Judge Lisa K. Sepe-Wiesenfeld, Case Number: 22STCV23403, Date: 2024-12-10 Tentative Ruling

Judge: Lisa K. Sepe-Wiesenfeld, Case: 22STCV23403, Date: 2024-12-10 Tentative Ruling

Defendants Hossein Nick Pirastehfar, M.D. (“Dr. Pirastehfar”), Providence Saint John’s Health Center (“PSJHC”), Scott Peter Layne, M.D. (“Dr. Layne”), and Abigail Elizabeth Beggs, M.D. (“Dr. Beggs”), each demur to Plaintiffs Marciela Javier, Uriel Javier, and Daniel Javier (“Plaintiffs”)’s single cause of action for constructive fraud in Plaintiffs’ Third Amended Complaint (“TAC”).

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967), but the Court does not “assume the truth of contentions, deductions, or conclusions of fact or law” (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125).

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”]; Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 [“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”]; Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768 [“When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.”].) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Civil Code section 1573 provides that constructive fraud consists of “any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him,” or “any such act or omission as the law specially declares to be fraudulent, without respect to actual fraud.” 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.)

In the first cause of action, Plaintiffs Marciela Javier, Uriel Javier, and Daniel Javier (“Plaintiffs”) allege that Drs. Pirastehfar, Layne, and Beggs had a fiduciary duty to Decedent Victor Manuel Javier Ruiz (“Decedent”), they did not disclose certain information or provided inaccurate or incomplete information, they gained an advantage over Decedent, and an officer, director, or managing agent of PSJHC ratified the doctors’ conduct. (TAC ¶¶ 85-95.) Elsewhere in the TAC, Plaintiffs allege that the doctors failed to disclose to Decedent or Plaintiff Marciela Javier that a COVID-19 PCR test could be a false positive, Remdesivir could cause harm, and there were available alternative treatments. (TAC ¶ 69.)

The Court previously sustained a demurrer to this cause of action on the ground that Plaintiffs’ constructive fraud claim consisted of conclusory and general statements of conduct by Defendants generally without alleging any specific fraud by the doctors or PSJHC providers. The Court then sustained a second demurrer on the same grounds. Here, on their fourth iteration of the complaint and third attempt to amend the complaint after a court ruling, Plaintiffs do not allege anything more specific to allow the claim to move forward. Again, Plaintiffs’ allegations simply take issue with the doctors’ medical choices, which does not support a claim for constructive fraud. Plaintiffs also provide only a conclusory allegation that a PSJHC agent ratified the doctors’ conduct, without statements that PSJHC had a financial interest or facts alleging any potential advantage for the doctors in their treatment. Again, Plaintiffs have pled no more than alleged medical negligence in this cause of action while failing to set forth specific statements made by the doctors or PSJHC providers, specific fraudulent conduct by each Defendant, and an advantage purportedly gained by that Defendant. Insofar as Plaintiffs allege that Defendants gained an advantage by placing them in a more favorable light and entitling the hospital to a bonus on the hospital bill (TAC ¶¶ 78, 79), these allegations are conclusory and speculative, and, again, Plaintiffs provide no specific allegations about the nature of the fraud that would have entitled Defendants to these purported advantages.

Defendants also contend that Plaintiffs’ claims are barred by the Federal Public Readiness and Emergency Preparedness Act (“PREP Act”), codified at title 42 United States Code sections 247d-6d and 247d-6e, which provides that “covered person[s] shall be immune from suit and liability under Federal and State law with respect to all claims for loss caused by, arising out of, relating to, or resulting from the administration to or the use by an individual of a covered countermeasure.” (42 U.S.C. § 247d-6d(a)(1).) In response to the COVID-19 pandemic, the Secretary of Health and Human Services issued a Declaration, retroactively effective as of February 4, 2020, that provided PREP Act immunity for individuals and entities responding to COVID-19. (85 C.F.R. § 15198 (2020).)

Drs. Pirastehfar, Layne, and Beggs qualify as “covered person[s]” because they are qualified to prescribe, administer, or dispense countermeasures to COVID-19. (42 U.S.C. § 247d-6d(i)(2)(B)(iv).) PSJHC qualifies as a “covered person” because it was an entity serving as a “program planner” who supervised or administered a program which administered countermeasures against COVID-19. (42 U.S.C. § 247d-6d(i)(2)(B)(iii), (i)(6).) Again, it appears that Plaintiffs’ claims fall within the purview of PREP Act immunity, as Plaintiffs take issue with Defendants’ administration of a PCR test and use of certain medication to treat COVID-19. Plaintiffs’ choice to plead a constructive fraud claim does not compel a different conclusion by the Court because Plaintiffs have not met the heightened standard for a fraud claim, and it appears Plaintiffs’ claim continues to be one for medical negligence. Plaintiffs argue that their claims are not within the scope of the PREP Act because the “claim for loss” has no causal connection to the later provision of Remdesivir, but this argument is not well taken, because Plaintiffs would not have harm without the purported improper use of Remdesivir, i.e., Plaintiffs’ allegations are that Decedent was not offered an alternative treatment other than Remdesivir, such that Plaintiffs take issue with the use of Remdesivir, placing the claims within the purview of the PREP Act. The Court does not read Defendants’ arguments as trying to place the practice of medicine within the purview of the PREP Act, as Plaintiffs argue.

The Court has allowed Plaintiffs three chances to amend their pleading, and they failed to amend the claims in a way that allows the Court to conclude that further amendment will cure the identified deficiencies. Accordingly, Defendant Hossein Nick Pirastehfar, M.D.’s Demurrer to Plaintiffs’ Third Amended Complaint is SUSTAINED without leave to amend, Defendant Providence Saint John’s Health Center’s Demurrer to Plaintiff’s [sic] Third Amended Complaint is SUSTAINED without leave to amend, Defendant Scott Peter Layne, M.D.’s Demurrer to Plaintiffs’ Third Amended Complaint is SUSTAINED without leave to amend, and Defendant Abigail Elizabeth Beggs, M.D.’s Demurrer to Plaintiffs’ Third Amended Complaint is SUSTAINED without leave to amend. Defendants Hossein Nick Pirastehfar, M.D., Providence Saint John’s Health Center, Scott Peter Layne, M.D., and Abigail Elizabeth Beggs, M.D. shall prepare, serve, and submit a proposed judgment as per statute.