Judge: Kenneth J. Medel, Case: 37-2017-00004475-CU-BC-CTL, Date: 2024-04-26 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - April 25, 2024

04/26/2024  09:30:00 AM  C-66 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Kenneth J Medel

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Civil - Unlimited  Breach of Contract/Warranty Motion Hearing (Civil) 37-2017-00004475-CU-BC-CTL CENTER FOR HEALTHCARE EDUCATION AND RESEARCH INC VS INTERNATIONAL CONGRESS FOR JOINT RECONSTRUCTION INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Amended Motion, 03/11/2024

CENTER FOR HEALTHCARE EDUCATION AND RESEARCH, INC's Motion to Add Dr Norman Scott as a Judgment is DENIED. As this Court previous ruled in its final order of May, 2021 [ROA 331], the evidence presented does not sufficiently show that Dr. Scott (1) had control of the underlying litigation and was virtually represented in that proceeding; (2) there is such a unity of interest and ownership that the separate personalities of the entity and the owners no longer exist; and (3) an inequitable result will follow if the acts are treated as those of the entity alone. This order was never appealed by CHE.

Even assuming the previous order was made without prejudice, CHE's assertions appear to be same assertions raised in the previous hearing. The Court will not revisit all of the evidence considered before.

This Court carefully considered this case in its Statements of Decision and all of the post-trial motions.

The Court has not seen evidence to support the alter ego liability proposed by CHE. The new points of focus involve argues that Dr. Scott controlled the litigation, and personally collected profits from ICJR's final conference in October 2022.

It does not appear to the Court that Dr. Scott controlled the litigation. ICJR's chief executive Jason Heath and ICJR's board were intact. Scott Dec. ¶ 6; Heath Dec. ¶ 9. One of the board members, Dr. Springer stated in his declaration he and Dr. Meneghini 'were a minority on the five-member ICJR board, and we had no ability to exercise any control over ICJR's actions in that lawsuit.' ROA 544 (Springer Dec.) ¶ 35.

This declaration was provided in defense of CHE's unsuccessful attempt to name Dr. Springer's company IOEN as a judgment debtor in May, 2023. Taking this statement at face value, the lack of board majority votes does not prove that Dr. Scott alone controlled the litigation. There was still an acting board.

CHE also points to Dr. Springer's declaration as support for the proposition that Dr. Scott personally collected profits from ICJR's final conference. 'It is my understanding that any profits remaining at the conclusion of [ICJR's final conference] were transferred to ICJR's secured creditor, Dr. Scott.' Understanding is not knowledge. Dr. Scott states emphatically that he did not receive any money from ICJR's final conference. Scott Dec. ¶ 10; Heath Dec. ¶ 26. In fact, he states he never received any money from ICJR at all. Scott Dec. ¶ 9; Heath Dec. ¶ 15. The evidence does not support reconsidering the Court's previous denial.

Further, alter ego is an equitable doctrine, subject to equitable defenses. Highland Springs Conference & Training Ctr. v. City of Banning, 244 Cal. App. 4th 267, 289 (2016). A plaintiff with unclean hands is not entitled to equitable (or legal) relief. Unilogic, Inc. v. Burroughs Corp., 10 Cal. App. 4th 612, 623 (1992). This Court and the Court of Appeal found that plaintiff violated conscience good faith, and equitable standards of conduct in this case. Based on this Court's factual findings detailing how plaintiff and Sacaris enriched themselves through undisclosed and unapproved fees, the Court of Appeal stated: 'The court's statement of decision is a scathing indictment of years of misconduct by Sacaris and CHE.' Center For Healthcare Education, 57 Cal. App. 5th at 1131.

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3096596  26 CASE NUMBER: CASE TITLE:  CENTER FOR HEALTHCARE EDUCATION AND RESEARCH INC  37-2017-00004475-CU-BC-CTL CHE's 'years of misconduct' was directly connected to the basis of the relief it now seeks through this motion. In essence, as has been found by this Court, plaintiff and Sacaris siphoned millions of dollars away from ICJR, which had the obvious effect of rendering ICJR unable to satisfy plaintiff's judgment.

They also damaged ICJR's reputation. ROA 188 at 7. Having injured the company's business, while looting it for their own enrichment, it would be inequitable to amend the judgment against Dr. Scott-a retired individual who has not received compensation from ICJR.

For finality, this ruling is without prejudice.

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