Judge Randolph M. Hammock, Case 20STCV15819 2022-08-22 Tentative Ruling

Plaintiff Nicholas Chen alleges he worked as a registered nurse at Defendant Tao & Josephine Corp. (dba Arcadia Medical & Cosmetic Center)(“AMCC”), a medical center specializing in cosmetic procedures. The other Defendants are Vincent Wu, Alice Lee, and Tao Chen, all of whom are administrators and/or employees of the Center.

Plaintiff alleges that the Defendants failed to have in place Standardized Procedures and Protocals (“SPP”) as required for its registered nurses to conduct Fraxel laser treatments and the IPL laser treatments. On or about May 9, 2019, the Board of Nursing (the “Nursing Board”) filed an accusation against Plaintiff seeking to revoke

his nursing license for violating the Nursing Practice Act by performing the Fraxel and the IPL procedures without having (i) the SPP in place and/or (ii) without signing the SPP, (b) for incompetence, and (c) for unprofessional conduct.

On January 30, 2020, an administrative law judge ruled Plaintiff departed from the ordinary standard of care by treating a patient with laser treatment without SPPs in place. The Court ordered Plaintiff’s license be revoked but stayed and placed on probation for years, that Plaintiff pay $2,500 to the Nursing Board, and that Plaintiff’s employment be restricted, among other penalties.

Plaintiff now brings causes of action against all Defendants for (1) negligence, against Defendant Wu for (2) Professional Negligence, and against all Defendants for (3) Violation of Business & Professions Code Section 17200, et seq. Plaintiff contends Defendants breached their duty to him by failing to establish a SPP and allowing Plaintiff to conduct procedures without an SPP in place.

There is no meet and confer declaration. Plaintiff’s counsel filed a declaration on August 16, 2022, stating that Defendants failed to meet and confer before filing the motion. The court will exercise its discretion to hear the motion. Both parties are admonished to comply with all meet and confer obligations going forward.

The court takes judicial notice of the exhibits without assuming the truth of the assertions contained therein. (Evid. Code, § 452, subd. (h).) (See Seelig v. Infinity Broad. Corp. (2002) 97 Cal. App. 4th 798, 808.)

A motion for judgment on the pleadings is properly granted when the “complaint does not state facts sufficient to constitute a cause of action against that defendant.” (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii).) The grounds for the motion must appear on the face of the challenged pleading or from matters that may be judicially noticed. (Code Civ. Proc., § 438, subd. (d).) The trial court must accept as true all material facts properly pleaded, but does not consider conclusions of law or fact, opinions, speculation, or allegations contrary to law or facts that are judicially noticed.

(Stevenson Real Estate Services, Inc. v. CB Richard Ellis Real Estate Services, Inc. (2006) 138 Cal.App.4th 1215, 1219-20.) “A motion for judgment on the pleadings may be made at any time either prior to the trial or at the trial itself.” (Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650.)

On June 26, 2017, the Nursing Board received a complaint that Chen caused “minor permanent injury” to a female patient when she underwent Fraxel and IPL laser treatments (hereinafter “laser treatments”). (RJN, Ex. G, Board Decision, p. 5 ¶ 12). On December 16, 2019, an administrative law judge (“ALJ”) heard the disciplinary action regarding the injured patient’s complaint before the Board (hereinafter the “Administrative proceeding”). (RJN, Ex. G, Board Decision, p. 1). A central issue in the Administrative proceeding was the fact that Plaintiff conducted laser treatments despite not having Standardized Procedures and Protocals (“SPP”) in place as required for registered nurses to conduct laser treatments. Among other defenses, Plaintiff argued that the responsibility of having written standardized procedures and protocols in place rested with his employer—Defendants in the instant action.

The Board’s expert witness, Endicott, testified that by performing laser treatments for the patient without signing written SPPs, Chen departed from the standard of care. (RJN, Ex. G, Board Decision, p. 6 ¶ 17.) Among other things, Endicott testified that Chen bears full responsibility for choosing to perform these functions without the requisite written SPPs in place; that he demonstrated incompetence; that Chen’s conduct was in violation of state law, making his level of decision-making questionable; and that he had deviated from the standard of care when he performed the laser treatments on patient when AMCC did not have written SPPs for these laser treatments. (RJN, Ex. G, Board Decision, pp. 6-7).

Ms. Rendi Solis testified as an expert witness on Plaintiff’s behalf. (RJN, Ex. G, Board Decision, p. 7.) Solis estimated that 95 percent of clinics comparable in size to AMCC operate without written standardized procedures. (Id).

The ALJ, however, denied Plaintiff’s arguments and held that he was independently responsible for his failure to follow SPPs regardless of any failure by his employer to provide SPPs. (RJN, Ex. G, Board Decision p. 15, ¶ 22.) The ALJ found that even though Defendants did not have SPPs in place, a nurse who performs laser treatments without SPPs in place departs from the applicable standard of care. (See RJN, Ex. G, Board Decision, p. 5 ¶ 14-15). Thus, the evidence established that Plaintiff departed from the standard of care by performing laser treatments on patient without SPPs in place. (RJN, Ex. G, Board Decision, p. 7, ¶ 21.)

Therefore, the Board issued a Decision and Order to temporarily restrict Chen’s nursing license with probation effective April 17, 2020. (RJN, Ex. G, Board Decision, p. 17). Revocation of his nursing license was “stayed” (i.e. temporarily set aside) for a minimum of three years, which still allows Chen to practice as a registered nurse with a restricted license under the minimum terms and conditions of probation. The Board further denied Chen’s request for reconsideration of his probation on April 20, 2020. (See RJN, Ex. G, Board Decision.)

Chen then sought a writ of mandate from the Los Angeles County Superior Court reversing the Decision by the Board of Registered Nursing to restrict his license as a registered nurse. (“Superior Court Hearing”). On April 27, 2021, Judge Chalfant issued a decision and order against Chen and in favor of the Board’s Decision. On May 7, 2021 the Los Angeles Superior Court adopted the Decision and Order (1) denying Chen’s Petition for Writ of Mandate, and (2) that Chen “shall take nothing by the action.” (Superior Court Judgment Denying Petition for Writ of Mandate In the Matter of Nicholas Chen v. Board of Registered Nursing, Case No. 20STCP01969. (RJN, Exhibit B.)

Defendant Tao & Josephine Corp. previously did business as Alhambra Medical & Cosmetic Center (“AMCC”) as a medical clinic specializing in cosmetic treatment of patients. Plaintiff Nicholas Chen worked as a registered nurse for AMCC. (Complaint ¶ 1). During the time of Chen’s employment at AMCC, defendant Dr. Vincent Wu was a medical doctor at AMCC, and defendants Alice Lee and Tao Chen were administrators of AMCC. (Complaint ¶ 2, 4-5). Attempting to revive a defense he made in the Administrative proceeding, Plaintiff alleges that the Defendants failed to have in place Standardized Procedures and Protocals (“SPP”) as required for its registered nurses to conduct Fraxel laser treatments and the IPL laser treatments.

Thus, Plaintiff asserts causes of action against Defendants for (1) Negligence and (2) Violation of Business & Professions Code §17200; and against defendant Dr. Vincent Wu individually for (3) Professional Negligence. (Complaint, pp. 6-8). Chen claims he is owed damages for: (1) paying the Board of Registered Nursing $2,500 for costs associated with its investigation of accusations against Chen; (2) incurring at least $110,000 in defending the Board’s accusations; (3) approximately $175,000 he will incur in appealing to the Superior Court; and (4) approximately $900,000 in losses of earnings he will suffer due to temporary license limitations. (Complaint ¶ 18-20.)

Defendants contend this action is Plaintiff’s attempt to re-adjudicate the administrative law judge’s prior judgments against him. Thus, Defendants say the action is barred by both res judicata and collateral estoppel.

The doctrine of res judicata precludes the re-litigation of certain matters which have been resolved in a prior proceeding under certain circumstances. (Brinton v. Bankers Pension Services, Inc. (1999) 76 Cal.App.4th 550, 556.) “Res judicata, or claim preclusion, prevents re-litigation of the same cause of action in a second suit between the same parties or parties in privity with them.” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896.) “Res judicata applies if (1) the decision in the prior proceeding is final and on the merits; (2) the present proceeding is on the same cause of action as the prior proceeding; and (3) the parties in the present proceeding or parties in privity with them were parties to the prior proceeding.” (Fed'n of Hillside & Canyon Associations v. City of Los Angeles (2004) 126 Cal.App.4th 1180, 1202.)

Res judicata and collateral estoppel can be applied to administrative decisions generally. “[U]nless a party to a quasi-judicial administrative agency proceeding challenges the adverse findings made in that proceeding, by means of a mandate action in superior court, those findings are binding in later civil actions.” (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 65, 99 Cal.Rptr.2d 316, 5 P.3d 874.) “ ‘[C]ollateral estoppel may be applied to decisions made by administrative agencies “[when] an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate....” ’ [Citations.]” (People v. Garcia, supra, 39 Cal.4th at p. 1076, 48 Cal.Rptr.3d 75, 141 P.3d 197.) A discussion of the elements of res judicata as applied to this case follows.

As noted above, res judicata applies if there has been a final judgment on the merits in a previous decision. (Fed'n of Hillside & Canyon Associations v. City of Los Angeles, supra, 126 Cal.App.4th at 1202.) “Full faith and credit must be given to a final order or judgment of a federal court. Such an order or judgment has the same effect in the courts of this state as it would have in a federal court.” (Levy v. Cohen (1977) 19 Cal.3d 165, 172-173.) “A judgment is on the merits for purposes of res judicata, ‘if the substance of the claim is tried and determined…” (Association of Irritated Residents v. Dept. of Conservation (2017) 11 Cal.App.5th 1202, 1220.)

Here, there is little doubt that the Administrative proceeding, as subsequently affirmed by the writ, was a final judgment on the merits. Plaintiff had the opportunity to present evidence (including an expert witness) and submit briefs. (See RJN, Ex. G, Board Decision, pp. 1-2, 7.) The Board issued a written statement of decision, based on the evidence and arguments from the hearing. (See RJN, Ex. G, Board Decision.) The board subsequently denied Plaintiff’s request for reconsideration of the decision. Finally, the Superior Court ruling was final as Judge Chalfant denied Plaintiff’s Petition for Writ of Mandate, ruled that Chen “shall take nothing by this action,” and entered the Judgment in favor of the Board. (RJN, Ex. B, Judgment, p. 2.) Under these facts, this court concludes the Administrative judgment was final and on the merits.

When applying res judicata, “the key issue is whether the same cause of action is involved in both suits. California law approaches the issue by focusing on the ‘primary right’ at stake: if two actions involve the same injury to the plaintiff and the same wrong by the defendant then the same primary right is at stake even if in the second suit the plaintiff pleads different theories of recovery, seeks different forms of relief and/or adds new facts supporting recovery.” (emphasis in original.) (Deleon v. Verizon Wireless (2008) 88 Cal.Rptr.3d 29, 35.) “As far as its content is concerned, the primary right is simply the plaintiff's right to be free from the particular injury suffered…” (Villacres v. ABM Indus. Inc. (2010) 189 Cal.App.4th 562, 575–76.)

Defendants argue “Chen’s Complaint, and the prior Administrative Hearing and the Superior Court Hearing, arise out of the same transactional nucleus of facts and contain substantially the same evidence. The gist of this Complaint and the prior proceedings is Chen’s objections to the restriction of his license resulting from his administering of laser treatments without written SPPs at AMCC.” (Mtn 9: 23-26.)

Plaintiff counters that Defendants had no involvement in the Administrative proceeding. Plaintiff appears to have raised a defense in the administrative hearing and in the writ proceeding that it was the Defendants who were responsible for putting in place a SPP. The ALJ rejected this argument, and Judge Chalfant did the same—essentially, the purported culpability of the Defendants could not resolve Plaintiff of his own duty to ensure a SPP was in place. However, Defendant has not directed this court to any portion of the administrative ruling where the ALJ resolved these Defendants of any wrongdoing. That was simply not at issue in the administrative proceeding.

Defendants also argue Plaintiff’s same “primary right” that was at issue in the administrative proceeding is at issue in this proceeding. Plaintiff analogizes this case to Wade v. Ports American Management Corp. (2013) 218 Cal.App.4th 648. There, the worker was laid off by his employer and filed a grievance alleging unlawful discrimination. The parties arbitrated the grievance. The arbitrator entered a written ruling finding the worker presented “no compelling evidence to support the claim.” (Id. at 652.)

The next year, the appellant filed an action in the superior court, alleging a single cause of action for retaliation and wrongful termination in violation of public policy based on similar facts in the arbitration. (Id.) The employer moved for summary judgment and asserted the claim was barred by res judicata, as the identical claim had been adversely decided against appellant in the labor arbitration. (Id.) The trial court granted the motion for summary judgment, finding the claim barred was barred.

On appeal, the Court of Appeal addressed whether the “cause of action” in the arbitration and superior court actions was the same. Invoking the “primary right theory”, the court explained that the plaintiff’s primary right in arbitration was “his right not to be discharged for wrongful reasons.” (Id. at 657.) That same allegedly wrongful termination was the basis for his subsequently filed action in superior court. “Thus,” the court explained, “the same primary right was at issue both in the labor arbitration proceeding and in the superior court action. Accordingly, res judicata applied to bar appellant's single cause of action for wrongful termination in violation of public policy.” (Id. at 657.) Moreover, the Court noted that the plaintiff “could and should have raised the issue of ‘wrongful termination in violation of the public policy against racial discrimination’ in the arbitration proceeding,” but failed to do so. On those facts, he was barred from filing the subsequent Superior Court action. (Id. at 658.)

Here, Defendants argue that like in Wade, the same “primary right” was at issue in both the Administrative Hearing and Superior Court Hearing. (Mtn. 12: 12-13.) Defendants, however, never state what the common purported “primary right” was. Moreover, as argued by Plaintiff, Defendants appear to conflate the rights to recovery (this action) with the right to defend oneself against an accusation (the administrative action.) Defendants have cited no authority suggesting that these very different proceedings can be treated the same way.

To the extent that Plaintiff even had “primary right” while as a respondent before the Board, this court cannot agree that it was the same primary right as in the instant action. The “right” at issue before the Board was whether Plaintiff’s conduct had violated his nursing license. The ALJ rejected that the instant Defendants could shelter the blame for Plaintiff’s violation. Now, however, Plaintiff’s primary right is the right to be free from his employer’s negligence. There is undoubtedly some overlap between the two proceedings, but not enough to conclude they involve the same primary right. In that sense, this case is readily distinguishable from Wade, in which the plaintiff asserted nearly identical causes of action against the same defendants in both proceedings.

It is also important to note that Plaintiff raised these “culpability” arguments only as a defense to the Board’s accusations. But it does not appear that Plaintiff had the opportunity to directly assert his instant claims against Defendants in the Administrative or Writ proceedings. There is nothing to suggest the ALJ or the superior court did any fact finding as to Wu’s, Lee’s, Tao’s or AMCC’s fault. Moreover, the Board’s decision expressly stated there was no evidence the Board had “initiated disciplinary proceedings against any nurse other than respondent,” nor was their evidence of any “disciplinary proceedings against Alhambra Medical or its medical directors for the failure to develop standardized procedures for its nurses to administer laser treatments.” (D’s Exh. G., p. 8, ¶ 23.) Finally, it is unlikely the Board would have jurisdiction to adjudicate Plaintiff’s tort claims against Defendants even if he had tried.

Res judicata “applies only to the relitigation of the same cause of action between the same parties or those in privity with them.” (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 825.) “As applied to questions of preclusion, privity requires the sharing of “an identity or community interest,” with “adequate representation” of that interest in the first suit, and circumstances such that the nonparty “should reasonably have expected to be bound” by the first suit. A nonparty alleged to be in privity must have an interest so similar to the party’s interest that the party acted as the nonparty’s ‘virtual representative’ in the first action.” (Id. at 820; Gottlieb v. Kest (2006) 141 Cal.App.4th 110, 150; Clemmer v. Hartford Ins. Co. (1978) 22 Cal.3d 865, 875.)

The parties in the Administrative proceeding were a prosecuting officer of the Board on one side, and Plaintiff on the other. Nonetheless, Defendants say “they are in ‘privity’ with Chen because they were his employer and supervisors at AMCC and Chen made arguments involving all Defendants in this Complaint by arguing that the Board should not penalize him based on the contributory responsibility of Defendants for not developing SPPs at AMCC.” (Mtn. 13: 21.) Defendants cite to California Physicians' Serv. v. Aoki Diabetes Rsch. Inst. (2008) 163 Cal.App.4th 1506, for the proposition that two parties can be in “privity” even though one of them was not a party to the previous administrative proceeding.

First, California Physicians Services addressed collateral estoppel, not res judicata. Ignoring this point, that case is easily distinguishable. There, the parties deemed to be in privity were two insurance providers who “had an identity or community of interest” because one provider “made coverage decisions” for the other, decisions “which were at issue in the prior proceedings.” (Id. at 1522.) The court also found the party not involved in the administrative proceeding was “adequately represented” by the other, since the two had “identical interests” in the administrative proceeding. (Id.)

That is not the case here. This court notes again that the Defendants were not involved in the Administrative proceeding. To the extent Defendants try to argue they were in privity with Plaintiff himself, that argument fails. Simply put, Plaintiff and Defendants did not have identical interests in the Administrative hearing. In fact, their interests—at least from Plaintiff’s perspective—were entirely adverse. It is difficult to infer that Defendants had any interest whatsoever in the Administrative Action, of which they were not the subjects of. Defendants have not cited any case authority in support of this assertion.

Defendants also argue that Plaintiff’s claim is barred by collateral estoppel. Collateral estoppel, or issue preclusion, bars re-litigation of the same issues that were argued and decided in the previous action. (DKN Holdings, LLC v. Faerber (2015) 61 Cal.4th 813, 824.) The elements of issue preclusion are “(1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party.” (Id. at p. 825.) “The party asserting collateral estoppel bears a ‘heavy’ burden of proving all of these factors (Pacific Lumber, supra, 37 Cal.4th at p. 943)[.]” (Kemp Bros. Construction, Inc. v. Titan Electric Corp. (2007) 146 Cal.App.4th 1474, 1482, parallel citations omitted.)

Defendants argue the relevant issue in the Administrative Hearing is the same as in this case, that being, “whether a lack of SPPs by Defendants mitigates the disciplinary action of the probation of [Plaintiff’s] license.” (Mtn. 14: 19-20.) Defendants also argue “the issue of whether a lack of SPPs by Chen’s employer, Defendants, would mitigate the disciplinary action against Chen’s nursing license was actually litigated and determined at both the Administrative Hearing and Superior Court Hearing.” (Mtn. 14: 25-27.)

This court disagrees on both counts. As explained above, the “issue” in the Administrative proceeding was whether Plaintiff had violated the Nursing Practice Act by performing the Fraxel and the IPL procedures without having the SPPs in place. The separate issue of whether a lack of SPPs by Defendants mitigated Plaintiff’s actions was just one of many defenses Plaintiff raised to that charge.

This court agrees with Defendants that the alleged lack of SPPs by Defendants ultimately did not absolve Chen of any liability—both the ALJ and Judge Chalfant rejected this defense. In fact, they seemed to suggest it was irrelevant to their decisions. But there is nothing to suggest the ALJ or the superior court did any fact finding as to Wu’s, Lee’s, Tao’s or AMCC’s fault, or considered whether Defendants owed any duties to Plaintiff.

Simply put, Plaintiff breached his duty as a medical professional. That issue has been adjudicated. But Defendants have not met their burden to show that Plaintiff cannot now allege in a separate action that Defendants also breached some duty owed to him. This issue was not litigated in the Administrative action, nor could it have been.

This court notes again that Defendants were not involved in the Administrative proceeding. To the extent Defendants try to argue they were in privity with Plaintiff himself, that argument fails. Simply put, Plaintiff and Defendants did not have identical interests in the Administrative hearing. In fact, their interests—at least from Plaintiff’s perspective—were entirely adverse. It is difficult to infer that Defendants had any interest whatsoever in the Administrative Action, of which they were not the subjects of.

Plaintiff contends Defendants should be ordered to pay sanctions under CCP Section 128.7 because their motion was frivolous or made in bad faith. Although this court finds Defendants do not prevail on this motion, it was far from frivolous. Defendants had valid, albeit unconvincing, arguments that the previous proceedings should bar this claim. Ironically, it is this Court’s opinion that Plaintiff’s accusations to the contrary are more frivolous and incendiary than any argument made by Defendants. Just food for thought.

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.