Judge: Barbara M. Scheper, Case: 20STCV37618B, Date: 2024-01-10 Tentative Ruling
Case Number: 20STCV37618B Hearing Date: January 10, 2024 Dept: 30
Calendar
No.
Nat-Pharm Inc. vs. Silverado Senior Living, Inc.,
et. al., Case
No. 20STCV37618
Tentative Ruling re:
Defendants’ Motion for Summary Judgment, or in the alternative, Summary
Adjudication of Issues
Defendants Subtenant 514 N. Prospect
Ave. LLC dba Silverado Beach Cities Memory Care Community, Mary Lou Giebel, and
Kim Butrum (collectively, Defendants) move for summary judgment or, in the
alternative, summary adjudication against Plaintiff Nat-Pharm, Inc. dba South
Bay Pharmacy (Plaintiff). Summary judgment is granted for Defendants Mary Lou
Giebel and Kim Butrum, and is denied as to all claims against Defendant
Subtenant 514 N. Prospect Ave. LLC dba Silverado Beach Cities Memory Care
Community.
The function of a motion
for summary judgment or adjudication is to allow a determination as to whether
an opposing party can show evidentiary support for a pleading or claim and if
not to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001)
25 Cal.4th 826, 843 (Atlantic Richfield).) Code of Civil Procedure
Section 437c, subdivision (c) “requires the trial judge to grant summary
judgment if 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.” (Adler v. Manor Healthcare Corp. (1992) 7
Cal.App.4th 1110, 1119.)
Once the moving party has
met that burden, the burden shifts to the opposing party to show that a triable
issue of one or more material facts exists as to that cause of action or a
defense thereto. 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.)
Plaintiff, solely owned by
pharmacist Nitin Bhakta (Bhakta), operates South Bay Pharmacy in Redondo Beach,
California. (Plaintiff’s Evidence (PE), Bhakta Decl. ¶ 1.) In 2008, Defendant
Subtenant 514 N. Prospect Ave. LLC dba Silverado Beach Cities Memory Care
Community (Silverado) opened a long-term care facility next to Plaintiff’s
pharmacy. (Bhakta Decl. ¶ 3.) For the next ten years, Plaintiff acted as the
preferred pharmaceutical provider for Silverado and regularly provided services
to Silverado’s patients. (Bhakta Decl. ¶ 4.) Defendant Kim Butrum (Butrum) is
Silverado’s Senior Vice President of Clinical Services. Defendant Mary Lou
Giebel (Giebel) was Silverado’s head nurse during the period at issue. (PE,
Wiener Decl. ¶ 4 [19].)
In 2018, Silverado changed its
preferred pharmaceutical provider from Plaintiff to Omnicare-CVS (Omnicare).
(Undisputed Material Fact (UMF) 18.) On May 24, 2018, Silverado sent a
cancellation notice to Plaintiff stating that Silverado would end receipt of
pharmacy services from Plaintiff effective July 8, 2018. (Defendants’ Evidence
(DE), Ex. II.)
Plaintiff’s claims arise from
statements allegedly made by Defendants to Silverado residents in connection
with Silverado’s switch to Omnicare. The Complaint alleges, “[b]eginning in May
or June of 2018, and continuing thereafter to the present, Defendants willfully
. . . published statements to Silverado patients and their families . . .
claiming that Plaintiff had various technological limitations in providing
services to Silverado patients and their families. Such publications included .
. . claiming Plaintiff was not computerized, did not have the ability to use
electronic medical records, and/or similar statements relating to technological
limitations of Plaintiff. Such publications were in fact false and occurred
multiple times…” (Comp. ¶ 8.) Plaintiff asserts four causes of action against
Defendants, for (1) Defamation – Trade Libel and Slander; (2) Intentional
Interference with Prospective Economic Relations; (3) Negligent Interference
with Prospective Economic Relations; and (4) Unfair Business Practices.
Statute
of Limitations
Defendants first argue that
Plaintiff’s defamation claims are barred by the one-year statute of limitations
under Code Civ. Proc. § 340, subd. (c). Defendants argue that the allegedly
defamatory statements were made, at the latest, in September 2018. Plaintiff
filed this action on October 1, 2020.
However, as Plaintiff points out,
claims for trade libel are subject to the two-year statute of limitations under
Code Civ. Proc. § 339, subd. (1). (Guess, Inc. v.
Superior Court (1986) 176 Cal.App.3d 473, 477.) In addition, the Judicial
Council’s Emergency Rule 9(a) tolled the statute of limitations for all civil
claims for 180 days from April 6, 2020, through October 1, 2020. (See People
v. Financial Casualty & Surety, Inc. (2021) 73 Cal.App.5th 33, 39.)
Consequently, the statute of limitations
on Plaintiff’s defamation claims bars statements made prior to April 4, 2018
(180 days before October 1, 2018). As discussed below, Plaintiff has presented
evidence of defamatory statements made by Silverado within the limitations
period.
Defamation
– Trade Libel and Slander
“Trade libel is the publication of matter disparaging the quality of
another's property, which the publisher should recognize is likely to cause
pecuniary loss to the owner. [Citation.] The tort encompasses ‘all false
statements concerning the quality of services or product of a business which
are intended to cause that business financial harm and in fact do so.’
[Citation.]” (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993,
1010.) “[T]he plaintiff must prove in all cases that the publication has played
a material and substantial part inducing others not to deal with him, and that
as a result he has suffered special damages.... Usually, ... the damages
claimed have consisted of loss of prospective contracts with the plaintiff's
customers.” (Nichols v. Great American Ins. Companies (1985) 169
Cal.App.3d 766, 773.)
“To constitute trade libel, a
statement must be false. [Citation.] Since mere opinions cannot by definition
be false statements of fact, opinions will not support a cause of action for trade libel.
[Citation.] In most
cases, whether a statement is fact or opinion is a question of law. [Citation.]
To decide whether a statement is fact or opinion, a court must put itself in
the place of an average reader and determine the natural and probable effect of
the statement, considering both the language and the context.” (ComputerXpress,
Inc., 93 Cal.App.4th at 1011.)
As evidence of the disparaging
statements, Plaintiff presents declarations from three caregivers of Silverado
patients:
Lorraine B. Wiener states
that she received a package from Silverado with a “Resident Pharmacy Enrollment
Form” to switch providers to Omnicare. (PE, Wiener Decl. ¶ 1 [18].) After
initially signing and returning the letter, Wiener called Silverado and asked
them to throw the letter away so that she could stay with Plaintiff’s pharmacy.
(Wiener Decl. ¶ 3.) Wiener states that “[her] request to stay with South Bay
Pharmacy was not honored”; though she called Silverado at least three times
about staying with Plaintiff, Omnicare billed her for medication regardless.
(Wiener Decl. ¶ 4.) In a meeting with Giebel, Giebel told Wiener “that I
couldn’t remain with South Bay Pharmacy because they weren’t computerized.”
(PE, Wiener Decl. ¶ 5.) At another meeting, Giebel told Wiener “that South Bay Pharmacy
did not have a computer and that they used handwritten file cards to keep track
of their patients. Consequently, it was impossible for the staff at Silverado
to communicate with South Bay Pharmacy because Silverado used computers and
South Bay Pharmacy did not.” (Id. ¶ 7.)
Denis Raymond was also a
caregiver for a Silverado patient. (PE, Raymond Decl. ¶ 1 [24].) Along with
other patients and their families, Raymond attended meetings held by Silverado
representatives, in which the representatives asserted that “[Silverado] was
moving to an automated system and that South Bay Pharmacy wasn’t going to be
able to accommodate the automated system. They also stated that South Bay
Pharmacy couldn’t provide the type of packaging required by [Silverado] for
medications moving forward.” (PE, Raymond Decl. ¶¶ 4-5 [24].) At the meetings,
Silverado “was applying a lot of pressure on patients and their families to
complete the paperwork and switch providers to Omnicare,” and “initially told [attendees]
that we needed to sign something that night before going home. When questioned
about the urgency, Beach Cities then provided a different deadline to us.” (Id.
¶ 5.)
Ornella Wemyss-Peterson,
another caregiver, states that she attended meetings arranged by Silverado
between Omnicare and patients/family members to convince them to switch to
Omnicare. At those meetings, “[Silverado] made statements about how South Bay
Pharmacy was not computerized, could not do electronic MARs, was not automated,
could not do bubble-packs.” (PE, Wemyss-Peterson Decl. ¶ 5.) Wemyss-Peterson
told Silverado that she wanted to stay with Plaintiff’s pharmacy, but
“[d]espite this, Omnicare was provided my father’s information, and I even
received a bill from Omnicare.” (Id. ¶ 7.) Wemyss-Peterson eventually
moved her father from Silverado to a different care facility. (Id. ¶ 8.)
Defendants first argue that
the alleged statements were truthful, because Plaintiff was in fact using paper
records for Silverado’s residents as of July 2018. (DE, Ex. D [54].) However, the
statements did not only concern Plaintiff’s use of paper records; they further
asserted that Plaintiff was not computerized, would not be able to transition
to an electronic system, and that Plaintiff’s lack of a computer system would
prevent patients from continuing to use Plaintiff’s services. For instance, Giebel
told Wiener that she “couldn’t remain with South Bay Pharmacy” and “it was
impossible for the staff at Silverado to communicate with South Bay Pharmacy”
due to the lack of paper records. (PE, Wiener Decl. ¶¶ 5, 7.) Silverado’s
representatives told Raymond and other patients that Plaintiff “couldn’t
provide the type of packaging required by [Silverado] for medications moving
forward” (emphasis added). (PE, Raymond Decl. ¶ 4 [24].) Plaintiff has presented evidence showing a
triable issue as to whether Defendants’ statements on these points were false. Bhakta
states that Plaintiff was computerized, had the ability to work with an
automated system instead of paper records, and had the ability to continue
providing services to Silverado patients. (PE, Bhakta Decl. ¶¶ 17-18; DE, Ex. C
[49].) The evidence that some Silverado patients continued to use Plaintiff’s
services following the switch to Omnicare further contradicts Silverado’s
alleged statements.
Defendants next
argue that Plaintiff has failed to present evidence of damages resulting from
the disparaging statements. In actions for trade libel, “[i]t is nearly always
held that it is not enough to show a general decline in his business resulting
from the falsehood, even where no other cause for it is apparent, and that it
is only the loss of specific sales that can be recovered. This means, in the
usual case, that the plaintiff must identify the particular purchasers who have
refrained from dealing with him, and specify the transactions of which he
claims to have been deprived.” (Erlich v. Etner (1964) 224 Cal.App.2d
69, 73–74 [citing Prosser on Torts, 764–766].)
Plaintiff’s evidence is
sufficient to raise a triable issue as to damages Bhakta and another pharmacist
with Plaintiff describe specific Silverado patients and caregivers who
represented that they were switching to Omnicare due to Plaintiff’s purported
inability to continue providing services. (PE, Bhakta Decl. ¶¶ 8-15, Elias
Decl. ¶¶ 2-8, Ex. A.) Additionally, Raymond states that he ultimately switched
his pharmacy provider from Plaintiff to Omnicare as a result of Silverado’s
pressure. (PE, Raymond Decl. ¶ 6.)
Although some of the
evidence offered by Plaintiff is inadmissible hearsay, Plaintiff’s admissible
evidence is sufficient to raise a triable issue as to damages for trade libel
caused by Silverado’s disparagement.
Specifically, the Declarations of Wiener, Raymond and Wemyss-Peterson,
caregivers for patients at Silverado, each testified to Silverado’s statements
urging them to switch to Omnicare.
In addition, Plaintiff has
requested a continuance of the instant motion to obtain discovery specifically
directed towards this damage issue. The
Court is granting Plaintiff’s motion to compel further discovery responses
which will allow Plaintiff to develop its theory of damages.
However, Plaintiff has
presented no evidence creating a triable fact as to recoverable damages caused
by Mary Lou Giebel or Kim Butrum. The only statements from Giebel were made to
Lorraine B. Wiener, who does not claim that she stopped using Plaintiff’s
services. Plaintiff has presented no evidence of any misrepresentations made by
Kim Butrum.
Intentional
Interference with Prospective Economic Relations
The elements for the tort of intentional interference with
prospective economic advantage are: “(1) an economic relationship between the
plaintiff and some third party, with the probability of future economic benefit
to the plaintiff; (2) the defendant’s knowledge of the relationship; (3)
intentional acts on the part of the defendant designed to disrupt the
relationship; (4) actual disruption of the relationship; and (5) economic harm
to the plaintiff proximately caused by the acts of the defendant.” (Korea
Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.)
In order to establish intentional interference with
prospective economic advantage, a plaintiff must show that the
defendant engaged in an independently wrongful act. (Korea Supply Co.,
29 Cal.4th at 1158.) “An act is not independently wrongful merely because
defendant acted with an improper motive.” (Ibid.) “[A]n act is
independently wrongful if it is unlawful, that is, if it is proscribed by some
constitutional, statutory, regulatory, common law, or other determinable legal
standard.” (Id. at 1159.)
Plaintiff’s claim for intentional interference with
prospective economic relations is also based on Defendants’ alleged publication
of the defamatory statements to Silverado patients. (Comp. ¶ 26, 34.)
Defendants move for summary adjudication of this cause of action on the basis
that their decision to switch to Omnicare was a business decision and not a
wrongful act. This argument is unavailing because Plaintiff’s claim is premised
on Silverado’s alleged misrepresentations to patients, not on the decision to
switch providers itself. The evidence of statements made by Silverado
representatives to patients disparaging Plaintiff’s technological capacity and
ability to provide services, as discussed above, shows intentional,
independently wrongful acts by Silverado that interfered with the relationships
between Plaintiff and its customers. Plaintiff’s evidence is sufficient to
raise a triable issue of material fact on this cause of action as to Silverado.
However, Plaintiff again fails to present evidence of damages caused by Giebel
and presents no evidence relating to Butrum.
Negligent
Interference with Prospective Economic Relations
The
elements of the tort of negligent interference with prospective economic
advantage are: “(1) an economic relationship existed between the plaintiff and
a third party which contained a reasonably probable future economic benefit or
advantage to plaintiff; (2) the defendant knew of the existence of the
relationship and was aware or should have been aware that if it did not act
with due care its actions would interfere with this relationship and cause
plaintiff to lose in whole or in part the probable future economic benefit or
advantage of the relationship; (3) the defendant was negligent; and (4) such
negligence caused damage to plaintiff in that the relationship was actually
interfered with or disrupted and plaintiff lost in whole or in part the economic
benefits or advantage reasonably expected from the relationship.” (Venhaus
v. Shultz (2007) 155 Cal.App.4th 1072, 1078.) “
“[A] plaintiff seeking to
recover for alleged interference with prospective economic relations has the
burden of pleading and proving that the defendant's interference was wrongful
‘by some measure beyond the fact of the interference itself.’ ” (Della Penna
v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 392–393.) “The
defendant's conduct must ‘fall outside the boundaries of fair competition’
[Citations], but negligent misconduct or
the violation of a statutory obligation suffice.” (Venhaus, 155
Cal.App.4th at 1079.)
Defendants
first move for summary adjudication of Plaintiff’s negligent interference claim
on the basis that they did not owe any duty of care to Plaintiff. The Court
disagrees. “ ‘The tort of negligent interference with economic
relationship arises only when the defendant owes the plaintiff a duty of care.’
[Citation.] . . . As
Professor Witkin explained, among
the criteria for establishing a duty of care is the “blameworthiness” of the
defendant's conduct. [Citations.] For negligent interference, a defendant's
conduct is blameworthy only if it was independently wrongful apart from the
interference itself. [Citation.]” (Lange v. TIG Ins. Co. (1998) 68 Cal.App.4th 1179, 1188.) Here, as discussed above, the
alleged defamatory statements constitute independently wrongful, blameworthy
conduct, supporting imposition of a duty of care upon Defendants. Plaintiff’s
evidence of such statements made by Silverado representatives shows a triable
issue as to whether Silverado breached that duty of care.
Fourth Cause of Action
for Unfair Business Practices
California’s
Unfair Competition Law (UCL) prohibits unlawful, unfair, or fraudulent business
acts or practices. (Bus. & Prof. Code, § 17200 et seq.) “An
‘unlawful business activity’ includes ‘anything that can properly be called a
business practice and that at the same time is forbidden by law.’” (People
v. McKale (1979) 25 Cal.3d 626, 632 [quoting Barquis v. Merchants
Collection Assn. (1972) 7 Cal.3d 94, 113].) “Virtually
any law or regulation—federal or state, statutory or common law, can serve as a
predicate for a Business and Professions Code section 17200 ‘unlawful’
violation. [Citation.]” (Paulus v. Bob Lynch Ford, Inc. (2006) 139
Cal.App.4th 659, 681 [internal quotations omitted].)
Plaintiff’s
fourth cause of action alleges that Defendants’ wrongful acts constituted unlawful
and unfair business practices under the UCL. (Comp. ¶ 38.) Plaintiff’s trade
libel and interference claims against Silverado may serve as predicates for the
UCL claim against Silverado. Because Plaintiff has not raised any triable issue
for its prior claims against Giebel and Butrum, the UCL claim likewise fails
against those defendants.
Request for Continuance
Plaintiff has
requested that this motion be continued pursuant to Code Civ. Proc. § 437c,
subd. (h), to allow Plaintiff to conduct further discovery.
Under
section 437c, subd. (h), “if it appears from the affidavits submitted in
opposition to a motion for summary judgment or summary adjudication, or both,
that facts essential to justify opposition may exist but cannot, for reasons
stated, be presented, the court shall deny the motion, order a continuance to
permit affidavits to be obtained or discovery to be had, or make any other
order as may be just.”
To be entitled to a
continuance, a party should “explain why [they] believed the facts they sought
through the [discovery] actually existed [and] why these facts were essential
to oppose the summary judgment motion.” (Granadino v. Wells Fargo Bank, N.A.
(2015) 236 Cal.App.4th 411, 420.) “Code of Civil Procedure section 437c,
subdivision (h) requires more than a simple recital that ‘facts essential to
justify opposition may exist.’ The affidavit or declaration in support of the
continuance request must detail the specific facts that would show the
existence of controverting evidence. [Citations.]
There is good reason for this more exacting requirement. The statute cannot be
employed as a device to get an automatic continuance by every unprepared party
who simply files a declaration stating that unspecified essential facts may
exist. The party seeking the continuance must justify the need, by detailing
both the particular essential facts that may exist and the specific reasons why
they cannot then be presented.” (Lerma v. County of Orange (2004) 120 Cal.App.4th 709,
715.)
Plaintiff seeks to continue the motion to allow it to
complete Silverado’s PMK deposition; conduct further written discovery on
Silverado and related entities; allow the Court to rule on Plaintiff’s pending
Motion to Compel Further Responses (set for 1/10/24), which seeks the identity
and contact information of Silverado patients; depose witnesses who claim to
possess information regarding Defendants’ alleged misrepresentations; and
identify then depose employees of Silverado with relevant information. (A.
Bhakta Decl. ¶ 7 [31].)
The facts described by counsel’s declaration relate only
to Silverado, not to Giebel or Butrum. Because summary adjudication is denied
as to all claims against Silverado, and Plaintiff has not described any essential
facts relating to Giebel or Butrum that may exist, Plaintiff has not shown
grounds for continuance.