts of Appeal regarding the addition of the Sixth Cause of Action.

On July 30, 2019, Defendants filed an Answer to the TAC.

On July 30, 2019, SymbionARC filed a Cross-Complaint to the TAC against Tuli alleging a single cause of action for Breach of Consulting Agreement.

On October 1, 2019, the Courts of Appeal denied Defendants’ Petition for Writ of Mandate.

On October 29, 2019, Defendants filed the present Motion for Summary Judgment on the remaining Sixth Cause of Action. On January 13, 2020, Tuli filed an Opposition. On January 21, 2020, Defendants filed a Reply.

On November 13, 2019, Plaintiff Tuli filed the present Motion for Summary Judgment on the remaining Sixth Cause of Action. On January 13, 2020, Defendants filed an Opposition. On January 22, 2020, Tuli filed a Reply.

On January 27, 2020, the hearing on the instant Motions was continued for both parties to refile both physical courtesy copies and digital copies of their evidence with tabs.

Discussion

  1. OBJECTIONS

Defendants object to various of Tuli’s evidence submitted in opposition to Defendants’ Motion and in support of his Motion. In ruling on a motion for summary judgment or summary adjudication, the Court is only required to rule on objections to evidence which is material to its decision. (Code Civ. Proc., § 437c(q).) The Court declines to rule these objections for this reason.

  1. MOTIONS FOR SUMMARY JUDGMENT

A party may move for summary judgment “if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc. § 437c, subd. (a).) “[I]f all the evidence submitted, and all inferences reasonably deducible from the evidence and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law,” the moving party will be entitled to summary judgment. (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment. (Code Civ. Proc. § 437c, subd. (f)(2).)

The moving party bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact, and if he does so, the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; accord Code Civ. Proc. § 437c, subd. (p)(2).) To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

If the plaintiff is the moving party, the plaintiff must prove each element of the cause of action entitling the party to judgment on that cause of action.” (Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4th 226, 241.) However, a plaintiff is no longer required in California to disprove any defense asserted by the defendant in addition to proving each element of his own cause of action. (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1321.)

Neither a moving or responding party may rely on the mere allegations or denials of its pleadings. A moving party must submit specific admissible evidence showing that the responding party cannot establish at least one element of his, her or its cause of action or defense. The responding party, to defeat the motion, must submit specific admissible evidence showing that a triable issue of material fact does exist as to that element of the cause of action or defense. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

The “Golden Rule” on a motion for summary judgment or summary adjudication is that “if [a fact] is not set forth in the separate statement, it does not exist.” (Zimmerman, Rosenfeld, Gersh & Leeds LLP v. Larson (2005) 131 Cal.App.4th 1466, 1477, citing United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 337.).

Plaintiff and Defendants, separately, move for summary judgment on the remaining Sixth Cause of Action of the TAC, and Plaintiff further moves for Summary Judgment on the Cross-Complaint’s Claim for Breach of Consulting Agreement.

  1. Sixth Cause of Action – Restitution/ Unjust Enrichment

In the Sixth Cause of Action for Restitution or Unjust Enrichment, Tuli invokes Civil Code § 3275 in an attempt to reclaim a capital account valued at $506,000 and 11.3% equity shares with an estimated value of $5 million to $10 million. (TAC ¶ 107.) Section 3275 states:

Whenever, by the terms of an obligation, a party thereto incurs a forfeiture, or a loss in the nature of a forfeiture, by reason of his failure to comply with its provisions, he may be relieved therefrom, upon making full compensation to the other party, except in case of a grossly negligent, willful, or fraudulent breach of duty.

Tuli claims that he has incurred a forfeiture under this statute by reason of his purported breach of the Operating Agreement, and has offered to make full compensation for any financial loss suffered by Defendants. (TAC ¶¶ 117- 122.)

  1. Motions for Summary Judgment

Defendants argue that the Sixth Cause of Action – Restitution, is outside the scope of the Court of Appeal’s remand, is barred by the statute of limitations, restitution/unjust enrichment is not a valid cause of action, Tuli cannot prove that redemption of his Units was unjust, and Tuli does not qualify for equitable relief from forfeiture. (Def. Motion at p.p. 6-16.)

Tuli argues that he is entitled to restitution under Civil Code § 3275’s relief from forfeiture, and that Defendants’ redemption of his shares is void and unenforceable. (P. Motion at pp. 3-20.) Tuli further argues that SymbionARC cannot establish the elements of the breach of consulting agreement claim in the Cross-Complaint and that SymbionARC waived any breach. (P. Motion at pp. 23-27.)

It is noteworthy that neither party addresses the actual material issue of disputed fact which requires denial of both motions on the sixth cause of action of the complaint: was “redeeming” Tuli’ share for $0 reasonable or was it instead an arbitrary forfeiture?

Scope of Remand

Defendants contend that this case was remanded from the Courts of Appeal solely for the purpose of resolving the Cross-Complaint, and that the Court had not authority to allow an amendment to add this Sixth Cause of Action. (Def. Motion at p. 7.) This argument has previously been rejected by this Court. On October 1, 2019 the Court of Appeal denied Defendants’ Petition for Writ of Mandate on this issue. For the reasons previously stated by this Court, this contention is rejected and defendants Motion for Summary Judgment on this basis is DENIED

  1. Statute of Limitations

Defendants also argue that this Sixth Cause of Action is barred by the three-year statute of limitations. (Def. Motion at p. 8.) Defendants contend that Tuli first asserted this cause of action on February 1, 2019, and that the claim is based on the March 2014 redemption of Tuli’s units, putting it nearly two years beyond the statute of limitations. (Def. Motion on p. 8.)

In Opposition, Tuli argues that this cause of action relates-back to the filing of the original complaint, and Defendants waived the statute of limitations defense when they answered and demurred without raising it. (Oppo. at pp. 7-8.) In Reply, Defendants argue that this cause of action cannot relate-back because the Complaint was dismissed without prejudice on March 22, 2016, and that Tuli should have requested leave to add the restitution claim prior to the 2016 summary judgment hearing. (Reply at p. 2.) Defendants also contend that they asserted laches an affirmative defense to this cause of action due to extreme delay in filing the TAC. (Reply at p. 3.)

“The criterion of relation back is whether the original complaint gave the defendant enough notice of the nature and scope of the plaintiff's claim that he shouldn't have been surprised by the amplification of the allegations of the original complaint in the amended one.” (Pointe San Diego Residential Community, L.P. v. Procopio, Cory, Hargreaves & Savitch, LLP (2011) 195 Cal.App.4th 265, 279 citing Santamarina v. Sears, Roebuck & Co. (7th Cir. 2006) 466 F.3d 570, 573.) The general test is that an amendment relates-back to the original complaint if the amendment: “(1) rests on the same general set of facts; (2) involves the same injury; and (3) refers to the same instrumentality” as the original complaint. (Id. at 276.)

Here, the TAC for the Sixth Cause of Action rests on the same facts and injury as the original complaint, and in-fact realleges and incorporates the facts for the first five causes of action. (TAC ¶ 105.) The Sixth Cause of Action is based on the February 14, 2014 “terminating event” under the Operating Agreement that caused Defendants to redeem Tuli’s shares for $0. (TAC ¶¶ 106-108.) The original 2014 Complaint also heavily involved the same facts: the February 2014 terminating event based on the Operating Agreement and loss of ownership interest. (Compl. ¶¶ 81-82, 98-99.) Defendants’ argument that the complaint was dismissed with the 2016 summary judgment motion, especially since Tuli was granted leave in January 2019 to add the forfeiture claim.

Accordingly, the Motion for Summary Judgment on the grounds that the 6th cause of action is barred by the statute of limitations is DENIED.

  1. Restitution/Unjust Enrichment as a Cause of Action

Defendants further argue that restitution/unjust enrichment is not a cause of action, and it would not be available as a remedy because the parties had a valid and enforceable agreement. (Def. Motion at p. 9.) Defendants contend that there is not dispute that the Operating Agreement exists and is valid and enforceable, and thus that restitution/unjust enrichment is not applicable. (Def. Motion at p. 9.)

In Opposition, Tuli argues that unjust enrichment/restitution is a cognizable claim and that Defendants were unjustly enriched, and that while there was an Operating Agreement, “there is no provision in the SSCTO Operating Agreement that provides for the Company to redeem a Class A Member’s shares; thus, the contract does not cover the subject matter [this cause of action].” (Oppo. at p. 11.)

It is true that some courts have held that unjust enrichment is not a cause of action, but merely another way of asking for the remedy of restitution. (See Hill v. Roll Int’l Corp. (2011) 195 Cal.App.4th 1295, 1307 [“Unjust enrichment is not a cause of action, just a restitution claim.”].) But other courts have continued to construe unjust enrichment claims as causes of action, whether in their own right or as claims for “quasi-contract.” (See Professional Tax Appeal v. Kennedy-Wilson Holdings, Inc. (2018) 29 Cal.App.5th 230, 238 ["The elements of a cause of action for unjust enrichment are simply stated as receipt of a benefit and unjust retention of the benefit at the expense of another.”]; Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231 [construing unjust enrichment claim as one for quasi-contract].)

However, a claim for unjust enrichment must fail where valid express agreement defines the parties’ rights. (California Medical Ass'n, Inc. v. Aetna U.S. Healthcare of California, Inc. (2001) 94 Cal.App.4th 151, 172.) While both parties make numerous claims as to the meaning or interpretation of the Operating Agreement, the fact is that all of those claims have been disposed of by the court’s previous be granted summary judgment motion with one exception. That is whether the redemption of Tuli’s membership interest for $0 entitles Tuli to equitable relief from forfeiture under Civil Code §3275

Civil Code section 3275 states that if a party fails to comply with the terms of an obligation, a party may be relieved from forfeiture upon making full compensation to the other party, except in cases of grossly negligent, willful, or fraudulent breach of duty. (Civ. Code § 3275.)

The TAC alleges that the Operating Agreement is an obligation pursuant to Civil Code section 3275 and that Tuli incurred a forfeiture of his shares by reason of his alleged breach of the Operating Agreement by failing to cure his Terminating Event. (TAC ¶¶ 112, 118-119.) In the TAC Tuli “hereby offers to make full compensation for any financial loss sustained by Defendants as a result of his conduct that Defendants allege was a Terminating Event, and based upon which Defendants confiscated his capital account and redeemed his shares in SSC T.O.” (TAC ¶ 122.)

Defendants argue that relief from forfeiture is not available because Tuli previously, in 2014, had an opportunity to cure but he refused to do. (Def. Motion at p. 14.) In Opposition, Tuli argues that he did not have opportunity for “Alternative Performance” under section 3275. (Oppo. at p. 15.) He further contends, among other arguments, that the forfeiture was not reasonably calculated to be equal to the actual damage suffered. (P. Motion at p. 7.)

Tuli argues, essentially, that the forfeiture was unreasonable and an unenforceable penalty, and that he is entitled to relief from forfeiture and to be re-instated to his previous 11.3% share in the company. (P. Motion at pp. 6-12.)

This question, whether the forfeiture was an unreasonable penalty under the Operating Agreement, is a question for a jury and not to be decided on summary judgment. Tuli, himself, lists various factors for the Court to consider in determining whether the forfeiture was an unreasonable penalty.[1] Neither Motion even claims that that there are no triable issues of material fact on this issue.

“A motion for summary judgment is not a trial upon the merits. It is merely to determine whether there is an issue to be tried.” (Sesma v. Cueto (1982) 129 Cal.App.3d 108, 112.) Here, there are factual issues to be tried as to the Sixth Cause of Action, including the four factors identified by Tuli above going to reasonableness,

  1. Cross-Complaint – Breach of Consulting Agreement

The Cross-Complaint alleges that Tuli and SymbionARC entered into a Consulting Agreement on August 1, 2005, under which Tuli was to provide consulting and management advisory services to Specialty Surgical Center of Thousand Oaks, LLC (“SSCTO”). (CC ¶ 9.) The Cross-Complaint alleges that Tuli failed to provide any consulting services despite having been paid. (CC ¶ 10.)

“The standard elements of a claim for breach of contract are ‘(1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom. [Citation.]’ [Citation]” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.)

In the instant Motion Tuli argues that SymbionARC cannot provide facts that Tuli breached the consulting agreement or that SymbionARC has standing to bring the suit. (P. Motion at pp. 23-24.) However, the Court already ruled in its March 7, 2019 Summary Judgment Ruling that there is a triable issue of fact as to whether Tuli breached the agreement. This continues to be the Court’s finding.

Tuli further argues that SymbionARC waived any purported breach. (P. Motion at p. 24.) Tuli’s argument is premised on the theory that SymbionARC’s waived any breach because SymbionARC was aware that Tuli had not performed under the contract but there are no written communications that Tuli breached the agreement, and thus that he could not have breached the contract because the contract states that SymbionARC was to provide written notice of material breach. (P. Motion at pp. 25-26.) However, SymbionARC has presented evidence that it told Tuli that his performance under the contract was lacking and confirmed its oral statements in writing at least once. (Weaver Decl., Exhs. 2, 10.)

Accordingly, there exist triable issues of as to whether Tuli breached the agreement and as to whether SymbionARC waived the breach. Summary judgment is improper as to the Cross-Complaint.

Therefore, the Motions for Summary Judgment by Plaintiff and Defendants are DENIED.

DATED: February 28, 2020 ________________________________

Hon. Robert S. Draper

Judge of the Superior Court


[1]The listed factors are: “(1) whether the provision takes into account the actual damage suffered by the party for whose benefit the provision is drafted; (2) the actual value of the 11.3% interest forfeited or taken from Tuli; (3) the harm or damages that SSCTO was likely to have experienced as a result of the conditions satisfied, which gave rise to the terminating event (i.e., Tuli’s alleged disruption of Company affairs, and alleged failure to cure within 30 days); and (4) whether the value of Tuli’s forfeited 11.3% interest in the Company bears a reasonable relationship to the harm suffered by the Company, or whether in fact, no matter what the harm might be, the “formula” always ends up in a zero number (rather deceptively at that).” (P. Motion at p. 7.)

Case Number: BC542350    Hearing Date: January 27, 2020    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

randhir s. tuli;

Plaintiff,

vs.

specialty surgical center of thousand oaks llc., et al.;

Defendants.

Case No.:

BC542350

Hearing Date:

January 27, 2020

[TENTATIVE] RULING RE:

plaintiff’s Motion for Summary Judgment

DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT ON THE THIRD AMENDED COMPLAINT

Both Motions for Summary Judgment are continued until February 28, 2010. The Court orders Defendants to deliver printed courtesy copies of their moving and responding papers to Department 78 by Thursday, Januar30, 2020, with all exhibits indexed and tabbed. On the same date the Court orders Defendants to electronically file all evidence with all exhibits (both evidence in support of Defendants’ Motion and in Opposition to Plaintiff’s Motion) indexed and electronically tabbed. The Court orders Plaintiff by Thursday, January 30, 2020 to re-deliver printed courtesy copies of all evidence, including, this time, indexes and tabs for the exhibits and to electronically re-file all evidence, this time, with indexes and all exhibits electronically tabbed (both evidence for Plaintiff’s Motion and in Opposition to Defendants’ Motion). Plaintiff may comply with the order to supply an indexed and tabbed courtesy copy of their exhibits by retrieving the courtesy copy previously lodged with the court and inserting the index and tabs.

Factual Background

This is an action by Plaintiff Randhir Tuli (“Tuli”) for breach of contract and fiduciary duties, as well as claims for unfair competition. The issue in this case is whether the Governing Board of defendant Specialty Surgical Center of Thousand Oaks (“SSC”) properly terminated Tuli under the operative Third Amended and Restated Operating Agreement (“Operating Agreement”) The stated reason for this termination as that Tuli sent a letter through his counsel to SSC’s Members and employees accusing SSC of Medicare kickbacks, and bad faith and illegal actions. Based on its assertion that this constituted a “Terminating Event” under the Operating Agreement, the Governing Board voted to redeem Tuli’s membership interest for $0.

The facts of this case are set forth in more detail in this court’s March 22, 2016 order granting summary judgment in favor of defendants on the causes of action alleged in the complaint.

procedural history

Tuli filed his original complaint on April 11, 2014. On June 4, 2015, this court denied a Motion for Summary Adjudication brought by Tuli.

Tule filed his FAC on December 11, 2015, alleging five causes of action:

  1. Breach of Fiduciary Duties;

  2. Breach of Written Operating Agreement;

  3. Breach of Written Consulting Agreement

  4. Breach of the Implied Covenant of Good Faith and Fair Dealing;

  5. Violation of Business and Professions Code § 17200 et. seq.

On January 21, 2016, Defendants SSC and Symbion ARC Management Services field a Cross-Complaint against Tuli, alleging four causes of action:

  1. Breach of Consulting Agreement

  2. Breach of Operating Agreement

  3. Breach of Good Faith and Fair Dealing

  4. Breach of Fiduciary Duty

On March 22, 2016, this Court granted defendants’ Motion for Summary Judgment on the amended complaint. On April 25, 2016, this court entered the following final judgment:

1. Judgment is entered in favor of Defendants and against Plaintiff on Plaintiff’s operative amended complaint and it is hereby dismissed with prejudice;

2. Plaintiff shall take nothing, and Defendants shall recover costs pursuant to Sections 1032 and 1033.5 of the California Code of Civil Procedure, and attorney’s fees as permitted by statute and/or by contract between Plaintiff and certain Defendants, in an amount, if any, to be determined by post-judgment motion;

Cross-Complainants dismissed the Cross-Complaint without prejudice on April 7, 2016, pursuant to a tolling agreement with Tuli.

On July 5, 2016, this Court granted Defendants’ Motion for Attorneys’ Fees.

Tuli filed an appeal, which was rejected on April 18, 2018, as the premature appeal of a non-final judgment, given the parties’ agreement to pause litigation on the Cross-Complaint. The appeal was dismissed and the matter remanded for this Court to vacate the defective judgment and underlying stipulation and arrange to dispose of the Cross-Complaint.

On October 11, 2018, this Court vacated the judgment entered April 25, 2016, and the underlying stipulation.

On January 31, 2019, this Court denied Tuli’s Motion for Leave to Amend to add a fraud or unjust enrichment cause of action, but granted leave to assert a claim for relief from forfeiture.

Tuli filed a Second Amended Complaint on February 1, 2019, alleging the same causes of action, and adding a Sixth for “Restitution / Unjust Enrichment.”

Symbion ARC filed a Motion for Summary Judgment on December 20, 2018. Defendants filed a Demurrer on February 11, 2019.

On March 7, 2019, this Court denied Symbion ARC’s Motion for Summary Judgment. This Court also sustained Defendants’ Demurrer to the First through Fifth Causes of Action without leave to amend and sustained the Demurrer to the Sixth Cause of Action with leave to amend.

On March 18, 2019, Tuli filed a Third Amended Complaint (“TAC”) alleging the same six causes of action.

On October 29, 2019, Defendants filed the present Motion for Summary Judgment on the remaining Sixth Cause of Action. On January 13, 2020, Tuli filed an Opposition. On January 21, 2020, Defendants filed a Reply.

On November 13, 2019, Plaintiff Tuli filed the present Motion for Summary Judgment on the remaining Sixth Cause of Action. On January 13, 2020, Defendants filed an Opposition. Tuli filed a Reply.

Discussion

  1. MOTIONS FOR SUMMARY JUDGMENT

A party may move for summary judgment “if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc. § 437c, subd. (a).) “[I]f all the evidence submitted, and all inferences reasonably deducible from the evidence and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law,” the moving party will be entitled to summary judgment. (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment. (Code Civ. Proc. § 437c, subd. (f)(2).)

The moving party bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact, and if he does so, the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; accord Code Civ. Proc. § 437c, subd. (p)(2).) A Defendant moving for summary judgment may meet its initial burden, inter alia, by proving that for each cause of action alleged, Plaintiff cannot establish at least one element of the cause of action. (Code Civ. Proc. § 437c(p)(2).) What this means in practice is that if a cause of action, such as fraud, for example, requires proof of five elements, one of which is reliance, and if Defendant sets forth a prima facie case that reliance cannot be proven (either by citation to plaintiff’s deposition testimony, written discovery responses or other means), then Defendant has met its burden.

Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. (Aguilar, supra, 25 Cal.4th at 850.) The plaintiff may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto. (Ibid.) To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

It is the “Golden Rule” of summary judgment that “if it is not set forth in the separate statement, it does not exist.” (Zimmerman, Rosenfeld, Gersh & Leeds LLP v. Larson (2005) 131 Cal.App.4th 1466, 1477, citing United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 337.) However, the court may in its discretion look to evidence outside the separate statement, but “only if the evidence presented warrants it.” (Id. at 1478.)

Plaintiff and Defendants, separately, move for summary judgment on the remaining Sixth Cause of Action of the TAC.

  1. Sixth Cause of Action – Restitution/ Unjust Enrichment

The Sixth Cause of Action for Restitution or Unjust Enrichment, Tuli invokes Civil Code § 3275 in an attempt to reclaim a capital account valued at $506,000 and 11.3% equity shares with an estimated value of $5 million to $10 million. (TAC ¶ 107.) Section 3275 states:

Whenever, by the terms of an obligation, a party thereto incurs a forfeiture, or a loss in the nature of a forfeiture, by reason of his failure to comply with its provisions, he may be relieved therefrom, upon making full compensation to the other party, except in case of a grossly negligent, willful, or fraudulent breach of duty.

Tuli claims that he has incurred a forfeiture under this statute by reason of his purported breach of the Operating Agreement, and has offered to make full compensation for any financial loss suffered by Defendants. (TAC ¶¶ 117- 122.)

  1. Defendants’ Motion for Summary Judgment

  1. Procedural Defects

Defendants have not submitted any of the evidence they purport to rely on. Defendants’ Separate Statement of Undisputed Material Facts relies heavily upon Exhibits to the Weaver Declaration. The Weaver Declaration filed in support of this Motion does not refer to or attach any exhibits. Defendants Separate Statement also refers to exhibits and other evidence that are likewise not included in any submission to the Court.

Defendants also have not provided the Court with printed courtesy copies. (See General Order re: Mandatory Electronic Filing for Civil and Department 78 Courtroom Information Link on the LASC website.) The Tuli Declaration submitted in support of Plaintiff’s Opposition to Defendants’ Motion does not attach or include the cited Exhibits and other evidence referred to in the declaration.

Defendants are ordered to correct all of these deficiencies by Thursday, January 30, 2020 by electronically filing and delivering courtesy hard copies of the documents referred above which are compliant with Court rules. Both electronic and printed courtesy copies must include indexes and tabs for exhibits pursuant to California Rules of Court Rule 3.1110(f) and Rule 3.1350(g).T

  1. Plaintiff’s Motion for Summary Judgment

  1. Procedural Defects

The evidence submitted in support of Plaintiff’s Motion is neither indexed nor tabbed (either in hardcopy or electronic form), in violation of California Rules of Court Rule 3.1110(f) and Rule 3.1350(g). (See General Order re: Mandatory Electronic Filing for Civil and Department 78 Courtroom Information Link on the LASC website.)

Defendants have not provided the Court with printed courtesy copies. (See General Order re: Mandatory Electronic Filing for Civil and Department 78 Courtroom Information Link on the LASC website.). Plaintiffs are ordered to correct all of these deficiencies by Thursday, January 30, 2020 by electronically filing and delivering courtesy hard copies of the documents referred above which are compliant with Court rules. Both electronic and printed courtesy copies must include indexes and tabs for exhibits pursuant to California Rules of Court Rule 3.1110(f) and Rule 3.1350(g).

The Motions for Summary Judgment are continued until February 28, 2020.

DATED: January 27, 2020 ________________________________

Hon. Robert S. Draper

Judge of the Superior Court