2015-00184048-CU-PO

Marcus Gurion vs. Gramercy Healthcare, LLC

Nature of Proceeding: Hearing on Demurrer to Plaintiffs’ Third Amended Complaint

Filed By: Eng, Kevin L.

Defendants Life Generations Healthcare, LLC, Thomas Olds, Jr. and GHC of Sac-SNF, LLC dba Gramercy Court’s (together, “Defendants”) Demurrer to the Third Amended Complaint (“TAC”) is SUSTAINED without leave to amend.

Defendants’ request for judicial notice is granted.

Plaintiffs Marcus Gurion, Maxine Gurion, and Rovert Gurion, as individual and successors in interest to Decedent’s (together, “Plaintiffs”) request for judicial notice of Exhibits A, B, and C is granted. (See, Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc. (2005) 133 Cal. App. 4th 26, 32.) Plaintiffs’ request for judicial notice of Exhibit D, the California State Auditor’s report on Skilled Nursing Facilities, is denied.

This is an elder abuse action arising from the care rendered to decedent Evelyn Gurion (“Decedent”) from July 2014 to September 2014, when she passed away. Plaintiffs filed this action in September 2015 against defendants Gramercy Healthcare, LLC, Cottage Park Place, LP, dba Gramercy Court, Linda Gordon, Yuquo Kawasaki, David McCabe, Jeffrey West, and YK Enterprises (together, “Nonmoving Defendants”), alleging seven causes of action related to the care and death of Decedent.

On February 16, 2018, Plaintiffs filed a DOE amendment, adding Defendants to the Second Amended Complaint (“SAC”). Defendants filed a demurrer to the SAC for uncertainty and failure to state a cause of action, which the Court sustained with leave to amend on August 13, 2018. The Court’s ruling stated that the allegations against

Defendants were “deficient inasmuch as the 2AC fails to state facts which affirmatively establish any of the Defendants who did not ‘purchase[]’ the subject care facility until 2016 owed a duty of care to or had a fiduciary relationship in 2014 with either the decedent or plaintiffs.” (Def. RJN Ex. B.)

Plaintiffs then filed their TAC, which contains the same allegations as the SAC with a few additions. Specifically, Plaintiffs added allegations that at all relevant times, Defendants “were involved with and conspiring with” the other defendants, “as well as acting as joint venturers, managing agents, affiliates, partners, principals, and sister companies part of a single enterprise.” (TAC ¶13.) The TAC further alleges that Defendants conspired to “stage a fraudulent transfer” of the skilled nursing facility after the lawsuit was filed, and that the purpose of the transfer was to “stifle this lawsuit through despoliation of evidence, asset protection, and finger-pointing.” (Id. ¶¶14-16.) The TAC then alleges that all defendants were acting on behalf of every other defendant as agents, representatives, employees, joint-venturers, and/or co-conspirators. (Id. ¶18.)

The TAC again alleges seven causes of action against Defendants for (1) negligence,

(2) abuse/neglect of a dependent adult, (3) wrongful death, (4) violation of the Patient’s Bill of Rights, (5) fraud/misrepresentation, (6) constructive fraud, and (7) unfair business practices. Defendants have again demurred to all causes of action on the grounds that they are uncertain and fail to allege facts sufficient to state a cause of action.

Uncertainty

At the outset, the Court notes that the following timeline is undisputed: Decedent was a resident of the nursing facility Gramercy Court from July 2014 to September 2014, Decedent died in September 2014, the lawsuit was filed in September 2015, and Defendants purchased the facility in 2016. The only allegations connecting Defendants to the events alleged in the TAC are Plaintiffs’ conclusory allegations that Defendants “conspired with” the other defendants “at all relevant times” and that the eventual transfer of the facility was “fraudulent.” Plaintiffs also generally allege, again without alleging any actual facts, that Defendants had a variety of relationships with the other named defendants, as agents, employees, partners, representatives, co-conspirators, and sister companies, among others. Defendants are not mentioned by name in any of the causes of action.

A demurrer is properly sustained where the pleading is uncertain, ambiguous, or unintelligible. (CCP §430.10(f).) Although a demurrer for uncertainty is disfavored, it will be sustained only where the complaint is so bad that the defendant cannot reasonably respond. Normally, ambiguities can be clarified under modern discovery procedures. (1 Weil & Brown, Civil Procedure Before Trial (The Rutter Group 2008) § 7:84, p. 7(l)-37; Khoury v. Maly’s of California, Inc. (1993)14 Cal.App.4th 612, 616.)

Here, the allegations in the TAC connecting Defendants to the alleged acts are so vague and uncertain that the Court would be forced to speculate as to how Defendants are allegedly liable for various causes of action where their only alleged relationship with defendants is the purchase of the facility after the lawsuit was filed and two years after Decedent’s death. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139 n. 2.) Accordingly, the demurrer for uncertainty is sustained.

Elder Abuse

The demurrer as to the second cause of action for elder abuse is SUSTAINED.

Defendants argue that Plaintiffs’ cause of action for elder abuse fails pursuant to the California Supreme Court’s May 19, 2016 ruling in Winn v. Pioneer Medical Group, Inc. (2016) 63 Cal.4th 148, 152.) Defendants contend that under Winn, Plaintiffs are legally barred from pleading Elder Abuse against Defendants because they had no involvement with the facility until two years after Decadent’s death. (SAC ¶33, TAC ¶¶13-16; Def. RJ Ex. A.) They further argue that pursuant to California Association of Health Facilities v. The Dept. of Health Services (1997) 16 Cal.4th 284, licensees operating skilled nursing facilities owe a non-delegable duty to the facilities’ residents. Thus, because Cottage Park Place, LP dba Gramercy Court was the licensee of the facility where Decedent resided in 2014, and Defendants were not the licensee until 2016, two years after Decadent’s death, Defendants cannot be found liable for Elder Abuse.

In opposition, Plaintiffs argue that Defendants misrepresent the holdings in Winn and California Association of Health Facilities. They argue that Defendants can be held liable through theories of employer/employee, alter ego, and/or vicarious liability.

In Winn, the Court held that the Elder Abuse and Dependent Adult Civil Protection Act “does not apply unless the defendant health care provider had a substantial caretaking or custodial relationship, involving ongoing responsibility for one or more basic needs, with the elder patient. It is the nature of the elder or dependent adult’s relationship with the defendant-not the defendant’s professional standing-that makes the defendant potentially liable for neglect.” (Winn, 63 Cal. 4th at 152.) Here, the TAC does not allege that Defendants had a substantial caretaking relationship with Decedent that was ongoing. While Plaintiffs allege vaguely that Defendants were somehow conspiring with or in an agency relationship with the Nonmoving Defendants prior to Decedent’s death and before they purchased the nursing facility, there are simply no facts alleged in support of this conclusory statement. Accordingly, Plaintiffs’ cause of action for elder abuse must fail.

Moreover, as discussed in the Court’s prior ruling sustaining Defendants’ demurrer to the SAC, California law requires that all statutory causes of action must be pleaded with factual particularity, showing every fact essential to the existence of liability under the relevant statute(s). (Def. RJN Ex. B, citing Covenant Care, Inc. v. Superior Court (Inclan) (2004) 32 Cal.4th 771, 790 (citing Lopez v. Southern Cal. Rapid Trans. Dist. (1985) 40 Cal.3d 780, 795) (emphasis added).) Here, Plaintiffs again fail to allege Defendants’ conduct with specificity, most particularly their alleged relationship with the Nonmoving Defendants in this action and how this relationship renders them potentially liable for Elder Abuse. The Elder Abuse cause of action fails on these grounds as well.

Fraud/Misrepresentation and Constructive Fraud

The demurrer to the fifth and sixth causes of action for fraud/misrepresentation and constructive fraud is SUSTAINED.

Defendants argue that the fraud causes of action fail because they are not pled with particularity. Plaintiffs contend that the allegations are pled with particularity as to

Nonmoving Defendants, and that this is sufficient given their alleged relationship with Defendants.

To withstand a demurrer, the facts constituting every element of the fraud must be alleged with particularity and the claim cannot be salvaged by references to the general policy favoring the liberal construction of pleadings ” (Goldrich v. Natural Y Surgical Specialties, Inc. (1994) 25 Cal. App. 4th 772, 782-783. See also, Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) Where fraud against a corporation is alleged, “[T]he plaintiff must ‘allege the names of the persons who made the allegedly fraudulent representation, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Lazar v. Superior Court (1996)12 Cal. 4th 631, 645.)

Plaintiffs’ TAC fails to include any of the specifics required to adequately plead a cause of action for fraud. Plaintiffs’ conclusory allegations that Defendants have an agency, co-conspirator, or employee relationship with the other defendants are not sufficiently specific to save their claims. Accordingly, the demurrer to the fifth and sixth causes of action is sustained.

Negligence, Wrongful Death

The demurrer as to the negligence and wrongful death causes of action is SUSTAINED.

Defendants argue that these causes of action all fail because Plaintiffs have failed to allege that Defendants owed a legally cognizable duty to Plaintiffs. Plaintiffs argue that the TAC alleges Defendants violated various statutes, and that the allegations of an agency, owner, or other such relationship with the Nonmoving Defendants are sufficient.

To state a cause of action for negligence, the facts must show a legal duty of care, its breach, causation and resulting injury. Whether a defendant owes a duty of care is a question of law. Its existence depends upon the foreseeability of the risk and upon a weighing of policy considerations for and against imposition of liability. (Schwartz v Regents of the University of California (1990) 226 Cal.App.3d 149.) To plead wrongful death, Plaintiffs must allege that Decedent died as a result of Defendants’ breaches of duty.

Plaintiffs do not allege facts that Defendants owed a legal duty to Plaintiffs, arising out of a statute contract, or otherwise. The TAC and SAC allege that Cottage Park Place, LP dba Gramercy Court was the licensee of the facility in 2014. (SAC and TAC ¶8.)

Plaintiffs do not allege any facts supporting a finding that Defendants’ relationship with the Nonmoving Defendants imposed a duty on Defendants, which they owed to Plaintiffs. Vague allegations of an agency and/or employee and/or co-conspirator relationship are insufficient.

The demurrer to the first and second causes of action is accordingly sustained.

Patient’s Bill of Rights

The demurrer to the Patient’s Bill of Rights cause of action is SUSTAINED.

Defendants argue that the cause of action must fail because Defendants were not licensees of the facility at the time of the alleged wrongful conduct. Plaintiffs do not address Defendants’ argument in their opposition, which the Court takes as a concession on the merits.

Moreover, the TAC does not allege Defendants were licensees of a skilled nursing facility at the relevant time, as required by statute. (Health and Safety Code section 1430; see also California Association of Health Facilities, 16 Cal.4th at 295-302.) Nor do allegations that Defendants were in an agency relationship revive Plaintiffs’ claim, as licensees operating skilled nursing facilities owe a non-delegable duty to the facilities’ residence. (Id.) And in any event, as stated repeatedly, Plaintiffs’ allegations of a relationship between Defendants and the Nonmoving Defendants is too vague and conclusory to provide a basis for a cause of action.

Finally, as stated above, this statutory cause of action is not pled with specificity, as required. The demurrer is accordingly sustained.

Unfair Business Practices

Plaintiffs’ Unfair Business Practices cause of action under California Business & Professions Code § 17200 et seq.

A plaintiff alleging unfair business practices under this statute must state with reasonable particularity the facts supporting the statutory elements of the violation. ( Khoury v. Maly’s of California, Inc. (1993) 14 Cal. App. 4th 612, 619.) Here, Plaintiffs fail to do so. Additionally, having determined that the Plaintiffs’ other causes of action are deficient, the demurrer to the seventh cause of action must be sustained.

Leave to Amend

Plaintiffs ask that if the Court is inclined to sustain the demurrer, that it grant leave to amend.

A Court may sustain a demurrer with or without leave to amend. (CCP § 472a(c).) Leave to amend a defective complaint should be denied where no liability exists under substantive law. (Rotolo v San Jose Sports & Entertainment, LLC (2007) 151 Cal.App.4th 307, 321.) A demurrer must be sustained without leave to amend absent a showing by plaintiff that a reasonable possibility exists that the defect can be cured by amendment. (Blank v Kirwan (1985) 39 Cal.3d 311, 318.) The burden of proving such reasonable possibility rests squarely on the plaintiff. (Torres v City of Yorba Linda (1993) 13 Cal.App.4th 1035, 1041.)

Plaintiffs assert that they are “in the discovery process with the newly added Defendants seeking terminal inspection access to retrieve the full electronic records of [Decedent].” (Opp. at p. 15.) Plaintiffs state that they “anticipate that they will learn of even more facts that weigh against Defendant’s [sic] demurrer.” (Id.) Thus, they have failed to meet their burden to show that a reasonable possibility exists that they can cure their defects. Rather, Plaintiffs propose more time to fish for potential allegations against Defendants based on unspecified facts that they hope to find.

Moreover, the Court sustains Defendants’ demurrer for the same reasons that it sustained Defendants’ prior demurrer; i.e., the complaint “fails to state facts which

affirmatively establish any of the Defendants who did not ‘purchase[]’ the subject care facility until 2016 owed a duty of care to or had a fiduciary relationship in 2014 with either the decedent or plaintiffs.” (Def. RJN Ex. B.) Thus, Plaintiffs have been given two changes to plead a valid cause of action against Defendants and have failed to do so.

The demurrer is accordingly sustained without leave to amend.

The prevailing party shall prepare a formal order for the Court’s signature pursuant to C.R.C. 3.1312.

Item 2 2015-00184048-CU-PO

Marcus Gurion vs. Gramercy Healthcare, LLC

Nature of Proceeding: Motion to Strike Portions of Third Amended Complaint (Cottage Park

Filed By: Patterson, Jay C .

Defendants Cottage Park Place, LP dba Gramercy Court, Gramercy Healthcare, LLC, Linda Gordon, and Sandra Fong’s (together “Defendants”) Motion to Strike portions of the Third Amended Complaint is continued on the Court’s own motion to November 16, 2018 at 9:00 a.m. in Dept. 54. Defendants were required to file a meet and confer declaration with their motion pursuant to CCP § 435.5(a)(3). Defendants shall file their declaration no later than November 5, 2018.

Item 3 2015-00184048-CU-PO

Marcus Gurion vs. Gramercy Healthcare, LLC

Nature of Proceeding: Motion to Dismiss

Filed By: Patterson, Jay C.

Defendants Cottage Park Place, LP dba Gramercy Court, Gramercy Healthcare, LLC, Linda Gordon, and Sandra Fong’s (together, “Moving Defendants”) Motion to Dismiss defendants Yuquo Kawasaki , David McCabe, and Jeffrey West (together, “Individual Defendants”) is DENIED.

Plaintiffs Marcus Gurion, Maxine Gurion, and Robert Gurion, individually and as successor in interest to Evelyn Gurion (Decedent) (together, “Plaintiffs”) filed this action on September 9, 2015. Moving Defendants assert that they have been properly served with the Summons and Complaint since the case’s inception. However, they state that Plaintiffs have never properly served the Individual Defendants and there is no stipulation to extend time for service. (Patterson Decl. ¶¶3-4.) As it has now been three years since the case was filed, Moving Defendants seek an order dismissing the action as to the Individual Defendants, pursuant to CCP §§ 583.210(a), 583.250.

Plaintiffs oppose the motion. They assert that Proofs of Service of Summons and Declarations of Diligence for the Individual Defendants were filed on March 28, 2016, and appear on the Register of Actions. (Nowakowski Decl. ¶¶2-5; ROA 17-19.) The

Proofs of Service reflect that all three Individual Defendants were served by substitute service.

On reply, Individual Defendants argue that it is Plaintiffs’ burden to show that they properly served the parties when challenged, and that filing a proof of service is insufficient to meet their burden. Individual Defendants further argue that Plaintiffs’ actions reflect their position that they did not properly serve the Individual Defendants. Specifically, Individual Defendants note that they never filed responsive pleadings, yet Plaintiffs never moved to take their defaults. Additionally, Plaintiffs did not serve any of the Individual Defendants with discovery. They also served David McCabe by personal service after this motion was filed. (Patterson Reply Decl. ¶¶4, 6-8.) Individual Defendants argue that Plaintiffs are estopped from arguing proper service under these facts.

Individual Defendants further provide a Reply Declaration from Jay C. Patterson, counsel of record for Moving Defendants. He states that the summons and complaint were served via substitute service at the offices of Cottage Park Place, LP, however, “[n]one of these defendants reside or are employed there, and it is not the regular office or home address for any of them. As limited partners, they play no role in managing or operating partnership business.” (Patterson Reply Decl. ¶ 2.)

In response, Plaintiffs filed an objection to the newly raised arguments on reply, as well as to the Patterson Reply Declaration. Specifically, they argue that there is no foundation established for Mr. Patterson’s hearsay statements in his Reply Declaration, nor is it clear whether Mr. Patterson represents Individual Defendants.

Code of Civil Procedure section 583.210 requires that a summons and complaint be served upon a defendant within three years after an action is commenced against a defendant. If service is not completed upon a party within the three years, “the action shall not be further prosecuted and no further proceedings shall be held in the action.

” (CCP § 583.250(a)(1).) This three year requirement is mandatory and is not subject to extension, excuse, or exception unless so provided by statute. (CCP. § 583 .250
(b).)

Here, Plaintiffs assert that they served the Individual Defendants by substitute service, as reflected in the proofs of service on file. (Nowakowski Decl. ¶¶2-5, Exs. A-D.) The proofs of service reflect substitute service made on March 28, 2016, with subsequent copies mailed to each Individual Defendant. (Id.) Because the proofs of service are signed by a registered process server, they are entitled to the evidentiary presumption that they comply with statutory standards and are proper. (Evid. Code, sec. 647. Dill v. Berquist Construction Co., (1994) 24 Cal.App.4th 1426, 1441-1442.) Once the presumption is created, the burden shifts to the defendant to provide competent, contradictory evidence. (See also Floveyor Internat., Ltd. v. Superior Court (1997) 59 Cal.App.4th 789, 795 [filing of proof of service that complies with the applicable statutory requirements creates a rebuttable presumption of proper service].)

Pursuant to CCP § 415.20(b), “[i]f a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served . . . a summons may be served by leaving a copy of the summons and complaint at the person’s dwelling house, usual place of abode, usual place of business, or usual mailing address other than a United States Postal Service post office box . . .” (CCP § 415.20(b).)

Individual Defendants fail to provide admissible evidence sufficient to refute the presumption of proper service in this case. They do not provide any evidence from Individual Defendants themselves stating that they did not receive service, or that service was not properly effectuated. They only provide the Patterson Reply Declaration, which establishes no foundation for his purported knowledge for the statements: “[n]one of these defendants reside or are employed there, and it is not the regular office or home address for any of them. As limited partners, they play no role in managing or operating partnership business.” (Patterson Reply Decl. ¶ 2.) Indeed, the nature of the relationship between Mr. Patterson and the Individual Defendants is unclear. As such, paragraph 2 of the Patterson Reply Declaration is inadmissible.

Thus, the Court is left only with circumstantial evidence that, as discussed above, Individual Defendants never filed responsive pleadings, never had their defaults taken, and, unlike the other defendants in this action, were never served with discovery requests. (Id. ¶¶3-7.) Additionally, Plaintiffs served Mr. McCabe with the complaint on October 1, 2018. (Id. ¶8.) This evidence is admissible, as Mr. Patterson is in attorney in this action, representing Moving Defendants. Nonetheless, it is insufficient to rebut the presumption from the proofs of service that service was properly effectuated.

In reaching this ruling, the Court has considered the arguments made within the Reply brief, as well as any admissible evidence. Pursuant to the burden shifting analysis, Moving Defendants challenged the service of the Summons and Complaint, Plaintiffs met their initial burden in their opposition by producing proofs of service, and then Moving Defendants were permitted to produce evidence and argument to refute Plaintiffs’ proofs of service on reply. However, Moving Defendants failed to meet their burden.

The motion is accordingly denied.

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

Item 4 2015-00184048-CU-PO

Marcus Gurion vs. Gramercy Healthcare, LLC

Nature of Proceeding: Motion to Strike Portions of Third Amended Complaint (Life Generation

Filed By: Eng, Kevin L.

Defendants Life Generations Healthcare, LLC, Thomas Olds, Jr. and GHC of Sac-SNF, LLC dba Gramercy Court’s (together, “Defendants”) motion to strike portions of the Third Amended Complaint is DROPPED as moot in light of the tentative ruling sustaining Defendants’ demurrer to the Third Amended Complaint without leave to amend.