Carroll v. Arthroscopic & Laser Surgery Ctr. of San Diego

• Decision Date: 25 February 2014
• Docket Number: D063081
• Court: California Court of Appeals Court of Appeals
• Parties: TIM CARROLL et al., Plaintiffs and Appellants, v. ARTHROSCOPIC & LASER SURGERY CENTER OF SAN DIEGO et al., Defendants and Respondents.

TIM CARROLL et al., Plaintiffs and Appellants, v. ARTHROSCOPIC & LASER SURGERY CENTEROF SAN DIEGO et al., Defendants and Respondents.

D063081

COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA

Filed: February 25, 2014

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Super. Ct. No. GIC806902,

GIC806908)

APPEAL from an order of dismissal of the Superior Court of San Diego County, Ronald L. Styn, Judge. Affirmed.

Law Office of Marc O. Stern, Marc O. Stern; Boudreau Williams and Jon R. Williams for Plaintiffs and Appellants.

Higgs, Fletcher & Mack, John Morris, William A. Miller and Jason C. Ross for Defendants and Respondents Arthroscopic & Laser Surgery Center of San Diego, SHC San Diego, Inc. and HealthSouth Corporation.

Lewis Brisbois Bisgaard & Smith, Marilyn R. Moriarty and Julie R. Dann for Defendant and Respondent Gary Losse.

Davis, Grass, Goldstein, Housouer, Finlay & Brigham, Ben Housouer and Jeffery W. Grass for Defendants and Respondents Bryon King and Paul Murphy.

Edleson & Rezzo, L.B. Chip Edleson and Joann Rezzo for Defendants and Respondents Oasis MSO, Inc., David Chao and Oasis Sports Medical Group, Inc.

This appeal by plaintiffs and appellants Tim Carroll, Anna Goode and Paula Hamma (Appellants) arises from the trial court's order striking all class allegations in this action seeking recovery of restitutionary relief against a number of health care providers, based on payments Appellants made for surgical and medical treatments performed or prescribed for them by defendant and respondent Dr. Gary Losse, M.D. During the 1997-1999 time frame in which Appellants' surgeries were performed by Dr. Losse, he was the medical director of certain defendant and respondent health care facilities, and was allegedly known by colleagues to be "sufficiently addiction-impaired during all relevant times that he was not qualified to practice medicine." In the two amended, consolidated complaints (the operative pleadings), Appellants generally alleged that "none of them would have paid Dr. Losse anything to have him perform surgeries on them in such a state," and thus they are entitled to recover individually for financial injury incurred for the "valueless" services rendered, received and remunerated. They assert individual, representative, and class causes of action for rescission based on fraud, damages based onbreaches of fiduciary duty, and relief under the unfair competition law (the UCL, Bus. & Prof. Code, § 17200 et seq.).¹

The trial court's order sustained demurrers and motions to strike brought by former professional associates of Dr. Losse, Arthroscopic & Laser Surgery Center of San Diego, L.P. (or "ALSCSD"), SHC San Diego, Inc. ("SHC") and HealthSouth Corporation (sometimes together Respondents). These demurrers and motions attacking the class allegations were joined in by other defendants and respondents, Dr. Losse and his former professional associates Bryon King, M.D., Paul Murphy, M.D., David Chao, M.D., and his corporate entity Oasis Sports Medical Group, Inc., and Oasis MSO, Inc. (again, sometimes all together Respondents). The trial court's ruling resolved the demurrers to Appellants' class allegations as presenting only questions of law, sustained them without leave to amend, and struck all the class claims.

In the portion of this action that is not affected by this appeal (since the appeal is directed only to the class allegations), Appellants individually and on a representative basis seek monetary recovery against Respondents on claims for reimbursement of professional fees they paid, related to Dr. Losse's surgeries on each of them. These same motions and demurrers were denied and overruled as to Appellants' individual and UCL representative claims. The trial court's ruling therefore allows Appellants to pursue their individual tort claims, and also their UCL representative cause of action. Here, wereview only the dismissal of the class allegations on Appellants' tort and UCL representative claims, on the grounds stated in the demurrers and motions to strike.

Appellants contend the trial court erred as a matter of law in ruling that their class claims cannot be stated on the theories of fraud, breach of fiduciary duty, or entitlement to UCL relief. According to Appellants, each potential class member undergoing surgery and treatment, during the relevant time periods, was placed in the same legal position by the failure of all Respondents to disclose Dr. Losse's addiction impairment, and the risks it posed to the treatment process. Although Appellants expressly assert that they are not contending in this lawsuit that they sustained bodily injury as a result of the surgeries performed by Dr. Losse, they claim they have pleaded all required elements for recovery of classwide relief for financial and consumer fraud injuries they incurred in the form of (1) repayment of their treatment expenses due to fraud in the inducement, (2) restitution of payments they made while under ignorance of necessary facts to allow any fully informed consent to be made for their surgeries (i.e., due to breaches of a doctor's fiduciary duties), and (3) awards of restitution and injunction under the UCL cause of action.

Appellants mainly rely on the operation of section 2280, which forbids the practice of medicine while one is impaired by the influence of any narcotic drug or alcohol, as a common thread to be utilized "on a classwide basis to demonstrate that Dr. Losse was sufficiently impaired during the fairly discrete class period such that his practice of medicine was forbidden by law, as were the concomitant and substantialcharges he generated (to all of the Respondents' benefit) for that unlawful treatment."² Appellants also claim that even if they have not now shown a prima facie community of interest among all class members, the trial court should have deferred decision on the propriety of a class action "until an evidentiary hearing has been held on the appropriateness of class litigation." (Rose v. Medtronics, Inc. (1980) 107 Cal.App.3d 150, 154 [medical products liability class action]; Vasquez v. Superior Court (1971) 4 Cal.3d 800, 813 (Vasquez) [consumer fraud class action allowed to address overcharges for meat and freezer sales].) Appellants did not, however, suggest to the trial court or to this court any possibilities for discovery that would lead to a more successful allegation of these tort and statutory class claims, within the parameters of the UCL or otherwise.

" 'The ultimate question in every case of this type is whether, given an ascertainable class, the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants.' " (Brown v. Regents of University of California (1984) 151 Cal.App.3d 982, 988-989 (Brown) [disallowing proposed class action on fraud and other theories to challenge the adequacy of medical treatment rendered at a cardiology center].) Thus, "where there are diverse factual issues to be resolved, even though there may be many common questions of law" (ibid.), and where "the ability of each member of the class to recover clearly depends on aseparate set of facts applicable only to [one], then all of the policy considerations which justify class actions equally compel the dismissal of such inappropriate actions at the pleading stage." (Id. at p. 989.)

The operative pleadings reveal as a matter of law that this is not an appropriate class action, because individual issues on the effect of any misrepresentations arguably made to induce agreements for treatments, and any consequent financial injury, substantially predominate over any common questions. "[T]he difference between what the plaintiff paid and the value of what the plaintiff receives is a proper measure of restitution. [Citation.] In order to recover under this measure, there must be evidence of the actual value of what the plaintiff received." (In re Vioxx Class Cases (2009) 180 Cal.App.4th 116, 131.) Appellants contradictorily allege they, as a class, received medical services that did not injure them, and that Dr. Losse was still a licensed medical provider when those surgeries took place, but that they nevertheless should not have been held responsible to pay for those "valueless" surgeries. Appellants' allegations that Dr. Losse was known by some Respondents to be under a legal disability that should have voided their consents to contracts for medical care are only legal conclusions and not allegations of ultimate fact, and properly were found not to survive demurrer. (Kennedy v. Baxter Healthcare Corp. (1996) 43 Cal.App.4th 799, 807 (Kennedy) [" ' "We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law." ' "].)

Rather, these operative pleadings reveal that the ability of each potential member of the class to recover restitutionary relief or damages depends not upon common issuesof fact and law, but upon individual analysis and proof of separate sets of facts about whether Dr. Losse was addiction-impaired at the time of each surgery or treatment, and whether he or other Respondents caused each Appellant to incur compensable harm or damage, by not receiving the value of the services as charged and paid. As a class, Appellants cannot successfully divorce the factual and legal issues of whether each of them sustained any bodily injury from the surgeries, in order to claim as a matter of law that the surgeries were valueless, solely because of Dr. Losse's alleged...