Judge: Christian R. Gullon, Case: KC045216, Date: 2023-08-14 Tentative Ruling

Case Number: KC045216    Hearing Date: August 14, 2023    Dept: O

Tentative Ruling

(1)   Defendants’ MARK KISLINGER’s, M.D., MARK KISLINGER, M.D., INC.’s AND MARK KISLINGER, PHD, M.D., INC.’s (collectively, “Defendants”) MOTION TO QUASH PLAINTIFF’S SUBPOENAS OF RECORDS FROM UNITED WHOLESESALE MORTGAGE LLC is DENIED (but see discussion).

(2)   Defendants’ Hearing on Motion to Quash Plaintiff's Subpoena of Records from Bank of America, N.A is DENIED (but see discussion)

(3)   Plaintiff’s MOTION FOR DETERMINATION OF JURY TRIAL is GRANTED.

Background[1]

This case arises from the breach of a capitation contract to provide ophthalmology care to HMO patients.

On October 27, 2022, Mark Kislinger, M.D., Mark Kislinger, M.D., Inc. And Mark Kislinger, Phd, M.D., Inc.’S (Collectively, “Defendants”) Filed A Motion To Quash Plaintiff’s Subpoenas Of Records From Jpmorgan Chase Bank, N.A, which the court determined as moot because (unbeknownst to the court), the court was already in possession of the bank record(s).

On April 19, 2023, the court issued the following minute order:

The Motion is heard and argued. Plaintiff's counsel cites a new case during arguments. Defense counsel requests additional time to file a supplemental brief in regards to the case cited by plaintiff's counsel. Pursuant to the request of defendant, the Hearing on Motion to Quash Plaintiff's Subpoena of Records from United Wholesale Mortgage, LLC scheduled for 04/19/2023 is continued to 05/25/2023 at 10:00 AM in Department O at Pomona Courthouse South. Defendant's supplemental brief is to be served and filed by 5/5/2023. Plaintiff's reply to defendant's supplemental brief is to be served and filed by 5/19/2023. On the Court's own motion, the Hearing on Motion to Quash Plaintiff's Subpoena of Records from Bank of America, N.A. scheduled for 04/21/2023 is advanced to this date and continued to 05/25/2023 at 10:00 AM in Department O at Pomona Courthouse South. The plaintiff agrees that the ruling on the Motion to Quash Subpoena of Records from United Wholesale Mortgage will control the ruling on the Motion to Quash Subpoena of Records from Bank of America.

Discussion

I. Motions to Quash Financial Records

In the court’s April 19, 2023, the court set out in detail the reason(s) the motions to quash Defendant’s financial information should be granted. However, during the April 19, 2023 hearing, Plaintiff introduced another case Kelly v. Haag (2006) 145 Cal.App.4th 910 to support its position that it was not required to file a motion. While the facts of Kelly are not instructive because the issue in Kelly was the reasonableness of an award of punitive damages, Kelly does provide a rule statement that supports Plaintiff’s position: “even without such an order the plaintiff may subpoena documents or witnesses to be available at trial to establish the defendant's financial condition.” (Id. at p. 919.) Thus, Civil Code section 3295, subdivision (d) affords Plaintiff the relief it seeks: if a plaintiff has not brought a motion to permit pre-trial discovery of these records, plaintiff may still request the documents, but he or she cannot look at them until the conditions of Civil Code section 3295, subdivision (d), are met: that a jury returns a verdict for actual damages and a finding of “oppression, fraud or malice.”

Therefore, to appease both parties, the court DENIES the motion, but after the production of the records, they are to be kept by the court clerk and produced upon request after a trier of fact has determined the applicability of an award for punitive damages.

II. Motion for Determination of Jury Trial

As summarized by the court in ZF Micro Solutions, Inc. v. TAT Capital Partners, Ltd. (2022) 82 Cal.App.5th 28 992 ("ZF Micro "), the right to a jury trial “is a matter of right in a civil action at law, but not in equity.” (Id. at p. 989.) When evaluating whether an action is one triable by a jury at common law, the court is bound “by the nature of the rights involved and the facts of the particular case – the gist of the action. A jury trial must be granted where the gist of the action is legal, where the action is in reality cognizable at law.” (Ibid.) Simply put, when “the remedy is exclusively compensatory damages, and not ‘a full range of possible remedies,’ [citation omitted], the issue is most always one of law.” (Id. at 1001.)

Here, Plaintiff seeks a jury trial on the remaining causes of action for a derivative action on behalf of TransValley Eyes Associates, Inc. (TVE) for breach of fiduciary duties; direct action by Plaintiff for Defendant’s alleged breach of his fiduciary duties with regard to the parties’ joint venture, and the accounting cause of action. Plaintiff relies upon ZF Micro for his position that since Plaintiff seek only money damages, and no weighing of equities is required, the "gist" of both his 9th cause of action for breach of fiduciary duty, and his derivative shareholder's 5th cause of action for breach of fiduciary duty is legal, not equitable. (Motion p. 6.) As for the 10^th COA for accounting, though equitable, Plaintiff anticipates there will not be need for accounting to determine damages as there is an expert witness on the issue of damages. Similar to ZF Micro, in this case, the causes of action for breaches of fiduciary duties exclusively seek monetary damages; Plaintiff requests nothing in the way of equitable relief. (Ibid. [“There is, for example, no request to ‘disgorge ill-gotten gains’ [citation omitted] no request to enjoin or unwind.”].)

Therefore, as court is not called upon to balance or weigh the equities, the issues are legal, requiring a jury trial as a matter of law.

Therefore, Plaintiff’s motion for a jury trial is granted.