2013-00151427-CU-PO

Jean Beardsley vs. Progressive Home Care

Nature of Proceeding:   Hearing on Demurrer

Filed By:  Avelino, Kenneth A.

Defendants Anca Sferdian, Florin Sferdian, Steve Sferdian, and Coast Oak Villa
(“Coast”) (collectively, “Defendants”) demurrer to Plaintiffs the successor-in-interest to
the late Jean Beardsley (“Mrs. Beardsley”) and Mrs. Beardsley’s daughters and
husband (collectively, “Plaintiffs”) First Amended Complaint is OVERRULED.

The Court declines Plaintiffs’ request in opposition not to consider the pages of the
demurrer that exceed the page limit and format specified within California Rule of
Court 3.1113(d) & (f).  However, for future motions, Defendants should comply with the
applicable page limits.

In this action, Plaintiffs allege causes of action for Elder Abuse in violation of Welfare &
Institutions Code §§15600 et seq. (“Elder Abuse Act”), fraudulent misrepresentation,
constructive fraud, fraudulent concealment, negligent infliction of emotional distress,
and wrongful death.  (First Am. Compl. at 1.)  Plaintiffs allege that Mrs. Beardsley was
an elderly adult who resided at Coast from September 7, 2012 though February 22,
2013.  Coast is a residential care facility allegedly owned, managed, controlled, and
operated by the Sferdians.  Plaintiffs allege that Mrs. Beardsley was admitted to Coast
after slipping and falling in her kitchen.  Plaintiffs allege that, at the time she was
admitted to Coast in September of 2012, Mrs. Beardsley had no pressure ulcers on
her body and no history of pressure ulcers.  (Id. ¶¶ 9-12, 17, 29.)  Plaintiffs allege that,
on November 23, 2012, a pressure ulcer measuring 3.1 by 2.0 centimeters was found
on Mrs. Beardsley’s right back.  Plaintiffs allege that, over the next several months, the
pressure ulcer worsened, became infected, became painful, drained fluid, and grew in
size, among other things.  (Id. ¶¶ 19-28.)

Plaintiffs allege that nursing staff from Progressive Home Care (a named defendant in
this case but not a party to the pending demurrer), debrided Mrs. Beardsley’s pressure
ulcer on several different occasions while she resided at Coast.  (Id. ¶¶ 23-26.)  On
January 9, 2013, Mrs. Beardsley was allegedly ambulanced to the hospital with a high-
grade fever and symptoms of infection, where she was diagnosed as being septic and
having a Stave IV pressure ulcer on her right back.  The pressure ulcer was allegedly
“so deep that Mrs. Beardsley’s rib bones could be seen,” and that Mrs. Beardsley’s
“lungs inflating and deflating could be seen inside the wound.”  The pressure ulcer
tested positive for MRSA and had allegedly grown to measure 7 by 3 by 2.5
centimeters.  Hospital staff also allegedly noted the presence of two other pressure
ulcers on other parts of Mrs. Beardsley’s back.  (Id. ¶ 28.)  Mrs. Beardsley returned to
Coast on January 14, 2013, but allegedly did so “as a hospice patient due to her
severe Stage IV pressure ulcer.”  On February 22, 2013, Mrs. Beardsley allegedly died
as a result of the severe Stage IV pressure ulcer she acquired while residing at Coast.
(Id. ¶ 29.)

Plaintiffs allege that Defendants “failed to monitor” Mrs. Beardsley’s back and failed to
detect pressure ulcers in a timely way, failed to monitor the condition of her pressure
ulcers, failed to take action when the pressure ulcers were deteriorating, and failed to
turn and reposition Mrs. Beardsley to prevent worsening of the pressure ulcers.  (Id. ¶
50.)  Plaintiffs also allege that Defendants failed to inform Mrs. Beardsley’s family and
physician of the nature and extent of the pressure ulcers and failed to adequately
document their condition.  (Id. ¶ 52.)  Plaintiffs also allege that Defendants knew about
Mrs. Beardsley’s condition and largely ignored it, although they knew it would likely
cause her serious harm.  (Id. ¶ 55-56.)

All Causes of Action

Defendants’ demurrer to all causes of action is overruled.  Defendants argue that,
because Coast is an “assisted care home that provides a room, bed and assistance for
the patient or residence” and does not provide “medical care,” all of Plaintiffs claims
“should be denied.”  (Def.’s Ps & As at 4.)  Defendants fail to expand upon this
sweeping argument, however, and the argument is not well-taken.

Second Cause of Action (Elder Abuse)

Defendants’ demurrer to the Second Cause of Action is overruled.

Defendants argue that Plaintiffs fail to state a cause of action for Elder Abuse because
they “fail to prove by ‘clear and convincing evidence’ that” Coast “was liable.”  (Def.’s
Ps & As at 4.)  This argument misconstrues the legal standard applicable upon a
demurrer.  At the pleadings phase, a plaintiff need not “prove” her claims at all, let
alone do so by clear and convincing evidence.  A demurrer challenges only the legal
sufficiency of a complaint, not the truth or the accuracy of its factual allegations or the
plaintiff’s ability to prove those allegations.  (Ball v. GTE Mobilnet of California (2000)
81 Cal.App.4th 529, 534-35.)  Accordingly, Defendants’ argument is not well-taken.

At the pleading stage, Plaintiffs must allege conduct within the Elder Abuse Act, and
those claims must be pled “with particularity.”  (Covenant Care, Inc. v. Superior Court
(2004) 32 Cal.4th 771, 790 (analyzing the Elder Abuse Act and recognizing general
rule that statutory causes of action must be pleaded with particularity).)  Under the
Elder Abuse Act, “abuse” can take the form of “neglect” or other treatment with
“resulting physical harm or pain or mental suffering,” or the “deprivation by a care
custodian of goods or services that are necessary to avoid physical harm or mental
suffering.”  Welf. & Inst. Code § 15610.07; see also § 15610.57(b)(4).  Neglectful elder
abuse is “the failure of those responsible for attending to the basic needs and comforts
of elderly or dependent adults, regardless of their professional standing, to carry out
their custodial obligations.”  ( Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th
771, 785 (quoting Delaney v. Baker (1999) 20 Cal. 4th 23, 34) (emphasis in  Covenant
Care).)

In order to trigger liability under the Elder Abuse Act, a defendant’s conduct must rise
to the level of “recklessness, oppression, fraud, or malice.”  (Welf. & Inst. Code §
15657.)  For purposes of the Elder Abuse Act, reckless neglect is not negligence in the
undertaking of medical services, but rather concerns the fundamental failure to provide
medical care.  (Delaney v. Baker (1999) 20 Cal.4th 23, 34.)  Reckless neglect includes
only “acts of egregious abuse.”  (Id. at 35.) The Court understands that the term
“egregious” is a shorthand description of misconduct covered by the Act, as opposed
to ordinary professional negligence.  (Delaney, supra, 20 Cal.4th at 31-32.)
“Egregious” is not a statutory element.

Recklessness under the Elder Abuse Act, is more than “’inadvertence, incompetence,
unskillfullness, or a failure to take precautions’ but rather rise to a level of a ‘conscious
choice of a course of action . . . with knowledge of the serious danger to others
involved in it.'”  (Id. at 31-32.)  Recklessness refers to a subjective state of culpability
greater than simple negligence, which has been described as a deliberate disregard of
the high degree of probability that an injury will occur.  (Ibid.)

Defendants argue that Plaintiffs fail to state a claim for Elder Abuse on grounds that
Plaintiffs allege “only general and conclusory allegations.”  (Def.’s Ps & As at 6-7.)
The Court disagrees.  As described above, Plaintiffs have alleged more than mere
conclusions; they have alleged specific facts regarding Mrs. Beardsley’s stay at Coast,
her severe back ulcer(s), and Coast’s allegedly improper conduct in connection
therewith.  Further, the Court declines to consider the extrinsic evidence and additional
facts Defendants offer in support of their arguments regarding the Second Cause of
Action.  A demurrer tests the pleading alone; a court cannot sustain a demurrer on the
basis of extrinsic matter not appearing on the face of the pleading except for matters
subject to judicial notice.  (Bach v. McNelis (1989) 207 Cal.App.3d 852, 864.)
Defendants have not requested judicial notice in connection with their demurrer.

As part of their challenge to the Second Cause of Action, Defendants also argue that
Plaintiffs fail to state a cause of action for “professional negligence.”  (Def.’s Ps & As at
7-9.)  However, the First Amended Complaint does not include a claim for
“professional negligence.”  Plaintiffs have also confirmed that they have not alleged
such a claim.  (Pl.’s Oppo. at 4 n.2.)  Accordingly, Defendants’ argument is not well-
taken.

Sixth, Seventh, and Eighth Causes of Action (Fraud)

Defendants argue that Plaintiffs made “only general and conclusory allegations”
supporting their fraud claims.  (Def.’s Ps & As at 12-14.)  To allege a claim for fraud
Plaintiffs must allege, with particularity: “(a) misrepresentation (false representation,
concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to
defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.”  (
Lazar v. Superior Court (1996) 12 Cal.4th 631, 638, 645.)  The particularity
requirement necessitates pleading facts which “show how, when, where, to whom, and
by what means the representations were tendered.”  (Ibid. (citation omitted).)

Here, Plaintiffs have alleged that in the days prior to Mrs. Beardsley’s admission to
Coast, Defendants, and in particular, defendant Anca Sferdian on behalf of Coast,
intentionally represented to Plaintiffs that Coast was aware of Mrs. Beardsley’s
condition and limited mobility, that Coast had adequate staff to ensure Mrs. Beardsley
would be mobilized to help her rehabilitation, and that Coast staff would be attentive to
Mrs. Beardsley’s needs, including her need to be free from pressure ulcers.  (First Am.
Compl. ¶¶ 102-06.)  The representations allegedly occurred at Mrs. Beardsley’s prior
residence and at Coast’s facility.  (Ibid.)  Plaintiffs allege that Defendants knew these  representations to be false and were only interested in securing residents for the
facility and maximizing profits by reducing care expenditures.  (Ibid.)  Plaintiffs also
allege that they relied on the alleged misrepresentations in choosing to have Mrs.
Beardsley reside at Coast.  (Ibid.)  Further, Plaintiffs allege that Mrs. Beardsley
continued to reside at Coast because Coast misrepresented that Mrs. Beardsley was
receiving her physician-prescribed medications and receiving treatment for her
pressure ulcer, when in fact she was not.  (Id. ¶¶ 108-09.)  The Court finds that
Plaintiffs have pleaded factual allegations with particularity sufficient to support their
fraud claims.

Defendants also argue that Plaintiffs fail to state a cause of action for Fraudulent
Concealment because Plaintiffs failed to allege that Defendants were in a fiduciary
relationship with Mrs. Beardsley.  (Def.’s Ps & As at 14-15.)  However, Defendants are
alleged to have accepted Mrs. Beardsley as a resident in their care facility and
allegedly undertook to provide for her safety and health.  (First Am. Compl. ¶ 112.)
Plaintiffs have also alleged that Mrs. Beardsley was largely dependant on Defendants
for her needs as an ailing, elderly resident at Coast.  (Ibid.)  Defendants have not
compellingly argued that these facts, if true, would not suffice as the basis for a
fiduciary relationship between Defendants and Mrs. Beardsley.  (See Persson v. Smart
Inventions, Inc., 125 Cal.App.4th 1141, 1161 (Fraudulent concealment is characterized
by “[t]he vulnerability of one party to the other which 2) results in the empowerment of
the stronger party by the weaker which 3) empowerment has been solicited or
accepted by the stronger party and 4) prevents the weaker party from effectively
protecting itself.”) (citation and quotation marks omitted).)  Further, while not a “per se”
fiduciary relationship as in an attorney-client or physician-patient relationship, a
relationship between patient and nursing facility may arise to a fiduciary or confidential
one as a matter of fact, which would give rise to a claim for fraudulent concealment.
Such relation need not be legal; it may be moral, social, domestic, or merely
personal.”  (McCall  v Pacificare of Cal, Inc. (2001) 25 Cal.4th 412, 426   (HMO breach
of fiduciary duty to enrollee); Luiz v Queen of Angels Hospital (1942) 53 Cal.App.2d
310   (hospital through its officers/agents could form a confidential relationship with
patient); see CEB California Elder Law Litigation, section 2.53, page 50-51.)

Defendants also argue that Plaintiffs fail to state a cause of action for Fraudulent
Concealment because there are no allegations indicating that Defendants  “concealed
material information” from Plaintiffs.  (Def.’s Ps & As at 14-15.) However, Plaintiffs
have alleged facts suggesting Defendants concealed material information from
Plaintiffs regarding the care Mrs. Beardsley would receive (and was receiving) as well
as information regarding Coast’s staffing.  (First Am. Compl. ¶¶ 100-10, 112, 114-15.)
Defendants’ argument also relies upon extrinsic facts not properly before the court.
(Def.’s Ps & As at 15 (introducing and arguing Defendants’ own factual allegations).)
Accordingly, Defendants have not compellingly argued that Plaintiffs have not
adequately alleged facts to support a cause of action for Fraudulent Concealment.

Defendants also challenge Plaintiffs’ cause of action for Constructive Fraud.
Constructive fraud consists of “any breach of duty which, without an actually fraudulent
intent, gains an advantage to the person in fault, or anyone claiming under him, by
misleading another to his prejudice, or to the prejudice of anyone claiming under
him.”  (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 981 n.13;
Civ. Code § 1573.)  Defendants argue that Plaintiffs “failed to plead and prove” that
Defendants had a duty to Plaintiffs or obtained advantage over them.  (Def.’s Ps & As
at 16.)  Again, Plaintiffs need not “prove” anything at the pleading stage.  Moreover, as
noted above, Plaintiffs have pleaded facts supporting the existence of a duty between
Defendants and Mrs. Beardsley and the resulting advantage of Defendants (i.e.,
securing Mrs. Beardsley as a resident of Coast) and resulting harm to Plaintiffs. To the
extent Defendants argue that the alleged facts would not support the existence of a
duty between Defendants and any plaintiff other than Mrs. Beardsley (or her successor
-in-interest), Defendants have not cited authorities suggesting that a duty cannot arise
between a residential care facility and a family member entrusting their loved one into
the care of that facility.  Accordingly, Defendants’ challenge to the Constructive Fraud
claim is not well-taken.

Tenth and Twelfth Causes of Action (Negligent Infliction of Emotional Distress)

Defendants argue that Plaintiffs fail to state a cause of action for Negligent Infliction of
Emotional Distress (“NIED”) because they fail to allege the standard of care, how
Defendants failed to meet it, how such failure caused damages to Plaintiffs, and how
such conduct was “outrageous.”  (Def.’s Ps & As at 17.)

The Court finds that Plaintiffs did allege negligent conduct by Defendants in connection
with Mrs. Beardsley’s care, namely, with respect to failing to properly monitor and treat
her pressure ulcer as described above.  (First Am. Compl. ¶¶ 142, 157.)  Plaintiffs also
allege that, as a result, Plaintiffs suffered “emotional distress” due in part to observing
Mrs. Beardsley’s alleged deterioration while she resided at Coast.  (Id. ¶¶ 145-47.)
While Plaintiffs’ pleading does not specifically describe the specific way(s) in which the
alleged emotional distress has allegedly manifested, Defendants fail to cite to
authorities requiring such specificity.  Accordingly, Defendants’ argument is not well-
taken.

The Court notes that Defendants did not cite authorities or argue that “inadequate
staffing” cannot be perceived contemporaneously as causing injury for purposes of an
NIED claim, and the Court therefore does not make any finding as to that issue.

Fourteenth Cause of Action (Wrongful Death)

Defendants argue that Plaintiffs have not alleged any “economic loss,” such that they
have not adequately alleged a Wrongful Death claim.  (Def.’s Ps & As at 18-19.)
However, Defendants fail to cite to any authorities supporting this argument.  (Ibid.)
Moreover, as Plaintiffs note, “economic loss” is not an element of a Wrongful Death
cause of action.  (Pl.’s Oppo. at 15-16 (arguing that “non-economic” damages, such as
loss of society, are recoverable upon a showing of Wrongful Death).)  Indeed, “[t]he
elements of the cause of action for wrongful death are the tort (negligence or other
wrongful act), the resulting death, and the damages, consisting of the pecuniary loss
suffered by the heirs;” such “pecuniary loss” may consist of “pecuniary value” of non-
economic damages like lost society and companionship.  (Boeken v. Philip Morris
USA, Inc. (2010) 48 Cal.4th 788, 806 (citation omitted); Boeken v. Philip Morris USA
Inc. (2013) 217 Cal.App.4th 992, 997 (clarifying that a Wrongful Death plaintiff can
recover “noneconomic damages”) (emphasis added).)  Here, Plaintiffs have alleged
non-economic damages, such as loss of society, resulting from Defendants’ allegedly
negligent conduct.  (First Am. Compl. ¶ 166.)   Defendants have not cited authorities or
otherwise compellingly shown that such alleged damages cannot support the
“damages” element of a Wrongful Death Claim.

Defendants’ “Alter Ego” Argument Defendants argue that Plaintiffs “fail to state a cause of action to constitute alter ego”
on the pleaded facts and that the allegations lack specificity.  (Def.’s Ps & As at 11-12.)
However, Defendants do not cite to any authorities stating that facts supporting an
alter ego theory must be alleged with specificity.  Further, to allege facts sufficient to
support an alter ego theory, a plaintiff can allege “ultimate rather than evidentiary
facts.”  (Rutherford Holdings, LLC v. Plaza Del Rey (Jan. 23, 2014) 2014 Cal. App.
LEXIS 56.)  Where a plaintiff alleges that an individual dominated and controlled a
company; that a unity of interest and ownership existed between the individual and the
company; that the company was a mere shell and conduit for the individual’s affairs;
that the company was inadequately capitalized; that the company failed to abide by the
formalities of corporate existence; that the individual used the company assets as her
own; and that recognizing the separate existence of the company would promote
injustice, the plaintiff adequately alleged facts supporting an alter ego theory of liability.
(Ibid. (citing First Western Bank & Trust Co. v. Bookasta (1968) 267 Cal.App.2d 910,
915-916).)  Moreover, “less particularity [of pleading] is required where the defendant
may be assumed to possess knowledge of the facts at least equal, if not superior, to
that possessed by the plaintiff.”  (Ibid. (quotation marks and citation omitted).)

Here, Plaintiff has alleged that the Sferdians “are believed to exert total control over
the finances of” Coast, to engage in “self-dealing” to enrich themselves to the financial
detriment of Coast, to “freely extract[]” money from Coast in “non-arms length
transactions,” to treat Coast’s assets “as their own,” to extract money from Coast for
non-business purposes, to leave Coast “substantially undercapitalized,” and that that
the Sferdians operate Coast “as one joint enterprise that exists for the primary purpose
of financially enriching the Sferdians at the expense of resident care.”  (First Am.
Compl. ¶ 62.)  The Court finds that these and the other allegations in Plaintiffs’
pleading are sufficient to support an alter ego theory as against the moving
Defendants.

Defendants also argue that Plaintiffs’ “alter ego” theory is unnecessary in this case
given that Defendants Anca Sferdian and Florin Sferdian are the sole proprietors of
Coast and that it is not a corporation or LLC, such that “there is no need for an alter
ego cause of action.”  (Def.’s Ps & As at 12.)  However, Defendants’ argument relies
on the truth of facts about the structure of Coast that are not properly before the court
at the pleading stage.  Accordingly, Defendants’ argument is not well-taken.

Defendants’ Arguments Regarding Damages

Defendants’ demurrer includes challenges to Plaintiffs’ “claim for ten million dollars in
punitive damages,” and Plaintiffs’ claim for “treble damages under California Civil Code
§ 3345.”  (Def.’s Ps & As at 11, 16.)  Defendant’s demurrer is overruled in this regard. (
See Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 163 (“Since a demurrer
does not lie to a part of a cause of action [citation], petitioners’ punitive damage
allegations were not subject to real parties’ demurrers.”) (citation omitted).)
Defendants could have properly challenged the propriety of Plaintiffs’ requested
damages within a motion to strike, but Defendants’ Motion to Strike does not address
Plaintiffs’ requested damages.  Moreover, even if Defendants’ damages-related
arguments had been included in the Motion to Strike, they would not have been well-
taken.  Defendants argue that Plaintiffs have not “prove[n]” recklessness by “clear and
convincing evidence” (Def.’s Ps & As at 11) and as described above, Plaintiffs need
not “prove” anything – including damages — at the pleading stage.  (Ball, supra, 81              Cal.App.4th at 534-35.)  Defendants also argue (Def.’s Ps & As at 16) that Plaintiffs
cannot recover treble damages under Civil Code § 3345(b) because Defendants are
not alleged to have caused Mrs. Beardsley to “lose her primary residence,
employment, source of income, retirement, and other financial assets” under Civil
Code § 3345(b)(2), but Defendants fail to acknowledge that they are alleged to have
caused Mrs. Beardsley to “actually suffer[] substantial physical . . . damage,” which
supports Plaintiffs’ potential entitlement to treble damages under Civil Code § 3345(b)
(3).  Accordingly, Defendants’ challenges to Plaintiffs’ requested damages are not well-
taken.

The demurrer is overruled in its entirety.  No later than February 21, 2014, Defendants
shall file and serve their answers.

Defendants’ notice of hearing provides the incorrect address for Department 53, which
rd
is 800 Ninth Street, 3   Floor, Sacramento.  Defendants’ notice of motion does not
provide notice of the Court’s tentative ruling system as required by California Rule of
Court 3.1308 and Local Rule 1.06(D).  Defendants’ counsel is ordered to notify
Plaintiff’s counsel immediately of the tentative ruling system and of the correct
department and time of the hearing and to be available at the hearing, in person, or by
telephone, in the event Plaintiff’s counsel appears without following the procedures set
forth in Local Rule 1.06(B).

The minute order is effective immediately.  No formal order pursuant to CRC Rule
3.1312 or further notice is required.   Jean Beardsley vs. Progressive Home Care

Nature of Proceeding:       Motion to Strike

Filed By:   Avelino, Kenneth A.

Defendants Anca Sferdian, Florin Sferdian, Steve Sferdian, and Coast Oak Villa
(“Coast”) (collectively, “Defendants”)Motion to Strike the portions of the First Amended
Complaint is DENIED.

Defendants argue that the pleading contains multiple paragraphs of “false” allegations.
(Mot. to Strike at 7.)  However, Defendants improperly introduce extrinsic evidence in
efforts to prove such falsity.  (Code Civ. Proc. § 437 (“The grounds for a motion to
strike shall appear on the face of the challenged pleading or from any matter of which
the court is required to take judicial notice.”)  Defendants have not filed a request for
judicial notice in connection with their Motion to Strike, Defendants have not specified
any basis upon which their proffered evidence might be judicially noticeable (see Evid.
Code §§ 452-53), and the Court cannot resolve factual disputes at the pleading stage.
Moreover, the factual allegations Defendants frame as “false” are all squarely at issue
in this case; they are not extraneous allegations unrelated to Plaintiffs’ claims.  The
use of a motion to strike should be “cautious and sparing”; it should not be a
procedural “line item veto” for the civil defendant. (PH II, Inc. v. Superior Court (1995)
33 Cal.App.4th 1680, 1683.)  Accordingly, Defendants’ Motion to Strike is DENIED.

The minute order is effective immediately.  No formal order pursuant to CRC Rule
3.1312 or further notice is required.