Judge: Helen Zukin, Case: 22SMCV01527, Date: 2023-02-17 Tentative Ruling

Case Number: 22SMCV01527    Hearing Date: February 17, 2023    Dept: 207

Background

Plaintiff John Doe (“Plaintiff”) brings this action against Defendants Daniel Moghadam, M.D. (“Moghadam”) and Modern Aesthetica, Corp. (collectively with Moghadam, “Defendants”) stemming from two surgical procedures performed by Moghadam which Plaintiff alleges left him with injuries and complications. Plaintiff’s Complaint alleges causes of action against Defendants for medical malpractice, violation of the Consumer Legal Remedies Act, fraud, and unfair competition under Business and Professions Code § 17200, et seq.

Defendants bring this demurrer to all of these causes of action with the exception of Plaintiff’s claim for medical malpractice, arguing they fail to state sufficient facts to constitute causes of action against them and are uncertain pursuant to Code Civ. Proc. § 430.41(e)-(f). Defendants separately move to strike Plaintiff’s claim for punitive damages and references thereto from Plaintiff’s Complaint. Plaintiff opposes Defendants’ demurrer and motion to strike.

Demurrer Standard

When considering demurrers, courts read the allegations liberally and in context. (Wilson v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716, 720-21.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleading alone, and not on the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Id.) However, it does not accept as true deductions, contentions, or conclusions of law or fact. (Stonehouse Homes LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 538.)

The general rule is that the plaintiff need only allege ultimate facts, not evidentiary facts. (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.) “All that is required of a plaintiff, as a matter of pleading, even as against a special demurrer, is that his complaint set forth the essential facts of the case with reasonable precision and with sufficient particularity to acquaint the defendant with the nature, source and extent of his cause of action.” (Rannard v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157.) 

A special demurrer for uncertainty under Section 430.10(f) is disfavored and will only be sustained where the pleading is so unintelligible that a defendant cannot reasonably respond—i.e., cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him/her. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even if the pleading is somewhat vague, “ambiguities can be clarified under modern discovery procedures.” (Id.)

Motion to Strike Standard

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: 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.)

Analysis

            1.         Meet and Confer

The Court finds Defendants have satisfied the meet and confer obligations imposed by Code Civ. Proc. §§ 430.41 and 435.5. (Diamond Decl. at ¶¶3-7.)

            2.         Consumer Legal Remedies Act

The Consumers Legal Remedies Act (the “CRLA”) “declares unlawful a variety of ‘unfair methods of competition and unfair or deceptive acts or practices’ used in the sale or lease of goods to a consumer.” (Bower v. AT&T Mobility, LLC (2011) 196 Cal.App.4th 1545, 1556.) Civil Code § 1770(a)(1)-(27), provides a list of methods, acts, or practices that are unlawful under the CLRA. “An individual seeking to recover damages under the CLRA based on a misrepresentation must prove, among other things, actual injury. ‘Relief under the CLRA is specifically limited to those who suffer damage, making causation a necessary element of proof.’ [Citation.] Accordingly, ‘plaintiffs in a CLRA action [must] show not only that a defendant’s conduct was deceptive, but that the deception caused them harm.’ [Citations.][Citations.]” (Id. at 1556.)

There are no published cases in California applying the CLRA to analogous claims of medical malpractice or alleged misrepresentations regarding the safety of a certain medical procedure or a surgeon’s skill. The underlying purpose of the CLRA is to "protect consumers against unfair and deceptive business practices." (Civ. Code § 1760.) Services under the CLRA are defined as: "work, labor, and services for other than a commercial or business use, including services furnished in connection with the sale or repair of goods." (Civ. Code § 1761(b).) Section 1761(d) defines a consumer to be "an individual who seeks or acquires, by purchase or lease, any goods or services for personal, family, or household purposes."

Section 1761(e) defines a transaction as "an agreement between a consumer and another person, whether or not the agreement is a contract enforceable by action, and includes the making of, and the performance pursuant to, that agreement." Pursuant to § 1770(a)(5), a person violates the CLRA by representing that goods have characteristics, ingredients, uses, benefits or quantities which they do not have. A person further violates the CLRA by representing a good is of a particular standard, quality, or grade, when it was clearly of another. (Civ. Code § 1770(a)(7).)

Civil Code section 1782 provides the potential defendant in a lawsuit involving CLRA claims a 30-day window of opportunity to correct, repair or replace or otherwise rectify the goods alleged to be in violation of the CLRA before the lawsuit is commenced is further indication that the Legislature did not intend that claims based on medical malpractice be within the purview of the CLRA.

In examining the purposes and procedures of the CLRA as a whole, the Court finds the CLRA was not intended to apply to the kinds of claim raised by Plaintiff here. By its very nature, a claim based on medical negligence or physical injury stemming from alleged false representations of medical skill is not something that routinely can be corrected, repaired, replaced or otherwise rectified by returning a fee or product after the fact as contemplated by section 1782.

Applying the CLRA to Plaintiff’s claims here would also undermine and conflict with the Medical Injury Compensation Reform Act (“MICRA”). MICRA “reflects a strong public policy to contain the costs of malpractice insurance by controlling or redistributing liability for damages, thereby maximizing the availability of medical services to meet the state's health care needs.” (San Pedro Peninsula Hospital (1994) 8 Cal. 4th 100, 112.) Any claim for medical malpractice could be redrawn to state a claim under the CLRA where a patient was injured by a procedure recommended by a physician, and thus render moot the limitations on damages as established by MICRA. It is settled that doctors are not warrantors of cures nor are they required to guarantee results and in the absence of a want of reasonable care and skill will not be held responsible for untoward results. (Huffman v. Lindquist (1951) 37 Cal.2d 465, 475 [“a doctor is not a ‘warrantor of cures’ … or ‘required to guarantee results’”]; see also Stephenson v. Kaiser Foundation Hospitals (1962) 203 Cal.App.2d 631, 636.) Allowing Plaintiff to pursue a cause of action against Defendants under the CLRA would invariably cast doubt on this established principle.

Based on the above, the Court finds representations regarding the use of a particular product for a course of treatment by a physician are covered by the standard of care applied to doctors in the context of professional negligence and not the more general standards related to consumer protection under the CLRA. The Court thus SUSTAINS Defendants’ demurrer to this cause of action. As this is not an issue which could be cured by further amendment, Defendants’ demurrer to this cause of action is sustained without leave to amend.

            3.         Fraud

“The elements of fraud,” including a cause of action for fraudulent inducement, “are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.) The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) To properly allege fraud against a corporation, the plaintiffs must plead the names of the persons allegedly making the false representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

Defendants argue Plaintiff has not alleged a cause of action against them for fraud with the requisite level of specificity. The Court disagrees. The Complaint quotes specific representations made by Defendant Moghadam by text message, and alleges such representations were made between April 13, 2022, and April 16, 2022. (Complaint at ¶¶15-22.) The Complaint identifies three separate misrepresentations made by Moghadam: (1) combining two surgical procedures was not dangerous, (2) the enhancement procedure was “100% safe,” and (3) Moghadam was qualified to perform the procedures Plaintiff hired him to perform. (Id.) Plaintiff alleges Moghadam knew these representations were false and were made to induce Plaintiff to hire Defendants for their financial benefit. (Id. at ¶¶23, 45.) The Complaint also alleges Plaintiff’s reasonable and detrimental reliance on these statements, and his resulting injury. (Id. at ¶¶24-25, 46-47.)

While plaintiffs alleging a cause of action for fraud must meet a higher pleading standard, they are not required to prove every aspect of their claim at the pleading stage. Taken as a whole, the Court finds Plaintiff has alleged his cause of action for fraud with enough specificity to survive the pleading stage and therefore Defendants’ demurrer to this cause of action is OVERRULED.

            4.         Unfair Competition Law

California’s Unfair Competition Law (“UCL”), codified at Business and Professions Code section 17200 et seq., prohibits “any unlawful, unfair, or fraudulent business act or practice.” (Bus. & Prof. Code § 17200; see Clark v. Superior Court (2010) 50 Cal.4th 605, 610.) A UCL plaintiff must plead and prove the defendant engaged in a business practice which was either unlawful (i.e., is forbidden by law) or unfair (i.e., harm to victim outweighs any benefit) or fraudulent (i.e., is likely to deceive members of the public). (Albillo v. Intermodal Container Services, Inc. (2003) 114 Cal.App.4th 190, 206.) “An unlawful business practice or act within the meaning of the UCL is an act or practice, committed pursuant to business activity, that is at the same time forbidden by law.” (Bernardo v. Planned Parenthood Federation of America (2004) 115 Cal.App.4th 322, 351.)

Plaintiff’s cause of action for unfair competition under Business and Professions Code § 17200 is premised on the same alleged fraudulent business acts or practices which form the basis of Plaintiff’s claim for fraud against the Defendants. As the Court has determined Plaintiff has sufficiently alleged a claim for fraud, the Court finds Plaintiff has similarly sufficiently alleged a claim for unfair competition based on allegedly fraudulent conduct regarding Defendants’ representations regarding the safety of the subject surgical procedures. The Court thus OVERRULES Defendants’ demurrer to this cause of action.

            5.         Motion to Strike

“In order to survive a motion to strike an allegation of punitive damages, the ultimate facts showing an entitlement to such relief must be pled by a plaintiff. In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255 (internal citations omitted).)

A motion to strike punitive damages is properly granted where a plaintiff does not state a prima facie claim for punitive damages, including allegations that defendant is guilty of oppression, fraud, or malice. (Turman v. Turning Point of Cent. California, Inc. (2010) 191 Cal.App.4th 53, 63.) “Mere negligence, even gross negligence, is not sufficient to justify such an award” for punitive damages. (Kendall Tacht Corp. v. United California Bank (1975) 50 Cal.App.3d 949, 958.) The allegations supporting a request for punitive damages must be alleged with specificity; conclusory allegations without sufficient facts are not enough. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-42.) A plaintiff’s “conclusory characterization of defendant’s conduct as intentional, willful and fraudulent is a patently insufficient statement of ‘oppression, fraud, or malice, express or implied, within the meaning of section 3294.” (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864.)

Defendants move to strike Plaintiff’s claim for punitive damages and all references thereto from the Complaint on the ground that Plaintiff has not satisfied the requirements of Code Civ. Proc. § 425.13.

Code Civ. Proc. § 425.13 provides “In any action for damages arising out the professional negligence of a health care provider, no claim for punitive damages shall be included in a complaint or other pleading unless the court enters an order allowing an amended pleading that includes a claim for punitive damages to be filed. The Court may allow the filling of an amended pleading claiming punitive damages on a motion by the party seeking the amended pleading and on the basis of the supporting and opposing affidavits presented that the plaintiff has established that there is a substantial probability that the plaintiff will prevail on the claim pursuant to Section 3294 of the Civil Code. . . .” (C.C.P. § 425.13.) The provision applies whenever the gravamen of the action is professional negligence. (Central Pathology Service Medical Clinic, Inc. v. Superior Court (1992) 3 Cal.4th 181, 191.) Therefore, a plaintiff must comply with Section 425.13 when seeking punitive damages for an injury that is directly related to the professional services provided by a health care provider acting in its capacity as such. (Id.)

However, this does not mean section 425.13 applies to every action brought against a health care provider. As the California Supreme Court explained in Central Pathology, “Thus, a cause of action against a health care provider for battery predicated on treatment exceeding or different from that to which a plaintiff consented is governed by section 425.13 because the injury arose out of the manner in which professional services are provided. By contrast, a cause of action against a health care provider for sexual battery would not, in most instances, fall within the statute because the defendant's conduct would not be directly related to the manner in which professional services were rendered.” (Central Pathology, supra, 3 Cal.4th at 192.) Applying this rule, the Central Pathology Court held section 425.13 applies where a “cause of action for fraud … is directly related to the manner in which defendants provided professional services.”

The Court agrees with Defendants that Divino Plastic Surgery, Inc. v. Superior Court (2022) 78 Cal.App.5th 972 is squarely on point. In Divino plaintiffs alleged causes of action for intentional misrepresentation and promissory fraud stemming from a surgeon’s pre-surgery representations that he was a board-certified plastic surgeon and would have a licensed anesthesiologist present during surgery, which plaintiffs alleged had induced the decedent to undergo the surgery. (Id. at 985 [“the Espinozas allege Chacon misrepresented ‘he was qualified to perform certain medical procedures’ and ‘he would properly treat [decedent]’”].) The Court, citing Davis v. Superior Court (1994) 27 Cal.App.4th 623, held these representations occurred during the rendition of medical services as a matter of law, thus triggering the application of Code Civ. Proc. § 425.13:

First, an allegedly improper financial motivation for a physician's misrepresentations does not suffice to render section 425.13 inapplicable. (Davis, supra, 27 Cal.App.4th at p. 628.) “The focus is on the physician's conduct.” (Id. at p. 629.) Where, as here, “the doctor accused of the improper behavior was engaged in the practice of medicine at the time he or she was consulted by the patient,” section 425.13 applies. (Davis, at p. 629.)

Second, although “lawsuits unrelated to the practitioner's conduct in providing health care were not intended to be included” within the scope of section 425.13 (Williams v. Superior Court (1994) 30 Cal.App.4th 318, 324 [36 Cal. Rptr. 2d 112]), the statute applies “whenever an injured party seeks punitive damages for an injury that is directly related to the professional services provided by a health care provider acting in its capacity as such” (Central Pathology, supra, 3 Cal.4th at pp. 191–192). Chacon made the alleged misrepresentations to Megan in his capacity as a physician.

(Divino, supra, 78 Cal.App.5th at 986.) The same result follows here. Plaintiff seeks an award of punitive damages in connection with pre-surgery representations made by Defendants as to the safety of the procedures which he claims induced him to agree to the surgery. His claimed damages from this alleged fraud are the same for his claim for medical malpractice, that is, personal injuries suffered as a result of the allegedly “botched” medical procedures performed by Moghadam. Under Divino and Davis, such inducements are directly related to Defendants’ provision of medical service to Plaintiff so as to trigger section 425.13.

Plaintiff’s reliance on Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276 is misplaced. Bigler was concerned with whether plaintiff’s claim for intentional tort was subject to MICRA’s cap on noneconomic damages, and did not address whether those claims would have triggered the application of Code Civ. Proc. § 425.13. Both Bigler and Divino expressly acknowledged the standards imposed by section 425.13 and MICRA are not interchangeable. (See Divino, supra, 78 Cal.App.5th at 986 [“cases on what constitutes a professional negligence claim under MICRA are not controlling, because section 425.13 is not part of MICRA, uses different language, and serves a different purpose”]; Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 322 [because “section 425.13 is not part of MICRA and employs different language than MICRA's statutes, the Supreme Court repeatedly has rejected attempts to apply the standard it announced in Central Pathology to MICRA or other statutory provisions”].) As Bigler is a MICRA case and not a section 425.13 case, it is of limited usefulness in determining whether Plaintiff’s claims here are subject to section 425.13.

The Court thus GRANTS Defendants’ motion to strike Plaintiff’s claim for punitive damages and references to same. Defendants’ motion is granted without leave to amend, but also without prejudice to Plaintiff’s right to bring a motion for leave to assert a claim for punitive damages pursuant to the procedure outlined in Code Civ. Proc. § 425.13(a).

Conclusion

Defendants’ demurrer is SUSTAINED without leave to amend as to Plaintiff’s cause of action under the Consumer Legal Remedies Act and is otherwise OVERRULED. Defendants’ motion to strike is GRANTED without leave to amend and also without prejudice to Plaintiff’s filing a motion seeking leave to assert a claim for punitive damages at a later date pursuant to Code Civ. Proc. § 425.13.