Case Number: BC634638 Hearing Date: October 17, 2018 Dept: 5

Background

Defendant Hubert Wing Chow M.D. (“Dr. Chow”) moves for summary judgment on the complaint filed by Plaintiff Kimberly A. Rodgers (“Plaintiff”). The Complaint, filed on September 20, 2016, alleges causes of action for medical malpractice and medical battery against Dr. Chow and other medical entities and professionals.

This motion was originally heard on July 3, 2018 but was continued to October 1, 2018. Plaintiff filed an opposition to this motion on June 19, 2018 requesting that the Court continue this motion so that Plaintiff could complete discovery prior to the hearing of the merits of this motion. Plaintiff did not offer arguments or evidence as to the merits of this motion. The Court granted the continuance to October 1, 2018 to allow Plaintiff to conduct further discovery.

Plaintiff filed her substantive opposition papers on September 17, 2018, and Defendant filed its reply papers on September 26, 2018.

At the hearing on October 1, 2018, Plaintiff’s counsel for the first time informed the Court that Defendant Healthcom Medical Group, Inc.’s (“Healthcom, Inc.”) corporate status had been suspended by the Franchise Tax Board. Dr. Chow’s motion was premised on the argument that he was not personally liable as the director of Healthcom, Inc. for the negligent acts of its employees. The Court continued the hearing to allow the parties to provide supplemental briefing as to the effect that the newly discovered corporate status of Healthcom, Inc. had on this motion. Plaintiff filed supplemental briefing on October 4, 2018. Defendant Healthcom, Inc. filed a reply to this briefing on October 10, 2018. Dr. Chow has also filed a supplemental reply to Plaintiff’s briefing.

Discussion

In the supplemental briefing, Plaintiff requests that in light of the new status of Defendant Healthcom, Inc., the Court either: (1) continue the hearing to allow discovery on the status of Defendant Healthcom, Inc.’s corporate status as well as discovery on the theory that Healthcom, Inc. was the “alter ego” of Dr. Chow; or (2) allow an evidentiary hearing on the issue of the alter ego doctrine. Plaintiff also requests that the Court strike the Answer filed by Defendants Healthcom, Inc. and Ginny Powell, R.N. as well as issue sanctions under CCP § 128.7 against Defendant’s Healthcom, Inc. and Powell’s counsel of record for providing a defense in this action despite the suspended status of Defendant Healthcom, Inc.

Plaintiff’s request to strike defendant Healthcom, Inc.’s Answer or to issue sanctions must be denied at this juncture. The proper manner to seek such relief is by way of a noticed motion. A supplemental opposition to a different defendant’s motion for summary judgment is not the proper procedure to request such relief. The Court allowed this briefing for the limited purpose of arguing what effect, if any, the suspension of defendant Healthcom, Inc.’s corporate status may have on the liability of its directors and on Dr. Chow’s motion for summary judgment. It would be improper for the Court to grant Plaintiff’s request without proper notice to defendants Healthcom, Inc. and Powell. Therefore, Plaintiff’s request to strike defendant Healthcom, Inc.’s Answer or to issue sanctions is denied without prejudice for Plaintiff to bring a noticed motion seeking such relief.

The Court has broad discretion to allow a continuance of a hearing on a motion for summary judgment “upon a good faith showing by affidavit that a continuance is needed to obtain facts essential to justify opposition to the motion.” (Bahl v. Bank of America (2001) 89 Cal.App.4th 389, 395.) The ability of the non-moving party to request a continuance is built into the Code of Civil Procedure itself. (Ibid.) CCP § 437c subdivision (h) states in relevant part:

If it appears from the affidavits submitted in opposition to a motion for summary judgment or summary adjudication, or both, that facts essential to justify opposition may exist but cannot, for reasons stated, be presented, the court shall deny the motion, order a continuance to permit affidavits to be obtained or discovery to be had, or make any other order as may be just.

(Emphasis added.) The inclusion of the word “may” and “shall” in the text of the statute “leaves little room for doubt that such continuances are to be liberally granted.” (Bahl, supra, at 395.) When a party submits a declaration or affidavit demonstrating a good faith showing “demonstrating that a continuance is necessary to obtain essential facts to oppose a motion for summary judgment, the trial court must grant the continuance request.” (Park v. First American Title Co. (2011) 201 Cal.App.4th 1418, 1428.)

A declaration or affidavit submitted in support of a request to continue the trial for purposes of discovery must submit an affidavit showing that “(1) the facts to be obtained are essential to opposing the motion; (2) there is reason to believe such facts may exist; and (3) the reasons why additional time is needed to obtain these facts.” (Jade Fashion & Co., Inc. v. Harkham Industries, Inc. (2014) 229 Cal.App.4th 635, 656.) “It is not sufficient under the statute merely to indicate further discovery or investigation is contemplated. The statute makes it a condition that the party moving for a continuance show ‘facts essential to justify opposition may exist.’” (Roth v. Rhodes (1994) 25 Cal.App.4th 530, 548, 30 Cal.Rptr.2d 706.)

Lack of diligence alone is insufficient to justify the denial of a continuance under CCP § 437c(h). “[W]hen a party submits an affidavit demonstrating that facts essential to justify opposition may exist but have not been presented to the court because the party has not been diligent in searching for the facts through discovery, the court’s discretion to deny a continuance is strictly limited.” (Bahl, supra, 89 Cal.App.4th at 398.) In addition, courts must consider the policy favoring trial on the merits over dismissal for failure to proceed with reasonable diligence when determining whether a motion for summary judgment must be continued at the proper request of the opposing party. (Id. at 399-400.) Denial of a continuance under CCP § 437c(h) “due to lack of diligence may result in the granting of a motion for summary judgment, essentially no different from a Code of Civil Procedure section 583.410 dismissal for delay in prosecution.” (Id. at 399.) Thus, if an affidavit is presented showing “showing facts essential to justify opposition may exist and explaining why they cannot then be presented, the judge must consider other ways of handling the lack of diligence short of summary judgment.” (Ibid.)

As to the necessity of a continuance, the Court notes that since the October 1, 2018 hearing on this motion, neither party has adequately addressed the supplemental briefing and information requested by the Court. Defendant correctly points out that Plaintiff has failed to present evidence that Healthcom, Inc. was suspended at the time of the alleged incident in August 2016. However, Defendant has also failed to present any evidence of Healthcom, Inc.’s corporate status at the time of the alleged incident in August 2016. There is simply no evidence before the Court as to the period(s) during which Healthcom, Inc.’s corporate status was suspended. The only fact that does not appear in dispute is that Healthcom, Inc. is currently suspended. Without evidence of periods during which Healthcom, Inc.’s suspension commenced and ended, the Court may not simply deem the action of Healthcom, Inc. as the actions of the corporation as urged by Defendant pursuant to the cases cited in Defendant’s supplemental briefing. Thus, the Court finds that a continuance is necessary to allow the parties to present evidence as to Healthcom, Inc.’s corporate status from the time of the alleged incident in August 2016 through and including the present.

Plaintiff offers the declaration of counsel, Peter R. Nasmyth, Jr., to support the request for a continuance of the motion for summary judgment on a second ground. Nasmyth also requests a continuance of the motion to allow for discovery as to the issue of the applicability of the alter ego doctrine to this case. (Nasmyth Decl., at ¶ 3.) However, Nasmyth’s declaration does not sufficiently justify why a three-month continuance is necessary. In requesting a continuance of the motion for summary judgment, Plaintiff cannot merely claim that further discovery is contemplated but must show that “facts essential to justify opposition may exist.” (Roth, supra, at 548.) At the first continuance of this motion, Plaintiff provided the Court with a plan for discovery to obtain testimony and evidence that could refute the specific contentions of fact offered in the Dr. Chow’s motion for summary judgment. However, for the instant request for a further continuance, Nasmyth’s declaration fails to address (1) how the facts to be obtained are essential to opposing the motion; (2) why there is reason to believe such facts may exist; and (3) why additional time is needed to obtain these facts. It is also not clear why Plaintiff failed to pursue an alter ego theory in the last round of discovery and briefing before the October 1, 2018 hearing. Nonetheless, the Court recognizes that denial of a continuance on this ground may prevent Plaintiff from a disposition of the issues on the merits. Thus, the Court would be inclined to grant a lengthier continuance upon a proper showing by Plaintiff. Thus, the Court orders Plaintiff to appear at the October 17, 2018 hearing and provide a supplemental declaration addressing the defects identified by the Court above.

Finally, the Court finds that Plaintiff has provided no authority to support her request for an evidentiary hearing on the issue of the alter ego doctrine. The issue before the Court is whether Dr. Chow’s motion for summary judgment or alternatively summary adjudication may be granted or denied. It is not clear what authority allows an evidentiary hearing in such a case, nor what effect such an evidentiary hearing would have on the proceeding. Rather the appropriate procedure would be for Plaintiff to present evidence as to the alter ego doctrine in opposition to the motion for summary judgment. If the Court finds that a triable issue of material fact exists, then the issue of whether the corporation was used as an alter ego would be submitted to the jury to determine. Thus, Plaintiff’s request for an evidentiary hearing is denied.

Conclusion and Order

Plaintiff’s request for an evidentiary hearing is denied. Plaintiff’s request to strike defendant Healthcom, Inc.’s Answer or to issue sanctions is denied without prejudice for Plaintiff to bring a noticed motion seeking such relief.

Defendant’s motion for summary judgment will be continued to allow the parties to submit supplemental evidence of Healthcom, Inc.’s corporate status from the time of the alleged incident in August 2016 through and including the present time. The duration of the continuance will depend on whether Plaintiff provides a supplemental declaration correcting the defects identified above to support a second ground for the continuance.