STEPHANIE BROWN JACOBSON SPIES ET AL VS HRAYR SHAHINIAN MD E

Tentative Rulings

Case Number: BC684807    Hearing Date: October 08, 2020    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

STEPHANIE BROWN JACOBSON SPIES; HEATHER COE; CURTIS COE; ROBYN BILYEU; DONALD BILYEU, JR.; JESSICA TRISCHLER; JASON TRISCHLER; SONNY LANGLEY; CHELSEA LEHMAN; DANIELLE LEUCK; CINDY TRAVIS ELLISON; STEVEN ELLISON; BRANDY HARRELL; MATTHEW HARRELL; JUSTINE RODRIGUEZ, a minor, through her parents and Guardian Ad Litem STEPHANIE RODRIGUEZ; THOMAS KETTERING; CHRISTINE JONES; TAMICA WALKER; BRAD WALKER; LARA POWELL; KATHRYN MCCURDY; LARISSA HARDIN; and LILY WITHAM, Plaintiffs, vs. HRAYR SHAHINIAN, M.D.; SKULL BASE INSTITUTE; SKULL BASE MEDICAL GROUP, INC.; SKULL BASE FOUNDATION; DEANCO HEALTHCARE, LLC d/b/a MISSION COMMUNITY HOSPITAL; ROSE BILLING; and DOES 1 through 20, inclusive, Defendants.

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CASE NO: BC684807 [TENTATIVE] ORDER RE: SHAHINIAN’S DEMURRER & MOTION TO STRIKE Dept. U 8:30 a.m. October 8, 2020

I. BACKGROUND

Stephanie Brown Jacobson Spies (Spies), Heather Coe, Curtis Coe, Robyn Bilyeu, Donald Bilyeu, Jr., Jessica Trischler, Jason Trischler, Sonny Langley, Chelsea Lehman, Danielle Leuck, Cindy Travis Ellison, Steven Ellison, Brandy Harrell, Matthew Harrell, Justine Rodriguez, a minor, through her Parents and Guardian Ad Litem Stephanie Rodriguez, Thomas Kettering, Christine Jones, Tamica Walker, Brad Walker, Lara Powell, Kathryn McCurdy, Larissa Hardin, and Lily Witham (collectively, Plaintiffs) initiated this matter against Hrayr Shahinian, M.D. (Shahinian), Skull Base Institute (the Institute), Skull Base Medical Group, Inc. (the Medical Group), Skull Base Foundation (the Foundation), Deanco Healthcare, LLC d/b/a Mission Community Hospital (Mission Community), Rose Billing (collectively, Defendants), and Does 1 through 20 on November 28, 2017. Plaintiffs later filed a first and second amended complaint (SAC).

The operative pleading is the SAC, which asserts causes of action for: (1) medical negligence; (2) corporate negligence/negligent supervision; (3) corporate negligence/hospital liability; negligent credentialing; (4) fraud under Civil Code section 1572; (5) constructive fraud under Civil Code section 1573; (6) deceit – concealment under Civil Code sections 1709 and 1710(3); (7) deceit – intentional misrepresentation under Civil Code sections 1709 and 1710(1); (8) deceit – negligent misrepresentation under Civil Code sections 1709 and 1710(2); (9) violation of Business & Professions Code section 17200; (10) violation of Business & Professions Code section 17500; and (11) loss of consortium.

The key allegations of the SAC are these. Shahinian owns and operates the Institute, Medical Group, and Foundation (collectively, the Skull Base entities). (SAC, ¶¶ 9-13.) Rose Billing is a medical billing company employed by Shahinian and Mission Community. (Id., ¶ 14.) Plaintiffs are the patients of Shahinian and Mission Community, and their respective spouses. (Id., ¶ 20.)

Defendants misrepresented to Plaintiffs that Shahinian was qualified to conduct deep intradural brain surgery at the pineal gland, that Plaintiffs urgently needed this surgery, and that Shahinian’s revolutionary endoscopic method would cure Plaintiffs’ symptoms. (Id., ¶ 1.) However, Shahinian was not, as Defendants knew, a licensed neurosurgeon, and his unlicensed practice as such was a great departure from the standard of care. Endoscopic removal of pineal gland tumors or lesions is dangerous and is not a traditionally accepted method of surgery among neurosurgeons in the medical community. (Id., ¶ 2.)

Defendants knew Shahinian had his surgical privileges revoked by four prior hospitals due to negligently and recklessly performing endoscopic intradural brain surgeries. Nevertheless, Mission Community granted him surgical privileges due to its declining revenue. (Id., ¶¶ 3-4.) Shahinian conducted at least dozens of these brain surgeries and caused recurring harm and injury to his patients at Mission Community. (Id., ¶ 4.)

On January 6, 2020, Shahinian filed this demurrer to the SAC’s fourth through tenth causes of action pursuant to Code of Civil Procedure section 430.10(e) on the grounds that Plaintiffs have not sufficiently pled fraud against him. Shahinian also filed an accompanying motion to strike.

II. LEGAL STANDARD

A. Demurrer

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc., § 430.30(a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Ibid.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn v. Mirda, supra, at p. 747.)

B. Motion to Strike

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436(a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436(b).) The grounds for a motion to strike are that the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. (Id., § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., § 437.)

C. Leave to Amend

“Where the defect raised by a motion to strike or by demurrer is reasonably capable of cure, leave to amend is routinely and liberally granted to give the plaintiff a chance to cure the defect in question.” (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146.)

III. DISCUSSION

A. Meet and Confer Requirement

Before filing a demurrer or motion to strike, the moving party is required to meet and confer with the party who filed the pleading for the purposes of determining whether an agreement can be reached through the filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41 & 435.5.) Shahinian has satisfied this requirement.

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B. Fraud

The elements of fraud are: 1) a misrepresentation (false representation, concealment, or nondisclosure); 2) knowledge of falsity (or ‘scienter’); 3) intent to defraud, i.e., to induce reliance; 4) justifiable reliance; and 5) resulting damage.” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.) In California, fraud, including negligent misrepresentation, must be pled with specificity. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) “The particularity demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.)

Here, Plaintiffs plead that Shahinian misrepresented to them that he had unique qualifications to perform intradural brain surgery and insisted that the procedure was safe and effective because of his endoscopic method of surgery. (SAC, ¶ 51.) It is also alleged that Shahinian misrepresented to Plaintiffs that the need for the surgeries was urgent. (Ibid.) Shahinian and the Skull Base entities advertised these misrepresentations via videos on their website and television commercials. (Id., ¶ 76.) Shahinian conducted Skype consultation appointments with individual Plaintiffs. During these video calls, Shahinian represented that Plaintiffs’ tumors, cysts, or lesions would get progressively worse, possibly cancerous, and that they needed to be removed immediately. (Id., ¶¶ 80 – 81.) Shahinian promoted his endoscopic technique of removing the growths as the “best, cleanest, neatest, and least invasive” method of removing them and condemned traditional craniotomy methods. (Id., ¶ 82.) Shahinian represented that he was the only doctor with his expertise, training, and experience to complete the procedure. He also misled patients with surgical success rates and promised that none of his patients had complications and all were cured of their symptoms. (Id., ¶ 84.)

Several of the specific misrepresentations included on Shahinian’s website are included in Paragraph 91 of the SAC. Plaintiffs relied on these, and the representations received directly from Shahinian, in consenting to their surgeries. Paragraph 92 of the SAC adequately shows why the representations were false or misleading.

As an example of the damages caused to Plaintiffs by Shahinian’s misrepresentations, Spies suffered vision loss, blurry vision, fixed and dilated pupils, photophobia, osciollopsia, lack of depth perception, Parinaud’s syndrome, ataxia, Chiari malformation, strokes, loss of balance, headaches, head pressure, infection, cognitive impairment, and memory loss. (SAC, ¶ 134.) Shahinian claimed to have removed three growths from Spies’ brain when he actually only removed one growth and a portion of her pineal gland. Spies’ pathology reports indicate that she suffered strokes during the procedure which Shahinian denies occurred. (Id., ¶¶ 141 – 142.)

Despite Shahinian’s contentions, Plaintiffs have pled sufficient facts constituting fraud against Shahinian. Accordingly, Shahinian’s demurrer to this cause of action is overruled.

C. Constructive Fraud

“Constructive fraud is a unique species of fraud applicable only to a fiduciary or confidential relationship.” (Assilzadeh Odorizzi

Despite Shahinian’s contentions otherwise, “a physician has a fiduciary duty to disclose all information material to the patient's decision,” when soliciting a patient's consent to a medical procedure. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 129.) Here, Shahinian’s lack of licensure as a neurosurgeon, the true success rates of Shahinian’s patients following the endoscopic intradural brain surgery, and that the procedure was not widely accepted in the medical community, are information that would have been material to Plaintiffs’ informed consent. Plaintiffs plead that they would not have consented to the procedure had they known the existence and truth of the concealed material facts. (SAC, ¶ 425.)

Therefore, combined with the facts pled in support of fraud generally, Plaintiffs have alleged sufficient facts to constitute constructive fraud against Shahinian for his failure to disclose information material to Plaintiffs’ consent to their brain surgeries.

D. Deceit – Concealment

To establish fraud through nondisclosure or concealment of facts, it is necessary to show the defendant “was under a legal duty to disclose them.” (OCM Principal Opportunities Fund v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 845.) Nondisclosure or concealment may constitute actionable fraud when: 1) there is a fiduciary relationship between the parties; 2) the defendant had exclusive knowledge of material facts not known to the plaintiff; 3) the defendant actively conceals a material fact from the plaintiff; and 4) the defendant makes partial representations but also suppresses some material facts. (Los Angeles Memorial Coliseum Commission v. Insomniac, Inc. (2015) 233 Cal.App.4th 803, 831.)

Plaintiffs have pled sufficient facts to establish this claim for the same reasons as the Court found the fraud and constructive fraud claims to be adequately pled. Again, Shahinian’s demurrer to this claim must be overruled.

E. Deceit – Intentional Misrepresentation

To establish a claim for deceit based on intentional misrepresentation, the plaintiff must prove seven essential elements: 1) the defendant represented to the plaintiff that an important fact was true; 2) that representation was false; 3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; 4) the defendant intended that the plaintiff rely on the representation; 5) the plaintiff reasonably relied on the representation; 6) the plaintiff was harmed; and 7) the plaintiff's reliance on the defendant's representation was a substantial factor in causing that harm to the plaintiff. (Manderville v. PCG & S Group, Inc. (2007) 146 Cal.App.4th 1486, 1498.)

For the same reasons explained above in connection with Plaintiff’s fraud claim, the Court finds that the SAC includes sufficient factual allegation to state a claim for deceit by way of an intentional misrepresentation.

F. Deceit – Negligent Misrepresentation

Negligent misrepresentation requires the defendant to make false statements believing them to be true, but without reasonable ground for such belief. (Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 407.)

Here, Plaintiffs plead that Defendants made the misrepresentations without having reasonable grounds for believing them to be true. However, Plaintiffs do not plead that Defendants actually believed their misrepresentations were true. Rather, Plaintiffs plead that Defendants’ knew the misrepresentations were false and made them to induce Plaintiffs’ reliance in consenting to the procedure. Defendants’ lack of unreasonable belief in their misrepresentations is fatal to this claim. While it is true that Plaintiffs can assert contradictory alternative theories of recovery, the SAC does not include all the requisite elements for a claim for negligent misrepresentation. Accordingly, the demurrer to this claim is sustained, with leave to amend.

G. Violation of Business & Professions Code section 17200

For a business practice to be actionable under Business & Professions Code section 17200, et seq., it must be: 1) unfair, unlawful, or fraudulent; and 2) there must be an authorized remedy. (Bus. & Prof. Code § 17200; Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 676.)

Here, as detailed above, Plaintiffs have adequately pled fraud against Shahinian based on his misrepresentations and failure to disclose material information. Plaintiffs seek restitution and/or disgorgement in their prayer for relief. Plaintiffs have sufficiently pled facts constituting an unfair business practice by Shahinian.

Demurrer to this claim is, thus, overruled.

H. Violation of Business & Professions Code section 17500

A claim under Business and Professions Code section 17500 requires allegations that (1) the defendant intended to dispose of real or personal property or perform services; (2) the defendant publicly disseminated advertising containing an untrue or misleading statement; (3) the defendant knew, or should have known, it was untrue or misleading; and (4) the statement concerned the real or personal property or services or their disposition or performance or, in the alternative, the defendant publicly disseminated advertising with the intent not to sell the property or services at the price stated or as advertised. (Bus. & Prof. Code, §17500; People v. Sup. Ct. (1979) 96 Cal.App.3d 181, 190.)

Here, Plaintiffs plead that Shahinian intended to perform medical services, namely brain surgery, on Plaintiffs and other patient-consumers. It is alleged that Shahinian publicly disseminated advertising information about his brain surgeries through his and the Skull Base entities’ website knowing he was not licensed as a neurosurgeon. Shahinian knew, or should have known, that claiming to be a licensed neurosurgeon with unverified success rates would be misleading to the public. Shahinian’s false advertising directly implicated the surgical services he intended to perform on the public. Therefore, Plaintiffs have pled facts sufficient to constitute false advertising against Shahinian.

Demurrer to this claim is overruled.

I. Motion to Strike

Shahinian seeks to have all references and requests for punitive damages stricken from SAC, in addition to Plaintiffs request for restitution damages and all other forms of relief under Business & Professions Code section 1720 et seq.

Civil Code section 3294 authorizes the recovery of punitive damages in non-contract cases where “the defendant has been guilty of oppression, fraud, or malice . . . .” (Civ. Code § 3294(a).) “‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Id. § 3294(c)(1).) Punitive damages thus require more than the mere commission of a tort. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894-95.) Specific facts must be pleaded in support of punitive damages. (Hillard v. A.H. Robins Co. (1983) 148 Cal.App.3d 374, 391-392.)

Plaintiffs have adequately pled their fraud claims. Further the allegations, if proven to be true, would support a finding that Shahinian engaged in despicable conduct which was carried on by the doctor with a willful and conscious disregard for the rights and safety of Plaintiffs. Accordingly the Court denies the motion to strike the requested portions of the SAC at this time.

IV. CONCLUSION

For the foregoing reasons, Shahinian’s demurrer to Plaintiffs’ fourth, fifth, sixth, seventh, ninth, and tenth causes of action is OVERRULED.

Shahinian’s demurrer to the eighth cause of action is SUSTAINED, with 20 days’ leave to amend.

Shahinian’s motion to strike is DENIED.

Plaintiffs are ordered to give notice of the Court’s ruling.

DATED: October 8, 2020

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Hon. Theresa M. Traber

Judge of the Superior Court

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

STEPHANIE BROWN JACOBSON SPIES; HEATHER COE; CURTIS COE; ROBYN BILYEU; DONALD BILYEU, JR.; JESSICA TRISCHLER; JASON TRISCHLER; SONNY LANGLEY; CHELSEA LEHMAN; DANIELLE LEUCK; CINDY TRAVIS ELLISON; STEVEN ELLISON; BRANDY HARRELL; MATTHEW HARRELL; JUSTINE RODRIGUEZ, a minor, through her parents and Guardian Ad Litem STEPHANIE RODRIGUEZ; THOMAS KETTERING; CHRISTINE JONES; TAMICA WALKER; BRAD WALKER; LARA POWELL; KATHRYN MCCURDY; LARISSA HARDIN; and LILY WITHAM, Plaintiffs, vs. HRAYR SHAHINIAN, M.D.; SKULL BASE INSTITUTE; SKULL BASE MEDICAL GROUP, INC.; SKULL BASE FOUNDATION; DEANCO HEALTHCARE, LLC d/b/a MISSION COMMUNITY HOSPITAL; ROSE BILLING; and DOES 1 through 20, inclusive, Defendants.

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[TENTATIVE] ORDER RE: MISSION COMMUNITY’S DEMURRER & MOTION TO STRIKE Dept. U 8:30 a.m. October 8, 2020

I. BACKGROUND

Stephanie Brown Jacobson Spies (Spies), Heather Coe, Curtis Coe, Robyn Bilyeu, Donald Bilyeu, Jr., Jessica Trischler, Jason Trischler, Sonny Langley, Chelsea Lehman, Danielle Leuck, Cindy Travis Ellison, Steven Ellison, Brandy Harrell, Matthew Harrell, Justine Rodriguez, a minor, through her Parents and Guardian Ad Litem Stephanie Rodriguez, Thomas Kettering, Christine Jones, Tamica Walker, Brad Walker, Lara Powell, Kathryn McCurdy, Larissa Hardin, and Lily Witham (collectively, Plaintiffs) initiated this matter against Hrayr Shahinian, M.D. (Shahinian), Skull Base Institute (the Institute), Skull Base Medical Group, Inc. (the Medical Group), Skull Base Foundation (the Foundation), Deanco Healthcare, LLC d/b/a Mission Community Hospital (Mission Community), Rose Billing (collectively, Defendants), and Does 1 through 20 on November 28, 2017. Plaintiffs filed a first and second amended complaint (SAC).

The operative pleading is the SAC, which asserts causes of action for: (1) medical negligence; (2) corporate negligence/negligent supervision; (3) corporate negligence/hospital liability; negligent credentialing; (4) fraud under Civil Code section 1572; (5) constructive fraud under Civil Code section 1573; (6) deceit – concealment under Civil Code sections 1709 and 1710(3); (7) deceit – intentional misrepresentation under Civil Code sections 1709 and 1710(1); (8) deceit – negligent misrepresentation under Civil Code sections 1709 and 1710(2); (9) violation of Business & Professions Code section 17200; (10) violation of Business & Professions Code section 17500; and (11) loss of consortium.

The key allegations of the SAC are these.  Shahinian owns and operates the Institute, Medical Group, and Foundation (collectively, the Skull Base entities). (SAC, ¶¶ 9-13.) Rose Billing is a medical billing company employed by Shahinian and Mission Community. (Id., ¶ 14.) Plaintiffs are the patients, and their respective spouses, of Shahinian and Mission Community. (Id., ¶ 20.)

Defendants misrepresented to Plaintiffs that Shahinian was qualified to conduct deep intradural brain surgery at the pineal gland (the procedure), that Plaintiffs urgently needed this surgery, and that Shahinian’s revolutionary endoscopic method would cure Plaintiffs’ symptoms. (Id., ¶ 1.) However, Shahinian was not, as Defendants knew, a licensed neurosurgeon and the unlicensed practice as such was a great departure from the standard of care. Endoscopic removal of pineal gland tumors or lesions is dangerous and is not a traditionally accepted method of surgery among neurosurgeons in the medical community. (Id., ¶ 2.)

Defendants knew Shahinian had his surgical privileges revoked by four prior hospitals due to negligently and recklessly performing endoscopic intradural brain surgeries. Nevertheless, Mission Community granted him surgical privileges due to its declining revenue. (Id., ¶¶ 3-4.) Shahinian conducted at least dozens of these brain surgeries and caused recurring harm and injury to his patients at Mission Community. (Id., ¶ 4.)

On January 6, 2020, Mission Community filed this demurrer to the SAC’s fourth through tenth causes of action pursuant to Code of Civil Procedure section 430.10(e) on the grounds that Plaintiffs have not sufficiently pled fraud against it. Mission Community also filed an accompanying motion to strike.

II. LEGAL STANDARD

A. Demurrer

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc., § 430.30(a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Ibid.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn v. Mirda, supra, at p. 747.)

B. Motion to Strike

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436(a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436(b).) The grounds for a motion to strike are that the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. (Id., § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., § 437.)

C. Leave to Amend

“Where the defect raised by a motion to strike or by demurrer is reasonably capable of cure, leave to amend is routinely and liberally granted to give the plaintiff a chance to cure the defect in question.” (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146.)

III. DISCUSSION

A. Meet & Confer Requirement

Before filing a demurrer or motion to strike, the moving party is required to meet and confer with the party who filed the pleading for the purposes of determining whether an agreement can be reached through the filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41 & 435.5.) Mission Community has satisfied this requirement.

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B. Fraud

The elements of fraud are: 1) a misrepresentation (false representation, concealment, or nondisclosure); 2) knowledge of falsity (or ‘scienter’); 3) intent to defraud, i.e., to induce reliance; 4) justifiable reliance; and 5) resulting damage.” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.) In California, fraud, including negligent misrepresentation, must be pled with specificity. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) “The particularity demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) 

Here, Plaintiffs plead that Mission Community misrepresented to them that Shahinian was qualified to conduct the procedure knowing that Shahinian was not, in fact, qualified to perform this procedure because he was not a neurosurgeon. (SAC, ¶¶ 1-2.) It is alleged that Mission Community knew Shahinian was not qualified to perform the procedure without having completed a neurosurgical residency and that his performance of this procedure without the required training program was an extreme departure from the standard of care. (Id., ¶ 2.) Mission Community knew Shahinian was repeatedly negligent in performing these procedures because at least four other hospitals revoked his privileges after he caused injury and death to patients. (Id., ¶ 3.) Mission Community granted Shahinian surgical privileges despite knowing his lack of qualifications because its revenue was declining. (Id., ¶ 4.) Mission Community granted Shahinian privileges first on January 7, 2015 and again in 2017. By credentialing Shahinian, Mission Community authorized Shahinian to represent and speak on its behalf, including using Mission Community’s name, facilities, and reputation in Shahinian’s marketing materials and meetings with clients. (Id., ¶¶ 55-56.)

Mission Community’s name and facilities can be seen in the videos Shahinian published on his website. These representations indicate that Shahinian is Mission Community’s agent. (Id., ¶ 57.)  Shahinian’s background, contact information, and resume all display his affiliation with Mission Community. (Id., ¶ 58.)

During consultations, Shahinian represented to Plaintiffs that he was Mission Community’s representative and that the procedures would take place at its facility with its tools, equipment, and staff. (Id., ¶ 59.) Mission Community did, in fact, provide Shahinian with these resources. (Id., ¶ 60.) Plaintiffs attended in-person appointments with Shahinian at Mission Community’s facility.

Mission Community is responsible for the qualifications, conduct, credentialing, and supervision of its medical staff. By providing Shahinian with the resources to perform his unlicensed procedures, Mission Community ratified Shahinian’s misrepresentations to Plaintiffs. (Id., ¶ 66.) Mission Community’s ratification of Shahinian’s misrepresentations and presence on Shahinian’s website shows Mission Community’s intent to induce Plaintiffs to rely on its affiliation with Shahinian and, thereby, his misrepresentations.

Mission Community assisted Shahinian in defrauding Plaintiffs by providing him with a team of nurses, a facility, and location to conduct his surgeries. Following surgery, to minimize risk, Mission discharged Plaintiffs to a nearby hotel without any medical staff supervision. (Id., ¶ 53.) This demonstrates that Mission Community knew Shahinian was performing unlicensed procedures because they did not want the patients recovering at their facility.

As an example of the damages caused to Plaintiffs by Shahinian and Mission Community’s misrepresentations, it is alleged that Spies suffered vision loss, blurry vision, fixed and dilated pupils, photophobia, osciollopsia, lack of depth perception, Parinaud’s syndrome, ataxia, Chiari malformation, strokes, loss of balance, headaches, head pressure, infection, cognitive impairment, and memory loss. (SAC, ¶ 134.) Shahinian claimed to have removed three growths from Spies’ brain when he actually removed only one growth and a portion of her pineal gland.  Spies’ pathology reports indicate that she suffered strokes during the procedure which Shahinian denies occurred. (Id., ¶¶ 141 – 142.)

Despite Mission Community’s contentions, the Court finds that Plaintiffs have pled sufficient facts constituting fraud against it. Demurrer to this cause of action is overruled.

C. Constructive Fraud

“Constructive fraud is a unique species of fraud applicable only to a fiduciary or confidential relationship.” (Assilzadeh v. California Federal Bank Odorizzi v. Bloomfield School Dist.

Plaintiffs allege that Mission Community had the duty and authority to determine the qualifications of Shahinian and the power to allow him to practice at its facility. Plaintiffs plead that Mission Community breached its own fiduciary duty to Plaintiffs as well as aided and abetted Shahinian’s breach of fiduciary duty to them by providing him with resources. (American Master Lease LLC v. Indanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1477.)

Therefore, combined with the facts pled in support of fraud generally, Plaintiffs have alleged facts that are sufficient to constitute constructive fraud against Mission Community.

D. Deceit – Concealment

To establish fraud through nondisclosure or concealment of facts, it is necessary to show that the defendant “was under a legal duty to disclose them.” (OCM Principal Opportunities Fund v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 845.) Nondisclosure or concealment may constitute actionable fraud when: 1) there is a fiduciary relationship between the parties; 2) the defendant had exclusive knowledge of material facts not known to the plaintiff; 3) the defendant actively conceals a material fact from the plaintiff; and 4) the defendant makes partial representations but also suppresses some material facts. (Los Angeles Memorial Coliseum Commission v. Insomniac, Inc. (2015) 233 Cal.App.4th 803, 831.)

Plaintiffs have pled sufficient facts to establish this claim for the same reasons as the Court found the fraud and constructive fraud claims to be adequately pled.  Again, Mission Community’s demurrer to this claim must be overruled.

E. Deceit – Intentional Misrepresentation

To establish a claim for deceit based on intentional misrepresentation, the plaintiff must prove seven essential elements: 1) the defendant represented to the plaintiff that an important fact was true; 2) that representation was false; 3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; 4) the defendant intended that the plaintiff rely on the representation; 5) the plaintiff reasonably relied on the representation; 6) the plaintiff was harmed; and 7) the plaintiff's reliance on the defendant's representation was a substantial factor in causing that harm to the plaintiff. (Manderville v. PCG & S Group, Inc. (2007) 146 Cal.App.4th 1486, 1498.)

For the same reasons explained above in connection with Plaintiff’s fraud claim, the Court finds that the SAC includes sufficient factual allegation to state a claim for deceit by way of an intentional misrepresentation. 

F. Deceit – Negligent Misrepresentation

Negligent misrepresentation requires the defendant to make false statements believing them to be true, but without reasonable ground for such belief. (Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 407.)

Here, Plaintiffs plead that Defendants made the misrepresentations without having reasonable grounds for believing them to be true. However, Plaintiffs do not plead that Defendants actually believed their misrepresentations were true. Rather, Plaintiffs plead that Defendants knew the misrepresentations were false and made them to induce Plaintiffs’ reliance in consenting to the procedure. Defendants’ lack of unreasonable belief in their misrepresentations is fatal to this claim.

While it is true that Plaintiffs can assert contradictory alternative theories of recovery, the SAC does not include all the requisite elements for a claim for negligent misrepresentation.  Accordingly, the demurrer to this claim is sustained, with leave to amend.    

G. Violation of Business & Professions Code section 17200

For a business practice to be actionable under Business & Professions Code section 17200, et seq., it must be: 1) unfair, unlawful, or fraudulent; and 2) there must be an authorized remedy. (Bus. & Prof. Code § 17200; Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 676.)

Here, as detailed above, Plaintiffs have adequately pled fraud against Mission Community based on its misrepresentations and failure to disclose material information. Plaintiffs seek restitution and/or disgorgement in their prayer for relief. Plaintiffs have sufficiently pled facts constituting an unfair business practice by Mission Community.

Demurrer to this claim is, thus, overruled.

H. Violation of Business & Professions Code section 17500

A claim under Business and Professions Code section 17500 requires allegations that (1) the defendant intended to dispose of real or personal property or perform services; (2) the defendant publicly disseminated advertising containing an untrue or misleading statement; (3) the defendant knew, or should have known, it was untrue or misleading; and (4) the statement concerned the real or personal property or services or their disposition or performance or, in the alternative, the defendant publicly disseminated advertising with the intent not to sell the property or services at the price stated or as advertised.  (Bus. & Prof. Code, §17500; People v. Sup. Ct. (1979) 96 Cal.App.3d 181, 190.)

Here, Plaintiffs plead that Mission Community intended for Shahinian to perform medical services, namely brain surgery, on Plaintiffs and other patient-consumers at its facility. As Mission Community’s agent, Shahinian publicly disseminated advertising information about his brain surgeries through his and the Skull Base entities’ website knowing he was not licensed as a neurosurgeon. Mission Community knew, or should have known, that Shahinian claiming to be a licensed neurosurgeon with unverified success rates would be misleading to the public. Shahinian’s false advertising directly implicated the surgical services he intended to perform on the public. Therefore, Plaintiffs have pled facts sufficient to constitute false advertising against Mission Community.

Demurrer to this claim is overruled.

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I. Motion to Strike

Mission Community seeks to have all references and requests for punitive damages stricken from SAC, in addition to Plaintiffs request for restitution damages and all other forms of relief under Business & Professions Code section 1720 et seq.

Civil Code section 3294 authorizes the recovery of punitive damages in non-contract cases where “the defendant has been guilty of oppression, fraud, or malice . . . .” (Civ. Code § 3294(a).) “‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Id. § 3294(c)(1).) Punitive damages thus require more than the mere commission of a tort. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894-95.) Specific facts must be pleaded in support of punitive damages. (Hillard v. A.H. Robins Co. (1983) 148 Cal.App.3d 374, 391-392.) 

Plaintiffs have adequately pled their fraud claims.  Further the allegations, if proven to be true, would support a finding that Shahinian engaged in despicable conduct which was carried on by the doctor with a willful and conscious disregard for the rights and safety of Plaintiffs.  Accordingly the Court denies the motion to strike the requested portions of the SAC at this time..

Plaintiffs have adequately pled their fraud claims.  Further the allegations, if proven to be true, would support a finding that Mission Community engaged in despicable conduct which was carried on by the hospital and its affiliated doctor with a willful and conscious disregard for the rights and safety of Plaintiffs.  Accordingly, the Court denies the motion to strike the requested portions of the SAC.

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IV. CONCLUSION

For the foregoing reasons, Mission Community’s demurrer to Plaintiffs’ fourth, fifth, sixth, seventh, ninth, and tenth causes of action is OVERRULED.  Mission Community’s demurrer to the eighth cause of action is SUSTAINED, with 20 days’ leave to amend.

Mission Community’s motion to strike is DENIED.

Plaintiffs are ordered to give notice of the Court’s ruling.

DATED: October 8, 2020

_____________________

Hon. Theresa M. Traber

Judge of the Superior Court

Case Number: BC684807    Hearing Date: September 04, 2020    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

STEPHANIE BROWN JACOBSON SPIES; HEATHER COE; CURTIS COE; ROBYN BILYEU; DONALD BILYEU, JR.; JESSICA TRISCHLER; JASON TRISCHLER; SONNY LANGLEY; CHELSEA LEHMAN; DANIELLE LEUCK; CINDY TRAVIS ELLISON; STEVEN ELLISON; BRANDY HARRELL; MATTHEW HARRELL; JUSTINE RODRIGUEZ, a minor, through her parents and Guardian Ad Litem STEPHANIE RODRIGUEZ; THOMAS KETTERING; CHRISTINE JONES; TAMICA WALKER; BRAD WALKER; LARA POWELL; KATHRYN MCCURDY; LARISSA HARDIN; and LILY WITHAM, Plaintiffs, vs. HRAYR SHAHINIAN, M.D.; SKULL BASE INSTITUTE; SKULL BASE MEDICAL GROUP, INC.; SKULL BASE FOUNDATION; DEANCO HEALTHCARE, LLC d/b/a MISSION COMMUNITY HOSPITAL; ROSE BILLING; and DOES 1 through 20, inclusive, Defendants.

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CASE NO: BC684807 [TENTATIVE] ORDER RE: PLAINTIFF’S MOTION TO COMPEL FURTHER RESPONSES TO PLAINTIFF’S REQUESTS FOR PRODUCTION OF DOCUMENTS, SET ONE, & SPECIAL INTERROGATORIES & REQUEST FOR SANCTIONS Dept. U 8:30 a.m. September 4, 2020

I. BACKGROUND

Stephanie Brown Jacobson Spies (Spies), Heather Coe, Curtis Coe, Robyn Bilyeu, Donald Bilyeu, Jr., Jessica Trischler, Jason Trischler, Sonny Langley, Chelsea Lehman, Danielle Leuck, Cindy Travis Ellison, Steven Ellison, Brandy Harrell, Matthew Harrell, Justine Rodriguez, a minor, through her Parents and Guardian Ad Litem Stephanie Rodriguez, Thomas Kettering, Christine Jones, Tamica Walker, Brad Walker, Lara Powell, Kathryn McCurdy, Larissa Hardin, and Lily Witham (Plaintiffs) initiated this matter against Hrayr Shahinian, M.D., Skull Base Institute, Skull Base Medical Group, Inc., Skull Base Foundation, Deanco Healthcare, LLC d/b/a Mission Community Hospital, Rose Billing, and Does 1 through 20 on November 28, 2017. Plaintiffs filed a first amended complaint and a second amended complaint (SAC).

The SAC alleges claims for: (1) medical negligence; (2) corporate negligence/negligent supervision; (3) corporate negligence/hospital liability; negligent credentialing; (4) fraud under Civil Code section 1572; (5) constructive fraud under Civil Code section 1573; (6) deceit – concealment under Civil Code sections 1709 and 1710(3); (7) deceit – intentional misrepresentation under Civil Code sections 1709 and 1710(1); (8) deceit – negligent misrepresentation under Civil Code sections 1709 and 1710(2); (9) violation of Business & Professions Code section 17200; (10) violation of Business & Professions Code section 17500; and (11) loss of consortium.

On October 11, 2019, Spies served Shahinian with Special Interrogatories, Set One, and on October 24, 2019, Spies served Shahinian with Requests for Production (RFP) and Special Interrogatories, Set Two. Spies filed this motion to compel further responses and a request sanctions against Shahinian on June 16, 2020.

II. LEGAL STANDARDS & DISCUSSION

A. Meet & Confer Requirement

A motion to compel further responses to a request for production must be accompanied by a meet and confer declaration in compliance with Code of Civil Procedure section 2016.040. (Code Civ. Proc., § 2031.310(b)(2).) This declaration shall state facts showing a reasonable and good faith attempt at an informal resolution of each issue presented by the motion. (Code Civ. Proc., § 2016.040.) Spies satisfied this requirement by her counsel attempting to communicate with Shahinian on December 4 and 23, 2019.

B. Timeliness

California Civil Procedure section 2031.310(c) provides:

Unless notice of this motion is given within 45 days of the service of the verified response, or any supplemental verified response, or on or before any specific later date to which the demanding party and the responding party have agreed in writing, the demanding party waives any right to compel a further response to the demand.

Failure to make a motion within the specified period constitutes waiver of the right to compel a further response. (Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410.) The time period is mandatory and jurisdictional in the sense that it renders the Court without authority to rule on motions to compel other than to deny them. (Ibid.)

Here, on October 11, 2019, Spies served Shahinian with Special Interrogatories, Set One, and on October 24, 2019, Spies served Shahinian with RFP and Special Interrogatories, Set Two. Shahinian requested an extension on October 24, 2019 to respond to the first set of Special Interrogatories. Spies granted the extension. (Pederson declaration, ¶¶ 2-4.) Shahinian requested an additional extension on November 26, 2019. Spies agreed provided that Shahinian would provide complete responses to two-thirds of the discovery requests by November 29, 2019 and the remainder of his discovery responses on December 5, 2019. (Id., ¶ 5.) Shahinian served responses on these dates. Shahinian was granted numerous extensions of time to provide complete responses with the last deadline expiring on December 27, 2019. (Id., ¶¶ 6 & 8.)

Forty-five days from December 27, 2019 was February 10, 2020. On January 15, 2020 – 26 days before the motion deadline -- at the hearing on Shahinian’s ex parte application to shorten time on his motion to stay the action, the Court entered a stay on all discovery through February 26, 2020, to allow the Court to hearing the stay motion based on full briefing and on the merits. On February 26, 2020, the Court extended the stay to June 2, 2020. Spies filed this motion to compel further responses on June 16, 2020 – less than the 26 days remaining after the stay was lifted – so the motion was brought in a timely manner.

C. Motion to Compel Further Responses

Code of Civil Procedure section 2031.310(a) provides:

On receipt of a response to a demand for inspection, copying, testing, or sampling, the demanding party may move for an order compelling further response to the demand if the demanding party deems that any of the following apply:

(1) A statement of compliance with the demand is incomplete.

(2) A representation of inability to comply is inadequate, incomplete, or evasive.

(3) An objection in the response is without merit or too general.

Code of Civil Procedure section 2031.310(b)(1) requires the motion to state specific facts justifying production of the documents. These specific facts must be in declaration. (Calcor Space Facility v. Superior Court (1997) 53 Cal.App.4th 216, 224 (directing trial court to vacate its order compelling the defendant to produce records because the plaintiff had failed to provide specific facts showing good cause for their production).) “To establish good cause, a discovery proponent must identify a disputed fact that is of consequence in the action and explain how the discovery sought will tend in reason to prove or disprove that fact or lead to other evidence that will tend to prove or disprove the fact.” (Digital Music News LLC v Superior Court (2014) 226 Cal.App.4th 216, 224 (identifying manner for establishing good cause under Calcor).)

Spies maintains that Shahinian’s responses to her discovery requests are evasive, incomplete, and consist of meritless objections. Spies seeks proof of Shahinian’s qualifications to perform intradural brain surgery as he claims on his website. Spies also seeks production of documentation and communications regarding Shahinian’s relationship with his medical billing service, Rose Billing Services (Rose), because the surgeries performed were very costly and unconventional methods were used to make Plaintiffs pay their bills.

In response to Spies’ seven RFP seeking documentation and communications regarding Shahinian’s relationship with Rose, Shahinian produced a single document and does not appear to have made a good faith inspection of his records.

Spies’ Special Interrogatories, Set One, numbered 1, 7-12, 14, and 17, sought similar information regarding Shahinian’s relationship with Rose. As each of the Defendants contributed to the Plaintiffs’ harms in different ways, Spies argues it is necessary to understand the relationship between the Defendants to assign liability.

Special Interrogatories, Set Two, numbered 4-6, 11, 13, and 15-16 sought information about Shahinian’s qualifications to perform various brain surgeries that resulted in injury to the Plaintiffs. Shahinian asserted that Evidence Code section 1157 precludes discovery of the proceedings or records of hospital committees granting physicians privileges, thereby arguing that his personal knowledge of the number of times and where he applied for hospital privileges is also undiscoverable. This objection is unpersuasive because Shahinian’s knowledge of and evidence of his own qualifications is independent of the hospital committee proceedings.

Special Interrogatories, Set Two, numbered 7-8, 10, 12, and 14 sought information regarding the contracts and employees associated with his business. Shahinian refused to respond to this inquiry by arguing that his response would require a narrative that would not be admissible. Spies responds that she seeks a simple list of employees.

Spies has demonstrated that her discovery requests are aimed at discovering material evidence regarding Shahinian’s qualifications to perform brain surgeries and his relationship with Rose. These facts are relevant to assign liability. This motion is well-taken and the Court orders Shahinian to provide complete responses to Spies’ discovery requests.

D. Sanctions

The court shall impose a monetary sanction . . . against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel further response to a demand, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust. (Code Civ. Proc., § 2031.310(h).)

Spies requests that $3,150 in monetary sanctions be ordered against Shahinian as compensation for the 10.5 hours spent filing this motion. Pederson declares he spent 1.5 hours trying to meet and confer with Shahinian and 5.5 hours researching and drafting this motion, separate statement, and declaration. He anticipates spending another 3.5 hours responding to Shahinian’s opposition by drafting a reply and attending the hearing. Pederson’s hourly rate is $300.

The Court finds that Shahinian’s resistance to proper discovery is without substantial justification. While sanctions are warranted, the Court finds the amount of time spent preparing this motion unreasonable. The time spent trying to meet and confer should have occurred even without the need to file this motion and, thus, is not recoverable. Spending 5.5 hours to prepare this rather simple and routine motion is excessive. The Court reduces this time to three hours. No opposition has been filed, therefore, the need for a reply brief was obviated, and Pederson will likely appear telephonically for the hearing. Thus, his additional anticipated time is reduced to one hour. The Court finds a total of four hours reasonable, therefore, sanctions are ordered against Shahinian in the amount of $1,200 ($300/hour x 4 hours).

III. CONCLUSION

For the foregoing reasons, Spies’ motion to compel further responses is GRANTED, and the request for monetary sanctions against Shahinian is GRANTED in the amount of $1,200, which shall be paid by Shahinian to Plaintiffs’ counsel within 30 days of this ruling.

Spies is ordered to give notice of the Court’s ruling.

DATED: September 4, 2020

_____________________

Hon. Theresa M. Traber

Judge of the Superior Court

Case Number: BC684807    Hearing Date: August 21, 2020    Dept: U

PLEASE POST THIS FOR BOTH CASES:

Tentative ruling on the motions to stay filed by Defendant Hrayr Shahinian, M.D. in two related cases, STEPHANIE BROWN JACOBSON SPIES, et al. v. HRAYR SHAHINIAN MD, et al., Case No. BC684807, and MARY KAY RADAVICH, et al., v. HRAYR K. SHAHINIAN, Case No. BC657669.

BACKGROUND

In these related actions for medical malpractice, multiple plaintiffs allege that Defendant Hrayr Shahinian MD misrepresented that he was qualified to perform brain surgery. Plaintiffs allege Defendants Deanco Healthcare, LLC dba Mission Community Hospital knew Shahinian was negligent in his performance of brain surgery in at least four hospitals but nevertheless allowed Shahinian to perform perhaps hundreds of brain surgeries at Mission Community Hospital.

On or about October 28, 2019, Defendant Shahinian filed motions in both actions to stay all proceedings against him pending the completion of his declaratory relief action against his malpractice insurer, his writ proceedings challenging an administrative decision revoking his medical license, and the coordination of the various related cases that have been brought against him in Los Angeles Superior Court.  In his supplemental briefing, Defendant Shahinian adds that the stay should extend to allow him to secure a ruling on his recent efforts to reinstate his physician’s and surgeon’s licenses. 

In the oppositions filed by plaintiffs in both cases, they argue that the stay motions are Defendant Shahinian’s latest attempt to needlessly delay these action and is based on several flawed contentions: (1) that Shahinian’s coverage dispute with his carrier is directly related to the claims in this case; (2) that Shahinian has a pending appeal which impacts this case; (3) that the results of Shahinian’s application for reinstatement of his license will have any impact on the insurance coverage case or the underlying negligence actions; and (4) that Shahinian can secure prompt relief in his coverage action.  Plaintiffs ask this Court to deny Shahinian’s Motion arguing that neither Shahinian’s coverage dispute nor his reinstatement application has anything to do with whether Shahinian acted negligently or intentionally to injure plaintiffs, and that any further delays are unjustified and will unduly prejudice plaintiffs. 

TENTATIVE RULING

 

Defendant Hrayr Shahinian MD’s motions to stay are DENIED.

DISCUSSION

Defendant Hrayr Shahinian MD (“Defendant”) moves to stay both proceedings based on four sets of cases that Defendant contends are pending and present the risk of inconsistent rulings on common questions of fact.  Defendant also argues that he will be severely prejudiced if he is forced to mount a defense to Plaintiff’s actions without an attorney provided by his insurance carrier because he lacks funds to hire a private attorney and the legal training necessary to represent himself. 

Based on the Court’s analysis, the Court determines the reasons offered by Defendant are insufficient to justify the requested order.

A. Defendant’s Action against His Insurer, Physicians’ Casualty Risk Retention Group

Defendant contends that the Court should stay the action because Defendant’s action against his malpractice insurer (“Insurer Action”) is pending and he may obtain a legal defense in this action if he is successful in that action.  On May 30, 2018, Defendant commenced the Insurer Action against his malpractice insurer, Physicians’ Casualty Risk Retention Group, for breach of insurance contract and declaratory relief on the duty to defend. (See Case No. BC708094.)  Defendant urges the Court to set a schedule for the filing and consideration of cross-motions for summary adjudication to reach a prompt resolution of this action with the potential that he will be afforded a defense by his insurer in these malpractice actions.

The Court finds this argument to be unpersuasive for two reasons.  First, resolution of the coverage issues in the Insurer Action will have no impact on these malpractice actions as they are wholly unrelated to the negligence and other claims raised by Plaintiffs in their actions.  Second, in light of the mandatory stay issued in the Insurer Action, this Court lacks the authority to schedule cross-motions for summary adjudication on coverage issues.  Third, given the current posture of the Insurer Action, the Court concludes that Defendant’s successful resolution of those coverage issues in the proper forum in Alabama seems unlikely to occur any time soon. 

Turning to the first issue, the Court disagrees with Defendant that there is a factual or legal basis for staying the malpractice actions while the coverage issues are resolved.  The authority relied upon by the Defendant for a stay is Haskel, Inc. v. Superior Court (1995) 33 Cal.App.4th 963, 979.  Haskel rested on general principles from Montrose Chemical Corp. v. Superior Court (1993) 6 Cal.4th 287, 301-302, stating: “when the third party seeks damages on account of the insured's negligence, and the insurer seeks to avoid providing a defense by arguing that its insured harmed the third party by intentional conduct, the potential that the insurer's proof will prejudice its insured in the underlying litigation is obvious. This is the classic situation in which the declaratory relief action should be stayed.  By contrast, when the coverage question is logically unrelated to the issues of consequence in the underlying case, the declaratory relief action may properly proceed to judgment.” (Haskel, Inc. v. Superior Court, supra, 33 Cal.App.4th at 979.)

Here, the Insurer Action, which is a declaratory relief action to determine Defendant’s insurer’s duty to defend, is not logically related to issues of consequence in the underlying malpractice actions. The Insurer Action concerns whether Defendant’s insurer breached the insurance contract with Defendant based on the insurer’s allegedly incorrect assertion that Defendant failed to disclose a complaint by a patient to the insurer. (Complaint in Case No. BC708094, ¶ 26.)  By contrast, the underlying actions concern whether Defendant committed medical negligence by performing brain surgeries. (E.g., Jacobson Spies Second Amended Complaint, ¶ 1.) Defendant’s alleged failure to disclose a patient complaint to the insurer and Defendant’s performance of brain surgeries on patients are not logically related and do not require the same factual findings to determine liability.  Defendant has not made a sufficient showing that the actions are logically related or that they will involve overlapping factual findings.  Even if Defendant had shown the issues of consequence in the actions to be logically related, Haskel and Montrose authorized staying the declaratory relief action, not the underlying action, as requested here.  So, Defendant’s authority must also be distinguished on this basis.

Second, the Court lacks authority to schedule dispositive motions in the Insurer Action, which must be pursued in the insurance liquidation proceeding in Alabama.  On April 23, 2020, this Court issued an order staying all proceedings in the Insurer Action consistent with the August 16, 2019 order from the Circuit Court for Montgomery County, State of Alabama, in case no. 03-CV-2019-900803, Jim L. Ridling as Commissioner of Insurance v. Physicians Casualty Risk Retention Group, Inc., until further order of this Court.  The stay was entered in deference to the Alabama court’s determinations in a delinquency proceeding against Physicians Casualty Risk Retention Group that the company is insolvent and that all claims against the delinquent company must be prosecuted before the Alabama court.  This Court found that such a result was mandated by California Insurance Code section 1064.5.  Recently, on August 10, 2020, the Alabama court issued a further order terminating the rehabilitation proceedings, ordering liquidation of Physicians, and reaffirming its exclusive jurisdiction over all claims and cases brought against Physicians.  These rulings bar any action by this Court to schedule or consider the resolution of the coverage issues in the Insurer Action.  Any motions brought to determine coverage issues must be filed with and ruled on by the Alabama court presiding over Physicians’ delinquency proceeding. 

Third, in light of the Alabama court’s recent order to liquidate Physicians and require that all claims against the company be litigated in Alabama, this Court has no control over the timing of the resolution of Defendant’s coverage claims.  These claims have been pending in this Court for more than two years, and there is no assurance that they will be promptly resolved in the Alabama action or that any determination in the context of that liquidation proceeding will result in Defendant’s ability to secure insurance counsel.  With no foreseeable end in sight for Defendant’s efforts to establish coverage, the Court concludes that the balance of equities tips sharply in favor of denying a stay to avoid any further delays in the prosecution of Plaintiffs’ malpractice claims against Defendant. 

Based on the foregoing, the Court is not persuaded that a stay should be entered because of the pendency of the Insurer Action or Defendant’s underlying coverage arguments.

B. Writ after Defendant’s License was Revoked

Next, Defendant contends a petition for writ of mandate he filed in Sacramento County in response to the administrative decision revoking his medical license (the “Writ Action”) may be dispositive of claims in this case, and thus, the Court should stay this action pending the result of the Writ Action.

Defendant contends the Writ Action may be dispositive of this lawsuit because the underlying administrative decision challenged in the Writ Action and this action address similar “issues” arising from the Ralli case (Case No. BC362005), which was an action brought by a patient who is unrelated to the plaintiffs here, charging Defendant with medical malpractice and fraud. Defendant argues that a decision on the Writ Petition that is favorable to him would discredit the Ralli case and therefore the issues from Ralli raised in this case would also be decided in Defendant’s favor.

To the extent Defendant is suggesting that issue preclusion applies, Defendant has failed to demonstrate that any ruling on the Writ Action regarding his medical license would have any impact on the Court’s analysis of the argument that there were issues resolved in Ralli that bar relitigation in this case.  If faced with an issue preclusion argument, this Court would have to examine Ralli to determine if any issue resolved in that case is barred from being relitigated in this case.  Any conclusions reached in the Writ Action would be totally immaterial to this inquiry.  This is true whether the court in the Writ Action decided to rely on factual findings in Ralli or concluded that they were invalid or irrelevant.  The Court concludes that any reliance of the court in the Writ Action on factual findings made in the Ralli case would have no effect on this Court’s potential resolution of issue preclusion arguments that might be raised by the parties here.  Thus, regardless of its procedural status, the Writ Action does not provide any justification for staying this action. 

What is more, according to the website for the Court of Appeal for the Third Appellate District, the appellate court has already rejected Defendant’s petition for writ of mandate.  The only matter that remained to be resolved on Defendant’s challenge to his license revocation when when the Court first addressed Defendant’s motion to stay was his petition for review by the California Supreme Court which was received by the Court of Appeal on February 4, 2020.  That petition was denied by the Supreme Court on April 15, 2020. 

C. Resolution of Defendant’s Application to Reinstate His Medical Licenses

In his supplemental papers, Defendant asserts that the Court should stay the malpractice cases to allow him to pursue his application to reinstate his medical licenses.  Defendant fails to explain how this proceeding could have any impact on the negligence issues raised in the malpractice actions or on the coverage issues in the Insurer Action.  Any prospective relief Defendant might obtain can have no relevance whatsoever to these pending actions.  Nor is there any basis for concluding that any administrative findings in those cases would be of any significance in the malpractice actions, much less of such great import that the Court should arrest their progress to wait for such findings.

D. Resolution of Related Actions

Defendant contended in this moving papers that, although some Superior Court cases have been deemed related since September 20, 2018, “there has been no clarification or order as to how the related cases are to be handled or which of the several judges before whom this action and the two sister actions (the Radavich and Singh matters) are currently pending will ultimately preside over discovery, dispositive motions, or trial and pre- and post-trial related matters.” (Shahinian Decl. ¶ 13.) Thus, Defendant requests the Court stay the action until these issues are resolved.

Since Defendant’s motion to stay was initially heard in the Jacobson Spies case, all coordination issues have been resolved by the Superior Court.  On April 24, 2020, this Court ruled that the Jacobson Spies case (BC684807) and the Radavich action (BC657669) are related within the meaning of CRC 3.300(a), because both of them assert similar medical malpractice and other associated claims against Hrayr K. Shahinian, M.D., in connection with the medical treatment he provided the plaintiffs in both cases at Mission Community Hospital.  Accordingly, the Court ordered the Radavich action transferred to this judicial officer in Department U of the Van Nuys Courthouse East. 

A third case, PARMINDER SINGH, et al., v. HRAYR SHAHINIAN MD (Case No. BC694194), remains pending before Judge Lia Martin in Department 16 of the Stanley Mosk Courthouse.  Defendant Shahinian’s suggestion that the Court find it to be related to the Insurer Action and various actions brought against him was denied on November 4, 2019. 

Even if there are additional cases that raise similar claims or issues, Defendant has not shown that there are any matters raised by these cases that must be coordinated with the litigation of the two malpractice cases pending in Department U, nor any reason to stay this case to assess a purported need for such coordination.  If Defendant suggests to the Court that there are other cases that should be found to be related to this action, any issues of concern to him may be resolved.  The Court is not inclined to enter a stay of this action based on a theoretical coordination problem that may be resolved by the simple process of filing of notices of related cases. 

Defendant also cites authority for the Court to stay these malpractice action as a means of preventing inconsistent verdicts and findings of common factual issues. (Mot. 8:16-22.)  But Defendant has failed to show that either the Insurer Action, the Writ Action or any other actions pose such a problem.  The Court finds there is no showing of a danger of inconsistent rulings in permitting the continued litigation of these malpractice cases. 

Accordingly, the motion to stay is DENIED.

Plaintiffs’ counsel in each case is ordered to give notice of the Court’s ruling to the parties in that action.