Judge: Nathan R. Scott, Case: Vivera Pharmaceuticals v. GD Laboratory Consulting, Date: 2022-08-05 Tentative Ruling

Motion to Compel

Defendant Focal Point Laboratories LLC’s motion to compel is granted.

 

Deponent Gulzar Ahmad shall submit to a deposition and produce the requested documents within 30 days at 1230 Crenshaw Blvd, Suite 200, Torrance CA 90501, commencing at 10 am.   (See Cohen decl. Ex. A [subpoena].)

 

Deponent shall pay $2,674 in discovery sanctions to defendant.

 

The court declines defendant’s request to issue an OSC re contempt as the Discovery Act provides a sufficient remedy.

 

Creative Medical Demurrer to SAC

Defendants Creative Medical Services and Garrett Wilchek’s demurrer is overruled. 

 

Defendants shall file and serve their answers within 10 days.

 

Uncertainty/jurisdiction.  The SAC is not “so incomprehensible that a defendant cannot reasonably respond.”  (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.)  Any “ambiguities can be clarified under modern discovery procedures.”  (Ibid.)  Defendants have not shown the court lacks jurisdiction here.

 

4th cause of action, concealment.  The SAC alleges facts sufficient to constitute a cause of action.  It adequately alleges defendants aided and abetted concealment.  (See Casey v. U.S. Bank Nat. Assoc. (2005) 127 Cal.App.4th 1138, 1145 [elements]; Quelimane Co., Inc. v. Stewart Title Guar. Co. (1998) 19 Cal.4th 26, 38-39 [complaint alleging any cause of action survives demurrer]; Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139 [labels not determinative]; see also SAC ¶¶ 75-76.) 

 

6th cause of action, RICO.  The SAC alleges facts sufficient to constitute a cause of action.  (See Sedima, SPRL v. Imrex Co. (1985) 473 U.S. 479 [elements]; 18 U.S.C.A. § 1961, subd. (a) [racketeering includes wire fraud]; H.J., Inc. v. Northwestern Bell (1989) 492 U.S. 229, 239 [defining pattern of racketeering activity]; see also SAC ¶¶ 27 [alleging “illegal kickbacks”], 35 [alleging illegal commissions], 95 [alleging wire fraud].) 

 

Defendants have not shown plaintiffs must allege contractual privity to assert this claim. 

 

Dass Demurrer to SAC

Defendants Satish Dass, Ashlie Torres, Melinda Casas, and MSC Physician Billing Services Inc.’s demurrer is overruled.

 

Defendants shall file and serve their answers within 10 days.

 

Uncertainty.  The SAC is not “so incomprehensible that a defendant cannot reasonably respond.”  (Lickiss, supra, 208 Cal.App.4th at p. 1135.)  Any “ambiguities can be clarified under modern discovery procedures.”  (Ibid.)

 

2nd cause of action, securities laws.  The SAC alleges facts sufficient to constitute a cause of action.  (See Corp. Code, § 25401 [unlawful to offer/sell securities by misrepresenting or concealing material fact]; see also SAC ¶¶ 50 [alleging Edalat was fraudulently induced to purchase securities from Dass and Torres], 51 [specifically alleging misrepresentations].) 

 

Defendants have not shown plaintiffs must allege the specifics of each sale to survive demurrer.

 

4th cause of action, concealment.  The SAC alleges facts sufficient to constitute a cause of action.  (See Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 665-666 [elements].) 

 

As to defendants Dass and Torres, the SAC now alleges sufficient facts to show reliance.  (SAC ¶ 81.)  The remaining elements are also sufficiently alleged.  (SAC ¶¶ 8, 23, 67, 69 [duty to disclose], 29-34, 67, 70 [intentionally concealed material facts], 81-83 [proximately caused damages].)

 

As to defendants Casas and MSC Physician Billing Services Inc., the SAC adequately alleges they aided and abetted concealment.  (See Casey, supra, 127 Cal.App.4th at p. 1145 [elements]; Quelimane, supra, 19 Cal.4th at pp. 38-39; Williams, supra, 185 Cal.App.3d at p. 139; see also SAC ¶¶ 75-76.) 

 

6th cause of action, RICO.  The SAC alleges facts sufficient to constitute a cause of action.  (See Sedima, supra, 473 U.S. 479; 18 U.S.C.A. § 1961, subd. (a); H.J., Inc., supra, 492 U.S. at p. 239; see also SAC ¶¶ 27, 35, 95.) 

 

Vivera Demurrer to FAXC

Cross-defendants Vivera Pharmaceuticals Inc. and Paul Edalat’s demurrer is overruled.

 

Cross-defendants shall file and serve their answers within 10 days.

 

6th cause of action, breach of duty of loyalty.  The FAXC states facts sufficient to constitute a cause of action.  (See Carma Developers, Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 371 [implied covenant]; McClain v. Octagon Plaza, LLC (2008) 159 Cal.App.4th 784, 806 [same]; Quelimane, supra, 19 Cal.4th at pp. 38-39; Williams, supra, 185 Cal.App.3d at p. 139; Corp. Code, § 17704.09, subds. (d), (f)(2) [member of manager-managed LLC has duty to “exercise any rights consistent with the obligation of good faith and fair dealing”]; see also FACC ¶¶ 10-11, 20-33 & Ex. 1.)

 

10th cause of action, breach of lease.  The FAXC states facts sufficient to constitute a cause of action.  (See Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821 [elements]; Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 829–830 [third-party beneficiary]; see also FACC ¶¶ 10 & Ex. 2 § 6 [contract expressly benefiting Focal Point], 26, 83-84 [performance], 27-30, 85 [breach], 32, 86 [proximately caused damages].)

 

11th cause of action, forcible detainer.  The FAXC states facts sufficient to constitute a cause of action.  (See Code Civ. Proc., § 1159, subd. (a)(2) [defining “forcible entry”]; see also FACC ¶¶ 26 [Focal Point’s possession], 27-30 [cross-defendants’ forcible dispossession].)  This cause of action may be asserted by the “party in possession” and therefore not necessarily dependent on a written lease.

 

12th cause of action, claim and delivery.  The FAXC states facts sufficient to constitute a cause of action.  As alleged, it is not limited to property belonging to Focal Point pursuant to the alleged Joint Cooperation Agreement.  (See Civ. Code, §§ 3379, 3380 [authorizing claim and delivery]; see also FACC ¶¶ 20, 29-30 [alleging cross-defendants’ retention of personal property].) 

 

15th cause of action, constructive trust.  The FAXC states facts sufficient to constitute a cause of action.  As alleged, it is not limited to property retained in violation of any alleged fiduciary duty; nor is a fiduciary or confidential relationship required to impose a constructive trust. (See Campbell v. Superior Court (2005) 132 Cal.App.4th 904, 920 [constructive trust requires wrongful acquisition or detention of property]; see also FACC ¶¶ 20-21, 23, 27-30.)

 

Vivera Motion to Strike FAXC

Cross-defendants Vivera and Edalat’s motion to strike is granted as to ¶ 69 and otherwise denied.

 

Outside of the insurance context, “a breach of the covenant of good faith and fair dealing permits a recovery solely in contract,” not punitive damages.  (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1054.)  As no reasonable possibility exists of remedying this defect by amendment, leave to amend is denied.

 

Otherwise, the FACC alleges sufficient facts to support punitive damages.  (See Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 610 [in “a fraud case … [t]he pleading of fraud is sufficient”]; In re Brian S. (1982) 130 Cal. App. 3d 523, 531 [punitive damages for conversion]; Neibel v. Trans World Assur. Co. (9th Cir. 1997) 108 F.3d 1123, 1131 [punitive damages for RICO].)

 

Notice

Focal Point shall give notice of the ruling on its motion to compel.  Vivera shall give notice of all other rulings.