2017-00210774-CU-BT

Wellspace Health vs. Jo Taylor

Nature of Proceeding: Application for Temporary Restraining Order and Order to Show Cause

Filed By: Chisum, William T.

The OSC is DISCHARGED. The TRO is VACATED. The preliminary injunction is GRANTED.

I. Overview

This case presents business dispute. In its complaint, Plaintiff Wellspace Health (“Wellspace”) alleges that it purchased Taylor’s rights to the name “Health Care for Women” from Defendants Jo Taylor, M.D. and Jo Taylor, M.D., Inc. (collectively “Taylor”). However, Taylor continues to claim the use of the “Health Care for Women” name when identifying her private practice, and continues to claim she represents and is authorized to act for “Health Care for Women.” Wellspace further alleges that Taylor wrongfully directed the US Postal Service (“USPS”) to forward all mail addressed to “Health Care for Women” at 7601 Hospital Drive (Wellspace’s address “Hospital Drive Address”), to her private practice address at 9045 Bruceville Road (“Bruceville Road Address”).

Although Dr. Taylor worked for Wellspace for a period of time, she was terminated on 6/1/2016.

The complaint asserts causes of action for Unfair Competition, False Advertising, Fraud, Negligent Misrepresentation, Breach of Contract Assignment of DBA Agreement, Breach of Covenant of Good Faith and Fair Dealing, Breach of Independent Contractor Agreement, Breach of Implied Contract/Quantum Meruit Recovery, Common Counts, Account Stated, and Open Book.

In June 2016 and January 2017, Taylor submitted a Forwarding Change of Address Order (“Forwarding Order”) to the USPS forwarding all mail addressed to “Health Care for Women” at the Hospital Drive Address to the Bruceville Road Address. Wellspace apparently learned of the Forwarding Orders in February 2017. In March 2017, another Forwarding Order was submitted to the USPS, which indicated that the Bruceville Road Address was the permanent business address for Taylor with the business name of “Healthcare for Women.” Wellspace learned of this Forwarding Order in November 2017.

On 4/11/2017, Wellspace filed its first ex parte application for TRO. In response, the parties entered into a stipulation on 4/20/2017, wherein Taylor agreed to certain restrictions regarding the business. With respect to the handling of mail, the parties agreed that within 7 calendar days that the parties would agree to develop a protocol for distributing mail. The parties negotiated the mail handling protocol, but were unable to agree.

On October 17, 2018, a new Forwarding was submitted to the USPS which indicated that the Bruceville Road Address was the permanent business address for “Healthcare for Women.” When Wellspace learned of the forwarding order, it contacted USPS and filed a complaint since it did not authorize the submission of the Forwarding Order.

On 12/21/2018, the Court granted Wellspace’s second request for TRO and OSC re: issuance of preliminary injunction concerning mail addressed to “Health Care for Women” at 7601 Hospital Drive, Sacramento, California. The Court issued a TRO enjoining Taylor, their employees, officers, directors, members, partners, agents, assigns, affiliates, successors-in-interest and any other person or entity acting in concert with or on their behalf, including Deborah Tokevich, from: (1) taking any action interfering with, or attempting to divert or redirect, mail, any document or other item addressed to “Health Care for Women” at 7601 Hospital Drive, Sacramento California;

(2) submitting any mail forwarding order, or other similar document, to the U.S. Post Office or other delivery service, or any agent thereof, regarding delivery of any item addressed to “Health Care for Women” at 7601 Hospital Drive, Sacramento, California; and (3) representing that they, or any of them, are in any way authorized to act on behalf of or associated with an entity known as either “Health Care for Women” or “WellSpace Health – Health Care for Women Community Health Center.” The OSC was issued regarding the same.

Wellspace’s objections to the Declaration of David Burkett are SUSTAINED.

II. Legal Standard

In deciding whether to enter a preliminary injunction, the court evaluates two interrelated factors: (1) the likelihood that the applicant will prevail on the merits at trial, and (2) the interim harm the applicant will likely suffer if preliminary relief is not granted, as compared to the likely harm the opposing party will suffer if the preliminary injunction issues. (See, e.g., Langford v. Superior Court (Gates) (1987) 43 Cal.3d 21, 28.) One of these two factors may be accorded greater weight than the other depending on the applicant’s showing. (See Commons Cause v. Bd. of Supervisors (1989) 49 Cal.3d 432, 447.)

III. Analysis

a. Probability of Prevailing

Wellspace insists that it is likely to prevail on the UCL cause of action because Wellspace owns the “Health Care for Women” name. Therefore, Taylor’s use of the name is “false and can only serve to mislead and deceive patients and the public in general as to Defendants’ continuing association with ‘Health Care for Women’” (Wellspaces’ MP&As, 15:1-2), and Taylor’s representing to the USPS that she is authorized to act on behalf of “HealthCare for Women”, “constitutes and unfair business practice in violation of the UCL that is both unfair and illegal, if not also fraudulent.” (Reply, 9:2-5.)

The Court observes that Taylor does not dispute that she, or one of her agents/employees, submitted the three “Forwarding Change of Address Orders” to the USPS. Instead, Taylor contends that Wellspace is not likely to prevail on the UCL cause of action since Wellspace only purchased the dba “Healthcare for Women.” Whereas, according to Taylor’s attorney, David Burkett, even prior to the negotiations with Wellspace used the dba “Health Care for Women Medical Group.” (Declaration of David Burkett, ¶ 3.) According to Burkett, in the “Assignment of DBA Agreement”, Wellspace recognized that Taylor was using the dba “Health Care for Women Medical Group” and only assigned Wellspace the use of the dba “Healthcare for Women.” (Id. ) The Court, however, has sustained Wellspace’s objection to Mr. Burkett’s declaration. Therefore, Taylor does not have admissible evidence to support this argument.

The entirety the Assignment of DBA Agreement states:

THIS ASSIGNMENT AGREEMENT, made and entered into at Sacramento, California on the 4th DAY OF JUNE, 2014, is by and between JO TAYLOR M.D. INC., a California CORPORATION d.b.a. Health Care for Women Medical Group and WELLSPACE HEALTH, a Federally Qualified Health Center.

For Valuable Consideration, JO TAYLOR, M.D., INC. does hereby transfer and assign to WELLSPACE HEALTH, all right, title and interest in the DBA:

HEALTH CARE FOR WOMEN.

(Declaration of Jonathan Porteus, Ex. A.) As Wellspace notes, nothing in the agreement acknowledges that Taylor may continue to use the name “Health Care for Women” or that the parties could share the name. In any event, the Forwarding Orders expressly identified “Health Care for Women” as the business name and not “Health Care for Women Medical Group.” Thus, even if Taylor had the right to use the name “Health Care for Women Medical Group,” the evidence demonstrates that Taylor used the name “Health Care for Women” to forward the mail.

The Court concludes that for the purposes of this motion only, Wellspace has shown a probability of prevailing.

b. Balancing of Harms

Wellspace maintains that it will suffer injury absent injunctive relief because “Defendants’ attempts to control ‘Health Care for Women’ negatively impacts mail addressed to ‘Health Care for Women’ by WHS patients and others including mail containing time sensitive, confidential and protected health information entitled to protection under the federal Health Information Portability and Accounting Act or HIPAA. Rectifying such misdirected mail has entailed costs for WSH and endanger patient privacy.” (Wellspaces’ MP&As, 16:25-17:1.) For example, since documents containing protected health information were not delivered to Wellspace at the Hospital Drive address, Wellspace notified the Office for Civil Rights of the Department of Health and Human Services of the breach. (Declaration of Jonathan Porteus, ¶16.) In compliance with its legal notification obligations upon a breach, WellSpace also sent notification letters to the known patients who potentially had their private health information compromised. (Id.)

Taylor advances that Wellspace has failed to show irreparable harm when compared to Taylor’s harm because Wellspace has not been forwarding the mail sent to Taylor at the Hospital Drive address. Therefore, Taylor has not been receiving such mail. The Court notes that Taylor has not submitted a declaration in opposition to the motion. Instead, Burkett submits his declaration in support of these facts. Since the Court has sustained Wellspace’s objections to Burkett’s declaration, Taylor proffers no admissible evidence to support her argument.

The Court concludes that the harm tips in Wellspace’s favor.

Accordingly, the motion for preliminary injunction is GRANTED.

Neither party has addressed the issue of a bond. Plaintiffs shall post an injunction bond in the amount of $15,000 no later than February 5, 2018. (CCP §529.)

Wellspace shall submit a copy of the proposed preliminary injunction for the Court’s signature pursuant to CRC Rule 3.1312. The Court will sign the proposed preliminary injunction upon proof of posting of the injunction bond.