Judge Teresa A. Beaudet, Case Number: 19STCV17029, Date: 2025-01-23 Tentative Ruling

This matter came on for trial on September 11, 17 and 18, 2024, and October 14, 16 and 24, 2024 in Department 50 of the above-entitled Court before the Hon. Teresa A. Beaudet, sitting without a jury. The Court, having considered the evidence and read the trial briefs and closing arguments of counsel, issues this tentative and proposed Statement of Decision. This tentative and proposed Statement of Decision will become the Statement of Decision unless, within 15 days hereafter, a party serves and files objections to the proposed Statement of Decision.

Plaintiff Interventional Spine Care and Orthopedic Regenerative Experts, a California professional corporation, has sued Defendants Metis Law Group, LLP, a California limited liability partnership (“Metis”), Arpa Avanessian currently known as Arpa Rostami (“Rostami”) and Zhana Aivazi currently known as Zhana Azizz (“Azizz”) alleging causes of action for breach of written contract, breach of oral contract, and two common counts (i.e., reasonable value of services and account stated). Metis, Rostami and Azizz have sued Plaintiff and Dr. Maxim Moradian (“Moradian”) for breach of oral contract, unfair business practices (Business and Professions Code section 17200), negligent and intentional misrepresentation, false promise and defamation per se.[1]

At pages 3 through 5 of its Plaintiff and Cross-Defendant’s Closing Brief, Plaintiff seeks damages in the amount of $88,000 (i.e., $30,500 for medical services and $57,500 for expert services) for breach of written contract based upon the Physician’s Lien (Exhibit 1 to the Complaint but admitted as Exhibit 2 at trial). However, as pointed out by Defendants, the complaint in this action alleges only $30,500 in damages for breach of the Physician’s Lien. Additionally, in signing the Physician’s Lien, Rostami, acknowledged only that (1) she authorized the doctor to furnish to her attorney “a full report of [the doctor’s] case history, examination, diagnosis, treatment, and prognosis of myself,” and (2) she is “responsible to said doctor for all physician bills submitted by him for services rendered to me.” There is no mention of any expert report.[2] Consequently, Plaintiff’s breach of written contract cause of action is limited to the amount sought for medical services, namely $30,500.[3]

Plaintiff contends that Defendants have failed to honor the Physician’s Lien despite the fact that they submitted $30,500 in claims and were compensated for those claims in the underlying litigation based upon the $30,500 in bills by Plaintiff for medical services provided to Rostami. Defendants do not dispute that Plaintiff is entitled to compensation for the medical services rendered, but they dispute the amount and they dispute that the Physician’s Lien is enforceable as a written agreement because, inter alia, there was a lack of mutual consent and it is vague and ambiguous.[4] Plaintiff chose not to file a reply to any of the assertions made by Defendants, so the Court does not have the benefit of Plaintiff’s response to these assertions.

The Court does not find that there was a lack of mutual consent to the Physician’s Lien or that the Physician’s Lien is vague and ambiguous. No evidence was presented that either Rostami or her counsel Azizz did not consent to the Physician’s Lien. Similarly, there was no evidence that the words in the Physician’s Lien are somehow vague or ambiguous. The Physician’s Lien is a relatively straightforward document whereby Rostami and her attorney acknowledge that her doctor will be “awaiting payment” for his medical services, but that payment is protected by a lien against the proceeds generated by her lawsuit. They also acknowledge that Rostami remains responsible for paying for the doctor’s bills; so if she loses her case, the doctor still has to be paid by her.

What the Physician’s Lien does not do is set forth any agreement of the parties as to the amounts the doctor will charge for his medical services and whether there will be any basis for reducing those fees, including reductions based upon whether the case settles or goes to trial. The Physician’s Lien attaches only to “such sums as may be due and owing [the doctor] for services rendered.” The Physician’s Lien does not identify the criteria for determining what are the sums due and owing. Without these terms, the Physician’s Lien cannot form the basis for the contract sought to be enforced by Plaintiff. Consequently, the Court does not find that general damages are due for breach of the Physician’s Lien and finds in favor of Defendants on the first cause of action for breach of written contract.

In his second cause of action in the Complaint, Plaintiff alleged a breach of oral contract and

prayed for damages in the amount of $57,500 for failure to pay for the expert witness testimony by Moradian. However, at trial, Moradian admitted that there was no oral contract to pay the expert witness fees. In the TR for September 17, 2024, at page 17, lines 20-24, counsel for Defendants asked Moradian the following question:

“Q BUT THROUGHOUT THIS ACTION AND IN DISCOVERY IN THIS ACTION, YOU’VE ALSO MAINTAINED AND ALLEGED THAT THERE IS, IN FACT, NO ORAL AGREEMENT, ISN’T THAT ACCURATE?

Starting at page 19, line 11, through page 21, line 8, counsel for Defendants put on the record the verified response of Plaintiff to Form Interrogatory 50.1 which stated that “THE AGREEMENT BETWEEN THE PARTIES IS SOLELY IN WRITING . . . AND IS MEMORIALIZED IN THE LIEN AND INVOICE THAT ARE ATTACHED TO THE COMPLAINT IN THIS MATTER. . .” Counsel then asked Moradian: “Q SO BASED ON YOUR DISCOVERY RESPONSES, YOU DO SAY THAT THE AGREEMENT, AS YOU ALLEGE, IS ONLY IN WRITING; CORRECT. A. YES.”[5]

Defendants are entitled to rely upon the verified discovery response of Plaintiff to the effect that there was no oral agreement; for that reason, the Court finds that Plaintiff has failed to prove its cause of action for breach of oral contract and finds for Defendants on the second cause of action for breach of oral agreement.

In the Complaint, Plaintiff pled two common counts: reasonable value of services and account stated. In Plaintiff and Cross-Defendants’ Closing Brief, Plaintiff addresses only the former and refers to it as a claim for quantum meruit.[6] Defendants do the same and so will the Court.

As noted in Defendants’ Opposition, Plaintiff may not recover for quantum meruit from Metis or Azizz as to the medical services performed by Moradian since neither of them requested that Plaintiff perform any medical services on their behalf. Additionally, Azizz did not personally request an expert opinion. Consequently, the cause of action for quantum meruit as to Azizz fails.

There is no dispute that Moradian provided the medical services and expert testimony alleged in the Complaint. For purposes of the quantum meruit claim for payment for the medical services against Rostami, the only issue is whether the amount billed reflects the reasonable value of the services rendered. Plaintiff points to evidence that he had experience with setting rates as a member of the North American Spine Society Billing and Coding Committee and when he started the Plaintiff, he used that experience to set reasonable rates for his services; he also considered “The Fair Health Standards” and reviewed charges by colleagues and other practices where he had worked. Plaintiff and Cross-Defendants’ Closing Brief, page 6, line 24 through page 7, line 3. Moreover, Plaintiff asserts that Metis and Rostami are estopped from challenging the reasonableness of his charges for the medical services and the expert fees because they submitted the medical and expert expenses in the underlying case and claimed that they were reasonable. Plaintiff also referred the Court to the Stipulated Facts entered into by the parties, particularly Stipulated Fact No. 9 that the jury verdict in the underlying case included past medical expenses of $74,152, which obviously exceeds the $30,500 sought by Plaintiff herein, and Stipulated Fact No. 10 that Rostami submitted a Memorandum of Costs in the underlying action that included Plaintiff’s expert fees.

Although Defendants point out that Moradian admitted under oath that his charges were inflated, they nevertheless did not deny that they submitted those inflated charges to another court as reasonable. If Defendants thought Moradian’s fees were inflated, they should not have submitted them in the underlying action. This Court finds that they are estopped to deny the reasonableness of the fees in this action. Thus, the Court finds in favor of Plaintiff as to Metis in the amount of $57,500 and as to Rostami in the amount of $88,000 on the quantum meruit cause of action.

Metis, Rostami and Azizz (“Cross-Complainants”) have sued Plaintiff and Moradian (“Cross-Defendants”) for breach of oral contract. The essence of their cause of action appears to be that Cross-Defendants refused to “resolve” their liens in certain cases for less than the amounts that Cross-Complainants submitted to the Court in those underlying cases. Besides the dubious legality of having an agreement to knowingly submit inflated bills in court proceedings,[7] the evidence submitted to establish the purported oral agreement to “resolve” the liens is too vague, imprecise or unpredictable to be enforceable. For example, on September 18, 2024, at page 36, lines 20-25, Rostami testified as to what her understanding was of their oral agreement:

“THE ORAL AGREEMENT WAS ESSENTIALLY THAT EACH PROCEDURE THAT MORADIAN PERFORMED ON A LIEN BASIS WAS GOING TO BE REDUCED TO A SPECIFIC RANGE. THAT’S WHAT HE DEEMED THE REASONABLE VALUE FOR SAID SERVICE.” She goes on to state, at page 37, lines 11-24, that “THOSE ARE THE RANGES IN WHICH HE WOULD ACCEPT RESOLUTION. NOW ON CERTAIN VIP CLIENTS OF HIS, HE HAD A – HIS OWN FRIENDS THAT HE CONSIDERED VIP THAT WE ASSISTED WITH A PERSONAL INJURY CASE. IN THAT CASE, HE TOOK EVEN LESS THAN THE RANGE. AND, IN FACT, SAID, ‘MAKE IT UP THE NEXT TIME,’ CONFLATING MORE PATIENTS TOGETHER, WHICH WE OBVIOUSLY DIDN’T THINK IS SOMETHING THAT MAKES SENSE. AND BASED ON HIS TESTIMONY, ON A CASE-BY-CASE BASIS, IT APPEARS EACH ONE IS BEING NEGOTIATED SEPARATE AND APART. BUT THERE WAS AN AGREED UPON PRICE RANGE OF WHAT EACH OF HIS SERVICES WOULD REASONABLY COST. AND THOSE COSTS RANGES WERE MORE OR LESS THE RANGE OF VALUE OF SERVICES THAT HE PROVIDED.”

Additionally, as noted in the Opposition to Cross-Complainants Closing Brief, Cross-Complainants were not damaged by the failure of Cross-Defendants to reduce the amounts the clients had to pay. Cross-Complainants assert that they were damaged because they had to prepare two interpleader actions and their good will with their clients was damaged. Cross-Complainants’ Closing Brief, page 5, lines 21-26. However, Cross-Complainants did not submit evidence of bills or time spent on the interpleader actions or any evidence of quantifiable damage to the good will of their clients.

Because the purported oral agreement is too vague, imprecise and unpredictable to be enforceable, and because Cross-Complainants have not proven any damages, the Court finds that they cannot recover for breach of oral contract.

VI. UNFAIR BUSINESS PRACTICES (BUSINESS AND PROFESSIONS CODE SECTION 17200)

At page 9, lines 10 through 24 of their Closing Brief on Cross-Complaint, Cross-Complainants assert that Moradian engages in unfair business practices because “he may delay responding to lien negotiations for weeks at a time. . . He also demonstrates absolutely no rhyme or reason in how negotiations are handled for different patients.” Although this may constitute a poor business practice, it does not constitute an “unfair business practice” for purposes of Business and Professions Code section 17200.

Cross-Complainants also assert, at page 9, line 27 through page 10, line 3, that Cross-Defendants “led their patients … to believe that their health insurance would not be charged, only to turn around and demand/collect payment on a lien basis all the while subsequently also billing health insurance.” The testimony and evidence cited by Cross-Complainants did show that at least in once instance, Moradian billed a client’s insurance company while also demanding payment pursuant to his lien, but it did not establish that Cross-Defendants had misled their clients regarding this practice.

The Court finds against Cross-Complainants on the Unfair Business Practices cause of action.

The evidence in this case does not support any form of misrepresentation or false promise cause of action. This is a case where the parties had a practice of submitting inflated claims for medical services in litigation and then negotiating down the amount that would be paid to Cross-Defendants, typically in the context of settlement. The parties then had a falling out, and their arrangement fell apart. There simply was no evidence of negligent or intentional misrepresentation or a false promise.

In support of their defamation per se cause of action, Cross-Complainants rely upon Exhibit 129. Exhibit 129 is an email from one of their clients, Mr. Contreras, wherein he states that he spoke with the office supervisor of Moradian’s office and told her he was not going to pay $1,250 for a 15- minute consultation. The email goes on to state that the supervisor told him that the doctor “can charge what ever he wants” and she would then forward the bill to collections. She then referenced emails between the doctor’s office and his attorneys and said, “they can’t do anything if you guys ‘dropped the ball.’” He then told her that Cross-Complainants did not sign a lien with them and the bill was his responsibility as he understood it. During his deposition, counsel for Cross-Complainants asked Mr. Contreras: “BASED ON THIS E-MAIL, YOU WERE ALSO TOLD THAT MY OFFICE DROPPED THE BALL ON YOUR CASE; CORRECT? A. YES. AND IT’S IN QUOTATIONS, SO THAT MEANS THAT – THAT THOSE WERE PROBABLY THE EXACT WORDS.” (TR October 24, 2024, page 7, lines 12-16.) However, the email did not say that Cross-Complainants’ office “dropped the ball on your case;” rather it said, “they could not do anything about the bill “if” his attorneys “dropped the ball.” That comment was directed to the bill and whether there was a lien agreement or not; it was not about the handling of Mr. Contreras’ case. Since there does not appear to be any dispute about the fact that Cross-Complainants did not obtain a lien agreement for Mr. Contreras with Plaintiff, it does not appear that this statement was defamatory per se. Consequently, the Court finds against Cross-Complainants on the defamation cause of action.

As discussed above, the Court finds that (a) Plaintiff has proven only its quantum meruit cause of action against Metis in the amount of $57,500 and as to Rostami in the amount of $88,000, and (b) Cross-Complainants have not proven any of their causes of action.

Within ten days after this Statement of Decision becomes final, Plaintiff is ordered to file and serve a proposed judgment in accordance with this Statement of Decision (with a courtesy copy delivered to Dept. 50). The Court hereby dismisses with prejudice any Doe Defendants that have not previously been dismissed.

Plaintiff is ordered to give notice of this [Tentative and Proposed] Statement of Decision.

[1] Metis, Rostami and Aivazi waived their sixth, seventh and eighth causes of action for intentional interference of contractual relations, intentional interference of prospective economic advantage and negligent interference of prospective economic advantage, respectively. Cross-Complainants’ Closing Brief on Cross-Complaint, p. 1, line 6.

[2] In Plaintiff and Cross-Defendants’ Closing Brief at page 4, lines 16-20, Plaintiff states that Defendants asked Plaintiff to provide Moradian to act as an expert witness in the underlying case and that “to memorialize the terms of the engagement, Plaintiff provided Defendants with a rate sheet for services.” (Ex. 106) However, Moradian’s testimony does not support this contention. At page 47, lines 20-26 of the trial transcript (“TR”) for September 11, 2024, Moradian testified that Rostami requested the fee schedule as part of the expert witness designation that would be provided to the defense in the underlying action. He does not testify that it memorialized the terms of his engagement by Defendants. Moradian also admitted that the rate sheet was not signed by anyone. (TR for September 17, 2024, page 85, line 24 through page 86, line 17.) The rate sheet clearly is not a written contract setting forth the terms of an agreement regarding expert witness testimony and fees.

[3] In Plaintiff and Cross-Defendant’s Closing Brief at page 4, lines through 12, Plaintiff asserts that the written agreement also was breached because Defendants “failed to keep Plaintiff informed of relevant updates in the case, including settlement.” However, Exhibit 2 does not contain any such requirement nor was any such requirement alleged in the Complaint. Moreover, Plaintiff does not point to any evidence of damages resulting from any failure “to keep Plaintiff informed of relevant updates in the case, including settlement.”

[4] The Court notes that the Complaint in this action is not brought by Moradian despite the fact that Moradian performed both the medical and expert services, and despite the fact that Exhibit 2 states that Avanessian (Rostami) “give[s] a lien to said doctor on any settlement, claim, judgment, or verdict” and she authorizes her attorney “to pay directly to said [sic] such sums as may be due and owing him for services rendered to me. . . . “ There is no mention of any lien rights or other obligations to Plaintiff (as opposed to Moradian) in this case. However, the Defendants have not raised any issue as to the proper plaintiff and in fact, state in their Opposition to Plaintiff and Cross-Defendants’ Closing Brief (the “Opposition re Complaint”), at page 1, lines 24-25, that “they believe Plaintiff should be reasonably compensated for the work performed.” (Emphasis in original.) Plaintiff does note in the Opposition re Complaint at page 4, lines 25-27, that “all checks prior to the rise of the instant dispute were paid to ‘Max Moradian per Plaintiff’s request, and not to ‘iSCORE. Ex. 124. As such the agreement is vague and ambiguous. Plaintiff here is ISCORE – NOT Max Moradian.” (All caps in original.) The Court does not find that the Physician’s Lien is vague and ambiguous because checks were paid to Moradian.

[5] The Court notes that in the middle of the discussion quoted above, Moradian was asked “How do you believe that there is an oral agreement that was not adhered to? He responds by stating that “THERE WERE MULTIPLE DISCUSSIONS MADE PRIOR TO DOING THE WORK THAT I OFFERED, AND ONE OF THEM BEING THAT IF THE PATIENT AND THE LAW OFFICE WAS ABLE TO BEAT THE 998, THAT THE EXPERT FEES WOULD BE PAID FOR IN HUNDRED PERCENT; AND THAT’S THE ONLY AGREEMENT THAT I FELT THAT WAS BREACHED.” Even if Plaintiff had not stated under oath that the agreement was written rather than oral, clearly, multiple discussions do not equate to an oral agreement by the parties as to the extent of the services to be rendered, the fees to be charged, etc.

[6] The Court construes Plaintiff’s failure to address the cause of action for account stated in Plaintiff’s Closing Brief as a withdrawal by Plaintiff of that cause of action.

[7] In their Closing Brief on Cross-Complaint at page 2, lines 18-21, Cross-Complainants unabashedly point out the discrepancy between what Cross-Defendants bill and presumably submit in the court cases, and the amount “expected:” “Cross-Complainants’ testimony demonstrate that Cross-Defendants expected $500-$600 for his initial consultations (for which they bill $1,250), $300-350 for his follow ups (for which they bill $850), $2,500-$3,500 for epidural injections (for which they bill $10,000), $2,000 for facet joint injections (for which they also bill $10,000).”

INTERVENTIONAL SPINE CARE AND ORTHOPEDIC REGENERATIVE EXPERTS, a California professional corporation, Plaintiff, vs. METIS LAW GROUP, LLP, a California limited liability partnership; ARPA AVANESSIAN, an individual; and ZHANA AZIZZ, an individual Defendants	) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )		Case No.: 19STCV17029 Assigned to: Hon. Teresa A. Beaudet Dept.:50 [TENTATIVE AND PROPOSED] STATEMENT OF DECISION
And related cross-action.		) ) ) ) ) ) ) )