Defendants Dental Health Services and Ayers’s MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE SUMMARY ADJUDICATION OF ISSUES

Respondent: Plaintiff LeTran

TENTATIVE RULING

Defendants Dental Health Services and Ayers’s motion for summary adjudication is DENIED as to Issues 1-9 and 11-13, and GRANTED as to Issue 10.

Plaintiff’s evidentiary objections are overruled.

Defendant’s evidentiary objection to Letran declaration is overruled. Defendant’s evidentiary objection to deposition is sustained as to Nos. 1-7 and 16 and overruled as to Nos. 8-15 and 17.

A defendant moving for summary judgment/adjudication has met his burden of showing a cause of action has no merit if the defendant can show one or more elements of the plaintiff’s cause of action cannot be established. (CCP 437c(p)(2).)

Defendants DHS and Ayers move for summary judgment/adjudication of the following issues:

ISSUES 1 and 3:
Defendants contend the 1st cause of action for Libel and Slander against DHS a fails because the two allegedly false accusations were true. (Defense Separate Statement (DSS) 1-31), and Plaintiff cannot establish that any false oral statements were made against her by DHS. (DSS 16, 34, 35, 37, 39.)

Defendants produce the following evidence: Josh Nace’s letter (DSS 25) contained accurate statements about how plaintiff denied DHS access to her records and acknowledged instances of improper billing. (DSS 30.) The court finds Defendants have met their burden.

In opposition, Plaintiff submits evidence that she had terminated her contract with DHS on 10/6/11, prior to Nace’s 10/21/11 letter. (Ayers Deposition, Ex. 9). Therefore, Nace’s letter is misleading because it implies that DHS was terminating its relationship with Letran because of alleged improper billing and refusal to provide access to her records, when in fact Ayers and Plaintiff’s counsel were at a standstill regarding the reasonableness of DHS’s request for patient records. (PSS 45.) Therefore, the statement “AS A RESULT, Dr. Letran will no longer be a participating dentist with Dental Health Services,” is untrue.

Further, more than one defamatory letter is at issue. On 2/7/12, Ayers signed a cover letter to DHS member Hoshide on DHS letterhead. (Disputed DSS 25.) Enclosed with the cover letter was a so-called “formal letter” addressed to Letran, requesting that she provide a copy of Hoshide’s records to DHS. (Id.) Also enclosed was a formal complaint form to the Dental Board of California that DHS wanted to submit on Hoshide’s behalf. (Id.) The formal letter and formal complaint form had the logo for the Dental Board of California printed at the top. (Id.) DHS sent these letters to over 200 members. (Id.) The “formal letter,” containing the logo from the Dental Board of California implies that DHS was working with the Dental Board of California, and that Letran was in trouble with the Dental Board. (Id.) Letran received several signed letters from DHS members on what appeared to be Dental Board of California letterhead. (Letran Decl., Par. 4; PSS 57.) On 3/27/12, the Dental Board of California sent a cease and desist letter to Ayers and DHS CEO, Pernell. (PSS 58.)

Finally, Defendant DHS made oral false statements to Mandujano, Ayala, and Vigil – that Letran was committing fraud. (PSS 39.) Ayers admitted in deposition that the fraud investigation was not completed. (Ayers Deposition, 56:4-9.)

The court finds Plaintiff has produced sufficient evidence to create at triable issue as to her claim for Libel and Slander against DHS. Summary adjudication is DENIED.

ISSUES 2 and 5:
Defendants contend the 1st cause of action for Libel against DHS and Ayers fails because DHS and Ayers’s statements are privileged per CC 47(c) – common interest privilege. (DSS 9, 14, 22-23, 31-38; Lerette v. Dean Witter Organization, Inc. (1976) 60 Cal.App.3d 573, 577.) According to Defendants, DHS’s letter to its members are privileged because DHS and its members share a common interest in the subject matter and the communication was made without malice.

However, the court finds Defendant failed to meet their burden because they failed to submit evidence to demonstrate that their communications were done without malice. Plaintiff has produced evidence that creates a triable issue as to whether the communications were made maliciously. Based on preliminary findings from an incomplete investigation, Defendants published a letter falsely indicating that Letran was in trouble with the Dental Board of the State of California, and invited the patients to complain about Letran to the Dental Board. (PSS 39, 42.) Summary adjudication is DENIED.

ISSUE 4:
Defendant Ayers contends that the 1st cause of action for Libel against him fails because Ayers’ emails to Plaintiff’s attorney are privileged per CC 47(b) – litigation privilege. (DSS 9, 14, 22-23, 31-38.)

However, in opposition, Plaintiff produces evidence that Ayers also sent a 2/7/12 letter to patients with misappropriated Dental Board logos. (PSS 50-59, 68, 71.) Since this communication is not privileged, triable issues still exist regarding libel. Summary adjudication is DENIED.

ISSUE 6:
Defendant contends the 1st cause of action for Slander against Ayers fails because Plaintiff cannot establish that any false oral statements were made against her.

Plaintiff confirmed in deposition that she was not aware of Ayers making any oral false accusations against her to any of her patients, and Ayers’ statement to staff about opening a fraud investigation was true. (DSS 16, 27, 34, 35, 37, 39.)

In opposition, Plaintiff contends Ayers’ email exchanges with Watkins and Williams show him to be the direct source of the false statements that Letran was committing billing fraud, and when Pernell responded to the Dental Board’s cease and desist letter, he identified Ayers as the person “most familiar with the issues involved.” (PSS 63.) Therefore, Plaintiff contends the evidence supports a reasonable inference that Ayers made the false statements. However, the court finds this evidence is insufficient to raise a triable issue. Plaintiff failed to produce any evidence that Ayers made any false oral statements about her.

Notwithstanding, the court is unable to grant summary adjudication of Issue 6 because it does not completely dispose of an entire cause of action. Plaintiff’s 1st cause of action is for Defamation, which includes both Slander and Libel claims. Since triable issues exist regarding Libel, Defendant’s request for summary adjudication of Slander is improper. Summary adjudication is DENIED.

ISSUES 7-8:
Defendants contend the 2nd cause of action for IIED fails because Plaintiff cannot establish extreme and outrageous conduct, and severe emotional distress. (DSS 1-26, 28-33, 39-41, 45-62.)

In opposition, Plaintiff produces evidence that Defendants’ act of sending over 200 letters to patients with misappropriated logo from the Dental Board is extreme and outrageous conduct. Further, Letran suffered severe emotional distress and could not sleep for months and became paranoid. (PSS 59.) The court finds triable issues exist regarding Plaintiff’s IIED claim. Summary adjudication is DENIED.

ISSUE 9:
Defendants contend the 2nd cause of action for IIED fails because Defendants’ conduct was privileged, citing Fletcher v. Western National Life Insurance Co. (1970) 10 Cal.App.3d 376, 394 for the proposition that a business may communicate its position in good faith even though it is substantially certain that in doing so Plaintiff will suffer emotional distress.

In opposition, Plaintiff presents evidence that Defendants lost their privilege when they misappropriated “Dental Board” letterhead to manipulate Plaintiff’s patients into “asserting their rights.” (PSS 50-59, 68, 71.) As Fletcher notes, “the exercise of the privilege to assert one’s legal rights must be done in a permissible way and with a good faith belief in the existence of the rights asserted. IT IS WELL ESTABLISHED THAT ONE WHO, IN EXERCISING THE PRIVILEGE OF ASSERTING HIS OWN ECONOMIC INTERESTS, ACTS IN AN OUTRAGEOUS MANNER MAY BE HELD LIABLE FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS. (Fletcher v. Western National Life Insurance Co. (1970) 10 Cal.App.3d 376, 395 – “Even if it could be said that defendants were asserting their legal rights in good faith, they were not privileged to do so in an outrageous manner.”) The court finds that Plaintiff has presented sufficient evidence that creates a triable issue as to Defendants’ outrageous conduct. Summary adjudication is DENIED.

ISSUE 10:
Defendants contend that the 3rd cause of action for Violation of Common Law Right to Fair Procedure fails because Plaintiff failed to file a Petition for Writ of Mandamus per CCP 1094.5 – Inquiry into validity of administrative order or decision. If Plaintiff believed she had been denied her right to a fair hearing during the peer review hearing conducted by DHS, she was required to file a petition for writ of mandamus. Plaintiff never filed an action for a writ of mandamus. (DSS 197.)

In opposition, Plaintiff refers the court to Potvin v. Metro. Life Ins. Co. (2000) 22 Cal.4th 1060, 1064-66, where a writ of mandamus was not required. However, Potvin does not stand for the holding that a writ of mandamus was not required. In fact, CCP 1094.5 was not an issue that was raised in Potvin.

The court finds Plaintiff failed to meet her burden in opposition. Summary adjudication is GRANTED.

ISSUES 11-13:
Defendants contend the 3rd cause of action for Violation of Common Law Right to Fair Procedure fails because DHS cannot be liable for filing a 805 Report; the B&P 809.2 and 809.3 are inapplicable to the peer review hearing provided by DHS; and Plaintiff was neither excluded nor expelled from DHS. (DSS 1-3, 45-46, 63-76.)

B&P Code 805 provides:

If a licentiate takes any action listed in paragraph (1), (2), or (3) AFTER RECEIVING NOTICE OF A PENDING INVESTIGATION INITIATED FOR A MEDICAL DISCIPLINARY CAUSE OR REASON or after receiving notice that his or her application for membership or staff privileges is denied or will be denied for a medical disciplinary cause or reason, the chief of staff of a medical or professional staff or other chief executive officer, medical director, or administrator of any peer review body and the chief executive officer or administrator of any licensed health care facility or clinic where the licentiate is employed or has staff privileges or membership or where the licentiate applied for staff privileges or membership, or sought the renewal thereof, shall file an 805 report with the relevant agency within 15 days after the licentiate takes the action… (1) RESIGNS OR TAKES A LEAVE OF ABSENCE FROM MEMBERSHIP, STAFF PRIVILEGES, OR EMPLOYMENT. (B&P Code 805(c).)

A copy of the 805 report, and a notice advising the licentiate of his or her right to submit additional statements or other information, electronically or otherwise, pursuant to Section 800, shall be sent by the peer review body to the licentiate named in the report. The notice shall also advise the licentiate that information submitted electronically will be publicly disclosed to those who request the information. The information to be reported in an 805 report shall include the name and license number of the licentiate involved, a description of the facts and circumstances of the medical disciplinary cause or reason, and any other relevant information deemed appropriate by the reporter. (B& P Code 805(f).)

If a licentiate timely requests a hearing concerning a final proposed action for which a report is required to be filed under Section 805, the following shall apply:

(a) The hearing shall be held, as determined by the peer review body, before a trier of fact, which shall be an arbitrator or arbitrators selected by a process mutually acceptable to the licentiate and the peer review body, or before a panel of unbiased individuals who shall gain no direct financial benefit from the outcome, who have not acted as an accuser, investigator, factfinder, or initial decisionmaker in the same matter, and which shall include, where feasible, an individual practicing the same specialty as the licentiate.

(b) If a hearing officer is selected to preside at a hearing held before a panel, the hearing officer shall gain no direct financial benefit from the outcome, shall not act as a prosecuting officer or advocate, and shall not be entitled to vote.

(c) The licentiate shall have the right to a reasonable opportunity to voir dire the panel members and any hearing officer, and the right to challenge the impartiality of any member or hearing officer. Challenges to the impartiality of any member or hearing officer shall be ruled on by the presiding officer, who shall be the hearing officer if one has been selected.

(d) The licentiate shall have the right to inspect and copy at the licentiate’s expense any documentary information relevant to the charges which the peer review body has in its possession or under its control, as soon as practicable after the receipt of the licentiate’s request for a hearing. The peer review body shall have the right to inspect and copy at the peer review body’s expense any documentary information relevant to the charges which the licentiate has in his or her possession or control as soon as practicable after receipt of the peer review body’s request. The failure by either party to provide access to this information at least 30 days before the hearing shall constitute good cause for a continuance. The right to inspect and copy by either party does not extend to confidential information referring solely to individually identifiable licentiates, other than the licentiate under review. The arbitrator or presiding officer shall consider and rule upon any request for access to information, and may impose any safeguards the protection of the peer review process and justice requires.
…

(f) At the request of either side, the parties shall exchange lists of witnesses expected to testify and copies of all documents expected to be introduced at the hearing. Failure to disclose the identity of a witness or produce copies of all documents expected to be produced at least 10 days before the commencement of the hearing shall constitute good cause for a continuance.

(g) Continuances shall be granted upon agreement of the parties or by the arbitrator or presiding officer on a showing of good cause.

(h) A hearing under this section shall be commenced within 60 days after receipt of the request for hearing, and the peer review process shall be completed within a reasonable time, after a licentiate receives notice of a final proposed action or an immediate suspension or restriction of clinical privileges, unless the arbitrator or presiding officer issues a written decision finding that the licentiate failed to comply with subdivisions (d) and (e) in a timely manner, or consented to the delay. (B&P 809.2.)

During a hearing concerning a final proposed action for which reporting is required to be filed under Section 805, both parties shall have all of the following rights:

(1) To be provided with all of the information made available to the trier of fact.

(2) To have a record made of the proceedings, copies of which may be obtained by the licentiate upon payment of any reasonable charges associated with the preparation thereof.

(3) To call, examine, and cross-examine witnesses.

(4) To present and rebut evidence determined by the arbitrator or presiding officer to be relevant.

(5) To submit a written statement at the close of the hearing.

(b) The burden of presenting evidence and proof during the hearing shall be as follows:

(1) The peer review body shall have the initial duty to present evidence which supports the charge or recommended action.

(2) Initial applicants shall bear the burden of persuading the trier of fact by a preponderance of the evidence of their qualifications by producing information which allows for adequate evaluation and resolution of reasonable doubts concerning their current qualifications for staff privileges, membership, or employment. Initial applicants shall not be permitted to introduce information not produced upon request of the peer review body during the application process, unless the initial applicant establishes that the information could not have been produced previously in the exercise of reasonable diligence.

(3) Except as provided above for initial applicants, the peer review body shall bear the burden of persuading the trier of fact by a preponderance of the evidence that the action or recommendation is reasonable and warranted.

(c) The peer review body shall adopt written provisions governing whether a licentiate shall have the option of being represented by an attorney at the licentiate’s expense. No peer review body shall be represented by an attorney if the licentiate is not so represented, except dental professional society peer review bodies may be represented by an attorney provided that the peer review body grants each licentiate the option of being represented by an attorney at the licentiate’s expense, even if the licentiate declines to be represented by an attorney. (B&P 809.3.)

Defendant failed to establish that Plaintiff is not entitled to an 809 hearing simply because she resigned instead of being terminated or suspended. B&P 809.2 provides that a hearing shall be held “If a licentiate timely requests a hearing concerning a final proposed action for which a report is required to be filed under Section 805.”

It is undisputed that Plaintiff resigned. Therefore, Defendant was required to file an 805 report. However, Plaintiff was also entitled to a fair hearing pursuant to B&P 809.2 and 809.3. Thus, like Issue 6 above, a finding that Defendant was required to file an 805 report does not dispose of the entire cause of action. Therefore, summary adjudication of the limited Issue 11 is improper because it does not dispose of the entire cause of action.

Accordingly, summary adjudication of Issues 11-13 is DENIED. However, because the court granted summary adjudication of Issue 10, the 3rd cause of action is dismissed.